mgt 461 test 2
Most studies report that when different people rank-order jobs, the correlations are between:
.85 and .96
The most common way of allocating weights to factors is regression modeling
False
The most influential theory explaining pay-level differences is marginal revenue productivity.
False
The number of job evaluation plans required depends only upon the number of employees in the organization.
False
The primary reason for documenting the views of employees and supervisors on compensable factors is to meet requirements of the Equal Pay Act.
False
Transactional work is typically paid more than tacit work.
False
Wages in labor-intensive industries are generally higher than in technology-intensive industries.
False
factors are scaled after weights have been assigned
False
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?
job based pay plan
Talented individuals have a higher marginal value in larger organizations.
True
The main appeal of competencies is the direct link to the organization's strategy.
True
The three factors usually used to determine the relevant labor markets are the occupation, geography, and competitors.
True
compensable factors are aspects of work that add value to the organization
True
The policy capturing approach and the committee a priori approach for developing pay structures yield the same pay structure.
false
Basing pay on race or gender seems appalling today, but basing pay on someone's judgment of another person's integrity is considered the norm nowadays.
flase
The roots of job-based pay structures is traced to _____.
frederick taylor
The most widely used point method job evaluation is the:
hay plan
All of the following are advantages of a lead pay-level policy EXCEPT _____.
higher turnover rates
Which of the following is true regarding the Employment Cost Index (ECI)?
it allows comparison of changes in its average costs to an all-industry average.
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
When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.
true
A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.
variable pay
A criterion pay structure is a pay structure that can be duplicated with a point evaluation plan
True
A criterion pay structure is a pay structure that can be duplicated with a point evaluation plan.
True
A representative sample of benchmark jobs will include the entire domain of work being evaluated and capture the diversity of the work within that domain.
True
Both pay level and pay mix decisions focus on two objectives: (1) control costs and increase revenues and (2) attract and retain employees.
True
By encouraging employees to take charge of their own development, skill-based plans may give them more control over their work lives.
True
Skill-based plans are generally well accepted by employees because it is easy to see the connection between the plan, the work, and the size of the paycheck.
True
Skill-based plans establish single flat rates for each skill level regardless of performance or seniority.
True
Which of the following is most likely to be a disadvantage of skill-based pay plans?
They are expensive in the long run
Which of the following statements is true regarding broad bands?
They foster cross-functional growth.
Which of the following is NOT a reason a company might pay base wages above market?
To increase turnover rates
A job structure based upon job value orders jobs on the basis of the relative contribution of the skills, duties, and responsibilities of each job to the organization's goals.
True
A pay range exists when at least two employees in the same job are paid different rates.
True
A potential disadvantage of skill-based pay is that labor costs can be a source of competitive disadvantage.
True
According to efficiency-wage theory, paying higher wages than competitors can lower labor costs due to more efficient workers.
True
Advocates of competencies say that by focusing on optimum performance, rather than average performance, competencies can help employees maintain their marketability.
True
An employer offering lower base pay with high bonuses is a likely signal that it is seeking risk-taking employees.
True
As experience with competencies has grown, organizations are placing greater emphasis on business-related descriptions of behaviors.
True
Compared to an on-demand review of certifications, scheduling fixed review points makes it easier to budget and control payroll increases.
True
Compensable factors are aspects of work that add value to the organization.
True
Competencies provide guidelines for behavior and keep people focused.
True
In a labor market, the demand side focuses on the actions of the employers.
True
In determining the compensation strategy, a major strategic decision is whether to mirror what competitors are paying.
True
Many employers use market surveys to validate their own job evaluation results.
True
One approach to both improving and measuring the level of acceptance of job evaluation is to establish a formal appeals process.
True
One of the criteria for scaling compensable factors is to ensure that the number of degrees used is necessary to distinguish among jobs.
True
One way of evaluating a managerial job's multinational responsibilities would be to rate the percent of time spent on multinational issues.
True
Point plans represent a significant change from ranking and classification methods in that they make explicit the criteria for evaluating jobs: compensable factors.
True
Research shows that the weights assigned to compensable factors can affect the resulting pay structure.
True
Scaled competency indicators are similar to degrees of compensable factors.
True
Skill-based pay plans can focus on both the depth and breadth of work.
True
The job evaluation method that most resembles a bookcase with many shelves is:
classification
A job description is compared to class descriptions in the _____ of job evaluation.
classification method
Which of the following is least likely to be used in establishing skill-based certification methods?
college degree
The final major decision in pay-level determination is to _____.
design grades and ranges or bands
In the point method, the second step in designing a plan is to:
determine the compensable factors
Reliability of job evaluation techniques is measured by:
determining if different evaluators produce the same results
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
Which of the following statements is true of a job evaluation plan?
developed using benchmark jobs and then applied to non benchmark jobs
The final step in designing a point plan involves _____.
developing online software support
A camper is an employee who _____ in a skill-based pay system.
does not want to rotate jobs
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 a major decision in job evaluation?
establishing the purpose of evaluation
Competencies are derived from the _____ beliefs about the organization and its strategic intent
executive leaderships
The exchange value of a job is its _____.
external market value
The certification processes in skill-based pay is analogous to the _____ in a job-based analysis.
factor degrees and weights
Adjustments to forms of pay occur more often than adjustments to overall pay level.
false
Aging the market data to a point halfway through the plan year is called lead/lag.
false
Career moves between bands are more common than within bands.
false
Employers in highly competitive markets are more able to raise prices without loss of revenues
false
Employers in highly competitive markets are more able to raise prices without loss of revenues.
false
Employers tend to overestimate the importance of pay to employees and underestimate the role of relationships with the supervisor.
false
It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditionally relevant markets.
false
Market pricers emphasize any unique or difficult-to-imitate aspects of an organization's pay structure.
false
Stores that label each item's price or ads that list a job opening's starting wage are examples of bourses.
false
The final step in determining externally competitive pay levels and structures is the merging of internal and external pressure.
false
According to a WorldatWork survey, the primary method of job evaluation is _____.
market pricing
The _____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment.
market pricing
Leadership, customer orientation, and functional expertise are examples of which group of competencies?
organization specific
_____ refers to the average of the array of rates inside an organization.
pay level
The _____ method of job evaluation is the most commonly used method in the United States and Europe
point
The _____ method of job evaluation uses compensable factors.
point
The market pay rate is the:
point at which supply and demand lines cross.
When a statistical process is used to duplicate an existing pay structure, it is called:
policy capturing
Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.
productivity
The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called _____.
survey leveling
In today's organizations, in order to increase competitiveness and success, work is analyzed by separating transactional work from:
tacit work
The scheme used in the text for classifying competencies consists of three groups. Which of the following is NOT one of them?
team dynamics
All of the following are important factors in defining a market for compensation purposes EXCEPT:
the ability to pay.
In most organizations, the responsibility for managing a pay survey lies with _____.
the compensation manager
_____ puts a lid on the maximum pay level an employer can set.
the product market
A small lawn care company has two mowers and four employees. If it hires another employee and the factors of production remain the same, how will the productivity of the fifth employee compare to that of the current four employees?
the productivity will reduce
Which of the following is the reason why skill-based pay plans have maximum flexibility?
they pay employees for the highest level of skill they have achieved
Research shows that _____ factor(s) account(s) for 98 to 99 percent of the variance in job evaluation plans.
three
_____ measures reveal competitors' use of performance-based cash payments.
total cash
Which of the following sentences regarding skill-based structure is FALSE?
training costs are the lowest in comparison
A manager of a company could be a factor affecting the company's external competitiveness.
true
Combat pay premiums paid to military personnel to offset some of the risk of being fired upon is an example of a lead pay-level policy.
true
Identifying pay survey participants by company name is considered price fixing under the Sherman Act.
true
In a labor market, the market rate is where the lines for labor demand and labor supply cross.
true
Managers often regard external market data as more objective than internal job evaluation.
true
Pay ranges for managerial jobs are larger than the ranges for other jobs because these jobs have greater opportunity for both discretion and performance than lower-level jobs.
true
Research shows that a lead pay strategy reduces turnover.
true
Segmenting sources of labor is a means of reducing labor costs.
true
Smaller pay ranges may reduce the opportunities for promotion.
true
Turnover and organizational revenues are examples of survey data collected to gather competitive intelligence.
true
The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.
unemployment is low
Which of the following reasons makes competencies a risky foundation for a pay system?
vagueness and subjectivity
Most factor scales have _____ degrees.
4-8
Mark and Steve work as crane operators in a construction company called Asai Corp. Asai uses a skill-based plan that establishes single flat rates for each skill level. Mark performs better than Steve even though Steve has more seniority. Which of the following statements is most likely to be true in this scenario?
Both Mark and Steve will be paid the same amount.
The _____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data.
Bureau of Labor Statistics
A disadvantage of a skill-based plan is that people cannot be deployed in a way that matches the flow of work, thus causing bottlenecks as well as idle hands.
False
An advantage of the ranking method is that the basis for comparison is called out.
False
Focusing on the end product of the internal alignment process, the pay structure, is more important for acceptance of the results than focusing on the approach chosen.
False
Recent research shows that the use of online job evaluation by independent managers is more reliable than traditional job evaluation committees.
False
The NEMA plan explicitly states that the compensable factor experience should be correlated with tenure.
False
Which of the following is an example of a quoted-price market?
Nile, a website that allows sellers to sell their products for a fixed price
_____ is a crucial factor that affects the perception of fairness of a skill-based plan.
The design of the certification process
If Company A raises its pay rate by one dollar per hour to hire additional workers and competitors immediately match the increase, what will be the most likely result?
The labor costs for Company A will increase, but it will be unable to hire additional workers.
_____ is the additional output associated with the employment of one additional person, with other production factors held constant.
The marginal product of labor
which of the following is NOT a characteristic of a benchmark job?
The pay level is the best in the industry
Since business strategies may change often, compensable factors should rarely be added or deleted.
False
Which of the following is an example of a bourse market?
Flatcake, a website that allows buyers to negotiate the prices with the sellers of handmade goods
Gramhold Inc., a pharmaceutical company, reduces its 10 salary grades to just three broad bands. Which of the following statements is most likely to be true in this case?
Gramhold will experience career moves within bands more than career moves between bands.
In the context of internal alignment, which of the following is the correct sequence?
Job description > job evaluation > job structure
In which of the following conditions would product market competitors' data be given more weight than data from labor market competitors?
Product demand is responsive to price changes.
Which of the following is often used to set pay ranges?
Quartiles and percentiles
Which of the following is NOT true of the relationship between employer size and its ability to pay?
Talented individuals have a lower marginal value in a larger organization.
All of the following are examples of potential anomalies EXCEPT _____.
a large variation in average base pay for a job across companies
Common characteristics of the point method include all of the following EXCEPT:
benchmark factor classes
In the context of the point method of job evaluation, _____ are those characteristics in the work that an organization values; that help it pursue its strategy and achieve its objectives.
compensable factors
The process of identifying competencies in person-based structures resembles identifying _____ as part of job evaluation in job-based structures.
compensable factors
_____ are more likely to conduct job evaluations of senior management jobs.
compensation managers
_____ are the observable behaviors that indicate the level of competency.
competency indicators
_____ translate each core competency into action.
competency sets
The pay policy that is most closely associated with the decreased ability to attract employees is a(n) _____ policy.
lag
The pay-level policy that is most likely to reduce pay dissatisfaction is a(n) _____.
lead policy
Aging the market data to a point halfway through a plan year is called _____.
lead/lag
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
The majority of applications of skill-based pay have been in:
manufacturing industries
In a hiring situation, considering that other potential costs will not change in the short run, the level of demand that maximizes profits is that level at which the _____ of the last hire is equal to the _____ for that hire.
marginal revenue; wage rate
A study of 400 compensation specialists revealed that:
market data had a substantially larger effect on pay decisions than job evaluation data.
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
All of the following are advantages of the ranking method of job evaluation EXCEPT that:
rankings are easy to defend and justify
Pay ranges:
reflect the differences in performance or experience that an employer wishes to recognize with pay.
Among pay-mix alternatives, the percentage of base pay is highest in _____.
security or commitment policy
The first step in setting competitive pay and designing a pay structure is to _____.
specify a pay-level policy
The pay-mix policy alternative in which the percentage of benefits is likely to be the highest is known as _____.
work/life balance policy
In the regression equation, y = a + bx, job evaluation points are denoted by _____.
x
Which of the following is a disadvantage of the point method?
it can become bureaucratic and rule bond
Managers whose employers use _____ plans focus on placing the right people in the right job
job based
Managers whose employers use _____ plans focus on placing the right people in the right job.
job based
_____ is the process of systematically determining the relative worth of jobs for the purpose of creating an organization's job structure.
job evaluation
The most common pay policy is a(n) _____.
match policy
Person-based plans have the potential to clarify new standards and behavioral expectations.
True
Which of the following is the underlying assumption in the assessment of job content?
content has intrinsic value outside external market
Skill-based plans tend to work best in organizations using a(n) _____ strategy.
cost cutter
The second major decision in pay-level determination is to _____.
define the purpose of a survey
The final major decision in pay-level determination is to _____
design grades and ranges or bands
Defining the compensable factors and scales to include the content of jobs held predominantly by women is one of the methods to ensure that job evaluation plans are bias-free.
True
Human capital theory assumes that people are paid at the value of their marginal product.
True
If the purpose of a survey is to price the entire structure of a job, then benchmark jobs can be selected to include the entire job structure.
True
Who among the following is most likely to be working for a company that uses a competency-based pay plan?
carlos
A common first step in interpreting survey data is to _____.
check for the accuracy of job matches
A major decision in job evaluation is to:
choose among alternative approaches
Which of the following statements is true of pay level?
Pay level is directly proportional to labor costs.
Which of the following is an example of the demand side of labor?
Pay level offered by an employer
Employees in a multiskill system earn pay increases:
by acquiring new knowledge
Routine work is also termed _____.
transactional work
Pay ranges for office and production work commonly range between _____ and _____ percent.
5; 15
Which of the following is NOT true of the usage of multiple plans versus single job evaluation plans?
A single universal plan is acceptable to employees if the work covered is highly diverse.
Druk Inc. is a consulting firm with 10 employees. Each new client generates $10,000 in revenue. If the company hires another employee who brings in five new clients and all other factors of production are constant, which of the following statements is true?
Druk needs to pay $50,000 as wage to the eleventh employee to break even.
Wages tend to be the lowest in which of the following industries?
Education and health care
Which of the following is NOT a characteristic of a benchmark job?
a reasonable proportion of the work force is employed in this job
Because employers are raising employee pay at various times during the year, survey data must be updated using a process called _____ or _____.
aging; trending
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 been ordered?
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 a(n):
alternation-ranking method
