Question

After freezing salaries for three years, Solo Music Publishers determined that employees with two to three years of experience were leaving Solo because other employers were offering higher salaries. Which of the following is a step that Solo can take to reduce pay inequities?
A) Exclude benefits and other items from the total pay package
B) Base pay on the age of the employee
C) Benchmark against local and national markets
D) Base pay on the longevity of the employee’s association with the company

Answer 1

Answer: C) Benchmark against local and national markets

Explanation:

This is the best answer because Solo Music Publishers is losing employees to rivals because they offer better salaries. Should they then align their salary package to that of rivals at a local and national scale, they will become more competitive and hence more attractive. Baring other factors then, they should lose no more employees based on salary structure alone.