Question 1

What type of jobs do companies normally use to collect wage survey data?
A) key jobs
B) low-rated jobs
C) high-rated jobs
D) strategic jobs

Accepted Answer

Companies typically use key jobs to collect wage survey data because they are the most important and commonly found jobs in the organization. These jobs are used as benchmarks for setting pay rates for other jobs in the company.

Question 2

Crystal Ball Inc. is a large information technology firm with many levels of management. The company would like to compensate its managers on factors such as knowledge and accountability. Which system would you recommend?
A) market pricing
B) the Hay profile method
C) job classification as implemented in Microsoft
D) work valuation

Accepted Answer

The Hay profile method is designed to evaluate job roles based on three factors: knowledge, accountability, and working conditions. It is therefore suitable for a company like Crystal Ball Inc. that wants to compensate managers based on these factors. The market pricing method focuses more on external market rates, while job classification as implemented in Microsoft has limited capabilities for evaluating knowledge and accountability. Work valuation may not be as suitable for evaluating managerial roles.

Question 3

In geography, the water catchment area or watershed refers to the area that channels or supplies a specific area with its water. Catchment areas divide drainage basins. In wage surveys, what is this catchment area similar to?
A) the labour market
B) the region
C) the recruiting area
D) the supply region

Accepted Answer

The water catchment area or watershed is similar to the labour market in wage surveys, as it refers to the specific area from which employees are drawn to supply the workforce for a particular job or industry.

Question 4

Tiffany works as an IT specialist at Nortel. She is compensated based on such skills as programming and service to clients. It is likely that she is paid under which of the following pay plans?
A) a competence-based pay plan
B) a performance-based pay plan
C) a merit-based pay plan
D) a seniority-based pay plan

Accepted Answer

Tiffany's compensation is based on her skills and competence in programming and client service. This is characteristic of a competence-based pay plan, which rewards employees for their proficiency and abilities rather than performance or seniority.

Question 5

Which three factors does the Hay profile method use for evaluating jobs?
A) knowledge, skill, and responsibility
B) responsibility, mental activity, and skill
C) responsibility, knowledge, and mental activity
D) knowledge, accountability, and mental activity

Accepted Answer

The Hay profile method evaluates jobs based on knowledge, accountability, and mental activity.

Question 6

Which of the following is NOT a method of comparison used in job evaluation?
A) job worth system
B) job ranking system
C) job classification system
D) point system

Accepted Answer

The job worth system is not a recognized method of job evaluation. The other options (job ranking, job classification, and point system) are standard methods used to evaluate and compare jobs.

Question 7

When can red circle rates lead to results above the maximum for the pay range?
A) promotional opportunities are plentiful
B) the relevant jobs may have been evaluated too high previously
C) employees are demoted
D) grades are added to the range

Accepted Answer

Red circle rates are pay rates that exceed the maximum of the pay range for a particular job or grade. When this occurs, it may be because the job was previously evaluated too high, resulting in an inflated pay range. Therefore, choice B is the best answer. Choices A, C, and D may all affect pay rates, but they are not directly related to red circle rates leading to results above the maximum for the pay range.

Question 8

According to the text, what is the predominant approach to employee compensation?
A) pay-for-performance
B) competence-based pay
C) job-based pay
D) individual contract

Accepted Answer

The text states that the predominant approach to employee compensation is job-based pay, which refers to paying employees based on the specific job they hold within the organization. Pay-for-performance and competence-based pay are alternative compensation models, but the text does not suggest that they are more common than job-based pay. Individual contract is not a compensation approach, but rather a type of employment arrangement in which an employee negotiates the terms and conditions of their employment with their employer on an individual basis.

Question 9

What is job classification often used to help determine pay for?
A) merit bonuses
B) the company's CEO
C) classified university professors' jobs
D) government jobs

Accepted Answer

Job classification is often used to determine the pay for government jobs. This helps to ensure that employees are fairly compensated based on the duties and responsibilities of their position.

Question 10

Using the point manual, how is the relative worth of a job determined?
A) by benchmarking jobs contained in the point manual
B) through the wage mix
C) by the number of steps within the pay grade
D) by the total points that have been assigned to that job

Accepted Answer

The relative worth of a job is determined by the total points that have been assigned to that job within the point manual. Points are given based on a job's knowledge, skills, accountability, and working conditions. The higher the total points for a job, the higher it is ranked in the pay structure.

Question 11

In the development of a factor comparison scale, key jobs are NOT normally ranked against which of the following factors?
A) skill
B) performance
C) mental effort
D) responsibility

Accepted Answer

Key jobs are typically used to establish the relative importance of factors such as skill, mental effort, and responsibility. Performance, however, is not considered a factor for ranking key jobs as it is a result of the individual's performance, rather than an inherent characteristic of the job itself.

Question 12

Which of the following is a quantitative job evaluation procedure that determines a job's relative value on the basis of quantitative assessments of specific job elements?
A) the point system
B) job ranking
C) the factor comparison method
D) the job grade system

Accepted Answer

The point system is a quantitative job evaluation procedure that assigns point values to various job elements such as skill, effort, responsibility, and working conditions. The total point value determines the job's relative worth and its appropriate pay range.

Question 13

Ontario Hydro is seeking a top-level engineer to help with its operations. What is the relevant labour market to be surveyed?
A) regional
B) local
C) national
D) internal

Accepted Answer

Ontario Hydro is a provincial utility company, but it is a significant player in the energy sector in Canada. Therefore, the relevant labour market to be surveyed would be national to attract top-level engineers from across Canada. Regional and local surveys may not yield enough qualified candidates, and an internal survey would only include current employees, which may not necessarily have the desired skillset.

Question 14

What type of equity do wage and salary surveys permit an organization to maintain?
A) internal
B) distributive
C) external
D) salary

Accepted Answer

Wage and salary surveys permit an organization to maintain external equity by comparing their pay rates with those of other organizations in their industry or region. This helps them to ensure that they are paying their employees fairly and competitively in comparison to similar roles in the market. Internal equity refers to the fairness of pay within the organization, while distributive equity relates to how fairly rewards are distributed among individuals within the organization. Salary equity is not a commonly used term in compensation management.

Question 15

In developing a wage curve, what are market wage rates plotted against?
A) market survey data
B) employee benefits
C) the size of a firm
D) the point value of jobs

Accepted Answer

Market wage rates are plotted against the point value of jobs in developing a wage curve. The point value of jobs is determined by a job evaluation system that takes into account factors such as skill, effort, responsibility, and working conditions. Plotted against market wage rates, the wage curve shows where a company's pay rates fall in relation to the external labor market.

Question 16

What should employers do if they wish to encourage employees to accept a promotion to a job in a higher grade?
A) increase the size of successive rate ranges
B) increase the point spread of pay grades
C) decrease the size of successive rate ranges
D) decrease the point spread of pay grades

Accepted Answer

Increasing the size of successive rate ranges provides a greater financial incentive for employees to accept promotions, as it offers a more substantial increase in pay with each higher grade.

Question 17

According to the text, which job evaluation method is considered the most valid?
A) job ranking
B) the point method
C) the classification method
D) the factor comparison method

Accepted Answer

The text states that "the point method is the most widely accepted as being the most valid" job evaluation method.

Question 18

Which of the following pay systems would an organization wishing to establish greater job-staffing flexibility most likely use?
A) straight pay
B) competence-based pay
C) incentive pay
D) two-tier pay

Accepted Answer

Competence-based pay encourages employees to develop a variety of skills and competencies, which enhances job-staffing flexibility by allowing employees to perform multiple roles.

Question 19

To help achieve internal equity, factors such as skills, effort, responsibilities, and working conditions may be used to assess jobs. Which term refers to these factors?
A) job specifications
B) job classification factors
C) compensable factors
D) factor comparisons

Accepted Answer

Compensable factors are the factors that are used to determine the relative worth of different jobs within an organization. These factors include skills, effort, responsibilities, and working conditions. By using compensable factors, organizations can ensure that they are paying employees fairly for their work and achieving internal equity. Job specifications refer to the qualifications and requirements for a specific job, while job classification factors and factor comparisons are not relevant to this question.

Question 20

Accounting clerks, pay clerks, and junior secretaries are all classed in Grade 2 at Metroland Inc. Which of the following should apply to all these jobs?
A) They should all receive the same wage rate in order to achieve equality.
B) They should be paid within the same pay range.
C) They should be paid similar to Grade 2 jobs at McDonald's.
D) They should be paid at different wage rates because the worth of these jobs to the organization may differ.

Accepted Answer

Since all three positions are classified as Grade 2 within Metroland Inc., it is appropriate that they should be paid within the same pay range. However, it is not necessary for them to receive the same wage rate or be paid similar to other Grade 2 jobs in different organizations as the worth of these jobs to the organization may differ.

Quiz 9: Managing Compensation

What type of jobs do companies normally use to collect wage survey data?

Crystal Ball Inc. is a large information technology firm with many levels of management. The company would like to compensate its managers on factors such as knowledge and accountability. Which system would you recommend?

In geography, the water catchment area or watershed refers to the area that channels or supplies a specific area with its water. Catchment areas divide drainage basins. In wage surveys, what is this catchment area similar to?

Tiffany works as an IT specialist at Nortel. She is compensated based on such skills as programming and service to clients. It is likely that she is paid under which of the following pay plans?

Which three factors does the Hay profile method use for evaluating jobs?

Which of the following is NOT a method of comparison used in job evaluation?

When can red circle rates lead to results above the maximum for the pay range?

According to the text, what is the predominant approach to employee compensation?

What is job classification often used to help determine pay for?

Using the point manual, how is the relative worth of a job determined?

In the development of a factor comparison scale, key jobs are NOT normally ranked against which of the following factors?

Which of the following is a quantitative job evaluation procedure that determines a job's relative value on the basis of quantitative assessments of specific job elements?

Ontario Hydro is seeking a top-level engineer to help with its operations. What is the relevant labour market to be surveyed?

What type of equity do wage and salary surveys permit an organization to maintain?

In developing a wage curve, what are market wage rates plotted against?

What should employers do if they wish to encourage employees to accept a promotion to a job in a higher grade?

According to the text, which job evaluation method is considered the most valid?

Which of the following pay systems would an organization wishing to establish greater job-staffing flexibility most likely use?

To help achieve internal equity, factors such as skills, effort, responsibilities, and working conditions may be used to assess jobs. Which term refers to these factors?

Accounting clerks, pay clerks, and junior secretaries are all classed in Grade 2 at Metroland Inc. Which of the following should apply to all these jobs?