MGT 461 Exam 2

Most factor scales have _____ degrees.

4-8

TreeWind 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 subfactors with their corresponding weights, and if the skill factor has two subfactors 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.

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

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.

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. Which of the following is NOT one of them?

Team dynamics

If Company A raises its pay rate by one dollar per hour to hire additional workers and competitors immediately match the increase, what will be the most likely result?

The labor costs for Company A will increase, but it will be unable to hire additional workers.

_____ 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.

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

The process of identifying competencies in person-based structures resembles identifying _____ as part of job evaluation in job-based structures.

compensable factors

Skill-based plans tend to work best in organizations using a(n) _____ strategy.

cost-cutter

_____ puts a lid on the maximum pay level an employer can set.

The product market

_____ 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.

_____ measures reveal competitors' use of performance-based cash payments.

Total cash

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 increase

_____ 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

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 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 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.

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 exchange value of a job is its _____.

external market value

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

Managers whose employers use _____ plans focus on placing the right people in the right job.

job-based

The pay policy that is most closely associated with the decreased ability to attract employees is a(n) _____ policy.

lag

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.

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 most common pay policy is a(n) _____.

match policy

The _____ minimizes the distortion of the central tendency caused by outliers.

median

A study of graduating college students found they sought jobs with all of the following pay characteristics EXCEPT _____.

variable pay

Research shows that _____ factor(s) account(s) for 98 to 99 percent of the variance in job evaluation plans.

three

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

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

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

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 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 job description is compared to class descriptions in the _____ of job evaluation.

classification method

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 _____ method of job evaluation is the most commonly used method in the United States and Europe.

point

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.

Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.

productivity

All of the following are advantages of the ranking method of job evaluation EXCEPT that:

rankings are easy to defend and justify.

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