Question 1

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

This is an example of broadbanding, which involves consolidating pay grades into fewer, broader ranges in order to create a flatter organization in terms of compensation.

Question 2

________ represent the vertical dimension of pay structures.

Accepted Answer

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

Question 3

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 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 would differentiate the pay of newly hired employees from established employees, aligning with Mr. Martinez's belief that new hires should not be paid as much as tenured employees. Broadbanding, sales incentives, and merit pay do not address the issue of differing pay levels for new versus established employees.

Question 5

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 6

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

Broadbanding reduces the number of salary grades, which can actually limit traditional job promotions as there are fewer levels to move up, contrary to supporting them.

Question 7

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 8

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

A multiple-tiered commission plan allows employees to earn a higher rate of commission for all sales once they exceed a certain sales threshold.

Question 9

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...

Question 10

________ 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 11

________ 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 12

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

Accepted Answer

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

Question 13

________ 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 14

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 15

________ 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 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 a form of commission draw that acts as a salary because the employee does not have to pay back the money if they do not sell enough to cover the amount. The other choices, nonrecurring draw, safe draw, and graduated draw do not necessarily have this feature.

Question 17

Which of the following 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 loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it. In contrast, a non-recoverable draw is a type of loan that does not need to be repaid by the employee, while an interest-free loan is a loan that does not charge any interest. A commission-plus-draw plan is a compensation plan that combines a base salary with commissions and a draw against future commissions.

Question 18

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

A commission-only plan is best suited for a company following a lowest-cost strategy because it aligns the salesperson's incentives with the company's goal of minimizing costs, as the company only pays when sales are made.

Question 19

________,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 20

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 way to negotiate wage concessions with the union. This system allows the employer to hire new employees at a lower wage rate, while continuing to pay higher wages to existing employees who are protected by the union contract. This helps the employer to reduce labor costs and remain competitive while also maintaining the current wage rates for existing employees.

Quiz 8: Building Pay Structures That Recognize Individual Contributions

________ represent the vertical dimension of pay structures.

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

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

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

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

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

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

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

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

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

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

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

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.

Which of the following is a loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it?

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.

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