Compensation Exam 1 Ch 1-4 REV

Internal and external relationships

data related to employee

In an organization, competencies are derived from _____.

the executive leadership's views about the organization and its strategic purpose

The compensable factors used in the designing of a point plan are based on _____.

the strategic direction of business and the way in which the work contributes to the strategy

True or false: Pay strategies need to take into account the nature of the union-management relationship.

true

Identify the uses of generic job descriptions.

They can be used for external cross-checks. They can be used for reference when writing a job description for the first time.

Identify the true statements about the impact of internal pay structures

-High performers quit less under hierarchical systems when people have knowledge of the structure -High performers quit less under more hierarchical systems when pay is based on performance rather than seniority

How does job evaluation support the work flow in an organization? (Check all that apply.)

By setting pay for new, unique, or changing jobs By integrating each job's pay with its relative contributions to the organization

Any civil case in which parties indicated their intent to sue on behalf of themselves as well as others not specifically named in the suit at some point prior to the final resolution of the matter is called a(n) _______ ________ _______.

Class Action Lawsuit

Identify a true statement about involvement in the design of an organization's internal structure.

Committees, task forces, or teams that include representatives from key operating functions are often involved.

In the context of the point method of job evaluation, ________ are job attributes that provide the basis for evaluating the relative growth of jobs inside an organization

Compensable Factors

Uses of Job Analysis

It generates data that managers can use to defend their decisions when challenged It provides information that serves as a work-related rationale for pay differences

Merrill Lynch

It sizes jobs based on knowledge/skill, complexity, business impact, and strategic value.

Match the types of internal structures (in the left column) with the ways in which pay increases are obtained under them (in the right column).

Job-Based Structure: Via promotions to positions involving more responsible work Person-Based Structure: Via the gain of more-valued skills or competencies

The _______ ________ theory was put forth in the last half of the 19th century and countered the views of Karl Marx by stating that employers pay use value.

Marginal Productivity

________ _________ is a theory that was put forth in the last half of the 19th century and that countered the views of Karl Max by stating that employers pay use value.

Marginal productivity

In the context of compensation, which of the following is a way to better satisfy employees' individual needs and preferences?

Offering More Choice

In the context of the elements in the pay model, _____ refers to the role played by non-HR managers in making compensation decisions.

Ownership

Evidence has consistently proven that large organizations tend to _____ than do small organizations.

Pay Higher Wages

Identify a disadvantage of competency-based internal structures.

Pay differences are justified on the basis of inferred personal competencies.

Which of the following are conventional methods of job analysis?

Requesting employees who are doing a job to fill out a questionnaire Interviewing jobholders and their supervisors

According to the Department of Labor, _____ is the degree of accountability that is required to perform a job.

Responsibility

Identify common examples of income protection benefits provided by employers. (Check all that apply.)

Retirement programs Life insurance Medical insurance

Identify the generic groups into which the compensable factors used in existing, standardized point plans usually fall. (Check all that apply.)

Skills required Responsibility Effort required Working conditions

Value

The relative contribution of a job to the organization aims

Which of the following are true of aligned pay structures? (Check all that apply.)

They are fair to employees. They support the way work gets done.

Merrill Lynch

They are market competitive in base, benefits, incentive/bonus, and stock

How do external competitiveness decisions affect compensation objectives? (Check all that apply.)

They ascertain that the pay is enough to attract and retain employees. They control labor costs to maintain the competitiveness of an organization's prices of products or services in a global economy.

Identify the true statements about the design of competency-based structures. (Check all that apply.)

They possess relatively few levels. They have relatively wide differentials.

Which of the following are true of the employees of companies that are engaged in virtuous circles? (Check all that apply.)

They share in the company's success. They receive large bonuses and stock awards.

True or false: While referring to pay, the terms equity and equal can be used interchangeably.

This is false. The terms equity and equal are not interchangeable. Pay can be unequal across employees, but it can nevertheless be perceived as equitable or fair.

Identify the ways in which shareholders influence executive compensation decisions. (Check all that apply.)

Through the election of directors in proxy votes Through shareholder proposals

In determining the compensation strategy, a major strategic decision is whether to mirror what competitors are paying.

True

true

True or false: Professional or managerial job descriptions should include the relationship between the job, the person performing it, and the organization objectives.

False

True or false: Supervisors are the best source of job analysis data because they know the jobs thoroughly.

Identify the most common basis for formulating a company's internal structure.

Work Content and it's Value

Since governments are major stakeholders in determining compensation, _________ can be included in a compensation strategy. a. lobbying to influence laws and regulations b. underlining a value and mission statement c. understanding employee needs d. identifying union preferences

a

What did Matt Bloom discover about the effect of pay differences on performance based on eight years of data on major league baseball? a. mediocre team members performed better on a team with a hierarchical structure than on a team with an egalitarian structure b. teams with small differences in member salaries did better than those with large differentials c. individual performances improved in teams with a hierarchical structure, but the structure discouraged cooperative efforts d. egalitarian structures affected individual performance much more than team performance

b

_______ refers to the role played by non-HR managers in making compensation decisions. a. alignment b. compliance c. ownership d. prominence

c

Which compensation objective has a company failed to meet if it misuses the statistics used to measure competitors' pay rates?

ethics

validity

examines the convergence of results among sources of data and methods

Validity

examines the convergence of results among sources of data and methods.

reliability

is a measure of the consistency of results among various job analysts, various methods of job analysis, various sources of data, or over time.

Marginal Productivity

is a theory that was put forth in the last half of the 19th century and that countered the views of Karl Max by stating that employers pay use value.

Since governments are major stakeholders in determining compensation, _____ can be included in a compensation strategy.

lobbying to influence laws and regulations

In the context of the elements in the pay model, _____ is the measure of the significance of total compensation in the overall HR strategy.

prominence

Internal Labor Markets

refer to the rules and procedures that determine the pay for the different jobs within a single organization and allocate employees among those different jobs.

Internal Alignment

refers to the pay relationships among different jobs or skills or competencies within a single organization.

Use value

refers to the value of goods and services produced by an employee in a job

use value

refers to the value of goods and services produced by an employee in a job

exchange value

refers to the wage agree upon by the employer and employee for a job

In the United States, the pay for employees who are exempt from regulations of the Fair Labor Standards Act (FLSA) and hence do not receive overtime pay is referred to as

salary

True or false: A company's pay structure should support its work flow.

true

True or false: Job content does not have intrinsic value if its value depends on what it can command in the external market.

true. If some aspect of job content, such as stressful working conditions, is unrelated to wages paid in the external labor market, then that aspect does not have to be included in the job evaluation. In this perspective, the value of job content is based on what it can command in the external market and has no intrinsic value.

Heather, a law school graduate, applies for job at one of the leading corporate law firms in her hometown. In the interview, she is asked whether she has any intentions of getting married and having children in the near future. Male candidates applying for the same position are not asked these questions. In the context of discrimination under Title VII of the CIvil Rights Act of 1964, this scenario illustrates the concept of _______ ________

Disparate Treatment

DSTDB Corporation, a digital marketing agency, establishes a new system to calculate salaries based on skill and proficiency level, years of experience, market value, and merit. Based on this new system, the agency grants salary hikes to 45 female employees whose salaries were less than the amount computed by the new system. However, the agency refuses to grant salary hikes to 63 male employees whose salaries were also less than the amount computed by the new system. In this scenario, DSTDB Corporation is in violation of the Equal Pay Act. This violation is an example of _____.

Reverse Discrimination

An organization may use a sample of _____, or key jobs, to ensure that a job evaluation includes all relevant aspects of work.

benchmark jobs

Match Policy

company uses this for jobs that requires skills that are not very critical to its success

____ ____ refers to the array of pay rates for different work or skills within a single organization

pay structure

A ________ ________ focuses on those compensation choices that help the organization gain and sustain competitive advantage.

strategic perspective

—the education, experience, knowledge, abilities, and skills required to perform the work—is a major influence on internal structures.

human capital

Equity Theory

states that people compare the ratio of their own outcomes (e.g., pay, status, enjoyment) to inputs (e.g., effort, ability, performance) with the outcome to input ratio of others (internal, external, or themselves in a past or future situation).

job analysis

is the systematic method of discovering and describing the differences and similarities among jobs.

Today, job analysis is typically performed by

human resource generalists and supervisors.

The underlying assumption of efficiency-wage theory is that pay level determines _____.

Effort

Colina Manufacturing Inc.

Egalitarian structure

External factors

Economic pressures and government policies, laws, and regulations

Identify the compensation objectives that pay systems should meet. (Check all that apply.)

Efficiency Fairness Ethics Compliance with laws and regulations

Identify the consequences of deviations from acceptable wage structures. (Check all that apply.)

more grievances diminished motivation

Organization Factors

nature of the industry, company strategy and size, and characteristics of individual managers

In the context of pay structures, a _____ focuses on the work content—tasks, behaviors, responsibilities.

job-based structure

Identify the strategic choices involved in tailoring a pay structure that is internally aligned.

-How pay should be distributed throughout the levels in the structure -How specific the tailoring of the pay structure should be to the organization's design and work flow

Identify the aspects of the pay model that influence the impact of any internal structure on organizational performance.

-Management -Competitiveness -Contributions

Which of the following are true of aligned pay structures?

-They support the way work gets done -They are fair to employees

Arrange the steps involved in the determination of an internal skill-based structure in the order of their occurrence.

1) Analysis of Skills 2) Grouping of skills into skill blocks 3) Certification of Skills 4) Building of Internal Structure

Arrange the units of job analysis according to size, starting with the smallest.

1-Task 2-Position 3-Job 4-Job Family

Arrange the steps involved in developing a total compensation strategy in the order in which they are conducted.

1. Assessing the implications of total compensation 2. Mapping a strategy for total compensation 3. Implementing the total compensation strategy 4. Reassessing the total compensation strategy

Steps involved in developing a total compensation strategy in the order in which they are conduced.

1. Assessing the implications of total compensation 2. Mapping a strategy for total compensation 3. Implementing the total compensation strategy 4. Reassessing the total compensation strategy

What is the outcome of using the classification method of job evaluation?

A job structure with a sequence of classes, each having a number of similar jobs

Which combination may boost employee commitment and encourage teamwork, which may in turn improve productivity?

A lag pay-level policy combined with the promise of increased future returns

Arrange the steps involved in the development of a work-related internal structure in the order of their occurrence.

1. Collection and summarization of work content information that identifies similarities and differences 2. Determination of the aspects of job content that should be valued 3. Assessment of the relative value of the aspects of job content 4. Translation of the relative value into an internal structure

Distributive justice

A pay structure itself; addresses the acceptability of the actual pay differences among employees

Identify an accurate statement about a reservation wage.

A reservation wage may be more than or less than the market wage.

People who disagree with the idea of strategic fit in terms of compensation believe that _____.

A set of best practices that have universal applicability exist

Which of the following are steps involved in establishing a comparable-worth plan? (Check all that apply.)

A single "gender neutral" point job evaluation plan for all jobs within a unit should be adopted. Percentages of male and female employees in each job group should be identified.

Match the ways of ranking while evaluating jobs (in the left column) with their descriptions (in the right column).

Alternation Ranking: Evaluators reach a consensus on which jobs are the most and least valuable, followed by the next most and least valued, and so on, until all the jobs have been arranged in order. Paired Comparison: Evaluators use a matrix to compare every possible coupling of jobs.

What is the final outcome of a person-based plan?

An internal structure of work in the company

Identify the criteria that have been suggested for scaling compensable factors in the point method of job evaluation. (Check all that apply.)

Anchor degree definitions with benchmark-job titles and/or work behaviors Ensure that the number of degrees is necessary to distinguish among jobs Use understandable terminology Make it apparent how the degree applies to the job

In which of the following ways can employees view compensation? (Check all that apply.)

As a reward for having done well in a job As an incentive to take or stay in a job and to try to perform well in that job As a return in an exchange between their employer and themselves As an entitlement for being an employee of the company

Having a lag pay-level policy may impede an organization's ability to _____.

Attract Job Applicants

What are the objectives that pay-level and pay-mix decisions focus on? (Check all that apply.)

Attracting and keeping employees Controlling expenses and raising revenues

How do most organizations motivate employees to apply for higher-level positions?

By associating promotions with money

How do employees judge the equity of their pay?

By making several comparisons

How do employees judge the equity of their pay?

By making several comparisons (comparing jobs similar to their own, comparing their pay to external pay levels, and comparing their job's pay to other jobs in their organizations.)

Which of the following processes reflect the changes that are occurring in the design of organizations? (Check all that apply.)

Delayering Outsourcing

Which test of compensation strategy is the most difficult?

Determining rather it adds value

The pay differences among levels are referred to as ______.

Differentials

________ _________ applies different standards to different employees.

Disparate Treatment

General Mills' flexible benefits they offer their employees

Employees are allowed to exchange several weeks' salary for stock awards

General Mills flexible benefits they offer their employees

Employees are allowed to exchange several weeks' salary for stock awards.

Identify an advantage of a skill-based pay structure.

Employees can be deployed in a way that better aligns with the flow of work.

Netflix's flexible benefits they offer their employees

Employees can select the mix of stock options and salary

Netflix flexible benefits they offer their employees

Employees can select the mix of stock options and salary.

Which of the following requirements should be met by an organization's pay structure? (Check all that apply.)

Employees should be able to view the way in which their work is linked to the work of others and the organization's objectives. It should be fair to employees.

Whole Foods flexible benefits they offer their employees

Employees vote on the benefits of their choice

External factors affect the pay for what type of job?

Entry jobs

True or false: The development of a total compensation strategy should not involve trial and error.

False

True or False In the real workplace, pay structures follow either a job-based structure or a person-based structure.

False (it includes both)

T/F: Cost of living adjustments (COLAs) to base wages are becoming increasingly common nowadays.

False COLAs to base wages have become less common than in the past because employers continually try to control fixed costs and link pay increases to individual and/or company performance

Wages in labor-intensive industries are generally higher than in technology-intensive industries.

False Labor intensive industries have lower wages than technology intensive industries

Which of the following is true according to tournament theory?

Greater differentials between employees' salary and the boss's salary motivate employees to work hard

A characteristic of any pay structure is its _____.

Hierarchical Nature

Porfyra Manufacturing Inc.

Hierarchical structure

Which of the following would be considered a measure of success of the training provided to users to help them apply a point plan?

High (inter)rater reliability

Identify the true statements about the impact of internal pay structures. (Check all that apply.)

High-performing employees resign less under more hierarchical systems when their pay is based on performance rather than seniority High-performing employees resign less under hierarchical systems when they have knowledge of the pay structure.

elementary school teachers dieticians lodging managers

Identify the jobs that are less susceptible to automation.

supervisors jobholders

Identify the main sources of job analysis data.

It identifies similarities and differences in the work contents of jobs. It helps establish an internal job structure that is fair and aligned.

Identify the major uses of job analysis in compensation.

It does not require any specific type of analysis. It does not consider special pay rates or special benefits for people with disabilities.

Identify the true statements about the Americans With Disabilities Act (ADA).

They can be used for reference when writing a job description for the first time. They can be used for external cross-checks.

Identify the uses of generic job descriptions.

Which of the following are involved in the alignment of pay strategy? (Check all that apply.)

Internal alignment within the overall HR system External alignment with the economic and socio-political conditions Alignment with the business strategy

Ways to measure an merit increase program

Is usually based on a subjective rating of performance

Identify a true statement about the application of a point plan to nonbenchmark jobs.

It can be done by people who were not necessarily involved in the design process.

Identify a true statement about the "change-and-congeal" process of establishing pay structures.

It does not yet support the continuous changes occurring in the present economy.

A structure based on the value of work

It emphasizes the relative contribution of skills, tasks, and responsibilities to the organization's goals.

Which of the following are the uses of job analysis? (Check all that apply.)

It generates data that managers can use to defend their decisions when challenged. It provides information that serves as a work-related rationale for pay differences.

According to a study on managers' approaches to pay decisions under varying economic conditions, how did level of unemployment affect wage adjustment recommendations?

It had almost no impact on wage adjustment recommendations.

Identify an advantage of developing a job evaluation plan using benchmark jobs.

It helps to ensure the accuracy of the decisions based on the job evaluation.

Purpose of job analysis

It identifies a job's content

Identify the disadvantages of offering employees unlimited choice in terms of compensation. (Whole Foods Example)

It may confuse employees It would be difficult to design and manage It would not be approved by US Internal Revenue Service (because health benefits are not viewed as income)

Google's strategy for internal alignment

It minimizes hierarchy and stresses collaboration

Google

It minimizes hierarchy and stresses collaboration.

A structure based on work content

It usually ranks jobs based on the skills required, the complexity of tasks, problem solving, and/or responsibility.

Which of the following makes a company's compensation strategy difficult to imitate?

Its alignment with the overall HR strategy

Who among the following has violated the Fair Labor Standards Act of 1938? 1) Rachel, who pays all her workers a minimum wage of $13 2) Sally, who does not consider the time her employees spend travelling to work as compensable time 3 )Jeremy, who employs his 16-year-old cousin in his meat-packing plant 4) Randy, who employs his 17-year-old son in his stationery store as a cashier

Jeremy, who employs his 16-year-old cousin in his meat-packing plant

A group of positions with similar duties and responsibilities that require similar qualifications, are filled by similar recruiting procedures, and are paid under the same pay schedule is known as a ________ ________.

Job Group

The qualifications, or the knowledge, skills, and abilities, that are needed in order to be hired for a job are referred to as the ________ _________ .

Job Specifications

What are the only things that a manager using the marginal revenue product model must do? (Check all that apply.)

Calculate the pay level set by market forces Calculate the marginal revenue generated by each new hire

Which of the following can form the basis for a cost of living adjustment (COLA) to base wages? (Check all that apply.)

Changes in living costs Changes in experience or skill Changes in what other employers are paying for the same work

In the ________ method of job evaluation, a series of well-described classes covers the range of jobs in an organization, and a job description is compared to the class descriptions to decide which class is the best fit for that job.

Classification

Identify the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. (Check all that apply.)

Clawback provisions designed to allow companies to take back compensation from executives in some instances "Say on pay" that makes it obligatory for public companies to submit their executive compensation plan to a vote by shareholders

Characteristics in the work that the organization values, and those that help it pursue its strategy and achieve its objectives are called _______ _________.

Compensable Factors

Which of the following labor demand theories states that work with negative characteristics requires higher pay to attract or retain workers?

Compensating Differentials

Match the terms (in the left column) with their meanings (in the right column).

Content: The work performed in a job Value: The relative contribution of a job to the organization aims

A compensation system that focuses on competitors' labor costs is most closely associated with a(n) ________ strategy.

Cost-Cutter

Procedural justice

The methods for determining a pay structure; addresses the way in which design and administration decisions are made and whether measures are applied in a consistent manner

Procedural justice

The methods used for determining a pay structure

Which of the following are used to describe pay structure? (Check all that apply.)

The number of levels The criteria used to determine the differences in pay between different levels The differentials in pay between different levels

The hierarchy of a pay structure refers to _____.

The number of levels and reporting relationships

_______ _______ legislation is meant to provide an income floor for workers in society's least productive jobs.

Minimum Wage

Identify the jobs that are highly susceptible to automation. (Check all that apply.)

Models Insurance underwriters Ophthalmic laboratory technicians

Internal factors affect the pay for what type of job?

Nonentry jobs

In the context of compensation, which of the following is a way to better satisfy employees' individual needs and preferences?

Offering more choice

Identify the recent changes in employee skill certification procedures that are replacing traditional certification methods. (Check all that apply.)

Ongoing recertification Fixed review points

Match the domain titles of the Great Eight competencies (in the left column) with the hypothesized big five, motivation, and ability relationships (in the right column).

Organizing and executing: Conscientiousness and general mental ability Adapting and coping: Emotional stability Enterprising and performing: Need for achievement and negative agreeableness

______ ______ refers to the array of pay rates for different work or skills within a single organization.

Pay structure

Exchange value

Refers to the wage agreed upon by the employer and employee for a job

________ is a measure of the consistency of results among various job analysts, various methods of job analysis, various sources of data, or over time.

Reliability

Which of the following are conventional methods of job analysis? (Check all that apply.)

Requesting employees who are doing a job to fill out a questionnaire Interviewing jobholders and their supervisors

A(n) __________ __________ focuses on those compensation choices that help the organization gain and sustain competitive advantage.

Strategic Perspective

________ refers to the fundamental directions that an organization chooses.

Strategy

________ ________ reveal the actual work performed and its purpose or outcome.

Task Data

Identify the law that covers all employees of companies involved in interstate commerce or in the production of goods for interstate commerce.

The Fair Labor Standards Act of 1938

A study on how economic factors translated into wage decisions for managers found that the profitability of a company was viewed by managers as a factor for higher management in determining _____.

The General Pay Budget

Which of the following is a consequence of differences in compensable factors being based on the work itself?

The chances of accusations of pay discrimination (being raised) are reduced.

The reassessment step in formulating a total compensation strategy recognizes that _____.

The compensation strategy must undergo modifications in response to changing conditions

Which of the following types of internal structures attempts to isolate the underlying, broadly applicable knowledge, skills, and behaviors that form the base for success at any level or job in the organization?

The competency-based structure

What is the advantage of using existing, standardized point plans?

The relative internal value of jobs in an organization can be compared with similar jobs in other organizations.

What is the challenge called small numbers that is faced while deciding the number of compensable factors to be used while designing a point plan?

The tendency to use a factor present in even a single job in the benchmark sample for the entire work domain

Identify a disadvantage of skill-based pay structures.

These structures can lead to increased labor costs in a firm with labor-intensive products.

Google external comp.

They are market leaders in pay and benefits and provide unique benefits.

Identify the true statements about incentives. (Check all that apply.)

They are often known as variable pay. They are one-time payments.

Identify the true statements about skill-based plans. (Check all that apply.)

They are supported by very specific information on every aspect of the work process. They are especially suited for continuous-flow technologies where employees work in teams.

Why are some people against the idea of viewing pay as an investment with measurable returns?

They feel that this view reduces the importance of treating employees equitably

Attora Inc., an advertising company, provides its employees with benefits that include paid vacations, work from home facilities, and access to an onsite child care center. Identify a true statement about these benefits.

They help employees balance their work and personal lives.

Which of the following is true of the income protection benefits provided by employers?

They help protect employees from the financial risks inherent in daily life.

Which of the following is true of allowances?

They often grow out of whatever is in limited supply.

Identify a true statement about the Equal Pay Act and the Civil Rights Act.

They require "equal pay for equal work."

Identify a true statement about the appeals or review procedures for handling cases of incorrect job evaluation or employee grievances about internal pay structure.

They usually require approval by higher levels of management on completion.

True or false: In the real workplace, pay structures follow either a job-based structure or a person-based structure.

This is false. In the real workplace, pay structures include both job-based and person-based structures and not either one.

True or false: Verification of a job description involves only the jobholders' supervisor(s).

This is false. Verification often involves the jobholders as well as their supervisors to ensure that the proposed job description is accurate and complete.

SAS's main message being communicated by their compensation strategy maps

Total compensation supports work/life balance

According to _______ _______ , players will play better in a tournament where the prize differentials are large than in a tournament where the prize differentials are small.

Tournament Theory

True or False Unions, stockholders, and even political groups are involved in the determination of internal pay structure

True

True or false: In the context of developing an internal pay structure, employee involvement is almost built into skill-based plans.

True. In the context of developing an internal pay structure, employee involvement is almost built into skill-based plans.

Identify the ways in which pay can influence employee motivation and behavior. (Check all that apply.)

Via an incentive effect Via a sorting effect

The involvement of employees improves their understanding of the process.

What is the advantage of conventional questionnaires and interviews?

It identifies a job's content.

What is the purpose of job analysis?

When are the data from product market competitors likely to be given greater weight than that of labor market competitors in defining a relevant market? (Check all that apply.)

When labor expenses form a large share of total expenses When demand for a product is responsive to price changes When labor supply is not responsive to pay changes When employee abilities are specific to the product market

Which of the following features of research should be kept in mind while deciding the usefulness and relevance of a research study? (Check all that apply.)

Whether there are alternate explanations Whether the research separates correlation from causation

Match the companies (in the left column) with the flexible benefits they offer their employees (in the right column).

Whole Foods: Employees vote on benefits of their choice Netflix: Employees can select a mix of stock options and salary General Mills: Employees are allowed to exchange several weeks salary for stock rewards

The process by which goods and services are delivered to the customer is referred to as ______ _______

Work Flow

Identify the most common basis for formulating a company's internal structure.

Work content and its value

Position Analysis Questionnaire (PAQ)

___ ___ ___ (PAQ) groups work information into seven basic factors: information input, mental processes, work output, relationships with other persons, job context, other job characteristics, and general dimensions.

Managing compensation means: a. identifying the impact of a policy, technique, or decision b. developing pay techniques that align with the organizational strategy c. studying external market rates for various jobs d. conducting job evaluations to create an internal structure

a

People who support the idea of adopting best practices in developing a pay strategy feel that this: a. provides the employer with preferential access to superior employees b. helps in the formulation of the most effective business strategy c. ensures good relations between the management and union workers d. best aligns the pay strategy with the company's overall HR strategy

a

A study that used hockey teams to examine the influence of pay differences on performance found that: a. egalitarian structures helped improve the performance of mediocre players b. larger differentials based on performance generated positive sorting effects c. smaller differentials based on performance improved team performance d. hierarchical structures motivated players to perform well individually but reduced cooperation among the players

b

A drawback of the ranking method of job evaluation is that evaluators using this method must _____.

be knowledgeable about all jobs under study

Allowances are a type of _____.

benefit

Customer focused

business strategy places emphasis on pleasing customers and bases employee pay on how well they do this.

A crucial challenge in the design of next-generation pay system is: a. how to replace cash compensation with other benefits b. how to better sidestep laws and regulations c. how to better satisfy individual needs and preferences d. how to focus on relational rewards rather than on total compensation

c

According to which of the following compensation objectives should an organization give importance to the way in which its results are achieved? a. fairness b. efficiency c. ethics d. compliance

c

Task

smallest unit of analysis, specific statement of what a person does. EX. Serving coffee

external factors

stakeholders and cultures and customs

Organization factors

strategy, technology, human capital

One of the ways in which employers make pay cuts in times of high unemployment is by requiring employees to _____.

take furloughs without pay

Job family

group of related jobs with broadly similar contents. EX. Advertising

A characteristic of any pay structure is its _____

hierarchical nature

A characteristic of any pay structure is its _____.

hierarchical nature

The final result of the job analysis-job description-job evaluation process is a _____.

hierarchy of work

At Nucor Steel, the focus is on _____.

high productivity and quality

Managing compensation means _____.

identifying the impact of a policy, technique, or decision

Job evaluation supports an organization's strategy by _____.

identifying the way in which the job adds value

In 14th-century western Europe, the Christian church endorsed a(n) _____ _____ _______ that denied market forces such as skills shortages as appropriate determinants of pay structures.

just wage doctrine

The process by which goods and services are delivered to the customer is referred to as

work flow

The process by which goods and services are delivered to the customer is referred to as ___ ___.

work flow

The process by which goods and services are delivered to the customer is referred to as ________ ________.

work flow

The option of off-shoring to reduce labor expenses is also described as _____.

work flowing to the people

The _____ is the increase in output generated by the employment of one additional person, while keeping other production factors constant.

marginal product of labor

Identify the true statements about Whole Food's business objectives. (Select all that apply) a. to focus on product innovation b. to increase competition among employees by emphasizing pay-for-performance c. to take extraordinary measures to satisfy and delight customers d. to hire and try to retain employees who are going to help the company make money

c, d

The _____ is the increase in returns generated by the employment of one additional person by a firm, while keeping other production factors constant.

marginal revenue of labor

A major work decision change is _________, in which entire levels of work are removed.

delayering

Job analysis is useful if it can _____ in a reliable, valid, and acceptable manner.

determine similarities and differences among jobs

Even organizations that rely primarily on market pricing probably also use job evaluation because _____.

matching all jobs to market survey jobs directly is usually impossible

In a study conducted to determine the effects of sorting and signaling strategies, it was determined that pay level held more significance for _____.

materialists than for the risk-averse

Increments to base pay that are given to employees on the basis of their performance are known as _____.

merit increases

Which policy decision of the pay model emphasizes paying for performance?

employee contributions

An employer will keep hiring until the marginal revenue generated by the last hire equals the _____.

expenses associated with employing that person

Exchange value

refers to the wage agreed upon by the employer and employee for a job

The disagreement on the need for job analysis centers on the issue of _____.

flexibility

Recognition and status, employment security, challenging work, and opportunities to learn are examples of _____.

relational returns

Susan works in a small biochemical corporation. Although her base wage and other forms of cash compensation are not very high, she gets personal satisfaction from the work she does and enjoys working with talented and knowledgeable professionals from her field of interest. These positives are examples of _____.

relational returns from work

Wall Street financial services firms and banks rewarded employees for developing "innovative" new financial investment vehicles and for taking risks that helped them and their firms earn a significant amount of money by using _____.

incentive plans

Base wage

is the cash compensation that an employer pays an employee for the work performed

The term "reverse discrimination" is disliked by many people because they believe that _____.

it is still discrimination even if the group penalized is white males

focuses on the job

job description

Products of job analysis

job description job specification

The Davis-Bacon Act

requires that mechanics and laborers on public construction projects be paid the prevailing wage in an area

___ ___ begins with the traditional alternatives to lead, meet, or lag; it then adds a second part, which is to offer employees choices within limits in the pay mix

shared choice

Pay structures undergo changes due to external factors such as _____.

skill shortages

In 14th-century western Europe, the Christian church endorsed a(n) ______ _______ _______ that denied market forces such as skills shortages as appropriate determinants of pay structures.

"Just Wage" Doctrine

What are the assumptions that theories of labor markets usually begin with?

-Employers always seek to maximize profits -People are homogeneous and therefor interchangeable -The pay rates reflect all costs associated with employment -The markets faced by employers are competitive, so there is no advantage for a single employer to pay above or below the market value

Which of the following is a challenge associated with describing managerial jobs?

An individual manager can influence job content.

Which of the following are likely to be the focus of employees when they are given long-term incentives in the form of stock ownership? (Check all that apply.)

Return on investment Market share Return on net assets

The sorting effect

The effect of differences in the types of pay strategies on the types of people who apply to and stay with an organization

Which of the following are used to describe pay structure? (Check all that apply.)

The number of levels The differentials in pay between different levels The criteria used to determine the differences in pay between different levels

job specifications

The qualifications, or the knowledge, skills, and abilities, that are needed in order to be hired for a job are referred to as the

Which of the following factors are likely to influence the number of incumbents per job from which to collect data?

The stability of the job The ease of collecting the information

What are the major provisions of the Fair Labor Standards Act of 1938 (FLSA)? (Check all that apply.)

Child labor Minimum wage Hours of work

Which of the following terms refers to the criteria used for evaluating jobs in the point method?

Compensable factors

Which of the following is a reason for differing pay rates in the labor market and is difficult to document due to the inability to accurately measure and control the factors that go into a net-advantage calculation?

Compensating differentials

_______ _______ refers to pay comparisons with competitors.

External competitiveness

True or false: It is enough for an employer to pay at or above the legal minimum wage in order to be considered to be in compliance.

False. It is not enough for an employer to pay at or above the legal minimum wage. It must also meet provisions of prevailing wage laws and equal rights legislation.

True or false: Union representatives who actively participate in the design of internal structure believe that collective bargaining yields more equitable results.

False. Some union leaders believe that philosophical differences prevent their active participation in the design of internal structure. They believe that collective bargaining yields more equitable results.

The disagreement on the need for job analysis centers on the issue of _____.

Flexibility

Internal Alignment is oftentimes known as_______.

Internal Equity

Which of the following is true of Nucor Steel's corporate mission?

It believes in achieving success by working together.

Why has Nucor Steel done well despite paying its workers higher than companies inside and outside of the steel industry?

It has much higher productivity than is usually seen in the steel industry.

Major uses of job analysis in compensation

It identifies similarities and differences in the work contents of jobs It helps establish an internal job structure that is fair and aligned

Identify the major uses of job analysis in compensation

It identifies similarities and differences in the work contents of jobs It helps establish an internal job structure that is fair and aligned.

True strategy about the compensation strategy at Google

It offers its employees significant stock programs.

Identify the true statements about a company's strategic compensation map.

It provides a visual references of the company's compensation system It can elucidate the message that the company is trying to deliver with its compensation system

Identify examples of information that helps in identifying a job. (Check all that apply.)

Job titles Whether the job is exempt from the Fair Labor Standards Act The number of people holding the job Departments

What is the best way to deal with discrepancies in job analysis data?

Collecting more data

__________ refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.

Compensation

Americans With Disabilities Act (ADA) regulations state that "_____ refers to the fundamental job duties of the employment position the individual with a disability holds or desires."

Essential Functions

Which of the following methods can be used to heighten employee acceptability of internal pay structures?

Establishing a formal appeals process

T/F: Most managers read research because they find it relevant and useful while making compensation decisions.

F - most managers don't read research. They do not describe to research journals because they find them to be impractical, irrelevant, and filled with jargon and esoterica

True or false: Job analysis is best performed by new employees.

False

True or false: Skill-based structures pay employees only for the skills they use while performing the work assigned to them.

False. Skill-based structures pay individuals for all the skills for which they have been certified regardless of whether the work they are doing requires all or just a few of those particular skills.

True or false: Most firms allow all employees to request a reanalysis of their job and/or a skills reevaluation.

False. Most firms allow managers to request a reanalysis of their job and/or a skills reevaluation, but few extend the process to all employees unless it is part of a union-negotiated grievance process.

Porfyra Manufacturing Inc. and Colina Manufacturing Inc. are two companies that manufacture laboratory equipment. The sales department of the former has six levels with large pay differentials between them, while the sales department of the latter has only three levels with small pay differentials between them. What is Porfyra Manufacturing Inc.'s internal structure?

Hierarchical structure

Identify the true statements about the impact of internal pay structures. (Check all that apply.)

High-performing employees resign less under hierarchical systems when they have knowledge of the pay structure. High-performing employees resign less under more hierarchical systems when their pay is based on performance rather than seniority.

Identify the true statements about the impact of internal pay structures. (Check all that apply.)

High-performing employees resign less under more hierarchical systems when their pay is based on performance rather than seniority. High-performing employees resign less under hierarchical systems when they have knowledge of the pay structure.

Research has proven that in manufacturing, productivity has a positive correlation with _____.

Hourly Wage Level

According to the advocates of the strategic approach, what makes a pay strategy competitive?

How it is managed

Identify the strategic choices involved in tailoring a pay structure that is internally aligned. (Check all that apply.)

How specific the tailoring of the pay structure should be to the organization's design and work flow How pay should be distributed throughout the levels in the structure

A crucial challenge in the design of next-generation pay systems is _____.

How to better satisfy individual needs and preferences.

Arrange the steps involved in the determination of a competency-based internal structure in the order of their occurrence.

Identification of Core Competencies Identification of Competency Sets Identification of Behavioral Descriptors

Both have the same underlying purpose

Identify a similarity between job- and person-based work structures

According to research, under which of the following conditions are pay procedures more likely to be viewed as fair? (Check all that apply.)

If appeals procedures are included If employees were involved in the process If they are applied to all employees in a consistent manner If accurate data are used

In which of the following situations should an organization's internal structure be redesigned?

If it does not motivate employees to work toward achieving the organization's objectives

______ _______ is the process of systematically determining the relative worth of jobs to create a job structure for the organization.

Job Evaluation

Identify a similarity in the compensation strategies adopted by Google and Microsoft. a. a strong focus on reducing labor costs b. a strong emphasis on stock-related compensation c. a strong focus on total cash compensation d. a strong emphasis on work/nonwork balance

b

Wall Street financial services firms and banks rewarded employees for developing "innovative" new financial investment vehicles and for taking risks that helped them and their firms earn a significant amount of money by using: a. cafeteria benefit plans b. incentive plans c. flexible benefit plans d. broad-based option plans

b

Match the universal compensable factors employed by the Hay Group method (in the left column) with their definitions (in the right column)

Know How: The sum total of all the facts, information, and skill needed to do the job competently, irrespective of the way in which they are acquired Problem Solving: The measure of the inherent characteristics and complexity of the issues and challenges faced by the job Accountability: The measured effect that the job is designed to have on the organization's success

One of the negative effects of a _____ is that it forces an employer to raise the wages of current workers in order to avoid internal misalignment and murmuring.

Lead Pay-Level Policy

Identify the factors in the social and political context that influence compensation strategies. (Check all that apply.)

Legal requirements Demographical changes in the workforce

T/F: In the real workplace, pay structures follow either a job-based structure or a person-based structure.

False - pay structures include both job-based and person-based structures and not either one

Identify the true statements about the employees whose pay is referred to as salary in the United States. (Check all that apply.)

They include managers and professionals. Their pay is calculated at an annual or monthly rate.

Pay structures undergo changes due to external factors such as _____.

Skill Shortages

Identify the aspects of job content whose values depend on their relationship to market wages. (Check all that apply.)

Skills Required Customer Contacts

True or false: Most managers read research because they find it relevant and useful while making compensation decisions.

This is false. Most managers do not read research. They do not subscribe to research journals because they find them to be impractical, irrelevant, and filled with jargon and esoterica.

Which of the following is a major issue for both job-based and person-based plans?

The fairness of their administration

True or false: Flexible and balanced guidelines are necessary to ensure efficient job evaluation.

True. Balanced guidelines for job evaluation are required to ensure that employees are treated fairly and that pay decisions help an organization achieve its objectives.

Which of the following examines pay received by women and minorities for the jobs they perform?

Valuation discrimination

In which of the following situations can performance-based pay be a "worst practice"? (Check all that apply.)

When it alienates employees When it prompts government investigation

validity

Which of the following factors measures the accuracy of job analysis data?

Nations that have lower average labor costs display a tendency to have _____.

Lower Average Productivity

What are the pay objectives followed at Merrill Lynch? a. to hire, motivate, and retain the best talent b. to recognize individual contributions through unique benefits c. to minimize labor costs d. to lead the market in terms of total cash compensation

a

employees' attitudes and work behaviors

The importance given to employee contributions is a significant policy decision because it directly affects___

In a survey of approximately 1,000 members of WorldatWork, _____ was selected by the majority as the primary method of job evaluation.

Market Pricing

identify an accurate statement about the pay level in a company.

a company may have varying pay levels for different job families

There is evidence that organizations that widely use high-performance work practices and computer-based technology and employ higher-skilled employees _____.

Pay Higher Wages

The cost cutter business strategy

Places emphasis on efficiency and operational excellence

Identify the ways in which the reliability of job analysis data can be improved. (Check all that apply.)

Providing more training Using multiple raters

In order to collect job information, employees may be directed to a website where they fill in an online questionnaire. This approach is known as _______ ______ _______ (QJA).

Quantitative Job Analysis

Greatly improved communication and software connectivity have accelerated _____.

The Growth of Offshoring

Which of the following labor supply theories explains pay-level differences on the premise that higher wages flow to people who invest in themselves to increase their potential productivity?

The theory of human capital

Identify the drawbacks of conventional methods of job analysis. (Check all that apply.)

The use of conventional methods makes job analysis subjective and open to bias. Using conventional methods to collect information is time consuming.

True or false: The marginal product and the marginal revenue of a new hire are not directly measurable quantities.

True. In most organizations, it is almost impossible to quantify the goods or services produced by an individual employee, since most production is through joint efforts of employees with a variety of skills. So neither the marginal product nor the marginal revenue of the employee is directly measurable.

Identify a common example of a characteristic that is usually present in a limited number of jobs but is made into a compensable factor and applied to all jobs.

Unpleasant Working Conditions

_____ refers to the practicality of the collected information.

Usefulness

Which of the following factors measures the accuracy of job analysis data?

Validity

Internal alignment

is the policy that refers to comparisons among jobs or skill levels inside a single organization.

In 14th century western Europe, the Christian church endorsed a(n) _______ _______ ________ that denied market forces such as skills shortages as appropriate determinants of pay structures.

just wage doctrine

Identify the consequences of deviations from acceptable wage structures

-more grievances -Diminished motivation

The Wage and Hour Division of the Department of Labor specifies stringent norms that must be satisfied in order for jobs to be ______ from minimum-wage and overtime provisions.

Exempt

Mires Global Bank Corp. (MGBC) is an international financial institution. Investment bankers work for different branches of the bank across the world, including, Beijing, New Delhi, Berlin, and Chicago. Identify a true statement about the jobs of MGBC investment bankers in these four cities.

They have different exchange values.

Identify the advantages of skill-based pay structures. (Check all that apply.)

They help to match people to a changing work flow. They can cause substantial reductions in labor costs by reducing the need for supervisors.

When will an employer face no increase in labor supply even after raising its pay level?

When competitors quickly meet the employer's higher offer

According to the advocates of the strategic approach, what makes a pay strategy competitive? a. how it is managed b. how easy it is to execute c. how simple it is to follow d. how well it follows best practices

a

Long-term incentives are usually in the form of: a. stock ownership b. income protection c. allowances d. merit increases

a

Which of the following are used to describe pay structure? (Select all that apply) a. the differentials in pay between different levels b. the number of levels c. the job classes and their corresponding class descriptions d. the criteria used to determine the differences in pay between different levels e. the changes in pay over time

a, b, d

Identify the examples of programs that help employees balance their work and personal responsibilities. (Select all that apply) a. time away from work b. access to services to meet specific needs c. housing and transportation allowances d. income protection e. flexible work arrangements

a, b, e

In which of the following situations should an organization's internal structure be redesigned? a. if the number of levels and the differentials between them are not approved by unions b. if the size of the differentials between the entry level in the structure and the highest level is large c. if it does not include any unique titles and is easy to imitate d. if it does not motivate employees to work toward achieving the organization's objectives

d

Which of the following is true of an organization that has many levels? a. it generally has a loosely ordered pay structure b. it can hire fewer talented employees than an organization with fewer levels c. it generally has large pay differences between levels d. it can offer more promotions than an organization with fewer levels

d

Since a job summary needs to be useful in making pay decisions, it must _____.

emphasize the similarities and differences in content

Strategy

refers to the fundamental directions that an organization chooses.

Offshoring

refers to the movement of jobs to locations beyond a country's borders.

Task data

reveals the actual work performed and its purpose or outcome

Employers in markets with no competition have the ability to _____.

set whatever price they desire

Stores that fix the price of each item or ads that mention the starting wage of a job opening are examples of _____, whereas organizations that permit haggling over the terms and conditions until a consensus is reached are examples of _____.

the quoted-price market; the bourse

Performance-based pay is most effective when _____.

there is success to share

In order to discourage unions, many nonunionized companies tend to _____.

meet or lead competitors' wages

Which of the following are forbidden by equal employment legislation in the US from serving as the criteria for setting pay differentials?

-Gender -Race -Religion -National Origin

Which are the consequences of an internally aligned structure?

-Reduced pay-related work stoppages -Increased experience -Reduced pay-related grievances

How do managers choose their relevant labor markets?

-They look at the skills and knowledge required for a job -They evaluate the important of a job to their organization's success -they consider the products, size, and location of competitors

Identify the characteristics of jobs that are thought to make them more susceptible to offshoring

-easily routinized -inputs/outputs easily transmitted electronically -little need for interaction with other workers -little need for local knowledge like social and cultural factors

According to the Fair Labor Standards Act of 1938, overtime provision requires payment at one-and-a-half times the standard for working more than _____.

40 hours per week

Identify an accurate statement about the pay level in a company.

A company may have varying pay levels for different job families.

Which of the following can indirectly lead to bias in job evaluation?

The wages currently paid for jobs

Identify a true statement about the employees who are supplied by outsourcing specialists.

Their pay is based on the internal structure of their home employer.

Nuccor

They are market leaders for total cash compensation

False

True or false: Job analysis is best performed by new employees.

collecting more data

What is the best way to deal with discrepancies in job analysis data?

When is paying employees above market an efficient strategy for an organization?

When the organization's revenues exceed the strategy's expenses

While using the classification method of job evaluation, greater specificity of the class definition results in _____.

a more reliable evaluation

Distributive justice

a pay structure itself

Which of the following means ensuring that the right people get the right pay for achieving the right objectives in the right way?

management

According to the theory of human capital, improving productive skills by making investments in training will raise one's ____

marginal product

A pay-with-competition policy attempts to ensure than an organization's labor costs are approximately the same as those of its _____ and that its ability to attract potential employees is approximately the same as its _____.

product market competitors; labor market competitors

Which of the following processes reflect the changes that are occurring in the design of organizations?

Delayering and outsourcing

Whole Foods flexible benefits they offer their employees

Employees vote on the benefits of their choice.

In the given image, the point at which the labor demand line and the labor supply line cross is called the _____.

Market Rate

Identify the main sources of job analysis data. (Check all that apply.)

Supervisors Jobholders

What did Matt Bloom discover about the effect of pay differences on performance based on eight years of data on major league baseball?

Teams with small differences in member salaries did better than those with large differentials.

Merril Lynch external comp.

They are market competitive in base, benefits, incentive/bonus, and stock.

True or false: Professional or managerial job descriptions should include the relationship between the job, the person performing it, and the organization objectives.

True.

Identify common examples of income protection benefits provided by employers. (Select all that apply) a. medical insurance b. retirement programs c. incentive programs d. life insurance e. allowances

a, b, d

Attora Inc., an advertising company, provides its employees with benefits that include paid vacations, work from home facilities, and access to an onsite child care center. Identify a true statement about these benefits. a. they help employees balance their work and personal lives b. they are examples of relational returns from work c. they help protect employees from financial risks d. they are examples of special allowances

a

How does Whole Foods make its compensation strategies competitive in the external market? a. it provides health insurance for all full-time employees b. it offers employees significant stock programs c. it follows a no-layoff policy to compensate for fluctuating incomes d. it offers unique benefits such as an onsite child care center

a

________ states that people compare the ratio of their own outcomes (i.e. pay, status, enjoyment) to inputs (i.e. effort, ability, performance) with the outcome to input ratio of others (internal, external, or themselves in a past or future situation). a. equity theory b. institutional theory c. drive theory d. agency theory

a

Why are some people against the idea of viewing pay as an investment with measurable returns? a. they feel that this view does not allow a company's compensation strategy to be externally competitive b. they feel that this view focuses only on one dimension of the pay strategy c. they feel that this view reduces the importance of treating employees equitably d. they feel that this view does not align with a company's overall business strategy

c

Which of the following do most unions demand as a way to promote solidarity among members? (Select all that apply) a. relational rewards in place of cash compensation b. stock programs c. seniority-based promotions d. small pay differences among jobs

c, d

Identify the factors that influence the formulation of compensation strategies. (Select all that apply) a. the number of business units owned by a company b. customer demands c. employee and union preferences d. a company's culture and values e. a social and political context

c, d, e

One of the common cuts companies make in times of high unemployment is decreasing _____.

contributions to 401k retirement plans

Stockholders who are not in favor of using stock to pay employees believe that _____.

granting employees too much ownership dilutes stockholder wealth

Job Analysis

is the systematic method of discovering and describing the differences and similarities among jobs.

According to the theory of human capital, improving productive skills by making investments in training will raise one's _____.

marginal product

The main advantage of competencies is _____.

the direct association with an organization's strategy

The business units at United Technologies follow different compensation strategies because _____.

they face varied competitive conditions

Click and drag on elements in order Job Evaluation Job Analysis Job Description

1) Job Analysis 2) Job Description 3) Job Evaluation

Identify the various extremes of organizational pay-level and pay-mix strategies that exist on the continuum of possible organizational strategies. (Check all that apply.)

A low-wage, high-services strategy A high-wage, high-services strategy A low-wage, no-services strategy

Which test of compensation strategy is the most difficult?

Determining whether it adds value

Match the factors that influence a company's internal structure (in the left column) with their examples (in the right column).

External Factors: Stakeholders and cultures and customs Organizational Factors: HR policy, employee acceptance, and cost implications

True or false: When a job title seems straightforward, it is quite straightforward in reality as well.

False

Identify the strategic choices involved in tailoring a pay structure that is internally aligned. (Check all that apply.)

How pay should be distributed throughout the levels in the structure How specific the tailoring of the pay structure should be to the organization's design and work flow

They help in quick collection of data. They allow statistical analysis of the results.

Identify the features of quantitative questionnaires.

Using multiple raters Providing more training

Identify the ways in which the reliability of job analysis data can be improved.

How does Whole Foods make its compensation strategies competitive in the external market?

It provides health insurance for all full-time employees.

Nuccor's strategy for internal alignment

It provides several opportunities but no defined career paths

_____ provided by an employer are considered integral to every citizen's economic security and are regulated in most countries.

Pensions and Health care

The innovator business strategy

Places emphasis on new products and quick response to market trends

Which method of job evaluation has compensable factors whose degrees are numerically scaled and whose relative importance is weighed in the determination of job structure?

Point Method

Google's strategy with compensation

Recognition of contributions Emphasis on innovation Commitment to cost containment

Calculate the pay level of an organization that has labor costs of $16,000,000 for 400 employees

$40,000

Delayering

A major work change where entire levels of work are removed.

Identify the pay-level and pay-mix strategy with the least risk.

A match policy

Which of the following factors have reduced the break-even point at which it pays employers to schedule longer hours and pay the overtime premium, rather than hire, train, and pay benefits for more employees? (Check all that apply.)

A workforce with improved skills and increased training costs per employee Increased benefits costs

According to Boxall and Purcell, the _________ __________ is an increasingly common "very basic theory of performance" that bases performance on ability, motivation, and opportunity.

AMO Theory

According to Boxall and Purcell, the _______ _________ is an increasingly common theory of performance that bases performance on ability, motivation, and opportunity.

AMO theory

essential functions

Americans With Disabilities Act (ADA) regulations state that "_____ refers to the fundamental job duties of the employment position the individual with a disability holds or desires."

Which of the following is a difference between layered and delayered pay structures?

As opposed to the layered structure, employees are given more freedom and responsibility in the delayered structure.

________ _________ is the cash compensation that an employer pays an employee for the work performed.

Base wage

Ways to measure an incentive program

Based on an objective measure of performance

Identify a similarity between merit increases and merit bonuses.

Both are based on a performance rating.

What are the objectives of the compensation strategy followed at Google? (Check all that apply.)

Commitment to cost Containment Emphasis on Innovation Recognition of Contributions

Which of the following groups can qualify for the exemptions under the Fair Labor Standards Act of 193?

Computer Employees

The first step in designing a point plan is _____.

Conduct Job Analysis

Meaning of the objective compliance

Conforming to federal and state compensation laws and regulations

After the determination of factor weights by an advisory committee, the committee members recommend the _______ _______ ________ , that is, a pay structure they wish to duplicate with the point plan.

Criterion Pay Structure

Match the types of data collected for job analysis (in the left column) with their categories (in the right column).

Data Related to a Job: Work identification and content Data Related to Employee: Internal and external relationships

Work identification and content

Data related to job

Compensation strategy, HR strategy, and business strategy ultimately seek to _____, relative to competitors.

Decrease costs or increase revenues.

What information is required for the administration of a job-based or a person-based plan? (Check all that apply.)

Definitions of compensable factors Details of skill blocks, competencies, and certification methods

Identify an aspect of compensation that may be viewed as a measure of justice in society.

Earning differentials between men and women

Identify the jobs that are less susceptible to automation

Elementary school teachers Dietitians Lodging managers

________ focuses attention on the competitive positions reflected in the pay relationships among organizations.

External Competitiveness

T/F: The nature of the legal framework governing pay highlights the fact that pay is not important to employees in the employment relationship.

False

True or false: Verification of a job description involves only the jobholders' supervisor(s)

False

T/F: Alignment is probably the most difficult test that a pay strategy has to pass.

False Alignment is probably the easiest test t hat a pay strategy has to pass

True or false: Pay is inversely proportional to the value added by skills and experience.

False. Pay is proportional to value added by skills and experience.

The Occupational Information Network, or O*NET, is an easily accessible source of _____.

Generic Job Descriptions

______ _______ provides a minimum wage tailored to living costs in an area.

Living Wage

What are the consequences of an internally aligned structure? (Check all that apply.)

Reduced pay-related grievances Increased experience Reduced pay-related work stoppages

Which of the following makes competencies a "risky foundation for a pay system"?

Subjectivity

Who performs job analysis in present times?

Supervisors Human resource generalists

Identify the main sources of job analysis data.

Supervisors Jobholders

A contemporary U.S. example of legislation directed toward pay differentials is _____.

The Living Wage

flexibility

The disagreement on the need for job analysis centers on the issue of _____.

Content

The work performed in a job

Identify the features of quantitative questionnaires. (Check all that apply.)

They help in quick collection of data. They allow statistical analysis of the results.

What are the pay objectives followed at Merrill Lynch?

To hire, motivate, and retain the best talent

The purpose of each elemental task or unit of work

Which of the following does job content emphasize?

A lead pay-level policy maximizes the ability of an organization to _____.

attract and keep skilled employees

Pay structures undergo changes due to external factors such as: a. organization work design b. employee acceptance c. skill shortages d. HR policies

c

According to agency theory, companies must allot resources to systems that track employee output, which becomes more costly and difficult when _____.

cultural or geographic distance is great

____ ____ refers to the pay relationships among different jobs or skills or competencies within a single organization.

internal alignment

Most common competitive pay-level policy involves ____

matching competitors' wages

Which of the following processes reflect the changes that are occurring in the design of organizations? (Check all that apply.)

outsourcing delayering

In the context of the elements in the pay model, _____ refers to the role played by non-HR managers in making compensation decisions.

ownership

Job losses (or gains) in a nation over time are partly influenced by _____ across nations.

relative labor costs and productivity

A company that justifies comparatively low starting offers with assurances of large future pay increases is _____.

selling the present value of the future stream of earnings

Organizational Factors

strategy, technology, and human capital

The level at which job analysis begins influences _____.

the extent of similarity or dissimilarity between jobs

Pay structure

the mean of the array of rates an employer pays

True or false: Pay is inversely proportional to the value added by skills and experience.

False

True or false: Alignment is probably the most difficult test that a pay strategy has to pass.

False (it is the easiest)

True or false: Organizations commonly use an established approach to derive a single internal structure that can be applied to different functional groups or units.

False. Organizations commonly have multiple internal structures derived through multiple approaches that apply to different functional groups or units.

True or false: Some reservation-wage theorists say that job seekers accept the first job offer they receive where the pay is below their reservation wage.

False. Some reservation-wage theorists say that job seekers accept the first job offer they receive where the pay meets their reservation wage. This seeks to explain differences in workers' responses to offers.

Identify the examples of programs that help employees balance their work and personal responsibilities. (Check all that apply.)

Flexible work arrangements Access to services to meet specific needs Time away from work

________ ________ - the education, experience, knowledge, abilities and skills require to perform the work - is a major influence on internal structures.

Human capital

Job Titles Departments The number of people holding the job Whether the job is exempt from the Fair Labor Standards Act

Identify examples of information that helps in identifying a job

What did Matt Bloomer discover about the effect of pay differences on performance based on eight years of data on MLB?

Teams with small differences in members salaries did better than those with large differentials.

In the context of unequal pay for equal work, which of the following are included in factors other than sex? (Check all that apply.)

Temporary assignments Bona fide training programs Shift differentials Other reasons of "business necessity" Differences based on ability, training, or experience

Which of the following bars wage discrimination on the basis of gender if workers perform equal work in the same firm?

The Equal Pay Act of 1963

As opposed to hierarchical pay structures, egalitarian pay structures support _____.

The Equal Treatment of Employees

To deal effectively with turbulent competitive dynamics, an organization should first focus on _____.

The Factors that are of importance to the business environment in the present and in the future.

generic job descriptions

The Occupational Information Network, or O*NET, is an easily accessible source of _____.

True or false: A company's pay structure should support its work flow.

True

External competitiveness affects employee attitudes and work behaviors.

True.

True or false: Newer skill-based applications appear to be moving toward scheduling fixed review points in the year because scheduling makes it easier to budget and control payroll increases.

True. Newer skill-based applications appear to be moving toward scheduling fixed review points in the year because scheduling makes it easier to budget and control payroll increases.

Which of the following is true of the level of job analysis?

Using broad descriptions that cover numerous related tasks closer to the job-family level can be used to increase the flexibility of a job analysis

In which of the following situations can performance-based pay be a "worst practice"? (Check all that apply.)

When it alienates employees When it prompts government investigation

Identify the conditions under which jobs are susceptible to outsourcing. (Check all that apply.)

When only limited interaction with other workers is required When the work can be routinized When the electronic transmission of inputs and outputs is simple

According to the AMO theory, when will HR systems be most effective? (Check all that apply.)

When roles are designed to allow employees to participate in decision-making and have an opportunity to make an impact When the compensation system encourages employees to act on their abilities and utilize the opportunity to make a difference When employee ability is enhanced through selective hiring and training and development

Requesting employees who are doing a job to fill out a questionnaire Interviewing jobholders and their supervisors

Which of the following are conventional methods of job analysis?

It provides information that serves as a work-related rationale for pay differences It generates data that managers can use to defend their decisions when challenged.

Which of the following are the uses of job analysis?

The ease of collecting the information The stability of the job

Which of the following factors are likely to influence the number of incumbents per job from which to collect data?

low compensation rates

Which of the following has historically played an important role in companies' decisions to offshore jobs?

An individual manager can influence job content.

Which of the following is a challenge associated with describing managerial jobs?

marketing manager

Which of the following is an example of a job that is relatively less susceptible to offshoring?

Jobs progress steadily according to a hierarchy of increasing responsibility.

Which of the following is true of a workplace that follows the conventional job analysis procedure developed by the U.S. federal government?

Human resource generalists Supervisors

Who performs job analysis in present times?

Identify the aspects of the pay model that influence the impact of any internal structure on organization performance. (Select all that apply) a. management b. competitiveness c. contributions d. evaluations e. compliance

a, b, c

Match the groups of competencies (in the left column) with their components (in the right column).

Personal Characteristics: Integrity, flexibility, maturity of judgment, and respect for others Visionary Characteristics: Possessing a global perspective and taking the initiative in moving the organization in new directions Organization-Specific Characteristics: Functional expertise, customer orientation, and leadership

_______ ________ ________ determine pay for work done to produce goods and services contracted by the federal government.

Prevailing Wage Laws

____ ____ ____ refer to the rules and procedures that determine the pay for the different jobs within a single organization and allocate employees among those different jobs

internal labor markets

In 14th-century western Europe, the Christian church endorsed a(n) ____ ____ ____ that denied market forces such as skills shortages as appropriate determinants of pay structures.

just wage doctrine

To deal effectively with turbulent competitive dynamics, an organization should first focus on _____.

the factors that are of importance to the business environment in the present and in the future

True or false: Not all organizations that pay people have a compensation strategy.

False

Identify an advantage of the ranking method of job evaluation.

It is the least expensive method of job evaluation, at least initially.

What is the meaning of compensation in today's China?

It refers to how employees are being treated.

A characteristic of any pay structure is its: a. hierarchical nature b. deferred nature c. skill-based structure d. performance-based structure

a

Identify the strategic choices involved in tailoring a pay structure that is internally aligned. (Select all that apply) a. how specific the tailoring of the pay structure should be to the organization's design and work flow b. how involved employees should be in the development of the structure to ensure their acceptance of the structure c. how jobs should be evaluated to determine their relative worth d. how pay should be distributed throughout the levels in the structure

a, d

Identify the true statements about a company's strategic compensation map. (Select all that apply) a. it can elucidate the message that the company is trying to deliver with its compensation system b. it helps align the company's business strategy to its compensation system c. it can help decide which compensation strategy is best d. it provides a visual reference of the company's compensation system

a, d

What are the objectives of the compensation strategy followed at Google? (Select all that apply) a. commitment to cost containment b. recognition of contributions c. emphasis on innovation d. focus on customer e. emphasis on productivity

a, b, c

Which of the following are likely to be the focus of employees when they are given long-term incentives in the form of stock ownership? (Select all that apply) a. market share b. return on net assets c. compliance with guidelines d. return on investment e. service level agreement targets

a, b, d

Which of the following are involved in the alignment of pay strategy? (Select all that apply) a. external alignment with the economic and socio-political conditions b. internal alignment within the overall HR system c. alignment with "best practices" d. alignment with employee preferences e. alignment with the business strategy

a, b, e

What are the consequences of an internally aligned structure? (Select all that apply) a. increased experience b. reduced training c. reduced pay-related grievances d. increased turnover e. reduced pay-related work stoppages

a, c, e

A company that justifies comparatively low starting offers with assurances of large future pay increases is: a. involving employees in the company's long-term financial objectives b. selling the present value of the future stream of earnings c. emphasizing the relational returns that can be obtained from work d. trying to help protect applicants from the financial risks inherent in daily life

b

Pay discrimination involving the denial of certain jobs, promotions, or training opportunities to qualified women or minorities is called _______ ________.

Access Discrimination

The business strategy of Orient Inc., a clothing company, involves delighting customers by selling clothes at prices lower than those of their competitors. Which of the following would be an important compensable factor for this company?

Cost Containment

Identify the law that bars discrimination on the basis of age and the law that bars discrimination on the basis of disability. (Check all that apply.)

The 1967 Age Discrimination in Employment Act The 1990 Americans with Disabilities Act

Which policy decision of the pay model emphasizes paying for performance? a. compliance to guidelines b. employee contributions c. external competitiveness d. internal alignment

b

Identify the true statements about the findings of most studies on the reliability of job evaluations. (Check all that apply.)

There is high agreement when different evaluators rank-order jobs. There are practically important differences in salary when different evaluators assign job evaluation points.

Identify the features of quantitative questionnaires

They allow statistical analysis of the result They help in quick collection of data

Which of the following are true of aligned pay structures? (Check all that apply.)

They are fair to employees They support the way work gets done

A crucial challenge in the design of next-generation pay systems is _____.

how to better satisfy individual needs and preferences

Arrange the steps involved in the conventional job analysis procedure developed by the U.S. federal government in the order of their occurrence. (Place the first step at the top.)

1) Developing preliminary job information 2) Conducting a preliminary tour of the work site 3) Interviewing job-holders and supervisors 4) Conducting a follow-up tour of the worksite 5) Consolidating job information 6) Verifying job descriptions

Pay Mix

the different types of payments that constitute total compensation

In the context of the elements in the pay model, _____ is the measure of the significance of total compensation in the overall HR strategy.

Prominence

Way in which the sorting effect can influence employee motivation and behavior

The effect of differences in the types of pay strategies on the types of people who apply to and stay with an organization

True or false: An organization's internal pay structure must comply with the laws and regulations of the country in which the organization operates.

This is true. Just like any pay decision, an organization's internal pay structure must comply with the regulations of the country in which the organization operates.

True or false: Professional or managerial job descriptions should include the relationship between the job, the person performing it, and the organization objectives.

This is true. Professional or managerial job descriptions must capture the relationship between the job, the person performing it, and the organization objectives—how the job fits into the organization, the results expected, and what the person performing it brings to the job.

True or false: Pay strategies need to take into account the nature of the union-management relationship.

True

How did the study on managers' approaches to pay decisions in light of varying unemployment, profitability, and labor market conditions directly contradict the efficiency-wage theory?

Managers believed that difficulties with attracting and retaining people were the result of poor management and not inadequate compensation.

Match the companies (in the left column) with the main message being communicated by their compensation strategy maps (in the right column).

Microsoft: Total Compensation is given prominence SAS: Total Compensation supports work/life balance

Match the companies (in the left column) with the pay brands reflected by their compensation strategy maps (in the right column).

Microsoft: Competitiveness, individual accomplishments, and performance-based returns are emphasized. SAS: Competitive market position, companywide success sharing, and egalitarianism are the distinctive features.

In the U.S., the pay for employees who are exempt from regulations of the Fair Labor Standards Act (FLSA) and hence do not receive overtime pay is referred to as _________.

salary

Enforced by the Office of Federal Contracts Compliance Programs (OFCCP), Department of Labor, Executive Order 11246 (E.O.11246) bars _______ on the basis of race, color, religion, sex, or national origin.

Discrimination

The Department of Labor recognizes _____, mental or physical, as the degree of exertion actually expended in the performance of a job.

Effort

Porfyra Manufacturing Inc. and Colina Manufacturing Inc. are two companies that manufacture laboratory equipment. The sales department of the former has six levels with large pay differentials between them, while the sales department of the latter has only three levels with small pay differentials between them. What is Colina Manufacturing Inc.'s internal structure?

Egalitarian structure

Which of the following options reduces labor expenses when people flow to the work?

Segmenting the source of labor

Which of the following do most unions demand as a way to promote solidarity among members? (Check all that apply.) Relational rewards in place of cash compensation Stock programs Seniority-based promotions Small pay differences among jobs

Seniority Based Promotions Small Pay Differences Among Jobs

Which of the following do most unions demand as a way to promote solidarity among members? (Check all that apply.)

Seniority-based promotions Small pay differences among jobs

______ _______ begins with the traditional alternatives of lead, meet, or lag; it then adds a second part, which is to offer employees choices within limits in the pay mix.

Shared Choice

Which of the following statements highlights the influence of cultures and customs on internal pay structures?

Shared mind-sets may judge what size pay differential is fair.

emphasize the similarities and differences in content

Since a job summary needs to be useful in making pay decisions, it must _____.

_______ ________ is a systematic process of identifying and collecting information about skills required to perform work in an organization.

Skill Analysis

Identify a possible drawback of wage-setting practices today.

Complex procedures and creeping bureaucracy can cause users to lose sight of the objectives of job evaluation.

Identify a true statement about relative compensation costs and productivity rates across nations.

Countries like Mexico and China have much lower hourly compensation rates than the United States.

Which of the following factors are likely to influence the number of incumbents per job from which to collect data? (Check all that apply.)

The ease of collecting the information The stability of the job

Way in which the incentive effect can influence employee motivation and behavior

The extent to which pay influences individual and aggregate motivation among employees at a particular point in time

What is the advantage of conventional questionnaires and interviews?

The involvement of employees improves their understanding of the process.

True or false: The results from using a compensation system need to be assessed against the objectives the company is trying to achieve.

True

true

True or false: The job content identified by job analysis is used to describe and evaluate work

false

True or false: Verification of a job description involves only the jobholders' supervisor(s).

False

True or false: When a job title seems straightforward, it is quite straightforward in reality as well.

People who disagree with the idea of strategic fit in terms of compensation believe that _____.

a set of best practices that have universal applicability exist

Identify the factors that combine to form the basis for job evaluation. (Check all that apply.)

Value to the organization Organizational culture Skills required Job content The external market

People who support the idea of adopting best practices in developing a pay strategy feel that this _____.

provides the employer with preferential access to superior employees

Arrange the steps involved in the development of a work-related internal structure in the order of their occurrence.

1) Collection and Summarization of work content information that identifies similarities and differences 2) Determination of the aspects of job content that should be valued 3) Assessment of the relative value of the aspects of the job 4) Translation of the relative value into an internal structure

Calculate the number of employees in a company with a pay level of $43,000 and labor costs of $10,750,000.

250 employees

Identify recent examples of "benchmarking" behavior by organizations. (Check all that apply.)

The emphasis on teams The rush to outsource jobs

The incentive effect

The extent to which pay influences individual and aggregate motivation among employees at a particular point in time

confirming the accuracy of the resulting job descriptions

The final step of job analysis involves _____.

What are the differences between transactional and routine work?

Transactional Work: Routine work Tacit Work: Complex work

True or false: An organization's internal pay structure must comply with the laws and regulations of the country in which the organization operates.

True

True or false: Different business units within the same company can have different compensation strategies.

True

True or false: Job information must be up to date if it is to be valid, acceptable, and useful.

True

True or false: Unions, stockholders, and even political groups are involved in the determination of internal pay structures.

True

True or false: Different business units within the same company can have different compensation strategies.

True.

____ _____ is a theory that was put forth in the last half of the 19th century and that countered the views of Karl Max by stating that employers pay use value.

marginal productivity

Identify the disadvantages of offering employees unlimited choice in terms of compensation. (Check all that apply.)

It may confuse employees. It would not be approved by the U.S. Internal Revenue Service. It would be difficult to design and manage.

________ is the process of systematically determining the relative worth of jobs to create a job structure for an organization.

Job Evaluation

How do managers choose their relevant labor markets? (Check all that apply.)

They look at the skills and knowledge required for a job. They consider the products, size, and location of their competitors. They evaluate the importance of a job to their organization's success.

T/F: Not all organizations that pay people have a compensation strategy.

False All organizations that pay people have a compensation strategy. Some may have written compensation strategies, while others may be unaware that they have a compensation strategy

What are the consequences of an internally aligned structure? (Check all that apply.)

Reduced pay-related work stoppages Increased experience Reduced pay-related grievances

Use value

Refers to the value of goods or services produced by an employee in a job

The reassessment step in formulating a total compensation strategy recognizes that _____.

the compensation strategy must undergo modifications in response to changing conditions

Match the types of pay-level and pay-mix strategies (in the left column) with the types of jobs companies use them for (in the right column).

A match policy:Companies use this policy for jobs that require skills that are not very critical to their success. A lead policy:Companies use this policy for jobs requiring skills that are critical to their success. A lag policy:Companies use this policy for jobs that can be easily filled in the local labor market.

________ is the key to attracting, retaining, and motivating employees with the abilities necessary to execute the business strategy and handle greater decision-making responsibilities.

Compensation

Which of the following are the aspects of the pay model that influence the impact of any internal structure on organization performance? (Check all that apply.)

Competitiveness Management Employee performance

In which of the following situations can performance-based pay be a "worst practice"? (Select all that apply) a. when it prompts government investigation b. when it alienates employees c. when it tries to mirror best practices d. when it is followed by competing companies

a, b

Identify the ways in which compensation affects the success of managers. (Select all that apply) a. it is an important obstacle to increasing flexibility in internal structures b. it is a major expense that must be managed c. it is an important focus of labor unions' efforts to serve their members' interests d. it is a major factor determining employee attitudes and behaviors and thus, organization performance

b, d

To deal effectively with turbulent competitive dynamics, an organization should first focus on: a. the satisfaction of individual needs and preferences to better motivate the employees b. the mapping of an overall compensation strategy c. the factors that are of importance to the business environment in the present and in the future d. the role of pay in the overall HR strategy

c

The Wage and Hour Division of the Department of Labor specifies stringent norms that must be satisfied in order for jobs to be ________ from minimum-wage and overtime provisions.

Exempt

Identify the ways in which shareholders influence executive compensation decisions. (Select all that apply) a. through the election of directors in proxy votes b. through shareholder proposals c. through standardized job evaluations d. through the investment of venture capital

a, b

Identify the major uses of job analysis in compensation. (Check all that apply.)

It helps establish an internal job structure that is fair and aligned. It identifies similarities and differences in the work contents of jobs.

Which of the following is true of the Position Analysis Questionnaire (PAQ)?

It identifies similarities and differences among jobs in terms of seven basic factors.

Compliance

It is influenced by the basis used while making internal comparisons among employees.

_________ refers to the movement of jobs to locations beyond a country's borders.

Offshoring

Which of the following processes reflect the changes that are occurring in the design of organizations? (Check all that apply.)

Outsourcing Delayering

task

A specific statement of what a person does that forms the smallest unit of job analysis is known as a(n)

In the context of designing a point plan, arrange the steps that are followed after conducting a job analysis in the order in which they occur. (Place the immediate next step at the top.)

1. Determining compensable factors 2. Scaling compensable factors 3. Weighing compensable factors according to importance 4. Selecting criterion pay structure 5. Communicating the plan and training users 6. Applying the plan to nonbenchmark jobs and developing online software support

As part of the job evaluation process, a company identifies skill as one of the compensable factors and allocates 45 percent of the total value of factors to it. Skill has three subfactors, namely specialized knowledge, planning skills, and communication skills, with five degrees each. An employee receives five degrees of knowledge, four degrees of planning, and three degrees of communication during her job evaluation. The total number of points that the employee receives for skill is _____.

180

A high-wage, high-services strategy

A company that ensures that its highly-paid employees maintain a balance between their work and their personal lives

A low-wage, high-services strategy

A company that offers many services for the improvement of its low-wage employees

A low-wage, no-services strategy

A company that outsources in order to compete by producing its goods and services for the lowest compensation possible

Identify the true statements about organizations' business and pay strategies. (Check all that apply.)

A company's pay systems should align with it's business strategy Pay Systems should change according to changes in business strategies.

Which of the following affirmative defenses for unequal pay for equal work has brought about the greatest number of court cases?

A factor other than sex

Pay discrimination involving the denial of certain jobs, promotions, or training opportunities to qualified women or minorities is called ________ ________ .

Access Discrimination

Which of the following are involved in the alignment of pay strategy? (Check all that apply.)

Alignment with the business strategy External alignment with the economic and socio-political conditions Internal Alignment with the overall HR system

Total compensation

Base merit, incentives, cost-of-living adjustments, medical insurance, programs to help balance work and life demands, and so on

The _______-______ business strategy places emphasis on pleasing customers and bases employee pay on how well they do this.

Customer-Focused

Match the standards (in the left column) with their definitions of pay discrimination (in the right column).

Equal pay for equal work: This definition affirms that it is discriminatory to pay women less than men when they are performing equal work. Equal pay for work of comparable worth: This definition examines the illegality of paying workers in one job group less than workers in another if the two job groups include work that is not identical in content or results.

Meaning of the objective fairness

Equitable treatment of all employees through the recognition of employee contributions and needs

Aim of incentives

Explicitly attempt to influence future behavior

True or false: With growing experience, organizations seem to be focusing increasingly on self-concepts, traits, and motives to define competencies.

False. As experience with competencies has grown, organizations seem to be moving away from the vagueness of self-concepts, traits, and motives. Instead, they are placing greater emphasis on business-related descriptions of behaviors "that excellent performers exhibit much more consistently than average performers."

True or false: The regulatory environment does not constrain the decisions of a compensation manager.

False. Compliance with laws and regulations can be a constraint and/or an opportunity for a compensation manager. The regulatory environment certainly constrains the decisions that can be made. Once laws are passed and regulations published, employers must comply.

True or false: Each job in the labor market has a fixed "going rate."

False. Different employers set different pay levels; that is, they deliberately choose to pay above or below what others are paying for the same work. That is why there is no single "going rate" in the labor market for a specific job.

True or false: Not all organizations that pay people have a compensation strategy.

False; All organizations that pay people have a compensation strategy. Some may have written compensation strategies, while others may be unaware that they have a compensation strategy.

Meaning of the objective efficiency

Improving performance and quality, pleasing customers and stockholders, and keeping labor costs under control

Quantitative Job Analysis (QJA)

In order to collect job information, employees may be directed to a website where they fill in an online questionnaire. This approach is known as

Changes to the federal minimum wage can result in indirect, spillover effects because as legislation forces pay rates at the lowest end of the scale to move up, pay rates above the minimum often _____ in order to maintain differentials.

Increase

What are the consequences of an internally aligned structure? (Check all that apply.)

Increased experience Reduced pay-related grievances Reduced pay-related work stoppages

Which of the following is a likely outcome of skill-based plans?

Increased labor costs

What are the primary sources of the pay gaps among both black and Hispanic men and women? (Check all that apply.)

Level of schooling Work-related experience

A company's pay structure should clarify the relationship between each job and the company's objectives. This is an example of _____.

Line of Sight (because employees should "see" the connection between the job and objectives)

Identify the characteristics of jobs that are thought to make them more susceptible to offshoring. (Check all that apply.)

Little need for worker interaction Easy to routinize Little need for local insight on unique social and cultural factors Easy to transmit inputs/outputs electronically

Since governments are major stakeholders in determining compensation, _____ can be included in a compensation strategy.

Lobbying to influence laws and regulations

Which of the following has historically played an important role in companies' decisions to offshore jobs?

Low Compensation Rates (In Other Countries)

Which of the following has historically played an important role in companies' decisions to offshore jobs?

Low compensation rates

Match the sorting and signaling strategies (in the left column) with their descriptions (in the right column).

Paying below the market for base pay yet offering generous bonuses: This strategy is most likely to appeal to risk-takers who seek flexible schedules, more interesting projects, or more opportunities for promotion. Matching the market wage and offering no performance-based pay: This strategy is most likely to appeal to people who just want to show up and are risk-averse.

The ________ method of job evaluation uses compensable factors

Point

Identify the compensable factors employed by the Hay Group Guide Chart—Profile Method of job evaluation. (Check all that apply.)

Problem solving Accountability Know-how

Match the types of justice (in the left column) with the issues they address when applied to internal structures (in the right column).

Procedural Justice:Addresses the way in which design and administration decisions are made and whether measures are applied in a consistent manner Distributive Justice: Addresses the acceptability of the actual pay differences among employees

_________ __________ refers to the process used to make pay decisions and suggests that the way a pay decision is made may be equally as important to employees as the result of the decision.

Procedural fairness

Krypton Tech Inc., a technology company, produces high-end gadgets by studying global trends in customer demands and working closely with suppliers. Identify an important compensable factor for this company.

Product innovation

People who support the idea of adopting best practices in developing a pay strategy feel that this _____.

Provides the employer with preferential access to superior employees

Identify the ways in which the reliability of job analysis data can be improved

Providing more training Using multiple raters

Which of the following are forbidden by equal employment legislation in the United States from serving as the criteria for setting pay differentials? (Check all that apply.)

Race National Origin Gender Religion

Aim of merit adjustments

Reward past behavior, which is hoped to influence future behavior

Which of the following represent government interests in compensation decisions? (Check all that apply.)

Safety nets for employees who are unable to work and for those who are unemployed Protection of workers Whether systems for determining pay are fair

The last step in the point method of job evaluation is the _____.

application of the plan to non-benchmark jobs

a lead pay-level policy maximizes the ability of an organization to _____

attract and keep skilled employees

Which of the following requirements should be met by an organization's pay structure? (Select all that apply) a. it should be similar to that of other organizations in the same industry b. organizations should incorporate their employees' individual needs and preferences regarding forms of payment into the structure c. it should be fair to employees d. employees should be able to view the way in which their work is linked to the work of others and the organization's objectives

c, d

Lead policy

company uses this for jobs requiring skills that are critical to its success

Lag Policy

company uses this for jobs that can be easily filled in the local labor market

The dashboard form of reporting the mix of pay forms of a company focuses on _____.

comparing each pay form to the market

The process of identifying competencies in person-based structures resembles identifying ________ as part of job evaluation in job-based structures.

compensable factors

The higher wages that employees offer to make up for the negative characteristics of a job are known as _____.

compensating differentials

The final step of job analysis involves _____.

confirming the accuracy of the resulting job descriptions

A disadvantage of egalitarian pay structures is that they may result in a: a. first impression error b. criterion deficiency c. spillover error d. negative sorting effect

d

Identify a true statement about the "change-and-congeal" process of establishing pay structures. a. it does not yet support the maintenance of pay structures that may have been established at an earlier time for organizational and economic reasons b. it does not yet allow the acceptance of any distorted pay differences that may arise c. it does not yet allow the establishment of new norms around new pay structures that may emerge due to major economic upheavals d. it does not yet support the continuous changes occurring in the present economy

d

Pay differences among levels are referred to as ____

differentials

The pay differences among levels are referred to as

differentials

The pay differences among levels are referred to as _________.

differentials

A pay structure itself

distributive justice

Addresses the acceptability of the actual pay differences among employees

distributive justice

In both the quoted-price market and the bourse, _____ function as the buyers and _____ function as the sellers.

employers; job applicants

Differentials are used to _____.

encourage people to work for promotion to a higher-paying level

The executive branch of the federal government

enforces laws through agencies and its other bodies.

Strategic perspective

focuses on those compensation choices that help the organization gain and sustain competitive advantage

When outsourcing labor, companies must determine ____

how long the labor cost advantage at significantly lower pay will remain

______ ______ refers to the pay relationships among different jobs or skills or competencies within a single organization.

internal alignment

Internal alignment is often known as _____ _____.

internal equity

___ ___ ___refer to the rules and procedures that determine the pay for the different jobs within a single organization and allocate employees among those different jobs.

internal labor market

focuses on the person

job specification

Job Family

job with broadly similar content that are grouped

While _____ put a floor on the pay level needed to attract sufficient employees, _____ put a lid on the highest pay level than an employer can set.

labor market conditions; product market conditions

A study that used hockey teams to examine the influence of pay differences on performance found that _____.

larger differentials based on performance generated positive sorting effects

Product Market Factors

level of competition, and degree of product demand

A company's pay structure should clarify the relationship between each job and the company's objectives. This is an example of _____.

line-of-sight

A company's pay structure should clarify the relationship between each job and the company's objectives. This is an example of ______.

line-of-sight

Which of the following is likely if a company pays its employees based on performance?

low turnover

A disadvantage of egalitarian pay structures is that they may result in a _____.

negative sorting effect

A benefit of a lead pay-level policy is that it _____.

offsets less appealing features of work

Unlike merit increases, merit bonuses are _____.

paid in the form of a lump sum

technology-intensive industries tend to ___ more than labor-intensive industries.

pay higher

in the context of pay structures, a(n) ____-____ _____ focuses on the skills, knowledge, or competencies possessed by an employee, whether or not they are utilized in the employee's particular job.

person based structure

Tournament Theory

players will play better in a tournament where the prize differentials are large than in a tournament where the prize differentials are small.

Addresses the way in which design and administration decisions are made and whether measures are applied in a consistent manner

procedural justice

The methods used for determining a pay structure

procedural justice

job description job specification

products of job analysis

task data

reveal the actual work performed and its purpose or outcome.

The lack of representation of women in executive and director level positions in organizations is sometimes referred to as _____.

the "Glass Ceiling" effect

The Equal Pay Act is a part of the

the Fair Labor Standards Act.

An important motivation for risk taking among traders and others is _____.

the incentive system that often results in those who thrive under this incentive reaching top leadership positions

A contemporary U.S. example of legislation directed toward pay differentials is _____.

the living wage

The Occupational Safety and Health Administration specifies _____.

the number of breaks that must be provided in an eight-hour workday

The hierarchy of a pay structure refers to _____.

the number of levels and reporting relationships

According to ____ ____ players will play better in a tournament where the prize differentials are large than in a tournament where the prize differentials are small.

tournament theory

According to ____ ____, players will be better in a tournament where the prize differentials are large than in a tourney where they are small.

tournament theory

According to _______ _______, players will play better in a tournament where the prize differentials are large than in a tournament where the prize differentials are small.

tournament theory

True or false: Unions, stockholders, and even political groups are involved in the determination of internal pay structures.

true

The concept of upward sloping supply in theories of labor markets assumes that as wage rates increase, more people are willing to take a job. However, offers of increased pay may not boost labor supply when _____.

unemployment rates are low

Refers to the value of goods or services produced by an employee in a job

use value

Unlike Microsoft's compensation strategy, SAS Institute's approach to compensation emphasizes _____.

work/life programs

Identify the union preferences that influence compensation strategies. (Check all that apply.)

The desire for different forms of pay The worry about job security

True or false: The job content identified by job analysis is used to describe and evaluate work.

This is true. Job analysis identifies the content of a job. This content serves as input for describing and valuing work.

Match the types of internal structures (in the left column) with their limitations (in the right column).

Job-Based Structure: Potential inflexibility Person-Based Structure: Requires cost controls

Match the types of skill plans (in the left column) with the types of employees they focus on (in the right column).

Skill plans focusing on depth: Specialists in corporate law, finance, or welding and hydraulic maintenance Skill plans focusing on breadth: Generalists who know about every phase of operation including marketing, manufacturing, finance, and human resources

Merrill Lynch's strategy for internal alignment

It sizes jobs based on knowledge/skill, complexity, business impact, and strategic value

Which of the following makes a company's compensation strategy difficult to imitate?

It's alignment with the overall HR strategy

Match the areas that were the focus of early conceptions of competencies (in the left column) with their meanings (in the right column).

Skills: Display of expertise Knowledge: Gathered Information Self-Concepts: Self-image, attitudes, values Traits: General disposition to behave in a particular way Motives:Recurrent thoughts that influence behaviors

_______ refers to a wide range of factors, including legal and regulatory requirements, cultural differences, changing workforce demographics, expectations, and the like.

Context

"_____" refers to the image or brand a company projects as an employer.

Employer of Choice

True or false: Job content is the sole basis for pay.

False

Which of the following are forbidden by equal employment legislation in the United States from serving as the criteria for setting pay differentials? (Check all that apply.)

Gender National Origin Race Religion

Which of the following is true of the role of government in employment relationships?

General economic growth/demand and business activity can be influenced through government monetary policy

_____ force managers to consider the affordability of their compensation decisions.

Global and local competitive pressures

Match the companies (in the left column) with their strategies for internal alignment (in the right column). A) Google B) Nucor C) Merrill Lynch

Google: minimizes hierarchy and stresses collaboration Nucor: Provides several opportunities but no defined career paths Merrill Lynch: Sizes jobs based on knowledge/skills, complexity, business impact and strategic value

Which of the following is true according to tournament theory?

Greater differentials between employees' salary and the boss's salary motivate employees to work hard.

Identify a true statement about the factor scales constructed in the point method of job evaluation.

Most factor scales consist of four to eight degrees.

Labor Market Factors

Nature of demand for employees and nature of supply of employees

A disadvantage of egalitarian pay structures is that they may result in a _____.

Negative sorting effect

A 1999 advisory from the Wage and Hour Division specified that bonus, gain-sharing, and stock option payments must be included when determining overtime pay. The burden from extra bookkeeping and calculations forced employers to not provide such forms of pay to ________ employees. (Please enter one word.)

Nonexempt

Some researchers believe that job evaluation can be judged according to technical standards if it can be made sufficiently _____.

Numerical

Match the common job evaluation methods (in the left column) with their drawbacks (in the right column)

Ranking: It becomes cumbersome as the number of jobs increases. Classification: It can leave excessive room for manipulation. Point: It can become bureaucratic and bound by regulations.

Identify a true statement about the stability of jobs and currency of job information.

Some jobs remain relatively stable over time

The compensable factors used to determine an organization's internal pay structure should be acceptable to _____.

Stakeholders

According to the Worker Economic Opportunity Act, which of the following are exempted from inclusion in overtime calculations? (Check all that apply.)

Stock options Bonuses

A specific statement of what a worker does on a job is known as a(n)

Task

the extent of similarity or dissimilarity between jobs

The level at which job analysis begins influences _____.

Identify the drawbacks of conventional methods of job analysis.

The use of conventional methods makes job analysis subjective and open to bias Using conventional methods to collect information is time consuming.

Which of the following are true of competency-based internal structures? (Check all that apply.)

They apply more loosely to work that requires tacit knowledge than do other structures. They focus on optimum performance.

Nuccor external comp.

They are market leaders for total cash compensation.

True or false: Supervisors are the best source of job analysis data because they know the jobs thoroughly.

This is false. In theory, supervisors should know the jobs well. However, they may not, especially if jobs are changing.

True or false: Pay is inversely proportional to the value added by skills and experience.

This is false. Pay is directly proportional to the value added by skills and experience. The greater the value added by the skills and experience, the more pay those skills will command.

True or false: The nature of the legal framework governing pay highlights the fact that pay is not important to employees in the employment relationship.

This is false. The extensive legal framework governing pay, including minimum wage, living wage, overtime, and nondiscrimination regulations, highlights the central importance of pay to employees in the employment relationship.

What are the pay objectives followed at Merrill Lynch?

To Hire, Motivate and Retain the best Talent

True or false: Class action lawsuits associated with equal employment opportunity/discrimination can be very costly to employers.

True. Employment-related class action lawsuits such as those that pertain to equal employment opportunity/discrimination can be very costly to employers because they can include large numbers of potential plaintiffs (employees, former employees, potential employees).

A lead pay-level policy is capable of masking negative job traits that lead to higher _____ later on.

Turnover

What is the first step in formulating a total compensation strategy?

Understanding Business Strategy and Competitive Dynamics

Which of the following is the minimum wage for work done on covered government projects or purchases?

A government-defined prevailing wage

Which of the following is true of any change to the federal minimum wage?

Changes to the federal minimum wage have little direct impact on the software, chemical, oil, and pharmaceutical industries

Match the factors that shape the internal structure of an organization (in the left column) with their examples (in the right column).

External factors: Economic pressures and government policies, laws, and regulations Organization Factors:Strategy, technology, and human capital

True or false: While referring to pay, the terms equity and equal can be used interchangeably.

False

Whole Foods' shared-fate philosophy of limiting executive salaries to no more than 19 times the average pay of full-time employees is an example of which strategic pay decision?

Internal Alignment

______ _______ refers to the pay relationships among different jobs or skills or competencies within a single organization.

Internal Alignment (or) Internal Equity

______ ______ ______ refer to the rules and procedures that determine the pay for the different jobs within a single organization and allocate employees among those different jobs.

Internal Labor Markets

Match the categories of factors that shape external competitiveness (in the left column) with their examples (in the right column).

Labor Market Factors: Nature of demand for employees and nature of supply of employees Product Market Factors: Level of competition and degree of product demand Organization Factors: Nature of the industry, company strategy and size, and characteristics of individual managers

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

Lead Policy

In the context of the Equal Pay Act of 1963, which of the following criteria are affirmative defenses? (Check all that apply.)

Merit or quality of performance Quality or quantity of production Seniority Some factor other than sex

Porfyra Manufacturing Inc. and Colina Manufacturing Inc. are two companies that manufacture laboratory equipment. The sales department of the former has six levels with large pay differentials between them, while the sales department of the latter has only three levels with small pay differentials between them. Match the companies (in the left column) with their internal structures (in the right column).

Porfyra: Hierarchical Colina: Egaliatarian

The ______ _______ _______ (PAQ) groups work information into seven basic factors: information input, mental processes, work output, relationships with other persons, job context, other job characteristics, and general dimensions.

Position Analysis Questionnaire

Identify a difference between transactional work and tacit work.

Transactional work generates lower revenues than tacit work.

What is the first step in formulating a total compensation strategy?

Understanding business strategy and competitive dynamics

Identify a true statement about merit increases: a. they are based on an assessment of employees' performance in the recent past b. they do not permanently increase labor costs c. they are paid in the form of a lump sum d. they do not include any kind of cash compensation

a

Identify the union preferences that influence compensation strategy. (Select all that apply) a. the concern with job security b. the focus on base wages c. the preference for different forms of pay d. the concern with work/life balance

a, c

Identify the true statements about incentives. (Select all that apply) a. they permanently increase labor costs b. they are one-time payments c. they restrict employee efforts to short-term results d. they are often known as variable pay

b, d

Identify the union preferences that influence compensation strategy. (Select all that apply) a. the concern with work/life balance b. the concern with job security c. the focus on base wages d. the preference for different forms of pay

b, d

Which test of compensation strategy is the most difficult? a. determining whether it is competitive b. determining whether it differentiates c. determining whether it adds value d. determining whether it aligns

c

An important motivation for risk taking among traders and others is: a. the institution of legislation such as the Troubled Asset Relief Program (TARP) to encourage executives to take risks b. the restructuring of executive compensation packages to make executives' prospective wealth the same as their current wealth c. the subjective performance-based pay system that often guarantees better growth opportunities to those who take risks, irrespective of the outcome d. the incentive system that often results in those who thrive under this incentive reaching top leadership positions

d

Refers to the wage agreed upon by the employer and employee for a job

exchange value

job

group of tasks performed by one person. EX. Sales representitive

Reliability

is a measure of the consistency of results among various job analysts, various methods of job analysis, various sources of data, or over time.

Which of the following are forbidden by equal employment legislation in the United States from serving as the criteria for setting pay differentials? (Check all that apply.)

religion, national origin, race, gender

____ is a return (profits) received from activities that are in excess of the minimum pay level needed to attract people to those activities.

rent

Companies with higher profits than competitors can share this success with employees by leading competitors' pay levels and/or through bonuses that are tied to profitability. Academics view this as _____.

rent sharing

Identify the factors that shape external competitiveness. (Check all that apply.)

1) Competition in the labor market for applicants with various skills 2) Competition in the product and service markets 3) Attributes unique to each company

What are the assumptions that theories of labor markets usually begin with? (Check all that apply.)

1) People are homogeneous and thus interchangeable. 2) A single employer has no advantage to pays below or above the market rate. 3) Employers always aim to maximize profit. 4) All costs associated with employment are reflected in pay rates.

Rank the steps involved in filing affirmative action plans in the correct order.

1) Utilization analysis compares a contractor's workforce to the available external workforce 2) Goals and timetables are developed for achieving affirmative action 3) Action steps are developed for achieving goals and timetables

Identify examples of information that helps in identifying a job.

Departments Whether the job is exempt from the Fair Labor Standards Act Job titles The number of people holding the job

The Americans With Disabilities Act (ADA) requires that _____ ______ of a job—those that cannot be reassigned to other workers—must be specified for jobs covered by the legislation.

Essential Elements

Identify a difference between hierarchical and egalitarian pay structures.

Hierarchical pay structures have larger differentials between adjacent levels than do egalitarian pay structures.

The validity of job evaluation can be measured using —the degree to which the job evaluation plan matches an agreed-upon pay structure for benchmark jobs

Hit rates

According to the advocates of the strategic approach, what makes a pay strategy competitive?

How It is Managed

Insurance underwriters models Ophthalmic laboratory technicians

Identify the jobs that are highly susceptible to automation.

________ ________ refers to the pay relationships among different jobs or skills or competencies within a single organization.

Internal alignment

________ _________ is the policy that refers to comparisons among jobs or skill levels inside a single organization.

Internal alignment

Which of the following statements is true of a job evaluation plan?

It is developed using benchmark jobs and then applied to nonbenchmark jobs.

Why are skill-based plans usually well accepted by employees?

It is easy to see the link between the plan, the work, and the compensation received.

Fairness

It is influenced by employees' comparisons of their pay to the pay of other employees in an organization.

A(n) _______ refers to the group of tasks performed by one person that make up the total work assignment of that person.

Job

______ ______ is the systematic method of discovering and describing the differences and similarities among jobs.

Job Analysis

Match the types of work-related internal structures (in the left column) with their areas of focus (in the right column).

Job-based structures: Focus on what people are doing and the anticipated outcomes Skill- and competency-based structures: Focus on the person

Which of the following is a reliable job evaluation?

One where different evaluators provide the same results

Technology-intensive industries tend to _____ than labor-intensive industries.

Pay Higher

Match the common job evaluation methods (in the left column) with their advantages (in the right column).

Ranking: It is quick, simple, and easy to explain Classification: A wide range of work can be grouped together in a single system. Point: The basis for comparisons is determined by compensable factors

Which of the following do most unions demand as a way to promote solidarity among members? (Check all that apply.)

Small pay differences among jobs Seniority-based promotions

_____ examines the convergence of results among sources of data and methods.

Validity

______ refers to the degree to which an evaluation assesses what it is supposed to—the relative worth of jobs to the organization.

Validity

Which of the following are true of aligned pay structures? (Select all that apply) a. they are insensitive to external market rates b. they support the way work gets done c. they help establish a business strategy d. they are fair to employees

b, d

Compensation strategy, HR strategy, and business strategy ultimately seek to _____, relative to competitors.

decrease costs or increase revenues

An employer cannot alter most factors of production, such as technology, capital, or natural resources, in the short term. Thus, it can only alter its level of production if it alters the level of human resources. In these conditions, a single employer's labor demand coincides with the _____.

marginal product of labor

job

refers to the group of tasks performed by one person that make up the total work assignment of that person.

In 14th century western Europe, the Christian church endorsed a(n) ___ ___ ___ that denied market forces such as skills shortages as appropriate determinants of pay structures.

Just wage doctrine

Identify the examples of employee characteristics studied while collecting data for job analysis. (Check all that apply.)

Managerial and leadership skills Professional or technical knowledge Manual skills Verbal and written skills

Which of the following caused companies like Chrysler and General Motors to go through bankruptcy?

Paying employees more than their competitors without corresponding advantages in productivity and quality

Edward Lazear conducted an informative study on incentive and sorting effects in which he measured individual worker productivity before and after a glass installation company switched one of its plants from a salary-only system to an individual incentive plan. What were the findings of his study? (Check all that apply.)

Switching from a salary-only system to an individual incentive plan caused an increase in productivity. Approximately one-half of the increase in productivity was caused by less productive workers leaving and being replaced by more productive workers.

Which of the following statements about compensation may be seen as a reflection of equity or justice in society?

Individuals and businesses in the United States spend about 18 percent of U.S. economic output on health care.

Efficiency

It is influenced by employees' motivation to choose increased training and more responsibility in dealing with customers.

Which of the following is true about a job specification?

It is the list of knowledge, skills, and abilities that are necessary for an individual to have to perform a specific job.

Match the products obtained from a job analysis (in the left column) with their areas of focus (in the right column).

Job Description: Focuses on the job Job Specification: Focuses on the person

Match the products of job analysis (in the left column) with their definitions (in the right column).

Job Description: The list of tasks, duties, and responsibilities included in a job Job Specification: The list of knowledge, skills, abilities, and other characteristics that an individual must possess to perform the job

Identify a similarity in the compensation strategies adopted by Google and Microsoft

A strong emphasis on stock-related compensation

Which theory sees organizations as responding or conforming to normative pressures in their environments in order to gain legitimacy and to minimize risk?

Institutional theory

As opposed to hierarchical pay structures, egalitarian pay structures support _____.

the equal treatment of employees

According to the efficiency-wage theory, what do high wages need to do if they are to increase efficiency and reduce labor costs

-Attract higher-quality applicants -lower turnover -increase work effort -reduce shirking (screwing around) -reduce the need to supervise employees

Arrange the groups that can be used to classify competencies from the lowest to the highest level. (Place the first step at the top.)

1) Personal Characteristics 2) Organization-specific Characteristics 3) Visionary Characteristics

Which of the following is a requirement of competency-based plans?

A way to certify to all concerned that an employee possesses the required level of competency

Task Position Job Job Family

Arrange the units of job analysis according to size, starting with the smallest

How can a compensation manager ensure that compensation practices conform to judicial interpretation? (Check all that apply.)

By constantly reviewing compensation practices and their results By joining professional associations

When job analysis shows that managers and employees disagree on parts of a job, the best answer is to:

Collect More Data

What is the best way to deal with discrepancies in job analysis data?

Collecting More Data

Comparisons based on the forms of compensation used by other companies are part of?

External Competitiveness

_______ _____ the education, experience, knowledge, abilities, and skills required to perform the work—is a major influence on internal structures.

Human Capital

________ theory is based on the premise that higher earnings flow to those who improve their potential productivity by investing in themselves.

Human Capital

____ ____ --the education, experience, knowledge, abilities, and skills required to perform the work--is a major influence on internal structures

Human capital

Match the types of factors that affect the pay for jobs (in the left column) with the types of jobs they influence (in the right column).

Internal Factors: Non-Entry Jobs External Factors: Entry Jobs (must compete with market to grab attention of entry-level employees)

Identify the ways in which compensation affects the success of managers. (Check all that apply.)

It is a major expense that must be managed. It is a major factor determining employee attitudes and behaviors and thus, organization performance.

Match the competency domain titles of the Great Eight competencies (in the left column) with the competency domain definitions (in the right column).

Leading and Deciding: Initiates action, provides direction, and assumes responsibility Supporting and Cooperating: Puts people first, works effectively with individuals and teams, clients, and staff Interacting and Presenting: Communicates and networks effectively and persuades and influences others successfully Analyzing and Interpreting:Reaches the core of complex problems and issues and effectively applies own expertise

Relational returns

Learning opportunities, status, challenging work, and so on

Due to restrictions placed by the product market on an employer's pay level, what strategies must an employer use to compensate for paying above the maximum? (Check all that apply.)

Passing the higher pay level on to consumers by increasing prices Allocating a large share of total revenues to cover labor expenses

Which of the following does job content emphasize?

The purpose of each elemental task or unit of work

Performance-based pay is most effective when _____.

There is success to share

Which of the following characteristics must compensable factors possess if they are to be useful? (Check all that apply.)

They should be based on the work performed. They should be acceptable to the stakeholders affected by the resulting pay structure. They should be based on the strategy and values of the organization.

True or false: A present-value perspective focuses on the value of a company's initial offers to job applicants.

This is false. A present-value perspective shifts the comparison of a company's initial offers to consideration of future bonuses, merit increases, and promotions.

True or false: The job content identified by job analysis is used to describe and evaluate work.

True

True or false: The majority (1.4 million) of those earning minimum wage or less are in service occupations, mostly food service, where tips supplement hourly wages for many workers.

True

Identify a true statement about relative compensation costs and productivity rates across nations. a. countries like Mexico and China have much lower hourly compensation rates than the U.S. b. the U.S. has stopped sending white collar work overseas as the compensation costs for this type of work are similar all over the world c. the U.S. has stopped outsourcing manufacturing work as the productivity of workers overseas is very low d. countries like Mexico and China have much higher productivity than the U.S.

a

Recognition and status, employment security, challenging work, and opportunities to learn are examples of: a. long-term incentives b. relational returns c. income protection d. total compensation

b

The importance given to employee contribution is a significant policy decision because it directly affects: a. the competitiveness of an organization's product or service in the external environment b. employees' skill sets and know-how c. employees' attitudes and work behaviors d. an organization's compliance to guidelines

c

External competitiveness

refers to pay comparisons with competitors.

Pay Structure

refers to the array of pay rates for different work or skills within a single organization.

Identify the jobs that are highly susceptible to automation. (Check all that apply.)

Insurance underwriters Models Ophthalmic laboratory technicians

Some jobs remain relatively stable over time.

Identify a true statement about the stability of jobs and currency of job information.

Match the types of internal structure alignment (in the left column) with their features (in the right column).

Internal alignment based on content: It organizes jobs based on the required skills and the associated duties and responsibilities. Internal alignment based on value: It organizes jobs based on the relative contribution of the skills, duties, and responsibilities of each job to the organization's goals.

Identify the consequences of deviations from acceptable wage structures. (Check all that apply.)

More grievances Diminished motivation

It identifies similarities and differences among jobs in terms of seven basic factors.

Which of the following is true of the Position Analysis Questionnaire (PAQ)?

Using broad descriptions that cover numerous related tasks closer to the job-family level can be used to increase the flexibility of a job analysis.

Which of the following is true of the level of job analysis?

Unlike Microsoft's compensation strategy, SAS Institute's approach to compensation emphasizes _____.

Work/Life Programs

Identify common examples of income protection benefits provided by employers. (Select all that apply) a. life insurance b. allowances c. incentive programs d. medical insurance e. retirement programs

a, d, e

Which of the following can form the basis for a cost of living adjustment (COLA) to base wages? (Select all that apply) a. changes in incentive plans b. changes in what other employers are paying for the same work c. changes in performance evaluation results d. changes in living costs e. changes in experience or skill

b, d, e

In the context of compensation, which of the following is a way to better satisfy employees' individual needs and preferences? a. complying with legal and regulatory requirements b. understanding the nature of the union-management relationship c. offering more choice d. delivering business value

c

Since government are major stakeholders in determining compensation, ________ can be included in a compensation strategy. a. understanding employee needs b. identifying union preferences c. lobbying to influence laws and regulations d. underlining a value and mission statement

c

People who disagree with the idea of strategic fit in terms of compensation believe that: a. companies should focus on ensuring that their pay strategies are globally competitive b. managers need to be responsive to employees and union relations c. a company's HR strategy should be built around its pay strategy d. a set of best practices that have universal applicability exist

d

In the context of pay structures, a(n) ________-_______ _______ focuses on the skills, knowledge, or competencies possessed by an employee, whether or not they are utilized in the employee's particular job.

person-based structure

Job

refers to the group of tasks performed by one person that make up the total work assignment of that person

Pay is based on _____ in both specialist and generalist skill plans.

the employees' knowledge

Identify the uses of generic job descriptions. (Check all that apply.)

They can be used for external cross-checks. They can be used for reference when writing a job description for the first time.

How do some employers get around the overtime requirement?

They categorize employees as executives.

The business units at United Technologies follow different compensation strategies because _____.

They face varied competitive conditions

Why do some stockholders support the use of stock to pay employees?

They feel that it creates a sense of ownership among employees that will improve performance.

Why are some people against the idea of viewing pay as an investment with measurable returns?

They feel that this view reduces the importance of treating employees equitably.

Human Capital

—the education, experience, knowledge, abilities, and skills required to perform the work—is a major influence on internal structures.

In which of the following situations should an organizations' internal structure be redesigned?

If it does not motivate employees to work toward achieving the organization's objectives

According to research, under which of the following conditions are pay procedures more likely to be viewed as fair? (Check all that apply.)

If they are applied to all employees in a consistent manner If appeals procedures are included If accurate data are used If employees were involved in the process

According to research, under which of the following conditions are pay procedures more likely to be viewed as fair? (Check all that apply.)

If they are applied to all employees in a consistent manner If appeals procedures are included If employees were involved in the process If accurate data are used

Use Value

Refers to the value of goods or services produced by an employee in a job

A specific statement of what a person does that forms the smallest unit of job analysis is known as a(n) ________ .

Task

Identify recent examples of "benchmarking" behavior by organizations. (Check all that apply.)

The rush to outsource jobs The emphasis on teams

Which of the following are true of the perspective of individuals who make pay decisions based on job evaluation? (Check all that apply.)

They believe that job evaluation allows the exchange of views. They view job evaluation as a method that helps pay differences among jobs get accepted.

T/F: Different business units within the same company can have different compensation strategies.

True

T/F: The results from using a compensation system need to be assessed against the objectives the company is trying to achieve.

True

T/F: Unions, stockholders, and even political groups are involved in the determination of internal pay structures.

True

Why has Nucor Steel done well despite paying its workers higher than companies inside and outside of the steel industry? a. it has strictly stayed away from performance based compensation b. it has much higher productivity than is usually seen in the steel industry c. it has traditionally provided special programs, such as the employee stock purchase plan, only to executives d. it has a highly centralized management philosophy

b

Supply Chain Analysis

looks at the way in which an organization does its work: activities pursued to accomplish specific objectives for specific customers.

supply chain analysis

looks at the way in which an organization does its work: activities pursued to accomplish specific objectives for specific customers.

1. developing preliminary job information 2. Conducting a preliminary tour of the work site 3. Interviewing jobholders and supervisors 4. Conducting a follow-up tour of the worksite 5. Consolidating job information 6. Verifying job description

Arrange the steps involved in the conventional job analysis procedure developed by the U.S. federal government in the order of their occurrence.

Which of the following is a difference between the layered and the delayered pay structure?

As opposed to the layered structure, employees are given more freedom and responsibility in the delayered structure.

The final step of job analysis involves _____.

confirming the accuracy of the resulting job description.

In the point method of job evaluation, different factor weights indicate differences in _____.

importance attached to each factor by the employer

According to the efficiency-wage theory, under which of the following conditions do high wages increase efficiency and reduce labor costs? (Check all that apply.)

If they decrease turnover If they lure higher-quality applicants If they lower the need to supervise employees If they boost worker effort and decrease shirking behavior

Unlike merit increases, merit bonuses are: a. given as increments to base pay b. based on performance assessment c. paid in the form of a lump sum d. provided in the form of long-term incentives

c

______ is a return (profits) received from activities that are in excess of the minimum pay level needed to attract people to those activities.

Rent

T/F: A present-value perspective focuses on the value of a company's initial offers to job applicants.

False A present-value perspective shifts the comparison of a company's initial offers to consideration of future bonuses, merit increases, and promotions

T/F: The development of a total compensation strategy should not involve trial and error.

False Trial and error, experience, and insight play major roles in the development of a total compensation strategy

True or false: Alignment is probably the most difficult test that a pay strategy has to pass.

False, it is the easiest

True or false: The development of a total compensation strategy should not involve trial and error.

False.

True or false: Tradition does not influence whether or not the compensable factors used to slot jobs into the pay structure are accepted.

False. Acceptance of the compensable factors used to slot jobs into the pay structure may depend, at least in part, on tradition.

True or false: Evidence from various studies supports the proposition that job evaluation is susceptible to gender bias.

False. Although it has been widely speculated that job evaluation is susceptible to gender bias, there is no evidence to support this proposition.

organizational factors

HR policy, employee acceptance and cost implications

Organization factors that influence a company's internal structure

HR policy, employee acceptance, and cost implications

In which of the following ways can employees view compensation? (Check all that apply.)

As an incentive to take or stay in a job and to try to perform well in that job As an entitlement for being an employee of the company As a reward for having done well in a job As a return in an exchange between their employer and themselves

Identify the factors in the social and political context that influence compensation strategies. (Check all that apply.)

Demographical changes in the workforce Legal Requirements

Identify the economic pressures that influence the internal structure of an organization. (Check all that apply.)

Differences in productivity Supply and demand for products and services Supply and demand for labor

Which of the following are the aspects of the pay model that influence the impact of any internal structure on organization performance? (Check all that apply.)

Employee performance Management Competitiveness

_____ states that people compare the ratio of their own outcomes (e.g., pay, status, enjoyment) to inputs (e.g., effort, ability, performance) with the outcome to input ratio of others (internal, external, or themselves in a past or future situation).

Equity Theory

Identify some of the important decisions involved in job evaluation. (Check all that apply.)

Evaluating the usefulness of the results Deciding on single versus multiple plans Establishing the purpose(s) Choosing among alternative methods Obtaining involvement of relevant stakeholders

Identify a drawback of the ranking method of job evaluation.

Evaluations are subjective opinions that cannot be rationalized in work-related and strategic terms.

Identify a drawback of egalitarian pay structures.

High-performing and more skilled employees may feel underpaid.

Who performs job analysis in present times? (Check all that apply.)

Human resource generalists Supervisors

A(n) ______ refers to the group of tasks performed by one person that make up the total work assignment of that person.

Job

Arrange the steps involved in the determination of an internally aligned job structure in the order in which they occur.

Job Analysis Job Description Job Evaluation

Identify the products of job analysis. (Check all that apply.)

Job Description Job Specification

Identify the true statements about organizations' business and pay strategies. (Check all that apply.)

Pay systems should change according to changes in business strategies. A company's pay systems should align with its business strategy.

The statistical approach used to determine the weight for each factor and the factor scales that will reproduce, as closely as possible, the chosen criterion pay structure is often labeled _______ _______ to differentiate it from the committee a priori judgment approach.

Policy Capturing

External factors that influence a company's internal structure

Stakeholders and cultures and customs

Match the job analysis terms (in the left column) with their examples (in the right column).

Task: Analyzing Data Job: Content Developer Job Family: Clinical Research

Arrange the steps involved in the conventional job analysis procedure developed by the U.S. federal government in the order of their occurrence. (Place the first step at the top.)

1.Developing preliminary job information 2.Conducting a preliminary tour of the work site 3.Interviewing jobholders and supervisors 4.Conducting a follow-up tour of the work site 5.Consolidating job information 6.Verifying job descriptions

________ _________ refers to the pay relationships among organizations—an organization's pay relative to its competitors.

External Competitiveness

Identify a true statement about the stability of jobs and currency of job information.

Some jobs remain relatively stable over time.

______ ______ ______ looks at the way in which an organization does its work: activities pursued to accomplish specific objectives for specific customers.

Supply Chain Analysis

Identify the economic pressures that influence the internal structure of an organization. (Check all that apply.)

Supply and demand for products and services Supply and demand for labor Differences in productivity

Which of the following is currently believed to be responsible for too much risk-taking at Merrill Lynch and the eventual downfall of the company?

The aggressive pay-for-performance approach

True or false: Cost of living adjustments (COLAs) to base wages are becoming increasingly common nowadays.

This is false. Cost of living adjustments (COLAs) to base wages have become less common than in the past. This is because employers continually try to control fixed costs and link pay increases to individual and/or company performance.

True or false: Unions, stockholders, and even political groups are involved in the determination of internal pay structures.

This is true. Unions, stockholders, and even political groups are involved in the determination of internal pay structures. Unions are the most obvious case.

_____ of the Civil Rights Act of 1964 bars discrimination on the basis of sex, race, color, religion, or national origin in any employment condition, including hiring, firing, promotion, transfer, compensation, and admission to training programs.

Title VII

Identify the true statements about Whole Foods's business objectives. (Check all that apply.)

To hire and try to retain employees who are going to help the company make money To Take extraordinary measures to satisfy and delight customers

Why is a manual prepared after a job evaluation point plan is designed?

To permit users who were not involved in the plan's development to apply the plan as its developers intended

True or false: Living wage laws have narrower coverage than minimum wage laws.

True. Living wage laws have narrower coverage than minimum wage laws, as they cover only city (or state) employees and/or employers that do business with the city (i.e., contractors and subcontractors). Sometimes they cover only base wages, but more frequently they require health insurance, vacations, sick pay, job security, and provide incentives to unionize.

Diminishing marginal productivity for each new employee added to a firm arises from the fact that each new employee _____.

has access to a progressively smaller portion of other factors of production

In the short term, a company's factors of production are _____, which causes each new hire to have lower marginal productivity than the previous hire.

inalterable

Employers in extremely competitive markets find it more difficult than other employers to _____.

increase prices without loss of revenues

___ ___ is a theory that was put forth in the last half of the 19th century and that countered the views of Karl Max by stating that employers pay use value

marginal productivity

The level of demand that _____ is that level at which the marginal revenue of the last hire in the company equals the pay for that employee.

maximizes profits for a company

Which of the following is true of an organization that has many levels?

It can offer more promotions than an organization with fewer levels.

Why is it important to maintain some documentation to support the choice of compensable factors while developing a point plan? (Check all that apply.)

It can withstand a variety of challenges to the pay structure. It helps gain acceptance by employees and managers. It is easier to understand.

What is the effect of the introduction of new technology within an industry that reduces the skills required of employees?

It causes the employees' average pay to decline.

What is the purpose of job analysis?

It identifies a job's content.

Which of the following features of research should be kept in mind while deciding the usefulness and relevance of a research study? (Select all that apply) a. whether the research was conducted globally b. whether the research is useful c. whether the research separates correlation from causation d. whether the results of the research have ever been successfully applied e. whether there are alternate explanations

b, c, e

Which of the following makes a company's compensation strategy difficult to imitate? a. its alignment with the overall HR strategy b. the company's relationship with workers' unions c. its construction of a basic management hierarchy d. the company's job evaluation methods

a

Identify recent examples of "benchmarking" behavior by organizations. (Select all that apply) a. the emphasis on teams b. the outsourcing of jobs c. the shift away from a competency-based pay system d. the emphasis on individual contributions

a, b

The use of conventional methods makes job analysis subjective and open to bias. Using conventional methods to collect information is time consuming.

Identify the drawbacks of conventional methods of job analysis.

Verbal and written skills Professional or technical knowledge Manual skills Managerial and leadership skills

Identify the examples of employee characteristics studied while collecting data for job analysis.

Identify the true statements about a company's strategic compensation map. (Check all that apply.)

It can elucidate the message that the company is trying to deliver with its compensation system. It provides a visual reference of the company's compensation system.

Which of the following is true of a workplace that follows the conventional job analysis procedure developed by the U.S. federal government?

Jobs progress steadily according to a hierarchy of increasing responsibility

Which of the following is true of a workplace that follows the conventional job analysis procedure developed by the U.S. federal government?

Jobs progress steadily according to a hierarchy of increasing responsibility.

External Factors

economic pressures and government policies, laws, and regulations

Allowances are a type of: a. incentive b. relational return c. cash compensation d. benefit

d

Identify a true statement about the Equal Pay Act and the Civil Rights Act: a. they require the ratio of CEO pay to that of the average or entry level worker to be reported b. they require differentials between levels to be small c. they require equal "living wages" across all U.S. cities d. they require "equal pay for equal work"

d

External factors

economic pressures and government policies, laws, and regulations

Which theory sees organizations as responding or conforming to normative pressures in their environments in order to gain legitimacy and to minimize risk?

Institutional Theory

Match the terms (in the left column) with their examples (in the right column).

Task: Serving Coffee Job: Sales Representative Job Family: Advertising

Identify the jobs that are highly susceptible to offshoring.

Tax preparer Data entry keyer Telemarketer Computer programmer

Organization factors

Strategy, technology, and human capital

Nucor

It provides several opportunities but no defined career paths.

Microsoft's main message being communicated by their compensation strategy maps

Total compensation is given prominence

Which of the following is true of Nucor Steel's corporate mission? a. it believes in creating defined career paths for employees b. it offers its employees generous stock programs c. it believes in achieving success by working together d. it offers its employees unique benefits

c

Google

They are market leaders in pay and benefits and provide unique benefits

The higher the pay level of an organization relative to what its competitors pay, the _____.

greater the costs to provide comparable products or services

Arrange the steps involved in developing a total compensation strategy in the order in which they are conducted.

1) Assessing Total Compensation Implications 2) Map A Total Compensation Strategy 3) Implement Total Compensation Strategy 4) Reassess Total Compensation Strategy

According to which of the following compensation objectives should an organization give importance to the way in which its results are achieved?

ethics

Which of the following is true of internal alignment?

It addresses relationships inside an organization.

Identify the union preferences that influence compensation strategies.

The desire for different forms of pay The worry about job security

According to research, which of the following is likely to bring about commitment from employees and the management and acceptance of the internal pay structure?

Attending to the fairness of the design process

___________ refers to the fundamental directions that an organization chooses.

Strategy

True or false: One of the pitfalls of competency systems is trying to do too many things with ill-suited systems.

True

job description

A job summary that can be used to make HR decisions is called a(n)

Identify a difference between the layered and the delayered pay structure.

The layered structure is more hierarchical than the delayered structure

Identify a similarity in the compensation strategies adopted by Google and Microsoft.

A strong emphasis on stock-related compensation

Identify the true statements about the impact of internal pay structures. (Select all that apply) a. more hierarchical structures are related to greater performance when close collaboration and sharing of knowledge are required b. high performers quit less under hierarchical systems when people have knowledge of the structure c. more egalitarian structures are related to greater performance when the work flow depends on individual contributions d. high performers quit less under more hierarchical systems when pay is based on performance rather than seniority

b, d

Which of the following is currently believed to be responsible for too much risk-taking at Merrill Lynch and the eventual downfall of the company? a. the focus on cash compensation b. the no-layoff policy c. the aggressive pay-for-performance approach d. the practice of giving out generous stock awards

c

_________ is the measure of the significance of total compensation in the overall HR strategy. a. competitiveness b. alignment c. prominence d. management

c

__________ force managers to consider the affordability of their compensation decisions. a. shareholder proposals b. the nature of relational returns c. global and local competitive pressures d. the results of job evaluation studies

c

According to economic theory, a talented individual will have a higher marginal value when the individual is _____.

employed at a large organization

Examples of employee characteristics studied while collecting data for job analysis

professional or technical knowledge manual skills verbal and written skills managerial and leadership skills

Identify a true statement about the compensation strategy at Google.

It offers its employees significant stock programs.

In the point method of job evaluation, defining, scaling, and weighting the compensable factors is based on _____.

the content of benchmark jobs

Which of the following states that time spent on activities before beginning the "principal activity" is usually not compensable?

The Portal-to-Portal Act

Identify the provisions of the Dodd-Frank Wall street Reform and Consumer Protection Act. (Select all that apply) a. lock-up provisions that allow shareholders to sell company stock only to the potential buyer during a takeover b. clawback provisions designed to allow companies to take back compensation from executives in some instances c. "say on pay" that makes it obligatory for public companies to submit their executive compensation plan to a vote by shareholders d. individual incentive plans that provide for variable incentives on the basis of the number of units produced in a particular time period

b, c

True or false: Supervisors are the best source of job analysis data because they know the jobs thoroughly.

False

Which of the following statements about compensation may be seen as a reflection of equity or justice in society? a. U.S. companies exhibit strong links between executive pay and company performance b. individuals and businesses in the U.S. spend a significant amount of money per year on health care c. higher pay levels help organizations attract more high-quality applicants d. stockholders believe that using stock to pay employees creates a sense of ownership that improves performance

b

True or false: Managers must ensure that the work structure introduced following the establishment of a person-based plan remains internally aligned by reassessing work, skills, and competencies when required.

True. The work structure introduced in an organization following the establishment of a person-based plan must reflect the organization's internal alignment policy. Further, managers must ensure that the structure remains internally aligned by reassessing work, skills, and competencies when required.

Identify a true statement about the compensation strategy at Google. a. it offers its employees significant stock programs b. it bases its bonuses on company productivity c. it leads the market in terms of total cash compensation d. it maximizes hierarchy based on knowledge/skills and strategic value

a

Stockholders who are not in favor of using stock to pay employees believe that: a. granting employees too much ownership dilutes stockholder wealth b. granting employees too much ownership reduces risk taking c. granting stock options decreases employee loyality and commitment to an organization d. granting stock ptions decreases the difference between

a

Which of the following is true of allowances? a. they often grow out of whatever is in limited supply b. they often help in protecting employees from financial risks c. they are aimed at helping employees better integrate their work and life responsibilities d. they are part of the relational returns offered by an organization

a

Edward Lazear conducted an informative study on incentive and sorting effects in which he measured individual work productivity before and after a glass installation company switched one of its plants from a salary-only system to an individual incentive plan. What were the findings of his study? (Select all that apply) a. approximately 1/2 of the increase in productivity was caused by less productive workers leaving and being replaced by more productive workers b. switching from a salary-only system to an individual incentive plan caused a decline in productivity c. approximately 1/2 of the decline in productivity was caused by more productive workers leaving and being replaced by less productive workers d. switching from a salary-only system to an individual incentive plan caused an increase in productivity

a, d

In which of the following ways can employees view compensation? (Select all that apply) a. as a return in an exchange between their employer and themselves b. as a major expense that must be managed c. as a major determinant of worker attitudes and behaviors d. as a reward for having done well in a job e. as an entitlement for being an employee of the company f. as an incentive to take or stay in a job and try to perform well in that job

a, d, e, f

Which of the following is a difference between layered and delayered pay structures? a. the delayered structure guarantees greater employee satisfaction than does the layered structure b. as opposed to the layered structure, employees are given more freedom and responsibility in the delayered structure c. the delayered structure guarantees smaller differentials between adjacent levels than does the layered structure d. as opposed to the layered structure, employees are more closely supervised in the delayered structure

b