COMP #3 EXAM!!

Which of the following is often used to set pay ranges? A) Median B) Weighted mean C) Quartiles and percentiles D) Standard deviation

C) Quartiles and percentiles

Which of the following statistical measures shows how similar or dissimilar the market rates are from each other? A) Weighted mean B) Mean C) Standard deviation D) Median

C) Standard deviation

In the regression equation y = a + bx, job evaluation points are denoted by A) a. B) b. C) x. D) y.

C) x.

Pay ranges for office and production work commonly range between A) 5 and 15 percent. B) 15 and 30 percent. C) 30 and 40 percent. D) 40 and 60 percent

A) 5 and 15 percent.

The amount of fairness given to employees refers to A) total justice. B) quantitative justice. C) procedural justice. D) distributive justice.

D) distributive justice.

Which of the following statements is true regarding broad bands? A) They remove limits on total salary budgets. B) They support recognition via titles or career progression. C) They foster cross-functional growth. D) They increase the hierarchical nature of organizations

C) They foster cross-functional growth.

According to ________ theory, relative pay is important as employees evaluate the adequacy of their pay via comparisons with other employees. A) equity B) expectancy C) agency D) reinforcement

A) equity

Which of the following is an advantage of providing stock ownership as variable pay to employees? A) It reinforces team identity. B) It is the simplest type of variable pay plan. C) It defers a portion of taxes to employees. D) It provides a direct pay-performance link.

C) It defers a portion of taxes to employees.

In most organizations, the responsibility for managing a pay survey lies with A) top management. B) the facility or plant manager. C) outside consultants. D) the compensation manager

D) the compensation manager

The motivation triangle includes A) selection. B) organization design. C) culture. D) organization development.

C) culture.

The ability triangle includes A) selection. B) performance management. C) compensation. D) organization development

A) selection.

In the United States, the ________ is a major source of publicly available pay data, and it also calculates the consumer price index. A) Chamber of Commerce B) Bureau of Labor Statistics C) Compensation Association D) Department of Economics

B) Bureau of Labor Statistics

A market pay line A) reflects an organization's pay scale based on the ratings given by its employees. B) links a company's benchmark jobs with market rates paid by competitors. C) provides an accurate prediction of an organization's entry level pay rates. D) compares an organization's minimum and maximum pay rates for each skill level

B) links a company's benchmark jobs with market rates paid by competitors.

Most experts agree that employees do not begin to consider changing their behavior unless payouts are at least ________ percent higher. A) 5 B) 8 C) 20 D) 10

C) 20

________ requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action. A) A standard hour plan B) The Rowan plan C) A Bedeaux plan D) The Merrick plan

C) A Bedeaux plan

Asai uses a skill-based plan that establishes single flat rates for each skill level. Mark performs better than Steve, even though Steve has more seniority. Which of the following statements is most likely to be true in this scenario? A) Mark will be paid more than Steve as his performance is better. B) Steve will be paid more than Mark as he has more seniority. C) Both Mark and Steve will be paid the same amount. D) Steve will be given more incentives than Mark.

C) Both Mark and Steve will be paid the same amount.

Which of the following statements is true of market pricers? A) They align pay structures with the business strategy. B) Their pay structures are unique and difficult to imitate. C) They assume that little value is added through internal alignment. D) They emphasize pay structures based on unique technology or the way work is organized

C) They assume that little value is added through internal alignment.

Maxwell Construction Corp. employs a lot of uneducated laborers. The company wants to introduce a variable pay plan that is easy to understand and does not cost much to administer. Which of the following variable pay plans is Maxwell most likely to introduce? A) A balanced scorecard plan B) A gain-sharing plan C) A stock ownership plan D) A cash profit-sharing plan

D) A cash profit-sharing plan

Which of the following is true of the Employment Cost Index? A) It is one of three types of salary surveys published regularly by the Department of Commerce. B) It measures the rate of change in prices for goods and services in the product market, not wage changes in labor markets. C) It measures monthly changes in employer costs for compensation. D) It allows a firm to compare changes in its average costs to an all-industry or specific-industry average.

D) It allows a firm to compare changes in its average costs to an all-industry or specific-industry average.

________ minimizes the distortion of the central tendency caused by outliers. A) Weighted mean B) Mean C) Mode D) Median

D) Median

When employee performance is easily measured and the organization's performance is fairly stable over time, the most effective type of compensation is to offer A) a large base pay and low incentive pay. B) a variety of rewards in addition to base pay. C) a variety of rewards with significant incentive pay. D) monetary rewards with large incentives.

D) monetary rewards with large incentives.

Because employers are raising employee pay at various times during the year, survey data must be updated using a process called A) aging. B) leading. C) matching. D) gaining.

A) aging.

Droppiece, Inc. is a company that provides more performance-based pay and less base pay than its competitors. Who among the following is most likely to join Droppiece? A) George, a recently married man who wants a stable income B) Stella, a recent college graduate who loves to take on a challenge C) Mark, a musician who wants to supplement his income D) Sara, a senior citizen who wants a job only to keep herself busy

B) Stella, a recent college graduate who loves to take on a challenge

If you had repair work done on your car, the shop most likely used ________ to pay the mechanic. A) a Bedeaux plan B) a standard hour plan C) the Halsey 50-50 method D) a straight piecework plan

B) a standard hour plan

Gramhold, Inc., a pharmaceutical company, reduces its ten salary grades to just three broad bands. Which of the following statements is most likely to be true in this case? A) Gramhold will face difficulty in defining job responsibilities broadly with the new structure. B) Gramhold will find that the new structure hinders cross-functional growth. C) Gramhold will experience more career moves within bands than career moves between bands. D) Gramhold will offer recognition via titles rather than through cross-functional experience and lateral progression.

C) Gramhold will experience more career moves within bands than career moves between bands.

________ is employees' beliefs that higher job performance will be rewarded by the organization. A) Valence B) Expectancy C) Instrumentality D) Utility

C) Instrumentality

Which of the following statements is true of pay ranges? A) They are flexible enough to deal with differences in quality but not with the productivity or value of these quality variations. B) They usually lead to an increase in employee turnover. C) They reflect the differences in performance or experience that an employer wishes to recognize with pay. D) They cause employees to believe that their compensation cannot increase in the same job

C) They reflect the differences in performance or experience that an employer wishes to recognize with pay.

A person with low self-esteem is likely to seek A) a small, hierarchical organization with pay plans based upon individual performance. B) a flat organization with a significant amount of pay based upon performance. C) a small organization with large benefits based on group performance. D) a large, decentralized organization with little pay for performance

D) a large, decentralized organization with little pay for performance

The ________ pay strategy emphasizes external competitiveness and deemphasizes internal alignment. A) job structure B) broad banding C) reference rate D) market pricing

D) market pricing

Which of the following is an example of a company that uses broad banding? A) A company in which there are more lateral movements with no pay adjustment than promotions B) A company that has pay guidelines and controls designed right into the pay system C) A company that has an unlimited total salary budget D) A company that pays all its employees the same salary

A) A company in which there are more lateral movements with no pay adjustment than promotions

Which of the following is an example of the sorting effect in action? A) An employee leaving a high-paying job for one that provides more work/life balance B) The provision of across-the-board pay increases by a company C) The provision of cost-of-living increases by a company D) An employee choosing fewer incentives in his flexible compensation plan

A) An employee leaving a high-paying job for one that provides more work/life balance

Which of the following is a disadvantage of gain-sharing plans? A) Payouts can occur even if a company's financial performance is poor. B) Pay-performance links are indirect. C) Employees are required to put up money to exercise grants. D) Mandatory stock ownership required by gain-sharing plans can increase turnover rates.

A) Payouts can occur even if a company's financial performance is poor.

When an organization's performance has regular and large swings and individual performance is unclear and hard to measure, the most effective compensation mix is to offer A) a base pay with low incentives and a wide array of awards. B) monetary rewards with large incentives. C) a large base pay and low incentive pay. D) a wide range of rewards and significant incentives

A) a base pay with low incentives and a wide array of awards.

A common first step in interpreting compensation survey data is to A) check for the accuracy of job matches. B) seek out nonresponders. C) check for anomalies. D) remove the top- and bottom-paying companies

A) check for the accuracy of job matches.

When pay is based on individual performance, turnover tends to be highest among A) poor performers. B) good performers. C) single women with children. D) ethnic minorities

A) poor performers.

The first major decision in setting externally competitive pay and designing the corresponding pay structures is to A) specify the employer's competitive pay policy. B) conduct a job evaluation. C) select relevant market competitors. D) construct a pay policy line that reflects external pay policy

A) specify the employer's competitive pay policy.

TreeDen Corp. experiences an increase in its employee turnover rate. Upon investigating, it discovers that employees are dissatisfied with the company's pay. Employees cannot see a direct link between their performance and their pay. They are also unhappy about having to pay out of their pockets to obtain grants. In this case, TreeDen is most likely using a A) stock ownership plan. B) cash profit-sharing plan. C) gain-sharing plan. D) team incentive plan

A) stock ownership plan.

Which of the following theories states that people choose the behavior that leads to the most satisfactory exchange? A) Maslow's need hierarchy B) Expectancy theory C) Herzberg's two-factor theory D) Goal-setting theory

B) Expectancy theory

For any task completed in standard time or less, earnings are pegged at 120 percent of the time saved under the A) Merrick plan. B) Gantt plan. C) Taylor plan. D) Rowan plan.

B) Gantt plan.

Available evidence indicates that managers believe the most important factor for pay increases is A) experience. B) nature of the job. C) seniority. D) performance

D) performance

Which of the following are an example of a long-term incentive plan? A) Merit bonuses B) Performance plans C) Bedeaux plans D) Spot awards

B) Performance plans

The most frequently implemented incentive system is: A) a standard hour plan. B) a straight piecework system. C) the Merrick system. D) the Taylor differential piece-rate plan

B) a straight piecework system.

The most obvious sorting factor is A) seniority. B) ability. C) experience. D) educational qualification

B) ability.

The final major decision in setting externally competitive pay and designing the corresponding pay structures is to A) interpret survey results and construct the market line. B) construct a pay policy line that reflects external pay policy. C) design grades and ranges or bands. D) select relevant market competitors.

B) construct a pay policy line that reflects external pay policy.

The second major decision in setting externally competitive pay and designing the corresponding pay structures is to A) specify relevant markets. B) define the purpose of the survey. C) specify the pay-level policy. D) design grades and ranges.

B) define the purpose of the survey.

The trend in recent variable-pay design is to combine the best of A) individual and group incentive plans. B) gain-sharing and profit-sharing plans. C) the Halsey and Rowan plans. D) balanced scorecard and cash profit-sharing plans.

B) gain-sharing and profit-sharing plans.

A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour. Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour. The company is using the ________ method of job matching. A) benchmark job B) low-high C) survey leveling D) benchmark conversion

B) low-high

When an organization's performance has frequent highs and lows, but individual performance is fairly stable and performance measures are clear, the most effective compensation mix is to offer A) a base pay with low incentives and a variety of rewards. B) monetary rewards with large incentives. C) a large base pay and low incentive pay. D) a wide range of rewards and significant incentives.

B) monetary rewards with large incentives.

Which of the following jobs would most likely fall into a fuzzy market? A) The position of English professor that was filled by a Ph.D. holder in English language and literature with five years of teaching experience B) The position of sound engineer that was filled by a graduate with a degree in audio engineering C) The position of senior director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience D) The position of vice president of a marketing firm that was filled by a marketing manager with 15 years of experience in the marketing field

C) The position of senior director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience

________ measures reveal competitors' use of performance-based cash payments. A) Base pay B) Short-term incentive pay C) Total cash D) Long-term incentive pay

C) Total cash

________ is the value employees attach to the organization rewards received for job performance A) Equity B) Instrumentality C) Valence D) Reinforcement

C) Valence

Which of the following is a reward that recognizes outstanding past performance? A) Insurance B) An allowance C) A remittance D) Merit pay

D) Merit pay

When a company moves from an individual incentive plan to a group incentive plan, the company is most likely to experience A) higher turnover among high performers. B) an increase in instrumentality. C) higher turnover among poor performers. D) an increase in perceived equity.

A) higher turnover among high performers.

A team leader with a free-rider problem in his team can most likely maximize the performance of his team by: A) instructing the team to do their best. B) specifying performance levels and due dates. C) assigning tasks only to the top performers in the team. D) punishing free riders who fail to meet standards.

B) specifying performance levels and due dates.

For organizations using a skill-competency-based pay system or generic job descriptions, the best approach for pricing jobs is A) the benchmark job approach. B) the low-high approach. C) survey leveling. D) benchmark conversion

B) the low-high approach.

Paying a dime for every bottle collected and turned to a collection center is an example of: A) a standard hour plan. B) the Merrick system. C) a straight piecework system. D) the Rowan plan.

C) a straight piecework system.

When employee performance measures are ambiguous and vary from time to time, but the organization's performance is fairly stable over time, the most effective type of compensation is to offer A) a large base pay and low incentive pay. B) an increase in base pay. C) a variety of rewards with significant incentive pay. D) monetary rewards with no benefits

C) a variety of rewards with significant incentive pay.

Aging market data to a point halfway through a plan year is called A) leveling. B) updating. C) lead/lag. D) matching

C) lead/lag.

Company X pays for performance. Allan, an employee of the company, is not in favor of this reward system and, therefore, leaves Company X in search of another company with different rules for getting rewards. This is an example of the: A) design effect. B) compensation effect. C) sorting effect. D) incentive effect.

C) sorting effect.

The size of pay differentials between grades should A) be based upon differentials in market surveys. B) be approximately 20 percent. C) support career movement through the pay structure. D) be between 10 and 25 percent

C) support career movement through the pay structure.

An incentive system with three piecework rates is the A) Taylor plan. B) Gantt plan. C) Rowan plan. D) Merrick plan.

D) Merrick plan.

Components identified as vital to the success of both Scanlon and Rucker plans are: A) top management support and primary focus on wage incentives. B) a flexible payout formula and low turnover rates. C) union and top management support. D) a productivity norm and effective worker committees

D) a productivity norm and effective worker committees

The corporate performance of Yellow Corp. is fairly stable. However, it is difficult to measure individual performance. In this case, the most effective compensation mix is to offer A) a high base pay with high incentives. B) monetary rewards alone. C) a large base pay and low incentive pay. D) a wide range of awards beyond just money

D) a wide range of awards beyond just money

The process of matching survey jobs by applying an employer's plan to the external jobs and then comparing the worth of the external job with its internal "match" is called A) pay compression. B) collective bargaining. C) due diligence. D) benchmark conversion

D) benchmark conversion

In gain-sharing plan formulas, A) productivity measures are in the numerator and revenues are in the denominator. B) productivity measures are in the numerator and labor inputs are in the denominator. C) costs are in the numerator and revenues are in the denominator. D) labor inputs are in the numerator and productivity outcomes are in the denominator

D) labor inputs are in the numerator and productivity outcomes are in the denominator