Question 1

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

Accepted Answer

The answer of Which of the following statements is true...

Question 2

Pay ranges are most common for _____.

Accepted Answer

Pay ranges are most commonly used for white-collar jobs, which typically have a salary or hourly wage structure rather than a piece-rate or union contract structure. They allow for flexibility in pay based on factors such as experience, education, and job performance within a certain range or bracket. Pay ranges may also be used for some blue-collar jobs, but they are most common for white-collar positions.

Question 3

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

Accepted Answer

Limiting the overlap from one pay range to the next can create clearer distinctions between different levels of responsibility and performance, making promotions more meaningful and motivating for employees.

Question 4

A pay policy line

Accepted Answer

A pay policy line can indeed be generated using regression analysis, which is a statistical method used to determine the relationship between variables. In this context, it helps establish the relationship between job evaluation points and market pay rates, thereby guiding the organization in setting its pay structure.

Question 5

Thomas and Alex are welders working for two different divisions of the same company.Both have the same level of experience.However,Thomas earns more than Alex.Under the Fair Labor Standards Act (FLSA),which of the following will justify the organization's decision to pay Thomas more than Alex?

Accepted Answer

The FLSA allows for wage differentials based on location, as it recognizes that living expenses can vary greatly depending on where an employee resides. Therefore, if Thomas lives in an area with a higher cost of living, it may justify his higher wage compared to Alex.

Question 6

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

Basing employees' pay entirely on market forces can sometimes result in perceived unfairness among employees, particularly if the market rates are significantly different from what they were previously earning or what they believe they deserve.

Question 7

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

A pay range is a set of possible pay rates defined by a minimum, maximum and midpoint of pay for employees holding a particular job. A pay grade refers to a group of jobs that are similar in terms of content and value to an organization. Pay differentials refer to differences in pay between employees or groups of employees based on factors such as merit or seniority. Compa-ratio is a comparison of an employee's actual pay to the midpoint of the pay range for their job. Compensation differential refers to the difference in pay between employees who hold different jobs within an organization.

Question 8

Which of the following is a disadvantage of broad bands?

Accepted Answer

Broad bands reduce the number of levels in an organization's job structure, which can limit opportunities for promotions since there are fewer hierarchical levels to move up.

Question 9

Which of the following statements is true about pay ranges?

Accepted Answer

Pay ranges are designed to have a midpoint, which is typically the market rate or pay policy line for the particular job. The range then extends both above and below the midpoint to accommodate pay increases or decreases based on factors such as job performance and experience.

Question 10

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, such as paying more to employees in a hazardous working environment or to employees working in a region with a high cost of living. Bonus is an extra payment given to employees as a reward for excellent performance or to motivate them to work harder. Green-circle rate refers to a pay rate that is below the minimum rate for a job, usually provided to an inexperienced employee. Rank-and-file adjustment is a pay increase given to all employees in a particular job category based on seniority or job performance. Red-circle rate is a pay rate above the maximum rate for a job, usually offered to an experienced employee.

Question 11

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 can create a disincentive for employees to gain valuable experience through lateral career moves. This can result in employees only focusing on moving up the career ladder instead of developing broader skills and knowledge, which can limit their potential in the long run.

Question 12

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

Night shifts are often compensated with higher pay due to their undesirable hours, which can justify a pay difference.

Question 13

Which of the following is a disadvantage of skill-based pay systems?

Accepted Answer

Skill-based pay systems may result in paying employees for skills they don't use, leading to inefficiency and increased labor costs. This disadvantage can be particularly significant in rapidly changing industries where skills become outdated quickly. The other options (A, B, D, and E) are not necessarily disadvantages of skill-based pay systems or may even be advantages in some contexts.

Question 14

Which of the following is a characteristic of delayering?

Accepted Answer

Delayering aims at reducing the number of managerial levels within an organization, which in turn leads to a flatter structure. Such a structure enables the organization to make decisions more quickly and efficiently, thereby increasing its flexibility.

Question 15

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

Broad bands involve combining multiple assignments into a single layer, which allows managers to have more flexibility in making assignments and awarding pay increases.

Question 16

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

Accepted Answer

Job-based pay structures can hinder organizations from making necessary changes because it requires repeating the process of creating job descriptions and related paperwork.

Question 17

Joy Limon,a manufacturing company,has a pay structure based on job descriptions.As the company moves toward customizing production to meet customers' specific needs,it finds that managers are lacking flexibility in both job assignments as well as awarding pay increases to their employees.In this case,which of the following alternatives to job-based pay structures would best help the organization to respond to this problem?

Accepted Answer

The answer of Joy Limon,a manufacturing company,has a pay structure...

Question 18

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 to make decisions in various areas.This,in turn,ensures job enrichment.Based on this information,identify the pay structure being utilized by Instruck.

Accepted Answer

Instruck is utilizing a skill-based pay system, as the employees' pay is dependent on their capabilities and skills. This type of pay structure rewards employees for developing and enhancing their skill set, leading to job enrichment and greater independence.

Question 19

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 mean that multiple jobs can have the same pay range, allowing for more flexibility in transferring employees between jobs without necessarily having to change their pay. This gives the organization more options for filling job vacancies and moving employees around as needed.

Question 20

Which of the following is a drawback of setting pay rates based strictly on a pay policy line?

Accepted Answer

The estimated pay for a job may not reflect conditions in the labor market, which can lead to difficulty attracting and retaining employees. It is important to consider external factors such as the current state of the economy and the competition for talent when setting pay rates.

Quiz 12: Establishing a Pay Structure