Question 1

Team-based compensation plans are effective in all of these situations EXCEPT

Accepted Answer

Team-based compensation plans are not effective when team members compete with each other. This goes against the spirit of teamwork and collaboration, which are essential for such plans to work. In order for team-based compensation plans to be effective, team members must work together towards a common goal and communicate effectively with each other. Additionally, resources don't necessarily have to be plentiful, but the rewards must be significant and worthwhile to motivate team members to work harder towards achieving their shared goals.

Question 2

Edrian works for a bank that recently acquired his consulting shop. He has a "green-circled" job for the wage curve. His manager is likely to tell him:

Accepted Answer

A "green-circled" job means that the employee's current salary is above the range for their position. In this case, the manager is likely to give them a salary adjustment increase in their next paycheck to bring them closer to the range. Therefore, choice C is the best option. The other options are not applicable or unlikely based on the information given.

Question 3

Jon, a U.S. petroleum engineer, moved his family to Saudi Arabia for a two-year assignment. The company provided him a travel allotment of $.10 a mile, a food allowance of $500 a month, and $2000 a month for housing to maintain his standard of living. What kind of pay factor was used?

Accepted Answer

The travel allotment, food allowance, and housing allowance are all examples of differentials. These are additional payments or benefits that are provided to employees who work in difficult, overseas, or remote locations in order to attract and retain talent.

Question 4

Shameka is the new compensation manager of a large manufacturing company. She is currently redesigning the pay structure. She wants to be able to break down jobs based on identifiable factors and the degree to which these criteria exist on the different jobs in her company. What job evaluation method should Shameka use?

Accepted Answer

The point method allows for jobs to be evaluated based on identifiable factors (such as skill, effort, responsibility, and working conditions) and the degree to which these criteria exist on the different jobs in the company. It is a more precise method of job evaluation than the ranking, classification, or ordering methods, and is often used by organizations with complex and diverse job structures. The broad-banding method is not appropriate for this situation, as it involves grouping multiple jobs into a single pay grade based on their overall level of responsibility and skill, rather than evaluating individual jobs based on specific factors.

Question 5

Al's company just instituted a new compensation program for managers. Pay is based on competencies such as leadership, problem solving and strategic planning. Pay levels are preset and reflect the degree of competency. What kind of compensation system was used?

Accepted Answer

The new compensation program is using broad-banding, which involves grouping pay levels into broad bands based on competencies rather than specific job titles or responsibilities.

Question 6

How many times higher are the salaries of U.S. executives compared to those of their foreign counterparts?

Accepted Answer

According to the article, U.S. executives earn two to five times higher salaries compared to their foreign counterparts.

Question 7

Cesar, a satellite architect, accepted an overseas assignment for his company when the company agreed to provide a car and chauffeur, a beach villa, a sailboat, and a lump sum payment of $600,000. What kind of pay factor was used?

Accepted Answer

The lump sum payment of $600,000 is an incentive pay that was used to motivate Cesar to accept the overseas assignment.

Question 8

Jean, a geologic specialist, agreed to accept an overseas assignment for her company after the company agreed to store her yacht, provide security service 24X7, and arrange for Mimi, her cat, to go with her. What kind of pay factor was used?

Accepted Answer

Assistance programs are benefits provided by employers to help employees with personal needs, such as relocation support, pet arrangements, or storage services.

Question 9

Which of the following is the most widely used individual incentive plan?

Accepted Answer

Merit pay is the most widely used individual incentive plan, as it rewards employees based on their individual performance and contributions to the organization. This plan is often linked to performance appraisals and can be used to motivate employees to improve their performance and achieve specific goals. Additionally, this plan provides a clear and measurable way for employees to see how their efforts are being recognized and rewarded.

Question 10

Mid-level executives in the United States regularly earn annual base salaries

Accepted Answer

The answer of Mid-level executives in the United States regularly...

Question 11

As the HR manager of Company XYZ., Victoria is currently working on the reward system. She wants to be able to pay and reward employees based on their skills, knowledge, and behaviors. What pay system should Victoria use?

Accepted Answer

A competency-based pay system would be the best choice for Victoria because she wants to reward employees based on their skills, knowledge, and behaviors. This type of pay system focuses on individual performance rather than team performance or company profits. It provides employees with clear expectations and opportunities to develop their skills and knowledge, and rewards them for achieving their goals and demonstrating desired behaviors. The other options (A, B, C, and E) do not necessarily align with Victoria's goal of paying and rewarding employees based on their individual competencies.

Question 12

Mignon is worrying about the request to institute an incentive pay plan in her organization. All of these concerns are well-founded EXCEPT

Accepted Answer

Concerns about group incentives reducing cooperation on shared tasks are well-founded. However, the other concerns listed are also well-founded and valid.

Question 13

Dana, a compensation specialist for a large hospital in Phoenix is reviewing pay rates for nurses and nursing technicians in other health care organizations in the Phoenix area. She is also making sure her organization is giving as much vacation and shift differentials as her competition. What is she studying?

Accepted Answer

Dana is conducting a compensation survey to review pay rates and benefits offered by other healthcare organizations in the Phoenix area. A compensation survey allows organizations to compare their pay and benefits to those of their competitors to ensure they are staying competitive in the market.

Question 14

Rayshard works for an automobile salvage firm. Last year he started going to monthly meetings with managers and coworkers to evaluate labor-saving ideas. One idea, raising the crane level by 8 feet to clear the building, saved them $2 million. Each of the employees received a $200 bonus for the implementation of that idea. What kind of compensation system is used?

Accepted Answer

The Scanlon Plan is a type of gainsharing program where employees receive bonuses for cost-saving measures, particularly those that improve labor efficiency. The scenario describes a situation where employees collectively benefit from a cost-saving idea, which aligns with the principles of the Scanlon Plan.

Question 15

Zahur, a compensation analyst, is explaining the new wage structure to a group of managers. Grade 3 ranges from 201 to 300 points and $6.25 to $7.00. Grade 5 ranges from 401 to 500 points and $7.50 to $8.75. Which of the following statements would be true of Grade 4?

Accepted Answer

Since Grade 3 ranges from 201 to 300 points and Grade 5 ranges from 401 to 500 points, it can be inferred that Grade 4 falls between 301 and 400 points. The dollar spread for Grade 4 can be calculated by subtracting the lowest value ($6.25) from the highest value ($8.75), which gives a spread of $2.50. Dividing this by the range of points (100) gives a dollar amount of $.025 per point. Therefore, the dollar range for Grade 4 would be $7.00 to $7.00 + (100 x $.025) = $9.00. This means that the top of Grade 4 is greater than $7.50, making statement E true.

Question 16

Andres is the general manager of a plant that manufactures tires. He wants to introduce a plant-wide incentive program focusing on cooperation between management and employees through sharing problems, goals, and ideas. What incentive system should Andres use?

Accepted Answer

The incentive system that best suits Andres' goal of promoting cooperation between management and employees through sharing problems, goals, and ideas is the Scanlon plan. This plan encourages employee involvement in decision-making processes and creates a sense of ownership of the organization's goals. It also rewards employees based on the amount of money saved as a result of their suggestions, which further incentivizes teamwork and cooperation.

Question 17

What is the incentive plan that uses a mathematical formula to determine employee bonuses?

Accepted Answer

The incentive plan that uses a mathematical formula to determine employee bonuses is IMPROSHARE.

Question 18

Which of the following is NOT a factor that is taken into account in the balance sheet approach to international compensation?

Accepted Answer

The balance sheet approach takes into account factors such as base pay, differentials, incentives, and assistance programs, but golden parachute is not typically included as it refers to a form of compensation that provides financial benefits to executives in the event of a merger or acquisition.

Question 19

Which method breaks down jobs based on identifiable criteria and the degree to which these criteria exist on the job?

Accepted Answer

The point method breaks down jobs into components or factors such as skill, effort, responsibility, and working conditions. Each factor is then rated on a scale based on the level of importance to the job, and points are assigned to each level. This method provides a systematic and objective approach to job evaluation.

Question 20

International compensation packages typically include four factors, base bay, differentials, incentives and assistance programs. This approach is referred to as

Accepted Answer

The approach of including base pay, differentials, incentives, and assistance programs is referred to as balance sheet. This approach aims to balance the cost of living differences between the home and host country of the employee. It takes into account factors such as taxes, cost of housing, education, and transportation. The other options, broadband, golden parachute, expatriate and classification, are not relevant in this context.

Quiz 11: Compensation