At Methods Corp., a maker of premium art pencils, the human resource department is evaluating its pay structure. A compensatic computes the compa-ratio of the designers and determines that it is 1.9. What problem is most likely to result from a compa-ration size? O The company may have difficulty attracting and keeping qualified employees. The company may be in violation of the Fair Labor Standards Act. OThe company may have misclassified these employees as exempt when they are nonexempt. OThe company may not have met minimum-wage requirements. O The company may have difficulty keeping costs under control.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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What is pay structure?

**Transcription for Educational Purpose:**

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### Pay Structure Evaluation at Methods Corp.

**QUESTION 6**

At Methods Corp., a maker of premium art pencils, the human resource department is evaluating its pay structure. A compensation analyst computes the compa-ratio of the designers and determines that it is 1.9. What problem is most likely to result from a compa-ratio of this size?

- ○ The company may have difficulty attracting and keeping qualified employees.
- ○ The company may be in violation of the Fair Labor Standards Act.
- ○ The company may have misclassified these employees as exempt when they are nonexempt.
- ○ The company may not have met minimum-wage requirements.
- ○ The company may have difficulty keeping costs under control.

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In an educational context, this question would likely facilitate understanding of compensation management, focusing on potential challenges in maintaining a fair and legally compliant pay structure. The compa-ratio of 1.9 indicates that the designers at Methods Corp. may be compensated at almost double the market rate, which could lead to various managerial problems.
Transcribed Image Text:**Transcription for Educational Purpose:** --- ### Pay Structure Evaluation at Methods Corp. **QUESTION 6** At Methods Corp., a maker of premium art pencils, the human resource department is evaluating its pay structure. A compensation analyst computes the compa-ratio of the designers and determines that it is 1.9. What problem is most likely to result from a compa-ratio of this size? - ○ The company may have difficulty attracting and keeping qualified employees. - ○ The company may be in violation of the Fair Labor Standards Act. - ○ The company may have misclassified these employees as exempt when they are nonexempt. - ○ The company may not have met minimum-wage requirements. - ○ The company may have difficulty keeping costs under control. *Click Save and Submit to save and submit. Click Save All Answers to save all answers.* --- In an educational context, this question would likely facilitate understanding of compensation management, focusing on potential challenges in maintaining a fair and legally compliant pay structure. The compa-ratio of 1.9 indicates that the designers at Methods Corp. may be compensated at almost double the market rate, which could lead to various managerial problems.
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