MerTon Inc.decides to reduce labor costs by using exit incentives to encourage some of its senior, high-earning members to leave the organization.It replaces the employees who quit with new employees and pays them low wages.Which of the following statements is most likely true in this scenario?
A)The number of employees being paid red circle rates will increase.
B)The salary range midpoint of the company is lesser than the compa-ratio.
C)The salary range midpoint of the company is higher than the actual salary paid.
D)The compa-ratio of the company is greater than one.

Question

Quizplus · Accepted Answer

Since MerTon Inc. is looking to reduce labor costs by replacing high-earning employees with low-wage employees, it is likely that the actual salaries being paid are lower than the salary range midpoint. Therefore, option C is the most likely true statement. Option A and D are not directly related to the scenario mentioned. The salary range midpoint and compa-ratio are measures used to evaluate pay levels within an organization, and since the scenario does not provide enough information about these measures, option B cannot be determined.