Deck 10: Compensation Management

Question 1

________ are all rewards that can be classified as monetary payments and in-kind payments.

A)Benefits
B)Compensation components
C)Wages
D)Broadbands
E)Base pay

Answer 1

B

Question 2

In setting the base pay rate for new jobs at her organization, Alexis is doing an assessment of how much she can afford to pay.She is working on the ________ portion of her organizational philosophy on compensation.

A)ability to pay
B)types of compensation
C)pay for performance or longevity
D)skill or competency-based pay
E)None of the above

Answer 2

A

Question 3

Mimi is redesigning the compensation mix at her organization to include more family-friendly benefits such as child and elder care.Mimi is working on the ________ portion of her organizational philosophy on compensation.

A)ability to pay
B)types of compensation
C)wage compression
D)skill or competency-based pay
E)None of the above

Answer 3

B

Question 4

Which of the following is NOT one of the four basic components of compensation?

A)Base pay
B)Wage add-ons
C)Incentives
D)Expectancy pay
E)Benefits

Question 5

__________is a theory that employees are motivated when the ratio of their perceived outcomes to inputs is at least roughly equal to that of other referent individuals.

A)Broadbanding
B)Equity theory
C)Expectancy theory
D)Wage compression
E)Delayering

Question 6

__________is a theory proposing that employees are motivated when they believe they can accomplish a task and that the rewards for doing so are worth the effort.

A)Wage compression
B)Pay structure
C)Expectancy theory
D)Broadbanding
E)Equity theory

Question 7

Andrew earns $12 per hour during regular shifts.However, when he has to work the night shift, his pay goes up to $14 per hour.This part of his compensation is considered ________.

A)base pay
B)a wage and salary add-on
C)incentive pay
D)benefits
E)profit sharing

Question 8

If Brittany reaches her sales goals for this quarter, she will receive a $2,000 bonus.This part of her compensation is considered ________.

A)base pay
B)a wage and salary add-on
C)incentive pay
D)benefits
E)profit sharing

Question 9

_______refers to the mix of the four basic components of compensation-base pay, wage add-ons, incentives, and benefits-that we employ.We must divide available funds among the components.

A)Ability to pay
B)Pay for performance
C)At-market pay
D)Types of compensation
E)Wage compression

Question 10

Casey's compensation includes health and dental insurance.This part of her compensation is considered ________.

A)base pay
B)a wage and salary add-on
C)incentive pay
D)benefits
E)profit sharing

Question 11

________ are/is all rewards other than monetary and in-kind payments.

A)Premium pay
B)Incentives
C)Wages
D)Heath benefits
E)Noncompensation components

Question 12

__________is the total of an employee's pay and benefits.

A)Broadbanding
B)Delayering
C)Pay Structure
D)Wage Compression
E)Compensation

Question 13

Colton's salary is $40,000 per year.This part of his compensation is considered ________.

A)base pay
B)wage and salary add-on
C)incentive pay
D)benefits
E)profit sharing

Question 14

Aryn and Mary started at the organization on the same day.Both are hard workers and perceive that they are equitably rewarded for their efforts.According to equity theory, it is likely that both will ________.

A)request a raise
B)worker harder or longer
C)do less work
D)continue to put forth effort
E)None of the above

Question 15

Conner has received steady pay increases over the years for his solid sales performance.This year, the organization merged with another organization and money has become tight.Conner doubts there's any money available for raises.Therefore, he has not been motivated to work as hard.According to expectancy theory, Conner is unmotivated because _________ is lacking.

A)valence
B)instrumentality
C)expectancy
D)significance
E)confidence

Question 16

________ is an honest assessment of how much we can afford, or are willing to afford, in order to compensate our employees.

A)Ability to pay
B)Pay for performance
C)At-market pay
D)Above-market pay
E)Wage compression

Question 17

__________ includes anything that an employee may value and desire and that the employer is willing and able to offer in exchange.

A)Compensation system
B)Equity theory
C)Wage compression
D)Broadbanding
E)Pay structure

Question 18

Jacob's manager asks him to organize a blood drive for the organization.The manager tells Jacob that if he accepts the assignment, he will be awarded Employee of the Month.Jacob has organized blood drives in the past and knows how much work is involved.He does not doubt that his manager can deliver on the promise of the award.However, Jacob has always thought that the award was silly.According to expectancy theory, Jacob is unmotivated to accept the assignment because _________ is lacking.

A)valence
B)instrumentality
C)expectancy
D)significance
E)confidence

Question 19

Martha was promised a 10% raise if she wins a contract with the city government.Martha could use the money to pay off some debts.However, she happens to know that another company already has informally won the contract.There is a very slim chance that she could win the contract away from the other organization, but she does not believe she can do it.According to expectancy theory, Martha is unmotivated to try to win the contract because she lacks __________.

A)valence
B)instrumentality
C)expectancy
D)significance
E)confidence

Question 20

Jim just reached his 10-year anniversary with Acme Global.The company gave him a promotion and raise for being a loyal member of the organization.It appears Acme Global's compensation philosophy is _______.

A)below-the-market
B)at-the-market
C)pay for longevity
D)wage compression
E)None of the above

Question 21

If we pay our employees for knowledge, skills, and abilities they may never use in the workplace, our overall compensation cost ____________.

A)does not change
B)changes insignificantly
C)goes down
D)goes up
E)None of the above

Question 22

__________occurs when new employees require higher starting pay than the historical norm, causing narrowing of the pay gap between experienced and new employees.

A)Equity theory
B)Pay structure
C)Delayering
D)Wage compression
E)Broadbanding

Question 23

Trendy Tina's tech shop pays higher wages than any other electronics store in town.Trendy Tina's is paying ________

A)minimum wage
B)at market
C)above market
D)below market
E)profit sharing

Question 24

Mallory would like to attract better workers and enhance her organization's employment brand.Adopting a(n) ________ organizational philosophy on compensation could help her achieve her goals.

A)at-the-market
B)above-the-market
C)pay for longevity
D)pay secrecy
E)profit pay

Question 25

Mad Max retail store hires workers for $8.50 per hour, which is the same hourly rate as other nearby retail stores.Mad Max is paying _________.

A)minimum wage
B)at market
C)above market
D)below market
E)profit sharing

Question 26

If unemployment is high and it is easy to find replacement workers, which philosophy of compensation might an organization chose?

A)Pay for performance
B)Pay for longevity
C)Above-market pay
D)At-market pay
E)Below-market pay

Question 27

_____ theory notes that if a company pays higher wages, it can generally hire better people who will in turn be more productive.

A)Tournament
B)Signaling pay
C)Efficiency wage
D)Operational wage
E)Equity

Question 28

_______ refers to an organizational philosophy that bases pay on employees' performance in their jobs.

A)Pay for performance
B)Pay for longevity
C)Above-market pay
D)At-market pay
E)Below-market pay

Question 29

Katrina's organization is hiring for low-skilled jobs in an industry where unemployment is high and it is easy to find replacement workers.Adopting a(n) ________ organizational philosophy on compensation could allow her to hire plenty of workers.

A)wage compression
B)below-the-market
C)pay for longevity
D)competency-based pay
E)profit pay

Question 30

The best reason to pay above market is:

A)to attract better workers and enhance our employment brand
B)to take advantage of tax incentives
C)to keep the unemployment rates down
D)to invest in workforce development opportunities
E)to avoid negligent hires

Question 31

To attract better workers and enhance the organization's employment brand, which philosophy of compensation might an organization chose?

A)Pay secrecy
B)Pay for longevity
C)Above-market pay
D)At-market pay
E)Below-market pay

Question 32

Which of the following is a type of incentive compensation?

A)Base pay
B)Benefits
C)Wage compression
D)Skill-based pay
E)Broadbanding

Question 33

Krista's organization uses a differentiation strategy.To encourage workers to bring knowledge, skills, and abilities to the job that can allow them to analyze problems and come up with creative solutions, Krista might adopt a(n) ________ organizational philosophy on compensation.

A)pay secrecy
B)above-the-market
C)at-the-market
D)competency-based pay
E)profit sharing

Question 34

Courtney's organization is in a very competitive industry and getting goods to market quickly is vital to the organization's survival.For Courtney, adopting a(n) _________ organizational philosophy on compensation might be a good idea.

A)at-the-market
B)below-the-market
C)pay for performance
D)wage compression
E)None of the above

Question 35

_____ occurs when the gap between pay for newcomers and veteran employees narrows because of changing economic conditions over time.

A)Pay depression
B)Wage compression
C)Leveling
D)Econometric distribution
E)Equalization

Question 36

Sweet Sal's drive-thru eatery pays just above minimum wage, but other restaurants pay their workers more.Sweet Sal's is paying ___________.

A)minimum wage
B)at market
C)above market
D)below market
E)profit sharing

Question 37

Morgan is working on the compensation package for bank tellers.Bank customers like to see the same faces in the bank when they come in to talk about their money.Therefore, Morgan needs to find a way to reduce turnover among the tellers.Adopting a(n) _________ organizational philosophy on compensation might be a good idea.

A)below-the-market
B)at-the-market
C)pay for longevity
D)wage compression
E)None of the above

Question 38

__________is the lowest hourly rate of pay generally permissible by federal law.

A)Rate range
B)Wage compression
C)Pay structure
D)Compensation
E)Minimum wage

Question 39

_______ refers to an organizational philosophy that bases pay on organizational loyalty/tenure.

A)Pay for performance
B)Pay for longevity
C)Skill-based pay
D)At-market pay
E)Below-market pay

Question 40

__________is a higher than minimum, federally mandated wage, required for nonexempt employees if they work more than a certain number of hours in a week.

A)Broadbanding
B)Compensation
C)Pay structure
D)Delayering
E)Overtime

Question 41

Halle plans to pay her workers the lowest hourly rate of pay generally allowed under the Fair Labor Standards Act.In other words, Halle will pay her workers _________.

A)skill-based pay
B)overtime wages
C)at-the-market wages
D)minimum wage
E)profit wages

Question 42

When there are more workers available than jobs, the market can get some of them to work for ________.

A)more than the normal rate
B)extra benefits
C)less than the normal rate
D)product market competition
E)fewer breaks

Question 43

____________________ of job evaluation break a job down into components and then apply points to each of the factors based on that factor's difficulty.

A)FLSA requirements
B)Performance evaluations
C)Point-factor methods
D)Undercompensated employees
E)Ranking methods

Question 44

_______ is a function of the value of the product or service that the organization sells to the customer.

A)Expectancy theory
B)Compensation
C)Pay structure
D)Product market competition
E)Equity theory

Question 45

_____ is a concept that when jobs are distinctly different but entail similar levels of ability, responsibility, skills, and working conditions, they are of equal value and should have the same pay scale.

A)Equal worth
B)Comparable worth
C)Equitable value
D)Differential value
E)Comparable value

Question 46

_________is a hierarchy of jobs and their rates of pay within the organization.

A)Expectancy theory
B)Compensation
C)Pay structure
D)Broadbanding
E)Equity theory

Question 47

__________is the maximum, minimum, and midpoint of pay for a certain group of jobs.

A)Rate range
B)Compensation
C)Pay structure
D)Broadbanding
E)Overtime

Question 48

Overlapping _____ allows flexibility in assigning each person's pay rate within a particular pay level.

A)pay levels
B)pay lines
C)job evaluations
D)compensable factors
E)benchmark jobs

Question 49

__________is the process of changing the company structure to get rid of some of the vertical hierarchy (reporting levels) in an organization.

A)Delayering
B)Equity theory
C)Broadbanding
D)Pay structure
E)Compensation

Question 50

__________involves combining multiple pay levels into one pay level.

A)Delayering
B)Equity theory
C)Broadbanding
D)Wage compression
E)Pay structure

Question 51

When Stephanie compares the work required in her job to the work required in Heather's job, she finds that the two jobs are similar.While the work in the jobs is different, the jobs involve similar responsibility, skills, and working conditions.However, Heather is paid $2 an hour more than Stephanie is paid.Stephanie's findings appear to reveal a violation of ________.

A)pay secrecy
B)comparable worth
C)equal pay
D)market rates
E)profit sharing

Question 52

The job ranking method of job evaluation simply ranks jobs ___________________.

A)based on education attainment
B)from most- to least-desirable
C)from lowest to highest
D)based on number of job openings
E)based on pay

Question 53

Compensable factors:

A)are the determining factors in individual pay rates.
B)provide information on psychological success in a particular job.
C)provide information on physical success in a particular job.
D)would include factors such as essential functions in a job.
E)are usually identified by interviewing the individual job-holder.

Question 54

The FLSA includes information on each of the following EXCEPT:

A)Minimum wage.
B)Exempt employees.
C)Overtime.
D)Benefits.
E)Child labor.

Question 55

Green-circle rates:

A)are paid at the midpoint for a particular class of jobs.
B)are paid above a particular class of jobs.
C)are paid below a particular class of jobs.
D)are not counted in the pay structure.
E)are benchmark jobs in the overall pay structure.

Question 56

Which job evaluation method begins by comparing benchmark jobs and then uses both point factors and ranking?

A)Job classification
B)Decision banding
C)Job elements
D)Factor comparison
E)Hay Guide

Question 57

The first major provision of the FLSA concerns ____________________.

A)underage employees
B)the unskilled workforce
C)new hires
D)the federal minimum wage
E)profit sharing

Question 58

What is the law that governs federal minimum wage and overtime rules?

A)Social Security Act
B)Equal Employment Opportunity Act
C)Fair Labor Standards Act
D)Maximum Hour and Wage Act
E)Federal Minimum Wage Act

Question 59

__________is the process of determining the worth of each position relative to the other positions within the organization.

A)Delayering
B)Job evaluation
C)Expectancy theory
D)Equity theory
E)Compensation

Question 60

If you find a red-circle rate in a particular pay level, you should probably:

A)not allow the person to get any new raises because they are already being paid too much.
B)recheck your figures because you have a miscalculation in your salary computations.
C)move the person up to at least the bottom of the pay level for their job.
D)broadband the pay scale to put them in the boundary for that job.
E)promote the individual because it is obvious that they work harder than others in their department.

Question 61

Comparable worth means "similar pay for similar work."

Question 62

Comparable worth means "equal pay for equal work."

Question 63

Competency-based or skill-based pay will hinge partly on what skills employees bring to work and whether or not those skills are needed.

Question 64

Wage compression weakens the desired link between pay and performance.

Question 65

Efficiency wage theory says that if a company pays higher wages, it can generally hire better people who will in turn be more productive.

Question 66

Compensation components include all rewards that can be classified as monetary payments and in-kind payments.

Question 67

Wage compression widens the pay gap between new and experienced employees.

Question 68

_________-circle rates are those that are lower than the bottom of the pay range.

A)Red
B)Orange
C)Yellow
D)Green
E)Blue

Question 69

Performance philosophies of compensation don't tend to work well in competitive industries.

Question 70

Pay secrecy clauses are becoming more dangerous to companies who choose to enforce them.

Question 71

Virtually every EEO law identifies compensation as one of the employment actions where discrimination is prohibited if it is based on a protected characteristic.

Question 72

The longevity philosophy of compensation monetarily rewards employees for their loyalty to the firm.

Question 73

Ability to pay is determined by assessing estimated revenues from business operations, then deciding what percentage of revenues go toward compensation costs.

Question 74

Compensation components only include monetary payments to an employee.

Question 75

Comparable worth legislation has been proposed as a solution to the problem of persistent gender inequity in pay.

Question 76

_________-circle rates are those that are higher than the top of the pay range.

A)Red
B)Orange
C)Yellow
D)Green
E)Blue

Question 77

Organizations can have a performance or a longevity philosophy to compensation.

Question 78

Competencies and skills are the same thing.

Question 79

When we design compensation programs, we are trying to motivate the employee to do the things that we need them to do, consistently, over a period of time.

Question 80

Hayley is plotting a graphic of where the employees in her organization fall in the pay structure.She discovers that Vladimir's pay is much higher than his assigned pay level.What Hayley has discovered is a _______.

A)green-circle rate
B)red-circle rate
C)skill-based rate
D)delayered rate
E)overage rate