Chapter 8

What is the significance of the Employment Cost Index that measures quarterly changes in employer costs?

It permits a firm to compare changes in its average costs to an all-industry or specific industry average

Which of the following is true of adjustments to a company's pay mix?

They occur less frequently than do adjustments to overall pay level.

___________ _____________ is a technique that collapses salary grades into only a few broad-bands, each with sizables ranges

broad banding

A large amount of data in a pay survey can be reduced into a single number by using a measure of ________

central tendency

What are two factors that merit increase grids use to guide pay increases in an organization?

employee performance and position in the pay range

Which component of a total pay structure includes the salaries paid by relevant competitors for the benchmark job measured by a pay survey

external competitive data

An ________ __________ links a companies benchmark jobs on the horizontal axis with market rates paid by competitors on the vertical axis

market line

Competitive intelligence is increasingly being gathered in salary surveys and this is causing metrics of organization performance such as ____________ to be collected.

revenues and turnovers

An ___________ is the systematic process of collecting and making judgements about the compensation paid by other employers

survey

What do unusual shapes of frequency distributions in a pay survey reflect.

*Issues with job matches *companies with very different pay policies *greatly dispersed pay rates

What do managers use for pay ranges?

*To meet employees expectations that their salary will rise over time *To encourage employees to stay with the company *To acknowledge individual performance differences with pay

What are the anomalies in pay survey data that an analyst should look for when verifying survey data

*Whether there are any outliers *whether all employees show similar patterns *whether a single company dominates

Identify the three most commonly used measures of compensation in a pay survey

*base pay *total compensation *total cash

What are the steps involved in broad banding?

*set the number of bands *price the bands with reference to market rates