MGT 367 Ch. 11

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.

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

production

In communicating pay cuts to employees, which of the following strategies are effective? (Select all that apply.)

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

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

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

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

a stock plan

Which of the following aspects of an organization do executives typically influence substantially? (Select all that apply.)

tone performance culture

Which of the following are advantages of paying employee wages above the market average? (Select all that apply.)

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

In which of the following ways does pay affect an organization's strategic goals? (Select all that apply.)

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

True or false: Currency exchange rates affect the comparison of labor costs between countries.

TRUE

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? (Select all that apply.)

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

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

benchmarking

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

changing demographics of the workforce a shifting labor market

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

compa-ratio

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

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

delayering

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

efficiency wage

By paying higher labor costs than its competitors, a company can do which of the following? (Select all that apply.)

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

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

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

outside salespeople professional positions executive positions

Why are European automakers locating production facilities in the United States?

Labor costs are lower in the United States.

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

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

a job evaluation

Employee compensation requires scrutiny because it is typically ______.

a significant organizational cost

Most nonexempt employees are paid ______.

an hourly rate

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

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

One indicator of a country's productivity is ______.

its gross domestic product (GDP) per person

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

jobs and associated responsibilities

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

necessary

Employees can take part in the compensation decision-making process by doing which of the following? (Select all that apply.)

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

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

pay surveys

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

range