Large corporations are more likely than small businesses to use a market-based approach to setting pay rates because it is easier for a large firm to conduct formal job evaluations.

Question

Quizplus · Accepted Answer

Employers use two basic approaches to setting pay rates: market-based approaches and job evaluation approaches. Many firms, particularly smaller ones, simply use a market-based approach. The market-based approach bases pay rates on what other firms are paying and does not involve conducting a job evaluation.

Large Corporations Are More Likely Than Small Businesses to Use