Question 1

_____ measures reveal competitors' use of performance-based cash payments.
A) Base cash pay
B) Short-term incentive pay
C) Total cash
D) Long-term incentive pay

Accepted Answer

C

Question 2

Because employers are raising employee pay at various times during the year,survey data must be updated using a process called _____ or _____.
A) aging;trending
B) leading;smoothing
C) matching;leveling
D) gaining;smoothing

Accepted Answer

The statement is referring to the process of adjusting survey data to reflect changes in pay over time, which is commonly known as aging or trending. Choice A includes both of these terms, making it the best answer. Choices B and C are not accurate descriptions of this process, and choice D includes a term that is not related to the topic.

Question 3

The second major decision in pay-level determination is to _____.
A) specify relevant markets
B) define the purpose of a survey
C) design and conduct a survey
D) select product and labor market competitors

Accepted Answer

B

Question 4

Which of the following is often used to set pay ranges?
A) Median
B) Weighted mean
C) Quartiles and percentiles
D) Standard deviation

Accepted Answer

Quartiles and percentiles are commonly used to set pay ranges because they allow for a range of values to be considered rather than just one specific point. Median and weighted mean may also be used, but they do not provide as comprehensive of a range as quartiles and percentiles. Standard deviation is not typically used to set pay ranges, as it measures the dispersion of a set of data rather than the value of the data itself.

Question 5

Which of the following is an example of a company that uses broad banding?
A) A company in which there is more lateral movement with no pay adjustment than promotions
B) A company that has pay guidelines and controls designed right into the pay system
C) A company that has unlimited total salary budget
D) A company that pays all its employees the same salary

Accepted Answer

Broad banding is a system where salary ranges are combined into broader bands or categories, allowing for more lateral movement and fewer job classifications. Option A states that there is more lateral movement with no pay adjustment than promotions, which is a characteristic of a broad banding system. Option B is not necessarily related to broad banding. Option C is not a requirement for implementing broad banding. Option D is not an example of broad banding as it involves paying all employees the same salary regardless of their job responsibilities.

Question 6

The final major decision in pay-level determination is to _____.
A) interpret and apply the results of the survey
B) obtain top-management acceptance of the final decisions
C) design grades and ranges or bands
D) draw policy lines

Accepted Answer

Designing grades and ranges or bands is the final major decision in pay-level determination. This involves grouping jobs of similar value into grades and setting pay ranges or bands for each grade. This decision is based on the results of the survey and other factors such as organizational structure and budget. The other options mentioned, such as interpreting and applying the results of the survey, obtaining top-management acceptance, and drawing policy lines, are important steps in the process but do not involve the final major decision of designing grades and ranges or bands.

Question 7

The first step in setting competitive pay and designing a pay structure is to _____.
A) specify a pay-level policy
B) conduct a job evaluation
C) draw policy lines
D) specify the relevant market

Accepted Answer

The answer of The first step in setting competitive pay...

Question 8

Gramhold Inc. ,a pharmaceutical company,reduces its 10 salary grades to just three broad bands.Which of the following statements is most likely to be true in this case?
A) Gramhold will face difficulty in defining job responsibilities broadly with the new structure.
B) Gramhold will find that the new structure hinders cross-functional growth.
C) Gramhold will experience career moves within bands more than career moves between bands.
D) Gramhold will offer recognition via titles rather than through cross-functional experience and lateral progression.

Accepted Answer

With the reduction of salary grades, the broad bands will likely encompass multiple job responsibilities and skill levels. This makes it easier for employees to move within a band as they gain experience and develop their skills, rather than moving up or down the salary grades. Therefore, career moves within bands are more likely to occur than career moves between bands.

Question 9

All of the following are examples of potential anomalies EXCEPT _____.
A) outliers
B) a large variation in base pay for a job at one company
C) one company dominating the results
D) a large variation in average base pay for a job across companies

Accepted Answer

The answer of All of the following are examples of...

Question 10

A common first step in interpreting survey data is to _____.
A) check for the accuracy of job matches
B) seek out non-responders
C) check for anomalies
D) remove the top- and bottom-paying companies

Accepted Answer

The answer of A common first step in interpreting survey...

Question 11

Which of the following jobs would most likely fall into a fuzzy market?
A) The position of English professor that was filled by a Ph.D.holder in English Language and Literature with five years of teaching experience
B) The position of Sound Engineer that was filled by a graduate with a degree in audio engineering
C) The position of Senior Director of Future Vision Services that was filled by a software engineer with e-commerce,marketing,and theater experience
D) The position of Vice-President of a marketing firm that was filled by a marketing manager with 15 years of experience in the marketing field

Accepted Answer

The position of Senior Director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience is the most likely to fall into a fuzzy market. This is because the role seems to combine various skills and experiences, making it difficult to define a clear market or set of qualifications for the position.

Question 12

A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour.Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour.The company is using the _____ method of job matching.
A) benchmark-job
B) low-high
C) survey leveling
D) benchmark conversion

Accepted Answer

The answer of A company using a skill-based pay system...

Question 13

A survey conducted in January 2013 found that the median pay effective January 1,2013,for a clerk was $22,000 and that the forecast rate of wage increases in the market for 2013 was 5 percent and another 5 percent for 2014.An employer choosing to follow a lead strategy of 4 percent above the market for the plan year will need to _____.
A) multiply the salary by 105 percent and then by 109 percent
B) increase the clerk salary by $2,200
C) multiply the salary by 109 percent
D) multiply the salary by 114 percent

Accepted Answer

To follow a lead strategy of 4 percent above the market, the employer first needs to account for the market increases of 5 percent for 2013 and another 5 percent for 2014, and then add an additional 4 percent on top of the market rate. The correct calculation involves increasing the salary by 5 percent for 2013, then by another 5 percent for 2014, and finally applying the 4 percent lead strategy. However, the correct approach to match the given options is to first apply the market increases (5% for 2013 and 5% for 2014) and then apply the lead strategy. The option that correctly represents this calculation is not directly provided, leading to a misunderstanding in the explanation. The correct mathematical approach would be to increase the salary by 5% for 2013, resulting in a 105% multiplier (1.05), and then increase this result by another 5% for 2014, which would compound the increase, not simply add another 5% in a linear fashion. The lead strategy of 4% above this compounded increase is not accurately captured by any of the provided options.

Question 14

The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called _____.
A) updating
B) point factor adjustment
C) lead/lag policy adjustment
D) survey leveling

Accepted Answer

Survey leveling involves adjusting survey data to account for differences between benchmark jobs and the specific jobs within a company, ensuring that the data accurately reflects the company's job structure and pay scales.

Question 15

Which of the following statistical measures shows how similar or dissimilar the market rates are from each other?
A) Weighted mean
B) Mean
C) Standard deviation
D) Median

Accepted Answer

Standard deviation shows how dispersed the market rates are from the mean. A higher standard deviation indicates greater variability and dissimilarity among the rates.

Question 16

The _____ publishes extensive information on various occupations in different geographic areas.It is a major source of publicly available compensation data.
A) Chamber of Commerce
B) Bureau of Labor Statistics
C) Compensation Association
D) Department of Economics

Accepted Answer

The Bureau of Labor Statistics publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data.

Question 17

For organizations using a skill-competency-based pay system or generic job descriptions,the best approach for pricing jobs is _____.
A) benchmark-job approach
B) low-high approach
C) survey leveling
D) benchmark conversion

Accepted Answer

The answer of For organizations using a skill-competency-based pay system...

Question 18

The _____ minimizes the distortion of the central tendency caused by outliers.
A) weighted mean
B) mean
C) mode
D) median

Accepted Answer

The median is the best choice. It is the middle value when the data set is arranged in order, and is unaffected by extreme values, making it a good measure of central tendency when there are outliers present.

Question 19

Which of the following is true regarding the Employment Cost Index (ECI)?
A) It is published by the Department of Commerce.
B) It is an excellent source of competitor labor costs.
C) It measures annual changes in employer compensation costs.
D) It allows comparison of changes in its average costs to an all-industry average.

Accepted Answer

The answer of Which of the following is true regarding...

Question 20

In most organizations,the responsibility for managing a pay survey lies with _____.
A) top management
B) the facility or plant manager
C) outside consultants
D) the compensation manager

Accepted Answer

Managing a pay survey falls under the role of the compensation manager as it is their responsibility to ensure a fair and competitive compensation structure within the organization. Top management may provide guidelines and directions for the compensation philosophy, while facility or plant managers may provide input on the specific needs of their respective departments, and outside consultants may be used to gather data and provide recommendations, but ultimately the compensation manager is accountable for the management of pay surveys.

Quiz 8: Designing Pay Levels, Mix, and Pay

_____ measures reveal competitors' use of performance-based cash payments.

Because employers are raising employee pay at various times during the year,survey data must be updated using a process called _ or _.

The second major decision in pay-level determination is to _____.

Which of the following is often used to set pay ranges?

Which of the following is an example of a company that uses broad banding?

The final major decision in pay-level determination is to _____.

The first step in setting competitive pay and designing a pay structure is to _____.

Gramhold Inc. ,a pharmaceutical company,reduces its 10 salary grades to just three broad bands.Which of the following statements is most likely to be true in this case?

All of the following are examples of potential anomalies EXCEPT _____.

A common first step in interpreting survey data is to _____.

Which of the following jobs would most likely fall into a fuzzy market?

A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour.Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour.The company is using the _____ method of job matching.

The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called _____.

Which of the following statistical measures shows how similar or dissimilar the market rates are from each other?

The _____ publishes extensive information on various occupations in different geographic areas.It is a major source of publicly available compensation data.

For organizations using a skill-competency-based pay system or generic job descriptions,the best approach for pricing jobs is _____.

The _____ minimizes the distortion of the central tendency caused by outliers.

Which of the following is true regarding the Employment Cost Index (ECI) ?

In most organizations,the responsibility for managing a pay survey lies with _____.