chapter 8

(p. 267) This measure of compensation may overstate competitors' pay. A. Base pay plus benefits B. Total cash compensation C. Base pay D. Total compensation

B

. (p. 269) Survey data from one or a few employers that are significantly out of line with other employers _____. A. are deviant data B. are anomalies C. reflect a diverse sample D. are standard deviations

B

(p. 273-74) All of the following are examples of potential anomalies except _____. A. outliers B. a large variation in base pay for a job at one company C. one company dominates the results D. a large variation in average base pay for a job across companies Difficulty: Medium

D

(p. 246) The answer to the question of how many firms to include in a pay survey is _____. A. there are no firm rules B. include at least one-hundred C. focus primarily on labor-market competitors D. the top 50 percentile of similar sized firms

a

(p. 253) The first step in setting competitive pay and designing a pay structure is _____. A. specify pay-level policy B. conduct job evaluation C. draw policy lines D. specify relevant market

a

(p. 266) Financial data in pay surveys are used to _____. A. group firms by size B. analyze competitors' performance C. compare competitors' labor costs D. compare competitors' debt ratios

a

(p. 266) Pay surveys collect total number of employees for the purpose of_______ _____ A. impact on the labor market B. how work is organized C. ability to pay D. recruiting success

a

. (p. 255, 258) Which of the following types of labor would most likely be recruited only locally? A. Office and clerical workers B. Scientists C. Managers D. Executives

a

. (p. 276) Because employers are raising employee pay at various times during the year, survey data must be updated using a process called _____ or _____. A. aging, trending B. aging, smoothing C. trending, leveling D. gaining, smoothing

a

. (p. 277) 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 of was 5% and another 5% for 2014. An employer choosing to follow a lead strategy of 4% above the market for the plan year, will need to _____. A. multiply salary by 105% and then by 109% B. increase the clerk salary by $2,200 C. multiply the salary by 109% D. multiply the salary by 114%

a

. (p. 287) Paying jobs of different functions different rates within a pay band is called ____. A. reference rates B. broad banding C. pay leveling D. knowledge-based pay

a

p. 284) Pay ranges for clerical and production jobs commonly range between _____ and _____. A. 5, 15 B. 15, 30 C. 30, 40 D. 40, 60

a

(p. 253) The second major decision in pay-level determination is _____. A. specify relevant market B. define purpose of survey C. design and conduct survey D. select product and labor market competitors

b

(p. 261) The _____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data. A. Chamber of Commerce B. Bureau of Labor Statistics C. compensation association D. Department of Economics

b

(p. 265) For organizations using a skill-competency-based pay system or generic job descriptions, the best approach for pricing jobs is _____ A. benchmark job. B. low-high. C. market pricing D. benchmark conversion

b

(p. 274-75) You work in a midsize organization and have just conducted a wage survey. Five midsize companies have provided wage data for a particular job. Here are the numbers. Which of the following statistics will be the most accurate reflection of the market rate? A. Mean B. Weighted mean C. Median D. Mode

b

(p. 279) A market pay line _____. A. reflects an organization's internal alignment policy B. links a company's benchmark jobs with market rates paid by competitors C. provides an accurate prediction of an organization's entry level pay rates D. compares an organization's minimum and maximum pay rates for each skill level

b

. (p. 265) 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 _____ method of job matching. A. benchmark job B. low-high C. pay range D. benchmark conversion

b

(p. 253) The final major decision in pay-level determination is _____. A. interpret and apply results of survey B. obtain top-management acceptance of final decisions C. design grades and ranges or bands D. draw policy lines

c

(p. 280) In the regression equation, y = a + bx, job evaluation points are _____. A. a B. b C. x D. y

c

(p. 281) Aging market data to a point halfway through the plan year is called _____. A. leveling B. updating C. lead/lag D. lag

c

(p. 284) Size of pay differentials between grades should _____. A. be based upon differentials in market surveys B. be approximately 15 percent C. support career movement through the pay structure D. be between 10 and 25 percent Difficulty: Medium

c

(p. 288) Job structure is to ________ as pay structure is to pay-policy line. A. market line B. pay surveys C. job evaluation D. reference rates

c

(p. 289) Which of the following statements is true about market pricers? A. They align pay structures with the business strategy. B. Their pay structures are unique and difficult to imitate. C. They assume that little value is added through internal alignment. D. They emphasize pay structures based on unique technology or the way work is organized

c

. (p. 260) Which of the following jobs would most likely fall into a fuzzy market? A. Screen writer (MGM) B. Sound engineer (Sony studios) C. Director of future vision services (West Publishing) D. Vice-president of people (Southwest Airlines)

c

. (p. 262) Companies typically use _______ pay survey(s) when setting pay levels. A. one well-validated B. two C. three or more D. more than five

c

. (p. 265) Applying the job evaluation process to pay survey jobs to assess the degree of match between survey jobs and benchmark jobs is called the _____ approach. A. low-high B. benchmark job C. benchmark conversion D. point survey conversion

c

(p. 255) A relevant labor market includes all employers who compete in one or more of the following areas except _____. A. employees in the same geographic area B. the same occupations or skills C. the same products and services D. pay similar wages

d

. (p. 255) Which of the following is true regarding the Employment Cost Index (ECI)? A. It is published by the Department of Commerce. B. It is an excellent source of competitor labor costs. C. It measures annual changes in employer compensation costs. D. It allows comparison of labor costs to all-industry averages.

d

. (p. 260) The primary responsibility for conducting a pay survey is _____. A. top management B. the facility or plant manager C. outside consultants D. the compensation manager

d

. (p. 275) The _____ minimizes distortion of the central tendency caused by outliers. A. weighted mean B. mean C. mode D. median

d

. (p. 288-89) The _____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment. A. job structure B. broad banding C. reference rate D. market pricing

d

(p. 267) _____ shows how competitors value work in similar jobs. A. Base wage B. Total cash C. Total compensation D. Base pay plus benefits

A

(p. 269) The first step in interpreting survey data is _____. A. check for the accuracy of job matches B. seek out non-responders C. check for fraudulent data D. remove the top and bottom paying companies

A

(p. 268) _____ measures competitors' use of performance-based pay. A. Base pay B. Short-term incentive pay C. Total cash D. Total compensation

C

(p. 281) An organization that has a match (pay) policy will pay its employees: A. the market rate each month for the duration. B. more than the market rate for some months and less than the market rate for the other months. C. at the 100th percentile of the market rate obtained through the wage/salary survey. D. at the 50th percentile of the market rate obtained through the wage/salary survey.

b

(p. 275) Which of the following is often used to set pay ranges? A. Median B. Weighted mean C. Quartiles and percentiles D. Standard deviation

c

. (p. 275) Which of the following statistical measures shows how similar or dissimilar the market rates are from each other? A. Weighted mean B. Mean C. Standard deviation D. Median

c

. (p. 286) Which of the following statements is true regarding broad bands? A. They require a relatively stable organization design. B. They support recognition via titles or career progression. C. They foster cross-functional growth. D. They give managers "freedom with guidelines".

c

p. 282) Pay ranges: A. are flexible enough to deal with differences in quality, but not with the productivity or value of these quality variations. B. usually lead to an increase in employee turnover. C. reflect the differences in performance or experience that an employer wishes to recognize with pay. D. cause employees to believe that their compensation can increase by only a limited amount.

c

(p. 269) 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 _____. A. updating B. point factor adjustment C. lead/lag policy adjustment D. survey leveling

D