Comp & Benefits Chapter 3

Content

The work performed in a job

External factors affect the pay for what type of job?

Entry jobs

________ ________ refers to the pay relationships among different jobs or skills or competencies within a single organization.

Internal alignment

Internal factors affect the pay for what type of job?

Nonentry jobs

Which of the following are true of aligned pay structures? (Select all that apply) a. they are insensitive to external market rates b. they support the way work gets done c. they help establish a business strategy d. they are fair to employees

b, d

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

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

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

The process by which goods and services are delivered to the customer is referred to as ________ ________.

work flow

Distributive justice

A pay structure itself; addresses the acceptability of the actual pay differences among employees

T/F: In the real workplace, pay structures follow either a job-based structure or a person-based structure.

False - pay structures include both job-based and person-based structures and not either one

Organization factors that influence a company's internal structure

HR policy, employee acceptance, and cost implications

Porfyra Manufacturing Inc. and Colina Manufacturing Inc. are two companies that manufacture laboratory equipment. The sales department of the former has six levels with large pay differentials between them, while the sales department of the latter has only three levels with small pay differentials between them. What is Porfyra Manufacturing Inc.'s internal structure?

Hierarchical structure

________ _________ is a theory that was put forth in the last half of the 19th century and that countered the views of Karl Max by stating that employers pay use value.

Marginal productivity

______ ______ refers to the array of pay rates for different work or skills within a single organization.

Pay structure

Use value

Refers to the value of goods or services produced by an employee in a job

Exchange value

Refers to the wage agreed upon by the employer and employee for a job

External factors that influence a company's internal structure

Stakeholders and cultures and customs

A characteristic of any pay structure is its: a. hierarchical nature b. deferred nature c. skill-based structure d. performance-based structure

a

________ states that people compare the ratio of their own outcomes (i.e. pay, status, enjoyment) to inputs (i.e. effort, ability, performance) with the outcome to input ratio of others (internal, external, or themselves in a past or future situation). a. equity theory b. institutional theory c. drive theory d. agency theory

a

Which of the following is a difference between layered and delayered pay structures? a. the delayered structure guarantees greater employee satisfaction than does the layered structure b. as opposed to the layered structure, employees are given more freedom and responsibility in the delayered structure c. the delayered structure guarantees smaller differentials between adjacent levels than does the layered structure d. as opposed to the layered structure, employees are more closely supervised in the delayered structure

b

Identify the true statements about the impact of internal pay structures. (Select all that apply) a. more hierarchical structures are related to greater performance when close collaboration and sharing of knowledge are required b. high performers quit less under hierarchical systems when people have knowledge of the structure c. more egalitarian structures are related to greater performance when the work flow depends on individual contributions d. high performers quit less under more hierarchical systems when pay is based on performance rather than seniority

b, d

Pay structures undergo changes due to external factors such as: a. organization work design b. employee acceptance c. skill shortages d. HR policies

c

Which of the following do most unions demand as a way to promote solidarity among members? (Select all that apply) a. relational rewards in place of cash compensation b. stock programs c. seniority-based promotions d. small pay differences among jobs

c, d

A major work decision change is _________, in which entire levels of work are removed.

delayering

Porfyra Manufacturing Inc. and Colina Manufacturing Inc. are two companies that manufacture laboratory equipment. The sales department of the former has six levels with large pay differentials between them, while the sales department of the latter has only three levels with small pay differentials between them. What is Colina Manufacturing Inc.'s internal structure?

Egalitarian structure

________ ________ - the education, experience, knowledge, abilities and skills require to perform the work - is a major influence on internal structures.

Human capital

Value

The relative contribution of a job to the organization aims

Procedural justice

The methods for determining a pay structure; addresses the way in which design and administration decisions are made and whether measures are applied in a consistent manner

T/F: Unions, stockholders, and even political groups are involved in the determination of internal pay structures.

True

Identify recent examples of "benchmarking" behavior by organizations. (Select all that apply) a. the emphasis on teams b. the outsourcing of jobs c. the shift away from a competency-based pay system d. the emphasis on individual contributions

a, b

Identify the aspects of the pay model that influence the impact of any internal structure on organization performance. (Select all that apply) a. management b. competitiveness c. contributions d. evaluations e. compliance

a, b, c

Which of the following are used to describe pay structure? (Select all that apply) a. the differentials in pay between different levels b. the number of levels c. the job classes and their corresponding class descriptions d. the criteria used to determine the differences in pay between different levels e. the changes in pay over time

a, b, d

What are the consequences of an internally aligned structure? (Select all that apply) a. increased experience b. reduced training c. reduced pay-related grievances d. increased turnover e. reduced pay-related work stoppages

a, c, e

Identify the strategic choices involved in tailoring a pay structure that is internally aligned. (Select all that apply) a. how specific the tailoring of the pay structure should be to the organization's design and work flow b. how involved employees should be in the development of the structure to ensure their acceptance of the structure c. how jobs should be evaluated to determine their relative worth d. how pay should be distributed throughout the levels in the structure

a, d

A study that used hockey teams to examine the influence of pay differences on performance found that: a. egalitarian structures helped improve the performance of mediocre players b. larger differentials based on performance generated positive sorting effects c. smaller differentials based on performance improved team performance d. hierarchical structures motivated players to perform well individually but reduced cooperation among the players

b

What did Matt Bloom discover about the effect of pay differences on performance based on eight years of data on major league baseball? a. mediocre team members performed better on a team with a hierarchical structure than on a team with an egalitarian structure b. teams with small differences in member salaries did better than those with large differentials c. individual performances improved in teams with a hierarchical structure, but the structure discouraged cooperative efforts d. egalitarian structures affected individual performance much more than team performance

b

Which of the following requirements should be met by an organization's pay structure? (Select all that apply) a. it should be similar to that of other organizations in the same industry b. organizations should incorporate their employees' individual needs and preferences regarding forms of payment into the structure c. it should be fair to employees d. employees should be able to view the way in which their work is linked to the work of others and the organization's objectives

c, d

A disadvantage of egalitarian pay structures is that they may result in a: a. first impression error b. criterion deficiency c. spillover error d. negative sorting effect

d

Identify a true statement about the "change-and-congeal" process of establishing pay structures. a. it does not yet support the maintenance of pay structures that may have been established at an earlier time for organizational and economic reasons b. it does not yet allow the acceptance of any distorted pay differences that may arise c. it does not yet allow the establishment of new norms around new pay structures that may emerge due to major economic upheavals d. it does not yet support the continuous changes occurring in the present economy

d

Identify a true statement about the Equal Pay Act and the Civil Rights Act: a. they require the ratio of CEO pay to that of the average or entry level worker to be reported b. they require differentials between levels to be small c. they require equal "living wages" across all U.S. cities d. they require "equal pay for equal work"

d

In which of the following situations should an organization's internal structure be redesigned? a. if the number of levels and the differentials between them are not approved by unions b. if the size of the differentials between the entry level in the structure and the highest level is large c. if it does not include any unique titles and is easy to imitate d. if it does not motivate employees to work toward achieving the organization's objectives

d

Which of the following is true of an organization that has many levels? a. it generally has a loosely ordered pay structure b. it can hire fewer talented employees than an organization with fewer levels c. it generally has large pay differences between levels d. it can offer more promotions than an organization with fewer levels

d

The pay differences among levels are referred to as _________.

differentials