1. Cho & Greenwood, a management consulting firm, analyzes its own pay structure and finds that the average pay for junior associates is $60,000. The pay range that the firm set for this position is $50,000 to $72,000. Which of the following statements is true about the compa-ratio for this position?
A. The compa-ratio is $60,000/$72,000, or less than 1.
B. The compa-ratio is $60,000/$61,000, or slightly less than 1.
C. The compa-ratio is $60,000/$122,000, or much less than 1.
D. The compa-ratio is $61,000/$60,000, or slightly more than 1.
E. The compa-ratio is $72,000/$60,000, or greater than 1.
2. In most organizations, only a small fraction of the employees are executives, yet employees and others often consider executive pay when evaluating the equity of a company’s pay structure. Which of the following statements is a reason why executive pay draws this attention?
A. Executive pay ranges tend to be very close to the pay levels of the other employees.
B. Employees at all levels are affected by executives’ actions.
C. Customers are usually more satisfied when executives earn much more than other employees.
D. Front-line workers set the tone or culture of the organization.
E. CEOs of most companies earn $10 million or more per year.