Compensation Exam 2 Chap 8

Pay ranges for clerical and production jobs commonly range between....

5 and 15

Examples of potential anomalies: outliers, a large variation in base pay for a job at one company, and one company dominates the results. The following is an example of something that is NOT a potential anomaly;

A large variation in average base pay for a job across companies.

Base wage shows how.....

Competitors value work in similar jobs

The second major decision in pay-level determination is...

Define purpose of survey

A common practice is to use the 10th and 90th percentiles from pay survey data to set minimums and maximums of pay grades.

False

A frequency distribution must be constructed to calculate a median.

False

Adjustments to forms of pay occur more often than adjustments to overall pay level

False

Career moves between bands are more common than within bands.

False

It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditional relevant markets.

False

Market pricers match a small percentage of their jobs with market data.

False

Salary data available to employees via the Internet are as reliable and accurate as other more traditional surveys.

False

The final step in determining externally competitive pay levels and structures is merging internal and external pressure

False

The most common measure of variation in pay surveys is the standard deviation.

False

The pay structure is reflected in job evaluation or skill certification.

False

The relevant labor market for accounting, sales or clerical skills should be limited to each industry in which these types of work are found.

False

Total cash includes base pay plus stock options and benefits.

False

When flat pay rates are used, they are typically the midpoint of a corresponding survey controls.

False

A survey conducted in January, 2013 found the median pay effective January 1, 2013, for a clerk was $22,000 and the forecast rate of wage increases in the market for 2013 was 5% and another 5% for 2014. If using a lead strategy of 4% above market for the plan year how would you solve for the increase?

Need to multiply salary by 105% and then by 109%

The Bureau of Labor Statistics publishes extensive information on various occupations in different geographic areas. It is a major sources of.....

Publicly available compensation data

The first step in setting competitive pay and designing a pay structure is...

Specify pay-level policy

Applying the job evaluation to pay survey jobs to assess the degree of match between survey jobs and benchmark jobs is called....

The benchmark conversion approach

What method are they using in this example.......A company using a skill-based pay system prices the job of lead assembler at between $10 and $22 per hour. Survey data showed the job assembler averaged $10 per hour and the job of assembly supervisor at $22 per hour.

The company was using the low-high method of job matching.

A pay range exists when at least two employees in the same job are paid different rates.

True

A pure market pricing strategy tends to ignore internal alignment.

True

Aging the market data to a point halfway through the year is called lead/lag

True

Grades group job evaluation data on the horizontal axis.

True

Identifying pay survey participants by company name is considered price fixing under the Sherman Act.

True

If the purpose of a survey is to price the entire structure, then benchmark jobs can be selected to include the entire job structure.

True

Market lines may be constructed by either freehand drawing or linear regression.

True

Pay ranges for managerial jobs are larger than ranges for other jobs because these jobs have greater opportunity for both discretion and performance than lower level jobs.

True

Pay ranges from top-level management positions are commonly larger than those other professional and midlevel managerial positions.

True

Pay surveys include information about both all forms of cash compensation and benefits.

True

Regression smoothes large amounts of data while minimizing variations.

True

Setting your company's base pay to competitors' total compensation risks high fixed cost.

True

Smaller pay ranges may reduce the opportunities for promotion.

True

The process of multiplying survey data by a factor reflecting the difference between a survey and a company job is called survey leveling.

True

When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.

True

Market pricers assume little value is...

added through internal alignment Following questions are True/False

Because employers are raising employee pay at various times during the year, survey data must be updated using a process called...

ageing or trending

Survey data from one or a few employers that are significantly our of line with other employers are

anomalies

Size of pay differentials between grades should support....

career movement through the pay structure.

The first step in interpreting survey data is....

check for the accuracy of job matches

The Employment Cost Index (ECI) allows...

comparison of labor costs to all-industry averages

Total cash measures......

competitors' use of performance-based pay

Broad-bands foster...

cross-functional growth

The market pricing pay strategy emphasizes external competitiveness and....

deemphasizes internal alignment

The final major decision in pay-level determination is...

design grades and ranges

The purpose of collecting data on number of employees in a pay survey is to....

estimate the organization's impact on the labor market.

Financial data in pay surveys are used to....

group firms by size

The standard Deviation statistical measure shows....

how similar or dissimilar the market rates are from each other.

Aging market data to a point halfway through the plan year is called...

lead/lag

A market pay line links a company's benchmark jobs with...

market rates paid by competitors

Office and clerical workers as compared to scientists, managers and executives would.....

most likely be recruited only locally.

A relevant labor market includes all employers who compete in.....

one or more of the following areas except pay similar wages.

The median minimizes distortion of the central tendency caused by....

outliers

The total cash compensation measure of compensation may....

overstate competitors' pay

An organization that has a match(pay) policy will...

pay its employees more than the market rate for some months and less than the market rate for the other months.

Job structure is to job evaluation as pay structure is to...

pay-policy line

Paying jobs of different functions different rates within a pay band is called...

reference rates

The process of multiplying survey data by some factors judged to reflect the difference between a survey benchmark job and a company job is called....

survey leveling

The primary responsibility for conducting a pay survey is...

the compensation manager

Pay ranges reflect....

the differences in performance or experience that an employer wishes to recognize with pay.

The answer to the question of how many firms to include in a survey is....

there are no firm rules.

In the regression equation, y=a+bx, in the formula what is the job evaluation points...

x