Question 1

These are used as reference points for setting pay levels.

Accepted Answer

Benchmark jobs are those that are commonly found in the market and are used as reference points by employers to set pay levels. They are selected based on their importance to the organization and the prevalence of the job in the industry. Mean pay and median pay are measures of central tendency and may be useful in setting pay levels for individual jobs, but they are not specifically designed to serve as reference points for overall pay structure. Market-competitive pay is a broader concept that takes into account the overall labor market and the prevailing rates of pay for different jobs.

Question 2

Which of the following are the two types of central tendency measures that are pertinent to compensation?

Accepted Answer

The two types of central tendency measures that are pertinent to compensation are arithmetic mean and median. The arithmetic mean provides an average salary, while the median provides the middle salary. Both measures are useful in determining the typical salary range for a particular position or industry. The mode, which represents the most frequent salary, may also be useful in some cases but is not as commonly used in compensation analysis. Quartiles, which divide the salary range into four equal parts, are helpful in identifying outliers or extreme values but are not central tendency measures.

Question 3

This term refers to the distance of each salary figure from the mean.

Accepted Answer

Standard deviation measures the spread or dispersion of a set of data from its central point, which is usually the mean. It tells us how much the individual data points deviate from the average of the dataset.

Question 4

________ is defined as an in-depth examination of the external and internal environmental factors that are likely to have the greatest impact on the future of the company.

Accepted Answer

Strategic analysis involves a thorough review of both external and internal factors that could potentially affect a company's future operations and success. This process typically includes analyzing the competitive landscape, assessing market trends, evaluating the company's own strengths and weaknesses, and identifying potential threats and opportunities. Ultimately, the goal of strategic analysis is to develop a comprehensive understanding of the factors that are likely to impact the company's long-term viability and success, and to use this information to guide strategic decision-making.

Question 5

Which process can companies use to make corrections for differences between their jobs and external benchmark jobs?

Accepted Answer

Job leveling is used to adjust and align internal job roles with external benchmark jobs to ensure consistency and fairness in compensation.

Question 6

What does it mean when the distribution of data is skewed to the right?

Accepted Answer

When the distribution of data is skewed to the right, it means there is a tail on the right side of the distribution, indicating a lower frequency of larger values. In such distributions, the mean is typically greater than the median because the mean is pulled in the direction of the tail.

Question 7

Which of the following entails an examination of a company's external market context and internal factors?

Accepted Answer

A strategic analysis involves an examination of both external factors (such as market conditions, competition, and regulatory environment) and internal factors (such as organizational structure, resources, and capabilities) to develop a strategic plan for a company. A compensation survey, regression analysis, and compensation plan focus solely on compensation-related matters and do not involve a broader analysis of the company's market context and internal factors.

Question 8

Jose Escobar conducts a survey of salaries at ERL Enterprises and finds that 50% of the workers fall below the market pay average of $32,000.In which quartile do the workers at ERL Enterprises fall?

Accepted Answer

The second quartile, or the median, is where 50% of the data falls below a certain value. Since 50% of the workers earn below $32,000, they fall in the second quartile.

Question 9

This causes compensation survey data to become obsolete fairly quickly.

Accepted Answer

The lag time between data collection and data usage is a major factor in the obsolescence of compensation survey data. It often takes several months to collect, analyze and report survey data which can become outdated by the time it is used for making decisions.

Question 10

Compensation professionals integrate the internal job structure with the external market pay rates identified through compensation surveys,and this integration reveals which of the following?

Accepted Answer

Integrating the internal job structure with external market pay rates allows compensation professionals to identify pay rates that reflect both the company's and the external market's valuations of jobs. This helps in ensuring that the company's pay structure is competitive and attractive to both current and potential employees. Changes in wages and salaries, employee benefits, and labor costs between geographic locations also affect compensation decisions, but they are not the primary focus of this integration process.

Question 11

What does Quartile 3 represent?

Accepted Answer

The answer of What does Quartile 3 represent?
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Question 12

Which of the following surveys are tools used by employers to determine the pay levels needed to recruit highly qualified employees?

Accepted Answer

The answer of Which of the following surveys are tools...

Question 13

If the means salary for B42DA,Inc.,is $30,000 and the median salary is $32,000,what would Yolanda's salary of $165,000 be considered?

Accepted Answer

Yolanda's salary of $165,000 is significantly higher than both the mean and median salary, making it an outlier.

Question 14

Compensation surveys are typically focused on which two factors?

Accepted Answer

The answer of Compensation surveys are typically focused on which...

Question 15

Which of the following are reference points against which jobs within the company are judged?

Accepted Answer

Benchmark jobs are positions that are widely recognized across industries and are commonly used as a reference point for setting pay and benefits for similar jobs within an organization. They are used to help establish consistent compensation practices and ensure that employees are paid fairly based on job responsibilities and requirements.

Question 16

In which type of document do compensation professionals represent the selection and implementation of pay level and pay mix policies over a specified time period,usually one year?

Accepted Answer

A compensation plan outlines the selection and implementation of pay level and pay mix policies over a specified time period, usually one year.

Question 17

Identify and describe the four steps for establishing market competitive pay systems.

Accepted Answer

The answer of Identify and describe the four steps for...

Question 18

Suppose that a compensation professional would like to calculate the median salary.He orders four salaries as follows: $20,000,$22,000,$24,000,$26,000.What is the median salary for this data set?

Accepted Answer

The median salary is calculated by taking the average of the two middle numbers in an ordered list when the list has an even number of entries. Here, the two middle numbers are $22,000 and $24,000, so the median salary is ($22,000 + $24,000) / 2 = $23,000.

Question 19

Which of the following are the three measures of dispersion?

Accepted Answer

The three measures of dispersion are standard deviation, quartile, and percentile. Choice B includes all three of these measures. Option A includes percentile but not quartile or standard deviation. Option C includes arithmetic mean but not quartile, and option D includes arithmetic mean and percentile, but not quartile.

Question 20

In statistical analysis,which of the following is used to signify extreme observations?

Accepted Answer

Outliers are values that are significantly different from other observations in a dataset and are sometimes referred to as extreme values. Deviations and variants refer to the spread or variability of the data, while extremities is not commonly used in statistical analysis.

Quiz 7: Building Market-competitive Compensation Systems