Question 1

Both Thomas and his cousin,Alex,work for two different branches of the same organization.Both have the same level of experience in management.However,Thomas earns more than Alex.Under the laws governing Fair Labor Standards Act (FLSA),which of the following will justify the organization's decision to pay Thomas more than Alex?

Accepted Answer

Organizations may pay extra to employees in locations where living expenses are higher. These adjustments are called pay differentials.

Question 2

Kazuri Inc.,a manufacturing company,bases employees' pay entirely on market forces.In this case,which of the following is a practical drawback faced by the company?

Accepted Answer

The organization could base pay entirely on market forces. However, this approach also has some practical drawbacks. One is that employees may conclude that pay rates are unfair.

Question 3

Which of the following is the result of combining more assignments into a single layer,thus giving managers more flexibility in making assignments and awarding pay increases?

Accepted Answer

By combining more assignments into a single layer, organizations give managers more flexibility in making assignments and awarding pay increases. These broader groupings often are called broad bands.

Question 4

Instruck Inc.is a real estate firm based in Colorado.The company ensures that employees' pay is dependent on what they are capable of doing.The company also supports efforts to empower its employees by encouraging them to be independent and making decisions in various areas.This,in turn,ensures job enrichment.Based on this information,identify the pay structure being exemplified in this scenario.

Accepted Answer

Skill-based pay systems are pay structures that set pay according to the employees' level of skill or knowledge and what they are capable of doing. Paying for skills makes sense at organizations where changing technology requires employees to continually widen and deepen their knowledge.

Question 5

Overlapping _____ give the organization more flexibility in transferring employees among jobs,because transfers need not always involve a change in pay.

Accepted Answer

Overlapping pay ranges gives the organization more flexibility in transferring employees among jobs, because transfers need not always involve a change in pay.

Question 6

A pay policy line:

Accepted Answer

A pay policy line is a graphed line showing the mathematical relationship between job evaluation points and pay rate. This can be done statistically on a computer, using a procedure called regression analysis.

Question 7

Pay ranges are most common for _____.

Accepted Answer

Pay ranges are most common for white-collar jobs and for jobs that are not covered by union contracts.

Question 8

Which of the following statements is true about pay ranges?

Accepted Answer

Pay ranges are most common for white-collar jobs and for jobs that are not covered by union contracts. The range is widest for employees who are at higher levels in terms of their job evaluation points. That is because the performance of these higher-level employees will likely have more effect on the organization's performance, so the organization needs more latitude to reward them. A typical approach is to use the market rate or the pay policy line as the midpoint of a range for the job or pay grade.

Question 9

Which of the following is an adjustment to a pay rate to reflect differences in working conditions or labor markets?

Accepted Answer

Pay differential is an adjustment to a pay rate to reflect differences in working conditions or labor markets.

Question 10

Which of the following statements is true about job-based pay structures?

Accepted Answer

Organizations may avoid change because it requires repeating the time-consuming process of creating job descriptions and related paperwork.

Question 11

Which of the following is a drawback of pay rates?

Accepted Answer

Survey data may show that people in certain jobs are actually earning significantly more or less than the amount shown on the pay policy line.

Question 12

Which of the following is a disadvantage of broad bands?

Accepted Answer

Broad bands reduce the opportunities for promoting employees, so organizations that eliminate layers in their job descriptions must find other ways to reward employees.

Question 13

Triano Brothers,an insurance firm,follows an administrative procedure for measuring the relative worth of its jobs.The organization does this by assembling and training a committee consisting of people familiar with the jobs.The committee includes a human resource specialist and,if the budget permits,an outside consultant is hired.Which of the following is exemplified in this scenario?

Accepted Answer

Job evaluation is an administrative procedure for measuring the relative worth of the organization's jobs. Usually, the organization does this by assembling and training a job evaluation committee, consisting of people familiar with the jobs to be evaluated. The committee often includes a human resource specialist and, if its budget permits, may hire an outside consultant.

Question 14

John and Lisa hold the same position at Flyberry Electronics.However,John earns more than Lisa.In the context of pay structure,which of the following justifies the organization's decision to pay John more than Lisa?

Accepted Answer

In some situations organizations adjust pay to reflect differences in working conditions or labor markets. For example, an organization may pay extra to employees who work the night shift because night hours are less desirable for most workers. Similarly, organizations may pay extra to employees in locations where living expenses are higher.

Question 15

Assuming an organization wants to motivate employees through promotions,and assuming enough opportunities for promotions are available,the organization would want to:

Accepted Answer

Assuming the organization wants to motivate employees through promotions (and assuming enough opportunities for promotions are available), the organization will want to limit the overlap from one level to the next.

Question 16

Which of the following statements is true about key jobs?

Accepted Answer

Pay for the key jobs can be based on survey data, and pay for the organization's other jobs can be based on the organization's job structure. A job with a higher evaluation score than a particular key job would receive higher pay than that key job.

Question 17

Which of the following is a set of possible pay rates defined by a minimum,maximum,and midpoint of pay for employees holding a particular job?

Accepted Answer

Pay range is a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade.

Question 18

Joy Limon,a manufacturing company,has a job structure that focuses on higher pay for higher status.When the company's CEO decides that the company will need a new set of knowledge,skills,and abilities,he realizes that the existing pay structure may be rewarding the wrong behaviors.In this case,which of the following alternatives to job-based pay structures may help the organization to respond to this problem?

Accepted Answer

Some organizations have found greater flexibility through delayering, or reducing the number of levels in the organization's job structure. By combining more assignments into a single layer, organizations give managers more flexibility in making assignments and awarding pay increases.

Question 19

Which of the following is a characteristic of delayering?

Accepted Answer

Some organizations have found greater flexibility through delayering, or reducing the number of levels in the organization's job structure.

Question 20

Which of the following is a disadvantage of a pay structure that rewards employees for winning promotions?

Accepted Answer

A pay structure that rewards employees for winning promotions may discourage them from gaining valuable experience through lateral career moves.

Quiz 12: Establishing a Pay Structure