HR MGT Exam Review: Ch. 11
Which of the following are advantages of paying employee wages above the market average?
It attracts skilled workers. It encourages increased productivity. It helps retain top talent. It generates increased job satisfaction.
In a software company that caters to the federal government it would be most appropriate for which of the following positions to be paid at the highest percentile?
VP of software engineering
Which of the following problems can result from a job-based pay structure?
a growing bureaucracy decreased lateral job movement top-down decision making is reinforced
An administrative procedure used to measure internal job worth is called _____.
a job evaluation
Which factors can influence a company's ability to adhere to Equal Employment Opportunity (EEO) pay regulations?
a shifting labor market changing demographics of the workforce
Employee compensation requires scrutiny because it is typically ______.
a significant organizational cost
Employees typically view their compensation in terms of which of the following?
as it relates to the pay of their colleagues as a sign of status and success as a way of evaluating their relationship with the organization
The process by which an organization compares its own practices to those of the competition is called ____.
benchmarking
An organization that effectively competes in the product market is able to sell its goods and services at a quantity price that will _____.
bring a sufficient return on investment
In addition to salary, what is a major component of a typical CEO compensation package?
a stock plan
Most nonexempt employees are paid ______.
an hourly rate
Which of the following are provisions of the Fair Labor Standards Act (FLSA) as they relate to employee pay?
calls for time-and-a-half pay for hours exceeding 40 hours a week sets a minimum wage for jobs provides for a training wage
An index that measures the correspondence between actual pay and a company's intended pay policy is called the ______.
compa-ratio
The undervaluation of women's jobs has been combated through the policy of ______.
comparable worth
The characteristics of jobs that an organization values and chooses to pay are called ______.
compensable factors
Equal Employment Opportunity (EEO) compensation issues will likely remain in the spotlight because of the _____.
decrease of white males in the workforce
Equal Employment Opportunity (EEO) compensation issues will likely remain in the spotlight because of the ______.
decrease of white males in the workforce
The concept of reducing the number of job levels within an organization in order to gain flexibility in job assignments is called ______.
delayering
In communicating pay cuts to employees, which of the following strategies are effective?
demonstrating significant remorse for implementing the pay cuts providing detailed reasons why the pay cuts are necessary
In addition to labor costs, the proximity to which of the following can influence where a company locates its production facilities?
design group to manufacturing plant customers suppliers
Which of the following are considered part of an employee's total compensation?
paid vacation stock options salary
Another term for comparable worth is ______.
pay equity
A mathematical expression that describes the relationship between a job's pay and its job evaluation points is called the _____.
pay policy line
A mathematical expression that describes the relationship between a job's pay and its job evaluation points is called the ______.
pay policy line
Salary level decisions can be broken into which of the following two areas?
pay structure individual pay
Benchmarking against product market and labor market competitors is typically accomplished through the use of ______.
pay surveys
Which of the following aspects of an organization do executives typically influence substantially?
performance tone culture
One of the most important factors that influences the price of a good or service is the cost of ______, which includes labor costs.
production
Which of the following are ways employees attempt to restore equity when faced with perceived inequity in the workplace?
quitting voluntarily being less productive while at work stealing goods from their employer
The distance between the maximum and minimum pay within a pay grade is known as the _____ spread.
range
What do companies use to recognize differences in employee performance, seniority, and training in setting individual pay?
rate ranges
According to some critics, when it comes to pay, Equal Employment Opportunity (EEO) regulations obstruct ______.
market forces
The approach that places the greatest emphasis on external comparisons is achieved by basing pay on ______.
market surveys
When any change in existing pay practices is set to take place, the intimate involvement of line managers is ______.
necessary
To reduce labor costs, some companies are sending jobs overseas, a concept called ______.
offshoring
Which of the following kinds of occupations are typically exempt from Fair Labor Standards Act (FLSA) coverage?
outside salespeople professional positions executive positions
One important advantage of skill-based pay is the potential for ______.
increased worker flexibility
A company may pay a training wage to an employee under the age of 20 for up to _____ days.
90
Which of the following statements about resolving conflicts between market pay surveys and job evaluation is true?
An organization must weigh its objectives and select the most appropriate strategy
According to equity theory, there will be no change in employees' attitudes or behavior when which of the following is true?
Employees perceive their work situation as equitable.
True or false: Market forces provide the most inefficient means of pricing and allocating people to jobs.
False
In which of the following ways does pay affect an organization's strategic goals?
It influences the kind of employees attracted to the organization. It can help align employees' interests with those of the organization. It has an impact on employees' attitudes and behaviors.
MOST CHALLENGING CONCEPTS:
Recall market survey data. Describe the concept of delayering as it relates to pay structure.
Sophia is an American manager who works at a company branch in Seoul. Her salary is determined by American standards, which are higher than South Korea's. Which of the following statements are true?
Sophia is paid a higher salary due to labor market conditions in the United States and Europe. Sophia's higher salary may create a sense of inequity among her Korean peers.
Which of the following is generally true of relative hourly labor costs?
They are unstable over time.
True or false: Employees in the same job may have different pay rates based on performance, seniority, and training.
True
The concept that wages affect worker productivity is called the ______ theory.
efficiency wage
Skill-based pay structures encourage leaner staff levels because ______.
employee turnover or absenteeism can be covered by current multiskilled workers
By paying higher labor costs than its competitors, a company can do which of the following?
encourage desired employee behaviors retain valued employees draw better workers to produce higher-quality products than competitors
The concept that suggests people evaluate the fairness of their situations by comparing them with others is called _____.
equity theory
When thinking about the consequences of pay decisions, managers should keep in mind that employees often ______.
evaluate their pay relative to other employees
Which of the following make up a significant portion of labor costs?
health insurance wages and bonuses
Miguel is vice president of marketing at XYZ Corp. He is disappointed to learn that the vice president of sales at XYZ earns 20 percent more than he does despite the two positions having similar levels of responsibility and impact. In this example, what method is Miguel using to evaluate the fairness of his pay?
internal comparison
One indicator of a country's productivity is ______.
its gross domestic product (GDP) per person
The relative pay of jobs in an organization is known as the organization's ______.
job structure
What is the term for the relative worth of jobs in an organization based on internal comparisons?
job structure
The most widely used metric for defining pay structures is by ______.
jobs and associated responsibilities
In developing a pay structure, pay survey data and job evaluation data are commonly available for _____.
key jobs
A compa-ratio less than 1.00 suggests that actual pay ______.
lags behind company pay policy
In general, which combination would lead to the lowest unit labor costs for one country relative to another?
lower labor costs and higher productivity
One advantage of using a pay grade system in planning employee compensation is that it ______.
reduces the administrative burden of setting separate pay rates for hundreds of jobs
Organizations compete in the labor market, so they should consider their employees not just as a cost but also as a(n) ______.
resource that provides returns
Placing jobs in broader bands of classification gives managers the opportunity to _____.
reward high performers with merit increases
Placing jobs in broader bands of classification gives managers the opportunity to ______.
reward high performers with merit increases
Employees can take part in the compensation decision-making process by doing which of the following?
serving on a task force that designs a pay program explaining the company's rationale in implementing a specific pay program participating in a committee that is charged with recommending a pay program
Which is a component of labor costs?
staffing level
Typically, expatriate pay and benefits are linked most closely to ______.
the company's home country
A system in which employees doing the same jobs are paid two different rates, depending on their hiring date, is known as a ______.
two-tier wage plan
Fluctuations in currency exchange rates help explain which of the following?
unstable relative hourly labor costs
Which of the following are pay-setting approaches that vary in the relative importance they give to external and internal comparisons?
using pay grades using market survey data using the pay policy line
