MGT352 Ch.11 Smartbook

In a software company that caters to the federal government it would be most appropriate for which of the following positions to be paid at the highest percentile? VP of software engineering office manager VP of marketing manager of human resources

VP of software engineering

An administrative procedure used to measure internal job worth is called:

a job evaluation

When deciding on specific pay levels, organizations often consult _____

a market pay survey

Which factors can influence a company's ability to adhere to Equal Employment Opportunity (EEO) pay regulations? competition from foreign firms a shifting labor market changing demographics of the workforce competition to hire skilled workers

a shifting labor market changing demographics of the workforce

Employee compensation requires scrutiny because it is typically

a significant organizational cost

The process by which an organization compares its own practices to those of the competition is called:

benchmarking

An organization that effectively competes in the product market is able to sell its goods and services at a quantity price that will ______

bring a sufficient return on investment

In addition to salary, what is a major component of a typical CEO compensation package?

a stock plan

Most nonexempt employees are paid

an hourly rate

Which of the following are provisions of the Fair Labor Standards Act (FLSA) as they relate to employee pay? prohibits states from setting higher minimum wage rates calls for time-and-a-half pay for hours exceeding 40 hours a week sets a minimum wage for jobs provides for a training wage

calls for time-and-a-half pay for hours exceeding 40 hours a week sets a minimum wage for jobs provides for a training wage

Unlike key jobs, nonkey jobs ____

cannot be valued or compared through market surveys

In a skill-based pay structure, ______ tests must be developed to determine whether employees have acquired certain skills.

certification tests

An index that measures the correspondence between actual pay and a company's intended pay policy is called the

compa-ratio

The undervaluation of women's jobs has been combated through the policy of

comparable worth

The characteristics of jobs that an organization values and chooses to pay are called _____

compensable factors

Equal Employment Opportunity (EEO) compensation issues will likely remain in the spotlight because of the

decrease of white males in the workforce

Which of the following problems can result from a job-based pay structure? employees do not know which specific tasks they are responsible for decreased lateral job movement a growing bureaucracy top-down decision making is reinforced

decreased lateral job movement a growing bureaucracy top-down decision making is reinforced

The concept of reducing the number of job levels within an organization in order to gain flexibility in job assignments is called

delayering

In communicating pay cuts to employees, which of the following strategies are effective? ignoring the pay cuts until employees start complaining demonstrating significant remorse for implementing the pay cuts downplaying the pay cuts while conducting business as usual providing detailed reasons why the pay cuts are necessary

demonstrating significant remorse for implementing the pay cuts providing detailed reasons why the pay cuts are necessary

In addition to labor costs, the proximity to which of the following can influence where a company locates its production facilities? design group to manufacturing plant customers competitors to each other suppliers

design group to manufacturing plant customers suppliers

The pay-setting approach that uses the pay policy line to derive pay rates for both key and nonkey jobs _____

does not use actual market rates for key jobs

Miguel is vice president of marketing at XYZ Corp. He is disappointed to learn that the vice president of sales at XYZ earns 20 percent more than he does despite the two positions having similar levels of responsibility and impact. In this example, what method is Miguel using to evaluate the fairness of his pay?

internal comparison

Another term for comparable worth is

pay equity

A mathematical expression that describes the relationship between a job's pay and its job evaluation points is called the _____

pay policy line

Benchmarking against product market and labor market competitors is typically accomplished through the use of _____

pay surveys

Which of the following aspects of an organization do executives typically influence substantially? performance total labor costs tone culture

performance tone culture

The job evaluation system that relies on a weighting scheme to account for the relative importance of the different compensable factors that make up a job is called the:

point-factor system

One of the most important factors that influences the price of a good or service is the cost of ______, which includes labor costs

production

Which of the following kinds of occupations are typically exempt from Fair Labor Standards Act (FLSA) coverage? those who are paid hourly professional positions executive positions outside salespeople

professional positions executive positions outside salespeople

The distance between the maximum and minimum pay within a pay grade is known as the _____ spread.

range

What do companies use to recognize differences in employee performance, seniority, and training in setting individual pay? Multiple choice question.

rate ranges

In which of the following ways does pay affect an organization's strategic goals?

- It has an impact on employees' attitudes and behaviors. - It influences the kind of employees attracted to the organization. - It can help align employees' interests with those of the organization

Sophia is an American manager who works at a company branch in Seoul. Her salary is determined by American standards, which are higher than South Korea's. Which of the following statements are true? - Sophia is paid a higher salary due to labor market conditions in the United States and Europe. - Sophia is paid a lesser amount than her Korean peers. - Sophia's higher salary may create a sense of inequity among her Korean peers. - Sophia is paid the same amount as her South Korean colleagues.

- Sophia is paid a higher salary due to labor market conditions in the United States and Europe. - Sophia's higher salary may create a sense of inequity among her Korean peers.

Which of the following are characteristics of the point-factor system for evaluating jobs? - The system yields evaluation scores for each compensable factor of a job. - Each evaluation score is typically weighted to account for its relative importance. - The sum of the scores for any job must equal 100 points. - The resulting score for a job serves as a guide in determining resulting benefit levels.

- The system yields evaluation scores for each compensable factor of a job. - Each evaluation score is typically weighted to account for its relative importance.

Employees typically view their compensation in terms of which of the following?

- as it relates to the pay of their colleagues - as a sign of status and success - as a way of evaluating their relationship with the organization

Salary level decisions can be broken into which of the following two areas?

- individual pay - pay structure

Which of the following issues with pay structure must managers be prepared to handle? - knowing when a job needs to be reclassified because of substantial changes to its structure - telling employees when to stop asking about the pay structure - judging when changes to the pay structure are warranted - explaining the pay structure's design to employees

- knowing when a job needs to be reclassified because of substantial changes to its structure - judging when changes to the pay structure are warranted - explaining the pay structure's design to employees

By paying higher labor costs than its competitors, a company can do which of the following? - retain valued employees - draw better workers to produce higher-quality products than competitors - reduce associated employee benefits - encourage desired employee behaviors

- retain valued employees - draw better workers to produce higher-quality products than competitors - encourage desired employee behaviors

Which of the following are considered part of an employee's total compensation?

- salary - paid vacation - stock options

Which of the following are pay-setting approaches that vary in the relative importance they give to external and internal comparisons? - using market survey data - using the pay policy line - using pay grades - using government standards

- using market survey data - using the pay policy line - using pay grades

Labor market competition reflects how _____

many workers are available relative to the number of jobs available

According to some critics, when it comes to pay, Equal Employment Opportunity (EEO) regulations obstruct

market forces

The approach that places the greatest emphasis on external comparisons is achieved by basing pay on ______

market surveys

When any change in existing pay practices is set to take place, the intimate involvement of line managers is _____

necessary

To reduce labor costs, some companies are sending jobs overseas, a concept called

offshoring

A company may pay a training wage to an employee under the age of 20 for up to ______ days

90

Which of the following statements about resolving conflicts between market pay surveys and job evaluation is true?

An organization must weigh its objectives and select the most appropriate strategy.

According to equity theory, there will be no change in employees' attitudes or behavior when which of the following is true?

Employees perceive their work situation as equitable.

True or false: Pay policies are often attached to individual employees rather than to particular jobs

False

True or false: Market forces provide the most inefficient means of pricing and allocating people to jobs

False - market forces provide the most efficient means of pricing and allocation people to jobs

Which of the following are advantages of paying employee wages above the market average? - It helps retain top talent. - It increases personnel costs. - It encourages increased productivity. - It attracts skilled workers. - It generates increased job satisfaction.

It helps retain top talent. It encourages increased productivity. It attracts skilled workers. It generates increased job satisfaction.

Which of the following statements describe key jobs? - Key jobs are known as benchmark jobs. - Key jobs are common to many organizations. - Key jobs have relatively stable content. - Key jobs cannot be valued through use of market surveys.

Key jobs are known as benchmark jobs. Key jobs are common to many organizations. Key jobs have relatively stable content.

Which of the following statements about labor market competition is true? - A shortage of workers results in lower wages and salaries. - Shortages and surpluses influence pay levels. - Competition in the labor market is restricted to firms in the same product market. - Firms that are competitive in the labor market can pay lower wages than their competitors.

Shortages and surpluses influence pay levels

Which of the following is generally true of relative hourly labor costs?

They are unstable over time

True or false: Employees in the same job may have different pay rates based on performance, seniority, and training.

True

The most crucial role in communicating pay decisions is played by

managers

Which of the following do employees often feel when a trust gap exists? doubt about the intentions of senior management uncertainty about management's competence resentment of management's pay concern about managers' ability to maintain their lifestyles

doubt about the intentions of senior management uncertainty about management's competence resentment of management's pay

The concept that wages affect worker productivity is called the ______ theory

efficiency wage

Skill-based pay structures encourage leaner staff levels because

employee turnover or absenteeism can be covered by current multiskilled workers

Which of the following are considered disadvantages of a skill-based pay system? employees may acquire skills too quickly and top out on the pay scale it is more difficult to price jobs than combinations of skills skills must be described, measured, and assigned monetary values new skills can be difficult to use effectively, resulting in high labor costs training programs need to be developed to help employees acquire new skills

employees may acquire skills too quickly and top out on the pay scale skills must be described, measured, and assigned monetary values new skills can be difficult to use effectively, resulting in high labor costs training programs need to be developed to help employees acquire new skills

The concept that suggests people evaluate the fairness of their situations by comparing them with others is called ______

equity theory

When thinking about the consequences of pay decisions, managers should keep in mind that employees often

evaluate their pay relative to other employees

The type of pay comparison that focuses on what employees in other organizations are paid for similar jobs is called ______ equity

external

One important advantage of skill-based pay is the potential for ____

increased worker flexibility

Each employee must be assigned a rate of pay acceptable in terms of which of the following?

internal equity external equity individual equity employer's cost

With the pay-setting approach that uses the pay policy line to derive pay rates for both key and nonkey jobs, the pay of all the jobs is linked directly to the number of job evaluation points, which ____

introduces a greater degree of internal consistency

One indicator of a country's productivity is ______.

its gross domestic product (GDP) per person

The relative pay of jobs in an organization is known as the organization's

job structure

What is the term for the relative worth of jobs in an organization based on internal comparisons?

job structure

The most widely used metric for defining pay structures is by _____

jobs and associated responsibilities

In developing a pay structure, pay survey data and job evaluation data are commonly available for ____

key jobs

A compa-ratio less than 1.00 suggests that actual pay _____

lags behind company pay policy

If a company needs educated knowledge workers but needs to tightly control costs, the company should look for countries with

low labor costs and skilled workers

In general, which combination would lead to the lowest unit labor costs for one country relative to another?

lower labor costs and higher productivity

One advantage of using a pay grade system in planning employee compensation is that it _____

reduces the administrative burden of setting separate pay rates for hundreds of jobs

Organizations compete in the labor market, so they should consider their employees not just as a cost but also as a(n) ____

resource that provides returns

Placing jobs in broader bands of classification gives managers the opportunity to

reward high performers with merit increases

Employees can take part in the compensation decision-making process by doing which of the following? serving on a task force that designs a pay program participating in a committee that is charged with recommending a pay program explaining the company's rationale in implementing a specific pay program encouraging senior management to outsource the compensation program to consultants

serving on a task force that designs a pay program participating in a committee that is charged with recommending a pay program explaining the company's rationale in implementing a specific pay program

A computer manufacturer wants to open a facility overseas to produce tablets. Most of the jobs would be assembly-line jobs, and training would take place on site. This is an example of the manufacturer paying special attention to ______ when considering where to open the facility.

skill level

Which is a component of labor costs?

staffing level

Which of the following are ways employees attempt to restore equity when faced with perceived inequity in the workplace

stealing goods from their employer being less productive while at work quitting voluntarily

Typically, expatriate pay and benefits are linked most closely to _____

the company's home country

The ratio of top-executive pay to that of an average worker is often described as creating a(n)

trust gap

A system in which employees doing the same jobs are paid two different rates, depending on their hiring date, is known as a ____

two-tier wage plan

Fluctuations in currency exchange rates help explain which of the following?

unstable relative hourly labor costs

Which of the following make up a significant portion of labor costs?

wages and bonuses health insurance