Deck 8: Strategic Pay Plans

Question 1

The following are all primary functions of the job evaluation committee except

A) evaluating the worth of each job.
B) selecting a job evaluation method.
C) identifying 10 or 15 key benchmark jobs.
D) selecting behavioural anchors.
E) selecting compensable factors.

Answer 1

D
selecting behavioural anchors.

Question 2

Job evaluation is mostly a judgmental process which requires close cooperation and input from all of the following except

A) customer responses.
B) compensation specialists.
C) union representatives.
D) supervisors.
E) employees.

Answer 2

A
customer responses.

Question 3

Pay rates must be equitable for each employee relative to other pay rates inside the organization.This is known as

A) need for equity.
B) internal equity.
C) compensation plan.
D) external equity.
E) wage compensation.

Answer 3

B
internal equity.

Question 4

A total rewards approach considers

A) cost constraints.
B) business strategy.
C) individual reward components as part of an integrated whole.
D) employee value.
E) compensation and benefits together.

Question 5

Job evaluation involves comparing jobs to one another based on their content.Job content is assessed using

A) critical incidence.
B) job design.
C) comparable worth.
D) behavioural anchors.
E) compensable factors.

Question 6

The process whereby several people meet together who are familiar with the jobs in question, and who may have different perspectives regarding the nature of the jobs, is called a

A) performance appraisal.
B) job evaluation committee.
C) union negotiating team.
D) management negotiating team.
E) position review committee.

Question 7

Job evaluation is a technique used to determine

A) performance appraisals of individuals to the group.
B) promotability.
C) merit reviews of individuals to the group.
D) the relative value of an individual's career earnings to the group's.
E) the relative worth of each job.

Question 8

Important considerations for paying employees include all the following except

A) equity considerations.
B) legal considerations.
C) average age considerations.
D) union considerations.
E) policy considerations.

Question 9

Total rewards refers to

A) payroll costs.
B) all forms of pay or other compensation provided to employees.
C) cash payments only.
D) certain forms of pay and rewards to employees.
E) contractual pay methods or fringe benefits to employees.

Question 10

Wages must compare favourably with rates in other organizations or an employer will find it hard to attract and retain qualified employees.This is known as

A) compensation policy.
B) internal equity.
C) wage compensation.
D) external equity.
E) need for equity.

Question 11

The basic procedure of job evaluation is to compare the content of jobs in relation to one another in terms of all of the following except

A) effort.
B) responsibility.
C) working conditions.
D) personality traits.
E) skill.

Question 12

Compensation policies are usually written by the HR or compensation manager together with

A) supervisors.
B) employees.
C) stockholders.
D) compensation consultants.
E) senior management.

Question 13

The job classification method of job evaluation is a widely used method in which jobs are categorized into

A) functions.
B) groups.
C) factors.
D) clusters.
E) departments.

Question 14

Engagement is

A) providing competitive base pay.
B) transactional rewards which are consistent across competing organizations.
C) a positive emotional connection to the employer and a clear understanding of the strategic significance of the job.
D) the belief that the organization cares about talent management.
E) relational work experiences.

Question 15

The classification method is widely used

A) in small businesses.
B) in leading-edge Fortune 500 businesses.
C) in the public sector.
D) for technicians/technologists in hospitals.
E) for executive positions that are too difficult to assess using other methods.

Question 16

Jeffrey is the newly hired HR professional who is responsible for evaluating compensation practices at the company.To determine if there are issues with internal equity, he has chosen to conduct a job evaluation according to the method popularized by the Hay consulting firm.Which of the following are the compensable factors he uses to evaluate jobs?

A) skill, effort, problem solving, and working conditions
B) responsibility, skill, effort, and working conditions
C) know-how, problem solving, accountability, and working conditions
D) effort, responsibility, authority, and working conditions
E) knowledge, problem solving, responsibility, and working conditions

Question 17

The Revlex Company did a salary survey and the results showed that 10 of its key positions had lower wages compared with similar positions at their key competitors.The problem the company faces is

A) comparable worth.
B) pay equity.
C) external equity.
D) internal inequity.
E) broadbanding.

Question 18

The job evaluation method that rates each job relative to all other jobs, usually based on some overall factor like "job difficulty," is the

A) critical incidence method.
B) factor comparison method.
C) classification method.
D) point method plan.
E) ranking method.

Question 19

Pay equity laws were enacted in response to

A) pay discrimination against senior citizens.
B) the variety of compensable factors being used to evaluate jobs.
C) the historical undervaluing of "women's work."
D) gender-neutral job evaluation systems.
E) the variety of job evaluation systems being used to evaluate jobs.

Question 20

Work/life programs help employees do their jobs effectively using

A) flexible scheduling and childcare.
B) vacation and holidays.
C) employer-paid insurance.
D) advancement opportunities.
E) recognition programs.

Question 21

There are several steps in pricing jobs with a wage curve.The second is to

A) price jobs.
B) determine the rate range.
C) find the average pay for each pay grade.
D) create a wage line.
E) plot the pay rates.

Question 22

The point method of job evaluation identifies several compensable factors, each having several degrees, in addition to

A) degrees to which each of these factors is present in the job.
B) degrees within a present job.
C) identifying behavioural anchors.
D) establishing points in ranking jobs.
E) ranking jobs.

Question 23

Another way to categorize jobs when undertaking the job classification method, other than using class descriptions, is to

A) draw up a set of classifying rules.
B) rank jobs by compensable factors.
C) rank jobs against one another.
D) assign points to compensable factors.
E) rank jobs from lowest to highest.

Question 24

An example of an informal survey conducted by an employer would be a(n)

A) governmental agency survey.
B) professional organization survey.
C) telephone survey.
D) industry-wide survey.
E) commercial survey.

Question 25

The type of job evaluation method where the groups are called classes if they contain similar jobs is called the

A) ranking method.
B) point method.
C) Hay plan method.
D) job classification method.
E) factor comparison method.

Question 26

One way to depict the pay rate ranges for each pay grade is with a wage structure graphically depicting the

A) range of pay grades for each pay rate.
B) range of pay rates for each pay grade.
C) range of jobs.
D) pay for each job.
E) scatter-plot points within a pay grade.

Question 27

The job evaluation method in which a number of compensable factors are identified, and then the degree to which each of these factors is present on the job is determined, is the

A) factor comparison method.
B) ranking method.
C) point method.
D) Hay plan method.
E) job classification method.

Question 28

A wage survey that pertains to members of associations might involve

A) Professional Engineers Ontario.
B) geographic surveys.
C) area surveys.
D) local surveys.
E) benefits surveys.

Question 29

Wage surveys undertaken by the human resources department may collect other data which would include all of the following except

A) sick leave benefits.
B) vacation time.
C) industry demand.
D) employee benefits.
E) insurance benefits.

Question 30

In establishing pay rates, an employer should conduct a salary survey for the purpose of

A) fine tuning pay rates.
B) pricing jobs.
C) job evaluation.
D) performance appraisals.
E) slotting jobs into pay grades.

Question 31

Rate ranges are a series of steps or levels of pay within a pay grade, usually based upon

A) peer appraisals.
B) years of education.
C) years of service.
D) teamwork.
E) amount of responsibility.

Question 32

Statistics Canada provides monthly data on earnings by

A) geographic area and size of company.
B) size of company.
C) industry and city.
D) geographic area, industry, and occupation.
E) city and occupation.

Question 33

Establishing pay rates involves three stages, which are

A) job evaluation, conducting salary surveys, and combining job evaluation and salary survey results.
B) consulting with industry, determining salaries for executive positions, and deciding on a benefits plan.
C) pricing of benchmark jobs, collecting data on insurance benefits, and evaluating benefits packages.
D) collecting data on insurance benefits, creating a salary survey, and hiring external consultants.
E) collecting data used to price every job in the organization, working with a compensation consultant, and working with a benefits specialist.

Question 34

There are several steps in pricing jobs with a wage curve.The first is to

A) create a wage line.
B) find the average pay for each pay grade.
C) determine the pay grade.
D) determine the pay rate for a cluster of jobs.
E) determine the rate range.

Question 35

A disadvantage of the job classification method of job evaluation is the difficulty in

A) grouping jobs.
B) classifying jobs.
C) writing job descriptions.
D) writing grade descriptions.
E) developing job clusters.

Question 36

Assigning pay rates to each pay grade (or to each job) is usually accomplished with a

A) rate range.
B) job evaluation.
C) wage grade.
D) wage curve.
E) performance appraisal.

Question 37

The problem resulting from using data in employee compensation surveys is known as

A) employee discrimination.
B) upward bias.
C) systemic undervaluing.
D) stereotyping of data.
E) report bias.

Question 38

Once a job evaluation method has been used to determine the relative worth of each job, the committee can turn to the task of assigning pay rates to each job, but it will usually want to first group jobs into

A) labour contracts.
B) range rates.
C) personal contracts.
D) department classes.
E) pay grades.

Question 39

The job evaluation committee will want to group similar jobs (in terms of their ranking or number of points, for instance) into grades for

A) personal growth.
B) pay purposes.
C) assessment purposes.
D) wage structure purposes.
E) non-economic reasons.

Question 40

The graphic description of the relationship between the value of the job and the average wage paid for this job is called a

A) pay grade.
B) wage curve.
C) rate range.
D) wage structure.
E) wage grade.

Question 41

Broadbanding facilitates less specialized, boundaryless

A) jobs and organizations.
B) division of work.
C) job evaluation.
D) geographic dispersion.
E) leniency and error.

Question 42

The two bases upon which to pay employees are increments of performance and seniority.

Question 43

With skill/competency-based pay, employees are not paid for the job they currently hold, but instead for all the following except

A) knowledge.
B) depth of skills.
C) years of experience.
D) types of skills.
E) range of skills.

Question 44

Most of the pay equity acts in Canada focus on four compensable factors-skill, effort, responsibility, and working conditions.

Question 45

Management does not have the right to serve on a job evaluation committee, because this would constitute a conflict of interest.

Question 46

Total rewards refers to all forms of pay or other compensation arising from employment.

Question 47

The point method plan of job evaluation identifies several compensable factors, each having several degrees, as well as the degree to which each of these factors is present in the job.

Question 48

The point method of job evaluation is easily explained to employees.

Question 49

An alternative method to a traditional job evaluation is pay

A) based on seniority.
B) for education.
C) for skill/competency.
D) for responsibility.
E) for ability.

Question 50

Job evaluation involves an informal and unsystematic comparison of jobs to determine the worth of one job relative to another.

Question 51

The problem with having a wage structure with underpaid employees can be solved through raising their wages to

A) another pay grade.
B) the midrange of an employee's pay grade.
C) the minimum of the rate range for their pay grade.
D) the maximum of the rate range for their pay grade.
E) be competitive with other jobs in the firm.

Question 52

The rate range is usually built around the

A) job evaluation.
B) wage line or curve.
C) performance appraisal.
D) job specialization.
E) Hay system.

Question 53

Collapsing salary grades and ranges into just a few wide levels or "bands" is called

A) broadbanding.
B) job specialization.
C) wide banding.
D) compensation banding.
E) red circle banding.

Question 54

The "wage gap" between men and women is a result of systemic discrimination, as well as all of the following except

A) differences in hours worked.
B) education levels.
C) performance levels.
D) experience levels.
E) level of unionization.

Question 55

Rates being paid to overpaid employees are often called

A) red circle pay rates.
B) premium jobs pay rates.
C) excessive pay rates.
D) silver circle pay rates.
E) black circle pay rates.

Question 56

You are the HR professional at a forestry company in New Brunswick.Regarding pay equity, you should

A) hire pay equity consultants to develop a pay equity plan if you don't have one already, since pay equity is required in New Brunswick.
B) not worry about pay equity at all since the rates are set through negotiation with the union.
C) review pay rates for gender bias and monitor legislative requirements.
D) make sure that some women are promoted into higher-paying jobs to satisfy quota requirements.
E) initiate a plan to systematically reduce over-paid male employees by red-circling their wages.

Question 57

The Employment Equity Act provides unemployment compensation for up to 65 weeks for all Canadian workers.

Question 58

The great challenge of competency-based pay is

A) competency definition.
B) educational levels of employees.
C) measurement of skills, abilities, and competencies.
D) determining bonuses.
E) determining base pay.

Question 59

The only way to categorize jobs is to draw up class descriptions and place jobs into classes based on their correspondence to these descriptions.

Question 60

An advantage of using rate ranges for each pay grade is that it allows for

A) age differences.
B) gender differences.
C) education differences.
D) employer inflexibility.
E) performance differences.

Question 61

A type of organization-wide incentive plan which usually involves having a corporation contribute shares of its own stock to a trust, and distributes the stock to employees on retirement or separation from service, is referred to as a(n)
employee stock ownership plan.
individual retirement plan.
gainsharing plan.
profit-sharing plan.
employee trusteeship plan.

Question 62

Untac Inc., a consulting engineering firm, has recently implemented a type of organization-wide incentive plan whereby all full time employees share in the company's profits.Untac Inc.has implemented a
profit-sharing plan.
gainsharing plan.
salary and commission plan.
profit-loss plan.
piece-rate incentive plan.

Question 63

Skill/competency-based and market-based pay entirely eliminates the need for evaluating the worth of one job relative to others in the firm.

Question 64

Dominique has just been hired as the HR manager for a small but growing manufacturing company.Up until now, pay rates have been determined at the time of hire and are loosely based on "market" pay rates.Dominique has already noticed that some employees don't think the rates of pay are fair.How should Dominique go about establishing pay rates that are both externally and internally equitable? In your answer, indicate the issues that may arise if this is not done.

Question 65

A type of organization-wide incentive plan that engages many or all employees in a common effort to achieve a company's productivity objectives by sharing the resulting cost savings among employees and the company is referred to as a
gainsharing plan.
common incentive plan.
productivity plan.
profit-sharing plan.
cost savings plan.

Question 66

There are several specific common-sense considerations in establishing any incentive plan.Of primary importance is
pay-for-performance.
superior business results.
relationship building.
line of sight.
goal setting.

Question 67

Most employers pay just one pay rate for all jobs in a particular pay grade.

Question 68

Identify and briefly describe the five components of total rewards.

Question 69

With skill/competency-based pay, employees are paid for the range, depth, and type of skills and knowledge they are capable of using, rather than for the job currently held.

Question 70

Identify the four major compensable factors used in most point method job evaluation plans and identify and describe two sub-factors that might be used for each of the four major compensable factors.

Question 71

A plan that offers each person a bonus based on the company's results, regardless of the person's actual effort, is called
profit sharing.
a lump-sum bonus.
gainsharing.
financial incentives.
piece-rate production.

Question 72

Research suggests that employee stock ownership plans encourage employees to develop
concern about their retirement plan.
an interest in gainsharing.
a lack of interest in their job.
a sense of ownership in and commitment to the firm.
little interest in unions.

Question 73

The benefits of a gainsharing plan
usually take many years to fully realize.
accrue mostly to senior managers and executives.
are generally lower in terms of overall payout than those of an employee share plan.
are generally realized in the early years.
are extremely difficult to calculate.

Question 74

Reasons why incentive plans do not work include all of the following except
firms do not get what they pay for.
pay is not a motivator.
performance pay cannot replace good management.
rewards may undermine responsiveness.
rewards rupture relationships.

Question 75

Amir is the director of human resources at a management consulting firm.He has been asked to implement an organization-wide incentive plan aimed at increasing employee commitment to company goals.Identify and discuss two different organization-wide incentive plans Amir should consider.

Question 76

Many employers have incentive plans in which virtually all employees can participate.They include all of the following except
employee stock ownership.
salary and fringe benefit programs.
gainsharing plans.
stock option plans.
profit-sharing plans.

Question 77

Sue, a compensation analyst, found recent research that indicates that there are seven principles that support effective implementation of incentive plans.They include
group incentives must be complex.
rewards may undermine responsiveness.
link incentives to measurable competencies.
firms get what they pay for.
none of the above.

Question 78

Employers usually survey other firms to see if they are paying comparable pay for comparable jobs.