Comp & Benefits Chapter 10, Comp & Benefits Chapter 9, MGT of Compensation Chapter 5, MGT of Compensation Chapter 10, MGT of Compensation Chapter 9, MGT of Compensation Chapter 7, MGT of Compensation Chapter 8, Compensation Ch. 7, Comp & Benefits Cha...

Alfe Kohn believes that performance-based incentives are practically wrong because he believes that they reduce: a. control b. skills c. productivity d. labor costs

c

According to recent research, job applicants seek organizations with reward systems that _____.

match their personalities

What is the significance of the Employment Cost Index (ECI) that measures quarterly changes in employer costs?

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

____ ____ is a technique that collapses salary grades into only a few broad bands, each with a sizable range.

broad banding

the point at which the labor demand line and the labor supply line cross is called the _____

market rate

Rewards have been shown by hundreds of studies to _____.

motivate performance

Compensating Differentials occurs when...

Employers offer higher wages when a job has negative characteristics

Problem solving (dimensions included in the universal compensable factors employed by the Hay Group method)

Environment and challenge

T/F: Recent evidence indicates that the incentive effect of broad-based option plans (BBOPs) is relatively large, and strengthens as the number of employees included grows.

False

Financially focused, value creation measures

Resource yields, revenue growth, profit margins, and economic value added

Financially focused, value creation measures (factors of that types of performance measures focus on)

Resource yields, revenue growth, profit margins, and economic value added

Risk takers (pay systems that appeals to ppl with characteristics of job applicants' personalities)

Seek more pay based on performance

The behavior (labor supply) model assumes potential employees are...

Seeking jobs Possess accurate information about all job openings Have no barriers to mobility

Which of the following options reduces labor expenses when people flow to the work?

Segmenting the source of labor

Which of the following theories claims to integrate motivation theories under a wide umbrella?

Self-determination theory

_______-________ __________ specify that payouts only occur after a company reaches a certain profit target, following which variable payouts for individual, team, and company performance are triggered.

Self-funding plan

Product market factors (categories of factors that shape external competitiveness)

-ex: Level of competition and degree of product demand

What kind of pay systems has research shown employees to be comfortable with? (Select all that apply) a. pay systems that give superior performing employees bonuses b. pay systems that offer mostly team-based incentives c. pay systems that place substantial future incomes at risk d. pay systems that link primarily to individual performance

b, c

Human Capital theory assumes people are paid at the value of their....

marginal product

A pay-policy line always specifies a percent above the market line so that an organization can match its competitors.

False (An employer may choose to match only a few top-paying competitors, or it may choose to lead the market for certain job families and lag for others.)

The different functions or groups within bands are usually priced the same due to external market differences.

False (The second step in broad banding is pricing the bands with reference to market rates. Since external market differences exist, the different functions or groups within bands are priced differently.)

Recent evidence indicates that the incentive effect of broad-based option plans (BBOPs) is relatively large, and strengthens as the number of employees included grows.

False (There is growing evidence that the incentive effect of broad-based option plans (BBOPs) is relatively small, and declines as the number of employees included grows. The smaller size of the effect in larger plans is due to the free rider effect.)

T/F: It is enough for an employer to pay at or above the legal minimum wage in order to be considered to be in compliance.

False - must also meet provisions of prevailing wage laws and equal rights legislation

True or false: The marginal product and the marginal revenue of a new hire are not directly measurable quantities

TRUE - it is almost impossible to quantify the goods or services produced by an individual employee, since most production is through joint efforts of employees with a variety of skills.

Base pay (measures of compensation used in a pay survey)

The amount of cash each job and incumbent is worth

A drawback of the ranking method of job evaluation is that evaluators using this method must _____.

be knowledgeable about all jobs under study

One of the common cuts companies make in times of high unemployment is decreasing _____.

contributions to 401k retirement plans

Pay level is is the average of the

array of rates an employer pays

An entire industry can pass high pay rates on to consumers if pay is a relatively ______ proportion of total operating expenses

low

In a survey of approximately 1,000 members of WorldatWork, _____ was selected by the majority as the primary method of job evaluation.

market pricing

the point at which the labor demand line and the labor supply line cross is called the ____.

market rate

Which of the following labor supply theories explains pay-level differences on the premise that higher wages flow to people who invest in themselves to increase their potential productivity? a. the efficiency-wage theory b. the theory of compensating differentials c. the reservation-wage theory d. the theory of human capital

d

Each organization operates in ____________ labor markets, each with unique demand and supply.

many

Some researchers believe that job evaluation can be judged according to technical standards if it can be made sufficiently _____.

numerical

Evidence has consistently proven that large organizations tend to _____ than do small organizations.

pay higher wages

Adjustments made by employers to workers' pay levels on a regular basis can be based on the overall movement of wage rates caused by _____.

the competition for labor in the market

What are the effects of offering high wages in a lead pay-level policy?

-Reduced vacancy rates and training time -Reduced turnover and absenteeism

Rank wage components in increasing order of their riskiness, beginning with the least risky component. a. cost of living increase b. individual incentive c. merit pay d. across the board increase e. lump sum bonus f. base pay

f, d, a, c, e, b

One of the negative effects of a ____ is that it forces an employer to raise the wages of current workers in order to avoid internal misalignment and murmuring.

lead pay-level policy

Capability-focused measures

Turnover rates, employee satisfaction, promotionability index, total recruitment costs, distribution systems, rate of progress on developmental plans, and patents, copyrights, or regulations

Internal alignment based on content (features of this type of internal structure alignment)

It organizes jobs based on the required skills and the associated duties and responsibilities.

Identify a characteristic of individual spot awards.

They are awarded immediately after an individual performs exceptionally.

Identify a disadvantage of pay grades.

They are quite challenging to design.

According to the theory of human capital, the wages of new hires match the value of their ____.

marginal product

Identify the alternatives in the dimensions along which individual incentive plans are categorized. (Select all that apply) a. base pay remains the same but other wage components are increased b. pay varies as a function of production level c. pay is a constant function of production level d. a rate is based on units of production per time period e. a rate is based on the time period per unit of production f. base pay is increased but other wage components remain the same

b, c, d, e

Why should companies avoid defining very small teams in a group incentive plan? (Select all that apply) a. facilitating communication between all team members becomes impossible b. teams hesitate to spend time training new employees c. team members will not be convinced that their effort can affect the team's overall performance d. equalizing for difficulty across teams when assigning rewards becomes difficult e. teams refuse to allow the transfer of star performers

b, d, e

External competitiveness is expressed in practice by determining the pay mix relative to those of

competitors

According to agency theory, companies must allot resources to systems that track employee output, which becomes more costly and difficult when ____.

cultural or geographic distance is great

Employers in extremely competitive markets find it more difficult than other employers to: a. pay their employees minimum wage b. create a standard reservation wage c. avoid the scrutiny of government regulators d. increase prices without loss of revenues

d

_____ provides an opportunity for employers to allow employees to develop a reward package that is less expensive and more satisfying.

Flexible compensation

How does having a variety of teams within an organization affect group incentive plans? a. it makes it impossible to use group incentive plans in the organization b. it makes it difficult to use a single consistent kind of incentive plan c. it makes it hard to look at different compensation approaches for different teams d. it makes it impractical to set different standards of performance for different teams

b

A negative impact of new pay systems that expect employees to bear a share of risks is that these systems: a. have no connection to group and corporate performance b. lack a clear link between performance and compensation c. work against efforts that build employee commitment d. attract only security-driven employees to a company

c

One of the common cuts companies make in times of high unemployment is decreasing: a. the number of pay freezes they usually make b. the number of days off for employees c. quality and productivity to save resources d. contributions to 401k retirement plans

d

One of the major advantages of a standard piecework plan is that _____.

employees can easily comprehend it

According to the theory of human capital, improving productive skills by making investments in training will raise one's ____.

marginal product

An employer cannot alter most factors of production, such as technology, capital, or natural resources, in the short term. Thus, it can only alter its level of production if it alters the level of human resources. In these conditions, a single employer's labor demand coincides with the ____.

marginal product of labor

________ ________ is based on the idea that only the individual employee knows what package of rewards would best suit personal needs; it allows tradeoffs between pay and benefits.

Flexible compensation

Productivity/gain sharing (objectives of variable pay plans)

To reward employees for betterments in activities that they control

The higher wages that employees offer to make up for the negative characteristics of a job are known as: a. compensating differentials b. amelioratory wage rates c. hidden insurance payments d. marginal product revenues

a

When is turnover much higher for poor performers in a company? a. when pay is linked to individual performance b. when pay is tied to group performance c. when pay is independent of performance d. when pay is based on corporate performance

a

According to supporters of broad banding, the principal benefit of this technique is _____.

the cross-fertilization of ideas within an organization

In both the quoted-price market and the bourse, _____ function as the buyers and _____ function as the sellers

employers / job applicants

Identify the alternatives in the dimensions along which individual incentive plans are categorized.

-Pay is a constant function of production level. -Pay varies as a function of production level. -A rate is based on the time period per unit of production. -A rate is based on units of production per time period.

Diminishing marginal productivity for each new employee added to a firm arises from the fact that each new employee ____.

has access to a progressively smaller portion of other factors of production

What are the anomalies in pay survey data that an analyst should look for when verifying the survey data?

-Whether all employers show similar patterns -Whether there are any outliers -Whether a single company dominates

Instead of reconciling an internal and external pay structure, some employers directly use _____ to determine their internal pay structures and mimic competitors' structures.

market surveys

________-________ _________ focus on performance beyond the one-year time line used as the cutoff for short-term incentive plans.

Long-term incentives

In order for different operating units in an organization to be able to develop flexible variations on a pay-for-performance plan, the organization should _____.

have a decentralized structure

A single employer's demand for labor coincides with the

marginal product of labor

Evidence has consistently proven that large organizations tend to ________ than do small organizations. a. have a higher reservation wage b. assign a lower marginal value to talented individuals c. offer lesser compensation d. pay higher wages

d

Each job in the labor market has a fixed "going rate."

False. (Different employers set different pay levels, deliberately choose to pay above/below what others are paying for the same work. so no single "going rate" in the labor market for a specific job.)

Identify the factors that shape external competitiveness.

-Attributes unique to each company -Competition in the labor market for applicants with various skills -Competition in the product and service markets

Identify the findings of the study that involved 6 million employees across 275 firms conducted to analyze the impact of profit-sharing plans.

-Companies that used profit-sharing plans had 3.5-5.0 percent higher profits than companies that did not use these plans. -Productivity was higher in profit-sharing plans where payouts were made in the same year than in plans where the payment was deferred.

What are the disadvantages of group incentive plans?

-Compensation risk to employees increases due to lower income stability. -Line-of-sight may be reduced.

What are the principal decisions involved in an organization determining externally competitive pay and forming corresponding pay structures through a survey?

-Defining the purpose of the survey -Interpreting survey results and construct the market line -Designing the survey

Identify the criteria that have been suggested for scaling compensable factors in the point method of job evaluation.

-Ensure that the number of degrees is necessary to distinguish among jobs -Make it apparent how the degree applies to the job -Anchor degree definitions with benchmark-job titles and/or work behaviors -Use understandable terminology

Why is it important to maintain some documentation to support the choice of compensable factors while developing a point plan?

-It is easier to understand. -It can withstand a variety of challenges to the pay structure. -It helps gain acceptance by employees and managers.

Identify the functions that a job evaluation must perform.

-It should be fair to employees. -It should support organization strategy and work flow. -It should encourage behavior that supports organization objectives.

Identify the factors that combine to form the basis for job evaluation.

-Organizational culture -The external market -Value to the organization -Skills required -Job content

Why should companies avoid defining very small teams in a group incentive plan?

-Teams hesitate to take on new employees for the fear of losing time in training them. -Equalizing for difficulty across teams when assigning rewards becomes difficult. -Teams refuse transfer of star performers.

Which of the following guidelines helps ensure the success of an organization's attempt to change its employees' behavior?

-The organization should design its work and culture to provide the opportunity to leverage employees' motivation and ability. -The organization should provide necessary training to people whose behavior needs to be changed. -The organization should select the right people.

In the context of the implications of motivation theories for pay and pay for performance, which of the following can be inferred from expectancy theory?

-There must be a clear and perceivably strong link between pay and performance. -Employees' responsibilities and job tasks should be clearly defined.

What are the ways in which individualized incentive plans have an advantage over payment by time?

-They enable more accurate estimation of labor costs. -They require less direct supervision to maintain output.

Identify the true statements about the implementation of Rucker or Scanlon plans

-Worker committees are required to analyze employee and management suggestions for ways to increase productivity and/or cut costs. -Effective measurement of base-year data requires an organization to keep extensive records of past cost relationships.

Match policy

A company uses this for jobs that requires skills that are not very critical to its success

Identify a possible drawback of wage-setting practices today.

Complex procedures and creeping bureaucracy can cause users to lose sight of the objectives of job evaluation.

Classification (drawbacks of common job evaluation methods)

It can leave excessive room for manipulation.

An organization with widely variable performance across time and unstable and unclear performance measures (In the context of the relationship between performance measurement and compensation strategy, match the organizations with the most appropriate compensation strategies)

Offering a wide array of rewards beyond just money and emphasizing base pay with a low-incentive component

An organization with low variability in performance across time and unstable and unclear performance measures (In the context of the relationship between performance measurement and compensation strategy, match the organizations with the most appropriate compensation strategies)

Offering a wide array of rewards beyond just money and including a significant incentive component

Performance-accelerated restricted stock

Restricted stock granted only after specified performance objectives have been attained

_________ influences a job applicant's decision to join a company because it is one of the more visible rewards during the process of recruitment. a. level of pay b. empowerment c. work variety d. workload

a

__________ are stock grants that a company gives employees over a designated time period. a. broad-based option plans b. merit bonuses c. gain-sharing plans d. spot awards

a

The dashboard form of reporting the mix of pay forms of a company focuses on _____.

comparing each pay form to the market

One of the common cuts companies make in times of high unemployment is decreasing ____.

contributions to 401k retirement plans

What is the main issue with defining teams in a group incentive plan at the very broad level? a. teams refuse to take on and train new employees b. incentives can lose much of their motivational impact c. teams refuse to allow the transfer of star performers d. incentives can become too individualized to be of any good

b

Which of the following is a prediction about performance-based pay made by Maslow's needs theory? a. base pay must be comparable to that of an employee's peers to avoid conflict b. base pay must be sufficient for individuals to meet their basic living needs c. base pay must be the greatest reward that motivates employees to choose the best behavior d. base pay must be high enough to allow individuals to attain self-actualization

b

Cash profit sharing (objectives of variable pay plans)

To educate employees about the way in which a business operates

Technology-intensive industries tend to _______ than labor-intensive industries. a. pay higher b. pay lower c. have higher reservation wages d. have lower reservation wages

a

_______________ _____________ begins with the traditional alternatives of lead, meet, or lag; it then adds a second part, which is to offer employees choices within limits in the pay mix.

shared choice

In general, group incentives result in _____.

small increases in productivity

One of the methods used to translate pay policy determined through a pay survey into practice is to _____.

specify a percent below or above the market line that an organization intends to match

Payouts awarded to an individual for performance that greatly exceeds expectations or for exceptional performance on special projects are known as _____.

spot awards

A(n) ____ ____ plan is a generic term for plans setting the incentive rate based on completion of a task in some expected time period.

standard hour

The most commonly used individual incentive system is a _____.

straight piecework system

Unlike group plans, individual incentive plans should be chosen when _____.

supervisors are considered to be unbiased

Greatly improved communication and software connectivity have accelerated ____.

the growth of offshoring

What kind of pay systems has research shown employees to be uncomfortable with?

-Pay systems that place substantial future incomes at risk -Pay systems that offer mostly team-based incentives

A lead policy (type of pay-level and pay-mix strategies)

-types of jobs companies use them for: Companies use this policy for jobs requiring skills that are critical to their success.

Refer to the given image and match the letters of the alphabet with the corresponding factors that influence employee behavior

A --> Ability to perform B --> Motivation to perform C --> Opportunity to perform

Job content is the sole basis for pay.

False (The job's exchange value may also play a role in determining pay.)

Productivity/gain sharing (disadvantages of variable-pay plans)

It can have unintended consequences, such as quality drop-off.

According to agency theory, what motivates and directs employee performance? a. goals b. innovation c. flexibility d. pay

d

What does reinforcement theory recommend for reinforcing performance? a. performance must be rewarded discontinuously for maximum effect b. performance-based payments must always match an employee's perceived value of behavior c. performance-based payments must be given in anticipation of performance d. performance must be directly followed with performance-based payments

d

_________ is a return (profits) received from activities that are in excess of the minimum pay level needed to attract people to those activities.

Rent

How do market pricers approach nonbenchmark jobs?

They blend them into the pay structure created by external market rates.

Identify a mistake pay-for-performance plans make that cause them to be inefficient.

They focus on quantity at the expense of quality.

Rucker plans (features of types of gain-sharing plans)

They link incentives to a wide variety of savings.

Scanlon plans (features of types of gain-sharing plans)

They link incentives to labor savings only.

Measures

They need to be communicated to employees so that they will know what is used to determine whether their performance merits a payout

Objectives

They need to be specific yet flexible, and they need to avoid the "line-of-sight" issue

Which of the following is true of adjustments to a company's pay mix?

They occur less frequently than do adjustments to overall pay level.

In general, group incentives result in: a. higher turnover of poor performers b. lower turnover for good performers c. higher returns than do individual incentives d. small increases in productivity

d

In the short term, a company's factors of production other than its human resource pool are _________, which causes each new hire to have lower marginal productivity than the previous hire. a. indeterminable b. inexhaustible c. inaccessible d. inalterable

d

Merit pay has been criticized for: a. lacking standards b. being too arbitrary c. neglecting base pay d. being too expensive

d

MobiRise Corp., an automobile company, reduced base pay by 10% in year 1. The 10% was replaced with a 0.25% increase in base pay for every 1% rise in productivity beyond 80% of the prior year's productivity. MobiRise's incentive plan is an example of: a. standard hour plan b. reverse incentive plan c. success-sharing plan d. risk-sharing plan

d

In both the quoted-price market and the bourse, ____ function as the buyers and ____ function as the sellers.

employers; job applicants

The level of demand that maximizes profits is that level where marginal revenue is ____________ to the wage rate for that hire

equal

u

is the utility (revenue - cost) per hire per year.

r

is the validity coefficient, the correlation between criterion, y, and one or more pre-employment assessments.

If a _______ pay level policy is coupled with the promise of higher future returns, this may increase employee commitment and foster teamwork, increasing productivity

lag

In organizations that exhibit low variability in performance, it is appropriate to use _____ in the compensation packages.

large-incentive components

The most common policy is to _________ rates paid by competitors

match

A study on how economic factors translated into wage decisions for managers found that the profitability of a company was viewed by managers as a factor for higher management in determining _____.

the general pay budget

Greatly improved communication and software connectivity have accelerated _____.

the growth of offshoring

In the short term, an employer cannot change any factor of production except by

changing the level of human resources

Characteristics in the work that the organization values, and those that help it pursue its strategy and achieve its objectives are called ____ _____

compensable factors

The higher wages that employees offer to make up for the negative characteristics of a job are known as ____.

compensating differentials

In most companies, the person responsible for managing a pay survey is the _____.

compensation manager

Survey data are used by employers to gather ____ ____ in order to better understand how competitors achieve their market share and price their products and services.

competitive intelligence

As part of the job evaluation process, a company identifies skill as one of the compensable factors and allocates 45 percent of the total value of factors to it. Skill has three subfactors, namely specialized knowledge, planning skills, and communication skills, with five degrees each. An employee receives five degrees of knowledge, four degrees of planning, and three degrees of communication during her job evaluation. The total number of points that the employee receives for skill is _____.

180

In the image of an example depicting how choices for updating survey data reflect pay policy, match the letters in the image (in the left column) with the choices that they represent.

A -> Lag B -> Lead/lag C -> Lead

Indexed stock option

An option whose exercise price depends on peer companies experience with stock prices

In the point method of job evaluation, which of the following steps immediately follows the determination of compensable factors?

Construction of scales reflecting the different degrees within each factor

Customer-focused, customer satisfaction measures

Customer satisfaction, market share, customer growth and retention, and account penetration

Some reservation-wage theorists say that job seekers accept the first job offer they receive where the pay is below their reservation wage.

False. (Some reservation-wage theorists say that job seekers accept the first job offer they receive where the pay meets their reservation wage. This seeks to explain differences in workers' responses to offers.)

It is enough for an employer to pay at or above the legal minimum wage in order to be considered to be in compliance.

False. (must also meet provisions of prevailing wage laws and equal rights legislation)

Internal alignment based on value (features of this type of internal structure alignment)

It organizes jobs based on the relative contribution of the skills, duties, and responsibilities of each job to the organization's goals.

Product market factors

Level of competition and degree of product demand

_____ influences a job applicant's decision to join a company because it is one of the more visible rewards during the process of recruitment.

Level of pay

_____ is easily communicated in an offer of employment to a candidate because it is perceived as more objective than other characteristics of employment.

Level of pay

Total cash (measures of compensation used in a pay survey)

The amount of cash each job and incumbent is worth plus bonus

Identify a true statement about the appeals or review procedures for handling cases of incorrect job evaluation or employee grievances about internal pay structure.

They usually require approval by higher levels of management on completion.

Matching the market wage and offering no performance-based pay (sorting and signaling strategy)

This strategy is most likely to appeal to people who just want to show up and are risk-averse.

Paying below the market for base pay yet offering generous bonuses

This strategy is most likely to appeal to risk takers who seek flexible schedules, more interesting projects, or more opportunities for promotion

One of the best methods an organization can adopt to successfully change employees' behavior is to develop a compensation system that rewards desired behavior.

True (and a sufficiently attractive compensation system also makes it possible to recruit and hire good potential employees and to make sure the good employees stay with the organization.)

Individual incentive (components of compensation)

Variable pay linked directly to an objective measure of each employee's performance

The concept of upward sloping supply in theories of labor markets assumes that as wage rates increase, more people are willing to apply for a job position. However, offers of increased pay may not boost labor supply when: a. unemployment rates are low b. a country is going through economic recession c. the market is saturated with job seekers d. there are few jobs in the market

a

Identify a drawback of profit-sharing plans: a. they lead to administrative complications b. most employees believe that their jobs do not directly impact profits c. most employee believe that they should be awarded based on their effort, irrespective of profits d. they do not directly link performance to payouts

b

Identify the theory of motivation that emphasizes consistency and fairness of performance based pay across employees in a company: a. Maslow's needs hierarchy theory b. equity theory c. Herzberg's two-factor theory d. agency theory

b

In general, employers desire for employees to perform in ways that result in: a. improved reservation wages b. improved organizational performance c. greater reliance on competitors d. greater organizational turnover rates

b

In what kind of structure do group incentives work well? a. in individual-based structures where one employee directs all other team members b. in team-based structures where team members personally sanction poor performers c. in individual-based structures where each employee is responsible for himself or herself d. in team-based structures where members are not responsible for monitoring team performance

b

One of the negative effects of a _________ is that it forces an employer to raise the wages of current workers in order to avoid internal misalignment and murmuring. a. lay pay-level policy b. lead pay-level policy c. competition maximization policy d. pay-with-competition policy

b

Which of the following offers a promise of pay for some predetermined, objective level of performance? a. merit bonuses b. individual incentive plans c. lump-sum bonuses d. merit pay plans

b

Why does Alfie Kohn believe that performance-based incentives are morally wrong? a. he claims that they do not fulfill the basic living needs of employees b. he claims that they involve a person being controlled by another c. he claims that they make employment a reciprocal arrangement d. he claims that they work against risk-seeking employees

b

While verifying pay survey data, if a company job is found to be sufficiently similar to the survey job, particularly on the most fundamental aspects, an analyst can use _____ to multiply the survey data by a factor determined to be the difference between the two jobs.

benchmark conversion

An organization may use a sample of _____, or key jobs, to ensure that a job evaluation includes all relevant aspects of work.

benchmark jobs

The level of demand that _________ is that level at which the marginal revenue of the last hire in the company equals the pay for that employee. a. helps a company break even b. permits a company to hire many more people c. maximizes profits for a company d. equalizes an entire company's revenues and labor costs

c

What are the advantages of individualized incentive plans? (Select all that apply) a. they increase workers' trust of management b. they decrease quality concerns c. they increase workers' earning d. they decrease production costs e. they increase productivity

c, d, e

According to agency theory, companies must allot resources to systems that track employee output, which becomes more costly and difficult when _____.

cultural or geographic distance is great

An employer will keep hiring until the marginal revenue generated by the last hire equals the ____.

expenses associated with employing that person

A pure market pricing strategy carried to the extreme ignores _____ entirely.

internal alignment

The ____ is the increase in returns generated by the employment of one additional person by a firm, while keeping other production factors constant.

marginal revenue of labor

A(n) ____ ____ links a company's benchmark jobs on the horizontal axis with market rates paid by competitors on the vertical axis.

market line

For determining the pay level of nonbenchmark jobs, _____ are useful.

market pay lines

MobiRise Corp., an automobile company, reduced base pay by 10 percent in year one. This 10 percent was replaced with a 0.25 percent increase in base pay for every 1 percent rise in productivity beyond 80 percent of the prior year's productivity. MobiRise's incentive plan is an example of a _____.

risk-sharing plan

____-____ ____specify that payouts only occur after a company reaches a certain profit target, following which variable payouts for individual, team, and company performance are triggered.

self-funding plan

Performance-vested stock option (long-term incentives)

An option that vests only when a predetermined performance objective is attained

What are Characteristics unique to each organization?

Business strategy, technology, and the productivity and experience of its work force.

What are they?

Control costs Increase revenues Attract employees Retain employees

The business strategy of Orient Inc., a clothing company, involves delighting customers by selling clothes at prices lower than those of their competitors. Which of the following would be an important compensable factor for this company?

Cost containment

Customer-focused, customer satisfaction measures (factors of that types of performance measures focus on)

Customer satisfaction, market share, customer growth and retention, and account penetration

Instrumentality

Employees' beliefs that their organization will reward requisite job performance

Valency

Employees' valuation of organization rewards provided for satisfactory job performance

____ ____ is the process of systematically determining the relative worth of jobs to create a job structure for the organization.

Job evaluation

What can make it difficult to maintain manager-employee differentials among pay grades?

Large overlap between pay grades

Individualists (pay systems that appeals to ppl with characteristics of job applicants' personalities)

Prefer pay that is based on individual performance rather than pay that is based on group performance

High risk or reward (risk levels for long-term incentive plans)

Premium-priced stock options, indexed stock options, and performance-vested stock options

Pay grades enhance an organization's ability to _____.

transfer people among jobs with no change in pay

The most commonly used performance measure for large team incentive plans has historically been: a. financially focused measures b. capability-focused measures c. time-to-market measures d. internal process-focused measures

a

According to the theory of human capital, improving productive skills by making investments in training will raise one's: a. risk aversion b. marginal product c. compensating differential d. reservation wage

b

The dashboard form of reporting the mix of pay forms of a company focuses on ____.

comparing each pay form to the market

A study on how economic factors translated into wage decisions for managers found that the profitability of a company was viewed by managers as a factor for higher management in determining ____.

the general pay budget

For merit pay to live up to its potential, managers need to ensure that _____.

the size of the merit increase distinguishes across all performance levels

Identify the three most commonly used measures of compensation in a pay survey.

-Base pay -Total cash (base + bonuses) -Total compensation (base + bonus + stock options + benefits)

What are the steps involved in broad banding?

-Price the bands with reference to market rates -Set the number of bands

External competitiveness is expressed in practice by setting a pay level that is

above, below, or equal to competitors.

The goal of using a salary increase matrix is to keep adjusting employee pay so that it is _____.

appropriately positioned relative to the market

Calculate the pay level of an organization that has labor costs of $16,000,000 for 400 employees. a. $16,000 b. $64,000 c. $40,000 d. $80,000

c

Compensating ________ is a reason for differing pay rates in the labor market and is difficult to document due to the inability to accurately measure and control the factors that go into a net-advantage calculation.

differentials

In the context of salary grades, one of the advantages of broad banding is that it _____.

eases mergers and acquisitions

Stores that fix the price of each item or ads that mention the starting wage of a job opening are examples of _______, whereas organizations that permit haggling over the terms and conditions until a consensus is reached are examples of ________. a. flexible organizations; noncompetitive organizations b. noncompetitive organizations; rigid organizations c. the bourse; the quoted-labor market d. the quoted-price market; the bourse

d

The ________ is the increase in returns generated by the employment of one additional person by a firm, while keeping other production factors constant. a. employment differential b. compensating differential c. marginal cost of production d. marginal revenue of labor

d

The approach to motivation that believes that employees have the highest quality motivation when both extrinsic and intrinsic motivators are used is: a. goal setting theory b. reinforcement theory c. expectancy theory d. self-determination theory

d

Which of the following helps an organization when there are no profits? a. a high base pay plan b. recruiting more employees c. promoting more employees d. a variable pay plan

d

While _____ put a floor on the pay level needed to attract sufficient employees, _____ put a lid on the highest pay level than an employer can set.

labor market conditions / product market conditions

While ____ put a floor on the pay level needed to attract sufficient employees, ____ put a lid on the highest pay level than an employer can set.

labor market conditions; product market conditions

In the point method of job evaluation, defining, scaling, and weighting the compensable factors is based on _____.

the content of benchmark jobs

Due to restrictions placed by the product market on an employer's pay level, what strategies must an employer use to compensate for paying above the maximum?

-Allocating a large share of total revenues to cover labor expenses -Passing the higher pay level on to consumers by increasing prices

How does job evaluation support the work flow in an organization?

-By integrating each job's pay with its relative contributions to the organization -By setting pay for new, unique, or changing jobs

Identify the generic groups into which the compensable factors used in existing, standardized point plans usually fall.

-Responsibility -Skills required -Working conditions -Effort required

What are the advantages of individualized incentive plans?

-They increase productivity. -They increase workers' earnings. -They decrease production costs.

Which of the following characteristics must compensable factors possess if they are to be useful?

-They should be based on the work performed. -They should be acceptable to the stakeholders affected by the resulting pay structure. -They should be based on the strategy and values of the organization.

What are the differences among organizations that pay grades and pay ranges offer flexibility to deal with?

-Variations in quality among job applicants -Variations in the mix of pay forms competitors use -Variations in the value of quality differences

When are the data from product market competitors likely to be given greater weight than that of labor market competitors in defining a relevant market?

-When demand for a product is responsive to price changes -When employee abilities are specific to the product market -When labor expenses form a large share of total expenses -When labor supply is not responsive to pay changes

What is the effect of the introduction of new technology within an industry that reduces the skills required of employees?

It causes the employees' average pay to decline.

Cash profit sharing (disadvantages of variable-pay plans)

It has limited motivational impact.

Identify an advantage of developing a job evaluation plan using benchmark jobs.

It helps to ensure the accuracy of the decisions based on the job evaluation.

Identify a drawback of the ranking method of job evaluation.

Evaluations are subjective opinions that cannot be rationalized in work-related and strategic terms.

Alternation ranking (ways to ranking while evaluating jobs)

Evaluators reach a consensus on which jobs are the most and least valuable, followed by the next most and least valued, and so on, until all the jobs have been arranged in order.

Paired comparison (ways to ranking while evaluating jobs)

Evaluators use a matrix to compare every possible coupling of jobs.

For merit pay to live up to its potential, managers need to ensure that: a. the sorting effect leaves behind people who do not want their pay tied to performance b. merit increases are equal across all performance levels to promote employee satisfaction c. the amount of merit increase distinguishes between performance levels d. they allocate as little merit money as possible to their merit pay programs

c

How does the sorting effect improve productivity in an organization that uses individual incentives? a. poor performers are forced to improve productivity, and good performers reduce productivity to create a balance b. employees who do not want to perform better remain at the bottom structure c. employees who do not want to work harder leave and are replaced by better performers d. poor performers reject difficult projects, and good performers take those up instead, so overall productivity improves

c

_________ provided by an employer are considered integral to every citizen's economic security and are regulated in most countries. a. training and promotions b. basic psychological evaluations c. pensions and health care d. housing and travel benefits

c

When are the data from product market competitors likely to be given greater weight than that of labor market competitors in defining a relevant market? (Select all that apply) a. when the source of labor can be segmented to reduce costs b. when worker skills are applicable to a wide variety of markets c. when employee abilities are specific to the product market d. when labor expenses from a large share of total expenses e. when labor supply is not responsive to pay changes f. when demand for a product is responsive to price changes

c, d, e, f

Over the last several decades, organizations have been using new forms of pay that are more ________ than before. a. invariable b. stable c. entitlement-oriented d. performance-oriented

d

_________ provides an opportunity for employers to allow employees to develop a reward package that is less expensive and more satisfying. a. cash-only compensation b. equity compensation c. expectancy compensation d. flexible compensation

d

The level of demand that ____ is that level at which the marginal revenue of the last hire in the company equals the pay for that employee.

maximizes profits for a company

A(n) ____ ____ system links increases in base pay, or merit increases, to how highly employees are rated on a performance evaluation.

merit pay

The range maximum of a pay range is $81,000, and its range midpoint is $56,000. Calculate the range minimum of the pay range.

$31,000

Identify the various extremes of organizational pay-level and pay-mix strategies that exist on the continuum of possible organizational strategies.

-A high-wage, high-services strategy -A low-wage, high-services strategy -A low-wage, no-services strategy

Identify the components that are essential for the implementation and success of a Rucker or Scanlon plan.

-A productivity norm -Effective worker committees

Identify the characteristics of a benchmark job.

-Its contents are well known and relatively stable over time. -It employs a reasonable proportion of the work force.

Which of the following are increased by individual incentive plans to the detriment of an organization?

-Mistrust between employees and management -Conflict between quantity-oriented workers and quality-concerned managers -Complaints about the poor maintenance of equipment that hinders workers' efforts -Turnover among new workers discouraged by the resistance of experienced workers to cooperate in on-the-job training

Identify the essential features of Maslow's needs hierarchy.

-Needs are arranged from basic needs to higher-order needs. -Higher-order needs become motivating after basic needs have been fulfilled.

Identify the advantages of group incentive plans.

-They improve organization and individual performance. -They signal that cooperation is a desired behavior.

Rank the jobs in an organization's hierarchy in decreasing order of the sizes of their pay ranges, beginning with the positions that have the largest percent above and below their range midpoint.

1. Top-level management positions 2. Entry to midlevel professional and managerial positions 3. Office and production work

Calculate the number of employees in a company with a pay level of $43,000 and labor costs of $10,750,000.

250 employees Labor costs = (pay level) * (# of employees)

Which combination may boost employee commitment and encourage teamwork, which may in turn improve productivity?

A lag pay-level policy combined with the promise of increased future returns

Which of the following summarizes the distribution of going rates paid by competitors in a labor market?

A market line

Identify the pay-level and pay-mix strategy with the least risk.

A match policy

Scanlon plan (types of gain-sharing plans)

A plan designed to reduce labor costs without lowering the level of a firm's activity

Improshare (types of gain-sharing plans)

A plan in which any savings arising from production of agreed-upon output in fewer-than-expected hours is shared by a company and its employees

According to research, which of the following is likely to bring about commitment from employees and the management and acceptance of the internal pay structure?

Attending to the fairness of the design process

What are the objectives that pay-level and pay-mix decisions focus on?

Attracting and keeping employees Controlling expenses and raising revenues

In the context of surveys for determining pay levels, why do surveys of upper-level and executive positions in an organization include reporting relationships and financial data?

Because the organization's financial performance is directly related to compensation for these positions

How do poorly administered skill-based pay plans create cost inefficiencies that lead to plan abandonment?

By permitting more employees to obtain certification in a skill than are needed

How is external competitiveness expressed in practice?

By setting the pay mix in relation to those of competitors By establishing a pay level that is greater than, less than, or equal to that of competitors

Identify a key element in perceptions of fairness in an organization.

Communications

Financially focused, shareholder return measures

Earnings per share, growth in profitability, return on invested capital, and return on sales or earnings

Financially focused, shareholder return measures (factors of that types of performance measures focus on)

Earnings per share, growth in profitability, return on invested capital, and return on sales or earnings

What are the consequences of pay level and mix decisions?

Efficiency Fairness Compliance

T/F: Variable-pay plans always have a positive impact on performance.

False

The best pay-for-performance plan is rigid and consistent across all divisions in an organization.

False (A pay-for-performance plan should be adapted to the different needs of different divisions. A rigid pay-for-performance plan detracts from all the advantages of tailoring a plan to suit the demands of different units.)

What are the observable results of increased wages? (Check all that apply.)

Greater employee attraction and retention Improved quality, effort, and performance Greater pay satisfaction

In which type of incentive plan might the standard of comparison for determining incentives be an expected level of operating income for a division in an organization?

Group incentive plans

Why does Alfie Kohn believe that performance-based incentives are morally wrong?

He claims that they involve a person being controlled by another.

What has driven American firms to use variable pay in order to increase productivity and cut costs?

High competition from foreign producers

How does organization development help an organization with inefficient processes?

It frees up motivated employees to utilize their skills.

According to a study on managers' approaches to pay decisions under varying economic conditions, how did level of unemployment affect wage adjustment recommendations?

It had almost no impact on wage adjustment recommendations.

Which of the following is a feature of distributive justice that differentiates it from procedural justice?

Managers have little control over distributive justice.

Identify the types of jobs for which early point plans, such as the National Metal Trades Association (NMTA) plan and the National Electrical Manufacturers Association (NEMA) plan, were developed.

Manufacturing jobs Office jobs

what does point A refer to? (marginal revenue product, and line for supply to individual employer)

Marginal revenue product

Control

Organizations need to ensure that performance measures are fair and that a team has the ability to influence them

Control (measures organizations need to take for problematic areas in team compensation)

Organizations need to ensure that performance measures are fair and that a team has the ability to produce results.

Complexity

Organizations need to ensure that their group incentive plans draw a clear connection between employees' effort and the rewards they receive

Complexity (measures organizations need to take for problematic areas in team compensation)

Organizations need to ensure that their group incentive plans draw a clear connection between employees' effort and the rewards they receive.

According to agency theory, what motivates and directs employee performance?

Pay

Individualists

Prefer pay that is based on individual performance rather than pay that is based on group performance

Materialists

Relatively more concerned about pay level than others

According to goal-setting theory, which type of goals generate the most employee effort?

Specific and challenging performance goals

Performance-vested restricted stock (long-term incentives)

Stock granted to employees upon attainment of specified performance objective(s)

Performance-vested restricted stock

Stock granted to employees upon attainment of specified performance objectives

_____ supply the information needed to translate an external competitive pay policy into pay mix, pay levels, and pay structures.

Surveys

A reservation wage may be more than or less than the market wage.

TRUE

Identify the way of reporting an organization's mix of pay forms that is depicted in the image.

The dashboard

Stock purchase plan

The opportunity to purchase shares of a company stock either at prices below market price or with favorable financing

Stock purchase plan (long-term incentives)

The opportunity to purchase shares of company stock either at prices below market price or with favorable financing

What is the advantage of using existing, standardized point plans?

The relative internal value of jobs in an organization can be compared with similar jobs in other organizations.

Eligibility (standards for elements of a pay-for-performance plan)

This determines how far down an organization the plan will run and which employees will be included.

Funding (standards for elements of a pay-for-performance plan)

This determines whether a program will be supported out of extra returns generated beyond some predetermined standard.

Merrick plan (type of individual incentive plan)

This plan establishes three piecework rates: one that is high, for production in excess of 100 percent of a standard; a second that is medium, for production between 83 and 100 percent of the standard; and a third that is low, for production lower than 83 percent of the standard.

Flexible and balanced guidelines are necessary to ensure efficient job evaluation.

True (Balanced guidelines for job evaluation are required to ensure that employees are treated fairly and that pay decisions help an organization achieve its objectives.)

Job applicants are attracted to an organization with a reputation for compliance with compensation laws.

True (Employers tend to undervalue the reward value of a good reputation. To guard their reputation, they need to ensure that they comply with compensation laws.)

Job content does not have intrinsic value if its value depends on what it can command in the external market.

True (If some aspect of job content, such as stressful working conditions, is unrelated to wages paid in the external labor market, then that aspect does not have to be included in the job evaluation. In this perspective, the value of job content is based on what it can command in the external market and has no intrinsic value.)

_________________ is the dollar value created by increasing revenues and/or decreasing costs by changing one or more HR practices

Utility

How do employers best appeal to scarce talent?

With pay-for-performance combinations

What are the salient features of a pay range?

a midpoint, a minimum, and a maximum

The last step in the point method of job evaluation is the _____.

application of the plan to nonbenchmark jobs

Pay level research focuses on __________ __________ and ignores bonuses, incentives, options, employment security, benefits, or other forms of pay

base pay

Merit pay has been criticized for _____.

being too expensive

Identify the option to reduce labor expenses that is used when work flows to the people. a. increasing the value of compensating differentials b. segmenting the source of labor c. sending work to other cities or nations d. establishing a standard reservation wage

c

A lead pay-level is capable of masking negative job traits that lead to higher ________ later on. a. attraction b. retention c. productivity d. turnover

d

The underlying assumption of efficiency-wage theory is that pay level determines _____.

effort

According to economic theory, a talented individual will have a higher marginal value when the individual is ____.

employed at a large organization

According to economic theory, a talented individual will have a higher marginal value when the individual is _____.

employed at a large organization

In ____ ____ plans, a standard is established against which group performance is compared to determine the magnitude of incentive pay the group will receive.

group incentive

In ________ __________ plans, a standard is established against which group performance is compared to determine the magnitude of incentive pay the group will receive.

group incentive

An argument in favor of using merit pay states that merit pay _____.

has a significant impact on performance

In the short term, a company's factors of production are ____, which causes each new hire to have lower marginal productivity than the previous hire.

inalterable

In the short term, a company's factors of production are _____, which causes each new hire to have lower marginal productivity than the previous hire.

inalterable

Broad banding leaves an organization vulnerable to charges of _____.

inconsistency and favoritism

Employers in extremely competitive markets find it more difficult than other employers to ____.

increase prices without loss of revenues

Employers in extremely competitive markets find it more difficult than other employers to _____.

increase prices without loss of revenues

One of the criticisms of Alfie Kohn's rejection of incentives is that without incentives, _____.

less-motivated employees will not work hard

Wondrous Facts Inc. is a publisher of fact books that manages to exceed its sales targets every year. It rewards its employees' performance based on highly specific objective criteria, such as the quality of work and the number of units produced. These performance measures have remained the same for many years. There is little fluctuation in the nature of work and the employee performance expectations are consistent. In this scenario, the most appropriate compensation strategy for Wondrous Facts is rewarding its employees with _____.

monetary benefits that have a large-incentive portion

The concept of upward sloping supply in theories of labor markets assumes that as wage rates increase...

more people are willing to take a job

The optimal overlap between the pay grades of employees and managers should be large enough to _____.

motivate employees to work toward promotion into a higher grade

A benefit of a lead pay-level policy is that it ____.

offsets less appealing features of work

Unlike the pay structure of an organization, the job structure _____.

orders the organization's jobs according to internal factors

Both Scanlon and Rucker plans primarily focus on _____.

organizational behavior variables

External competitiveness refers to the pay relationships among

organizations (pay relative to competitors)

A pay-with-competition policy attempts to ensure than an organization's labor costs are approximately the same as those of its ____ and that its ability to attract potential employees is approximately the same as its ____.

product market competitors; labor market competitors

Alfie Kohn believes that performance-based incentives are practically wrong because he believes that they reduce _____.

productivity

A band in broad banding encompasses many positions of varying values, so a _____ is usually not used.

range midpoint

The most common statistical measure of variation is probably _____, which is rarely used in pay surveys.

standard deviation

A ________ _________ plan is a generic term for plans setting the incentive rate based on completion of a task n some expected time period.

standard hour

Pay-for-performance plans that introduce variability into the amount of pay employees receive can only be effective if _____.

they are designed well

This happen IF...

they attract high quality applicants, lower turnover, increase worker effort, reduce shirking, and reduce the need for supervision

One of the purposes of employee stock ownership plans (ESOPs) is to _____.

tie employees to the success or failure of an organization

Pay mix is the various types of payments or pay forms, that make up

total compensation

A lead pay-level policy is capable of masking negative job traits that lead to higher ____ later on.

turnover

Utility formula:

u = r * SDy * Z - C/SR

The concept of upward sloping supply in theories of labor markets assumes that as wage rates increase, more people are willing to take a job. However, offers of increased pay may not boost labor supply when ____.

unemployment rates are low

The distribution of rates around a measure of central tendency is called _____.

variation

Calculate the pay level of an organization that has labor costs of $16,000,000 for 400 employees.

$40,000

The range maximum of a pay range is $68,000, and its range minimum is $34,000. Calculate the range midpoint of the pay range.

$51,000

Calculate the labor costs for a company with 300 employees and a pay level of $21,000.

$6,300,000 Labor costs = (pay level) * (# of employees) => 21000 * 300 = 6300000

Labor Costs =

(pay level) X (number of employees)

What do unusual shapes of frequency distributions in a pay survey reflect?

-Issues with job matches -Greatly dispersed pay rates -Companies with very different pay policies

Identify the incentive plans that provide for variable incentives tied to a standard expressed as a time period per unit of production.

-The Gantt plan -The Halsey 50-50 method -The Rowan plan

Identify the primary types of gain-sharing plans.

-The Rucker plan -The Scanlon plan -Improshare

Which of the following incentive plans provide for variable incentives as a function of units of production per time period?

-The Taylor plan -The Merrick plan

What are the two dimensions along which individual incentive plans vary?

-The method of rate determination -The specified relationship between production level and wages

What are the areas in which employers belonging to a labor market must compete?

-The same skills or occupations -The same services and products -Employees situated in the same geographic area

Arrange the wage components in the increasing order of their riskiness. (Place the least risky component at the top.)

1. Base pay 2. Across-the-abor

Arrange the steps involved in the determination of an internally aligned job structure in the order in which they occur.

1. Job Analysis 2. Job Description 3. Job Evaluation

Pay level and pay mix focus on _____________ objectives

4

Theories of labor markets begin with ________ basic assumptions:

4

In the formula Behavior = f (A, M, O), if Behavior represents employee behavior, what do A, M, and O represent?

A = ability M = motivation O = opportunity

Example of a low-wage, no-services strategy

A company that outsources all of its work in order to compete by producing its goods and services for the least compensation possible

Classification (advantages of common job evaluation methods)

A wide range of work can be grouped together in a single system.

How is external competitiveness expressed in practice?

By establishing a pay level that is greater than, less than, or equal to that of competitors By setting the pay mix in relation to those of competitors

What are the only things that a manager using the marginal revenue product model must do?

Calculate the pay level set by market forces Calculate the marginal revenue generated by each new hire

What are the only things that a manager using the marginal revenue product model must do?

Calculate the pay level set by market forces Calculate the marginal revenue generated by each new hire

Identify a true statement about involvement in the design of an organization's internal structure.

Committees, task forces, or teams that include representatives from key operating functions are often involved.

An organization with low variability in performance across time and stable and clear performance measures (In the context of the relationship between performance measurement and compensation strategy, match the organizations with the most appropriate compensation strategies)

Emphasizing monetary rewards and including a significant incentive component

Which component of a total pay structure includes the salaries paid by relevant competitors for the benchmark jobs measured by a pay survey?

External competitive data

________ _________ refers to the pay relationships among organizations - an organization's pay relative to its competitors.

External competitiveness

Each job in the labor market has a fixed "going rate." T/F

False

Accountability (dimensions included in the universal compensable factors employed by the Hay Group method)

Freedom to act and impact

________-_________ _________ are a type of group incentive plan in which employees share in a company's gains.

Gain-sharing plans

Which of the following would be considered a measure of success of the training provided to users to help them apply a point plan?

High (inter)rater reliability

In what kind of structure do group incentives work well?

In team-based structures where team members personally sanction poor performers

Ranking (drawbacks of common job evaluation methods)

It becomes cumbersome as the number of jobs increases.

Ranking (advantages of common job evaluation methods)

It is quick, simple, and easy to explain.

Identify an advantage of the ranking method of job evaluation.

It is the least expensive method of job evaluation, at least initially.

How does having a variety of teams within an organization affect group compensation plans?

It makes it difficult to use a single consistent type of compensation plan.

How should an organization with a variety of teams deal with group compensation plans?

It should offer different compensation approaches for different types of teams.

Identify a drawback of using the Bureau of Labor Statistics as a source in a pay survey.

Its data are usually not specific enough to be used alone.

Which of the following is also known as lump-sum bonuses and are earned by employees every year?

Merit bonuses

Customer-focused, time-to-market measures

New product introductions, on-time delivery, and cycle time

Customer-focused, time-to-market measures (factors of that types of performance measures focus on)

New product introductions, on-time delivery, and cycle time

Three factors usually used to determine relevant labor markets:

Occupation (skill or knowledge required) Geography (willingness to relocate, commute, or become a virtual employee) Competitors (other employers in the same product or service and labor markets)

Communications

Organizations need to ensure that any group incentive plan they implement is transparent in order to build employee trust

Communications (measures organizations need to take for problematic areas in team compensation)

Organizations need to ensure that any group incentive plan they implement is transparent in order to build employee trust.

____ provided by an employer are considered integral to every citizen's economic security and are regulated in most countries.

Pensions and health care

Identify an accurate statement about the goal-setting theory's approach to performance-based pay.

Performance-based pay should be contingent upon the completion of major performance goals.

Across-the-board increase (components of compensation)

Permanent increase in salary given to all employees regardless of performance

The two key product market factors that affect the ability of an organization to change what it charges for its products are:

Product demand Degree of competition

Krypton Tech Inc., a technology company, produces high-end gadgets by studying global trends in customer demands and working closely with suppliers. Identify an important compensable factor for this company.

Product innovation

Identify the statistical measures of variation that are commonly found in pay surveys.

Quartiles and percentiles

Which of the following job evaluation methods arranges job descriptions from highest to lowest according to a universal definition of relative value or contribution to the organization's success?

Ranking

Materialists (pay systems that appeals to ppl with characteristics of job applicants' personalities)

Relatively more concerned about pay level than others

Identify a difference between success-sharing plans and risk-sharing plans.

Risk-sharing plans reduce base pay, while success-sharing plans do not.

Total compensation (measures of compensation used in a pay survey)

The amount of cash each job and incumbent is worth plus bonus, stock options, and benefits

Point (advantages of common job evaluation methods)

The basis for comparisons is determined by compensable factors.

Problem solving (universal compensable factors employed by the Hay Group method)

The measure of the inherent characteristics and complexity of the issues and challenges faced by the job

Lag (In the context of how updating salary survey data reflects policy, match the terms used to describe the changes that an organization makes to its pay policy with their descriptions)

The organization selects a "match" policy but then updates survey data to the start of the plan year/end of the current year and maintains this rate throughout the plan year.

Time-vested stock option

The right to buy stock at a specified price for a fixed time period

Measures (standards for components of a pay-for-performance plan)

They need to be communicated to employees so that they will know what is used to determine whether their performance merits a payout.

Objectives (standards for components of a pay-for-performance plan)

They need to be specific yet flexible, and they need to avoid the "line-of-sight" issue.

Taylor plan (type of individual incentive plan)

This plan sets two piecework rates; one that is more than the regular wage and is for when production exceeds an established standard for a set time period, the second that is less than the regular wage and is for when production falls below standard.

Matching the market wage and offering no performance based pay

This strategy is most likely to appeal to people who just want to show up and are risk everse

Individual plan

This type of plan should be chosen when the labor mix and production methods are relatively constant

Balanced scorecard objective

To focus employees on the need to raise shareholder value

T/F: The marginal product and the marginal revenue of a new hire are not directly measurable quantities.

True

There is no research to show how much of a pay-grade differential is required to induce employees to seek promotion into a higher grade.

True (There is virtually no research to indicate how much of a differential is necessary to influence employees to work toward promotion into a higher grade. Tracing how an employee might move through a career path in the pay structure and what size pay increases will accompany that movement will help answer that question.)

Analyses for designing pay grades and pay ranges focus on the basic value of the work in consideration rather than the performance levels of employees.

True. (Analyses for designing pay grades and pay ranges usually use base pay data as base pay indicates the fundamental worth of the work being analyzed rather than the levels of performance of employees.)

The marginal product and the marginal revenue of a new hire are not directly measurable quantities.

True. (In most organizations, it is almost impossible to quantify the goods or services produced by an individual employee, since most production is through joint efforts of employees with a variety of skills. So neither the marginal product nor the marginal revenue of the employee is directly measurable.)

Identify a common example of a characteristic that is usually present in a limited number of jobs but is made into a compensable factor and applied to all jobs.

Unpleasant working conditions

When will an employer face no increase in labor supply even after raising its pay level?

When competitors quickly meet the employer's higher offer

When is turnover much higher for poor performers in a company?

When pay is linked to individual performance

According to reinforcement theory, how should an organization discourage undesirable behavior? a. by withholding payouts b. by giving incentives c. by reassigning an employee d. by laying off redundant employees

a

Identify an accurate statement about the goal setting theory's approach to performance-based pay: a. it should be contingent upon the completion of major performance goals b. targets must be fixed so that employees believe that they are unchangeable c. targets should be communicated in terms of easily achievable, general goals d. it should keep the amount of incentive award independent of a goal's difficulty

a

One of the purposes of employee stock ownership plans (ESOPs) is to: a. tie employees to the success or failure of an organization b. reduce employee involvement in an organization c. emphasize short-term gain d. control labor costs

a

What are the disadvantages of group incentive plans? (Select all that apply) a. compensation risk to employees increases due to lower income stability b. line-of-sight may be reduced c. decision-making may become restricted to the top management d. individual performance suffers at the hand of team performance

a, b

According to the efficiency-wage theory, what do high wages need to do if they are to increase efficiency and reduce labor costs? (Select all that apply) a. lure higher-quality applicants b. boost worker effort and decrease shirking c. lower the need to supervise employees d. increase worker monitoring e. raise organizational pay level f. decrease turnover

a, b, c, f

Which of the following are increased by individual incentive plans to the detriment of an organization? (Select all that apply) a. mistrust between employees and management b. inability to accurately estimate labor costs c. complaints about the poor maintenance of equipment that hinders workers' efforts d. conflict between quantity-oriented workers and quality-oriented managers e. turnover among new workers discouraged by experienced workers' resistance to on-the-job training f. supervision required to maintain reasonable levels of output

a, c, d, e

Identify the essential features of Maslow's needs hierarchy. (Select all that apply) a. needs operate cyclically as they can never be completely met b. when needs are met, they become frustrating c. people are motivated by external needs d. needs are arranged into a hierarchy from basic psychological needs to higher-order needs e. higher-order needs motivate people after basic needs have been met

a, d, e

An organization has an employee with performance ratings that are consistently high. According to the salary increase matrix of the organization, the pay of the employee should be _____.

above the pay range midpoint

In order to discourage unions, many nonunionized companies tend to: a. lag competition b. meet or lead competitors' wages c. set a low reservation wage d. outsource a large part of their labor

b

Analyses for the purpose of designing pay grades and pay ranges are usually done with _____.

base pay data

When outsourcing labor, companies must determine: a. how long the cost of segmenting labor sources outweighs the benefits b. for how long their employees can be hired at a higher wage than that of their peers c. how long the labor cost advantage at a significantly lower pay will return d. for how long their employees can legally be uprooted from their countries

c

A type of fairness that is a concern for employees is fairness in the amount that is distributed to employees, and this type of fairness is labeled ____ ____

distributive justice

A type of fairness that is a concern for employees is fairness in the amount that is distributed to employees, and this type of fairness is labeled __________ _________.

distributive justice

The best way to answer questions on anomalies while analyzing pay survey data is to _____.

do an analysis of them alone

Evidence shows that skill-based pay benefits an organization by _____.

helping employees believe in the significance of quality

The final result of the job analysis-job description-job evaluation process is a _____.

hierarchy of work

Unlike job evaluations, market surveys lack _____.

high standards of reliability and validity

Efficiency Wage theory

high wages INCREASE efficiency and lower labor costs

Human Capital theory:

higher earnings flow to those who improve their potential productivity by investing in themselves

Organizations that use fair procedures and have managers who are perceived as allocating rewards in a fair manner are likely to have _____.

higher levels of commitment

Job evaluation supports an organization's strategy by _____.

identifying the way in which the job adds value

While verifying pay survey data, in most cases, the match between the survey job and an organization's job is _____.

imperfect

In the point method of job evaluation, different factor weights indicate differences in _____.

importance attached to each factor by the employer

In general, employers desire for employees to perform in ways that result in _____.

improved organizational performance

After the results of a pay survey have been interpreted and a market line constructed, two components of the total pay structure of an organization merge. These components are _____.

internal alignment and external competitiveness

Companies often set different pay level policies for different...

job families

Reservation wage theory:

job seekers have a wage level below which they will not accept a job, no matter how attractive the other attributes

Signaling holds that employers design pay levels and mix to signal the

kinds of behaviors they seek (Those better trained, better educated, and with more experience signal they are likely to be better performers)

A _________ pay level policy maximizes the ability to attract and retain quality employees and minimizes employee pay dissatisfaction

lead

The amount each hire produces is the:

marginal product

When a company's job _____, a pay level can be selected that is a function of the pay of other companies as well as the role played by the job in executing the strategy of its own company.

matches a survey job well

Even organizations that rely primarily on market pricing probably also use job evaluation because _____.

matching all jobs to market survey jobs directly is usually impossible

The most common competitive pay-level policy involves ____.

matching competitors' wage rates

In a study conducted to determine the effects of sorting and signaling strategies, it was determined that pay level held more significance for ____.

materialists than for the risk-averse

In a study conducted to determine the effects of sorting and signaling strategies, it was determined that pay level held more significance for _____

materialists than for the risk-averse

Recently, unemployment is high and companies make...

pay cuts or They may also reduce 401k contributions. Or impose pay freezes.

Different jobs in an organization that are considered substantially equal for pay purposes are grouped into a _____ to build flexibility into the organization's pay structure.

pay grade

Technology-intensive industries tend to ____ than labor-intensive industries.

pay higher

Technology-intensive industries tend to _____ than labor-intensive industries.

pay higher

In geographical areas with high concentrations of managers, scientists, and engineers, the primary market comparison is usually _____.

regional

The higher the pay level relative to competitors, the greater the...

relative costs to provide similar products or services

____ is a return (profits) received from activities that are in excess of the minimum pay level needed to attract people to those activities.

rent

Companies with higher profits than competitors can share this success with employees by leading competitors' pay levels and/or through bonuses that are tied to profitability. Academics view this as ____.

rent sharing

One of the ways in which employers make pay cuts in times of high unemployment is by requiring employees to _____.

take furloughs without pay

Demand focuses on...

the actions of employers

The mechanisms through which pay is linked to performance are _____, which means that pay itself motivates employees to improve performance, and _____, which means that employees opt in or out of work based on its importance to them.

the incentive effect; the sorting effect

Z

the mean standard score of those hired.

Stores that fix the price of each item or ads that mention the starting wage of a job opening are examples of ____, whereas organizations that permit haggling over the terms and conditions until a consensus is reached are examples of ____.

the quoted-price market; the bourse

SR

the selection ration, which is hires/applicants.

It is evident from practice that different pay surveys imply _____.

varying levels of pay

In a pay survey, an analyst calculates the _____ by adding the base wages for all the employees in the survey and dividing that amount by the number of employees in the survey.

weighted mean

How a company compares to the market depends on...

what competitors are compared to what pay forms are included

Identify some of the important decisions involved in job evaluation.

-Establishing the purpose(s) -Choosing among alternative methods -Evaluating the usefulness of the results -Deciding on single versus multiple plans -Obtaining involvement of relevant stakeholders

According to expectancy theory, match the perceptions that shape employees' motivation with their descriptions

-Expectancy --> Employees' evaluation of their ability to carry out required job tasks -Instrumentality --> Employees' beliefs that their organization will reward high job performance -Valence --> The significance employees attribute to the organization rewards received for job performance

In the context of salary grades, identify the advantages of broad banding.

-It allows job responsibilities to be defined more broadly and flexibly than when using ranges. -It fosters cross-functional growth and development in downsized or boundary-less organizations. -It supports organizations that have eliminated levels of managerial positions.

Identify the aspects of job content whose values depend on their relationship to market wages.

-Skills required -Customer contacts

Which of the following are true of the perspective of individuals who make pay decisions based on job evaluation?

-They believe that job evaluation allows the exchange of views. -They view job evaluation as a method that helps pay differences among jobs get accepted.

What do managers use pay ranges for?

-To encourage employees to stay with the company -To meet employees' expectations that their salary will rise over time -To acknowledge individual performance differences with pay

In the context of designing a point plan, arrange the steps that are followed after job analysis in the order in which they occur.

1. Determining compensable factors 2. Scaling compensable factors 3. Weighing compensable factors according to importance 4. Selecting criterion pay structure 5. Communicating the plan and training users 6. Applying the plan to nonbenchmark jobs and developing online software support

Rank the steps involved in reinforcing employee behaviors through an organization's compensation system in the order in which they occur. -Motivating employees to perform their jobs well by using their knowledge and skills to improve organizational performance -Developing a compensation package that attracts good potential employees to the organization -Ensuring that skilled and talented employees remain with the organization -Developing further knowledge and skills of employees

1. Developing a compensation package that attracts good potential employees to the organization 2. Ensuring that skilled and talented employees remain with the organization 3. Developing further knowledge and skills of employees 4. Motivating employees to perform their jobs well by using their knowledge and skills to improve organizational performance

Identify an accurate statement about the pay level in a company.

A company may have varying pay levels for different job families.

Identify an accurate statement about the pay level in a company:

A company may have varying pay levels for different job families.

A high-wage, high-services strategy (types of organizational pay-level and pay-mix strategies)

A company that ensures that its highly-paid employees maintain a balance between their work and their personal lives

Example of a high-wage, high-services strategy

A company that ensures that its highly-paid employees maintain a balance between their work and their personal lives

A low-wage, high-services strategy (types of organizational pay-level and pay-mix strategies)

A company that offers many services for the improvement of its low-wage employees

Example of a low-wage, high-services strategy

A company that offers many services for the improvement of its low-wage employees

A low-wage, no-services strategy (types of organizational pay-level and pay-mix strategies)

A company that outsources in order to compete by producing its goods and services for the lowest compensation possible

Jobs that a company would use lead policy

A company uses this for jobs requiring skills that are critical to its success

Jobs that a company would use a lag policy

A company uses this for jobs that can easily be filled in the local labor market

Jobs that a company would use a match policy

A company uses this for jobs that require skills that are not very critical to its success

Due to restrictions placed by the product market on an employer's pay level, what strategies must an employer use to compensate for paying above the maximum? (Check all that apply.)

Allocating a large share of total revenues to cover labor expenses Passing the higher pay level on to consumers by increasing prices

Time based restricted stock

An award of shares that are received, in reality, only after the completion of a predetermined service period

Time-based restricted stock (long-term incentives)

An award of shares that are received, in reality, only after the completion of a predetermined service period

Performance-vested stock option

An option that vests only when a predetermined performance objective is attained

Indexed stock option (long-term incentives)

An option whose exercise price depends on peer companies' experiences with stock prices

Performance accelerated stock option

An option with a vesting schedule that can be reduced if certain performance criteria are met

Performance-accelerated stock option (long-term incentives)

An option with a vesting schedule that can be reduced if certain performance criteria are met

Which of the following terms refers to the criteria used for evaluating jobs in the point method?

Compensable factors

Which of the following is a reason for differing pay rates in the labor market and is difficult to document due to the inability to accurately measure and control the factors that go into a net-advantage calculation?

Compensating differentials

Identify an important point that compensation experts often miss.

Compensation is not the only reward that influences employee performance.

What are the factors that shape external competitiveness?

Competition in the labor market for applicants with various skills Attributes unique to each company Competition in the product and service markets

What are the three Cs that lead to major problems with team compensation?

Complexity, control, and communications

An organization with widely variable performance across time and stable and clear performance measures (In the context of the relationship between performance measurement and compensation strategy, match the organizations with the most appropriate compensation strategies)

Emphasizing monetary rewards and emphasizing base pay with a low-incentive component

What are the two factors that merit increase grids use to guide pay increases in an organization?

Employee performance rating and position in the pay range

How does the sorting effect improve productivity in an organization that uses individual incentives?

Employees who do not want to work harder leave and are replaced by better performers.

T/F: The best pay-for-performance plan is rigid and consistent across all divisions in an organization.

False

Tradition does not influence whether or not the compensable factors used to slot jobs into the pay structure are accepted.

False (Acceptance of the compensable factors used to slot jobs into the pay structure may depend, at least in part, on tradition.)

The Rowan plan (types of incentive plans)

In this plan, an employee's bonus increases as the time needed to complete a task decreases.

The Halsey 50-50 method (types of incentive plans)

In this plan, any savings from the completion of a task in less than an established standard time is equally divided between the worker and the employer.

The Gantt plan (types of incentive plans)

In this plan, the standard time for a task is deliberately set at a level that needs a lot of effort to achieve. For any task completed in standard time or less, earnings are set at 120 percent of the time saved.

What is the main issue with defining teams in a group incentive plan at a very broad level?

Incentives can lose much of their motivational impact.

Identify an outcome of employee stock ownership plans (ESOPs).

Increased employee willingness to take part in decision making

Balanced scorecard disadvantage

It can be complicated

Balanced scorecard (disadvantages of variable-pay plans)

It can be complicated.

Identify a true statement about the application of a point plan to nonbenchmark jobs.

It can be done by people who were not necessarily involved in the design process.

Point (drawbacks of common job evaluation methods)

It can become bureaucratic and bound by regulations.

Cash profit sharing disadvantage

It may be considered an entitlement and has limited motivational impact

A lead policy can have negative effects:

It may force the employer to increase wages of current employees too. It may mask negative job attributes that contribute to high turnover.

Stock ownership or options disadvantage

It may require employees to put money up to exercise grants

Identify a drawback of profit-sharing plans.

Most employees believe that their jobs do not directly impact profits.

Identify a true statement about the factor scales constructed in the point method of job evaluation.

Most factor scales consist of four to eight degrees.

_____ involves offering what's important to a person in exchange for some desired behavior.

Motivation

Organization factors

Nature of the industry, company strategy and size, and characteristics of individual managers

External competitiveness perspective (views on pay ranges)

Pay range is a control device because a range maximum is the highest an organization is willing to pay for the work and the range minimum is the lowest.

Internal alignment perspective (views on pay ranges)

Pay range reflects the variations in experience or performance that an organization wishes to acknowledge with pay.

What does reinforcement theory recommend for reinforcing performance?

Performance must be directly followed by performance-based payments.

Which job evaluation approach is most commonly used in the United States and Europe?

Point plans

Applicants with low self-esteem

Prefer large, decentralized company with little performance-based pay

Applicants with low self-esteem (pay systems that appeals to ppl with characteristics of job applicants' personalities)

Prefer large, decentralized company with little performance-based pay

The range midpoint of a pay range that has been set at 30 percent above and 30 percent below the midpoint is $20,000. Calculate the range maximum (Rmax) and range minimum (Rmin) of the pay range.

Rmax is $26,000, and Rmin is $14,000.

Internal process-focused measures

Safety rates, cost allocation ratios, program implementation, budget-to-actual expenses, accuracy or error rates, teamwork effectiveness, reliability or rework, and service or quality index

Internal process-focused measures (factors of categories of performance measures)

Safety rates, cost-allocation ratios, program implementation, budget-to-actual expenses, accuracy or error rates, teamwork effectiveness, reliability or rework, and service or quality index

Risk takers

Seek more pay based on performance

What do unionized workers consider the most important basis for salary increases?

Seniority

Which of the following is a consequence of differences in compensable factors being based on the work itself?

The chances of accusations of pay discrimination being raised are reduced.

A restaurant offers incentives to employees who eliminate cockroaches and rats. Which of the following changes in the behavior of the employees could be considered a failure of the restaurant's incentive plan?

The employees begin bringing dead cockroaches and rats into the kitchen to clean them up.

In order to increase the time spent on quality checks, a garage offers its employees incentives for fixing brake lines that are cut. Which of the following changes in the behavior of the employees could be considered a failure of the garage's incentive plan?

The employees begin cutting brake lines just to repair them.

Accountability (universal compensable factors employed by the Hay Group method)

The measured effect that the job is designed to have on the organization's success

Lead (In the context of how updating salary survey data reflects policy, match the terms used to describe the changes that an organization makes to its pay policy with their descriptions)

The organization ages the market data to a point at the end of the plan year and pays at this rate for the entire plan year.

Lead/Lag (In the context of how updating salary survey data reflects policy, match the terms used to describe the changes that an organization makes to its pay policy with their descriptions)

The organization ages the market data to a point in the middle of the plan year and updates the original survey rates to the end of the current year plus half the predicted amount for the plan year.

Time-vested stock option (long-term incentives)

The right to buy stock at a specified price for a fixed time period

Know-how (universal compensable factors employed by the Hay Group method)

The sum total of all the facts, information, and skill needed to do the job competently, irrespective of the way in which they are acquired

What is the challenge called small numbers that is faced while deciding the number of compensable factors to be used while designing a point plan?

The tendency to use a factor present in even a single job in the benchmark sample for the entire work domain

Which of the following labor supply theories explains pay-level differences on the premise that higher wages flow to people who invest in themselves to increase their potential productivity?

The theory of human capital

How do frequency distributions aid an analyst during the statistical analysis of a pay survey?

They aid in visualizing information. (and reveal anomalies)

Cash profit sharing objective

To educate employees about the way in which a business operates

There are three pay level policies:

To lead To meet or match To follow competition, or lag

Why should an organization's pay-for-performance plan comply with existing laws?

To maintain the organization's reputation

Why is a manual prepared after a job evaluation point plan is designed?

To permit users who were not involved in the plan's development to apply the plan as its developers intended

Why are outside consulting firms often used in designing a survey?

To protect a company from price-fixing lawsuits

Balanced scorecard (objectives of variable pay plans)

To recruit best-quality employees when the future of an organization is highly uncertain

When are the data from product market competitors likely to be given greater weight than that of labor market competitors in defining a relevant market? (Check all that apply.)

When employee abilities are specific to the product market When labor expenses form a large share of total expenses When labor supply is not responsive to pay changes When demand for a product is responsive to price changes

When is turnover much higher for good performers in a company?

When pay is based on group performance

When is paying employees above market an efficient strategy for an organization?

When the organization's revenues exceed the strategy's expenses

A criticism of Alfie Kohn's stance on incentives is that in the real world, performance-based incentives are: a. required for the completion of uninteresting jobs b. very effective in boosting employees' internal rewards c. most commonly used for jobs that involve multitasking d. necessary for the recognition of teamwork

a

According to Herzberg's two-factor theory, _________ are factors related to basic living needs that prevent behaviors in their absence, whereas _________ are factors that motivate performance. a. hygiene factors; satisfiers b. expectancies; valencies c. esteem needs; physiological needs d. achievement factors; maintenance factors

a

An argument in favor of using merit pay states that merit pay: a. has a significant impact on performance b. does not need to involve base pay c. is easily given as it is a spot reward d. is the least expensive of all variable-pay plans

a

Employers in markets with no competition have the ability to: a. set whatever price they desire b. regulate competitive markets c. keep a standard reservation wage d. pay below the minimum wage

a

How do poorly administered skill-based pay plans create cost inefficiencies that lead to plan abandonment? a. by permitting more employees to obtain certification in a skill than are needed b. by taking employees' focus off the importance of quality in the work they do c. by increasing productivity to an excessive, unmanageable degree d. by lowering the pay of employees who are trained in an unnecessary skill

a

How does organization development help an organization with inefficient processes? a. it frees up motivated employees to utilize their skills b. it eliminates all old skills in favor of new ones c. it reinforces all behaviors exhibited by an employee d. it increases the steps involved in getting approval for change

a

Identify a disadvantage of individual incentive plans: a. it is hard to find objective individual measures b. it is unreasonable to expect employees to meet measurable standards c. it is difficult to monitor individuals' performance d. it is impossible to establish a standard for employee performance

a

Identify an accurate statement about the pay level in a company: a. a company may have varying pay levels for different job families b. the variations in pay within a company are always identical to those of its competitors c. the variations in pay within a company are always identical to those in the labor market d. a single company has the same pay level across all job types

a

If other elements of a total HR plan are developed to nurture and reinforce risk-taking behavior, the compensation component of the HR plan should: a. avoid rewarding the status quo b. also reinforce the status quo c. also nurture risk averseness d. avoid selecting risk-taking behavior

a

In what kind of organizations is it appropriate to emphasize base pay while having a low-incentive component in the compensation strategy? a. in organizations that have highly variable annual performance b. in organizations that encourage innovation c. in organizations that want employees to be flexible and show commitment d. in organizations that expect employees to perform the same task every day

a

Studies have consistently proven that high performers in an organization: a. are given larger merit increases than average performers b. prefer incentive plans based on team performance c. receive the same amount of bonuses as average performers d. dislike pay that is based on individual performance

a

Instead of timing an entire task, _____ requires determination of the time required to complete each simple action of a task, and workers receive a wage incentive for completing a task in less than the standard time.

a Bedeaux plan

While using the classification method of job evaluation, greater specificity of the class definition results in _____.

a more reliable evaluation

Rent =

a return on activities in excess of the minimum

An alternative to combination plans that is often preferred by CEOs who do not like to make payouts when a company loses money is _____.

a self-funding plan

Unlike grades-and-ranges approaches to designing pay structures, broad-banding approaches have controls in the form of _____.

a total salary budget that limits managers

What are the observable results of increases wages? (Select all that apply) a. greater pay satisfaction b. improved employer size and ability to pay c. improved quality, effort, and performance d. greater employee attraction and retention e. greater attrition rates

a, c, d

Having a lag pay-level policy may impede an organization's ability to ____.

attract job applicants

Sorting is the effect pay strategy has on who is ___________ to and ______________ in a job

attracted / retained

Identify the advantages of group incentive programs. (Select all that apply) a. they reduce turnover of individual top performers b. they improve organization and individual performance by about 5 to 10 percent per year c. they may make it easier for employees to see how their individual performance affects their incentive payouts d. they may motivate employees to increasingly participate in decision-making processes

b, d

In the context of the implications of motivation theories for pay and pay for performance, Maslow's needs hierarchy suggests that _____.

base pay must be sufficient for individuals to meet their basic living needs

Identify a characteristic of individual spot awards: a. they are awarded once a year at the end of an organization's financial year b. they are awarded to all employees in an organization on the basis of corporate performance c. they are awarded immediately after an individual performs exceptionally d. they are awarded for every year that an employee stays with the employer

c

Identify a mistake pay-for-performance plans make that cause them to be inefficient: a. they allow flexible variations of themselves b. they make payouts that influence performance on the bottom line c. they focus on quantity at the expense of quality d. they unnecessarily reduce cost inefficiencies

c

One of the major advantages of a standard piecework plan is that: a. it is easy to set standards based on time per unit produced b. employees never sort themselves out c. employees can easily comprehend it d. it only needs to be implemented once a year

c

Rewards have been shown by hundreds of studies to: a. cause cost inefficiencies b. have no effect on productivity c. motivate performance d. devalue effort

c

The dashboard form of reporting the mix of pay forms of a company focuses on: a. the importance of internal competition b. the relative importance of each form within a single company c. comparing each pay form to the market d. contrasting each pay form with its reservation wage

c

When collecting organizational data for a salary survey, financial data are typically used to _____.

categorize firms by size, expressed in terms of revenues or sales

A large amount of data in a pay survey can be reduced into a single number by using a measure of _____.

central tendency

An analyst of a pay survey should avoid using the Consumer Price Index (CPI) for updating salary survey data because the CPI does not measure _____.

changes in wages in the labor markets

The _____ is defined as employee salary divided by salary range midpoint.

compa-ratio

A garage began offering its employees incentives for fixing cut brake lines in order to increase the time spent on quality checks. Which of the following is a change in the behavior of its employees that could be considered a failure of the garage's incentive plan? a. the employees begin spending twice as much time looking under cars than they used to b. the employees begin finding dangerous flaws that could have cost car owners their lives c. the employees begin inspecting brake lines much more carefully d. the employees begin cutting brake lines just to repair them

d

A study on how economic factors translated into wage decisions for managers found that the profitability of a company was viewed by managers as a factor for higher management in determining: a. a standard reservation wage b. marginal revenues c. individual pay adjustments d. the general pay budget

d

There is substantial evidence that indicates that most employees and managers believe that: a. incentives are morally wrong because they involve one person controlling another b. seniority needs to be the primary basis for pay increases c. incentives directly reduce productivity, making them practically useless d. salary increases should be tied to job performance

d

Many critics of merit pay argue that it _____.

does not improve performance

____ ____ is based on the idea that only the individual employee knows what package of rewards would best suit personal needs; it allows tradeoffs between pay and benefits.

flexible compensation

Employees seek transparency of pay practices so that they can _____.

give input into expectations for them

In managerial jobs, larger pay ranges reflect _____.

greater scope for performance variations and individual discretions

The higher the pay level of an organization relative to what its competitors pay, the ____

greater the costs to provide comparable products or services

Over the last several decades, companies have been moving more toward _____.

greater use of variable pay programs

Research has proven that in manufacturing, productivity has a positive correlation with ____.

hourly wage level

Research has proven that in manufacturing, productivity has a positive correlation with _____.

hourly wage level

According to Herzberg's two-factor theory, _____ are factors related to basic living needs that prevent behaviors in their absence, whereas _____ are factors that motivate performance.

hygiene factors; satisfiers

If an organization fails to _____, it becomes difficult to implement revised training programs or create compensation packages to reward new skills immediately.

identify changing skill requirements

Unlike the job structure of a company, the pay structure _____.

is anchored by the company's external competitive position

Unlike distributive justice, procedural justice _____.

is more under the control of managers

One of the drawbacks of the salary data available on the Web is that much of the data _____.

is of uncertain quality

C

is the cost per applicant.

SDy

is the standard deviation of the dollar value of different employee performance levels.

The first step in designing a point plan is _____.

job analysis

Changes to the pay mix of an organization occur less frequently than changes to the pay level probably because of the _____.

lack of attention given to pay mix decisions

An issue encountered while adjusting an organization's pay structure is that the job structure that emerges from internal job evaluation _____.

may not match the pay structures of competitors

In a pay survey, a _____ is calculated by summing up the base wages of all organizations in the survey and dividing by the number of organizations.

mean

A(n) ____ ____, or a lump-sum bonus, is an end-of-year bonus that is based on employee or company performance and does not build into base pay.

merit bonus

A(n) ________ _________, or a lump-sum bonus, is an end-of-year bonus that is based on employee or company performance and does not build into base pay.

merit bonus

A ________ ________ system links increases in base pay, or merit increases, to how highly employees are rated on a performance evaluation.

merit pay

There is evidence that organizations that widely use high-performance work practices and computer-based technology and employ higher-skilled employees ____.

pay higher wages

These factors act in concert to influence...

pay level and pay mix decisions

Regular adjustments made by organizations to employees' pay levels may be based on _____.

performance, ability to pay, or terms specified in a contract

In the context of motivation theories, agency theory maintains that _____.

performance-based pay helps motivate and direct employee performance

The statistical approach used to determine the weight for each factor and the factor scales that will reproduce, as closely as possible, the chosen criterion pay structure is often labeled ____ ____ to differentiate it from the committee a priori judgment approach.

policy capturing

A criticism of Alfie Kohn's stance on incentives is that in the real world, performance-based incentives are _____.

required for the completion of uninteresting jobs

Some believe job seekers take the first job offer whose pay meets their _____________ wage

reservation

Employers will hire until marginal _____________ equals the cost associated with ___________ that person.

revenue / employing

There is substantial evidence that indicates that most employees and managers believe that _____.

salary increases should be tied to job performance

The approach to motivation that believes that employees have the highest quality motivation when both extrinsic and intrinsic motivators are used is _____.

self-determination theory

Employers in markets with no competition have the ability to ____.

set whatever price they desire

One of the ways in which employers make pay cuts in times of high unemployment is by requiring employees to ____.

take furloughs without pay

One of the disadvantages of individualized incentive plans is that employees _____.

tend to resist employers' attempts to introduce new technology

The primary source of publicly available compensation data in the United States is _____.

the Bureau of Labor Statistics

marginal revenue of labor:

the additional revenue generated from employing one additional person (The money generated by the sale of the marginal product - the additional output of one additional person)

Perceptions of fairness relating to distributive justice depend on _____ compared against a suitable standard.

the amount of pay received relative to input

According to reinforcement theory, an organization should discourage an employee's undesirable behavior by _____.

withholding the employee's payouts

A negative impact of new pay systems that expect employees to bear a share of risks is that these systems _____.

work against efforts that build employee commitment

Identify the principal decisions for an organization in determining externally competitive pay and creating corresponding pay structures.

-Choose relevant market competitors -Balance competitiveness with internal alignment -Create a pay policy line that reflects external pay policy

What are the assumptions that theories of labor markets usually begin with?

-People are homogeneous and thus interchangeable. -All costs associated with employment are reflected in pay rates. -Employers always aim to maximize profit. -A single employer has no advantage to pays below or above the market rate.

Variable-pay plans always have a positive impact on performance.

False (Too often variable-pay plans have unattainable or too easy goals, too small a payout for the work expected, too many metrics, or outdated or inaccurate metrics.)

Due to restrictions placed by the product market on an employer's pay level, what strategies must an employer use ti compensate for paying above the maximum? (Select all that apply) a. ensuring that competitors reduce the prices of similar products b. allocating a larger share of total revenues to cover labor expenses c. passing the higher pay level on to consumers by increasing prices d. increasing the resources used for performance-linked incentives

b, c

According to the efficiency-wage theory, what do high wages need to do if they are to increase efficiency and reduce labor costs? (Select all that apply) a. raise organizational pay level b. boost worker effort and decrease shirking c. lure higher-quality applicants d. lower the need to supervise employees e. increase worker monitoring f. decrease turnover

b, c, d, f

In the ____ method of job evaluation, a series of well-described classes covers the range of jobs in an organization, and a job description is compared to the class descriptions to decide which class is the best fit for that job.

classification

The easiest way to convert market data to fit a skill or competency structure is to use _____ as anchors for the competency-based structures.

the wages for the lowest- and highest-paid benchmark jobs for the relevant skills in the market

_____ is used to estimate the relative value of job evaluation points for survey jobs and internal jobs in order to provide guidance for adjusting market data.

Benchmark conversion

Identify a disadvantage of individual incentive plans.

It is hard to find objective individual measures.

two basic types of markets:

Quoted price (Amazon is a quoted price market, price is known) Bourse (eBay - allows haggling/negotiation)

Performance-accelerated restricted stock (long-term incentives)

Restricted stock granted only after specified performance objectives have been attained

Labor market factors (categories of factors that shape external competitiveness)

-ex: Nature of demand for employees and nature of supply of employees

Organization factors (categories of factors that shape external competitiveness)

-ex: Nature of the industry, company strategy and size, and characteristics of individual managers

A lag policy (type of pay-level and pay-mix strategies)

-types of jobs companies use them for: Companies use this policy for jobs that can be easily filled in the local labor market.

A match policy (type of pay-level and pay-mix strategies)

-types of jobs companies use them for: Companies use this policy for jobs that require skills that are not very critical to their success.

Flexible and balanced guidelines are necessary to ensure efficient job evaluation.

True (required to ensure that employees are treated fairly and that pay decisions help an organization achieve its objectives)

Which option to reduce labor expenses is used when people flow to the work? a. segmenting the source of labor b. offshoring work c. sending labor to other nations d. using people in different locations

a

In an organization that uses a pure market pricing strategy, the pay structure is completely determined by _____.

competitors' pay decisions

In order to translate an external competitive pay policy into practice, an employer needs _____.

information on the external market

The compensable factors used to determine an organization's internal pay structure should be acceptable to _____.

the stakeholders

The compensable factors used in the designing of a point plan are based on _____.

the strategic direction of business and the way in which the work contributes to the strategy

What are common across various employers, have stable job content, and have sizable numbers of employees?

Benchmark jobs

Success-sharing plans (components of compensation)

A generic category of variable pay that is linked to some measure of group performance

What is the outcome of using the classification method of job evaluation?

A job structure with a sequence of classes, each having a number of similar jobs

What are they?

A single employer has no advantage to pays below or above the market rate. Employers always aim to maximize profit. All costs associated with employment are reflected in pay rates People are homogeneous and thus interchangeable.

_____ is a generic term for plans setting the incentive rate based on completion of a task in some expected time period.

A standard hour plan

In which individual incentive system is rate determination based on units of production per time period and wages vary directly as a function of production level?

A straight piecework plan

_____ are stock grants that a company gives employees over a designated time period.

Broad-based option plans

The type of fairness that employees are concerned about that involves the fairness of the procedures used to determine the amount of rewards they receive is known as ________ _________.

procedural justice

Companies with higher profits than competitors can share this success with employees by leading competitors' pay levels and/or through bonuses that are tied to profitability. Academics view this as _____.

rent-sharing

Labor markets work with ___________ and __________ of labor

supply / demand

The option of off-shoring to reduce labor expenses is also described as ____.

work flowing to the people

The option of off-shoring to reduce labor expenses is also described as _____.

work flowing to the people

Expectancy

Employees' assessment of their ability to complete necessary job tasks

Productivity/gain sharing disadvantage

It can have unintended consequences, such as a quality drop-off

Stock ownership or options (objectives of variable pay plans)

To recruit best-quality employees when the future of an organization is highly uncertain

____-____ ____ focus on performance beyond the one-year time line used as the cutoff for short-term incentive plans.

long-term incentives

How do managers choose their relevant labor markets? (Check all that apply.)

They look at the skills and knowledge required for a job. They consider the products, size, and location of their competitors. They evaluate the importance of a job to their organization's success

Paying below the market for base pay yet offering generous bonuses (sorting and signaling strategy)

This strategy is most likely to appeal to risk-takers who seek flexible schedules, more interesting projects, or more opportunities for promotion.

Individual plan (situations that types of incentive plans should be used in)

This type of plan should be chosen when the labor mix and production methods are relatively constant.

Group plan

This type of plan should be chosen when the production methods and labor mix need to adapt to meet changing pressures

Group plan (situations that types of incentive plans should be used in)

This type of plan should be chosen when the production methods and labor mix need to adapt to meet changing pressures.

Low risk or reward (risk levels for long-term incentive plans)

Time-based restricted stock, performance-accelerated restricted stock, and stock purchase plans

Medium risk or reward (risk levels for long-term incentive plans)

Time-vested stock options, performance-vested restricted stock, and performance-accelerated stock options

Stock ownership or options objective

To recruit best-quality employees when the future of an organization is highly uncertain

Team/group incentives (objectives of variable pay plans)

To reiterate the need for employees to work together to obtain results

Team/group incentives objective

To reiterate the need for employees to work together to obtain results

What are the only things that a manager using the marginal revenue product model must do? (Select all that apply) a. calculate the pay level set by market forces b. calculate the number of people hired at a loss c. calculate the marginal revenue generated by each new hire d. calculate the difference in pay levels across competitors

a, c

Studies have consistently proven that high performers in an organization _____.

are given larger merit increases than average performers

how did the study on managers' approaches to pay decisions in light of varying unemployment, profitability, and labor market conditions directly contradict the efficiency-wage theory? a. managers believed that problems with attracting and keeping people were the result of inadequate compensation b. managers blamed difficulties with attracting and retaining people on poor management c. managers perceived rent sharing to be a means of increasing worker effort and reducing shirking d. managers thought it prudent to pay less when market conditions permit lower pay as it helps attract and retain employees

b

Match the letters in the image with the stages in the cascading link between organization strategy and employee behavior they represent

A --> Corporate Goals B --> SBU Goals C --> Department/Team Goals D --> Employee Team Results E --> Individual Goals

Match the letters in the image of a grid with a pay range on the vertical axis (in the left column) with the salient features of the pay range they represent (in the right column).

A -> Range maximum B -> Range midpoint C -> Range minimum

Since employees these days are easily able to compare their salaries to others' using data from the Bureau of Labor Statistics or Salary.com, managers must _____.

be able to defend the salaries they pay

Identify the characteristics of jobs that are thought to make them more susceptible to offshoring. (Select all that apply) a. little need for local insight on unique cultural factors b. continuously changing nature of work c. little need for worker interaction d. inputs/outputs easy to transmit electronically e. easy to routinize f. little need for labor of any kind

a, c, d, e

An employer will keep hiring until the marginal revenue generated by the last hire equals the: a. average of the array of rates paid by the employer b. costs of vetting and training that person c. labor costs for all the employees in an organizations d. expenses associated with employing that person

d

Companies with higher profits than competitors can share this success with employees by leading competitors' pay levels and/or through bonuses that are tied to profitability. Academics view this as: a. stock sharing b. risk liability c. marginal sharing d. rent sharing

d

Employees seek transparency of pay practices so that they can: a. determine their own incentives and compensation b. completely control distributive justice c. ensure that organizational structure is completely centralized d. give input into expectations for them

d

An employer will keep hiring until the marginal revenue generated by the last hire equals the _____.

expenses associated with employing that person

If other elements of a total HR plan are developed to nurture and reinforce risk-taking behavior, the compensation component of the HR plan should _____.

avoid rewarding the status quo

Which combination may boost employee commitment and encourage teamwork, which may turn improve productivity? a. a lag pay-level policy combined with the promise of increased future returns b. a low-wage, no-services policy combined with high risk to the company reputation c. a lead pay-level policy combined with internal misalignment and murmuring d. a pay-with-competition policy combined with a lack of offered bonuses

a

Rucker plan (types of gain-sharing plans)

A plan that uses a ratio that expresses the value of production required for each dollar of total wage bill to decide worker incentive bonuses

Identify an accurate statement about a reservation wage.

A reservation wage may be more than or less than the market wage.

Which of the following approaches determines pay structures almost entirely on external market rates?

Market pricing

Stock ownership or options (disadvantages of variable-pay plans)

It may require employees to put up money to exercise grants.

marginal product of labor:

The additional output associated with the employment of one additional person, with other production factors held constant

A(n) ____ plan provides a variation on straight piecework and standard hour plans and requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action.

Bedeaux

Organizations commonly use an established approach to derive a single internal structure that can be applied to different functional groups or units.

False (commonly have multiple internal structures derived through multiple approaches that apply to different functional groups or units)

Which of the following offers a promise of pay for some predetermined, objective level of performance?

Individual incentive plans

Straight piecework plan

Individual incentive system whose rate determination is based on units of production per time period and wages vary directly as a function of production level

What significance does pay level have in the application of Herzberg's two-factor theory to designing compensation to motivate employees?

It must satisfy an employee's hygiene needs before the employee can be motivated.

For merit pay to achieve its goals, what change does an organization need to make?

It needs to enhance the accuracy of performance ratings.

Why are market data weighed more heavily than internal job evaluation data when reconciling differences in pay structures?

Market data are usually perceived as more objective.

a return (profits) received from activities that are in excess of the minimum pay level needed to attract people to those activities.

RENT

Identify the best solution to the differing pay structures for a job that arise out of differences between market structures and rates and job evaluation rankings.

Reanalyzing the job evaluation or market data for the job

________ _________ begins with the traditional alternatives of lead, meet, or lag; it then adds a second part, which is to offer employees choices within limits in the pay mix.

Share choice

____ ____ begins with the traditional alternatives of lead, meet, or lag; it then adds a second part, which is to offer employees choices within limits in the pay mix.

Shared Choice

Productivity/gain sharing objective

To reward employees for betterments in activities that they control

What are the factors that contribute to the success of an organization's attempt to change its employees' behavior? (Select all that apply) a. performance needs to be measured by the organization b. a compensation system should be set up to reward the desired behavior c. the desired behavior needs to be incorporated into the organization culture d. employees need to be motivated to take their knowledge and abilities outside the company e. the organization needs to lay off workers who do not immediately change f. the people whose behavior needs to be changed should have the necessary training g. the right people need to be selected by the organization

a, b, c, f, g

How do managers choose their relevant labor markets? (Choose all that apply) a. they consider the products, size, and location of competitors b. they evaluate the value of potential employees' self-investments c. they evaluate the importance of a job to their organization's success d. they look at the skills and knowledge required for a job e. they examine the reservation wage set by their competitors

a, c, d

What significance does pay level have in the application of Herzberg's two-factor theory to designing compensation to motivate employees? a. it induces extra performance in addition to the level of performance induced by incentives b. it operates as the primary motivator of employee performance in an organization c. it must satisfy an employee's hygiene needs before the employee can be motivated d. it negates the motivation to perform well created by performance-based pay in employees

c

Identify an accurate statement about a reservation wage: a. a reservation wage is the sum of all bonuses offered b. a job seeker will not take up a job offer that offers his or her reservation wage as an incentive c. a job seeker may accept a job offer above or below his or her reservation wage level d. a reservation wage may be more than or less than the market wage

d

Nations that have lower average labor costs display a tendency to have ____.

lower average productivity

Unlike broad-banding approaches to designing pay structures, grades-and-ranges approaches have guidelines and controls in the form of _____.

range minimums, range maximums, and range midpoints

What are the assumptions that theories of labor markets usually begin with? (Select all that apply) a. all costs associated with employment are reflected in pay rates b. the markets faced by employers are essentially noncompetitive c. a single employer has no advantage if it pays above or below the market rate d. people are homogeneous and thus interchangeable e. employees need to be retained at all costs as they are irreplaceable f. employers always aim to maximize returns

a, c, d, f

What are the two dimensions along which individual incentive plans vary? (Select all that apply) a. the method of rate determination b. the complexity of tasks performed c. the component of salary that is considered variable in the plan d. the specified relationship between production level and wages

a, d

What are the ways in which individualized incentive plans have an advantage over payment by time? (Select all that apply) a. they eliminate the prioritizing of quantity over quality b. they allow labor costs to be estimated more accurately c. they elevate levels of trust between workers and management d. they require less direct supervision to maintain output

b, d

If the content of a company's jobs fails to sufficiently match that of jobs in a salary survey, an attempt can be made to quantify the dissimilarity through _____.

benchmark conversion

If a pay survey's purpose is to price a company's entire pay structure, then _____ can be chosen to include the entire job structure, with all its important functions and all its levels.

benchmark jobs

Companies examine their own practices and costs in the area of compensation against their competitors in order to _____.

better comprehend how their competitors achieve their market share

According to a study on managers' approaches to pay decisions under varying economic conditions, how did level of unemployment affect wage adjustment recommendations? a. high unemployment meant cuts in salaries for most managers b. it was considered the most important determinant of wages c. it had almost no impact on wage adjustment recommendations d. high unemployment was seen as reason enough for pay hikes

c

When is paying above market an efficiency strategy for an organization? a. when a competitor with a lower pay level has greater reliability and higher morale b. when the labor costs exceed the organization's returns c. when the organization's revenues exceed the strategy's expenses d. when a competitor has a lower pay level and exponentially higher returns

c

Which of the following labor supply theories explains pay-level differences on the premise that higher wages flow to people who invest in themselves to increase their potential productivity? a. the efficiency-wage theory b. the reservation-wage theory c. the theory of human capital d. the theory of compensating differentials

c

What are the effects of offering high wages in a lead pay-level policy? (Select all that apply) a. reduced satisfaction with pay b. reduced employee attraction and retention c. reduced vacancy rates and training time d. reduced turnover and absenteeism

c, d

What are the predictions that expectancy theory makes about performance-based pay? (Select all that apply) a. performance-based pay returns must be small enough to be seen as rewards b. employees must believe that performance targets are unchangeable c. smaller incentive payments are not as effective as larger ones d. employees select the behavior that yields the biggest reward e. the connection between pay and performance must be clearly visible to an employee

c, d, e

The pay data for a salary survey are usually updated through a process called trending or aging to predict the _____.

competitive rates for the future date when the pay decisions will be implemented

One of the arguments for merit pay is that it creates a sorting effect that _____.

creates a workforce that is more responsive to merit rewards

After the determination of factor weights by an advisory committee, the committee members recommend the ____ ____ ____, that is, a pay structure they wish to duplicate with the point plan.

criterion pay structure

The market rate is where labor demand and labor supply ___________

cross

Evidence shows that skill-based pay benefits an organization by: a. creating a surplus of employees with a required skill b. increasing productivity c. creating cost efficiencies d. helping employees believe in the importance of quality

d

Why should an organization's pay-for-performance plan comply with existing laws? a. to ensure that managers control distributive justice b. to undervalue competitors' pay systems c. to eliminate risk-takers from the job applicant pool d. to maintain the organization's reputation

d

Diminishing marginal productivity for each new employee added to a firm arises from the fact that each new employee _____.

has access to a progressively smaller portion of other factors of production

A low-high approach to selecting jobs for inclusion in surveys is used to determine the pay level when an organization _____.

has skill-competency-based structures

It is appropriate to use a compensation strategy that emphasizes base pay with a low-incentive component in organizations that _____.

have highly variable annual performance

Until fixed production factors change, each new hire produces...

less than the previous hire.

Supply looks at...

potential employees

Employers are using variable-pay plans to motivate employees to adapt to new technologies, work processes, and work relationships at an unparalleled speed so that the employers can _____.

prevent market share from going to competitors

"____" refers to the image or brand a company projects as an employer.

Employer of choice

Identify the theory of motivation that emphasizes consistency and fairness of performance-based pay across employees in a company.

Equity theory

Which theory of motivation states that employees are motivated when the ratio of their perceived inputs and outputs is equal to their perceived inputs and outputs of a comparison person?

Equity theory

Union representatives who actively participate in the design of internal structure believe that collective bargaining yields more equitable results.

False (Some union leaders believe that philosophical differences prevent their active participation in the design of internal structure. They believe that collective bargaining yields more equitable results.)

What are the principal decisions involved in an organization determining externally competitive pay and forming corresponding pay structures through a survey?

-Designing the survey -Interpreting survey results and construct the market line -Defining the purpose of the survey

Identify the characteristics of jobs that are thought to make them more susceptible to offshoring.

-Easy to transmit inputs/outputs electronically -Easy to routinize -Little need for worker interaction -Little need for local insight on unique social and cultural factors

According to the efficiency-wage theory, under which of the following conditions do high wages increase efficiency and reduce labor costs?

-If they boost worker effort and decrease shirking behavior -If they decrease turnover -If they lower the need to supervise employees -If they lure higher-quality applicants

How do managers choose their relevant labor markets?

-They evaluate the importance of a job to their organization's success -The consider the products, size, and location of competitors -They look at the skills and knowledge required for a job

Identify the compensable factors employed by the Hay Group Guide Chart—Profile Method of job evaluation.

-know-how -problem solving -accountability

Merit pay (components of compensation)

Permanent increase in salary given to an employee as a function of some evaluation of employee performance

Which method of job evaluation has compensable factors whose degrees are numerically scaled and whose relative importance is weighed in the determination of job structure?

Point method

Labor market factors

Nature of demand for employees and nature of supply of employees

Capability-focused measures (factors of categories of performance measures)

Turnover rates, employee satisfaction, promotability index, total recruitment costs, distribution systems, rate of progress on developmental plans, and patents, copyrights, or regulations