Deck 11: Establishing Strategic Pay Plans

Question 1

All of the following occupations are exempt from the overtime provisions stated in the Fair Labor Standards Act except .

A)teachers
B)management trainees
C)dentists
D)physicians
E)architects

Answer 1

B

Question 2

Which of the following factors affects the design of any pay plan?

A)company policy
B)legal
C)equity
D)union
E)all of the above

Answer 2

E

Question 3

The sets basic labor standards for employees working on any government contract that amounts to more than $10,000.

A)Civil Rights Act
B)Davis-Bacon Act
C)Walsh-Healey Public Contract
D)Fair Labor Standards Act
E)Fair Wages Act

Answer 3

C

Question 4

Which of the following is addressed by the Fair Labor Standards Act?

A)overtime pay
B)minimum wage
C)child labor
D)maximum hours
E)all of the above

Question 5

Which act provided for the creation of government -run employer-financed corporations to protect employees against the failure of their employer's pension plan?

A)Equal Pay Act
B)Employer Retirement Income Security Act
C)Fair Labor Standards Act
D)Civil Rights Act
E)Davis-Bacon Act

Question 6

Which compensation-related law contains minimum wage, maximum hours, overtime pay, equal pay, and child labor provisions?

A)Davis-Bacon Act
B)Fair Labor Standards Act
C)Walsh-Healey Public Contract
D)Fair Wages Act
E)Civil Rights Act

Question 7

The Fair Labor Standards Act covers workers employed in .

A)service industries
B)manufacturing
C)agriculture
D)retailing
E)all of the above

Question 8

Whether or not a position is exempt from provisions including overtime pay in the Fair Labor Standards Act depends upon the associated with the job.

A)job responsibilities
B)job duties
C)salary
D)employee experience
E)A, B, and C

Question 9

The states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work.

A)Davis-Bacon Act
B)Employer Retirement Income Security Act
C)Equal Pay Act
D)Civil Rights Act
E)American Disabilities Act

Question 10

refers to all forms of pay or rewards going to employees and arising from their employment.

A)Reimbursement
B)Remuneration
C)Benefits
D)Employee compensation
E)Salary

Question 11

Which of the following is categorized as an indirect payment portion of employee compensation?

A)salaries
B)wages
C)employer-paid insurance
D)bonuses
E)commissions

Question 12

John is a sales representative in a jewelry store. He typically works 40 hours per week and his pay is completely based on his sales. He earns a commission on every sale he makes. John's pay is based on .

A)incentives
B)bonuses
C)time
D)sales performance
E)seniority

Question 13

Jill works as a cashier at a grocery store. She earns $8 an hour (or $320 for a 40 -hour week). Last week, she worked 44 hours. What did she earn last week?

A)$336
B)$392
C)$368
D)$344
E)$320

Question 14

Jack worked 6 hours of overtime this week but has decided to take time off instead of overtime pay. How many hours will Jack get off?

A)6 hours
B)18 hours
C)12 hours
D)3 hours
E)9 hours

Question 15

Which law makes it illegal to discriminate against any individual with respect to compensation because of race, color, religion, sex, or national origin?

A)Equal Pay Act
B)Fair Labor Standards Act
C)Civil Rights Act
D)Davis-Bacon Act
E)Employer Retirement Income Security Act

Question 16

Under which condition below is it acceptable for employees of the opposite sex to receive different pay for doing roughly equivalent work?

A)when the difference exists despite equal efforts
B)when the difference exists because of a merit system
C)when the difference exists despite equal skills
D)when the difference exists despite similar responsibility
E)it is never acceptable

Question 17

Which law allows the secretary of labor to set wage rates for laborers and mechanics employed by contractors working for the federal government?

A)Davis-Bacon Act
B)Walsh-Healey Public Contract
C)Fair Wages Act
D)Fair Labor Standards Act
E)Civil Rights Act

Question 18

According to the Fair Labor Standards Act, if a worker covered by the act works more than 40 hours, he or she will receive overtime pay at a rate of of normal pay for any hours worked over 40 in a workweek.

A)50%
B)100%
C)125%
D)150%
E)200%

Question 19

Direct financial payments include all of the following except .

A)commissions
B)insurance
C)wages
D)salaries
E)incentives

Question 20

Which of the following occupations must adhere to overtime and minimum pay provisions stated in the Fair Labor Standards Act?

A)department heads
B)pharmacists
C)attorneys
D)purchasing agents
E)paralegals

Question 21

When longer-term employees' salaries are lower than those of workers entering the firm today, has occurred.

A)salary compression
B)market expansion
C)age discrimination
D)reward strategy
E)wage curve

Question 22

When managers ask "how can I construct a total portfolio of reward programs that link to both short and long-term business success, drive shareholder value, encourage desired behaviors, and deliver value to our employees," they are seeking to produce a(n).

A)strategic compensation package
B)pay-for-performance program
C)labor relations board
D)wage curve
E)aligned reward strategy

Question 23

According to the Family and Medical Leave Act, eligible employees can take unpaid, job-protected leave for the .

A)birth of a child
B)care of a child
C)care of a parent
D)care of a spouse
E)all of the above

Question 24

How are cost-of-living differentials handled by employers when employees are transferred from one location to one with a higher cost of living?

A)payment of a nonrecurring, lump sum amount
B)raise employee's base salary
C)pay an ongoing differential for ongoing costs plus a lump sum amount
D)payment of a differential for ongoing costs
E)all of the above

Question 25

Unions negotiate all of the following pay -related issues except .

A)wage rates
B)income security
C)time off with pay
D)unpaid leave to care for an immediate family member
E)all of the above

Question 26

Historically, the main issue in collective bargaining is .

A)wage rates
B)health care benefits
C)cost-of-living adjustments
D)time off with pay
E)income security

Question 27

The prohibits discriminating against employees who are 40 years of age and older in all aspects of employment, including compensation.

A)Equal Pay Act
B)Age Discrimination in Employment Act
C)Employer Retirement Income Security Act
D)Fair Labor Standards Act
E)Civil Rights Act

Question 28

Who usually pays the extra tax burden resulting from taxes a manager on international assignment is liable for over and above those he or she would have to pay in the home country?

A)the employer
B)the host country
C)the home country
D)the employee
E)there are no additional tax burdens

Question 29

Jason is an information systems technician in a town in North Carolina with a population of 100,000. He earns 35,000/year. He recently found out that a nearby town with a similar population pays people in the same position $40,000/year. Jason is concerned with the form of equity.

A)external
B)procedural
C)internal
D)individual
E)distributive

Question 30

Salary compression can be caused by .

A)economic depression
B)recession
C)inflation
D)all of the above
E)none of the above

Question 31

What theory of motivation states that people are strongly motivated to maintain a balance between what they perceive as their inputs or contributions and their rewards?

A)Learned needs theory
B)Equity theory
C)Two-factor theory
D)Maslow's hierarchy of needs
E)Expectancy theory

Question 32

The gave employees the right to organize, bargain collectively, and engage in concerted activities for the purpose of collective bargaining.

A)National Labor Relations Act
B)Employer Retirement Income Security Act
C)Civil Rights Act
D)Equal Pay Act
E)Fair Labor Standards Act

Question 33

When an employee transferred to another country is assigned a salary based on the base salary for that position in the country where he or she will work, the employer has used a salary plan.

A)transfer
B)allowances included
C)host-based
D)home-based
E)cost-of-living

Question 34

Which of the following professions is considered "nonexempt" from provisions of the Fair Labor Standards Act?

A)management trainee
B)computer systems analyst
C)general manager
D)physician
E)attorney

Question 35

refers to the ownership employees build up in their pension plan should their employment be terminated before retirement.

A)Portability
B)Equity
C)401k
D)Unemployment
E)Vesting

Question 36

Which of the following is true for employers who use independent contractors?

A)Federal income taxes are charged at a reduced rate
B)Fair Labor Standards Act regulations do not apply
C)Social Security taxes are higher than for regular employees
D)State income taxes are charged at a higher rate
E)Social Security taxes are charged at a higher rate

Question 37

Which of the following is not a form of equity that should be addressed by managers dealing with compensation issues?

A)internal
B)procedural
C)external
D)individual
E)underreward

Question 38

When an employee transferred to an international location and his or her base salary reflects his or her home country's salary with allowances added for cost-of-living differences, the employer has used a salary plan.

A)home-based
B)host-based
C)transfer
D)cost-of-living
E)allowances included

Question 39

According to the Family and Medical Leave Act, eligible employees can take up to weeks of unpaid, job-protected leave for the birth of a child or for the care of a child, spouse, or parent.

A)two
B)twelve
C)four
D)six
E)sixteen

Question 40

Which form of equity refers to how a job's pay rate in one company compares to the job's pay rate in other companies?

A)external
B)internal
C)distributive
D)individual
E)procedural

Question 41

Another term for job classification is .

A)job ranking
B)job categorization
C)job evaluation
D)job grading
E)none of the above

Question 42

The job grading method of job evaluation entails .

A)ranking each job relative to all other jobs based on some overall factor
B)deciding which jobs have more of the chosen compensable factors
C)using raters to categorize jobs into groups
D)identifying several compensable factors, each having several degrees, and the degree to which each of these factors is present in the job
E)none of the above

Question 43

Procedural equity refers to .

A)how a job's pay rate in one company compares the job's pay rate in other companies
B)how fair the job's pay rate is, when compared to other jobs within the same company
C)the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance
D)the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay
E)the use of salary surveys to monitor levels paid for jobs industry -wide

Question 44

When using the job classification method of job evaluation, raters categorize jobs into groups of jobs that are similar in difficulty but not in context called .

A)cohorts
B)grades
C)schedules
D)classes
E)sections

Question 45

Internal equity refers to .

A)how a job's pay rate in one company compares the job's pay rate in other companies
B)how fair the job's pay rate is, when compared to other jobs within the same company
C)the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance
D)the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay
E)the use of salary surveys to monitor levels paid for jobs industry -wide

Question 46

Which job evaluation method entails deciding which jobs have more of the chosen compensable factors?

A)point method
B)job grading method
C)job classification method
D)factor comparison
E)ranking method

Question 47

External equity refers to .

A)how a job's pay rate in one company compares the job's pay rate in other companies
B)how fair the job's pay rate is, when compared to other jobs within the same company
C)the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance
D)the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay
E)the use of salary surveys to monitor levels paid for jobs industry -wide

Question 48

Which job evaluation method is a quantitative technique involving the identification of several compensable factors and the degree to which each of these factors is present in the job?

A)point method
B)job classification method
C)job grading method
D)factor comparison
E)ranking method

Question 49

Jack is a sales manager and he recently learned that human resource managers with similar responsibilities and spans of control earn more than he does. Jack is concerned with the form of equity.

A)external
B)internal
C)distributive
D)individual
E)procedural

Question 50

Which form of equity refers to the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance?

A)external
B)internal
C)distributive
D)individual
E)procedural

Question 51

The factor comparison method of job evaluation entails .

A)ranking each job relative to all other jobs based on several compensable factors
B)deciding which jobs have more of the chosen compensable factors
C)identifying several compensable factors, each having several degrees, and the degree to which each of these factors is present in the job
D)using raters to categorize jobs into groups
E)none of the above

Question 52

is a formal and systematic comparison of jobs to determine the worth of one job relative to another.

A)Benchmark analysis
B)Compensable evaluation
C)Job evaluation
D)Job analysis
E)Job ranking

Question 53

Factors that establish how the jobs compare to one another and set the pay for each job are called .

A)comparison factors
B)analysis factors
C)compensable factors
D)ranking factors
E)job evaluation factors

Question 54

Audrey is a lawyer in a mid-size firm in Chicago. She recently learned that another lawyer who joined the firm at the same time earns a lower salary than she does. Audrey is experiencing the form of equity.

A)external
B)internal
C)distributive
D)individual
E)procedural

Question 55

Which of the following is not one of the compensable factors emphasized in the Equal Pay Act?

A)responsibility
B)effort
C)working conditions
D)accountability
E)skills

Question 56

Individual equity refers to .

A)how a job's pay rate in one company compares the job's pay rate in other companies
B)how fair the job's pay rate is, when compared to other jobs within the same company
C)the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance
D)the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay
E)the use of salary surveys to monitor levels paid for jobs industry -wide

Question 57

Which form of equity refers to the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay?

A)external
B)internal
C)distributive
D)individual
E)procedural

Question 58

The point method of job evaluation entails .

A)using raters to categorize jobs into groups
B)ranking each job relative to all other jobs based on some overall factor
C)deciding which jobs have more of the chosen compensable factors
D)identifying several compensable factors, each having several degrees, and the degree to which each of these factors is present in the job
E)none of the above

Question 59

When using the job classification method of job evaluation, raters categorize jobs into groups of similar jobs called .

A)classes
B)cohorts
C)grades
D)schedules
E)sections

Question 60

Which form of equity refers to how fair a job's pay rate is, when compared to other jobs within the same company?

A)external
B)internal
C)distributive
D)individual
E)procedural

Question 61

Portability rights refer to the ability for an employee to transfer his or her vested rights from one organization to another.

Question 62

A is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

A)wage curve
B)benchmark
C)pay grade
D)pay group
E)class

Question 63

Indirect payments that contribute to an employee's compensation include variable pay like commissions and bonuses.

Question 64

When employees work more than 40 hours per week, employers must pay overtime at a rate of at least one and a half times the normal pay for any hours worked over 40 in a workweek.

Question 65

The Equal Pay Act states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work.

Question 66

Financial benefits like employer-paid insurance and vacations are not a part of employee compensation.

Question 67

While laws exist to protect against discrimination in compensation based on gender and age, no law protects against such discrimination against persons with disabilities.

Question 68

When employers set salary for professional employees by pricing professional jobs in the marketplace to establish the values for benchmark jobs, and then develop a salary structure based on the benchmarks and their other professional jobs, the employer has used a approach.

A)market-pricing
B)cost
C)point
D)job ranking
E)job evaluation

Question 69

Performance-based pay is more popular than time-based pay.

Question 70

What is the purpose of the wage curve?

A)to choose benchmark jobs within each pay grade
B)to equate jobs of approximately equal difficulty or importance as established by job evaluation
C)to assign pay rates to pay grades
D)to show the relationship between the value of the job as determined by one of the job evaluation methods and the current average pay rates for your grades
E)to cluster jobs into logical groupings

Question 71

refers to the requirement to pay men and women equal wages for jobs of roughly equivalent value to the employer.

A)Broadbanding
B)Comparable worth
C)Strategic compensation
D)Job evaluation
E)Job grading

Question 72

Supplemental executive retirement plans and supplemental life insurance are classified as in executive compensation packages.

A)long-term incentives
B)bonuses
C)base pay
D)executive benefits
E)short-term incentives

Question 73

The shows the pay rates currently paid for jobs in each pay grade, relative to the points or rankings assigned to each job or grade by the job evaluation.

A)benchmark
B)wage curve
C)pay grade
D)pay group
E)class

Question 74

Direct financial payments may be based on increments of time and on performance.

Question 75

Employers prefer to give time off in lieu of overtime pay because they only have to grant the same number of hours off as the employee worked overtime while overtime pay is calculated at 150% of normal pay.

Question 76

Which of the following is typically included in compensation packages for a company's top executives?

A)perks
B)executive benefits
C)short-term and long-term incentives
D)base pay
E)all of the above

Question 77

means collapsing salary grades and ranges into just a few wide levels or bands, each of which contains a relatively wide range of jobs and salary levels.

A)Job evaluation
B)Comparable worth
C)Job grading
D)Broadbanding
E)Strategic compensation

Question 78

Because the minimum wage is set by the Fair Labor Standards Act, all states adhere to that wage.

Question 79

If the current rate being paid for a job falls below the wage line, what step should be taken?

A)a pay freeze should be enacted for that job
B)a bonus should be offered
C)no steps are necessary
D)a pay raise should be provided
E)a pay decrease should be assessed

Question 80

A company using competency-based pay compensates for all of the following except an employee 's .

A)range of skills
B)depth of knowledge
C)type of skills
D)job title
E)all of the above are part of competency-based pay plans