Deck 7: Building Market-competitive Compensation Systems

Question 1

These are used as reference points for setting pay levels.

A)mean pay
B)median pay
C)market-competitive pay
D)benchmark jobs

Answer 1

D

Question 2

Which of the following are the two types of central tendency measures that are pertinent to compensation?

A)mode and arithmetic mean
B)median and mode
C)mode and quartile
D)arithmetic mean and median

Answer 2

D

Question 3

This term refers to the distance of each salary figure from the mean.

A)standard deviation
B)quartile
C)percentile
D)deviated mean

Answer 3

A

Question 4

________ is defined as an in-depth examination of the external and internal environmental factors that are likely to have the greatest impact on the future of the company.

A)Market-competitive pay structure
B)Regression analysis
C)Competitive strategy
D)Strategic analysis

Question 5

Which process can companies use to make corrections for differences between their jobs and external benchmark jobs?

A)job evaluation
B)job leveling
C)job analysis
D)compensation surveys

Question 6

What does it mean when the distribution of data is skewed to the right?

A)a lower frequency of larger values and the median is greater than the mean
B)a higher frequency of larger values and the median is greater than the mean
C)a lower frequency of larger values and the mean is greater than the median
D)a higher frequency of larger values and the mean is greater than the median

Question 7

Which of the following entails an examination of a company's external market context and internal factors?

A)compensation survey
B)strategic analysis
C)regression analysis
D)compensation plan

Question 8

Jose Escobar conducts a survey of salaries at ERL Enterprises and finds that 50% of the workers fall below the market pay average of $32,000.In which quartile do the workers at ERL Enterprises fall?

A)first
B)second
C)third
D)fourth

Question 9

This causes compensation survey data to become obsolete fairly quickly.

A)the lag time between data collection and data usage
B)pay compression
C)changes in the unemployment rate
D)changes in the company's geographic location

Question 10

Compensation professionals integrate the internal job structure with the external market pay rates identified through compensation surveys,and this integration reveals which of the following?

A)pay rates that reflect both the company's and the external market's valuations of jobs
B)changes in wages and salaries over time
C)changes in employee benefits over time
D)changes in labor costs between geographic locations

Question 11

What does Quartile 3 represent?

A)figures that are above 25%
B)figures that fall below 25%
C)figures that are above 75%
D)figures that fall below 75%

Question 12

Which of the following surveys are tools used by employers to determine the pay levels needed to recruit highly qualified employees?

A)strategic
B)external market
C)compensation
D)internal market

Question 13

If the means salary for B42DA,Inc.,is $30,000 and the median salary is $32,000,what would Yolanda's salary of $165,000 be considered?

A)overlie
B)outsider
C)outlier
D)over layer

Question 14

Compensation surveys are typically focused on which two factors?

A)competitors' promotion and advancement opportunities
B)internal promotion and advancement opportunities
C)competitors' wage and salary practices
D)internal wage and salary practices

Question 15

Which of the following are reference points against which jobs within the company are judged?

A)benchmark jobs
B)relevant labor markets
C)internal labor markets
D)human resource capabilities

Question 16

In which type of document do compensation professionals represent the selection and implementation of pay level and pay mix policies over a specified time period,usually one year?

A)compensation plan
B)job structure reports
C)strategic compensation plan
D)pay structure reports

Question 17

Identify and describe the four steps for establishing market competitive pay systems.

Question 18

Suppose that a compensation professional would like to calculate the median salary.He orders four salaries as follows: $20,000,$22,000,$24,000,$26,000.What is the median salary for this data set?

A)$21,000
B)$22,000
C)$23,000
D)$24,000

Question 19

Which of the following are the three measures of dispersion?

A)percentile standard, deviation, arithmetic mean
B)standard deviation, quartile, percentile
C)quartile, arithmetic mean, standard deviation
D)arithmetic mean, percentile, quartile

Question 20

In statistical analysis,which of the following is used to signify extreme observations?

A)deviations
B)extremities
C)outliers
D)variants

Question 21

The XYZ Company is a world leader in medical device manufacturing.Aiming to continue its market position in this industry,the XYZ Company pursues a differentiation strategy.As a result,this company compensates its employees higher than competitors in order to attract and retain the best employees.What kind of pay level policy does the XYZ Company follow?

A)market match
B)market lag
C)market lead
D)market pay line

Question 22

________ represents the amount of spread or dispersion in a set of data.

Question 23

________ analyses enable compensation professionals to establish pay rates for a set of jobs that are consistent with typical pay rates for jobs in the external market.

Question 24

________ refers to a group of two or more jobs that are based on similar work characteristics,duties,and responsibilities.

Question 25

Market match policies are generally set to which quartile in the salary survey?

A)1st
B)2nd
C)3rd
D)4th

Question 26

XYZ Inc.pursues a low-cost strategy in its industry and generally needs lower skilled employees.As a result,their management team decided to establish a compensation policy that pays less than the marketplace.In recent years,the company became susceptible to labor shortages and high turnover.Which kind of pay level policy does XYZ Inc.follow?

A)market match
B)market lag
C)market lead
D)market pay line

Question 27

Market lag policies are generally set to which quartile in the salary survey?

A)1st
B)2nd
C)3rd
D)4th

Question 28

The R2 statistic tells us how well the variation in the company's valuation of jobs based on job evaluation points explains the variation in market pay rates from the compensation survey.What does it mean when the R2 = 1?

A)All of the variation in market pay can be explained by the company's job structure.
B)None of the variation in market pay can be explained by the company's job structure.
C)All of the variation in market pay can be explained by the company's external pay rates.
D)All of the variation in market pay can be explained by the benchmark rates.

Question 29

When using compensation survey data,statistical analyses are used to integrate this with the external market,in order to determine pay rates.

A)internal pay scales
B)nominal pay rates
C)internal pay benchmarks
D)internal job structures

Question 30

Companies pursuing a differentiation strategy are most likely to use which pay level policy?

A)market lead
B)market average
C)market lag
D)market match

Question 31

In the regression analysis formula,what does the X represent?

A)predicted salary
B)job evaluation points
C)the slope
D)the Y intercept

Question 32

The ________ is the middle value in an ordered sequence of numerical data.

Question 33

________ represent the fields of potentially qualified candidates for particular jobs.

Question 34

The Consumer Price Index represents the average price changes for the price of goods and services in how many regions?

A)2
B)4
C)6
D)8

Question 35

________ allow compensation professionals to describe the distribution of data based on four groupings.

Question 36

How often is the Consumer Price Index calculated for the United States?

A)daily
B)weekly
C)monthly
D)twice a year

Question 37

The ________ is the most commonly used method for tracking cost changes throughout the United States.

Question 38

Explain the three reasons why companies often choose not to develop their own compensation surveys.

Question 39

HR professionals rely on ________ jobs as reference points for setting pay levels.

Question 40

Compensation professionals in the XYZ Company use regression analysis to determine the pay rates of its marketing professionals.There are 4 different marketing job titles in the XYZ Company.Compensation professionals use job evaluation points assigned to each marketing job title and a salary survey data.In other words,they regress job evaluation points on the salary data to indicate the amount of variation in market pay rates that can be explained by a company's job structure.Which of the following best describes this amount of variation when the R2 value turns out to be 0.85?

A)All of the variation in market pay
B)None of the variation in market pay
C)A large amount of the variation in market pay
D)A small amount of the variation in market pay

Question 41

The market ________ policy distinguishes a company from competition by compensating employees less than most competitors.

Question 42

The market ________ policy most closely follows the typical market pay rates because companies pay according to the market pay line.

Question 43

Elaborate on the link between a company's pay level policy and its strategic mandate.

Question 44

What is an appropriate pay policy mix?