Question 1

In which situation is a commission-only plan best suited?
A) The salesperson has little influence over the sales.
B) The company is following a lowest-cost strategy.
C) Extensive training or expertise is required.
D) The sales cycle is long.

Accepted Answer

The answer of In which situation is a commission-only plan...

Question 2

________,or lump sum bonuses,lend themselves well to cost containment,since these bonuses are not permanent percentage increases on worker base pay levels.

Accepted Answer

The answer of ________,or lump sum bonuses,lend themselves well to...

Question 3

________ makes sure that employees have at least a minimally acceptable level of skill proficiency upon completion of a training unit.

Accepted Answer

The answer of ________ makes sure that employees have at...

Question 4

Alejandro Martinez is responsible for setting up the pay structure for his company.He believes that newly hired employees should not be paid as much as established employees.Accordingly,what type of pay structure should Mr.Martinez use?
A) broadbanding
B) sales incentives
C) two-tiered
D) merit pay

Accepted Answer

A two-tiered pay structure involves paying newer employees less than established employees. This aligns with Mr. Martinez's belief and would therefore be the most appropriate option for him to use. Broadbanding involves grouping jobs into wide salary ranges, sales incentives are tied to performance, and merit pay is based on an individual's performance and not related to hierarchy within the company.

Question 5

________ is a form of compensation based upon a percentage of the selling price of a product or service.

Accepted Answer

The answer of ________ is a form of compensation based...

Question 6

________ rates pay wages higher than the maximum listed in order to help retain valued employees fielding big job offers elsewhere.

Accepted Answer

The answer of ________ rates pay wages higher than the...

Question 7

The HR manager of a company thinks that they have too many narrow pay grades within the organization.By getting the support from upper management,they decided to consolidate existing pay grades and ranges into fewer pay grades and broader pay ranges in order to create a flatter organization in terms of compensation.This is an example of which pay structure variation?
A) broadbanding
B) two-tier pay system
C) pay compression
D) multiple-tier pay system

Accepted Answer

Broadbanding involves consolidating existing pay grades and ranges into fewer pay grades and broader pay ranges. This helps to create a flatter organization in terms of compensation, as in this case where the HR manager wants to eliminate narrow pay grades. Therefore, the correct choice is A) broadbanding.

Question 8

A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

Accepted Answer

The answer of A ________ is the difference between the...

Question 9

________ represent the vertical dimension of pay structures.

Accepted Answer

The answer of ________ represent the vertical dimension of pay...

Question 10

What types of companies are most likely to utilize two-tier wage systems?
A) unionized firms
B) sales firms
C) public sector companies
D) private sector companies

Accepted Answer

Two-tier wage systems are often utilized by unionized firms as a bargaining tool to reduce labor costs and gain more flexibility in hiring new employees. The system allows for new hires to receive lower wages than current employees, creating a divide in pay and benefits between the two groups. This can be controversial and has often been a point of contention between unions and management.

Question 11

________ assign different pay rates for jobs of unequal worth,and provide the basic framework for recognizing differences in individual's contributions.

Accepted Answer

The answer of ________ assign different pay rates for jobs...

Question 12

This term describes a set of skills necessary to perform a specific job or a group of similar jobs.
A) skill range
B) skill grade
C) skill block
D) skill structure

Accepted Answer

The answer of This term describes a set of skills...

Question 13

This is a loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it.
A) commission-plus-draw plan
B) a recoverable draw
C) a non-recoverable draw
D) an interest-free loan

Accepted Answer

A recoverable draw is a type of advance payment that an employer makes to an employee against future commissions or earnings. Unlike a non-recoverable draw, the recoverable draw must be repaid by the employee if they do not earn enough commissions to cover the advance. This type of loan is carried forward indefinitely until the employee sells enough to repay it, making it a suitable option for employees who have a variable income stream.

Question 14

Which of the following would NOT be considered as an advantage of broadbanding?
A) elimination of narrow bands broadens employees' job duties and responsibilities
B) reduced organizational hierarchies that support job promotions
C) reduced management layers that promotes quicker decision making cycles
D) greater responsibility for supervisors for administering each employee's compensation within the confines of the broadbands

Accepted Answer

The answer of Which of the following would NOT be...

Question 15

With which type of sales commission plan does an employee earn a higher rate of commission for all sales made in a given period if the sales level exceeds a predetermined level?
A) commission-plus-draw plan
B) straight commission
C) multiple-tiered commission
D) graduated commission

Accepted Answer

The answer of With which type of sales commission plan...

Question 16

This type of commission draw acts as a salary because employees are not obligated to repay the loans if they do not sell enough to cover the amount.
A) nonrecurring draw
B) safe draw
C) nonrecoverable draw
D) graduated draw

Accepted Answer

A nonrecoverable draw is one where the employee is not required to repay the loan if they do not make enough sales to cover the amount. This type of draw functions like a salary and is considered a safer option for employees. The other choices given do not accurately describe this type of commission draw.

Question 17

Money that covers the basic living expenses of sales professionals is better known as a ________,

Accepted Answer

The answer of Money that covers the basic living expenses...

Question 18

The ________ pay value is the halfway mark between the range minimum and maximum rates.

Accepted Answer

The answer of The ________ pay value is the halfway...

Question 19

________ describe the allocation of monetary resources to fund pay structures.

Accepted Answer

The answer of ________ describe the allocation of monetary resources...

Question 20

A company adopting a commissions-oriented sales compensation plan would most likely be pursing which type of competitive strategy?
A) highest quality
B) lowest-cost
C) differentiation
D) fairest-price

Accepted Answer

The answer of A company adopting a commissions-oriented sales compensation...

Quiz 8: Building Pay Structures that Recognize Individual Contributions

In which situation is a commission-only plan best suited?

________,or lump sum bonuses,lend themselves well to cost containment,since these bonuses are not permanent percentage increases on worker base pay levels.

________ makes sure that employees have at least a minimally acceptable level of skill proficiency upon completion of a training unit.

Alejandro Martinez is responsible for setting up the pay structure for his company.He believes that newly hired employees should not be paid as much as established employees.Accordingly,what type of pay structure should Mr.Martinez use?

________ is a form of compensation based upon a percentage of the selling price of a product or service.

________ rates pay wages higher than the maximum listed in order to help retain valued employees fielding big job offers elsewhere.

A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

________ represent the vertical dimension of pay structures.

What types of companies are most likely to utilize two-tier wage systems?

________ assign different pay rates for jobs of unequal worth,and provide the basic framework for recognizing differences in individual's contributions.

This term describes a set of skills necessary to perform a specific job or a group of similar jobs.

This is a loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it.

Which of the following would NOT be considered as an advantage of broadbanding?

With which type of sales commission plan does an employee earn a higher rate of commission for all sales made in a given period if the sales level exceeds a predetermined level?

This type of commission draw acts as a salary because employees are not obligated to repay the loans if they do not sell enough to cover the amount.

Money that covers the basic living expenses of sales professionals is better known as a ________,

The ________ pay value is the halfway mark between the range minimum and maximum rates.

________ describe the allocation of monetary resources to fund pay structures.

A company adopting a commissions-oriented sales compensation plan would most likely be pursing which type of competitive strategy?