Question 1

Which of the following factors influences decisions made using the top-down approach?&#10;A) estimating the pay increase budget&#10;B) providing consultation to managers&#10;C) analyzing forecasts&#10;D) monitoring budget versus actual increases&#10;E) reviewing and revising forecasts and budgets with management

Accepted Answer

estimating the pay increase budget&#10;

Question 2

Which of the following statements is true about analyzing the value added of pay decisions?&#10;A) It is a practice followed by all organizations regularly.&#10;B) It encourages looking at compensation as an investment as well as an expense.&#10;C) It increases the focus of employees as individuals and not as human capital.&#10;D) It focuses on increasing the turnover of top employees.&#10;E) It restricts thinking to treating compensation as only an expense.

Accepted Answer

Analyzing the value added of pay decisions encourages looking at compensation as an investment as well as an expense, which means that organizations can see it as adding value to the organization rather than just being a cost. This approach helps to facilitate the effective use of compensation, which can lead to better outcomes for both the organization and its employees. None of the other options are true.

Question 3

The marketing approach focuses on which of the following?&#10;A) increase guides&#10;B) range maximums&#10;C) bottom-up budgeting&#10;D) strategy&#10;E) merit pay

Accepted Answer

The marketing approach is a strategic approach that focuses on planning and implementing strategies to promote a product or service in order to achieve specific business objectives. Therefore, the correct choice is D) strategy. The other choices (A) increase guides, (B) range maximums, (C) bottom-up budgeting, and (E) merit pay are not directly related to the marketing approach.

Question 4

Which of the following would increase the controls and guidelines inherent in any pay plan?&#10;A) broadbanding&#10;B) replacing bonuses with merit grids&#10;C) using skill-based plans instead of job evaluation&#10;D) reducing the impact of range minimum and maximums&#10;E) green circling

Accepted Answer

Replacing bonuses with merit grids increases the controls and guidelines in a pay plan by providing a structured framework for awarding pay increases based on performance, thus enhancing the plan's predictability and fairness.

Question 5

Announcements of layoffs and plant closings always have negative effects on stock prices as investors anticipate poor cash flow and increased costs.

Accepted Answer

While announcements of layoffs and plant closings can sometimes lead to a decrease in stock prices due to concerns over the company's future performance and potential costs, in other instances, investors might view these actions as cost-saving measures that could improve profitability and efficiency in the long run, potentially leading to an increase in stock prices. The effect on stock prices depends on investors' perceptions of the reasons for and the expected impact of the layoffs and plant closings.

Question 6

The CPI does not necessarily reflect an individual employee's cost of living.

Accepted Answer

The CPI is a measure of the average price changes in a basket of goods and services consumed by households in a given area. It may not accurately reflect the specific costs or spending habits of any individual employee.

Question 7

Merit grids make it difficult to control costs because of the varied increases to employees.

Accepted Answer

The answer of Merit grids make it difficult to control...

Question 8

Competency-based plans provide more flexibility for manager to assign employees to a wider variety of work.

Accepted Answer

Competency-based plans focus on the skill sets and abilities of employees, rather than specific job duties, allowing managers to assign them to a wider variety of work that requires those skills and abilities. Therefore, they provide more flexibility in work assignments.

Question 9

Employee sell-service allows access to choices about healthcare coverage and compensation recommendations.

Accepted Answer

The answer of Employee sell-service allows access to choices about...

Question 10

What are the main issues with workforce reductions?

Accepted Answer

The answer of What are the main issues with workforce...

Question 11

What can employers do with red circled and green circled employees?

Accepted Answer

The answer of What can employers do with red circled...

Deck 13: Compensation Budgets and Administration