Chapter 3: MNGT 463

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

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.

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

False

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

False

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.

organizational factors

HR policy, employee acceptance and cost implications

Identify a difference between hierarchical and egalitarian pay structures.

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

Porfyra Manufacturing Inc.

Hierarchical structure

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.

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

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

The pay differences among levels are referred to as

differentials

Addresses the acceptability of the actual pay differences among employees

distributive justice

External factors

economic pressures and government policies, laws, and regulations

Differentials are used to _____.

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

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

human capital

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

internal alignment

___ ___ ___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

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

job-based structure

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

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

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

procedural justice

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

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

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.

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

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

Colina Manufacturing Inc.

Egalitarian structure

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

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 theory sees organizations as responding or conforming to normative pressures in their environments in order to gain legitimacy and to minimize risk?

Institutional theory

Which of the following is true of an organization that has many levels?

It can offer more promotions than an organization with fewer levels.

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.

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

Small pay differences among jobs Seniority-based promotions

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.

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

Value

The relative contribution of a job to the organization aims

Content

The work performed in a job

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.

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.

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

They require "equal pay for equal work."

Distributive justice

a pay structure itself

____ _____ 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 consequences of deviations from acceptable wage structures. (Check all that apply.)

more grievances diminished motivation

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

negative sorting effect

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

outsourcing delayering

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

pay structure

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

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

skill shortages

external factors

stakeholders and cultures and customs

Organization factors

strategy, technology, human capital

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

the equal treatment of employees

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

the living wage

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

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

true

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

work flow