Org Compensation and Rewards Test 2

When using the point factor method, how do you know a job's relative value? What is it ultimately determined by? (where it fits in the hierarchy)

A job's relative value is determined by its total point value which is gained from the compensable factors a job has.

How is it possible to lead the market in base pay and lag in total compensation? (or vice versa)

By offering too much base compensation and not enough supplemental compensable factors

Point factor methods all have 3 things (components) in common. What are they?

Compensable factors, factor degrees numerically scaled, weights reflecting the relative importance of each factor

Which of the following labor demand theories states that work with negative characteristics requires higher pay to attract or retain workers?

Compensating differentials

What type of structure begins by looking at the work performed in the organization?

Competency based

External competitiveness is shaped by what factors?

Labor market factors, product market factors and org

What is the difference in pay level and pay mix?

Level is formation of rates; mix is various types that make up total compensation

This type of job evaluation method looks at the external market to get an idea of the going rate for benchmark jobs and uses this to create an internal hierarchy

Market Pricing

What is the most prevalent method of job evaluation that is used?

Market Pricing

Benchmark jobs example and def

Marketing Manager, hold a key job and position and come across a lot of people, job content is standard

What criteria should you consider when scaling compensable factors?

Need to be definable, measurable, observable, and they need to fit into the company

What factors are used to determine a company's relevant labor market?

Occupation, geography and competitors

What are the purposes of a skill based structure?

Pay attaches to the person

How is external competitiveness defined?

Refers to pay relationship among orgs and its pay relative to competitors

What is the purpose of factor weights in the point factor method of evaluation?

Relative importance of the factor

Describe the difference in a reliable and a valid evaluation technique.

Reliable has evaluators finding the same results

A pay mix that focuses heavily on base wage and benefits with little to no inclusion of bonuses/incentives describes what type of pay mix?

Security mix

What type of pay plan is used in environments that rely on teams, multiskilled works, flexibility?

Skill Based

What is the systematic process of identifying and collecting information about skills required to perform work in an organization.

Skill analysis

What are the two types of person based plans?

Skill and Competency Based

An employer offering lower base pay with high bonuses is a likely signal that it is seeking risk-taking employees. (T or F)

True

Compared to an on-demand review of certifications, scheduling fixed review points makes it easier to budget and control payroll increases. (T or F)

True

Job Evaluation

a process that determines the relative worth of each job in a company

Skill Analysis

a systematic process of identifying and collecting information about skills required to perform work in an organization

Pay level

average of the array of rates an employer pays (Base+Bonus)/# of employees

Shared Choice

begins with the lead, meet, or lag alternatives

Since business strategies may change often, compensable factors should rarely be added or deleted.

by acquiring new knowledge

In the context of the point method of job evaluation, ________ are job attributes that provide the basis for evaluating the relative growth of jobs inside an organization

compensable factors

Most factor scales have ________ degrees.

four to eight

4 types of job evaluations

job ranking, job classification, point factor, market pricing

Labor Market factors

nature of demand, nature of supply

Pay Mix

the various types of payments, or pay forms, that make up total compensation

Job Content is -

the work that is performed and how it gets done

pay-with-competition policy

tries to match wage costs to product competitors and attract applicants equal to the labor market competitors

When selecting compensable factors for an organization, what two things should they be based on?

what functions of the job add value to the company, and based on the strategy/values of the org

What does employer of choice mean?

Brand or image of a company projects as an employer

Product Market Factors

Degree of Competition, Level of product demand

What is the purpose of a job evaluation

Determine the value or worth of a given job within the company

What is the purpose of pay level & pay mix?

Helps maintain costs, helps retain employees

Since business strategies may change often, compensable factors should rarely be added or deleted.(T or F)

False

Organization Factors

Industry, Strategy, Size, Individual manager

Benefits of Job Content Evaluations

Internal consistency, control labor costs, fairness, market competitiveness

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

Which type of job evaluation plan is this an example of?

Job Classification

In what type of evaluation plan do raters look at each job and compare them with every job possible in their department?

Job Ranking

Which of the following statements is true of pay level?

Pay level is directly proportional to labor costs

Describe the characteristics of a lag level pay policy.

Paying below market rates may hurt a firm's ability to attract and maintain quality employees

How do organizations certify that employees possess and apply skills?

Peer reviews, tests, on job demonstrations

Not all jobs are considered benchmark jobs. How do you align them with your internal hierarchy?

Perform a job analysis to understand job content and value

A pay mix that relies on a smaller percentage of base wage and an increased focus on options and bonuses would best describe what type of pay mix?

Performance driven mix

Explain the difference in a job based structure and a person based structure related to pay plans

Person based links pay to skill knowledge and abilities of person and job based links pay to he functions of a job

Which Job Evaluation is most easily defended in a court of law? Why?

Point factor, most thorough and shows exactly what is valued

•What are the pro's & con's of a lead level pay policy?

Pros- maxes ability to gain and keep quality employees Cons-

What is the difference in a specialist and a generalist?

Specialist - hired for certain skills

Job Value

Structure based on job value orders jobs on the relative contribution of the skills, duties, and responsibilities to the organization's goals