HRMT 5316 Compensation Mgt Final Exam
Common bases for modern pay structures include all BUT which of the following?
the extent of external competitiveness and equity
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
Which of the following reasons makes competencies a risky foundation for a pay system?
vagueness and subjectivity
is the value employees attach to the organization rewards received for job performance
valence
The most common bases for determining internal structures are:
work content and its value
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
The denial of jobs or training opportunities to qualified women and minorities are examples of...
access discrimination
According to the _________ theory of motivation, employees prefer certain or fixed income flows, such as wage or salary, to variable income flows, such as performance-based pay
agency
theory that argues pay should be based on outcomes if monitoring of behaviors is difficult or costly and if risk due to variability in outcomes is not large
agency
Because employers are raising employee pay at various times during the year, survey data must be updated using a process called _____ or _____.
aging or maturing
All of the following are categories of rater training EXCEPT ________________ training
behavior modeling
The process of matching survey jobs by applying an employer's plan to the external jobs and then comparing the worth of the external job with its internal "match" is called...
benchmark conversion
Financially healthy employers may wish to maintain their competitive positions in the labor market or share financial success through...
bonuses and profit sharing
defined benefit plans that look like a defined contribution plan
cash balance plans
A job description is compared to class descriptions in the __________ of job evaluation.
classification method
In the context of performance appraisal formats, which of the following criteria is concerned with whether the evaluation form initially requires a long time to be developed?
cost
The final major decision in setting externally competitive pay and designing the corresponding pay structures is to...
design grades and ranges or bands
The decisions to implement pay for performance, flat rate pay, and profit sharing are examples of __________ policy decisions.
employee contribution
The Executive branch of the federal government
enforces laws through agencies and its other bodies
According to __________ theory, relative pay is important as employees evaluate the adequacy of their pay via comparisons with other employees.
equity
Which of the following is a fundamental objective, and NOT a policy of the pay model?
fairness
The trend in recent variable-pay design is to combine the best of
gain-sharing and profit-sharing plans
The alignment test:
helps ensure passing the differentiation test
All of the following are advantages of a lead pay-level policy EXCEPT
higher turnover rates
External factors are dominant influences on jobs filled via:
hiring graduates
Degree to which pay influences individual and aggregate motivation
incentive effect
A compensation system using market-based pay is most likely to be part of a(n) _________ strategy.
innovator
In gain-sharing plan formulas...
labor inputs are in the numerator and productivity outcomes are in the denominator
A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour. Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour. The company is using the _____ method of job matching.
low-high
Which of the following is a benefit under Social Security?
lump-sum death payments
Which of the following rating formats has the lowest rating errors?
management by objectives
The ______________ pay strategy emphasizes external competitiveness and deemphasizes internal alignment
market pricing
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
Annual bonuses often play a major role in executive compensation and are primarily designed to _____.
motivate better short-term performance
Managers seek internal alignment within their organization by...
paying on the basis of similarities among jobs
Available evidence indicates tat managers believe the most important factor for pay increases is...
performance
Which of the following is an example of a long-term incentive plan?
performance plans
A major criticism of standard rating scales is that...
raters have different definitions of scale levels
Which of the following statistical measures shows how similar or dissimilar the market rates are from each other?
standard deviation
The Worker Economic Opportunity Act
states that income from most stock plans need not be included in calculating overtime pay
have indirect pay-performance links and require employees to put up money to exercise grants
stock option plans
In most organizations, the responsibility for managing a pay survey lies with...
the compensation manager
is designed to lessen an employer's ability to deny coverage to an employee for a preexisting condition
(HIPAA) Health Insurance Portability and Accountability Act
Total compensation in many organizations makes up at least __________ of the operating expenses
50 percent
Approximately ___________ percent of private sector employees have access to paid life insurance?
56%
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
When a job involves very routine, mechanistic tasks, the most appropriate appraisal format is:
Behaviorally Anchored Rating Scales (BARS)
Which of the following is the best appraisal format in terms of legal defensibility?
Behaviorally Anchored Rating Scales (BARS)
Which of the following companies is taking efforts to improve the work/life balance of its employees?
MH Corp., which increases the number of paid holidays given to its senior employees
An incentive system with three piecework rates is the _____ plan.
Merrick plan
Egalitarian pay structures have all but which of the following characteristics?
Preference for individual performance over team performance
Most unions prefer which of the following?
Small pay differences among jobs and seniority-based promotions
Which of the following acts requires that essential elements of a job--those that cannot be assigned to other workers--must be specified for jobs covered by legislation?
The Americans with Disabilities Act
allows employees who resign or are laid off through no fault of their own to continue receiving health coverage under their employer's plan at a cost borne by the employee
The Consolidated Omnibus Budget Reconciliation Act of 1984 (COBRA)
Which of the following is defined as a structured job analysis technique that classifies job information into seven basic factors: information input, mental processes, work output, relationships with other persons, job context, other job characteristics, and general dimensions?
The Position Analysis Questionnaire
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 ordered?
The alternation-ranking method
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 the....
alternation-ranking method
Which of the following is an open-ended performance appraisal format that involves the use of descriptors ranging from comparisons with other employees to adjectives, behaviors, and goal accomplishment?
an essay format
Most job structures are best described as
both person- and job-based structures.
A common first step in interpreting compensation survey data is to...
check for the accuracy of job matches
In the context of child labor which of the following is true?
child labor has decreased in most countries across the world in recent years
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
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
Which of the following is least likely to be used in establishing skill-based certification methods?
college degree
_______ are more likely to conduct job evaluations of senior management jobs.
compensation managers
__________ are the observable behaviors that indicate the level of competency within each competency set.
competency indicators
A compensation system that focuses on competitors' labor costs is most closely associated with a(n) _______________ strategy.
cost-cutter
Skill-based plans tend to work best in organizations using a(n) _____ strategy.
cost-cutter
Regarding pay differences for different jobs, _____.
courts continue to uphold the use of market data to justify differences
The motivation triangle includes...
culture
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
The reliability of job evaluation techniques is measured by:
determining if different evaluators produce the same results
Compensable factors, skill blocks, and competency sets are used for:
determining what to value
The final step in designing a point plan involves
developing online software support
The amount of fairness given to employees refers to...
distributive justice
A difference between increases and merit increases is that incentives...
do not increase the base wage, whereas merit increases do increase the base wage
Which of the following is the basic question to ask to improve quality and ensure that value is added by each technique and at each stage in the compensation system?
does each specific activity directly contribute to our objectives?
In recent years, some firms have tried to deal with the plateau effect and also accommodate the different career motivations of mature scientists and engineers through a(n)...
dual-career ladder
Joshua believes that 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 a(n):
egalitarian pay structure
Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that:
employers seek to maximize profits
Which of the following is the most popular executive perk offered by most companies?
executive physicals
Which of the following theories states that people choose the behavior that leads to the most satisfactory exchange?
expectancy theory
focuses attention on the competitive positions reflected in the pay relationships among organizations.
external competitiveness
Which of the following benefits communication methods allows for personalized communication methods and requires current contact information?
face-to-face methods
Which of the following statements regarding wage differences in industries and firms is NOT true?
female employment is more heavily concentrated in large firms
Contingent workers receive __________ benefits than regular workers, contingent workers' benefits cost ________ for employers than it does for regular workers
fewer, less
A recent article analyzing the results from over 100 executive pay studies shows that the best predictor of executive pay is by far...
firm size
Bottom-up budgeting includes the process of distributing forecasting instructions and worksheets where...
firms furnish managers with the forms and instructions necessary to preplan increases
________________theory is based on the premise that higher earnings flow to those who improve their potential productivity by investing in themselves
human capital
Research investigating high-performance workplaces found that performance-based pay ____________ when combined with other high-performance practices.
improves attitudes and behaviors
Which form of pay does not permanently increase labor costs?
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
Career growth, hierarchy, and flexible design are most closely associated with the _____ aspect of mapping a total compensation strategy.
internal alignment
In the context of benefits communication methods, which of the following is mostly true about an information portal?
it requires ongoing maintenance and an intuitive user interface
Which of the following is true of the Age Discrimination in Employment Act
it was amended in 1990 to include Older Workers Benefit Protection Act
The systematic process of collecting information that identifies the similarities and differences among jobs is know as...
job analysis
The list of tasks, duties, and responsibilities that make up a job is known as...
job description
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 an assumption held by the labor supply model about the behavior of potential employees?
job seekers do not face barriers to mobility
A ____________ approach controls costs by paying only as much as the work performed is worth, regardless of any greater skills the employee may possess.
job-based
The pay-level policy that is most likely to reduce pay dissatisfaction is a(n)
lead policy
If several incumbents, supervisors and peers respond in similar ways to job analysis questionnaires, this suggests the results are ____.
likely to be valid
The estimates of competitors' pay rates will be incorrect and the pay level an pay mix inappropriately established if...
markets are incorrectly defined
__________ is a nonpermanent (variable) payment (bonus or lump sum) form of variable pay granted to employee as function of some (typically primarily subjective) assessment of individual employee performance
merit bonus
In mapping a total compensation strategy, the question of how important compensation is in the overall HR strategy is part of...
objectives
The role non-HR managers play in making pay decisions is called _____.
ownership
In the context of job evaluation methods, which of the following is a common way of ranking?
paired comparison
When organization performance declines
performance-based pay plans do not pay off.
Teaching raters what constitutes good, average, and poor performance is _____ training.
performance-standard
uses cash or stock award this determined by an increase in stock price at a fixed future
phantom stock plan
A ________ plan is a hybrid health care plan combining the benefits of a health maintenance organization and a _____________
point-of-service, preferred provider organization
a group of tasks assigned to one individual
position
If Philadelphia has a CPI of 165 and Houston has a CPI of 145, and if both cities started with bases of 100, it means that _____.
prices have risen faster in Philadelphia since the base year than in Houston
refers to the process by which a decision is reached: the right to an attorney, the right to an impartial judge, and the right to receive a copy of the arresting officer's statement
procedural justice
______________ is the measure of how important total compensation is in the overall HR strategy.
prominence
In a contemporary job description of a specific job, the job summary section
provides an overview of the job
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
A major advantage of a _________ is that it reduces benefits, costs, something that the other cost-cutting options ordinarily do not achieve
reduction in force
A compa-ratio reflects the....
relationship of the average actual salary in each range to the midpoint of the range
The Davis-Bacon Act
requires that mechanics and laborers on public construction projects be paid the prevailing wage in an area
Among pay-mix alternatives, base pay is largest in _______________.
security or commitment policy
Which of the following is often the largest component in executive pay packages?
stock options
One of the most preferred benefits is...
stock plans
Size of pay differentials between grades should _____.
support career movement through the pay structure
A specific statement of what a worker does on a job is known as a(n)
task
The most widely used benefit survey is conducted by...
the U.S. Chamber of Commerce
Which of the following is a test that must be met to qualify for the administrative employee exemption?
the employee must be compensated on a salary or fee basis at a rate not less than $455 per week
puts a lid on the maximum pay level an employer can set
the product market
Apart from being reliable, a job analysis is also considered valid if...
the results converge among various sources of data and methods
argues that executive pay rises to maintain the same relative relationship with the salaries of lower-level employees
the social comparison theory
Which of the following is true of incentives?
they are re-earned each pay period
Research shows that ______________ factor(s) for 98 to 99 percent of the variance in job evaluation plans.
three
The most common way to collect job information is...
to ask incumbents to fill out a questionnaire
Which of the following is an objective of the unemployment insurance program?
to provide an incentive for employers to stabilize employment
The most obvious sorting factor is
ability
Competencies are derived from the _____ beliefs about the organization and its strategic intent.
executive leadership's
All of the following factors are reasons for the growth of benefits EXCEPT...
foreign lawsuits
The most common form of outcome-bases appraisal is....
management by objectives
The biggest cost-containment strategy in recent years is the movement to....
outsourcing
In a strategic approach to pay, internal alignment is the _________ issue to be decided.
second
If red circle rates become common throughout an organization,
then the design of the ranges and the evaluation of the jobs should be reexamined.
Which of the following benefits is a federally administered program?
Social Security
How many weeks of leave does the Family Medical Leave Act of 1993 mandate for all workers at companies that employ 50 or more people?
12 weeks
TreeWind Inc. is a bookstore that uses skill and responsibility as its compensable factors. It assigns 20 percent weight to responsibility and 80 percent weight 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
the average company match for 401(k) retirement plans
50 cents on the dollar up to 6% of pay
requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship
Patient Protection and Affordable Care Act
Which of the following policy decisions directly affects employees' attitudes and work behaviors?
Employee Contributions
Compensation Policy choices affecting pay level are most closely associated with...
External Competitiveness
Which of the following is the least popular executive perk offered by most companies?
Housing allowance
In the context of internal structures, which of the following is true of a delayered structure?
It sends the message that all employees are valued equally
_____ is the process of systematically determining the relative worth of jobs to create a job structure for an organization.
Job evaluation
Who among the following is examining the validity of a job evaluation?
Keira, who is measuring the degree to which the job evaluation plan matches an agreed upon pay structure for benchmark jobs.
In the formula for predicting performance, the component most closely related to compensations is...
M
Which of the following is an advantage of skill-based pay plans?
They aid in deploying workers in a way that better matches the work flow
Which of the following is a characteristic of benchmark jobs?
They employ a reasonable proportion of the workforce
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, who suggests increasing the decision-making authorities given to the employees to make work more challenging
In the context of subordinates as raters, which of the following statements is true?
Upward feedback has been historically viewed as countercultural
In the regression equation y=a + bx, job evaluation points are denoted by...
X
requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action
a Bedeaux plan
A benefit plan that allocates a set dollar amount to the employees and allows them to select benefits is called a ___________ plan.
a flexible benefit
An early study on the effects of the living wage law in Los Angeles found all of the following EXCEPT that...
a higher proportion of new hires were female
Lisa is a manager at Trell Inc. When she hires her employees, she focuses on finding the right job for the right person. Which of the following pay plans is her employer most likely using?
a job-based pay plan
The most common approach to motivating executives to make decisions that are in the best interests of stockholders is...
a long-term incentive plan using stock options
Who among the following is most likely to be working for a company that uses a competency-based pay plan?
Carlos, who focuses on obtaining certifications in his field to get a pay increase.
The roots of job-based pay structures is traced to _____.
Frederick Taylor
__________ curve expresses the relationship between years since last degree, performance, salary
a maturity
If you had repair work done on your car, the shop most likely used the _____ plan to pay the mechanic.
a standard hour plan
The most frequently implemented incentive system is...
a straight piecework system
Which of the following is an individual incentive plan?
a straight piecework system