Question 1

In a brief essay, discuss the purpose of job evaluations. Discuss the similarities and differences between job evaluations conducted for managerial positions and lower level positions at a firm.

Accepted Answer

The answer of In a brief essay, discuss the purpose...

Question 2

What is the primary purpose of offering an executive stock options in a compensation package?

Accepted Answer

B)Long-term incentives aim to encourage the executive to take actions that drive up the value of the company's stock and include things like stock options; these generally give the executive the right to purchase stock at a specific price for a specific period.

Question 3

Richard was recently offered a position as vice president of marketing at a national retail chain. As a top executive at the firm, Richard will most likely be compensated with all of the following EXCEPT ________.

Accepted Answer

C)Compensation for a company's top executives usually consists of four main elements: base pay, short-term incentives like bonuses, long-term incentives, and executive perks such as pension plans and supplemental life insurance. Sales commissions are not a typical compensation for top executives.

Question 4

Which of the following terms refers to a series of steps or levels within a pay grade?

Accepted Answer

B)The term pay range refers to a series of steps or levels within a pay grade. It lets the employer take a more flexible stance in the labor market.

Question 5

A ________ is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

Accepted Answer

C)A pay grade is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

Question 6

Which of the following terms refers to the requirement to pay men and women equal wages for jobs of roughly equivalent value to the employer?

Accepted Answer

B)Comparable worth refers to the requirement to pay men and women equal wages for jobs that are of comparable (rather than strictly equal)value to the employer. Comparable worth may involve comparing quite dissimilar jobs.

Question 7

Which of the following shows the relationship between the value of the job and the average pay for this job?

Accepted Answer

D)The wage curve shows the pay rates currently paid for jobs in each pay grade, relative to the points or rankings assigned to each job or grade by the job evaluation. You'll typically use a wage curve to help assign pay rates to each pay grade (or to each job).

Question 8

The point method of job evaluation is the most frequently used job evaluation method, but it is also associated with lawsuits involving comparable worth. In a brief essay, explain the point method of job evaluation and why it is problematic for firms in regards to comparable worth.

Accepted Answer

The answer of The point method of job evaluation is...

Question 9

Which of the following is NOT one of the compensable factors emphasized in the Equal Pay Act?

Accepted Answer

B)The Equal Pay Act emphasizes four compensable factors-skills, effort, responsibility, and working conditions.

Question 10

According to many experts, which of the following would most likely reduce the wage gap between men and women?

Accepted Answer

A)Education may reduce the wage gap. Studies suggest that schooling's impact on earnings is greater for females than for males, other things equal. This may be because education reduces the male-female earnings gap attributable to female discrimination.

Question 11

Which of the following questions is most relevant to developing a market-competitive pay system?

Accepted Answer

B)With a market-competitive pay system, the employer's actual pay rates are competitive with those in the relevant labor markets. Rankings are more relevant to the job evaluation method of setting pay rates.

Question 12

The purpose of the wage curve is to ________.

Accepted Answer

A)The purpose of the wage curve is to show the relationships between the value of the job as determined by one of the job evaluation methods and the current average pay rates for your grades.

Question 13

What are the primary factors involved in determining compensation for a firm's CEO? What reasons best explain compensation reductions for top executives in recent years?

Accepted Answer

The answer of What are the primary factors involved in...

Question 14

Phil, the owner of Eastline Electronics, recently learned that the current rate being paid for the position of engineering assistant at his firm falls significantly below the wage line. Which of the following steps should Phil most likely take to correct this problem?

Accepted Answer

D)If the current rates being paid for any of your jobs or grades fall well above or below the wage line, raises or a pay freeze for that job may be in order. In this case, a pay raise is appropriate because the rate is below the wage line.

Question 15

________ means collapsing salary grades and ranges into just a few wide levels, each of which contains a relatively wide range of jobs and salary levels.

Accepted Answer

C)Broadbanding means collapsing salary grades into just a few wide levels or bands, each of which contains a relatively wide range of jobs and pay levels. A company may create broadbands for all its jobs or for specific groups such as managers or professionals.

Question 16

Job evaluations are used to determine the pay scale of all employees in an organization from hourly workers to the CEO.

Accepted Answer

For top executive jobs (especially the CEO), job evaluation typically has little relevance, but job evaluations are used for other positions in a firm. Top executive compensation depends on job complexity, the employer's ability to pay, and the executive's human capital.

Question 17

Which of the following job evaluation methods is associated with almost every comparable worth lawsuit?

Accepted Answer

D)Virtually every comparable worth case that reached a court involved the use of the point method of job evaluation. By assigning points to dissimilar jobs, point plans facilitate comparability ratings among different jobs.

Question 18

A company using competency-based pay compensates employees for all of the following EXCEPT ________.

Accepted Answer

B)Competency-based pay occurs when a firm pays wages based on an employee's knowledge, skills, behaviors, and abilities rather than for the job title that he or she holds.

Question 19

Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the past few years, the company's market share has dropped significantly, and employee turnover has increased. Upper management is considering the implementation of a new compensation policy in its efforts to turn the company around. Historically, the company has paid all employees similarly with some variation for seniority but no distinction between high and low performers. Which of the following, if true, best supports the decision by Homelife executives to implement competency-based pay?

Accepted Answer

C)When used in conjunction with team-building and worker involvement programs, competency-based pay appears to lead to higher quality and lower absenteeism. Comparable worth and minority hiring are irrelevant to competency-based pay.

Question 20

Most organizations use a market-pricing approach when determining compensation for professional employees such as engineers and scientists.

Accepted Answer

Most employers use a market-pricing approach when compensating professional employees. They price professional jobs in the marketplace as best they can, to establish the values for benchmark jobs. Then they slot these benchmark jobs and their other professional jobs into a salary structure.

Quiz 11: Establishing Strategic Pay Plans