Compensation and Benefits Exam 1

Among employers that provide health insurance, the cost to provide family coverage per year per employee is approximately

$16,000

Most factor scales have _ degrees.

4-8

Recent surveys show that, on average, an outstanding performer receives a _ merit increase, an average performer a _ merit increase, and a poor performer a .4% merit increase.

4.4% ; 2.8%

TreeWind Inc. is a bookstore that uses skill and responsibility as its compensable factors. It assigns 20 percent weight to responsibility and 80 percent wieght to skill. If the responsibility factor scores a 60 after multiplying the subfactors with their corresponding weights, and if the skill factor has two subfactors that are rated as 4 and 5, what is the total weightage given to the job?

420

Research shows the skills, one of the compensable factors, accounts for _ percent or more of the variance in job evaluation results.

90

Nina is a high performing individual who works best alone. Which of the following companies is the most appropriate for her?

A company that uses a hierarchical pay structure to pay its employees based on performance

Which of the following is NOT true of the usage of multiple plans versus single job evaluation plans?

A single universal plan is acceptable to employees if the work covered is highly diverse.

Which of the following statements regarding allowing employees a choice in their pay mix is NOT true?

Allowing employees their choice is easy for competitor companies to imitate.

When cooperation is important for successful organization performance, which of the following pay structures is most suitable?

An egalitarian pay structure

Which of the following is the correct order of the steps in formulating a total compensation strategy?

Assess the strategy, map the strategy, implement the strategy, and reassess the strategy.

Which of the following is a policy, and NOT an objective, in the pay model?

Competitiveness

Which of the following is the underlying assumption in the assessment of job content?

Content has intrinsic value outside external market

Organization factors that shape internal pay structures include all BUT which of the following?

Cultures and customs

Organization factors that shape internal pay structures include all BUT which of the following?

Economic pressures

Incentives and merit guidelines are techniques of the _ policy of the pay model.

Employee contributions

The decisions to implement pay for performance, flat rate pay, and profit sharing are examples of _ policy decisions.

Employee contributions

Which of the following decisions directly affects employees' attitudes and work behaviors?

Employee contributions

Which of the following is an example of a relational return?

Employment security

Which of the following is NOT a factor in defining equal work according to the Equal Pay Act?

Equal experience

Which of the following is a major decision in job evaluation?

Establishing the purpose of evaluation

Comparisons on the forms of compensation used by other companies are part of _

External competitiveness

According to the text, which of the following decisions should be made jointly?

External competitiveness and employee contribution decisions.

Which of the following is a fundamental objective, and NOT a policy, in the pay model?

Fairness

Which of the following statements is NOT true?

Focusing only on one dimension of the pay strategy is a best practice

Hourly compensation costs for production workers in manufacturing are higher in _ than in the United States.

Germany

Which of the following is NOT included in a strategy map?

HR alignment

Which of the following pay structure procedures would NOT increase perceptions of pay fairness?

Hiring consultants to develop the pay structure

Which form of pay does not permanently increase labor costs?

Incentive

Variable pay may also be called

Incentives

Robert, the CEO of GameTrack Corp., wants to restructure the pay plan without increasing the labor costs in the long run. He is most likely to achieve this, while retaining his top employees, by

Increasing incentive pay and decreasing base pay

Whole Foods' shared-fate philosophy of limiting executive salaries to no more than 19 times the average pay of full-time employees is an example of which strategic pay decision?

Internal alignment

_ refers to comparisons among jobs or skills inside a single organization.

Internal alignment

Which of the following is a disadvantage of the point method?

It can become bureaucratic and rule-bound

Which of the following statements is true of a job evaluation plan?

It is developed using benchmark jobs and then applied to nonbenchmark jobs.

In the context of internal alignment, which of the following is the correct sequence?

Job description > job evaluation > job structure

Which of the following is NOT true?

Large raises with a promotion decreases effort and increases absenteeism

In the formula predicting performance, the component most closely related to compensation is

M

Which of the following companies is taking efforts to improve the work/life balance of its employees?

MH Corp. increases the number of paid holidays given to its senior employees.

One of the reasons why 8 in 10 of the uninsured in the United States are from working families is that _.

Many small employers are much less likely than larger employers to offer health insurance to their employees.

Which of the following is given as an increment to the base pay in recognition of the past work behavior?

Merit pay

You are an HR manager, and your boss has told you to find the best way to raise job performance. After some research, you find that _ have the greatest instrumental value.

Monetary incentives

In the context of pay relationships, which of the following is illegal in the United States?

Paying on the basis of one's age

Egalitarian pay structures have all BUT which of the following characteristics?

Prefer individual performance over team performance

Hierarchical pay structures have all BUT which of the following characteristics?

Prefer team performance over individual performance

_ is the measure of how important total compensation is in the overall HR strategy.

Prominence

Most unions prefer which of the following?

Small pay differences among jobs and seniority-based promotions

Which of the following is often the largest component in an executive pay package?

Stock Options

Which of the following is NOT one of the factors that define an internal pay structure?

The number of times the pay structure has been changed

Which of the following is NOT a characteristic of a benchmark job?

The pay level is the best in the industry.

Which of the following is NOT a characteristic of aligned pay structures?

They are designed to increase turnover rate

GreenRain Corp. faces an increase in employee turnover rate. The CEO calls for a board meeting with the senior executives to discuss the issue. Who among the following suggests increasing the relational returns that employees receive to reduce the turnover rate at GreenRain?

Tom suggests increasing the decision-making authorities given to the employees to make work more challenging.

Which theory predicts that individual performance will be maximized when the pay differentials between job levels is large?

Tournament theory

_ refers to openness and communication about pay.

Transparency

Which of the following programs introduced by Congress includes restrictions on executive pay that are designed to discourage executives from taking "unnecessary and executive risks"?

Troubled Asset Relief Program

Which of the following is NOT a question to ask for determining if research has value?

Was the research conducted by PhD researchers?

Based on the opinions of 10,000 U.S. workers, Hudson found that when given their choice of unconventional benefits, most employees would select

a more flexible work schedule

Which of the following tests of competitive advantage is probably the easiest test to pass?

alignment test

MXB Inc. is a carwash service provider. It orders the jobs in the company on the basis of the least important job to the most important job. In this case, MXB is most likely using an

alternation-ranking method

Which of the following methods requires evaluators to agree on which jobs are the most and least valuable, then the next most and least valued, and so on until all the jobs have been ordered?

alternation-ranking method

Union preferences are a major factor in _ a total compensation strategy.

assessing

Common characteristics of the point method include all of the following EXCEPT

benchmark factor classes

Most job structures are best described as

both person and job based structures

The best way to establish _ is to account for competing explanations, either statistically or through control groups.

causation

A major decision in job evaluation is to

choose among alternative approaches

The job evaluation method that most resembles a bookcase with many shelves is

classification

A job description is compared to class descriptions in the _ of job evaluation.

classification method

The well-defined jobs at McDonald's and their small differences in pay are an example of a _ pay structure.

closely tailored

Jacob works at PrimeClean Corp., a carwash company. He is asked to follow a set of instructions in a predetermined order to wash a car. All the details including the amount of washing liquid to use for each type of car are clearly specified. In this case, Jacob's company is most likely to use a

closely tailored pay structure

In the context of the point method of job evaluation, _ are those characteristics in the work that an organization values; that helps it pursue its strategy and achieve its objectives.

compensable factors

_ are more likely to conduct job evaluations of senior management jobs.

compensation managers

A measure of how changes in one variable are related to changes in another variable is the

correlation coefficient

A compensation system focusing on system control and work specifications is most closely associated with a _ strategy.

cost-cutter

A compensation system that focuses on competitor's labor cost is most closely associated with a

cost-cutter

Which of the following is NOT a test of whether a pay strategy is a source of competitive advantage?

cost-effectiveness test

All of the following EXCEPT _ are compensation systems associated with a cost-cutter strategy.

customer satisfaction incentives

Mich Inc., a hardware store, has a rating system in place that rates employees on their friendliness, usefulness, and product knowledge. Based on the ratings an employee receives, he or she gets an incentive. The compensation strategy followed by Mich is most closely described as a

customer-focused strategy

In the point method, the second step in designing a plan is to

determine the compensable factors.

The final step in designing a point plan involves

developing online software support

A difference between incentives and merit increases is that incentives

do not increase the base wage, whereas merit increases the base wage

In firefighting and rescue squads and global software design teams, a _ structure is most closely associated with higher performance.

egalitarian

Joshua believes in treating employees equally will improve their job satisfaction, which in turn will increase their work productivity and performance. In accordance to his beliefs, he wants to reduce the number of job levels and the pay differentials between the levels. In this case, he is most likely to use an

egalitarian pay structure

Compensation policy choices that affect the pay level relative to other companies are most closely associated with the _ aspect of the pay model.

external competitiveness

The exchange value of a job is its

external market value

The most widely used point method job evaluation is the

hay plan

The alignment test

helps ensure passing the differentiation test

External factors are dominant influences on jobs filled via:

hiring graduates

Research investigating high-performance workplaces found that performance-based pay _ when combined with other high-performance practices.

improves attitudes and behaviors

The degree to which pay influences individual and aggregate motivation among employees at any point in time is referred to as an

incentive effect

A compensation system using market-based pay is most likely to be part of an _ strategy

innovator

Flexible-generic job descriptions would most likely to be used with an _ strategy.

innovator

Career growth, hierarchy, and flexible design are most closely associated with the _ apsect of mapping a total compensation strategy.

internal alignment

Research shows that _ will effectively shift an organization in a downward performance spiral to an upward one.

it is unclear what compensation practices

_ is the process of systematically determining the relative worth of jobs for the purpose of creating an organization's job structure.

job evaluation

Organizations in a turbulent and unpredictable environment requiring flexibility in jobs and work processes are likely to be more successful with a _ internal pay structure.

loosely coupled

Issues of transparency, technology, and choice are most closely associated with the _ aspect of mapping a total compensation strategy.

management

The second step of developing a total compensation strategy is to

map the strategy

According to a WorldatWork survey, the primary method of job evaluation is

market pricing

_ are related to greater performance when the work flow depends on individual contributors.

more hierarchical structures

According to the Hudson survey, _ is the single thing that would make 41 percent of the U.S. workers happier.

more money

In mapping a total compensation strategy, the question of how important compensation is in the overall HR strategy is part of

objectives

The role of non-HR managers play in making pay decisions is called

ownership

Managers seek internal alignment within their organization by

paying on the basis of similarities among jobs

Trying to measure an ROI for any compensation strategy implies that

people are "human capital", similar to other factors of production

When organization performance declines

performance-based pay plans do not pay off

The _ method of job evaluation is the most commonly used method in the United States and Europe.

point

The _ method of job evaluation uses compensable factors.

point

When a statistical process is used to duplicate an existing pay structure, it is called

policy capturing

James says, "I don't trust the way the company determines pay rates in my department." If James feels this way despite being happy with his current salary, he is most likely concerned about

procedural justice

KayDen Corp., a small organization with 15 employees, conducts job evaluation using the least expensive method for the first time. In this case, KayDen is most likely to have used the

ranking method

All of the following are advantages of the ranking method of job evaluation EXCEPT that

rankings are easy to defend and justify

In the strategic approach to pay, internal alignment is the _ issue to be decided.

second

The problem that is most likely to be faced by organizations using an egalitarian pay structure is

the difficulty in external recruitment

Common bases for modern pay structures include all BUT which of the following?

the extent of external competitiveness and equity

The parable of the vineyard owner and the compensation paid to the laborers illustrated

the ignorance of the owner toward the content of the work

Pay for temporary workers is based upon

the internal structure of their home employer

Incentives do not permanently increase labor costs because

they are one-time payments

Research shows that _ factor(s) account(s) for 98 to 99 percent of the variance in job evaluation plans.

three

Marginal productivity theory argues that employers pay

use value

The most common bases for determining internal structures are

work content and its value

Content refers to the

work performed in a job and how it gets done