Deck 9: Base Compensation

Question 1

One goal of a strategic compensation system is to attract and retain qualified employees.

Answer 1

True

Question 2

How organizations choose to compensate employees can make those organizations more or less attractive as employers,motivate different employee behaviors,and affect financial outcomes.

Answer 2

True

Question 3

Compensation is not considered a strategic tool.

Answer 3

False

Question 4

There is one main type of compensation.

Question 5

Employees and their employers have an exchange relationship in which employees apply their time and talents to create value for the organization in exchange for tangible and intangible rewards that employees value.

Question 6

Incentive pay is a popular form of indirect compensation.

Question 7

Direct financial compensation is influenced by the organization,the job,the specific employee,and external factors.

Question 8

A strategic perspective on compensation focuses on tailoring a firm's compensation system to reinforce the firm's business strategy.

Question 9

To maximize your own compensation,carefully choose your industry as well as your career.

Question 10

Pay followers pay their frontline employees as high a wage as possible.

Question 11

In large companies,severance pay is given to all employees upon termination of their employment.

Question 12

Employees exchange their labor for both financial and nonfinancial rewards.

Question 13

Base pay reflects the size and scope of an employee's responsibilities.

Question 14

A cost-of-living allowance is a clause in union contracts that allows the company to argue against an increase in wages.

Question 15

Diversified firms are more likely to link employee pay with business unit performance,whereas less diversified firms are more likely to link employee pay with corporate performance.

Question 16

The resource dependence theory proposes that organizational decisions are influenced by both internal and external agents who control critical resources.

Question 17

Total rewards include everything an employee perceives to be of value that results from the employment relationship but excludes the physical work environment,organizational culture,professional development,recognition,and work/life balance.

Question 18

Seniority and merit are two of the largest influences on wage differentials among people holding the same job in an organization.

Question 19

There are numerous laws requiring severance pay.

Question 20

The labor market is all of the potential employees located within a geographic area from which the organization might be able to hire.

Question 21

Market pricing identifies the economic worth of a job on the open labor market based on what is needed to attract and retain qualified individuals.

Question 22

__________ include(s) all the tangible and financially valued rewards that are not included in direct compensation,including free meals,vacation time,and health insurance.

A) Direct financial compensation
B) Benefits
C) Incentive pay
D) Indirect financial compensation

Question 23

There is no legal requirement to provide __________.

A) financial compensation
B) base pay
C) severance pay
D) total rewards

Question 24

_________ bases some or all of an employee's compensation on employee,team,or organizational performance.

A) Variable pay
B) Fixed pay
C) A pay mix
D) A pay structure

Question 25

__________ typically reflects the size and scope of an employee's responsibilities.

A) Incentive pay
B) Base pay
C) Severance pay
D) Benefits

Question 26

__________ is a popular form of indirect compensation.

A) Direct financial compensation
B) Benefits
C) Incentive pay
D) Indirect financial compensation

Question 27

In applying the point factor method,benchmark jobs are selected based on their having equitable pay and representing a wide range of the compensable factors.

Question 28

The Position Analysis Questionnaire is a structured job evaluation questionnaire that is statistically analyzed to calculate pay rates based on how the labor market is valuing worker characteristics.

Question 29

Development opportunities can be considered a type of __________.

A) direct financial compensation
B) nonfinancial compensation
C) incentive pay
D) indirect financial compensation

Question 30

Julie has just been laid off from her job,and her company has agreed to pay her $15,000 for each year she was with the company.This is an example of __________.

A) incentive pay
B) base pay
C) severance pay
D) total rewards

Question 31

Indirect financial compensation is also referred to as __________.

A) direct financial compensation
B) benefits
C) incentive pay
D) indirect financial compensation

Question 32

The Hay Group Guide Chart-Profile Method is a point-factor system used to produce both a profile and a point score for each position.

Question 33

__________ refers to everything an employee perceives to be of value that results from the employment relationship.

A) Incentive pay
B) Base pay
C) Severance pay
D) Total rewards

Question 34

Any characteristic used to provide a basis for judging a job's value is called a compensation factor.

Question 35

__________ is typically reviewed annually in light of an individual's performance and experience,competitive trends,and the geographic location of the job.

A) Incentive pay
B) Base pay
C) Severance pay
D) Total rewards

Question 36

__________ is compensation received in the form of salary,wages,commissions,stock options,or bonuses.

A) Direct financial compensation
B) Benefits
C) Incentive pay
D) Indirect financial compensation

Question 37

The amount of __________ a departing employee receives is typically based on their length of eligible employment with the company.

A) incentive pay
B) base pay
C) severance pay
D) total rewards

Question 38

__________ includes casual dress codes and flexible work hours.

A) Direct financial compensation
B) Nonfinancial compensation
C) Incentive pay
D) Indirect financial compensation

Question 39

__________ is/are the largest element of base compensation.

A) Direct financial compensation
B) Benefits
C) Incentive pay
D) Indirect financial compensation

Question 40

__________ pays employees a set amount regardless of performance.

A) Variable pay
B) Fixed pay
C) A pay mix
D) A pay structure

Question 41

__________ financial compensation is influenced by the organization,the job,the specific employee,and external factors.

A) Variable
B) Indirect
C) Direct
D) Fixed

Question 42

__________ is the relative emphasis given to different compensation components.

A) Variable pay
B) Fixed pay
C) Pay mix
D) Pay structure

Question 43

Companies with an innovation or customer service strategy use the pay __________ strategy to attract and retain higher quality employees who are critical to their success.

A) leader
B) challenger
C) follower
D) structure

Question 44

__________ differentials are differences in pay between various workers,groups of workers,or workers within a career field.

A) Wage
B) Labor
C) Market
D) Legal

Question 45

__________ reinforces the competitive advantage of cost efficiency because the pay system helps to control labor costs.

A) Variable pay
B) Fixed pay
C) A pay mix
D) A pay structure

Question 46

Different industries and different organizations within an industry are able to pay differently based on their __________ and resources.

A) competition
B) profitability
C) position
D) compensation

Question 47

According to the __________ theory,an organization must acquire resources to survive,and it interacts with other actors who control such resources.

A) resource dependence
B) resource independence
C) critical resource
D) critical dependency

Question 48

A pay __________ is an organization with a compensation policy of giving employees greater rewards than their competitors do.

A) leader
B) challenger
C) follower
D) structure

Question 49

Seniority and merit are two of the largest influences on __________ among people holding the same job in an organization.

A) wage differentials
B) labor markets
C) labor unions
D) labor laws

Question 50

__________ often pay below the market average wage rate due to an inability to pay more or a belief that their employees are easily replaceable.

A) Pay leaders
B) Pay challengers
C) Pay followers
D) Pay structures

Question 51

__________ is the array of pay rates for different work or skills within a single organization

A) Variable pay
B) Fixed pay
C) Pay mix
D) Pay structure

Question 52

To maximize motivation,__________ is usually based on performance over which the employee has some degree of control.

A) variable pay
B) fixed pay
C) a pay mix
D) a pay structure

Question 53

__________ influence compensation through the process of collective bargaining.

A) Wage differentials
B) Labor markets
C) Labor unions
D) Labor laws

Question 54

The __________ theory proposes that organizational decisions are influenced by both internal and external agents who control critical resources.

A) resource dependence
B) resource independence
C) critical resource
D) critical dependence

Question 55

__________can be designed to price jobs at the prevailing market rate or to preserve internal pay equity by compensating each job consistently with the positions above and below it in the company hierarchy.

A) Variable pay
B) Fixed pay
C) The pay mix
D) The pay structure

Question 56

A pay __________ pays their frontline employees as little as possible.

A) leader
B) challenger
C) follower
D) structure

Question 57

The __________ during the time of an employee's hire can result in differing pay for employees in the same job.

A) wage differential
B) labor market
C) labor union effect
D) labor laws

Question 58

__________ expand as positions are located higher in the organization.

A) Wage differentials
B) Labor markets
C) Labor union effects
D) Labor laws

Question 59

A __________ consists all of the potential employees located within a geographic area from which the organization might be able to hire.

A) wage differential
B) labor market
C) labor union
D) labor laws

Question 60

__________ often experience high turnover and lower employee performance.

A) Pay leaders
B) Pay challengers
C) Pay followers
D) Pay structures

Question 61

__________ systems are appropriate when the job doesn't allow for a significant performance difference across employees,and when the employee is paid for time on the job or for simply completing the job as directed.

A) Job pricing
B) Single pay rate
C) Pay grade
D) Broadbanding

Question 62

Many organizations,including the military,base their compensation plans on ________.

A) job pricing
B) single pay rate
C) pay grades
D) broadbanding

Question 63

A __________ is the range of possible pay for a group of jobs.

A) job price
B) single pay rate
C) pay grade
D) broadband

Question 64

A _________ is derived from factors including education,tasks performed,and required skills and abilities.

A) job price
B) single pay rate
C) pay grade
D) broadband

Question 65

A __________ must be clearly and carefully established,and the levels of each factor must mean the same to all pay rates

A) ranking method
B) job classification
C) point factor method
D) compensable factor

Question 66

The __________ of job evaluation uses a set of compensable factors to determine the value of each job.

A) ranking method
B) job classification criteria
C) point factor method
D) compensable factor

Question 67

A __________does not address employees,their performance,or their pay-only the relative size and value of a job compared to other jobs in the organization.

A) benchmark job
B) job evaluation
C) benchmark evaluation
D) compensation evaluation

Question 68

A __________ is any characteristic used to provide a basis for judging a job's value.

A) ranking
B) job classification
C) point factor
D) compensable factor

Question 69

A __________ may have slightly different job titles across organizations but has enough consistency that it can be used as a basis for comparison.

A) benchmark job
B) job evaluation tier
C) benchmark evaluation
D) compensation evaluation

Question 70

The __________ of job evaluation subjectively compares jobs to each other based on their overall worth to the organization.

A) ranking method
B) job classification
C) point factor method
D) compensable factor

Question 71

__________ are jobs that tend to exist across departments and across diverse organizations,allowing them to be used as a basis for compensation comparisons.

A) Benchmark jobs
B) Job evaluations services
C) Evaluations jobs
D) Compensation jobs

Question 72

__________ is the generation of salary structures and pay levels for each job based on the job evaluation data

A) Job pricing
B) Single pay rate status
C) Pay grade reckoning
D) Broadbanding

Question 73

__________ of job evaluation subjectively classifies jobs into an existing hierarchy of grades or categories.

A) The ranking method
B) Job classification
C) The point factor method
D) The compensable factor

Question 74

A __________ is a systematic process that uses expert judgment to assess differences in value between jobs.

A) benchmark job tier
B) job evaluation
C) benchmark evaluation
D) compensation evaluation

Question 75

A __________ clarifies compensation by communicating what an employee's base compensation will be based on,and how long they hold the job.

A) job price
B) single pay rate
C) pay grade
D) broadband

Question 76

__________ pricing is particularly important when an organization believes that it must pay competitively in the open market to attract sufficient numbers of appropriately qualified talent.

A) Arcade
B) Compensation
C) Market
D) Organizational

Question 77

Under a __________ system a single market-determined rate is paid for the job.

A) job pricing
B) single pay rate
C) pay grade
D) broadbanding

Question 78

__________ is the use of very wide pay grades to increase pay flexibility.

A) Job pricing
B) Single pay rate tiers
C) Pay grade reckoning
D) Broadbanding

Question 79

If a nonunionized company wants to be competitive in the __________,it often must at least match the terms of the local union contract.

A) wage differential criteria
B) labor market
C) labor union category
D) labor environment

Question 80

__________ pricing uses external sources of information about how others are compensating certain positions to assign value to similar jobs.

A) Arcade
B) Compensation
C) Market
D) Organizational