Compensation 400 Test 2 CH 5-8
The treadline for the pay structure XYZ corporation is y=36.593x+21910. The midpoint for a 500- point level jobs is approximately
$40,000
________________ theory is the most influential in explaining pay-level differences.
human capital
The pay policy associated with increased productivity is ___________
hybrid
The job evaluation method that most resembles a bookcase is
classification
Purposes of a survey may include all but ____________.
meeting Fair Labor Standards Act requirements
how well it aligns with the organization strategy
true
Which of the following jobs would most likely fall into a fuzzy market?
director of future vision services (West Publishing)
All of the following are advantages of a lead pay policy except _______________.
higher financial performance
Output associated with hiring an additional person, holding constant other production factors, is _______________.
the marginal product of labor
Skill-based is to transactional work as competencies are to ____________ work.
their superior's ratings of the manager's competencies
Vagueness and subjectivity can make competencies a "risky foundation for a pay system".
true
When an organization changes it's strategy and goals, job evaluation helps workers understand what is important in their work.
true
When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.
true
Employee B has been promoted by Pay grade 7 and her annual salary will be increased to $42,200 from $40,000. Within Pay Grade 7, her compensation is now at approximately the _____ percentile
87th
Research shows that the compensable factor skill accounts for ___ percent of the variance in job evaluation results.
90
Job evaluation is the process of determining the relative worth of jobs to create a job structure.
TRUE
Wages in labor-intensive industries are generally lower than in technology intensive industries
TRUE
Skill-based plans tend to work best in organizations using ________________ strategy.
cost-cutter
An advantage of broad bands is managers have to judge the abilities and performance of their subordinates less than in a traditional pay range and grade pay structure.
FALSE
According to the team effectiveness model outlined in the text, effective teams exhibit all of the following specific composition characteristics EXCEPT _____________________.
False
Research suggests that the most important factor affecting employee and management acceptance of a pay structure is the resulting pay structure itself.
False
Based upon a market survey it is determined that the Market Index (based upon the Companys salary structure in the attachments) for a fully competent pay Grade 5 employee (Employee C) is at 0.90. The company has decided not to adjust the pay structure relative to the market. However, the company would like to recognize the contribution of Employee C, by providing Employee C with a pay adjustment that would relate to a new salary resulting in a market index of 1.00. The recommended salary for Employee C should be approxamitely
$41,797
A new employee (Employee A) is hired in pay grade 4 at the 25th percentile, as is the standard practice for Acme Corporation. The Starting salary compa-ratio for Employee A will be
0.90
While it is common for organizations to have multiple pay structures, typically, the same approaches to creating the pay structures are used to facilitate understanding and acceptance.
False
Which of the following is true regarding the Employment Cost Index (ECI)?
It is an excellent source of competitor labor costs
Effort is one of the generic compensable factors used to define equal work in the Equal Pay Act.
True
Information available on O*Net is related to that found on Cybercomp but different in important ways.
True
Which of the following would not be used as a criterion pay structure?
any of the above may be used
The growing view of competencies is they are a set of _____________.
behaviors requiring no assumption
Common characteristics of the point method include all but _________________
benchmark factor classes
Answer the following three questions based upon the statement below. The effectiveness of the majority of the position's decisions can be measured within: __ 1. one day; __ 2. one week; __ 3. one month; __ 4. six months; __ 5. one year; __ 6. more than one year This example is most likely related to ____________
decision making
The definition of compa-ratio for a specific job is
employee salary divided by company pay grade midpoint
The definition of market index for a specific job is
employee salary divided by market average
The certification process in skill-based pay is analogous to ____________________.
factor degrees and weights
A frequency distribution must by constructed to calculate a median.
false
Both skill-based and competency-based plans have objective methods of certification.
false
External competitiveness is determined by examining the mix of pay compared to competitors.
false
If a compensable factor is present in less than 10% of jobs in a pay structure, the factor should always be excluded since it would have little effect on pay differences.
false
In a skill-based pay system, workers with greater seniority and experience receive higher pay.
false
In the classification method, total points for each job determines its position in the structure.
false
It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditional relevant markets.
false
Job evaluation is a compensation method developed by the federal government in the early 1920's.
false
Maturity of judgment and respect for others are examples of organization specific competencies.
false
Only jobs with the same number of job evaluation points should be in a pay grade.
false
Setting your company's base pay to competitors' total compensation risks setting pay too low.
false
Since business strategies may change often, compensable factors should rarely be added or deleted.
false
The "Pitfall of Pies" refers to the fact that base pay may change when the value of stock options change.
false
The most common measure of variation in pay surveys is the standard deviation.
false
There is very little evidence that market pay can bias job evaluation results against women's pay.
false
When total compensation costs are identical for the same job in different companies, the pay mix will be the same.
false
Financial data in pay surveys are used to ____________.
groups firms by size
Segmented labor supply means____________.
hiring from different sources and differential pay and benefits for the same work
The most important factor determining success of a skill-based pay plan is ______________________.
how well it aligns with the organization strategy
A "camper" is a person who ___________ in a skill-based pay system.
is an employee who does not want to rotate jobs
Which of the following is the correct sequence?
job description > job evaluation > job structure
Job structure is to ________ as pay structure is to pay-policy line.
job evaluation
Which of the following is not a generic compensable factor used to determine equal work in the Equal Pay Act?
knowledge
A small lawn care company has two mowers and four employees. If it hires another employee, how productive will productivity of the fifth employee compare to the current two employees?
less productive
A market pay line _________.
links a company's benchmark jobs with market rates paid by competitors
Research on efficiency wage theory shows ______________.
more unqualified workers apply
A survey conducted January, 2007 found the median pay effective January 1, 2007, for a clerk was $20,000 and the forecast rate of wage increases in the market for 2007 of 5% and another 5% for 2008. An employer choosing to follow a lead/lag policy for the 2008 plan year will need to ___________.
multiply the salary by 105 % and then by another 5 %
When Acme corporation elected not to change its overall salary structure relative to the market, it decided to practice a compensation philosophy which is
none of the above __ (lag policy)
Which of the following types of labor would most likely be recruited only locally?
office and clerical workers
Leadership, customer orientation and functional expertise are examples of which group of competencies?
organization specific
aging or tending
process of updating pay data to forecast the competitive rates for the market line
A small organization is most likely to use ___________ for job evaluation.
ranking
Employee D is currently a Pay Grade employee and her annual salary is $60,000. During the course of the year, a compensation market survey is conducted and it is determined by employee D is in a _____ job which decreases the likelihood that she will receive the standard 4% pay increase at the end of the year.
red-circled
The introduction of scanners, bar codes and self-server checkout has __________ the average pay of check out clerks since 1984.
reduced their pay by 8%
Paying jobs of different functions different rates within a pay band is called ____.
reference rates
Ranges are to controls as _________ are to guides.
reference rates
In ____________________ theory, pay is described as noncompensatory.
reservation wage
Among pay-mix alternatives, base pay is largest in ___________.
security or commitment
how well it aligns with the organization strategy
skill certification
Research shows that __________ size firms pay the least.
small employers (less than 100 employees)
market line
summarizes the distribution of going rates paid by competitors in the market
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
Skill-based is to transactional work as competencies are to ____________ work.
tactic knowledge
For a pay survey, which was conducted in the third quarter of the year, to be valid effective January 1 of the following year, it is essential that
the data be aged to reflect projected January 1 market pay returns
Which of the following is not a characteristic of a benchmark job?
the pay level is typical of the industry
In which of the following would data from labor market competitors be given more weight than product market data?
the supply of labor is responsive to changes in pay
A potential disadvantage of skill-based pay is labor costs can be a source of competitive disadvantage.
true
A study of factors managers consider in setting pay budgets found that managers did not believe it was fair to have smaller budgets when unemployment is high.
true
According to efficiency-wage theory, paying higher wages than competitors lowers labor costs due to more efficient workers.
true
Complex work is likely best supported by person- versus job-based pay systems.
true
Core competencies focus on underlying knowledge, skills and behaviors that are the basis for success in the organization.
true
Identifying pay survey participants by company name is considered price fixing under the Sherman Act.
true
Introduction of new technologies that reduce skills required in an industry are likely to lead to lower pay.
true
One way that job evaluation supports workflow is to help set pay for new jobs.
true
The first decision for determining skill-based structures is the same as for job-based structures.
true
Though the accuracy of job matches is necessary for pay survey data to be useful, job matches are often subjective and not highly reliable.
true
The pay-mix component in which benefits is likely to be largest is ______________.
work-life balance
