Comp Exam 2

In what condition would product market competitor's data be given more weight than data from labor market competitors?;

- product demand is responsive to price changes

Among pay-mix alternatives the percentage of base pay is highest in a __________;

- security of commitment policy

Definition of job evaluation

Job evaluation is the process of systematically determining the relative worth of jobs to create a job structure for the organization

Major decisions in job evaluation;

- 1. Establish the purpose - 2. Decide on single versus multiple plans - 3. Choose among alternative methods - 4. Obtain involvement of relevant stakeholders - 5. Evaluate the usefulness of the results

Steps and order in doing the point method; Book definition of compensable factors;

- 8 Steps: 1. Conduct job analysis, 2. Determine Compensable factors, 3. Scale the factors, 4. Weight the factors according to importance, 5. Select criterion pay structure, 6. Communicate the plan and train users, 7. Apply to nonbenchmark jobs, 8. Develop online software support - Compensable factors: Are based on the strategic direction of the business and how the work contributes to these objectives and strategy. Characteristics in the work that the organization values.

In the context of job evaluation the two common ways of ranking are?;

- Alternation ranking and paired comparison

1. Definition of the term "camper" in a skill-based pay system;

- An employee not wanting to give up the job they currently have

assumption held by the labor supply model about the behavior of potential employees;

- Are seeking jobs. - Possess accurate information about all job openings. - Have no barriers to mobility

Types of markets like bourse and quoted market;

- Bourse allows haggling over a price until an agreement is reached, whereas a quoted market gives a set price, making you unable to name a price

1. Employees in a multi-skill system earn pay increases by?;

- By acquiring new knowledge, where the knowledge is specific to a range of related jobs

Focus on information in the text on classification and its own evaluation of its pros and cons;

- CONS: o Too general of a title to slot into a specific job class o Writing class descriptions can be troublesome when jobs from several job families are covered by a single plan. - PROS: o Including titles of benchmark jobs can help make descriptions more concrete o With the classification method the job descriptions are not just compared to the class descriptions and benchmark jobs, but can also be compared to eachother

Disadvantages of the ranking method;

- Can create problems that require potentially expensive and difficult solutions, since it doesn't tell employees and managers what it is about their jobs that is important - The criteria on which the jobs are ranked is usually poorly defined, making this more opinion based for the evaluator

The job evaluation system that most resembles a book case with many shelves;

- Classification

1. Definition of policy capturing in the context of job evaluation;

- Compensable factor importance weights are inferred using statistical methods such as regression analysis - Once a criterion structure is agreed on, statistical modeling techniques are used to determine the weight for each factor and the factor scales that will reproduce, as quickly as possible, the chosen. The statistical approach is often labeled as policy capturing.

1. the process of identifying competencies in person-based structures resembles identifying _______ as part of job evaluation in job-based structures;

- Compensable factors

1. Who is most likely to conduct job evaluations of senior management jobs?

- Compensation managers

You need to recognize advantages of skill-based pay plans;

- Continuous learning, Flexibility, Reduced work force - it facilitates matching people to a changing workflow

1. What are core competencies and what are they often linked to?;

- Core competencies are often linked to mission statements that express an organization's philosophy - Core competencies try to abstract the underlying, broadly applicable, knowledge, skills, and behaviors that form the foundation for success at any level or job in the organization.

1. Know the groups of competencies and be able to recognize examples within a specific group;

- Core competencies, cross-functional competencies, functional competencies

1. Definition of "scaling";

- Determining the intervals on a measurement instrument.

Recognize an example of a bourse;

- Ebay is Bourse. It allows haggling over a price

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

- Education and health care

Pay level - recognize true and false statements about;

- External competitiveness is expressed in practice by setting a pay level above, below, or equal to that of the competitors - Pay level focuses on control costs and increasing revenues and attracting and retaining employees

1. What is a crucial factor that affects the perception of fairness of a skill-based plan?;

- Favoritism and bias - The design of the certification bias

1. Managers whose employees use ___________ plans focus on placing the right people in the right job;

- Job based

Correct sequence of events in the context of internal alignment;

- Job description > Job evaluation > Job structure

1. The organization specific group for classifying competencies generally includes _________.;

- Leadership, customer orientation, and functional expertise

1. the majority of applications of skill-based pay have been in?;

- Manufacturing, where work often involves team work , multiskills, and flexibility

Lead policy;

- Maximizes the ability to attract and retain quality employees and minimizes employee dissatisfaction with pay.

1. Competency indicators;

- Observable behaviors that indicate the level of competency within each set. These indicators may be used for staffing and evaluation as well as for pay purposes

1. How the alternation ranking method works;

- Orders job descriptions alternately at each extreme. Evaluators reach agreement on which jobs are the most and least valuable.

Recognize an example of the demand side of labor;

- Pay level offered by an employer - An employer cannot change any other factor of production, thus its level of production can change only if it changes the level of human resources

Recognize true or false comments on a job evaluation plan;

- Rarely do employers evaluate all jobs at the same time - Many employers design different plans for different types of work - Prominent examples include Position Analysis Questionnaire and the Hay Plan - Ranking, classification, and point (factor) method

Definition of pay level;

- Refers to the average of the array of rates paid by an employer - Base + bonus + benefits + value of stock holdings/ number of employees

advantages of a lead policy-level;

- Research links high wages to ease of attraction, reduced vacancy rates and training time, and better-quality employees

1. An employee's focus in a job-based approach is to?;

- Seek promotions to earn more pay

Definition of the marginal product of labor and how it works;

- The additional output associated with the employment of one additional person, with other production factors held constant is the marginal product model

Recognize true/false comments about marginal revenue product model;

- The additional output associated with the employment of one additional person, with other production factors held constant is the marginal product model - Marginal Revenue - the money generated from the sale of the marginal product - A manager using this revenue model must only do two things: determine the pay level set by market forces and determine the marginal revenue generated by each new hire.

What happens if markets are incorrectly defined?

- The estimates of competitors' pay rates will be incorrect and the pay level and pay mix inappropriately established if:

Company A raises its pay rate by one dollar per hour to hire additional workers and competitors immediately match the increase , what will be the most likely result?;

- The labor costs for Company A will increase, but it will be unable to hire additional workers

Connection of wage and revenue;

- The point at which the incremental income generated by an additional employee equals the wage rate is the marginal revenue product

________ puts a lid on the maximum pay level and employer can set;

- The product market

1. Reason why skill-based plans have maximum flexibility;

- They pay employees for the highest level of skill they have achieved regardless of the work they perform.

1. What do competency sets do?;

- Translate each core competency into action

1. From provided examples, be able to identify who among them is examining the validity of a job evaluation;

- Validity of job evaluation has been measured in two ways: hit rates and ranking of benchmarks

Shared choice policy;

- begins with the lead, meet, or lag alternatives - Then, adds a second part which is to offer employees choices, within limits of the pay mix

1. The reliability of job evaluation techniques is measured by?;

- determining if different evaluators produce the same results.

First labor market theory assumption;

- employers seek to maximize profits

1. Competencies are derived from the __________ beliefs asbout the organization and its strategic intent;

- executive leadership's

Premise Human Capital Theory is based on;

- higher earnings flow to those who improve their potential productivity by investing in themselves (through additional education, training, and experience). •The theory assumes that people are in fact paid at the value of their marginal product.

1. A study of 400 compensation specialists reveal that:;

- market data had a substantially larger effect on pay decisions than job evaluation data.

Compensating differentials labor demand theory - what does it state?;

- the additional amount of income that a given worker must be offered in order to motivate them to accept a given undesirable job, relative to other jobs that worker could perform.

External competitiveness;

- the pay relationships among organizations - pay relative to competitors

1. Disadvantages of the point method according to the text;

1. Time, effort, money 2. May be going back to pay grades, if so why should you go through the trouble and expense of developing a point method? 3. As with the factor comparison method, the point method relies heavily on key jobs for which valid market rates can be determined. Unless such key jobs and correct pay rates exist, the point method may not be valid.

1. Most factors have _________ number of degrees;

4-8

Which of the following is NOT true of the relationship between employer size and its ability to pay? A. Talented individuals have a lower marginal value in a larger organization. B. Talented people can influence more people and decisions C. Influence of talented people leads to more profits. D. Talented people prefer to work in larger organizations

A. Talented individuals have a lower marginal value in a larger organization.

Which of the following statements is true of pay level? A. Pay level is the same across all organizations for the same job. B. The higher the pay level relative to what competitors pay, the lower the relative costs to provide similar products or services. C. Pay level is directly proportional to labor costs. D. Pay level is independent of the number of employees in an organization.

C. Pay level is directly proportional to labor costs.

A job description is compared to class descriptions in the ________ of job evaluation (which method?);

Classification

1. Which is least likely to be used in establishing skill-based certification methods?;

College Degree

Underlying assumption in the assessment of job content

Content has intrinsic value outside the external market

Skill-based pay plans work best in organizations using _____ strategy;

Cost Cutter

Which of the following is NOT true of the usage of multiple plans versus single job evaluation plans? A. Employers rarely evaluate all jobs in the organization at one time. B. Many employers design different evaluation plans for different types of work. C. Typically, a related group of jobs is used for evaluation. D. A single universal plan is acceptable to employees if the work covered is highly diverse.

D. A single universal plan is acceptable to employees if the work covered is highly diverse.

1. Compensable factors, skill blocks, and competency sets are use for?;

Determining what to value/ assessing relative value

1. According to Frito-Lay's list of competencies for managerial work, the behavior of modeling, teaching, and coaching company values is linked to the _______ competency dimension?;

Doing it the right way

1. The roots of job-based pay structures are traced to?'

Frederick taylor

1. Most widely used point method job evaluation;

Hay Group Plan

1. A ___________ approach controls costs by paying only as much as the work performed is worth, regardless of any greater skills the employee may possess.

Job Based

Which job evaluation method uses compensable factors?;

Point Method

The most commonly used job evaluation method in the United States and Europe;

Point method

Least expensive method for doing job evaluation is?;

Ranking

Exchange Value

The price of labor (the wage) determined in a competitive market; in other words, labor's worth (the price) is whatever the buyer and seller agree upon

1. Routine work is also termed?;

Transactional Work

___________ reason makes competencies a risk foundation for a pay system;

Vagueness and Subjectivity

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

Evidence shows that in manufacturing _________ is positively correlated with hourly wage level;

productivity

What is linked to high pay levels?;

reduced vacancy rates

1. Research shows that _______ factor(s) account(s) for 98 to 99 percent of the variance in job evaluation plans;

three

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

work life balance policy