1. You have been asked to evaluate whether your organization’s current pay structure makes sense in view of what competing organizations are paying. How would you determine what organizations to compare your organization with? Why might your organization’s pay structure differ from those in competing organizations? What are the potential consequence of having a pay structure that is out of line relative to those of your competitors?

2. Top management has decided that the organization is too bureaucratic and has too many layers of jobs to compare effectively. You have been asked to suggest innovative alternatives to the traditional “job-based” approach to employee compensation and to do list the advantages and disadvantages of these new approaches.

3. If major changes of the type mentioned in problem 2 are to be made, what types of so-called process issues need to be considered? Of what relevance is equity theory in helping to understand how employees might react to changes in the pay structure?

4. Are executive pay levels unreasonable? Why or why not?

5. Your company plans to build a new manufacturing plant but is undecided where to locate it. What factors would you consider in choosing in which country (or state) to build the plant?

6. You have been asked to evaluate whether a company’s pay structure is fair to woman and minorities. How would go about answering this problem?