MGT 461 Exam 2
Most studies report that when different people rank-order jobs, the correlations are between:
.85 and .96
Most factor scales have _____ degrees.
4-8
Tree Wind Inc. is a bookstore that uses skill and responsibility as its compensable factors. It assigns 20 percent weight to responsibility and 80 percent weight to skill. If the responsibility factor scores a 60 after multiplying the sub factors with their corresponding weights, and if the skill factor has two sub factors that are rated as 4 and 5, what is the total weightage given to the job?
420
Which of the following is the underlying assumption in the assessment of job content?
Content has intrinsic value outside external market.
Skill-based plans tend to work best in organizations using a(n) _____ strategy.
Cost-cutter
Which of the following is true regarding the Employment Cost Index (ECI)?
It allows comparison of changes in its average costs to an all-industry average.
Which of the following is a disadvantage of the point method?
It can become bureaucratic and rule-bound
In the context of internal alignment, which of the following is the correct sequence?
Job description > Job evaluation > Job structure
_____ is the process of systematically determining the relative worth of jobs for the purpose of creating an organization's job structure.
Job evaluation
A _____ approach controls costs by paying only as much as the work performed is worth, regardless of any greater skills the employee may possess.
Job-based
Managers whose employers use _____ plans focus on placing the right people in the right job.
Job-based
_____ approach controls costs by paying only as much as the work performed is worth, regardless of any greater skills the employee may possess.
Job-based
Lisa is a manager at Trell Inc. When she hires her employees, she focuses on finding the right job for the right person. Which of the following pay plans is her employer most likely using?
Job-based pay plan
In which of the following conditions would product market competitors' data be given more weight than data from labor market competitors?
Product demand is responsive to price changes.
Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.
Productivity
Which of the following is often used to set pay ranges?
Quartiles and percentiles
Kay Den Corp., a small organization with 15 employees, conducts job evaluation using the least expensive method for the first time. In this case, Kay Den is most likely to have used the _____.
Ranking method
Which of the following statistical measures shows how similar or dissimilar the market rates are from each other?
Standard deviation
Which of the following is NOT true of the relationship between employer size and its ability to pay?
Talented individuals have a lower marginal value in a larger organization.
The scheme used in the text for classifying competencies consists of three groups. 27. Which of the following is NOT one of them?
Team dynamics
The scheme used in the text for classifying competencies consists of three groups. Which of the following is NOT one of them?
Team dynamics
____ is a crucial factor that affects the perception of fairness of a skill-based plan.
The design of the certification process
_____ is a crucial factor that affects the perception of fairness of a skill-based plan.
The design of the certification process
_____ is the additional output associated with the employment of one additional person, with other production factors held constant.
The marginal product of labor
Which of the following is NOT a characteristic of a benchmark job?
The pay level is the best in the industry.
In the context of the point method of job evaluation, _____ are those characteristics in the work that an organization values; that help it pursue its strategy and achieve its objectives.
compensable factors
The process of identifying competencies in person-based structures resembles identifying _____ as part of job evaluation in job-based structures.
compensable factors
Which of the following jobs would most likely fall into a fuzzy market?
The position of Senior Director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience
Which of the following is an example of the demand side of labor? Pay level offered by an employer _____ puts a lid on the maximum pay level an employer can set.
The product market
A small lawn care company has two mowers and four employees. If it hires another employee and the factors of production remain the same, how will the productivity of the fifth employee compare to that of the current four employees?
The productivity will reduce
_____ is an example of a bourse.
The total compensation for a top athlete
Which of the following is an advantage of skill-based pay plans?
They aid in deploying workers in a way that better matches the work flow.
Which of the following is most likely to be a disadvantage of skill-based pay plans?
They are expensive in the long run as the majority of employees become certified at the highest pay levels.
Which of the following statements is true about market pricers?
They assume that little value is added through internal alignment.
Which of the following statements is true regarding broad bands?
They foster cross-functional growth.
Which of the following is the reason why skill-based pay plans have maximum flexibility?
They pay employees for the highest level of skill they have achieved regardless of the work they perform.
Which of the following is NOT a reason a company might pay base wages above market?
To increase turnover rates
_____ measures reveal competitors' use of performance-based cash payments.
Total cash
Which of the following sentences regarding skill-based structure is FALSE?
Training costs are the lowest in comparison to all other pay plans.
Which of the following reasons makes competencies a risky foundation for a pay system?
Vagueness and subjectivity
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?
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.
Bureau of Labor Statistics
Who among the following is most likely to be working for a company that uses a competency-based pay plan?
Carlos, who focuses on obtaining certifications in her field to get a pay
Which of the following is least likely to be used in establishing skill-based certification methods?
College degree
_____ are more likely to conduct job evaluations of senior management jobs.
Compensation managers
_____ are the observable behaviors that indicate the level of competency.
Competency indicators
_____ translate each core competency into action
Competency sets
Druk Inc. is a consulting firm with 10 employees. Each new client generates $10,000 in revenue. If the company hires another employee who brings in five new clients and all other factors of production are constant, which of the following statements is true?
Druk needs to pay $50,000 as wage to the eleventh employee to break even.
Wages tend to be the lowest in which of the following industries?
Education and health care
Which of the following is a major decision in job evaluation?
Establishing the purpose of evaluation
The exchange value of a job is its _____.
External market value
Which of the following is an example of a bourse market?
Flatcake, a website that allows buyers to negotiate the prices with the sellers of handmade goods
The roots of job-based pay structures is traced to _____.
Frederick Taylor
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 experience career moves within bands more than career moves between bands.
The most widely used point method job evaluation is the:
Hay Plan
The _____ theory is the most influential in explaining pay-level differences.
Human capital
The second major decision in pay-level determination is to _____
define the purpose of a survey
The final major decision in pay-level determination is to _____.
design grades and ranges or bands
In the point method, the second step in designing a plan is to:
determine the compensable factors
Reliability of job evaluation techniques is measured by:
determining if different evaluators produce the same results.
Compensable factors, skill blocks, and competency sets are used for:
determining what to value.
The final step in designing a point plan involves _____.
developing online software support
A camper is an employee who _____ in a skill-based pay system.
does not want to rotate jobs
Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that:
employers seek to maximize profits.
Competencies are derived from the _____ beliefs about the organization and its strategic intent.
executive leadership's
The certification processes in skill-based pay is analogous to the _____ in a job-based analysis.
factor degrees and weights
All of the following are advantages of a lead pay-level policy EXCEPT _____.
higher turnover rates
Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the:
labor costs
The pay-level policy that is most likely to reduce pay dissatisfaction is a(n) _____.
lead policy
Aging the market data to a point halfway through a plan year is called _____.
lead/lag
A market pay line _____.
links a company's benchmark jobs with market rates paid by competitors
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.
low-high
For organizations using a skill-competency-based pay system or generic job descriptions, the best approach for pricing jobs is _____.
low-high approach
The majority of applications of skill-based pay have been in:
manufacturing industries.
In a hiring situation, considering that other potential costs will not change in the short run, the level of demand that maximizes profits is that level at which the _____ of the last hire is equal to the _____ for that hire.
marginal revenue; wage rate
A study of 400 compensation specialists revealed that:
market data had a substantially larger effect on pay decisions than job evaluation data.
According to a WorldatWork survey, the primary method of job evaluation is _____.
market pricing
The _____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment.
market pricing
The most common pay policy is a(n) _____.
match policy
The assumption of the upward sloping supply curve that offers of higher pay will increase supply will most likely NOT hold when _____.
unemployment is low
A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.
variable pay
The pay-mix policy alternative in which the percentage of benefits is likely to be the highest is known as _____.
work/life balance policy
A job description is compared to class descriptions in the _____ of job evaluation.
classification method
Routine work is also termed _____.
transactional work
Pay ranges for office and production work commonly range between _____ and _____ percent.
5; 15
Research shows that skills, one of the compensable factors, accounts for _____ percent or more of the variance in job evaluation results.
90
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
Which of the following is NOT true of the usage of multiple plans versus single job evaluation plans?
A single universal plan is acceptable to employees if the work covered is highly diverse.
Which of the following methods requires evaluators to agree on which jobs are the most and least valuable, then the next most and least valued, and so on until all the jobs have been ordered?
Alternation-ranking method
Who among the following is examining the validity of a job evaluation?
Keira, who is measuring the degree to which the job evaluation plan matches an agreed-upon pay structure for benchmark jobs
The pay policy that is most closely associated with the decreased ability to attract employees is a(n) _____ policy.
Lag
According to a World at Work survey, the primary method of job evaluation is _____.
Market pricing
The _____ minimizes the distortion of the central tendency caused by outliers.
Median
Which of the following is an example of a quoted-price market?
Nile, a website that allows sellers to sell their products for a fixed price
Leadership, customer orientation, and functional expertise are examples of which group of competencies?
Organization specific
_____ refers to the average of the array of rates inside an organization.
Pay level
Which of the following statements is true of pay level?
Pay level is directly proportional to labor costs.
Which of the following is an example of the demand side of labor?
Pay level offered by an employer
The _____ method of job evaluation is the most commonly used method in the United States and Europe.
Point
The _____ method of job evaluation uses compensable factors.
Point
In the regression equation, y = a + bx, job evaluation points are denoted by _____.
X
All of the following are examples of potential anomalies EXCEPT _____.
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
MXB Inc. is a carwash service provider. It orders the jobs in the company on the basis of the least important job to the most important job. In this case, MXB is most likely using a(n):
alternation-ranking method
Common characteristics of the point method include all of the following EXCEPT:
benchmark factor classes.
Employees in a multi-skill system earn pay increases:
by acquiring new knowledge
Employees in a multiskill system earn pay increases:
by acquiring new knowledge.
A common first step in interpreting survey data is to _____.
check for the accuracy of job matches
A major decision in job evaluation is to:
choose among alternative approaches.
The job evaluation method that most resembles a bookcase with many shelves is:
classification
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
The market pay rate is the:
point at which supply and demand lines cross
When a statistical process is used to duplicate an existing pay structure, it is called:
policy capturing
KayDen Corp., a small organization with 15 employees, conducts job evaluation using the least expensive method for the first time. In this case, KayDen is most likely to have used the _____.
ranking method
All of the following are advantages of the ranking method of job evaluation EXCEPT that:
rankings are easy to defend and justify.
Pay ranges:
reflect the differences in performance or experience that an employer wishes to recognize with pay.
Among pay-mix alternatives, the percentage of base pay is highest in _____.
security or commitment policy
The first step in setting competitive pay and designing a pay structure is to _____.
specify a pay-level policy
Size of pay differentials between grades should _____.
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 _____.
survey leveling
In today's organizations, in order to increase competitiveness and success, work is analyzed by separating transactional work from:
tacit work
All of the following are important factors in defining a market for compensation purposes EXCEPT:
the ability to pay
In most organizations, the responsibility for managing a pay survey lies with _____.
the compensation manager
