A temporary pay premium added to the regular base pay of an employee to account for a temporary market escalation in pay for certain skills in extreme shortage is called a(n)_____________.
A) hot skill premium
B) tight labor market adjustment
C) key skill premium
D) none of these

Question

Quizplus · Accepted Answer

A hot skill premium is a short-term increase in pay for employees with skills that are in high demand and short supply in the labor market. It is used to attract and retain skilled employees during a tight labor market. Option B, tight labor market adjustment, is incorrect because it refers to a general increase in wages due to a shortage of workers in a particular market, not specifically for skills in short supply. Option C, key skill premium, is also incorrect because it is a broad term that can refer to any premium pay given for an employee's unique skills or qualifications.

A Temporary Pay Premium Added to the Regular Base Pay