Ch 7 Defining Competitiveness

_____ is an example of a bourse.

Bourse = a market that allows haggling over terms and conditions until an agreement is reached. Total Compensation for a Top Athlete

A pay policy MOST likely to reduce pay dissatisfaction is __________________.

a lead pay policy

Which of the following statements is true of pay level?

*Four True statements Pay level is directly proportional to labor costs; the more you pay the more it costs. Pay level is not the same across all organizations for the same job. The higher the pay level to what competitors pay, the higher their relative cost to provide relative products or services. Pay level is not independent of the number of employees in an organization

Which theory supports the idea that coal mining should be paid more than office clerical work?

Compensating Differentials

Segmented labor supply involves all of the following EXCEPT:

Does Involve: Hiring from different sources Paying workers differently who are performing the same work Employing regulars, part-times, and temps

Wages tend to be the lowest in which of the following industries?

Education and Healthcare

The _____ theory is the most influential in explaining pay-level differences.

Human Capital Theory

Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the:

Labor Costs

_____ refers to the average of the array of rates inside an organization.

Pay Level

Which of the following is an example of the demand side of labor?

Pay Level Offered by an Employer Supply Side: Level of pay applicants will accept, qualifications of applicants, locations of potential employees

The market pay rate is the:

Point at which supply and demand lines cross

In which of the following conditions would product market competitors' data be given more weight than data from labor market competitors?

Product demand is responsive to product price changes

All the following are important factors in defining a market for compensation purposes EXCEPT:

Real Reasons: The skill and knowledge required Geography Product Competitors and/or market Competitors

Among pay-mix alternatives, base pay is largest in _______________.

Security or Commitment

Which of the following is NOT true of the relationship between employer size and its ability to pay?

Talented Individuals have a lower marginal value in a larger organization (This statement is NOT true. In fact, the opposite is correct)

_____ is the additional output associated with the employment of one additional person, with other production factors held constant.

The Marginal Product of Labor

________________ sets a maximum pay level an employer can pay.

The Product Market

. In which of the following would data from labor market competitors be given more weight than product market competitors' data?

The Supply of Labor is responsive to changes in pay

Which of the following is NOT a reason a company might pay base wages above market?

These are actual reason a company might pay base wages above market: To Increase Employee Productivity To Increase Wage Satisfaction To Attract More Applicants

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

causation

The pay policy that is most closely associated with the decreased ability to attract employees is a(n) _____ policy.

lag

A pay policy MOST likely to reduce pay dissatisfaction is __________________.

lead

The most common pay policy is a(n) _____.

match policy

According to the text, the market rate is the:

point at which supply and demand line cross

Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.

productivity

Implication of the _______________ theory is that pay level affects in employer's ability to recruit.

reservation wage

The assumption of the upward sloping supply curve may NOT hold when ________________.

unemployment is low

The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.

unemployment is low. This is because there is a limited number of potential employees available to apply.

The pay-mix policy alternative in which the percentage of benefits is likely to be the highest is known as _____.

work/life balance policy

. In which of the following would data from labor market competitors be given more weight than product market competitors' data?

The Supply of Labor is responsive to price changes

Among pay-mix alternatives, the percentage of base pay is highest in _____.

security or commitment policy

Output associated with hiring an additional person, holding constant other production factors, in referred to as:

the marginal product of labor.

The pay-level policy that is most likely to reduce pay dissatisfaction is a(n) _____.

lead policy

A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.

variable Pay

Which of the following is NOT a reason a company might pay base wages above market competitors?

Actual Reasons: Employees are more productive Turnover will be lower To attract more job applicants Example of a "not a reason": competitor production costs are lower

All of the following are advantages of a lead pay-level policy EXCEPT _____.

Advantages: Reduce Vacancy Rates Reduced Absenteeism Better Quality Employees Example of an "except": higher turnover rates.

In a hiring situation, considering that other potential costs will not change in the short run, the level of demand that maximizes profits is that level at which the ______________ of the last hire is equal to the _______________ for that hire.

marginal revenue; wage rate