HR CH 10

On average, ________ of a U.S. employee's pay is variable.

10%

Which of the following is an example of a non-exempt employee?

An hourly employee on the production line

Employees' total compensation consists of which of the following?

Base compensation, pay incentives, indirect compensation

An individual-based pay policy works best in which of the following situations

Employees may have many opportunities to learn new skills.

Job-based pay policies work best in which of the following situations?

Employees' jobs don't change often

The MAA gives the highest possible points to which compensable factor?

Experience

Which of the following is most likely true regarding compensation systems?

External equity is easier to manage in decentralized pay systems.

Which of the following affects most pay structures in the United States?

Fair Labor Standards Act

According to surveys, which of the following is most likely true about family businesses?

Family employees would earn more compensation at similar positions in businesses not owned by family members.

Which of the following is the most common compensation practice among small firms?

Paying bonuses based on company performance

A skill-based approach to compensation is built on which of the following characteristics?

The greater the variety of job-related skills a worker possesses, the more he/she should be paid.

Which of the following is NOT a criticism of skill-based compensation systems?

Too much labor specialization

According to your text, which of the following questions is LEAST relevant to developing an effective compensation plan?

Will the compensation plan be developed by HR managers?

Employee earnings

affect employees economically and psychologically.

Job-based compensation plans have the advantage of:

appearing rational and systematic, thereby minimizing employee complaints

Egalitarian compensation systems are:

becoming common in competitive environments.

Decentralizing pay decisions most likely enables a company to:

build a stronger link between pay and performance.

If a company uses a committee to sort job descriptions into grades without using a point system, the company is most likely using a ________ system for its job evaluation.

classification

Carlos is reviewing the knowledge, problem-solving skills, and accountability for a particular job. He is most likely reviewing

compensable factors

Carlos is reviewing the knowledge, problem-solving skills, and accountability for a particular job. He is most likely reviewing:

compensable factors

The design of job-based compensation pay plans begins with:

conducting a job analysis

Job specifications

consist of worker characteristics necessary for successful performance.

A company designs its compensation system around the philosophy that employees exchange their skills and contributions for pay. As a consequence, employees feel fairly compensated when the ratio of their inputs and outputs is equivalent to those of other employees whose job demands are similar to their own. This company's compensation system is based on a ________ compensation model.

distributive justice

The stockholders are concerned about the cost of perquisites. Management wants maximum flexibility to move people among jobs without having to adjust their compensation. Management also wants more joint-task accomplishment and better cooperation among employees. A(n) ________ compensation system will reinforce all these goals.

egalitarian

Garden of the Gods' (GOTG) employees are compensated according to their organizational level, with upper-level managers receiving more compensation than lower-level managers. GOTG uses a(n) ________ pay system.

elitist

If management wants the compensation system to reinforce a traditional organizational structure and stability within the company, a(n) ________ compensation system is the best choice.

elitist

Firms that use nonmonetary rewards are most likely trying to:

emphasize customer service and loyalty.

The distributive justice model is based on the idea that:

employees make input/output comparisons to their co-workers.

In order for a compensation system to work well, it must:

enable the firm to achieve its objectives.

Job-based compensation plans focus on the key component of:

equity

When setting up a job-based pay plan, it is most likely important for a firm to:

establish a way for employees to improve pay without moving into management.

Cornilia and Janice have similar jobs at different firms. Janice is compensated with higher pay and better benefits than Cornilia, which bothers Cornilia. Cornilia's concern reflects the compensation issue of:

external equity

The perceived fairness of what an employer pays, relative to what other employers pay for the same type of labor, is known as:

external equity

Karen, president of a small restaurant chain, would like to centralize compensation decisions. She asks you about the pitfalls of such a move, and you should most likely respond that:

external equity is difficult to maintain.

Base compensation refers to

fixed pay received on a regular basis.

An individual-centered compensation system:

focuses on employees' contribution and increases compensation based on the employee's ability to perform more duties successfully

The practice of secret pay in a compensation system generally leads to:

greater pay dissatisfaction among employees.

Indirect compensation in a pay mix typically includes:

health insurance and vacation time

In order to tie job evaluation data and external wage/salary data together, a company needs to:

identify benchmark jobs.

Job descriptions

identify, define, and describe each job in terms of its duties, responsibilities, and working conditions.

Above-market compensation policies are more likely to:

improve employee morale and reduce employee turnover.

The practice of openness in a compensation system generally leads to:

increased fairness in managerial pay decisions.

Skill-based pay plans pose some risks to the organization, such as:

increasing employees' frustration when they hit the top of the pay structure.

Balancing equity is most likely difficult because:

internal and external equity often oppose one another.

When implementing a job-based compensation plan, it is best that a company:

involve employees

Job-based compensation

is less appropriate at higher levels in a firm

An exempt employee:

is not covered by the Fair Labor Standards Act

A compensation system that assumes that the tasks being performed and the contribution of those tasks to the company are the best criteria for setting the wage is a(n) ________-centered compensation system.

job

The head of HR has asked you to gather information about the tasks, duties, and responsibilities of specific jobs. He has most likely asked you to perform a(n):

job analysis

A job hierarchy in a compensation plan is primarily built on:

job specifications, descriptions, and ratings

The Hay Guide Chart Profile Method of weighing compensable factors in a job is best used when establishing a:

job-based compensation system

The line, "Grade 2, Clerk-Typist, $12.35 hr.," is most likely from a:

job-based pay structure.

A compensation system that assumes that employees should be compensated based upon their abilities, potential, and flexibility to perform multiple tasks is a(n) ________ compensation system

knowledge-based

In the opening case in chapter 10, an experienced computer programmer complains that the starting salary for new hires at Sigma, Inc. is 15% more than his current salary. Dr. Smith's answer reveals that Sigma's compensation system is built on a(n) ________ compensation model.

labor market

Companies that pay employees at rates above the market are generally

larger companies in less competitive industries.

An important tool for companies seeking to maintain external equity is the use of:

market survey data.

In the opening case in chapter 10, a secretary complains that janitors make more money than she does. Her complaints and Dr. Smith's response show that Sigma's compensation system:

may lack internal equity.

An emphasis on monetary rewards will generally reward a company with:

more achievement and responsibility among employees.

An emphasis on external equity is most important for

newer, smaller firms in quickly changing markets.

A membership-contingent compensation system pays employees:

on the basis of the value of the job they perform

According to your text, as employees' base pay increases, their:

overall compensation is more subject to risk.

Bobcat International pays a range of salaries for retail workers. Employees can be paid anywhere from $5.50/hr to $8.50/hr. This range of pay is called a:

pay grade scale

When a work force is highly unionized:

pay is typically subject to negotiation and bargaining requirements.

Rose works for a home interiors company. She hostesses several parties a week and sells various kinds of home decorations. She receives a commission on all that she sells. Rose receives:

performance-contingent compensation

Michele is determining the value of different jobs in a medium-sized contracting company. She is most likely

performing job analysis.

Variable compensation takes a variety of forms, including:

profit sharing

Once job specifications and descriptions are created, the next step in developing a compensation system is:

rating the worth of jobs.

You are trying to convince the management of Marcelle, Inc. to pay its employees the "going rate", no more, no less. You are trying to

reach external equity.

Advocates of skill-based pay argue that it:

reduces absenteeism

In building a job-based compensation plan, the job evaluation process is designed to assess the:

relative contribution of different jobs to the organization

As the HR director, you are reviewing the comparability of pay of each employee within a range for particular jobs. You are:

reviewing individual equity.

You have just been hired at Corpus Entertainment, Inc. (CEI) and as part of your contract, you sign an oath that you will not divulge information about your compensation to your co-workers or any other employee of CEI. You realize that the company has a(n) ________ pay policy.

secret

The Equal Pay Act prohibits compensation discrimination between men and women doing substantially the same job, except when:

seniority or productivity are the basis for the differential

Kora is reviewing her company's pay structure and sees, "Grade 3, Able to work independently and use WordPerfect software, $14.57 hr." Kora is most likely reviewing a:

skill-based pay structure.

Companies using performance-based compensation systems tend to be:

smaller, rapidly growing companies that face strong competitive pressures.

Perquisites, also called "perks" are best described as:

special benefits reserved for upper-level managers.

Job-based compensation systems have a number of disadvantages or drawbacks, such as being:

subjective and arbitrary.

Both the MAA and the Hay Guide Chart Profile Method share:

the use of a scale of numbers and degrees

A company using a labor market model holds the philosophy that:

the wage rate for any given job is set at the point where the supply of labor equals the demand for that labor in the marketplace

When management is discussing whether to lead, lag, or pay the "going rate" for a job, they are deciding

their company's pay policy.

A performance-contingent compensation system bases pay upon

units produced

Elitist compensation systems are most likely:

used by older firms with mature products

Companies that emphasize monetary rewards are primarily associated with:

volatile markets

Variable compensation systems work best:

with smaller, less well-established firms with younger employees.

When conducting a job evaluation, it is most important to remind employees that:

your focus is on the value of the tasks, not their individual performances