In setting the base pay rate for new jobs at her organization,Alexis is doing an assessment of how much she can afford to pay.She is considering ______.
A) ability to pay
B) types of compensation
C) performance- or longevity-based pay
D) skill- or competency-based pay

Question

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Ability to pay refers to the organization's financial capacity to offer a certain level of pay to its employees. This is crucial in setting the base pay rate for new jobs as it ensures that the organization can afford to pay its employees and stay financially sustainable. Choices B, C, and D refer to different types of compensation schemes that an organization may use in addition to the base pay rate. However, determining the base pay rate is the first step, and this is where the consideration of ability to pay comes into play.

In Setting the Base Pay Rate for New Jobs at Her