Comp Exam 2 study Ch 5, 6, 7, 8, 17
In the context of internal alignment, which of the following is the correct sequence?
Job description > Job evaluation > Job structure
_____ is the process of systematically determining the relative worth of jobs for the purpose of creating an organization's job structure.
Job evaluation
The _____ method of job evaluation is the most commonly used method in the United States and Europe.
Point
The _____ method of job evaluation uses compensable factors.
Point
The _____ minimizes the distortion of the central tendency caused by outliers. weighted mean mean mode median
median
Pay ranges: are flexible enough to deal with differences in quality but not with the productivity or value of these quality variations. usually lead to an increase in employee turnover. reflect the differences in performance or experience that an employer wishes to recognize with pay. cause employees to believe that their compensation cannot increase in the same job.
reflect the differences in performance or experience that an employer wishes to recognize with pay
The Davis-Bacon Act___.
requires that mechanics and laborers on public construction projects be paid the prevailing wage in an area
Among pay-mix alternatives, the percentage of base pay is highest in _____.
security or commitment policy
The first step in setting competitive pay and designing a pay structure is to _____. specify a pay-level policy conduct a job evaluation draw policy lines specify the relevant market
specify a pay-level policy
Which of the following statistical measures shows how similar or dissimilar the market rates are from each other? Weighted mean Mean Standard deviation Median
standard deviation
The Worker Economic Opportunity Act___.
states that income from most stock plans need not be included in calculating overtime pay
The highest rates of child labor are in___.
sub-Saharan Africa
Size of pay differentials between grades should _____. be based upon differentials in market surveys be approximately 15 percent support career movement through the pay structure be between 10 and 25 percent
support career movement through the pay structure
The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called _____. updating point factor adjustment lead/lag policy adjustment survey leveling
survey leveling
In today's organizations, in order to increase competitiveness and success, work is analyzed by separating transactional work from:
tacit work.
All of the following are important factors in defining a market for compensation purposes EXCEPT:
the ability to pay.
In most organizations, the responsibility for managing a pay survey lies with _____. top management the facility or plant manager outside consultants the compensation manager
the compensation manager
___ prohibits discrimination on the basis of race, color, religion, sex, or national origin.
Executive Order 11246
Career moves between bands are more common than within bands.
False
The final step in determining externally competitive pay levels and structures is the merging of internal and external pressure.
False
___is defined by the Department of Labor as the experience, training, education, and ability as measured by the performance requirements of a particular job.
Skill
A _____ approach controls costs by paying only as much as the work performed is worth, regardless of any greater skills the employee may possess.
job-based
Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.
productivity
_____ puts a lid on the maximum pay level an employer can set.
The product market
Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the:
labor costs.
___has produced more comparable-worth pay increases than any other approach.
Collective bargaining
Which of the following is a major decision in job evaluation?
Establishing the purpose of evaluation
It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditionally relevant markets.
False
Which of the following jobs would most likely fall into a fuzzy market? The position of English professor that was filled by a Ph.D. holder in English Language and Literature with five years of teaching experience The position of Sound Engineer that was filled by a graduate with a degree in audio engineering The position of Senior Director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience The position of Vice-President of a marketing firm that was filled by a marketing manager with 15 years of experience in the marketing field
The position of Senior Director of Future Vision Services that was filed by a software engineer with e-commerce, marketing, and theater experience
A survey conducted in January 2013 found that the median pay effective January 1, 2013, for a clerk was $22,000 and that the forecast rate of wage increases in the market for 2013 was 5 percent and another 5 percent for 2014. An employer choosing to follow a lead strategy of 4 percent above the market for the plan year will need to _____. multiply the salary by 105 percent and then by 109 percent increase the clerk salary by $2,200 multiply the salary by 109 percent multiply the salary by 114 percent
multiply the salary by 105 percent then by 109 percent
Which of the following is the reason why skill-based pay plans have maximum flexibility?
They pay employees for the highest level of skill they have achieved regardless of the work they perform.
Market pricers emphasize any unique or difficult-to-imitate aspects of an organization's pay structure.
False
Pay ranges for top-level management positions are smaller than the pay ranges for entry-level managerial positions.
False
Who among the following has violated the Fair Labor Standards Act of 1938?
Jeremy, who employs his 16-year-old cousin in his meat-packing plant
Lisa is a manager at Trell Inc. When she hires her employees, she focuses on finding the right job for the right person. Which of the following pay plans is her employer most likely using?
Job-based pay plan
Which of the following is an advantage of skill-based pay plans?
They aid in deploying workers in a way that better matches the work flow.
Which of the following is most likely to be a disadvantage of skill-based pay plans?
They are expensive in the long run as the majority of employees become certified at the highest pay levels.
Which of the following statements is true about market pricers? They align pay structures with the business strategy. Their pay structures are unique and difficult to imitate. They assume that little value is added through internal alignment. They emphasize pay structures based on unique technology or the way work is organized.
They assume that little value is added through internal alignment
Which of the following statements is true regarding broad bands? They remove limits on total salary budgets. They support recognition via titles or career progression. They foster cross-functional growth. They increase the hierarchical nature of organizations.
They foster cross-functional growth
Most studies report that when different people rank-order jobs, the correlations are between:
.85 and .96
Which of the following is the underlying assumption in the assessment of job content?
Content has intrinsic value outside external market.
Most factor scales have _____ degrees.
4-8
TreeWind Inc. is a bookstore that uses skill and responsibility as its compensable factors. It assigns 20 percent weight to responsibility and 80 percent weight to skill. If the responsibility factor scores a 60 after multiplying the subfactors with their corresponding weights, and if the skill factor has two subfactors that are rated as 4 and 5, what is the total weightage given to the job?
420
Pay ranges for office and production work commonly range between _____ and _____ percent. 5; 15 15; 30 30; 40 40; 60
5; 15
Research shows that skills, one of the compensable factors, accounts for _____ percent or more of the variance in job evaluation results.
90
Which of the following is NOT true of the usage of multiple plans versus single job evaluation plans?
A single universal plan is acceptable to employees if the work covered is highly diverse.
Which of the following methods requires evaluators to agree on which jobs are the most and least valuable, then the next most and least valued, and so on until all the jobs have been ordered?
Alternation-ranking method
Which of the following is NOT one of the steps in establishing a comparable-worth pay plan?
Base the wage-to-job evaluation point ratio on the wages paid for female-dominated jobs.
Mark and Steve work as crane operators in a construction company called Asai Corp. Asai uses a skill-based plan that establishes single flat rates for each skill level. Mark performs better than Steve even though Steve has more seniority. Which of the following statements is most likely to be true in this scenario? Mark will be paid more than Steve as his performance is higher. Steve will be paid more than Mark as he has more seniority. Both Mark and Steve will be paid the same amount. Steve will be given more incentives than Mark.
Both Mark and Steve will be paid the same amount
The _____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data. Chamber of Commerce Bureau of Labor Statistics Compensation Association Department of Economics
Bureau of Labor Statistics
Who among the following is most likely to be working for a company that uses a competency-based pay plan?
Carlos, who focuses on obtaining certifications in her field to get a pay increase
A job description is compared to class descriptions in the _____ of job evaluation.
Classification
The job evaluation method that most resembles a bookcase with many shelves is:
Classification.
_____ are more likely to conduct job evaluations of senior management jobs.
Compensation managers
_____ are the observable behaviors that indicate the level of competency.
Competency indicators
_____ translate each core competency into action.
Competency sets
Which of the following groups can qualify for the exemptions under the Fair Labor Standards Act of 1938?
Computer employees
The second major decision in pay-level determination is to _____. specify relevant markets define the purpose of a survey design and conduct a survey select product and labor market competitors
Define the purpose of the survey
In which of the following types of cases is the focus on the discriminatory consequences rather than the intent to discriminate?
Disparate impact
Wages tend to be the lowest in which of the following industries?
Education and health care
Which of the following statements regarding wage differences in industries and firms is NOT true?
Female employment is more heavily concentrated in large firms.
Which of the following is an example of a bourse market?
Flatcake, a website that allows buyers to negotiate the prices with the sellers of handmade goods
The roots of job-based pay structure is traced to ____.
Fredrick Taylor
Gramhold Inc., a pharmaceutical company, reduces its 10 salary grades to just three broad bands. Which of the following statements is most likely to be true in this case? Gramhold will face difficulty in defining job responsibilities broadly with the new structure. Gramhold will find that the new structure hinders cross-functional growth. Gramhold will experience career moves within bands more than career moves between bands. Gramhold will offer recognition via titles rather than through cross-functional experience and lateral progression.
Gramhold will experience career moves within bands more than career moves between bands
The most widely used point method job evaluation is the:
Hay plan.
Which of the following is true regarding the Employment Cost Index (ECI)? It is published by the Department of Commerce. It is an excellent source of competitor labor costs. It measures annual changes in employer compensation costs. It allows comparison of changes in its average costs to an all-industry average.
It allows comparison of changes in its average costs to an all-industry average
Which of the following is a disadvantage of the point method?
It can be bureaucratic and rule-bound
Which of the following statements is true of a job evaluation plan?
It is developed using benchmark jobs and then applied to nonbenchmark jobs.
Which of the following is NOT a provision of the Fair Labor Standards Act of 1938?
It requires that employers provide 15 weeks of medical leave to employees.
Who among the following is examining the validity of a job evaluation?
Keira, who is measuring the degree to which the job evaluation plan matches an agreed-upon pay structure for benchmark jobs
Under the ___, employers can be liable for current pay differences that are a result of discrimination that occurred many years earlier.
Lilly Ledbetter Fair Pay Act
MNTX University requires that all its female professors score higher than the male professors in their appraisal rating to qualify for a pay bonus as there are more female professors than male professors in the university. Which of the following statements is true in this case?
MNTX is liable for disparate treatment of women.
Meltrop Corp. employs two store clerks, Sam and Stella. Stella sues Meltrop claiming unequal pay as she earns $500 a week less than Sam does despite doing the same work as Sam. Which of the following is most likely to be the result of the litigation?
Meltrop will lose the litigation as it has committed valuation discrimination.
The agency that conducts reviews and seeks remedies where insufficient compliance to Executive Order 11256 is found is the___.
OFCCP
The___ specifies the number of breaks that must be provided in an eight-hour workday.
Occupational Safety and Health Administration legislation
Leadership, customer orientation, and functional expertise are examples of which group of competencies?
Organization specific
_____ refers to the average of the array of rates inside an organization.
Pay level
Which of the following is an example of the demand side of labor?
Pay level offered by an employer
Which of the following is often used to set pay ranges? Median Weighted mean Quartiles and percentiles Standard deviation
Quartiles and percentiles
Under the___ Act, executives cannot retain bonuses or profits from selling company stock if they mislead the public regarding their company's financial condition.
Sarbanes-Oxley
Which of the following is NOT true of the relationship between employer size and its ability to pay?
Talented individuals have a lower marginal value in a larger organization.
The scheme used in the text for classifying competencies consists of three groups. Which of the following is NOT one of them?
Team dynamics
Which of the following includes a provision that requires public companies to set policies to allow executive compensation to be taken back if it was based on accurate financial statements that did not comply with accounting standards?
The Dodd-Frank Wall Street Reform and Consumer Protection Act
Which of the following regarding child labor is NOT true?
The ILO finds that child labor is increasing on a global basis
The most common pay policy is a(n) _____.
match policy
Susan works in a sterile laboratory that requires her to scrub and put on protective clothing. Which of the following acts determines whether she should be paid for this time?
The Portal-to-Portal Act
_____ is a crucial factor that affects the perception of fairness of a skill-based plan.
The design of the certification process
Which of the following is a test must be met to qualify for the administrative employee exemption?
The employee must be compensated on a salary or fee basis at a rate no less than $455 per week.
If Company A raises its pay rate by one dollar per hour to hire additional workers and competitors immediately match the increase, what will be the most likely result?
The labor costs for Company A will increase, but it will be unable to hire additional workers.
_____ is the additional output associated with the employment of one additional person, with other production factors held constant.
The marginal product of labor
Which of the following is NOT a characteristic of a benchmark job?
The pay level is the best in the industry.
A small lawn care company has two mowers and four employees. If it hires another employee and the factors of production remain the same, how will the productivity of the fifth employee compare to that of the current four employees?
The productivity will reduce.
_____ is an example of a bourse.
The total compensation for a top athlete
Research shows that _____ factor(s) account(s) for 98 to 99 percent of the variance in job evaluation plans.
Three
Which of the following is NOT a reason a company might pay base wages above market?
To increase turnover rates
_____ measures reveal competitors' use of performance-based cash payments. Base cash pay Short-term incentive pay Total cash Long-term incentive pay
Total cash
Which of the following sentences regarding skill-based structure is FALSE?
Training costs are the lowest in comparison to all other pay plans.
A pay range exists when at least two employees in the same job are paid different rates. True
True
A pure market pricing strategy carried to its extreme tends to ignore internal alignment completely.
True
Identifying pay survey participants by company name is considered price fixing under the Sherman Act.
True
If the purpose of a survey is to price the entire structure of a job, then benchmark jobs can be selected to include the entire job structure.
True
In cases where the content of an organization's jobs does not sufficiently match that of the jobs in the salary survey, an effort can be made to quantify the difference via benchmark conversion.
True
Many employers use market surveys to validate their own job evaluation results.
True
Regression smoothes large amounts of data while minimizing variations.
True
Skill-based plans establish single flat rates for each skill level regardless of performance or seniority.
True
Smaller pay ranges may reduce the opportunities for promotion.
True
Turnover and organizational revenues are examples of survey data collected to gather competitive intelligence.
True
When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.
True
Which of the following reasons makes competencies a risky foundation for a pay system?
Vagueness and subjectivity
The___ Act extends the prevailing-wage concept to manufacturers or suppliers of goods for government contracts.
Walsh-Healey Public Contracts
Which of the following is an example of a company that uses broad banding? A company in which there is more lateral movement with no pay adjustment than promotions A company that has pay guidelines and controls designed right into the pay system A company that has unlimited total salary budget A company that pays all its employees the same salary
a company in which there is more lateral movement with no pay adjustment than promotions
An early study of the effects of the living wage law in Los Angeles found all of the following EXCEPT that___.
a higher proportion of new hires were female
All of the following are examples of potential anomalies EXCEPT _____. outliers a large variation in base pay for a job at one company one company dominating the results a large variation in average base pay for a job across companies
a large variation in average base pay for a job across companies
Denial of jobs, promotions, or training opportunities to qualified women or minorities are examples of___.
access discrimination
Because employers are raising employee pay at various times during the year, survey data must be updated using a process called _____ or _____. aging; trending leading; smoothing matching; leveling gaining; smoothing
aging; trending
MXB Inc. is a carwash service provider. It orders the jobs in the company on the basis of the least important job to the most important job. In this case, MXB is most likely using a(n):
alternation-ranking method.
Common characteristics of the point method include all of the following EXCEPT:
benchmark factor classes.
Employees in a multiskill system earn pay increases:
by acquiring new knowledge.
A common first step in interpreting survey data is to _____. check for the accuracy of job matches seek out non-responders check for anomalies remove the top- and bottom-paying companies
check for the accuracy of job matches
A major decision in job evaluation is to:
choose among alternative approaches.
Which of the following is least likely to be used in establishing skill-based certification methods
college degree
In the context of the point method of job evaluation, _____ are those characteristics in the work that an organization values; that help it pursue its strategy and achieve its objectives.
compensable factors
The process of identifying competencies in person-based structures resembles identifying _____ as part of job evaluation in job-based structures.
compensable factors
Skill-based plans tend to work best in organizations using a(n) _____ strategy.
cost-cutter
Regarding pay differences for different jobs,___.
courts continue to uphold the use of market data to justify differences
The final major decision in pay-level determination is to _____. interpret and apply the results of the survey obtain top-management acceptance of the final decisions design grades and ranges or bands draw policy lines
design pay grades and ranges or bands
In the point method, the second step in designing a plan is to:
determine the compensable factors.
Reliability of job evaluation techniques is measured by:
determining if different evaluators produce the same results.
Compensable factors, skill blocks, and competency sets are used for:
determining what to value.
The final step in designing a point plan involves _____.
developing online software support
A camper is an employee who _____ in a skill-based pay system.
does not want to rotate jobs
Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that:
employers seek to maximize profits.
The executive branch of the federal government___.
enforces laws through agencies and its other bodies
Competencies are derived from the _____ beliefs about the organization and its strategic intent.
executive leadership's
The exchange value of a job is its _____.
external market value
The certification processes in skill-based pay is analogous to the _____ in a job-based analysis.
factor degrees and weights
The _____ theory is the most influential in explaining pay-level differences.
human capital
The determination of pay discrimination on jobs of dissimilar content requires a standard that allows jobs of dissimilar content to be declared comparable and that allows pay differences for jobs that are not comparable. This standard is___.
job evaluation
Managers whose employers use _____ plans focus on placing the right people in the right job.
job-based
The pay-level policy that is most likely to reduce pay dissatisfaction is a(n) _____.
lead policy
Aging the market data to a point halfway through a plan year is called _____. leveling updating lead/lag matching
lead/lag
A market pay line _____. reflects an organization's pay scale based on the ratings given by its employees links a company's benchmark jobs with market rates paid by competitors provides an accurate prediction of an organization's entry level pay rates compares an organization's minimum and maxi mum pay rates for each skill level
links a company's benchmark jobs with market rates paid by competitors
A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour. Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour. The company is using the _____ method of job matching. benchmark-job low-high survey leveling benchmark conversion
low-high
For organizations using a skill-competency-based pay system or generic job descriptions, the best approach for pricing jobs is _____. benchmark-job approach low-high approach survey leveling benchmark conversion
low-high approach
The majority of applications of skill-based pay have been in:
manufacturing industries.
In a hiring situation, considering that other potential costs will not change in the short run, the level of demand that maximizes profits is that level at which the _____ of the last hire is equal to the _____ for that hire.
marginal revenue; wage rate
A study of 400 compensation specialists revealed that:
market data had a substantially larger effect on pay decisions than job evaluation data.
According to a WorldatWork survey, the primary method of job evaluation is _____.
market pricing
The _____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment. job structure broad banding reference rate market pricing
market pricing
The market pay rate is the:
point at which supply and demand lines cross.
When a statistical process is used to duplicate an existing pay structure, it is called:
policy capturing.
Routine work is also termed _____.
transactional work
The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.
unemployment is low
A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.
variable pay
The ADEA ___.
was amended in 1990 to include the Older Workers Benefit Protection Act
Prevailing-wage laws___.
were passed in response to conditions on projects such as the construction of the Hoover Dam during the Depression
The pay-mix policy alternative in which the percentage of benefits is likely to be the highest is known as _____.
work/life balance policy
In the regression equation, y = a + bx, job evaluation points are denoted by _____. a b x y
x