Chapter 12
According to equity theory, people decide whether their pay is fair by comparing it to their _____.
inputs
The perceived equity of a pay system across different jobs within an organizations is called ______.
internal equity
Which pay system rewards employees for acquiring skills but does not provide a way to make sure employees are actually using the skills they've learned.
skill-based pay
When calculating overtime pay, employers are required to include time the employee spent doing which of the following? (Select all that apply.)
tidying up the job site traveling between job sites attending required classes
When a non-exempt employee works more than ______ hours per week, the law requires the employer to pay overtime, which is one and a half times a worker's usual hourly rate.
40
What are two potential problems with basing employees' pay entirely on market forces?
Employees may feel that the pay rates are unfair. Managers who rotate through different departments may be reluctant to do so.
____ equity pay comparisons focus on what employees in other organizations are getting paid for the same job.
External
What is a disadvantage to using a skill-based pay system?
It may result in the employer paying for skills that the employee does not use.
When employed citizens are called for military duty, who pays their wages?
The military pays, and some employers voluntarily pay, also.
Which two characteristics are compensable factors of a job?
They are factors the organization values. They are factors the organization is willing to pay for.
How do labor and product markets affect companies' pay level decisions?
They provide a range in which the company can determine pay.
True or false: Competition for labor is a key element in determining the appropriate pay level to hire an employee.
True
Which two comprise most of the compensation for CEOs?
bonuses and company stock performance-related pay
In response to companies that pay less for work traditionally done by women, it has been proposed that businesses could adopt a policy called equal pay for _____.
comparable worth
The concept that suggests people evaluate the fairness of their situations by comparing them with others is called Blank______.
equity theory
A compa-ratio _____ "1" indicates that payroll is probably more expensive than the organization expected, and the cost might be hard to control.
greater than
In what type of organization does a skill-based pay system make sense?
in an organization where changing technology is critical
A compa-ratio less than 1 suggests that the company ______.
is underpaying for human resources
The lowest hourly amount that employers may pay under federal or state law is called the ______.
minimum wage
Thomas works the night shift and earns $4 more per hour than the employees who work the day shift. This extra pay to reflect the difference in working conditions demonstrates a _____.
pay differential
Jobs that have similar value or content, grouped together to calculate rates of pay, are called _____.
pay grades
In a ________ -based pay system, pay is set according to the employee's levels of skill or knowledge and what they are capable of doing. (Enter one word in the blank.)
skill
Fill in the blank question. The Fair Labor Standards Act restricts the use of child labor for workers younger than _______ years of age. (Enter one word in the blank.)
18
The ______ is the primary collector of the data contained in pay surveys that companies use for benchmarking.
Bureau of Labor Statistics
When designing a pay structure, human resources departments consider which of the following? (Select all that apply.)
Legal requirements Market forces Principles of fairness
What is a drawback of using pay grades?
Pay rates for individual work do not match pay levels specified by the market.
What is the best way for an organization to satisfy an employee that is concerned about the fairness of his or her pay?
Share research with the employee showing why the company considers the pay to be fair.
Which law applies to federal contractors receiving $10,000 or more in federal funds and the wages they pay their employees?
The Walsh-Healy Public Contracts Act
The pay rates in the organization may not match the pay structure in the market when a company sets its pay rates based strictly on _____.
a pay policy line
Under the provisions of the Fair Labor Standards Act, exempt employees ______.
are paid a specific salary, not hourly wage are considered professionals
What are benefits of establishing a pay structure that helps the organization achieve its goals? (Select all that apply.)
attracting talented employees cost control employee motivation
When a business compares its own practices against those of its rivals, it is engaging in _____.
benchmarking
How can organizations make the process of creating a pay structure more practical?
by defining key jobs
The undervaluation of women's jobs has been combated through the policy of Blank______.
comparable worth
When studying the worth of work performed by its employees, a company identifies what it values about each of the jobs the employees do. These job characteristics are called _____.
compensable factors
How does a business calculate the least it must pay an employee for a specific job?
competition for labor
The Davis-Bacon Act applies to pay policies of _____ that receive more than $2,000 in federal money.
construction contractors
Jose lives in Chicago and pays much more for his mortgage and groceries than his brother, Ricky, who lives in Mississippi. As a result, Jose receives a higher salary for his accountant job than Ricky, who has the same job where he lives. This demonstrates how the _____ affects the labor market.
cost of living
The amount of money it takes to run an average household (for example, house payments, food, health care, and utilities) is called the ______.
cost of living
What business principle explains why employees might resent a CEO who is paid 100 times more than the average worker in that industry?
equity theory
Managers and other employees who are not covered by the Fair Labor Standards Act requirement for overtime pay are known as _____ employees.
exempt
Certain types of work are common in a variety of organizations. Jobs that have relatively stable content and are common among many organizations are called ____ jobs.
key
Under federal law, Katrine knows her employer must pay her at least $7.25 an hour. This regulated hourly pay is known as the _____.
minimum wage
Most workers paid on an hourly basis are covered by requirements set down by the Fair Labor Standards Act and are called ____ employees.
nonexempt
Randall is an electrical assistant and receives an hourly wage. He is eligible for overtime pay which makes him a(n) _____ employee.
nonexempt
Under the Uniformed Services Employment and Reemployment Rights Act, an employer must _____, for up to five years.
offer a job to their former employees who have returned from military duty
Under federal legislation, children aged 14 and 15 may work _____.
only limited hours after school
Sometimes a pay rate is raised or lowered to compensate for specific working conditions (such as working the night shift) or labor markets (such as living in a high-rent location). These adjustments are called _____.
pay differentials
Minimum, maximum, and midpoint rates of pay for employees who work within a each pay grade constitute a _____.
pay range
A human resource professional would use a compa-ratio to compare actual pay to the _____.
pay structure
Benchmarking against product market and labor market competitors is typically accomplished through the use of Blank______.
pay surveys
The way employees feel about their level of pay is most often based on which of the following?
perceptions
Organization's compete with one another in the ____ market by offering goods and services to the same customers.
product
A company's product market includes _____.
rival companies that provide similar products and services
The pay policy resulting from job structure and pay-level decisions is called the pay _____.
structure
When would a company want to pay above market average for its employees?
when attracting highly skilled employees would provide a competitive advantage
Pay ranges are most commonly used for which of the following? (Select all that apply)
white-collar jobs jobs not covered by union contracts
When an organization has a pay structure, it is easier to decide how much to pay each employee, because _____.
workers with similar jobs are grouped together
