Compensation 400 Test 2 CH 5-8

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The treadline for the pay structure XYZ corporation is y=36.593x+21910. The midpoint for a 500- point level jobs is approximately

$40,000

________________ theory is the most influential in explaining pay-level differences.

human capital

The pay policy associated with increased productivity is ___________

hybrid

The job evaluation method that most resembles a bookcase is

classification

Purposes of a survey may include all but ____________.

meeting Fair Labor Standards Act requirements

how well it aligns with the organization strategy

true

Which of the following jobs would most likely fall into a fuzzy market?

director of future vision services (West Publishing)

All of the following are advantages of a lead pay policy except _______________.

higher financial performance

Output associated with hiring an additional person, holding constant other production factors, is _______________.

the marginal product of labor

Skill-based is to transactional work as competencies are to ____________ work.

their superior's ratings of the manager's competencies

Vagueness and subjectivity can make competencies a "risky foundation for a pay system".

true

When an organization changes it's strategy and goals, job evaluation helps workers understand what is important in their work.

true

When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.

true

Employee B has been promoted by Pay grade 7 and her annual salary will be increased to $42,200 from $40,000. Within Pay Grade 7, her compensation is now at approximately the _____ percentile

87th

Research shows that the compensable factor skill accounts for ___ percent of the variance in job evaluation results.

90

Job evaluation is the process of determining the relative worth of jobs to create a job structure.

TRUE

Wages in labor-intensive industries are generally lower than in technology intensive industries

TRUE

Skill-based plans tend to work best in organizations using ________________ strategy.

cost-cutter

An advantage of broad bands is managers have to judge the abilities and performance of their subordinates less than in a traditional pay range and grade pay structure.

FALSE

According to the team effectiveness model outlined in the​ text, effective teams exhibit all of the following specific composition characteristics EXCEPT​ _____________________.

False

Research suggests that the most important factor affecting employee and management acceptance of a pay structure is the resulting pay structure itself.

False

Based upon a market survey it is determined that the Market Index (based upon the Companys salary structure in the attachments) for a fully competent pay Grade 5 employee (Employee C) is at 0.90. The company has decided not to adjust the pay structure relative to the market. However, the company would like to recognize the contribution of Employee C, by providing Employee C with a pay adjustment that would relate to a new salary resulting in a market index of 1.00. The recommended salary for Employee C should be approxamitely

$41,797

A new employee (Employee A) is hired in pay grade 4 at the 25th percentile, as is the standard practice for Acme Corporation. The Starting salary compa-ratio for Employee A will be

0.90

While it is common for organizations to have multiple pay structures, typically, the same approaches to creating the pay structures are used to facilitate understanding and acceptance.

False

Which of the following is true regarding the Employment Cost Index (ECI)?

It is an excellent source of competitor labor costs

Effort is one of the generic compensable factors used to define equal work in the Equal Pay Act.

True

Information available on O*Net is related to that found on Cybercomp but different in important ways.

True

Which of the following would not be used as a criterion pay structure?

any of the above may be used

The growing view of competencies is they are a set of _____________.

behaviors requiring no assumption

Common characteristics of the point method include all but _________________

benchmark factor classes

Answer the following three questions based upon the statement below. The effectiveness of the majority of the position's decisions can be measured within: __ 1. one day; __ 2. one week; __ 3. one month; __ 4. six months; __ 5. one year; __ 6. more than one year This example is most likely related to ____________

decision making

The definition of compa-ratio for a specific job is

employee salary divided by company pay grade midpoint

The definition of market index for a specific job is

employee salary divided by market average

The certification process in skill-based pay is analogous to ____________________.

factor degrees and weights

A frequency distribution must by constructed to calculate a median.

false

Both skill-based and competency-based plans have objective methods of certification.

false

External competitiveness is determined by examining the mix of pay compared to competitors.

false

If a compensable factor is present in less than 10% of jobs in a pay structure, the factor should always be excluded since it would have little effect on pay differences.

false

In a skill-based pay system, workers with greater seniority and experience receive higher pay.

false

In the classification method, total points for each job determines its position in the structure.

false

It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditional relevant markets.

false

Job evaluation is a compensation method developed by the federal government in the early 1920's.

false

Maturity of judgment and respect for others are examples of organization specific competencies.

false

Only jobs with the same number of job evaluation points should be in a pay grade.

false

Setting your company's base pay to competitors' total compensation risks setting pay too low.

false

Since business strategies may change often, compensable factors should rarely be added or deleted.

false

The "Pitfall of Pies" refers to the fact that base pay may change when the value of stock options change.

false

The most common measure of variation in pay surveys is the standard deviation.

false

There is very little evidence that market pay can bias job evaluation results against women's pay.

false

When total compensation costs are identical for the same job in different companies, the pay mix will be the same.

false

Financial data in pay surveys are used to ____________.

groups firms by size

Segmented labor supply means____________.

hiring from different sources and differential pay and benefits for the same work

The most important factor determining success of a skill-based pay plan is ______________________.

how well it aligns with the organization strategy

A "camper" is a person who ___________ in a skill-based pay system.

is an employee who does not want to rotate jobs

Which of the following is the correct sequence?

job description > job evaluation > job structure

Job structure is to ________ as pay structure is to pay-policy line.

job evaluation

Which of the following is not a generic compensable factor used to determine equal work in the Equal Pay Act?

knowledge

A small lawn care company has two mowers and four employees. If it hires another employee, how productive will productivity of the fifth employee compare to the current two employees?

less productive

A market pay line _________.

links a company's benchmark jobs with market rates paid by competitors

Research on efficiency wage theory shows ______________.

more unqualified workers apply

A survey conducted January, 2007 found the median pay effective January 1, 2007, for a clerk was $20,000 and the forecast rate of wage increases in the market for 2007 of 5% and another 5% for 2008. An employer choosing to follow a lead/lag policy for the 2008 plan year will need to ___________.

multiply the salary by 105 % and then by another 5 %

When Acme corporation elected not to change its overall salary structure relative to the market, it decided to practice a compensation philosophy which is

none of the above __ (lag policy)

Which of the following types of labor would most likely be recruited only locally?

office and clerical workers

Leadership, customer orientation and functional expertise are examples of which group of competencies?

organization specific

aging or tending

process of updating pay data to forecast the competitive rates for the market line

A small organization is most likely to use ___________ for job evaluation.

ranking

Employee D is currently a Pay Grade employee and her annual salary is $60,000. During the course of the year, a compensation market survey is conducted and it is determined by employee D is in a _____ job which decreases the likelihood that she will receive the standard 4% pay increase at the end of the year.

red-circled

The introduction of scanners, bar codes and self-server checkout has __________ the average pay of check out clerks since 1984.

reduced their pay by 8%

Paying jobs of different functions different rates within a pay band is called ____.

reference rates

Ranges are to controls as _________ are to guides.

reference rates

In ____________________ theory, pay is described as noncompensatory.

reservation wage

Among pay-mix alternatives, base pay is largest in ___________.

security or commitment

how well it aligns with the organization strategy

skill certification

Research shows that __________ size firms pay the least.

small employers (less than 100 employees)

market line

summarizes the distribution of going rates paid by competitors in the market

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 _______________.

survey leveling

Skill-based is to transactional work as competencies are to ____________ work.

tactic knowledge

For a pay survey, which was conducted in the third quarter of the year, to be valid effective January 1 of the following year, it is essential that

the data be aged to reflect projected January 1 market pay returns

Which of the following is not a characteristic of a benchmark job?

the pay level is typical of the industry

In which of the following would data from labor market competitors be given more weight than product market data?

the supply of labor is responsive to changes in pay

A potential disadvantage of skill-based pay is labor costs can be a source of competitive disadvantage.

true

A study of factors managers consider in setting pay budgets found that managers did not believe it was fair to have smaller budgets when unemployment is high.

true

According to efficiency-wage theory, paying higher wages than competitors lowers labor costs due to more efficient workers.

true

Complex work is likely best supported by person- versus job-based pay systems.

true

Core competencies focus on underlying knowledge, skills and behaviors that are the basis for success in the organization.

true

Identifying pay survey participants by company name is considered price fixing under the Sherman Act.

true

Introduction of new technologies that reduce skills required in an industry are likely to lead to lower pay.

true

One way that job evaluation supports workflow is to help set pay for new jobs.

true

The first decision for determining skill-based structures is the same as for job-based structures.

true

Though the accuracy of job matches is necessary for pay survey data to be useful, job matches are often subjective and not highly reliable.

true

The pay-mix component in which benefits is likely to be largest is ______________.

work-life balance


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