MGT 3306 Chapter 8

A common first step in interpreting survey data is to _____. check for the accuracy of job matches seek out non-responders check for anomalies remove the top- and bottom-paying companies

check for the accuracy of job matches

A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour. Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour. The company is using the _____ method of job matching. benchmark-job low-high survey leveling benchmark conversion

low-high

For organizations using a skill-competency-based pay system or generic job descriptions, the best approach for pricing jobs is _____. benchmark-job approach low-high approach survey leveling benchmark conversion

low-high approach

The _____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment. job structure broad banding reference rate market pricing

market pricing

The _____ minimizes the distortion of the central tendency caused by outliers. weighted mean mean mode median

median

In most organizations, the responsibility for managing a pay survey lies with _____. top management the facility or plant manager outside consultants the compensation manager

the compensation manager

In the regression equation, y = a + bx, job evaluation points are denoted by _____. a b x y

x

Pay ranges for office and production work commonly range between _____ and _____ percent. 5; 15 15; 30 30; 40 40; 60

5; 15

Which of the following is often used to set pay ranges? Median Weighted mean Quartiles and percentiles Standard deviation

Quartiles and percentiles

Which of the following jobs would most likely fall into a fuzzy market? The position of English professor that was filled by a Ph.D. holder in English Language and Literature with five years of teaching experience The position of Sound Engineer that was filled by a graduate with a degree in audio engineering The position of Senior Director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience The position of Vice-President of a marketing firm that was filled by a marketing manager with 15 years of experience in the marketing field

The position of Senior Director of Future Vision Services that was filed by a software engineer with e-commerce, marketing, and theater experience

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

They assume that little value is added through internal alignment

Which of the following statements is true regarding broad bands? They remove limits on total salary budgets. They support recognition via titles or career progression. They foster cross-functional growth. They increase the hierarchical nature of organizations.

They foster cross-functional growth

_____ measures reveal competitors' use of performance-based cash payments. Base cash pay Short-term incentive pay Total cash Long-term incentive pay

Total cash

The final major decision in pay-level determination is to _____. interpret and apply the results of the survey obtain top-management acceptance of the final decisions design grades and ranges or bands draw policy lines

design pay grades and ranges or bands

Mark and Steve work as crane operators in a construction company called Asai Corp. Asai uses a skill-based plan that establishes single flat rates for each skill level. Mark performs better than Steve even though Steve has more seniority. Which of the following statements is most likely to be true in this scenario? Mark will be paid more than Steve as his performance is higher. Steve will be paid more than Mark as he has more seniority. Both Mark and Steve will be paid the same amount. Steve will be given more incentives than Mark.

Both Mark and Steve will be paid the same amount

The _____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data. Chamber of Commerce Bureau of Labor Statistics Compensation Association Department of Economics

Bureau of Labor Statistics

The second major decision in pay-level determination is to _____. specify relevant markets define the purpose of a survey design and conduct a survey select product and labor market competitors

Define the purpose of the survey

Gramhold Inc., a pharmaceutical company, reduces its 10 salary grades to just three broad bands. Which of the following statements is most likely to be true in this case? Gramhold will face difficulty in defining job responsibilities broadly with the new structure. Gramhold will find that the new structure hinders cross-functional growth. Gramhold will experience career moves within bands more than career moves between bands. Gramhold will offer recognition via titles rather than through cross-functional experience and lateral progression.

Gramhold will experience career moves within bands more than career moves between bands

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

It allows comparison of changes in its average costs to an all-industry average

Which of the following is an example of a company that uses broad banding? A company in which there is more lateral movement with no pay adjustment than promotions A company that has pay guidelines and controls designed right into the pay system A company that has unlimited total salary budget A company that pays all its employees the same salary

a company in which there is more lateral movement with no pay adjustment than promotions

All of the following are examples of potential anomalies EXCEPT _____. outliers a large variation in base pay for a job at one company one company dominating the results a large variation in average base pay for a job across companies

a large variation in average base pay for a job across companies

Because employers are raising employee pay at various times during the year, survey data must be updated using a process called _____ or _____. aging; trending leading; smoothing matching; leveling gaining; smoothing

aging; trending

Aging the market data to a point halfway through a plan year is called _____. leveling updating lead/lag matching

lead/lag

A market pay line _____. reflects an organization's pay scale based on the ratings given by its employees links a company's benchmark jobs with market rates paid by competitors provides an accurate prediction of an organization's entry level pay rates compares an organization's minimum and maxi mum pay rates for each skill level

links a company's benchmark jobs with market rates paid by competitors

A survey conducted in January 2013 found that the median pay effective January 1, 2013, for a clerk was $22,000 and that the forecast rate of wage increases in the market for 2013 was 5 percent and another 5 percent for 2014. An employer choosing to follow a lead strategy of 4 percent above the market for the plan year will need to _____. multiply the salary by 105 percent and then by 109 percent increase the clerk salary by $2,200 multiply the salary by 109 percent multiply the salary by 114 percent

multiply the salary by 105 percent then by 109 percent

Pay ranges: are flexible enough to deal with differences in quality but not with the productivity or value of these quality variations. usually lead to an increase in employee turnover. reflect the differences in performance or experience that an employer wishes to recognize with pay. cause employees to believe that their compensation cannot increase in the same job.

reflect the differences in performance or experience that an employer wishes to recognize with pay

The first step in setting competitive pay and designing a pay structure is to _____. specify a pay-level policy conduct a job evaluation draw policy lines specify the relevant market

specify a pay-level policy

Which of the following statistical measures shows how similar or dissimilar the market rates are from each other? Weighted mean Mean Standard deviation Median

standard deviation

Size of pay differentials between grades should _____. be based upon differentials in market surveys be approximately 15 percent support career movement through the pay structure be between 10 and 25 percent

support career movement through the pay structure

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 _____. updating point factor adjustment lead/lag policy adjustment survey leveling

survey leveling