Question

In the context of pay-structure decisions, which of the following is a difference between hierarchical pay structures and compressed pay structures?

a. Unlike hierarchical pay structures, in compressed pay structures, there are big differences from one pay level to another.
b. Unlike hierarchical pay structures, the basic idea behind compressed pay structures is that similar pay levels should lead to higher levels of cooperation and better group and team performance.
c. Unlike hierarchical pay structures, in compressed pay structures, pay is more dispersed and varied across jobs in a company.
d. Unlike hierarchical pay structures, the basic idea behind compressed pay structures is that large differences in pay between jobs should motivate people to work harder to obtain those higher-paying jobs.

Answer 1

Answer: B.

Unlike hierarchical pay structures, the basic idea behind compressed pay structures is that similar pay levels should lead to higher levels of cooperation and better group and team performance.

Explanation: In hierarchical pay structure, payment is bases on rank, position and status in an organization. The higher the rank the higher the pay, this system pay more to staff ranked high with experience and qualification.

While the compressed pay structure operate a negligible difference in pay between staff who have differing skill set, qualification and experience.