HRMT 5316 Compensation Mgt Final Exam

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Common bases for modern pay structures include all BUT which of the following?

the extent of external competitiveness and equity

Pay for temporary workers is based upon

the internal structure of their home employer.

Incentives do not permanently increase labor costs because:

they are one-time payments

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

vagueness and subjectivity

is the value employees attach to the organization rewards received for job performance

valence

The most common bases for determining internal structures are:

work content and its value

Which of the following is the correct order of the steps in formulating a total compensation strategy?

Assess the strategy, map the strategy, implement the strategy, and reassess the strategy

The denial of jobs or training opportunities to qualified women and minorities are examples of...

access discrimination

According to the _________ theory of motivation, employees prefer certain or fixed income flows, such as wage or salary, to variable income flows, such as performance-based pay

agency

theory that argues pay should be based on outcomes if monitoring of behaviors is difficult or costly and if risk due to variability in outcomes is not large

agency

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

aging or maturing

All of the following are categories of rater training EXCEPT ________________ training

behavior modeling

The process of matching survey jobs by applying an employer's plan to the external jobs and then comparing the worth of the external job with its internal "match" is called...

benchmark conversion

Financially healthy employers may wish to maintain their competitive positions in the labor market or share financial success through...

bonuses and profit sharing

defined benefit plans that look like a defined contribution plan

cash balance plans

A job description is compared to class descriptions in the __________ of job evaluation.

classification method

In the context of performance appraisal formats, which of the following criteria is concerned with whether the evaluation form initially requires a long time to be developed?

cost

The final major decision in setting externally competitive pay and designing the corresponding pay structures is to...

design grades and ranges or bands

The decisions to implement pay for performance, flat rate pay, and profit sharing are examples of __________ policy decisions.

employee contribution

The Executive branch of the federal government

enforces laws through agencies and its other bodies

According to __________ theory, relative pay is important as employees evaluate the adequacy of their pay via comparisons with other employees.

equity

Which of the following is a fundamental objective, and NOT a policy of the pay model?

fairness

The trend in recent variable-pay design is to combine the best of

gain-sharing and profit-sharing plans

The alignment test:

helps ensure passing the differentiation test

All of the following are advantages of a lead pay-level policy EXCEPT

higher turnover rates

External factors are dominant influences on jobs filled via:

hiring graduates

Degree to which pay influences individual and aggregate motivation

incentive effect

A compensation system using market-based pay is most likely to be part of a(n) _________ strategy.

innovator

In gain-sharing plan formulas...

labor inputs are in the numerator and productivity outcomes are in the denominator

A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour. Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour. The company is using the _____ method of job matching.

low-high

Which of the following is a benefit under Social Security?

lump-sum death payments

Which of the following rating formats has the lowest rating errors?

management by objectives

The ______________ pay strategy emphasizes external competitiveness and deemphasizes internal alignment

market pricing

You are an HR manager, and your boss has told you to find the best way to raise job performance. After some research, you find that _____ have the greatest instrumental value.

monetary incentives

Annual bonuses often play a major role in executive compensation and are primarily designed to _____.

motivate better short-term performance

Managers seek internal alignment within their organization by...

paying on the basis of similarities among jobs

Available evidence indicates tat managers believe the most important factor for pay increases is...

performance

Which of the following is an example of a long-term incentive plan?

performance plans

A major criticism of standard rating scales is that...

raters have different definitions of scale levels

Which of the following statistical measures shows how similar or dissimilar the market rates are from each other?

standard deviation

The Worker Economic Opportunity Act

states that income from most stock plans need not be included in calculating overtime pay

have indirect pay-performance links and require employees to put up money to exercise grants

stock option plans

In most organizations, the responsibility for managing a pay survey lies with...

the compensation manager

is designed to lessen an employer's ability to deny coverage to an employee for a preexisting condition

(HIPAA) Health Insurance Portability and Accountability Act

Total compensation in many organizations makes up at least __________ of the operating expenses

50 percent

Approximately ___________ percent of private sector employees have access to paid life insurance?

56%

Nina is a high-performing individual who works best alone. Which of the following companies is the most appropriate for her?

A company that uses a hierarchical pay structure to pay its employees based on performance

When a job involves very routine, mechanistic tasks, the most appropriate appraisal format is:

Behaviorally Anchored Rating Scales (BARS)

Which of the following is the best appraisal format in terms of legal defensibility?

Behaviorally Anchored Rating Scales (BARS)

Which of the following companies is taking efforts to improve the work/life balance of its employees?

MH Corp., which increases the number of paid holidays given to its senior employees

An incentive system with three piecework rates is the _____ plan.

Merrick plan

Egalitarian pay structures have all but which of the following characteristics?

Preference for individual performance over team performance

Most unions prefer which of the following?

Small pay differences among jobs and seniority-based promotions

Which of the following acts requires that essential elements of a job--those that cannot be assigned to other workers--must be specified for jobs covered by legislation?

The Americans with Disabilities Act

allows employees who resign or are laid off through no fault of their own to continue receiving health coverage under their employer's plan at a cost borne by the employee

The Consolidated Omnibus Budget Reconciliation Act of 1984 (COBRA)

Which of the following is defined as a structured job analysis technique that classifies job information into seven basic factors: information input, mental processes, work output, relationships with other persons, job context, other job characteristics, and general dimensions?

The Position Analysis Questionnaire

Which of the following methods requires evaluators to agree on which jobs are the most and least valuable, then the next most and least valued, and so on, until all the jobs have ordered?

The alternation-ranking method

MXB, Inc. is a carwash service provider. It orders the jobs in the company on the basis of the least important job to the most important job. In this case, MXB is most likely using the....

alternation-ranking method

Which of the following is an open-ended performance appraisal format that involves the use of descriptors ranging from comparisons with other employees to adjectives, behaviors, and goal accomplishment?

an essay format

Most job structures are best described as

both person- and job-based structures.

A common first step in interpreting compensation survey data is to...

check for the accuracy of job matches

In the context of child labor which of the following is true?

child labor has decreased in most countries across the world in recent years

A major decision in job evaluation is to...

choose among alternative approaches

The job evaluation method that most resembles a bookcase with many shelves is:

classification

Jacob works at PrimeClean Corp., a carwash company. He is asked to follow a set of instructions in a predetermined order to wash a car. All the details including the amount of washing liquid to use for each type of car are clearly specified. In this case, Jacob's company is most likely to use a:

closely tailored pay structure

Which of the following is least likely to be used in establishing skill-based certification methods?

college degree

_______ are more likely to conduct job evaluations of senior management jobs.

compensation managers

__________ are the observable behaviors that indicate the level of competency within each competency set.

competency indicators

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

cost-cutter

Skill-based plans tend to work best in organizations using a(n) _____ strategy.

cost-cutter

Regarding pay differences for different jobs, _____.

courts continue to uphold the use of market data to justify differences

The motivation triangle includes...

culture

Mich Inc., a hardware store, has a rating system in place that rates employees on their friendliness, usefulness, and product knowledge. Based on the ratings an employee receives, he or she gets an incentive. The compensation strategy followed by Mich is most closely described as a:

customer-focused strategy

The reliability of job evaluation techniques is measured by:

determining if different evaluators produce the same results

Compensable factors, skill blocks, and competency sets are used for:

determining what to value

The final step in designing a point plan involves

developing online software support

The amount of fairness given to employees refers to...

distributive justice

A difference between increases and merit increases is that incentives...

do not increase the base wage, whereas merit increases do increase the base wage

Which of the following is the basic question to ask to improve quality and ensure that value is added by each technique and at each stage in the compensation system?

does each specific activity directly contribute to our objectives?

In recent years, some firms have tried to deal with the plateau effect and also accommodate the different career motivations of mature scientists and engineers through a(n)...

dual-career ladder

Joshua believes that treating employees equally will improve their job satisfaction, which in turn will increase their work productivity and performance. In accordance to his beliefs, he wants to reduce the number of job levels and the pay differentials between the levels. In this case, he is most likely to use a(n):

egalitarian pay structure

Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that:

employers seek to maximize profits

Which of the following is the most popular executive perk offered by most companies?

executive physicals

Which of the following theories states that people choose the behavior that leads to the most satisfactory exchange?

expectancy theory

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

external competitiveness

Which of the following benefits communication methods allows for personalized communication methods and requires current contact information?

face-to-face methods

Which of the following statements regarding wage differences in industries and firms is NOT true?

female employment is more heavily concentrated in large firms

Contingent workers receive __________ benefits than regular workers, contingent workers' benefits cost ________ for employers than it does for regular workers

fewer, less

A recent article analyzing the results from over 100 executive pay studies shows that the best predictor of executive pay is by far...

firm size

Bottom-up budgeting includes the process of distributing forecasting instructions and worksheets where...

firms furnish managers with the forms and instructions necessary to preplan increases

________________theory is based on the premise that higher earnings flow to those who improve their potential productivity by investing in themselves

human capital

Research investigating high-performance workplaces found that performance-based pay ____________ when combined with other high-performance practices.

improves attitudes and behaviors

Which form of pay does not permanently increase labor costs?

incentives

Robert, the CEO of GameTrack Corp., wants to restructure the pay plan without increasing the labor costs in the long run. He is most likely to achieve this, while retaining his top employees, by:

increasing incentive pay and decreasing base pay

Career growth, hierarchy, and flexible design are most closely associated with the _____ aspect of mapping a total compensation strategy.

internal alignment

In the context of benefits communication methods, which of the following is mostly true about an information portal?

it requires ongoing maintenance and an intuitive user interface

Which of the following is true of the Age Discrimination in Employment Act

it was amended in 1990 to include Older Workers Benefit Protection Act

The systematic process of collecting information that identifies the similarities and differences among jobs is know as...

job analysis

The list of tasks, duties, and responsibilities that make up a job is known as...

job description

In the context of internal alignment, which of the following is the correct sequence?

job description > job evaluation > job structure

Which of the following is an assumption held by the labor supply model about the behavior of potential employees?

job seekers do not face barriers to mobility

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

job-based

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

lead policy

If several incumbents, supervisors and peers respond in similar ways to job analysis questionnaires, this suggests the results are ____.

likely to be valid

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

markets are incorrectly defined

__________ is a nonpermanent (variable) payment (bonus or lump sum) form of variable pay granted to employee as function of some (typically primarily subjective) assessment of individual employee performance

merit bonus

In mapping a total compensation strategy, the question of how important compensation is in the overall HR strategy is part of...

objectives

The role non-HR managers play in making pay decisions is called _____.

ownership

In the context of job evaluation methods, which of the following is a common way of ranking?

paired comparison

When organization performance declines

performance-based pay plans do not pay off.

Teaching raters what constitutes good, average, and poor performance is _____ training.

performance-standard

uses cash or stock award this determined by an increase in stock price at a fixed future

phantom stock plan

A ________ plan is a hybrid health care plan combining the benefits of a health maintenance organization and a _____________

point-of-service, preferred provider organization

a group of tasks assigned to one individual

position

If Philadelphia has a CPI of 165 and Houston has a CPI of 145, and if both cities started with bases of 100, it means that _____.

prices have risen faster in Philadelphia since the base year than in Houston

refers to the process by which a decision is reached: the right to an attorney, the right to an impartial judge, and the right to receive a copy of the arresting officer's statement

procedural justice

______________ is the measure of how important total compensation is in the overall HR strategy.

prominence

In a contemporary job description of a specific job, the job summary section

provides an overview of the job

KayDen Corp., a small organization with 15 employees, conducts job evaluation using the least expensive method for the first time. In this case, KayDen is most likely to have used the _____.

ranking method

A major advantage of a _________ is that it reduces benefits, costs, something that the other cost-cutting options ordinarily do not achieve

reduction in force

A compa-ratio reflects the....

relationship of the average actual salary in each range to the midpoint of the range

The Davis-Bacon Act

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

Among pay-mix alternatives, base pay is largest in _______________.

security or commitment policy

Which of the following is often the largest component in executive pay packages?

stock options

One of the most preferred benefits is...

stock plans

Size of pay differentials between grades should _____.

support career movement through the pay structure

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

task

The most widely used benefit survey is conducted by...

the U.S. Chamber of Commerce

Which of the following is a test that must be met to qualify for the administrative employee exemption?

the employee must be compensated on a salary or fee basis at a rate not less than $455 per week

puts a lid on the maximum pay level an employer can set

the product market

Apart from being reliable, a job analysis is also considered valid if...

the results converge among various sources of data and methods

argues that executive pay rises to maintain the same relative relationship with the salaries of lower-level employees

the social comparison theory

Which of the following is true of incentives?

they are re-earned each pay period

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

three

The most common way to collect job information is...

to ask incumbents to fill out a questionnaire

Which of the following is an objective of the unemployment insurance program?

to provide an incentive for employers to stabilize employment

The most obvious sorting factor is

ability

Competencies are derived from the _____ beliefs about the organization and its strategic intent.

executive leadership's

All of the following factors are reasons for the growth of benefits EXCEPT...

foreign lawsuits

The most common form of outcome-bases appraisal is....

management by objectives

The biggest cost-containment strategy in recent years is the movement to....

outsourcing

In a strategic approach to pay, internal alignment is the _________ issue to be decided.

second

If red circle rates become common throughout an organization,

then the design of the ranges and the evaluation of the jobs should be reexamined.

Which of the following benefits is a federally administered program?

Social Security

How many weeks of leave does the Family Medical Leave Act of 1993 mandate for all workers at companies that employ 50 or more people?

12 weeks

TreeWind Inc. is a bookstore that uses skill and responsibility as its compensable factors. It assigns 20 percent weight to responsibility and 80 percent weight to skill. If the responsibility factor scores a 60 after multiplying the subfactors with their corresponding weights, and if the skill factor has two subfactors that are rated as 4 and 5, what is the total weightage given to the job?

420

the average company match for 401(k) retirement plans

50 cents on the dollar up to 6% of pay

requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship

Patient Protection and Affordable Care Act

Which of the following policy decisions directly affects employees' attitudes and work behaviors?

Employee Contributions

Compensation Policy choices affecting pay level are most closely associated with...

External Competitiveness

Which of the following is the least popular executive perk offered by most companies?

Housing allowance

In the context of internal structures, which of the following is true of a delayered structure?

It sends the message that all employees are valued equally

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

Job evaluation

Who among the following is examining the validity of a job evaluation?

Keira, who is measuring the degree to which the job evaluation plan matches an agreed upon pay structure for benchmark jobs.

In the formula for predicting performance, the component most closely related to compensations is...

M

Which of the following is an advantage of skill-based pay plans?

They aid in deploying workers in a way that better matches the work flow

Which of the following is a characteristic of benchmark jobs?

They employ a reasonable proportion of the workforce

GreenRain Corp. faces an increase in employee turnover rate. The CEO calls for a board meeting with the senior executives to discuss the issue. Who among the following suggests increasing the relational returns that employees receive to reduce the turnover rate at GreenRain?

Tom, who suggests increasing the decision-making authorities given to the employees to make work more challenging

In the context of subordinates as raters, which of the following statements is true?

Upward feedback has been historically viewed as countercultural

In the regression equation y=a + bx, job evaluation points are denoted by...

X

requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action

a Bedeaux plan

A benefit plan that allocates a set dollar amount to the employees and allows them to select benefits is called a ___________ plan.

a flexible benefit

An early study on the effects of the living wage law in Los Angeles found all of the following EXCEPT that...

a higher proportion of new hires were female

Lisa is a manager at Trell Inc. When she hires her employees, she focuses on finding the right job for the right person. Which of the following pay plans is her employer most likely using?

a job-based pay plan

The most common approach to motivating executives to make decisions that are in the best interests of stockholders is...

a long-term incentive plan using stock options

Who among the following is most likely to be working for a company that uses a competency-based pay plan?

Carlos, who focuses on obtaining certifications in his field to get a pay increase.

The roots of job-based pay structures is traced to _____.

Frederick Taylor

__________ curve expresses the relationship between years since last degree, performance, salary

a maturity

If you had repair work done on your car, the shop most likely used the _____ plan to pay the mechanic.

a standard hour plan

The most frequently implemented incentive system is...

a straight piecework system

Which of the following is an individual incentive plan?

a straight piecework system


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