Chapter 9 465

For real wages to increase, which of the following must be true?

An employee's wage increase must be greater than the increase in the consumer price index (CPI).

Which of the following is NOT a component of the Consumer Price Index?

Automobiles

____ helps eliminate the obsession with grades and, instead, encourages employees to move to jobs they can develop in their careers and add value to the organization.

Broadbanding

Which of the following is NOT a form of pay equity?

Collective equity

Which of the following is NOT an internal factor affecting the pay mix?

Cost of living

Which of the following is an external factor that can influence the rates at which employees are paid?

Cost of living

The federal wage law that is criticized for a rule that allows minimum pay to be based on the prevailing rate, which often includes higher union wages is:

Davis-Bacon Act.

_____ encompasses employee wages and salaries, incentives, bonuses, and commissions.

Direct compensation

Which of the following is an example of a nonfinancial compensation?

Employee recognition programs

Because of its focus, the Hay profile method is most useful for evaluating which type of jobs?

Executive and managerial positions

Which system of job evaluation is being used when cards that list the duties and responsibilities of the job are arranged by raters in order of the importance of the job?

Job ranking

Which is the simplest and oldest method of job evaluation?

Job ranking system

The Hay profile method uses which three factors for evaluating jobs?

Knowledge, accountability, and mental ability

_____ includes employee recognition programs, rewarding jobs, organizational support, work environment, and flexible work hours to accommodate personal needs.

Nonfinancial compensation

The federal wage law that may require government contractors to pay overtime for work more than eight hours a day is:

Walsh-Healy Act.

Which job evaluation system serves to direct compensation dollars to the type of work pivotal to organizational goals?

Work valuation

Clauses in labor agreements that provide for quarterly cost-of-living adjustments in wages, basing the adjustments on changes in the consumer price index are known as:

escalator clauses.

The concept that employees should exert greater work effort if they have reason to expect it will result in a valued reward forms the basis of:

expectancy theory.

When the organization pays wages that are relatively equal to that of other employers for similar work, it is the basis of:

external equity.

The Equal Pay Act prohibits wage discrimination based on:

gender

There is reason to believe that pay secrecy can do all of the following EXCEPT:

generate feelings of commitment.

Employers wishing to encourage employees to accept a promotion to a job in a higher grade would:

increase the size of successive rate ranges.

Elements of the compensation package are said to have _____ when an employee's high performance leads to monetary rewards that are valued.

instrumentality

Job evaluation helps to establish:

internal equity.

A _____ is a system of job evaluation in which jobs are classified and grouped according to a series of predetermined wage grades.

job classification system

The simplest and oldest system of job evaluation is the _____, which arrays jobs on the basis of their relative worth.

job ranking system

The predominant approach to employee compensation is:

job-based pay.

The area from which employers obtain certain types of workers is known as the:

labor market.

In conducting a wage and salary survey for office personnel, the relevant labor market to be surveyed is most likely:

local

Employees covered by the overtime provisions of the Fair Labor Standards Act are labeled:

nonexempt employees.

In ____, employees are paid according to the number of units they produce.

piecework

Instrumentality refers to:

rewards that are valued and motivate employees.

Employees whose compensation is calculated on the basis of weekly, biweekly, or monthly periods are classified as:

salaried employees.

Most pay increases may lack motivational value to employees when _____.

salary budgets are low

Employers may _____ their workforce to help them identify the most valuable contributors.

segment

The exempt or nonexempt status of employees is determined by:

the U.S. Department of Labor.

The measure of the average change in prices over time in a fixed "market basket" of goods and services is known as:

the consumer price index.

The job evaluation system that seeks to measure a job's worth through its value to the organization is known as the:

work valuation system.

A job evaluation system that seeks to measure a job's worth through its value to the organization is known as:

work valuation.

In a 2010 survey of more than 1,000 entrepreneurs, _____ of all small businesses in the United States had to make pay cuts.

35 percent

Which system of job evaluation is being used when jobs are classified according to a series of predetermined wage grades?

Job classification system

The Fair Labor Standards Act permits employers to pay a "training wage" of _____ per hour for employees younger than the age of twenty during their first ninety days of employment, provided their employment does not displace other workers.

$6.16

The most common cost-of-living adjustments are ____ per hour for each .3-point or .4-point change in the consumer price index (CPI).

1 cent

Which of the following is NOT a common goal of a strategic compensation policy?

To mesh employees' past performance with organizational goals

The federal civil service job classification system uses which type of job evaluation system?

Job classification system

According the compensation scorecard, functions with a compa ratio below ______ are considered to be paying their employees below the company norm.

100 percent

The Fair Labor Standards Act prohibits the employment of those between the ages of _____ in hazardous occupations such as mining, logging, and meatpacking.

16 and 18

A U.S. survey found that _____ of employees say they work in a place where discussions of pay are "formally prohibited and/or employees caught discussing wages could be punished."

19 percent

One of the basis for compensation centers on whether employees are classified as nonexempt or exempt under the _____.

Fair Labor Standards Act

The major provisions of which act are concerned with minimum wage rates and overtime payments, child labor, and equal rights?

Fair Labor Standards Act

_____ may create problems for managers who wish to maintain pay secrecy among employees.

Internet salary survey data

_____ is a pay system in which employees are paid according to the number of units they produce.

Piecework

With respect to pay equity, which of the following is NOT considered an input?

Salary

Which of the following compensation options would not qualify under the term pay-for-performance?

Seniority-based pay

Which of the following is an internal factor that can influence the rates at which employees are paid?

The employer's ability to pay

An employee's relative worth can be determined by:

an effective performance appraisal system.

Under the Fair Labor Standards Act, exempt employees:

are those employees not covered by the overtime provisions of the Act.

The term pay-for-performance can encompass all of the following EXCEPT:

base salary.

Jobs that are grouped into the same pay grade should:

be paid within a range that may overlap with adjoining grades, so that an employee with experience can be paid as much as or more than a newer employee in a higher grade.

Wages gained through collective bargaining extend:

beyond the segment of the labor force that is unionized.

Collapsing many salary grades into a few wide salary bands is known as:

broadbanding

Using the point method of job evaluation requires that managers:

compare the job descriptions against the various factor-degree descriptions.

The elements of a job such as skills, efforts, responsibilities, and working conditions are referred to as:

compensable factors.

The _____ collects and displays the results for all the measures that a company uses to monitor and compare compensation among internal departments or units.

compensation scorecard

Compensation programs that compensate employees for the knowledge they possess are known as:

competence-based pay plans.

A Bloomberg National Poll showed that more than _____ of Americans thought big bonuses should be banned for Wall Street companies that took taxpayer bailouts.

d. 70 percent

The biggest challenge with competence-based pay is:

developing appropriate measures of skills and competencies.

Equity theory is also known as:

distributive fairness

Red circle rates above the maximum for the range can result because:

employees have high seniority.

When cost-of-living pay increases are given routinely, employees may view them as _____.

entitlements

The fact that people make comparisons to others is central to:

equity theory.

Pay levels are limited in part by:

the organization's profits and the productivity of employees.

A quantitative job evaluation procedure that determines a job's relative value on the basis of quantitative assessments of specific job elements is known as:

the point system.

The relative worth of a job evaluated using the point manual is determined by:

the total points that have been assigned to that job.

Pay-for-performance programs:

tie rewards to employee effort

The relationship between the relative worth of jobs and their wage rates can be represented by means of a:

wage curve.