Deck 9: Compensation Management

Question 1

In Canada,absolute pay tends to cause more dissatisfaction than relative pay.

Answer 1

False

Question 2

Pay equity legislation has dramatically increased the use of the job ranking and job grading methods as the most effective means of evaluating jobs.

Answer 2

False

Question 3

Compensation programs help to maintain an organization's human resources.

Answer 3

True

Question 4

In the point system of job evaluation,listing job factors down one side and point levels across the top results in a point system matrix.

Question 5

Internal equity in compensation requires that pay be directly related to the rate perceived as fair in the local marketplace.

Question 6

External equity is fairness of pay relative to what other employers are publishing as their pay ranges.

Question 7

Compensation does not include non-cash rewards employees receive in exchange for their work.

Question 8

Among the objectives of effective compensation administration are included the desire to control costs,reward behaviours,and ensure equity.

Question 9

Wage and salary surveys are studies of what other organization are paying within the employer's labour market.

Question 10

The first step in the point system of job evaluation is to determine compensable factors.

Question 11

Job evaluation methods include job ranking,job grading,and the point system.

Question 12

If a recruiter offers a higher than normal (for the organization)salary to a qualified recruit in a labour-competitive market,this can cause a conflict with internal equity policies.

Question 13

When relative pay is too low,employees cannot meet their physiological and security needs.

Question 14

The point system for job evaluation cannot be applied until the point matrix and the point manual are ready.

Question 15

Employee dissatisfaction can arise because needs are affected by both relative and absolute levels of pay.

Question 16

The purpose of job evaluation is to identify which jobs should be paid more than others.

Question 17

Job evaluations are systematic procedures to determine the relative worth or value of jobs.

Question 18

In compensation management,internal equity is also referred to as internal consistency.

Question 19

All job evaluation techniques result in a ranking of jobs that assures internal equity.

Question 20

There are six steps required to implement the point system of job evaluation.

Question 21

Wage-trend lines are plotted on a scattergram by using non-key jobs and then are used to determine wage rates for key jobs.

Question 22

Piecework,bonuses,and commissions can all be considered types of individual incentive plans.

Question 23

The total reward model of compensation includes rewarding everything employees value in an employment relationship.

Question 24

To maintain a competitive advantage,organizations must develop strategic pay plans.

Question 25

Performance can be defined as the accomplishment of assigned tasks,while productivity can be defined as a measure of output.

Question 26

The concept of pay equity was repealed by the Human Rights Act in 1978,and replaced with the non-discriminatory concept of equal pay for equal work.

Question 27

Wage and salary surveys are also known as pricing jobs.

Question 28

Pay equity and the concept of equal pay for equal work are the same.

Question 29

Pricing jobs involves two activities: establishing an appropriate pay level for each job and grouping the pay levels into a manageable structure.

Question 30

Organizations have to make sure that their reward system allows for occasional failures if they want to reward an entrepreneurial culture.

Question 31

Although many businesses complain about minimum wage legislation,government requirements such as this actually have little or no direct effect on organizational compensation policies.

Question 32

Pay is not an important motivator for employees.

Question 33

One reason that women's wages or earnings are less then men's is very often influenced by their roles as mothers and homemakers.

Question 34

New approaches to compensation include both variable pay and broadbanding.

Question 35

For confidentiality reasons private consultants are usually the poorest source of compensation information.

Question 36

The biggest problem with broadbanding as a salary structure is that it emphasizes promotions and makes organizations somewhat less flexible.

Question 37

Group incentive plans have been developed to provide incentives for teamwork.

Question 38

The concept of equal pay for work of equal value is known as pay equity.

Question 39

Relative and absolute job information can be combined by means of a graph called a scattergram.

Question 40

A job's relative worth is determined by what the labour market pays and its absolute worth by the internal job evaluation.

Question 41

The principle of equal pay for men and women in jobs with comparable worth to the organization is called:

A)equal pay for equal work
B)equal pay for work of equal value
C)employment equity
D)fair pay
E)fair employment pay

Question 42

All of the below are steps that compensation specialists go through to set wages/salaries for each job,EXCEPT for:

A)job analysis information
B)wage and salary surveys
C)demographic lifestyle analysis
D)job evaluation
E)pricing jobs

Question 43

The following list gives some of the steps in the point system method of job evaluation.The steps are in sequence from the start of the process,except for one step that is out of sequence.Indicate that step.

A)determine compensable factors
B)determine levels of factors
C)develop the point manual
D)allocate points to sub factors
E)allocate points to levels

Question 44

Pay equity legislation defines some factors that can justify differences in wages for jobs of equal value,including which of the following?

A)all of the choices
B)seniority
C)demotion pay procedures
D)different performance ratings (based on formal appraisals)
E)rehabilitation assignment (after sick leave)

Question 45

The job grading method of job evaluation is also known as:

A)job ranking
B)job classification
C)job posting
D)job listing
E)job comparison

Question 46

The point system for job evaluation is the most widely used system in Canada due to:

A)ease of communicating the job evaluation process to employees
B)the fact that it is the easiest to develop
C)it being a far more simple system than either job ranking or job grading
D)the need to conform to pay equity legislation and the provision,relatively,of the best information about job values
E)the fact that generic computerized plans can be purchased

Question 47

Rankings established through the job evaluation process are used by organizations to determine:

A)any job's relative worth
B)any job's absolute worth
C)any job's variable value
D)any job's worth as perceived by the jobholder
E)any job's worth as perceived by the manager

Question 48

Consolidating a large number of pay grades into a fewer number of (larger)categories is called:

A)broadbanding
B)wide banding
C)flatstructuring
D)de-grading
E)wage rationalization

Question 49

The final step in the point system job evaluation method is:

A)training managers on the system
B)determining compensable factors
C)applying the point system
D)developing the point manual
E)determining levels of factors

Question 50

To determine a fair rate of employee compensation,most firms rely upon:

A)retention targets
B)wage and salary surveys
C)historical records
D)Cartesian labour analysis
E)Brownian motion studies

Question 51

The principle of equal rates of pay for all employees in an organization performing the same kind and amount of work,regardless of any personal characteristics that are not job-related,is called:

A)equal pay for work of equal value
B)pay equity
C)equal pay for equal work
D)non-discriminatory job-related pay rates
E)reverse discrimination

Question 52

Which of the following are sources of information on wage and salary benchmark data?

A)Employment and Social Development Canada
B)compensation specialists and consultants
C)Canada Human Resource Centres
D)employer and professional associations
E)all of the choices

Question 53

A pay raise given to an employee according to a performance evaluation is referred to as:

A)merit raise
B)seniority raise
C)bonus
D)promotion
E)step increase

Question 54

Group or team based incentive plans include all of the following EXCEPT:

A)profit-sharing plans
B)production incentive plans
C)commissions
D)employee stock options
E)team results

Question 55

Piecework is an individual incentive plan which pays employees:

A)for exceeding a specific level of output
B)a percentage or flat amount for each unit sold
C)for saving production time
D)for each unit of output produced
E)based on an individually designed compensation package

Question 56

Individual pay incentive plans can include which of the following EXCEPT:

A)piecework
B)production bonuses
C)commissions
D)executive incentives
E)profit-sharing plans

Question 57

In order to develop a strategic pay plan,Lawler suggests concentrating on a limited number of areas that affect pay systems.That number is:

A)five (5)
B)seven (7)
C)four (4)
D)eight (8)
E)three (3)

Question 58

Which of the following are steps required by the point system of job evaluation?

A)determination of compensable factors
B)allocation of points to levels (degrees)
C)determination of levels (degrees)associated with each factor
D)allocating points to sub factors
E)all of the choices

Question 59

Wage dissatisfaction can be caused by employee needs (e.g.social and security)not being met by both __________ and _________ levels of pay.

A)absolute;relative
B)corporate;social
C)absolute;needs
D)basic;relative
E)absolute;basic

Question 60

According to Lawler all the following areas that affect pay systems should be given particular importance EXCEPT:

A)relate rewards to performance
B)motivate skill and knowledge development
C)foster attraction and retention
D)identify valued rewards
E)establish year-end bonuses

Question 61

Absolute pay levels primarily affect such employee needs as:

A)esteem needs
B)physiological needs only
C)security needs only
D)both physiological and security needs
E)belonging needs

Question 62

Perceived fairness of job rankings within an organization is referred to as:

A)external equity
B)internal equity
C)labour harmony
D)unionization
E)turnover

Question 63

The reason that the point system has become the major job evaluation method is because of:

A)the fact that it provides the best information regarding job values
B)the Charter of Rights and Freedoms
C)the Human Rights Act
D)the ease with which it can be developed and applied
E)its relative inexpensiveness when compared to other systems

Question 64

A form of job evaluation that assigns jobs to predetermined job classifications according to their relative worth to the organization is known as the __________ method.

A)job ranking
B)job grading
C)point system
D)job description
E)administrative

Question 65

External equity in job evaluation may be defined as:

A)perceived fairness of a pay system relative to others within the organization
B)a situation where job descriptions match those of other similar organizations within a specific area
C)perceived fairness in pay relative to what other employers are paying for the same type of work
D)being treated as an equal regardless of personal characteristics when being evaluated for a job
E)the fact that an employee is still seen as equal to others even outside the job

Question 66

In pricing jobs,the appropriate pay level for any job reflects:

A)the job's relative worth only
B)the job's absolute worth only
C)the intrinsic value of the employee occupying the job
D)what a manager determines to be appropriate
E)both the job's relative and absolute worth

Question 67

In order to ensure that a company's pay system is in line with government legislation,which of the following measures are suggested?

A)review the philosophy and rationale of the current job evaluation plan
B)all of the choices
C)review recruiting and promotional decisions
D)examine the differential between the earnings of male and female employees
E)review human resource planning techniques and procedures

Question 68

While flat wage rates are easier to administer they can obstruct rewarding employees.One way organizations avoid such problems is by utilizing:

A)individual rates
B)rate ranges
C)random wages
D)not rewarding exceptional performance
E)allowing employees to set their own wage rates

Question 69

When a company increases employee compensation,this has the effect on the wage-trend line of:

A)moving it to the right
B)moving it upwards
C)moving it downwards
D)reversing the direction of its slope
E)moving it to the left

Question 70

If,for a particular job class,the average hourly wage rate is $13,but a less average employee can be paid $11 and an exceptional employee $15,then this is an example compensation policy utilizing __________ within job classes.

A)flat rates
B)disbursed rates
C)modified rates
D)rate ranges
E)employee non-evaluated rates

Question 71

What makes the issue of equal pay for work of equal value a difficult concept to deal with?

A)it only covers women in the marketplace and ignores other protected classes
B)generally a company will not know how much it pays its female versus male employees
C)the concept (and laws)do not clearly define "equal value" and how it can be measured
D)it conflicts with equal pay for equal work laws
E)it relates only to certain groups of people as specified by the federal government

Question 72

Through the dots that represent key jobs on a scattergram,a __________ is drawn as close to as many points as possible.

A)wage-trend line
B)Scatterline
C)pay rate line
D)pay-point line
E)job evaluation curve

Question 73

New pay concepts such as skill or knowledge-based pay require that human resource departments do all of the following EXCEPT:

A)identify the tasks that have to be performed
B)identify skills required to complete tasks
C)price skills for pay rates
D)ideally,provide incentives for continuous horizontal and vertical learning
E)be prepared to significantly enlarge the workforce

Question 74

No matter what pay rate methods are used to set wages and salaries,they must all be tempered by a variety of challenges including which of the following?

A)organizational policies
B)union power
C)level of productivity
D)prevailing wage rates
E)all of the choices

Question 75

Companies utilize a variety of methods to set pay rates.Which factors can challenge organizational plans and policies concerning wages and salaries?

A)child labour laws
B)production bonuses
C)scatterlines
D)government regulations
E)the British North-America Act

Question 76

There are several new approaches to paying employees which include:

A)skills or knowledge based pay and employee stock ownership plans
B)variable pay and piecework
C)profit sharing and skills or knowledge based pay
D)variable pay and skills or knowledge based pay
E)piecework and profit sharing

Question 77

A systematic procedure to determine the relative worth or value of jobs is called:

A)job evaluation
B)job analysis
C)job standard measurement
D)performance evaluation
E)job intrinsic valuation determination

Question 78

Compensation systems are intended to do all of the following EXCEPT:

A)satisfy employees
B)tie rewards to the achievement of company objectives
C)reimburse employees for their work
D)motivate employees
E)replace performance appraisals

Question 79

In obtaining wage and salary information,regardless of the source,it is always most important to ensure that:

A)the information is printed and not simply verbal
B)the information is in both English and French
C)the information is legally valid under the Human Rights Act
D)the information offers comparisons between similar jobs and not just similar titles
E)the information is in accordance with salaries as laid out in the Employment Equity Act

Question 80

A job evaluation system where jobs in an organization are placed subjectively on a scale in accordance to their importance in comparison with other jobs is called:

A)job grading
B)job progression ladder scaling
C)job ranking
D)job factoring
E)job description comparison technique