SB Q&A Topic 9

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

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

efficiency wage

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

lags behind company pay policy

Employees typically view their compensation in terms of which of the following? (Select all that apply.)

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

Which of the following are characteristics of the point-factor system for evaluating jobs? (Select all that apply.)

-Each evaluation score is typically weighted to account for its relative importance. -The system yields evaluation scores for each compensable factor of a job.

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

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

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

-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.

Which of the following statements describe key jobs? (Select all that apply.)

-Key jobs are known as benchmark jobs. -Key jobs are common to many organizations. -Key jobs have relatively stable content.

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? (Select all that apply.)

-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.

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

Which of the following problems can result from a job-based pay structure? (Select all that apply.)

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

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

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

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

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

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

Which of the following are considered part of an employee's total compensation? (Select all that apply.)

-stock options -salary -paid vacation

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 pay-setting approaches that vary in the relative importance they give to external and internal comparisons? (Select all that apply.)

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

Which of the following make up a significant portion of labor costs? (Select all that apply.)

-wages and bonuses -health insurance

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.

Which of the following statements about labor market competition is true?

Shortages and surpluses influence pay levels.

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

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

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

a stock plan

The pay-setting approach that uses the pay policy line to derive pay rates for both key and nonkey jobs ______.

does not use actual market rates for key jobs

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

Unlike key jobs, nonkey jobs ______.

cannot be valued or compared through market surveys

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

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

delayering

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

With the pay-setting approach that uses the pay policy line to derive pay rates for both key and nonkey jobs, the pay of all the jobs is linked directly to the number of job evaluation points, which ______.

introduces a greater degree of internal consistency

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

Labor market competition reflects how ______.

many workers are available relative to the number of jobs available

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

market surveys

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

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

pay surveys

The job evaluation system that relies on a weighting scheme to account for the relative importance of the different compensable factors that make up a job is called the ______.

point-factor system

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

production

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

range

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

Which is a component of labor costs?

staffing level

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

the company's home country