Compensation :: Chapter Seven

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

WOULD PAY BECAUSE: -to increase employee productivity by attracting more productive workers - to increase wage satisfaction - to attract more applicants ANYTHING ELSE IS WRONG NOT A REASON: - increase turnover rates

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

WOULD: - employees are more productive - turnover will be lower - to attract more job applicants NOT: -competitors production costs are lower

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

a match policy

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

causation

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

compensating differentials

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

education + health care

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

human capital

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

labor cost

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

labor costs

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

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

lead

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

lead

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

The most common pay policy is _____________.

match

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

pay level offered by an employer

The market pay rate is the:

point at which supply and demand lines 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

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

security / commitment

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

security or commitment policy

All of the following EXCEPT the ______________ shape external competitiveness.

skill level of employees DO SHAPE: nature of the demand; industry strategy; level of product demand

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

supply of labor is responsive to changes in pay

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

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

the marginal product of labor

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

the marginal product of labor

_____ puts a lid on the maximum pay level an employer can set.

the product market

______________________ 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 price changes

_____ is an example of a bourse.

total compensation for a top athlete

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

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

variable pay

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

work/life balance policy

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

ADVANTAGES: - reduced vacancy rates - reduced absenteeism - better quality employees Example of an EXCEPT: - higher turnover rate

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

ARE IMPORTANT: - skill and knowledge required - geography - product and/or market competitors ARE NOT IMPORTANT (the except) - the ability to pay

Segmented labor supply involves all of the following EXCEPT

DOES INCLUDE: - hiring from different sources - paying workers differently who are performing the same work - employing regulars, part-times and temps Example of EXCEPT: - hiring from different sources and differential pay and benefits for the same work

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

Pay level

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 price changes

Which of the following statements is true of pay level?

TRUE: - pay level is directly proportional to labor costs (the more you pay the more it affects labor costs) - pay level is NOT the same across all orgs for the same job - the higher the pay level to what competitors pay, the higher your relative cost to provide similar products - pay level is NOT independent to the number of employees in the organization

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

TRUE: - talented individuals have a higher marginal value in a larger org - talented people can influence more people in decisions - influence of talented people leads to more profits NOT TRUE: - talented people prefer to work in larger organizations