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
