HR MGT Exam Review: Ch. 11

Which of the following are advantages of paying employee wages above the market average?

It attracts skilled workers. It encourages increased productivity. It helps retain top talent. It generates increased job satisfaction.

In a software company that caters to the federal government it would be most appropriate for which of the following positions to be paid at the highest percentile?

VP of software engineering

Which of the following problems can result from a job-based pay structure?

a growing bureaucracy decreased lateral job movement top-down decision making is reinforced

An administrative procedure used to measure internal job worth is called _____.

a job evaluation

Which factors can influence a company's ability to adhere to Equal Employment Opportunity (EEO) pay regulations?

a shifting labor market changing demographics of the workforce

Employee compensation requires scrutiny because it is typically ______.

a significant organizational cost

Employees typically view their compensation in terms of which of the following?

as it relates to the pay of their colleagues as a sign of status and success as a way of evaluating their relationship with the organization

The process by which an organization compares its own practices to those of the competition is called ____.

benchmarking

An organization that effectively competes in the product market is able to sell its goods and services at a quantity price that will _____.

bring a sufficient return on investment

In addition to salary, what is a major component of a typical CEO compensation package?

a stock plan

Most nonexempt employees are paid ______.

an hourly rate

Which of the following are provisions of the Fair Labor Standards Act (FLSA) as they relate to employee pay?

calls for time-and-a-half pay for hours exceeding 40 hours a week sets a minimum wage for jobs provides for a training wage

An index that measures the correspondence between actual pay and a company's intended pay policy is called the ______.

compa-ratio

The undervaluation of women's jobs has been combated through the policy of ______.

comparable worth

The characteristics of jobs that an organization values and chooses to pay are called ______.

compensable factors

Equal Employment Opportunity (EEO) compensation issues will likely remain in the spotlight because of the _____.

decrease of white males in the workforce

Equal Employment Opportunity (EEO) compensation issues will likely remain in the spotlight because of the ______.

decrease of white males in the workforce

The concept of reducing the number of job levels within an organization in order to gain flexibility in job assignments is called ______.

delayering

In communicating pay cuts to employees, which of the following strategies are effective?

demonstrating significant remorse for implementing the pay cuts providing detailed reasons why the pay cuts are necessary

In addition to labor costs, the proximity to which of the following can influence where a company locates its production facilities?

design group to manufacturing plant customers suppliers

Which of the following are considered part of an employee's total compensation?

paid vacation stock options salary

Another term for comparable worth is ______.

pay equity

A mathematical expression that describes the relationship between a job's pay and its job evaluation points is called the _____.

pay policy line

A mathematical expression that describes the relationship between a job's pay and its job evaluation points is called the ______.

pay policy line

Salary level decisions can be broken into which of the following two areas?

pay structure individual pay

Benchmarking against product market and labor market competitors is typically accomplished through the use of ______.

pay surveys

Which of the following aspects of an organization do executives typically influence substantially?

performance tone culture

One of the most important factors that influences the price of a good or service is the cost of ______, which includes labor costs.

production

Which of the following are ways employees attempt to restore equity when faced with perceived inequity in the workplace?

quitting voluntarily being less productive while at work stealing goods from their employer

The distance between the maximum and minimum pay within a pay grade is known as the _____ spread.

range

What do companies use to recognize differences in employee performance, seniority, and training in setting individual pay?

rate ranges

According to some critics, when it comes to pay, Equal Employment Opportunity (EEO) regulations obstruct ______.

market forces

The approach that places the greatest emphasis on external comparisons is achieved by basing pay on ______.

market surveys

When any change in existing pay practices is set to take place, the intimate involvement of line managers is ______.

necessary

To reduce labor costs, some companies are sending jobs overseas, a concept called ______.

offshoring

Which of the following kinds of occupations are typically exempt from Fair Labor Standards Act (FLSA) coverage?

outside salespeople professional positions executive positions

One important advantage of skill-based pay is the potential for ______.

increased worker flexibility

A company may pay a training wage to an employee under the age of 20 for up to _____ days.

90

Which of the following statements about resolving conflicts between market pay surveys and job evaluation is true?

An organization must weigh its objectives and select the most appropriate strategy

According to equity theory, there will be no change in employees' attitudes or behavior when which of the following is true?

Employees perceive their work situation as equitable.

True or false: Market forces provide the most inefficient means of pricing and allocating people to jobs.

False

In which of the following ways does pay affect an organization's strategic goals?

It influences the kind of employees attracted to the organization. It can help align employees' interests with those of the organization. It has an impact on employees' attitudes and behaviors.

MOST CHALLENGING CONCEPTS:

Recall market survey data. Describe the concept of delayering as it relates to pay structure.

Sophia is an American manager who works at a company branch in Seoul. Her salary is determined by American standards, which are higher than South Korea's. Which of the following statements are true?

Sophia is paid a higher salary due to labor market conditions in the United States and Europe. Sophia's higher salary may create a sense of inequity among her Korean peers.

Which of the following is generally true of relative hourly labor costs?

They are unstable over time.

True or false: Employees in the same job may have different pay rates based on performance, seniority, and training.

True

The concept that wages affect worker productivity is called the ______ theory.

efficiency wage

Skill-based pay structures encourage leaner staff levels because ______.

employee turnover or absenteeism can be covered by current multiskilled workers

By paying higher labor costs than its competitors, a company can do which of the following?

encourage desired employee behaviors retain valued employees draw better workers to produce higher-quality products than competitors

The concept that suggests people evaluate the fairness of their situations by comparing them with others is called _____.

equity theory

When thinking about the consequences of pay decisions, managers should keep in mind that employees often ______.

evaluate their pay relative to other employees

Which of the following make up a significant portion of labor costs?

health insurance wages and bonuses

Miguel is vice president of marketing at XYZ Corp. He is disappointed to learn that the vice president of sales at XYZ earns 20 percent more than he does despite the two positions having similar levels of responsibility and impact. In this example, what method is Miguel using to evaluate the fairness of his pay?

internal comparison

One indicator of a country's productivity is ______.

its gross domestic product (GDP) per person

The relative pay of jobs in an organization is known as the organization's ______.

job structure

What is the term for the relative worth of jobs in an organization based on internal comparisons?

job structure

The most widely used metric for defining pay structures is by ______.

jobs and associated responsibilities

In developing a pay structure, pay survey data and job evaluation data are commonly available for _____.

key jobs

A compa-ratio less than 1.00 suggests that actual pay ______.

lags behind company pay policy

In general, which combination would lead to the lowest unit labor costs for one country relative to another?

lower labor costs and higher productivity

One advantage of using a pay grade system in planning employee compensation is that it ______.

reduces the administrative burden of setting separate pay rates for hundreds of jobs

Organizations compete in the labor market, so they should consider their employees not just as a cost but also as a(n) ______.

resource that provides returns

Placing jobs in broader bands of classification gives managers the opportunity to _____.

reward high performers with merit increases

Placing jobs in broader bands of classification gives managers the opportunity to ______.

reward high performers with merit increases

Employees can take part in the compensation decision-making process by doing which of the following?

serving on a task force that designs a pay program explaining the company's rationale in implementing a specific pay program participating in a committee that is charged with recommending a pay program

Which is a component of labor costs?

staffing level

Typically, expatriate pay and benefits are linked most closely to ______.

the company's home country

A system in which employees doing the same jobs are paid two different rates, depending on their hiring date, is known as a ______.

two-tier wage plan

Fluctuations in currency exchange rates help explain which of the following?

unstable relative hourly labor costs

Which of the following are pay-setting approaches that vary in the relative importance they give to external and internal comparisons?

using pay grades using market survey data using the pay policy line