CHAPTER 8

The ______________publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data.

Bureau of Labor Statistics

Grades group job evaluation data on the horizontal axis.

True

Pay ranges for managerial jobs are larger than ranges for other jobs because these jobs have greater opportunity for both discretion and performance than lower level jobs.

True

Pay surveys include information about both all forms of cash compensation and benefits.

True

Survey data from one or a few employers that are significantly out of line with other employers are ___________

anomalies

The ____________ (ECI) allows comparison of labor costs to all-industry averages.

employment cost index

The purpose of collecting data on number of employees in a pay survey is to estimate the organization's impact on the ____________

labor market

Aging market data to a point halfway through the plan year is called ________

lead/lag

The primary responsibility for conducting a pay survey is the compensation _________

manager

A __________ links a company's benchmark jobs with market rates paid by competitors.

market pay line

how many firms to include in a pay survey is there are ________

no firm rules

The median minimizes distortion of the central tendency caused by _____________

outliers

__________ reflect the differences in performance or experience that an employer wishes to recognize with pay

pay ranges

Size of pay differentials between grades should support career movement through the _________

pay structure

The first step in setting competitive pay and designing a pay structure is specify ______________

pay-level policy

The______________ statistical measure shows how similar or dissimilar the market rates are from each other

standard deviation

The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is ________________

survey leveling

Pay ranges for clerical and production jobs commonly range between ______

5 and 15

A common practice is to use the 10th and 90th percentiles from pay survey data to set minimums and maximums of pay grades.

False

A frequency distribution must be constructed to calculate a median

False

Adjustments to forms of pay occur more often than adjustments to overall pay level.

False

Career moves between bands are more common than within bands.

False

It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditional relevant markets.

False

Market pricers match a small percentage of their jobs with market data.

False

Ranges support flexibility within guidelines while bands support some flexibility within controls.

False

Salary data available to employees via the Internet are as reliable and accurate as other more traditional surveys.

False

The final step in determining externally competitive pay levels and structures is merging internal and external pressure.

False

The most common measure of variation in pay surveys is the standard deviation.

False

The pay structure is reflected in job evaluation or skill certification.

False

The relevant labor market for accounting, sales or clerical skills should be limited to each industry in which these types of work are found.

False

Total cash includes base pay plus stock options and benefits.

False

A pay range exists when at least two employees in the same job are paid different rates.

True

A pure market pricing strategy tends to ignore internal alignment.

True

Aging the market data to a point halfway through the plan year is called lead/lag.

True

Identifying pay survey participants by company name is considered price fixing under the Sherman Act.

True

If the purpose of a survey is to price the entire structure, then benchmark jobs can be selected to include the entire job structure.

True

Market lines may be constructed by either freehand drawing or linear regression

True

Pay ranges for top-level management positions are commonly larger than those other professional and midlevel managerial positions.

True

Regression smoothes large amounts of data while minimizing variations

True

Setting your company's base pay to competitors' total compensation risks high fixed costs.

True

Smaller pay ranges may reduce the opportunities for promotion.

True

The process of multiplying survey data by a factor reflecting the difference between a survey and a company job is called survey leveling.

True

When flat pay rates are used, they are typically the midpoint of a corresponding survey job.

True

When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.

True

Because employers are raising employee pay at various times during the year, survey data must be updated using a process called ____________

aging or trending

Examples of potential ___________: outliers, a large variation in base pay for a job at one company, and one company dominates the results. The following is an example of something that is NOT a potential anomaly: a large variation in average base pay for a job across companies.

anomalies

__________ shows how competitors value work in similar jobs.

base wage

__________ foster cross-functional growth.

broad-bands

Job structure is to job evaluation as pay structure is to ____________

pay-policy line

Applying the job evaluation process to pay survey jobs to assess the degree of match between survey jobs and benchmark jobs is called the _____________

benchmark conversion approach

The second major decision in pay-level determination is _____________

define purpose of survey

The final major decision in pay-level determination is _____________

design grades and ranges

Market pricers assume that little value is added through _____________

internal alignment

The first step in ___________ is check for the accuracy of job matches.

interpreting survey data

A survey conducted in January, 2013 found the median pay effective January 1, 2013, for a clerk was $22,000 and the forecast rate of wage increases in the market for 2013 was 5% and another 5% for 2014. An employer choosing to follow a ______________of 4% above the market for the plan year, we need to multiply salary by 105% and then by 109%.

lead strategy

A company using a skill-based pay system prices the job of lead assembler at between $10 and $22 per hour. Survey data showed the job assembler averaged $10 per hour and the job of assembly supervisor at $22 per hour. The company was using the __________________

low-high method of job matching

An organization that has a______________ will pay its employees more than the market rate for some months and less than the market rate for the other months.

match (pay) policy

The market ______________ emphasizes external competitiveness and deemphasizes internal alignment.

pricing pay strategy

Office and clerical workers as compared to scientists, managers, and executives would most likely be ____________

recruited locally

Paying jobs of different functions different rates within a pay band is called _________

reference rates

In the ______________, y = a + bx, job evaluation points are x.

regression equation

A _______________ includes all employers who compete in one or more of the following areas except pay similar wages

relevant labor market

Financial data in pay surveys are used to group firms by _________

size

___________ measures competitors' use of performance-based pay.

total cash

The ____________ measure of compensation may overstate competitors' pay.

total cash compensation