Deck 11: Strategic Pay Plans

Question 1

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

A) Compensation policy
B) Internal equity
C) Wage compensation
D) External equity
E) Need for equity

Answer 1

D

Question 2

Which of the following would managers use to monitor and maintain external equity?

A) Salary surveys
B) Pay equity legislation
C) Human rights act
D) Performance appraisals
E) Employee grievances

Answer 2

A

Question 3

Kenty runs a small manufacturing company. A worker hurt his hand on a vertical grinding machine. Kenty filed the proper legal documents quickly so the worker could receive benefits while recovering from his injury. Which type of legislation did Kenty adhere to quickly?

A) Pay equity
B) Workers compensation
C) Human rights
D) Overtime pay
E) Pensions

Answer 3

B

Question 4

What does employee compensation encompass?

A) Payroll costs including government taxes
B) All forms of pay or rewards
C) Regular pay and bonuses
D) Salary or wages and overtime pay
E) Earnings plus absences for sickness or other reasons

Question 5

In a recent study conducted by Towers Watson, what is the most important factor in retaining employees?

A) Excellent career opportunities
B) Competitive base pay
C) Interaction with co-workers
D) Bonuses and benefits
E) Relationship with their immediate manager

Question 6

An employer chooses to be gender-neutral in devising salaries for jobs that are both male- and female-dominated. Which type of legislation is the employer adhering to?

A) Comparable worth
B) Pay equity
C) External equity
D) Internal inequity
E) Broadbanding

Question 7

What is engagement with respect to the impact of rewards?

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 workers and will reward talent
E) Relational work experiences with co-workers and one's manager

Question 8

Which type of pay is predominant today?

A) Piecework
B) Commission
C) Time-based pay
D) Flat rate
E) Pay per project

Question 9

Brenda begins working at a retail gift store. She thinks older workers who have been at the store for years are lazy and that she does far more work than they do. Upon learning how much more they are paid than her, Brenda speaks to the manager about receiving a pay increase and is unhappy to be denied since pay increases are based on years of service. What is Brenda's unhappiness based on?

A) Pay equity
B) Procedural equity
C) External equity
D) Equity theory
E) Internal equity

Question 10

What does job evaluation determine?

A) Performance appraisals of individuals to the group
B) Promotability of employees who are not yet managers
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 jobs within a firm

Question 11

Who should write the compensation policies for a company?

A) CEO
B) CFO
C) Direct managers
D) Labour consultant
E) HR manager

Question 12

Up to how many weeks does the Employment Insurance Act provide benefits to workers unemployed through no fault of their own?

A) 30
B) 45
C) 52
D) 26
E) 18

Question 13

Julien and Bernard, friends in the same commerce program, find similar summer jobs at banks at the end of their winter school terms. Julian learns that Bernard's compensation is 11% more than what he is being paid. Julien feels his employer provides unfair compensation and begins looking for a new job? What is this an example of?

A) Pay equity
B) Procedural equity
C) External equity
D) Equity theory
E) Internal equity

Question 14

Which of the following do unions believe will be the best able to judge the relative value of a job?

A) Immediate manager of workers
B) HR manager
C) General manager overseeing many jobs
D) The workers themselves
E) A third party objective labour consultant

Question 15

Justin used to assemble 18 desks per hour during his shift for the furniture company he works for. Then he found out that other workers who only assemble 13 to 15 desks per hour were receiving the same compensation as he was. Justin now assembles 14 desk per hour. What is this an example of?

A) Pay scales
B) Workers compensation
C) Human rights
D) Equity theory
E) Piece work

Question 16

Dylan is designing a compensation program for his company's sales force that will provide a base rate plus commission for sales over and above a minimum target. The company also provides a generous dental and medical program. He feels this will motivate the sales force to maximize their efforts and sales as well as be loyal to the company and not look for work at other companies. What has Dylan formally created?

A) Strategic compensation plan
B) Aligned reward strategy
C) Hybrid pay structure
D) Dual salary/commission plan
E) Total compensation package

Question 17

Victoria is very happy. She has been a contract worker for a construction company and has just been offered full time. She will now receive additional benefits such as vacation pay. What is this component of employee compensation called?

A) Indirect deposit
B) Indirect financial payment
C) Direct pay
D) Direct deposit
E) Direct financial payment

Question 18

Kyle just started his new position with a large cola company. Part of his orientation was to provide banking information for deposit of his salary into his bank account as opposed to receiving a payment via a company cheque. What is this component of employee compensation called?

A) Indirect deposit
B) Indirect financial payment
C) Direct pay
D) Direct deposit
E) Direct financial payment

Question 19

When Mary started her web application company one of her missions was to make sure job applicants and employees would not experience discrimination as it related to their pay and opportunities for advancement. Which type of legislation did Mary adhere to?

A) Pay equity
B) Workers compensation
C) Human rights
D) Overtime pay
E) Pensions

Question 20

Pay equity laws were enacted in response to which of the following?

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 21

Statistics Canada provides monthly data on earnings by

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

Question 22

What is the job evaluation method that rates each job relative to all other jobs, usually based on some overall factor like "more important"?

A) Critical incidence method
B) Factor comparison method
C) Classification method
D) Point method
E) Ranking method

Question 23

What is used to define job content?

A) Job variety
B) Job design
C) Comparable worth
D) Behavioural anchors
E) Compensable factors

Question 24

What is the eventual result of job evaluation?

A) Job hierarchy
B) Promotion process
C) Internal equity
D) Human rights
E) Compensable factors

Question 25

What is a diverse group of people called who meet together to ensure the fair and comprehensive representation of the nature and requirements of a job in question?

A) Performance appraisal committee
B) Job evaluation committee
C) Union negotiating team
D) Management negotiating team
E) Position review committee

Question 26

What is the graphic description of the relationship between the value of the job and the average wage paid for this job?

A) Pay grade chart
B) Wage curve
C) Rate range graph
D) Wage chart
E) Pay grade curve

Question 27

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 28

Which job evaluation method identifies compensable factors in a job and then calculates a value for each factor?

A) Factor comparison method
B) Ranking method
C) Point method
D) Hay plan method
E) Job classification method

Question 29

What is used to assign pay rates to each pay grade?

A) Rate range
B) Job evaluation
C) Wage grade
D) Wage curve
E) Performance appraisal

Question 30

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

A) Draw up a set of classifying rules
B) Rank jobs by classifying factors
C) Rank jobs against other classes of jobs
D) Assign points to various job classes
E) Rank jobs from lowest to highest class

Question 31

Why does the job evaluation committee want to group jobs in terms of their ranking or number of points into grades?

A) Determine personal growth amongst members of a group
B) Compare dissimilar jobs in groups
C) Assess performance of a group
D) Define the group wage structure
E) Evaluate each individual in a group

Question 32

What is an example of an informal survey conducted by an employer?

A) Governmental agency survey
B) Professional organization survey
C) Telephone survey
D) Industry-wide survey
E) Commercial survey

Question 33

What is the disadvantage of using the job classification method in job evaluation?

A) Grouping jobs
B) Classifying jobs
C) Writing job descriptions
D) Writing grade descriptions
E) Developing job clusters

Question 34

Which of the following commonly use the classification method to categorize jobs into groups?

A) Small businesses
B) Leading-edge Fortune 500 businesses
C) The public sector
D) Hospitals that have technicians and technologists
E) Non-profit charitable organizations

Question 35

What is the problem resulting from using data in employee compensation surveys known as?

A) Employee discrimination
B) Upward bias
C) Systemic undervaluing
D) Stereotyping of data
E) Report bias

Question 36

Aaron decided to pursue a career as a financial. His decision was strongly influenced by his research that revealed virtually every company needs accountants. With respect to job evaluation what kind of job is accounting?

A) Standard job
B) Benchmark job
C) Equitable job
D) Comparable job
E) Common job

Question 37

What is the formal term for a group of jobs that have approximately the same value?

A) Salary grade
B) Wage grade
C) Pay grade
D) Job grade
E) Point grade

Question 38

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

A) Teams
B) Groups
C) Hierarchies
D) Clusters
E) Departments

Question 39

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

A) Contracts
B) Ranges
C) Personal contracts
D) Classes
E) Grades

Question 40

What are the three stages in establishing pay rates?

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 41

What are "pay-for-knowledge" systems also known as?

A) Education-based pay
B) Skill-based pay
C) Competency-based pay
D) Experience-based pay
E) Performance-based pay

Question 42

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 43

What is the term for reducing the number of salary grades and ranges into just a few wide levels?

A) Broadbanding
B) Job specialization
C) Departmentalization
D) Job classification
E) Positioning grading

Question 44

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

Question 45

Pay equity has narrowed the wage gap but it still exists. What is the explanation for this?

A) Glass ceiling effect
B) Upward bias
C) Systemic discrimination
D) Increased contract work
E) Demands for work/life balance

Question 46

What is the cornerstone of executive compensation?

A) Prestige
B) Benefits
C) Incentives
D) Bonuses
E) Salary

Question 47

A benchmark job is held by the higher achievers of companies serves as the performance target for employees.

Question 48

Point systems used in job evaluations are widely used since they are easily developed and quickly understood by user groups.

Question 49

The purpose of pay equity is to eliminate discrimination based on gender, age, culture, and other differences within an organization.

Question 50

There are several steps in pricing jobs with a wage curve. What is the first step?

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 51

Since the introduction of pay equity legislation in Canada the wage gap between genders is virtually non-existent today.

Question 52

The problem with having a wage structure with underpaid employees can be solved through raising their wages to which of the following?

A) An external industry pay grade system
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 53

Walking a customer to where a product is located rather than telling the customer where it is and pointing to the general area, is considered a core competency.

Question 54

A pay grade comprises jobs of similar responsibility but a wide range of compensation.

Question 55

"Total rewards" refers the monetary component of compensation.

Question 56

Rate or pay ranges are a series of steps or levels of pay within a pay grade. What are the ranges usually based on?

A) Peer appraisals
B) Years of education
C) Years of service
D) Teamwork
E) Amount of responsibility

Question 57

What is the term for a rate of pay that is above the pay range maximum?

A) Red circle pay rates
B) Premium job pay rates
C) Excessive pay rates
D) Overage pay rates
E) Outlier pay rates

Question 58

Management does not serve on a job evaluation committee because this would constitute a conflict of interest.

Question 59

What is the basic advantage of broadbanding?

A) Facilitates internal and external equity
B) Encourages human rights adherence by the employer
C) Eliminates upward bias in job evaluation
D) Injects greater flexibility into employee compensation
E) Creates a true company hierarchy

Question 60

An advantage of using rate ranges for each pay grade is that it allows for which of the following?

A) Age differences
B) Gender differences
C) Education differences
D) Employer inflexibility
E) Performance differences

Question 61

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 62

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 63

Describe pay-for-knowledge compensation systems as they relate to competencies and describe what a pay-for-knowledge program should include.