Ch10 - Compensating Employees

Salary survey is a systematic process for collecting information about wages in the external labor market. Based on this, which of the following statements is true?

-Salary surveys can be constructed internally, based on the data acquired from professional organizations and HR consulting firms -Data is usually from salaries in the same industry and the appropriate geographic labor market -Benchmarked jobs should represent the range and type of jobs in a company

In the point method of internal alignment, ______________ are used to determine the traits and responsibilities of a job that are most important for a company to succeed.

Compensable factors

A written communication about what is valued in the organization that helps in standardizing pay is called a(n)

Compensation Philosophy

__________ is compensation received in the form of salary, wages, commissions, stock options, or bonuses.

Direct Financial Compensation

An organization's employees believe that their pay is fair if other employers pay equivalently to their employees performing similar jobs is known as _______?

External Equity

Company can only pay above the market or below the market.

False

Green circled jobs are the ones that are paid above the pay grade and thus, the firm should either freeze the wage or reevaluate the job to place it in higher pay grade.

False

Internal alignment uses salary surveys to ensure employees within the organization are paid comparably.

False

Merit increases are granted to employees yearly but they are not rolled into an employee's base pay.

False

Point Method is a type of job evaluation that involves developing broad descriptions for groups that are similar in terms of their tasks, duties, responsibilities, and qualifications for the purpose of assigning wages.

False

When expatriates are sent abroad, their compensation is usually adjusted down to compensate for lower costs of living.

False

The reason why the factor comparison model is not typically used in organizations is

It is difficult to explain to employees.

When using ______________, companies collect data from the external competitors first. It is important to evaluate the accuracy of data collected and ensure measurement errors are minimized.

Market Pricing

When assigning pay grades and pay ranges, the range at the bottom of the organization tends to be ______________ and the top of the organization tends to be ______________.

Narrower, Wider

Salary compression happens when

Salaries on the market rise faster than those currently employed.

__________ refers to everything an employee perceives to be of value that results from the employment relationship.

Total Rewards

Broadbanding provides organizations with more flexibility for managing pay ranges than traditional pay plans.

True

Comparable worth is not mandated, but many companies are adopting this practice.

True

Equity theory is a motivational theory that relates employee inputs and outputs relative to the inputs and outputs of a referent group.

True

Overtime for nonexempt employees is legally required.

True