Employee Comp Auburn Test 2 Chapter 5-8

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Studies have shown that the majority of firms that use​ person-focused pay programs are in the manufacturing industry.​ Typically, these firms employ between​ ________.

150 and​ 2,000 people and have been around for 10 years

Studies report that many of the companies using​ person-focused pay systems have workforces of about​ _______ employees.

150-2000

Which statement about the stairstep model is​ FALSE?

A company can only have one​ stair-step model.

Which of the following is an example of a nonrecurring merit​ increase?

A plant manager receives a lump sum bonus because his store maintained a perfect safety record.

In the​ job-point accrual​ method, why do companies limit the number of jobs that an employee is allowed to​ learn?

An employee becomes a​ "jack of all trades and master of​ none."

​Generally, Western European cultures are considered much better than the American culture in providing the workforce with​ ________.

Applied vocational education

Which of the following is NOT a step that compensation professionals use to begin plans for setting the merit pay​ grid?

Asking managers to provide names of all those receiving merit pay increases

Which fixed cost goes up considerably for companies when it comes to employee pay and narrowly defined job​ descriptions?

Benefits

What is the potential impact of broadbanding on organizational​ structure?

Broadbanding creates a flatter organization.

How does the​ job-point accrual method create organizational flexibility and promote company​ goals?

By assigning more points to those skills that are important to the company

What is critical to developing an effective compensation​ survey?

Clarifying what companies hope to gain from the survey

What can sometimes happen when companies follow the market lag policy as their choice for compensation​ policy?

Companies have difficulty attracting quality candidates.

What determines the need to use different job evaluation​ techniques?

Compensable factors

​________ are the salient job characteristics by which companies establish pay rates.

Compensable factors

Which of the following refers to the allocation of monetary resources to fund pay​ structures?

Compensation budget

​________ are blueprints that describe the allocation of monetary resources.

Compensation budgets

​A(n) ________ refers to an​ individual's capability to orchestrate and apply combinations of knowledge and skills consistently over time to perform work successfully in required work situations.

Compentasy

What is the end result of a reliable job analysis​ method?

Consistent results under similar conditions

Which of the following is NOT a consideration when moving from​ job-based pay to​ skill-based pay?

Cost of training

Custom surveys are superior to published surveys when determining​ competitors' pay mix. What is the reason for​ this?

Custom surveys can be tailored to the​ company's needs and selected companies can be studied.

Which is the first step in constructing a pay​ structure?

Deciding on the number of pay structures

Which of the following is NOT a step in the job analysis​ process?

Determining a plan for the pay structure

Why do employees who participate in​ person-focused pay systems exhibit greater​ productivity?

Employees know entire production​ processes, which can be valuable.

What implication does​ person-focused pay have for​ employees?

Employees should stop considering pay an entitlement.

Why are employers able to have leaner staffing in a​ person-focused pay​ system?

Employers using​ person-focused pay systems develop multiskilled employees.

In a​ person-focused pay​ system, which of the following would most likely NOT be​ rewarded?

Exhibiting successful job performance

Based on what considerations would HR officials and the chief financial officer of a company adjust the wages in the company equal to the market pay​ rate?

Financial resources and the strategic value of the jobs

According to the U.S. Department of Labor Competency​ Model, academic competencies are considered​ ________ competencies.

Foundational

When conducting a strategic analysis for designing a​ market-competitive pay​ system, which of the following would be considered an internal​ factor?

Functional capabilities of the firm

Which of the following is NOT a method for collecting job analysis​ information?

Gathering customer input

What is a potential disadvantage of​ broadbanding?

Higher compensation costs

Who leads the job analysis​ process?

Human resource specialists

​________ pay is based on the attainment of goals that have been communicated in advance.

Incentive

Technological innovation has been an important force behind​ person-focused pay. Employers​ today, as a​ result, not only expect technical​ skills, but also​ ________ from work teams.

Interpersonal skills

The chief advantage to an employer who uses a​ job-based pay system is that​ ________.

It is an easy pay system to administer

Why has the term competency become increasingly important in the world of​ HR?

It is because of the changing nature of jobs.

What is one of the outcomes of performing a complete job analysis when it comes to establishing an internally consistent pay​ system?

It reduces the​ company's ability to be flexible when responding to​ competitors' pay​ rates, since there are structured job descriptions and job structures.

What does the R2 statistic tell the compensation​ professional?

It tells us how well the variation in the​ company's valuation of jobs based on job evaluation points explains the variation in market pay rates from the compensation survey.

If the slope of the market pay line was​ $30, what would it mean for a job that has 301 job evaluation points instead of 300 job evaluation​ points?

It would mean that the job that has 301 evaluation points would be worth​ $30 more.

The​ stair-step model is a type of​ person-focused pay. What do the steps represent in the​ stair-step model?

Job Levels

Which term refers to the detailed process of​ gathering, documenting, and analyzing information in order to describe​ jobs?

Job analysis

Which two processes are used by compensation specialists to create internally consistent job​ structures?

Job analysis followed by job evaluation

Which of the following refers to the actual activities that an employee must perform on the​ job?

Job content

What is the fundamental principle on which internally consistent compensation systems are​ based?

Jobs that require higher​ qualifications, responsibilities, and complex job duties should pay more than those that do not have the same requirements.

Which of the following refers to a set of skills necessary to perform a specific​ job?

Knowledge blocks

Which of the following factors is NOT likely to be considered when setting the minimum amount for a merit pay​ increase?

Legality

What major trend are companies following by using the broadbanding concept to consolidate existing pay grades and ranges into fewer pay grades and wider​ ranges?

Making the organizations flatter

Many of the firms using​ person-focused pay systems operate in which type of​ industry?

Manufacturing

Following which type of pay level policy would enable a company to follow a​ lowest-cost strategy?

Market lag

When a company pursues a differentiation​ strategy, it is best to follow a market lead strategy as its choice of compensation policy. Why is that​ so?

Market lead policy helps companies pursue their competitive strategies.

Which of the following BEST describes worker​ requirements?

Minimum qualifications and the​ knowledge, skills, and abilities needed to perform a job

Which of the following​ tend(s) to create hierarchy and social distance within a​ company?

Narrow pay grades

Which of the following is an example of pay​ compression?

New information system employees receive the same salary package as that of existing employees in the same position with 3 years of seniority in the company.

​____________ policies refer to the combination of core compensation and employee benefits components that make up an​ employee's total compensation package.

Pay mix

Which of the following assigns different pay rates for jobs of unequal​ worth?

Pay structures

The type of pay plan that rewards employees for acquiring​ job-related competencies,​ knowledge, or skills rather than demonstrating successful job performance is known as​ ________.

Person focused pay

Which of the following evaluation methods is most popular because it gives compensation professionals better control over balancing internal and market​ considerations.?

Point method

Of the following​ phrases, which would apply best to​ person-focused pay?

Potential job performance of an employee to make positive job contributions

Which of the following is the correct equation that models the prediction of the market pay​ line?

Predicted salary equals the Y intercept plus the slope multiplied by job evaluation points.

Many companies use market match or market lead policies for which types of​ employees?

Professional and managerial employees

Which statement about compensation surveys is​ FALSE?

Published compensation surveys are mostly inaccurate.

What statistical method makes it possible for compensation specialists to set pay rates for a set of jobs that are consistent with the pay rates in the​ market?

Regression analysis

Which of the following best helps compensation professionals establish market pay​ rates?

Regression analysis

Which of the following BEST describes what a​ well-designed pay structure should​ promote?

Retaining valued employees

Juan works as a salesperson for a major farming equipment manufacturer.​ Usually, there is considerable lead time between when he approaches a prospective client and when the sale is finalized. Juan typically generates demand for the product and another member of the sales team closes the sale. What type of commission would be most appropriate for​ Juan?

Salary only plan

​Sheila's employer offers a​ person-focused pay program.​ , which has led Sheila to acquire multiple skills and be flexible in the types of jobs she can handle.​ Presently, Sheila's company is facing slow sales. What can Sheila more than likely​ expect?

Sheila should expect to keep her job because of her flexibility.

In a skill blocks model of a​ person-focused pay​ program, ________.

Skills do not nessassry build on each other

Which type of courses would a company offer​ in-house as opposed to asking employees to take at an educational​ institution?

Specialized course

Of the following​ organizations, which one would be most likely to utilize a​ person-focused pay​ program?

TV manufacter

What is the key advantage to an employee who works for an employer that awards​ job-based pay as opposed to an employer that awards​ person-focused pay?

The employee is rewarded for job performance.

Which of the following describes midpoint pay​ value?

The halfway mark on the pay range of minimum and maximum rates

When competition demands​ it, employees have to engage in duties that are beyond the scope of their jobs. What does that do to their​ jobs?

Their jobs become more fluid and equity is hard to assess.

As jobs become more​ automated, what are many employers doing as far as workers are​ concerned?

They are combining jobs and giving broader responsibilities to workers.

Using the point​ method, how do compensation professionals determine the overall value of a​ job?

They assign numerical values to compensable factors and add up the total points.

At a​ minimum, what do all​ employees, regardless of their​ function, have in common when it comes to​ compensation?

They wish to be compensated and valued for their efforts.

Which of the following statements regarding compensation plans and competitive strategy is​ TRUE?

The​ company's choice of strategy should play a role in the choice of compensation plan.

One of the reasons why employees prefer​ person-focused pay systems is because such systems provide job security. How does this​ occur?

The​ person-focused system creates workers who can perform a variety of jobs.

Why do compensation professionals use regression​ analysis?

To determine pay rates that are comparable to pay rates in the market

What is the primary reason that compensation professionals design compensation​ policies?

To promote competitive advantage

Skills assessment is a consideration when going from​ job-based pay to​ person-focused pay. Which of the following questions is NOT relevant to skills​ assessment?

What input should customers provide in the skills assessment​ process?

Narrowly defined jobs lead to​ ________.

bureaucracies

When compensation professionals systematically study the differences in the relative worth among a set of jobs to establish pay​ levels, they are​ ________.

conducting a job evaluation

When a company thoroughly examines its external market context and its internal​ factors, it​ is, in​ essence, ________.

conducting a strategic analysis

One of the limitations of an internally consistent compensation system is that it​ ________.

creates a bureaucratic job structure

A committee created to​ design, oversee, and evaluate jobs would include representatives from all of the following groups EXCEPT​ ________.

customers

Skill blocks are sets of skills​ (knowledge) necessary to perform a job. Before grouping skills into​ blocks, a company needs to​ ________ and​ ________.

develop job​ descriptions; organize jobs into job families

In recent​ years, ________ have become part of compensation surveys because they are key elements of​ market-competitive pay systems.

employee benefits

Each of the following is a criterion that should be used to determine whether to develop and deliver training​ in-house or to​ outsource, EXCEPT​ ________.

employee preference

Limited case studies on pay systems suggest that​ ________.

employees and employers enjoy the benefits of​ person-focused pay systems

Compensation professionals use job evaluation to​ ________.

establish pay differentials

When companies use a​ market-based job evaluation​ technique, they are trying to​ ________.

establish wages that are neither too high nor too low relative to the market

The first step in conducting a pointmethod valuation is to select benchmark jobs. A benchmark job can be defined as a job​ ________.

found outside the company that is used as a reference point to judge jobs within the company

​Well-designed pay systems generally​ ________.

help companies pursue competitive strategies

The difference between job analysis and job evaluation is that​ ________.

job analysis is​ descriptive, whereas job evaluation reflects​ management's priorities for different positions

Equity assessments become more difficult when​ ________.

job definitions become more fluid

When creating knowledge​ blocks, which of the following should be considered blueprints for the creation of a​ person-focused system?

job descriptions

When compensation professionals create internally consistent job​ structures, they should conduct a​ ________ and then a​ ________.

job​ analysis; job evaluation

What is the most likely outcome of firms that increase their use of​ robotics?

losing some jobs​ (ones focused on routine​ tasks)

Greater use of technology means that workers​ ________.

need to be autonomous and work in a​ team-based environment

Companies emphasize some elements relative to others such as merit pay and​ short-term incentives focused on individual performance in formulating​ ____________.

pay mix

One of the key advantages of​ person-focused pay for employers is that employers can​ ________.

rely on leaner staffing

All of the following would be considered part of the physical environment of a job EXCEPT​ ________.

reporting relationships

All of the following are activities that create​ market-competitive pay systems EXCEPT​ ________.

surveying employees and supervisors in the company

Those companies that follow a market match policy when designing compensation policies​ ________.

take a safe approach

A major limitation of the​ two-tiered pay system is that​ ________.

the company has difficulty recruiting and retaining new hires who are brought in at a lower pay scale

When an​ employer's total compensation is analyzed to determine benefits and core​ compensation, the result is called​ ________.

the pay mix

A key piece of information that compensation specialists hope to gain from compensation surveys is about​ ________.

the pay practices of their competitors and employee preferences for different forms of compensation

When there is a conflict between the market pay rate and what is being paid for jobs within the​ firm, compensation professionals are most likely to refer to​ ________.

top executives at the firm

A​ two-tiered wage system is most likely to exist in​ a(n) ________.

unionized airline

​Person-focused pay systems​ ________.

use market basis for skill valuation

All of the following contribute to the cost of developing custom surveys EXCEPT​ ________.

using BLS data to enhance the survey

Compensation surveys generally focus on​ competitors' ________.

wage and salary practices

Which of the following awards sales professionals with subsistence base pay yet provides them with a strong incentive to​ excel?

​Commission-plus-draw plan

Which form of commission allows the sales professional to earn a higher rate of commission for all sales made in a given period of time if the sales level exceeds a predetermined​ level?

​Multiple-tiered commissions

What is the key advantage associated with nonrecurring merit pay​ increases?

​Non-recurring merit pay increases strengthen the​ pay-for-performance link and contain costs for the company.

Which is a TRUE statement regarding​ person-focused pay​ programs?

​Person-focused pay programs apply in a more limited context than do​ job-focused pay programs.

Which of the following compensation plans has the disadvantage of not linking pay to​ performance?

​Salary-only plan

Which type of plan spreads the risk of selling between the company and its sales​ professionals?

​Salary-plus-commission

Which of the following refers to pay received mostly by those who do physical​ work?

​Skill-based pay

Which pay structure has the disadvantage of hurting a​ company's ability to recruit and retain highly skilled​ employees?

​Two-tier pay structure


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