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Q:
What is the most common type of pay for performance used by firms?
A) Perks
B) Bonuses
C) Stock options
D) Nonmonetary rewards
Q:
It is most likely true that the use of pay-for-performance systems is:
A) increasing rapidly around the world.
B) declining due to implementation problems.
C) failing to motivate employees as employers had expected.
D) increasing slowly among small businesses in the high-tech industry.
Q:
What is comparable worth? What role does job evaluation play in arguments for and against comparable worth?
Q:
What is the impact of the Fair Labor Standards Act and the Equal Pay Act on employee compensation?
Q:
The code of tax laws that affects how much of their earnings employees can keep and how benefits are treated for tax purposes, is called the ________.
Q:
________ is a pay concept or doctrine that calls for comparable pay for jobs that require comparable skills, effort, and responsibility and have comparable working conditions, even if the job content is different.
Q:
An employee who is covered by the provisions of the FLSA is referred to as a(n) ________.
Q:
Most professional, administrative, executive, and outside sales jobs fall into the category of ________.
Q:
The ________ is the fundamental compensation law in the United States that requires employers to record earnings and hours worked by all covered employees, and to report this information to the U.S. Department of Labor.
Q:
The Internal Revenue Code affects how benefits are treated for tax purposes.
Q:
While the Fair Labor Standards Act dictates that employers pay workers overtime for each hour they work over 40 hours in a week, it does not dictate the rate they must be paid. Employers may pay anywhere from 1/2 to 2 times their regular wage.
Q:
Some companies, in order to dodge costs related to the Fair Labor Standards Act, will claim more exempt employees than nonexempt employees.
Q:
The Equal Pay Act prohibits compensation discrimination between men and women doing substantially the same job, EXCEPT when:
A) the pay differential is due to gender.
B) the titles of the jobs in question are different.
C) there is no apparent disparate impact from the practice.
D) the base pay for the job is minimum wage.
E) seniority or productivity are the basis for the differential.
Q:
An exempt employee:
A) works as a temporary employee.
B) is more costly to a firm than a nonexempt employee.
C) is not covered by the Fair Labor Standards Act.
D) works part time rather than full time.
Q:
Which of the following is an example of a non-exempt employee?
A) A manager
B) A salesperson
C) An HRM professional
D) An hourly employee on the production line
Q:
Which of the following affects most pay structures in the United States?
A) Executive Order 11246
B) Fair Labor Standards Act
C) Civil Rights Act of 1991
D) Equal Pay Act
Q:
The process of achieving internal equity involves six steps. Enumerate and explain this process.
Q:
The practice of replacing narrowly defined job descriptions with broader categories or related jobs is referred to as ________.
Q:
A job that is similar or comparable in content across firms is called a(n) ________.
Q:
A listing of jobs in order of their importance to the organization, from highest to lowest, is referred to as a(n) ________.
Q:
________ are work-related criteria that an organization considers most important in assessing the relative value of different jobs.
Q:
In skill-based compensation plans, employees acquire depth skills when they learn self-management abilities, such as scheduling and organizing.
Q:
Job banding entails replacing narrowly defined job descriptions with broad categories of related jobs.
Q:
Job-based compensation plans place strong consideration on the nature of the business.
Q:
In order to achieve external equity, a company must first benchmark key jobs.
Q:
A job hierarchy lists jobs in order of their importance to an organization.
Q:
Compensable factors are concrete terms relating to the necessary education, skill, and work experience for compensation at a particular level.
Q:
The first step in achieving pay equity for job-based compensation plans is conducting a job analysis.
Q:
Skill-based pay assumes that workers should be paid according to how flexible or capable they are at performing multiple tasks.
Q:
Additional Case 10.2
O'Donnell International is updating its job-based compensation system with a primary goal of achieving internal equity. Sean is responsible for gathering and organizing information concerning the tasks and duties of specific jobs. Susie is to determine the prerequisites for the successful accomplishment of each job analyzed. Jeff will work with three line managers to determine the compensable factors for specific lower-level jobs. The HR director, the president, and two VPs will review the information on management jobs in order to determine the compensable factors in each before putting all jobs at the firm into a job hierarchy.
Refer to Additional Case 10.2. Which of the following, if true, best supports the use of market data rather than internal job evaluations to determine the value of jobs at O'Donnell?
A) Turnover at O'Donnell is relatively low.
B) Most jobs at O'Donnell are typical for the industry.
C) The organizational structure at O'Donnell is flat.
D) Most lower-level positions at O'Donnell are exempt.
Q:
Additional Case 10.2
O'Donnell International is updating its job-based compensation system with a primary goal of achieving internal equity. Sean is responsible for gathering and organizing information concerning the tasks and duties of specific jobs. Susie is to determine the prerequisites for the successful accomplishment of each job analyzed. Jeff will work with three line managers to determine the compensable factors for specific lower-level jobs. The HR director, the president, and two VPs will review the information on management jobs in order to determine the compensable factors in each before putting all jobs at the firm into a job hierarchy.
Refer to Additional Case 10.2. Which of the following would be most appropriate for Jeff to use?
A) MAA
B) Hay Guide
C) Ranking system
D) Classification system
Q:
Additional Case 10.2
O'Donnell International is updating its job-based compensation system with a primary goal of achieving internal equity. Sean is responsible for gathering and organizing information concerning the tasks and duties of specific jobs. Susie is to determine the prerequisites for the successful accomplishment of each job analyzed. Jeff will work with three line managers to determine the compensable factors for specific lower-level jobs. The HR director, the president, and two VPs will review the information on management jobs in order to determine the compensable factors in each before putting all jobs at the firm into a job hierarchy.
Refer to Additional Case 10.2. For Jeff to accomplish his task, he most likely needs to:
A) conduct the job evaluations.
B) write the job descriptions.
C) rate the worth of the jobs.
D) create a job hierarchy.
Q:
Additional Case 10.2
O'Donnell International is updating its job-based compensation system with a primary goal of achieving internal equity. Sean is responsible for gathering and organizing information concerning the tasks and duties of specific jobs. Susie is to determine the prerequisites for the successful accomplishment of each job analyzed. Jeff will work with three line managers to determine the compensable factors for specific lower-level jobs. The HR director, the president, and two VPs will review the information on management jobs in order to determine the compensable factors in each before putting all jobs at the firm into a job hierarchy.
Refer to Additional Case 10.2. Susie's responsibility most likely relates to:
A) conducting the job evaluations.
B) writing the job descriptions.
C) identifying job specification components.
D) rating the worth of the jobs.
Q:
Additional Case 10.2
O'Donnell International is updating its job-based compensation system with a primary goal of achieving internal equity. Sean is responsible for gathering and organizing information concerning the tasks and duties of specific jobs. Susie is to determine the prerequisites for the successful accomplishment of each job analyzed. Jeff will work with three line managers to determine the compensable factors for specific lower-level jobs. The HR director, the president, and two VPs will review the information on management jobs in order to determine the compensable factors in each before putting all jobs at the firm into a job hierarchy.
Refer to Additional Case 10.2. Which of the following methods would Sean LEAST likely use?
A) Interviewing employees
B) Using a point factor system
C) Analyzing equipment costs
D) Distributing questionnaires to managers
Q:
Additional Case 10.2
O'Donnell International is updating its job-based compensation system with a primary goal of achieving internal equity. Sean is responsible for gathering and organizing information concerning the tasks and duties of specific jobs. Susie is to determine the prerequisites for the successful accomplishment of each job analyzed. Jeff will work with three line managers to determine the compensable factors for specific lower-level jobs. The HR director, the president, and two VPs will review the information on management jobs in order to determine the compensable factors in each before putting all jobs at the firm into a job hierarchy.
Refer to Additional Case 10.2. What is the best way to address O'Donnell's key concern?
A) Conducting a market survey
B) Referring to the Hay system
C) Conducting a job evaluation
D) Initiating a TQM program
Q:
According to surveys, which of the following is most likely true about family businesses?
A) Family employees earn twice as much in base salary at family-owned businesses than they would at businesses not owned by family members.
B) Family employees would earn more compensation at similar positions in businesses not owned by family members.
C) Owners of family businesses have total compensation packages less than those paid to nonowner presidents.
D) Contributions of family member employees outweigh personal needs when determining compensation.
Q:
Which of the following is the most common compensation practice among small firms?
A) Paying below-market rates to technical workers
B) Offering stock options instead of base salaries
C) Paying bonuses based on company performance
D) Offering sign-on bonuses to attractive recruits
Q:
Skill-based pay plans pose some risks to the organization, such as:
A) increasing employees' frustration when they hit the top of the pay structure.
B) being more subjective and arbitrary than job-based pay plans.
C) leading to bias against women and minorities.
D) not considering the nature of the business.
Q:
A skill-based approach to compensation is built on which of the following characteristics?
A) Workers are paid for performing well-defined jobs using vertical skills.
B) The greater the variety of job-related skills a worker possesses, the more he/she should be paid.
C) Each job must be very clearly described with highly defined tasks and skill requirements.
D) The primary objective is to allocate pay so that the most important jobs command the highest pay.
Q:
When setting up a job-based pay plan, it is most likely important for a firm to:
A) have a relatively flat management hierarchy.
B) use an external consulting firm to ensure objectivity.
C) differentiate among depth, horizontal, and vertical skills.
D) establish a way for employees to improve pay without moving into management.
Q:
When implementing a job-based compensation plan, it is best that a company:
A) focus on tactical, immediate issues.
B) narrow each job's pay range.
C) avoid job banding.
D) involve employees.
Q:
Job-based compensation plans have the advantage of:
A) being objective, data-based systems.
B) having a bureaucratic and definitive structure.
C) appearing rational and systematic, thereby minimizing employee complaints.
D) focusing on the three most important compensable factors, depth, breadth, and vertical skills.
Q:
Job-based compensation:
A) is less appropriate at higher levels in a firm.
B) is the most objective of all compensation systems.
C) is less bureaucratic and inflexible than other systems.
D) has less bias toward women than skill-based compensation systems.
Q:
Job-based compensation systems have a number of disadvantages or drawbacks, such as being:
A) difficult to administrate.
B) subjective and arbitrary.
C) too flexible for managers.
D) biased against managerial jobs.
Q:
As the HR director, you are reviewing the comparability of pay of each employee within a range for particular jobs. You are:
A) applying market survey data.
B) rating individual jobs.
C) reviewing individual equity.
D) conducting a job analysis.
E) assessing internal equity.
Q:
When management is discussing whether to lead, lag, or pay the "going rate" for a job, they are deciding:
A) whether to be egalitarian or elitist.
B) if they want to have an open or secret compensation system.
C) how to balance internal equity.
D) their company's pay policy.
Q:
In order to tie job evaluation data and external wage/salary data together, a company needs to:
A) establish a job hierarchy.
B) have an open compensation system.
C) identify benchmark jobs.
D) use a skill-based compensation system.
Q:
An important tool for companies seeking to maintain external equity is the use of:
A) job analysis.
B) job hierarchies.
C) Hay rating scales.
D) market survey data.
Q:
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.
A) ranking
B) factor comparison
C) classification
D) policy capturing
Q:
When conducting a job evaluation, it is most important to remind employees that:
A) your focus is on the value of the tasks, not their individual performances.
B) you are looking at their individual performance in specific jobs.
C) external data is needed to establish the job's position in the job hierarchy.
D) knowledge and skill are equally important in your assessment.
Q:
A job hierarchy in a compensation plan is primarily built on:
A) job specifications, descriptions, and ratings.
B) job classifications by pay grade.
C) corporate pay policies.
D) market surveys.
Q:
Both the MAA and the Hay Guide Chart Profile Method share:
A) the same compensable factors.
B) the use of a scale of numbers and degrees.
C) an emphasis on experience over other factors.
D) the same job hierarchy.
Q:
The MAA gives the highest possible points to which compensable factor?
A) Problem solving
B) Accountability
C) Experience
D) Skill
Q:
The Hay Guide Chart Profile Method of weighing compensable factors in a job is best used when establishing a:
A) skill-based compensation system.
B) job-based compensation system.
C) performance-centered compensation system.
D) variable pay compensation system.
Q:
Carlos is reviewing the knowledge, problem-solving skills, and accountability for a particular job. He is most likely reviewing:
A) job specifications.
B) compensable factors.
C) working conditions.
D) performance benchmarks.
Q:
Once job specifications and descriptions are created, the next step in developing a compensation system is:
A) conducting a job analysis.
B) creating a job hierarchy.
C) rating the worth of jobs.
D) assigning individual pay.
Q:
Job descriptions:
A) require the rating of each position described.
B) list all the compensable factors of a particular job.
C) consist of worker characteristics necessary for successful performance.
D) identify, define, and describe each job in terms of its duties, responsibilities, and working conditions.
Q:
Job specifications:
A) require the rating of each position described.
B) list all the compensable factors of a particular job.
C) consist of worker characteristics necessary for successful performance.
D) identify, define, and describe each job in terms of its duties, responsibilities, and working conditions.
Q:
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):
A) job evaluation.
B) job analysis.
C) equity analysis.
D) comparable worth assessment.
Q:
Michele is determining the value of different jobs in a medium-sized contracting company. She is most likely:
A) performing job analysis.
B) conducting a job evaluation.
C) trying to achieve internal equity.
D) determining job specifications.
Q:
The design of job-based compensation pay plans begins with:
A) writing job descriptions.
B) creating a job hierarchy.
C) conducting a job analysis.
D) writing job specifications.
Q:
In building a job-based compensation plan, the job evaluation process is designed to assess the:
A) relative contribution of different jobs to the organization.
B) relative value or contribution of individual employees to the organization.
C) external equity of the system.
D) specific tasks and duties required of the jobs in the plan.
Q:
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:
A) job-based pay structure.
B) skill-based pay structure.
C) decentralized pay system.
D) knowledge-based pay system.
Q:
The line, "Grade 2, Clerk-Typist, $12.35 hr.," is most likely from a:
A) job-based pay structure.
B) skill-based pay structure.
C) decentralized pay system.
D) knowledge-based pay system.
Q:
Job-based compensation plans focus on the key component of:
A) openness.
B) equity.
C) motivation.
D) job knowledge.
Q:
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:
A) pay grade scale.
B) pay range.
C) payroll span.
D) pay area.
Q:
Describe the reasons a company would choose below-market or above-market compensation policy and the advantages and disadvantages of open versus secret pay policies.
Q:
A(n) ________ is a pay plan in which different compensation systems are established for employees or groups at different organizational levels.
Q:
A pay plan in which most employees are part of the same compensation system is referred to as a(n) ________.
Q:
In a company where pay decisions are decentralized, the managers of each unit often have the responsibility of determining compensation for employees.
Q:
Open pay policies tend to lead to greater dissatisfaction among employees as employees compare compensation with each other.
Q:
Organizations that emphasize nonmonetary rewards are often trying to encourage and reinforce individual achievement and responsibility among employees.
Q:
Most Americans feel that pay is the most important consideration in accepting or staying at a job.
Q:
Below-market compensation is more prevalent at larger companies in less competitive industries.
Q:
An egalitarian pay system strives to place most of their employees under the same compensation plan, while elitist pay systems establish different compensation plans based on employees' organizational level.
Q:
Azzi recently went through company training on using a new computer system, and she has recently received her Associates of Arts degree in Accounting. Her company is raising her salary in response to her new abilities and is giving her new, related responsibilities. The company probably uses a job-based pay system.
Q:
A job-based pay system works best where jobs don't change often, when a great deal of training is required to learn a job, and when employees expect to move up through the system over time.
Q:
Additional Case 10.1
Brighton Manufacturing is reviewing its compensation system. The CEO wants employees to be paid wages and benefits comparable to Brighton's competitors. He wants a system that allows for maximum flexibility in reassigning workers to different jobs without requiring compensation adjustments each time. The Finance VP suggests that the company link compensation costs more closely to productivity and profit. When profits are down, compensation costs should be reduced as well. The Finance VP also believes that employees should be paid for what they produce, not for their time, and the compensation program should apply to all employees equally. The VP of HR suggests that the key to the company's success is their employees and advocates an individual-based compensation plan. People should be paid for their skills or knowledge, not just because they are fulfilling certain jobs. The VP of HR also feels that it would be simpler to implement a compensation system by level rather than by job.
Refer to Additional Case 10.1. Brighton executives have decided to implement a decentralized pay system. Which of the following, if true, best supports this decision?
A) Brighton is a large, diverse firm that has never faced legal challenges regarding compensation.
B) The Brighton CEO wants pay decisions to be made at the firm's headquarters.
C) Brighton's unit managers have never received compensation training.
D) A large percentage of Brighton's staff is non-exempt.
Q:
Additional Case 10.1
Brighton Manufacturing is reviewing its compensation system. The CEO wants employees to be paid wages and benefits comparable to Brighton's competitors. He wants a system that allows for maximum flexibility in reassigning workers to different jobs without requiring compensation adjustments each time. The Finance VP suggests that the company link compensation costs more closely to productivity and profit. When profits are down, compensation costs should be reduced as well. The Finance VP also believes that employees should be paid for what they produce, not for their time, and the compensation program should apply to all employees equally. The VP of HR suggests that the key to the company's success is their employees and advocates an individual-based compensation plan. People should be paid for their skills or knowledge, not just because they are fulfilling certain jobs. The VP of HR also feels that it would be simpler to implement a compensation system by level rather than by job.
Refer to Additional Case 10.1. The CEO, VP of HRM, and VP of Finance would most likely agree on a(n):
A) elitist pay system.
B) egalitarian pay system.
C) below-market pay system.
D) individual-centered pay system.
Q:
Additional Case 10.1
Brighton Manufacturing is reviewing its compensation system. The CEO wants employees to be paid wages and benefits comparable to Brighton's competitors. He wants a system that allows for maximum flexibility in reassigning workers to different jobs without requiring compensation adjustments each time. The Finance VP suggests that the company link compensation costs more closely to productivity and profit. When profits are down, compensation costs should be reduced as well. The Finance VP also believes that employees should be paid for what they produce, not for their time, and the compensation program should apply to all employees equally. The VP of HR suggests that the key to the company's success is their employees and advocates an individual-based compensation plan. People should be paid for their skills or knowledge, not just because they are fulfilling certain jobs. The VP of HR also feels that it would be simpler to implement a compensation system by level rather than by job.
Refer to Additional Case 10.1. Which of the following, if true, best supports the compensation plan advocated by the VP of HR?
A) Turnover at Brighton is relatively low.
B) Most jobs at Brighton require significant employee training.
C) The technology used at Brighton changes frequently.
D) Employees at Brighton rarely need to cover for each other.