Ch 3 comp management
How do most organizations motivate employees to apply for higher-level positions?
By associating promotions with money
Which of the following is true according to tournament theory?
Greater differentials between employees' salary and the boss's salary motivate employees to work hard.
True or false: A company's pay structure should support its work flow.
True
The relative contribution of a job to the organization aims
Value
The pay differences among levels are referred to as
differentials
A study that used hockey teams to examine the influence of pay differences on performance found that _____.
larger differentials based on performance generated positive sorting effects
Pay structures undergo changes due to external factors such as _____.
skill shortages
Distributive Justice
A pay structure itself
Which of the following is a difference between the layered and the delayered pay structure?
As opposed to the layered structure, employees are given more freedom and responsibility in the delayered structure.
The worked performed in a job
Content
A major work decision change is ________ in which entire levels of work are removed.
Delayering
Refers to the wage agreed upon by the employer and employee for a job
Exchange value
Economic pressures and government policies, laws, and regulations
External factors
True or false: Pay is inversely proportional to the value added by skills and experience.
False
Identify a difference between hierarchical and egalitarian pay structures. Multiple choice question.
Hierarchical pay structures have larger differentials between adjacent levels than do egalitarian pay structures.
Identify a drawback of egalitarian pay structures
High-performing and more skilled employees may feel underpaid.
Identify the true statements about the impact of internal pay structures.
High-performing employees resign less under more hierarchical systems when their pay is based on performance rather than seniority.High-performing employees resign less under hierarchical systems when they have knowledge of the pay structure.
Identify the strategic choices involved in tailoring a pay structure that is internally aligned
How specific the tailoring of the pay structure should be to the organization's design and work flow How pay should be distributed throughout the levels in the structure
Identify the strategic choices involved in tailoring a pay structure that is internally aligned.
How specific the tailoring of the pay structure should be to the organization's design and work flowHow pay should be distributed throughout the levels in the structure
the education, experience, knowledge, abilities, and skills required to perform the work—is a major influence on internal structures.
Human capital
According to research, under which of the following conditions are pay procedures more likely to be viewed as fair?
If employees were involved in the process If accurate data are used If appeals procedures are included If they are applied to all employees in a consistent manner
In which of the following situations should an organization's internal structure be redesigned?
If it does not motivate employees to work toward achieving the organization's objectives
What are the consequences of an internally aligned structure?
Increased experienceReduced pay-related grievancesReduced pay-related work stoppages
Which theory sees organizations as responding or conforming to normative pressures in their environments in order to gain legitimacy and to minimize risk?
Institutional theory
refers to the pay relationships among different jobs or skills or competencies within a single organization.
Internal alignment
Internal alignment is often known as _____ _____.
Internal equity
refer to the rules and procedures that determine the pay for the different jobs within a single organization and allocate employees among those different jobs.
Internal labor markets
Which of the following is true of an organization that has many levels?
It can offer more promotions than an organization with fewer levels.
Identify a true statement about the "change-and-congeal" process of establishing pay structures
It does not yet support the continuous changes occurring in the present economy.
Which of the following requirements should be met by an organization's pay structure?
It should be fair to employees. Employees should be able to view the way in which their work is linked to the work of others and the organization's objectives.
theory was put forth in the last half of the 19th century and countered the views of Karl Marx by stating that employers pay use value.
Marginal productivity
Strategy, technology, and human capital
Organization factor
Which of the following processes reflect the changes that are occurring in the design of organizations?
Outsourcing Delayering
refers to the array of pay rates for different work or skills within a single organization.
Pay structure
Which of the following statements highlights the influence of cultures and customs on internal pay structures?
Shared mind-sets may judge what size pay differential is fair.
Which of the following do most unions demand as a way to promote solidarity among members?
Small pay differences among jobs Seniority-based promotions
Identify the economic pressures that influence the internal structure of an organization.
Supply and demand for labor Supply and demand for products and services Differences in productivity
What did Matt Bloom discover about the effect of pay differences on performance based on eight years of data on major league baseball?
Teams with small differences in member salaries did better than those with large differentials.
Which of the following are used to describe pay structure?
The criteria used to determine the differences in pay between different levels The differentials in pay between different levels The number of levels
Identify a difference between the layered and the delayered pay structure.
The layered structure is more hierarchical than the delayered structure.
procedural justice
The methods used for determining a pay structure
Identify recent examples of "benchmarking" behavior by organizations.
The rush to outsource jobs The emphasis on teams
Identify a true statement about the employees who are supplied by outsourcing specialists
Their pay is based on the internal structure of their home employer.
Which of the following are true of aligned pay structures?
They are fair to employees. They support the way work gets done.
Identify a true statement about the Equal Pay Act and the Civil Rights Act.
They require "equal pay for equal work."
True or false: Unions, stockholders, and even political groups are involved in the determination of internal pay structures.
True
Refers to the value of goods or services produced by an employee in a job
Use value
The process by which goods and services are delivered to the customer is referred to as
Work flow
Differentials are used to _____
encourage people to work for promotion to a higher-paying level
As opposed to hierarchical pay structures, egalitarian pay structures support _____.
equal treatment of employees
_____ states that people compare the ratio of their own outcomes (e.g., pay, status, enjoyment) to inputs (e.g., effort, ability, performance) with the outcome to input ratio of others (internal, external, or themselves in a past or future situation).
equity theory
True or false: While referring to pay, the terms equity and equal can be used interchangeably.
false
A characteristic of any pay structure is its _____.
hierarchical nature
In 14th century western Europe, the Christian church endorsed a(n) ___ ___ ___ that denied market forces such as skills shortages as appropriate determinants of pay structures.
just wage doctrine
A company's pay structure should clarify the relationship between each job and the company's objectives. This is an example of _____
line of sight
A contemporary U.S. example of legislation directed toward pay differentials is _____.
living wage
Identify the consequences of deviations from acceptable wage structures.
more grievances diminished motivation
A disadvantage of egalitarian pay structures is that they may result in a _____.
negative sorting effect
In the context of pay structures, a(n) ____ - _____ ______ focuses on the skills, knowledge, or competencies possessed by an employee, whether or not they are utilized in the employee's particular job
person-based structure
What is pay structure?
refers to the array of pay rates for different work or skills within a single organization. The number of levels, the differentials in pay between the levels, and the criteria used to determine those differences describe the structure.
The hierarchy of a pay structure refers to _____
the number of levels and reporting relationships
Internal alignment, often called internal equity, refers to
the pay relationships among different jobs/skills/competencies within a single organization.
According to ______ ______ players will play better in a tournament where the prize differentials are large than in a tournament where the prize differentials are small.
tournament theory
Identify the most common basis for formulating a company's internal structure.
work content and its value
