Chapter 9: Compensation Management

New pay concepts such as skill or knowledge-based pay require that human resource departments do all of the following except A. identify the tasks that have to be performed B. identify skills required to complete tasks C. price skills for pay rates D. ideally, provide incentives for continuous horizontal and vertical learning E. be prepared to significantly enlarge the workforce

E

The line that is plotted on a pay-rate point-system scattergram as close to as many key job points as possible is called a A. wage-trend line B. scatterline C. pay rate line D. pay-point line E. job evaluation curve

A

In 1977 Part I of the Canada Labour Code was repealed and replaced by A. the Charter of Rights and Freedoms B. the Canadian Human Rights Act C. the Canada Labour Code Part I-A D. the Employment Equity Act E. the Labour Relations Act

B

The difference between the concepts of equal pay for work of equal value, and equal pay for equal work, is A. the latter came after the former and expands on it B. the former came later and expands on the latter C. the latter considers the comparable worth of jobs rather than just the same or similar jobs D. the former only applies to women while the latter only applies to visible minorities E. is negligible as the two concepts are, for all intents and purposes, identical

B

The job grading method of job evaluation is also known as A. job ranking B. job classification C. job posting D. job listing E. job comparison

B

The most commonly used job evaluation method today is, by far, the A. job ranking method B. point system C. the job grading method D. the job analysis system E. job description method

B

The pay equity concept makes it illegal A. to discriminate on the basis of job description B. to discriminate on the basis of job value or content C. to discriminate on the basis of skill or responsibility D. to discriminate on the basis of performance merit E. to discriminate on the basis of seniority

B

The point system of job evaluation involves A. simply evaluating the critical factors of a job B. evaluating the critical factors of a job and determining different levels or degrees for each factor and then allocating points to each level or degree C. is also called job grading D. ranking jobs numerically E. assigning jobs to various classifications that have been preset by the human resource department

B

The principle of equal pay for men and women in jobs with comparable worth to the organization is called A. equal pay for equal work B. equal pay for work of equal value C. employment equity D. fair pay E. fair employment pay

B

To determine a fair rate of employee compensation most firms rely on A. retention targets B. wage and salary surveys C. historical records D. Cartesian labour analysis E. Brownian motion studies

B

Incentive pay A. provides only a vague link between pay and productivity B. is very easy to administer C. is directly linked to an employee's performance or productivity D. is part of a system widely accepted by unions E. tends to focus on several aspects such as sales and outputs

C

The final step in the point system job evaluation method is A. training managers on the system B. determining compensable factors C. applying the point system D. developing the point manual E. determining levels of factors

C

Pay equity legislation defines some factors that can justify differences in wages for jobs of equal value, including all of the following except A. different performance ratings (based on formal appraisals) B. seniority either within or outside of a union environment C. demotion pay procedures D. actual supply and demand of labour in any geographic area E. rehabilitation assignment (after sick leave)

D

Pay levels for an organization can be determined by utilizing a graph called a __________ that puts pay rates on one axis, job evaluation points on the other, then plots for each key job and finally produces a wage-trend line A. pay rate graph B. wage-trend chart C. wage-point matrix D. scattergram E. telegram

D

Compensation systems are intended to do all the following except A. satisfy employees B. tie rewards to the achievement of company objectives C. reimburse employees for their work D. motivate employees E. replace performance appraisals

E

Some sources of information on wage and salary benchmark data include all the below except A. Human Resources and Social Development Canada B. compensation specialists and consultants C. Canada Human Resource Centres D. employer and professional associations E. internal salary matrices

E

With compensation programs, dissatisfaction can arise because employee needs are affected by A. absolute rates of pay only B. corporate culture C. relative rates of pay only D. job analysis E. both absolute and relative rates of pay

E

The job ranking method of job evaluation A. is simple to use relative to other methods B. differentiates quantitatively between the relative importance of jobs within an organization C. is expensive but very accurate D. is currently popular due to the impact of pay equity legislation E. is very similar to the point system

A

The job ranking method of job evaluation is A. the simplest method, but the least precise B. a complex and yet imprecise method C. a complex but very precise method D. a simple and relatively precise method E. the only method that relies on the allocation of points for every job

A

n order to develop a strategic pay plan, Lawler suggests concentrating on a limited number of areas that affect pay systems. That number is A. five (5) B. seven (7) C. four (4) D. eight (8) E. three (3)

B

Although companies utilize a variety of methods to set pay rates, other factors can challenge organizational plans and policies concerning wages and salaries, including all of the below except A. government regulations B. union strength C. the organization's level of productivity D. recruiting policies E. organization's wage and salary policies

D

Piecework is an individual incentive plan which pays employees A. for exceeding a specific level of output B. a percentage or flat amount for each unit sold C. for saving production time D. for each unit of output E. based on an individually designed compensation package

D

Lawler suggests that the all of the following areas by utilized to develop a strategic pay strategy except A. relating rewards to performance B. motivating skill and knowledge development C. fostering attraction and retention D. identifying valued rewards E. establish year end bonuses

E

No matter what pay rate methods are used to set wages and salaries, they must all be tempered by a variety of challenges including all the following except A. organizational policies B. union contracts C. level of productivity D. prevailing wage rates E. manager's personal opinion

E

A systematic procedure to determine the relative worth or value of jobs is called A. job evaluation B. job analysis C. job standard measurement D. performance evaluation E. job intrinsic valuation determination

A

In the point system method of job evaluation, the listing of critical factors down one side and corresponding levels across the top is called a A. point system matrix B. point system graph C. point system ranking or grading D. point system manual E. point system factor-level list

A

One thing all job evaluations have in common is that they all result in an ordering of jobs based upon A. their perceived relative worth B. the opinions of the incumbents C. the opinions of human resource specialists D. definitions laid out in the Canada Labour Code E. seniority

A

Employee stock ownership plans can be modeled in all of the following manners except A. to motivate employees and improve their productivity B. as a percentage for exceeding predetermined levels of output C. to attract and retain employees D. as a source of additional financing E. as an alternative to wage and salary increases

B

In order to ensure that a company's pay system is in line with government legislation, all of the following measures are suggested except A. review the philosophy and rationale of the current job evaluation plan B. contract the Ministry of Labour to review salary ranges C. review recruiting and promotional decisions D. examine the differential between the earnings of male and female employees E. review human resource planning techniques and procedures

B

Perceived fairness of job rankings within an organization will assure A. a sense of external equity B. a sense of internal equity C. labour harmony D. an avoidance of moves to unionize E. increased turnover

B

Group or team based incentive plans include all of the following except A. profit-sharing plans B. production incentive plans C. commissions D. employee stock options E. team results

C

Absolute pay levels primarily serve such employee needs as A. esteem needs B. physiological needs only C. security needs only D. both physiological and security needs E. belonging needs

D

Among the objectives of effective compensation management are all the following except A. ensure equity B. control costs C. reward desired behaviour D. set performance appraisal systems E. retain present employees

D

The motivational theory that most utilizes all aspects of the field of human resource management is A. equity theory B. Maslow's hierarchy of needs C. goal-setting theory D. expectancy theory E. re-enforcement theory

D

Among the steps required by the point system of job evaluation include all of the following except A. determination of compensable factors B. allocation of points to levels (degrees) C. determination of levels (degrees) associated with each factor D. allocating points to subfactors E. allocating points based on job comparisons

E

In pricing jobs, the appropriate pay level for any job reflects A. the job's relative worth only B. the job's absolute worth only C. the intrinsic value of the employee occupying the job D. what a manager determines to be appropriate E. both the job's relative and absolute worth

E

Individual pay incentive plans can include all of the below except A. piecework B.production bonuses C. commissions D. executive incentives E. profit-sharing plans

E

Job evaluation methods can include all the below except A. job ranking B. job grading C. job classification D. point system E. job analysis

E

Rankings established through the job evaluation process are used by organizations to determine A. any job's relative worth B. any job's absolute worth C. any job's variable value D. any job's worth as perceived by the jobholder E. any job's worth as perceived by the manager

A

The compensation model known as the " total reward model " A. rewards everything an employee values including social interaction and workload B. is based on a performance linked compensation approach C. encourages employees to broaden their skills and abilities D. pays employees based on the total output of their work group E. bases an employees compensation on a combination of fixed and variable pay

A

Two major objectives of compensation management are to reward desired behaviour and control costs. Human resource specialists often find that A. these two goals are always mutually exclusive B. these two objectives can often be in conflict C. these two objectives are seldom in conflict D. the two objectives are one and the same E. it is usually impossible to reward desired behaviour

B

Wage and salary surveys are used by organizations to determine A. any job's relative worth B. any job's absolute worth C. any job's variable value D. any job's worth as perceived by the jobholder E. any job's worth as perceived by the manager

B

When a company increases employee compensation, this has the effect on the wage-trend line of A. moving it to the right B. moving it upwards C. moving it downwards D. reversing the direction of its slope E. moving it to the left

B

Effective compensation management has the all following objectives except A. to reward desired behaviour B. to encourage unproductive employees to leave C. to ensure internal equity D. to attract qualified applicants E. to ensure external equity

B

All of the following are government restraints on an organization's wage and salary policies except A. human rights legislation B. pay equity C. union policies D. child labour laws E. minimum wage

C

The point system of job evaluation requires __________ steps to implement A. two B. four C. six D. eight E. ten

C

A pay raise given to an employee according to a performance evaluation is referred to as a A. merit raise B. seniority raise C. bonus D. promotion E. step increase

A

Consolidating a large number of pay grades into a fewer number of (larger) categories is called A. broadbanding B. widebanding C. flatstructuring D. de-grading E. wage rationalization

A

The major problem for human resource departments when dealing with the variety of published wage and salary surveys can be that A. despite similar titles, analysts cannot always be certain that their jobs actually match those being reported B. the surveys are usually biased toward management level jobs C. the surveys are often biased towards industrial and less skilled jobs D. the surveys are usually unreliable E. it is too costly to subscribe to the reports

A

The reason that the point system has become the major job evaluation method is because of A. the fact that it provides the best information regarding job values B. the Charter of Rights and Freedoms C. the Human Rights Act D. the ease with which it can be developed and applied E. its relative inexpensiveness when compared to other systems

A

A form of job evaluation that assigns jobs to predetermined job classifications according to their relative worth to the organization is known as the __________ method A. job ranking B. job grading C. point system D. job description E. administrative

B

One way for managers to be certain that employees will be motivated by rewards is to A. always offer money B. ascertain the needs and reward preferences of individual employees C. ascertain the needs and reward preferences of groups of employees D. predetermine what will be offered as rewards E. restrict rewards to only the very best employees

B

Relative pay levels serve such employee needs as A. physiological and security needs B. social and esteem needs C. basic survival needs D. health needs E. love and affection needs

B

While flat wage rates are easier to administer they can obstruct rewarding employees. One way organizations use to avoid such problems inherent in flat rates is to utilize instead the concept of A. individual rates B. rate ranges C. random wages D. not rewarding exceptional performance E. allowing employees to set their own wage rates

B

A job evaluation system where jobs in an organization are placed subjectively on a scale in accordance to their importance in comparison with other jobs is called A. job grading B. job progression ladder scaling C. job ranking D. job factoring E. job description comparison technique

C

All of the below are steps that compensation specialists go through to set wages/salaries for each job, except for A. job analysis information B. wage and salary surveys C. demographic lifestyle analysis D. job evaluation E. pricing jobs

C

External equity in job evaluation may be defined as A. perceived fairness of a pay system relative to others within the organization B. a situation where job descriptions match those of other similar organizations within a specific area C. perceived fairness in pay relative to what other employers are paying for the same work D. being treated as an equal regardless of personal characteristics when being evaluated for a job E. the fact that an employee is still seen as equal to others even outside the job

C

Regardless of all the tradeoffs involved in compensation management, an overriding objective is A. to maintain internal equity B. to further administrative efficiency C. to maintain legal compliance D. control costs E. develop satisfied employees

C

Studies indicate that one reason that women are often paid less, or earn less, than men is due to A. intentional discrimination in organization compensation policies B. the fact that men generally work harder C. women's job choices are often being influenced by their roles as homemaker and mother D. males desire to join organizations with higher risks E. minimum wage legislation

C

The following list gives some of the steps in the point system method of job evaluation. The steps are in sequence from the start of the process, except for one step that is out of sequence. Indicate that step: A. determine compensable factors B. determine levels of factors C. develop the point manual D. allocate points to subfactors E. allocate points to levels

C

The job evaluation method that assesses the relative importance of a job's key factors to arrive at the relative worth of that job within the organization is called A. job ranking B. job grading C. the point system D. job classification E. the relative importance technique

C

The principle of equal rates of pay for all employees in an organization performing the same kind and amount of work, regardless of any personal characteristics that are not job-related, is called A. equal pay for work of equal value B. pay equity C. equal pay for equal work D. non-discriminatory job-related pay rates E. reverse discrimination

C

What makes the issue of equal pay for work of equal value a difficult concept to deal with is A. it only covers women in the marketplace and ignores other protected classes B. that generally a company will not know how much it pays its female versus male employees C. that the concept (and laws) do not clearly define "equal value" and how it can be measaured D. that it conflicts with equal pay for equal work laws E. it relates only to certain groups of people as specified by the federal government

C

Government constraints on wage and salary policies include all of the following except A. minimum wage B. overtime pay C. equal pay D. productivity incentives E. maximum weekly hours

D

If, for a particular job class, the average hourly wage rate is $13, but a less average employee can be paid $11 and an exceptional employee $15, then this is an example compensation policy utilizing __________ within job classes A. flat rates B. disbursed rates C. modified rates D. rate ranges E. employee non-evaluated rates

D

In a point system matrix for evaluating any particular job, compensable factors could possibility include all of the following except A. level of responsibility B. skill requirements C. working conditions D. employee goals E. effort needed

D

In obtaining wage and salary information, regardless of the source, it is always most important to ensure that A. the information is printed and not simply verbal B. the information is in both English and French C. the information is legally valid under the Human Rights Act D. the information offers comparisons between similar jobs and not just similar titles E. the information is in accordance with salaries as laid out in the Employment Equity Act

D

The point system for job evaluation is the most widely used system in Canada due to A. the need to conform to pay equity legislation B. the fact that it is the simplest and most cost effective to develop C. its being a far more simple system than either job ranking or job grading D. the need to conform to pay equity legislation and the provision, relatively, of the best information about job values E. the fact that generic computerized plans can be purchased

D

There are several new approaches to paying employees which include A. skills or knowledge based pay and employee stock ownership plans B. variable pay and piecework C. profit sharing and skills or knowledge based pay D. variable pay and skills or knowledge based pay E. piecework and profit sharing

D