Question 1

An organization is paying their Associate Vice President of Human Resources the equivalent to the pay of the other Associate Vice Presidents within the organization as they all have relatively equal job evaluation points.The AVP of HR is earning more than HR AVPs in other organizations.The organization is focusing on what with regards to their approach to compensation?

Accepted Answer

The organization is focusing on internal comparison, as they are paying their AVP of HR based on how they measure up to other AVPs within the organization. Although the AVP of HR may be earning more than HR AVPs in other organizations, this is not necessarily relevant to the organization's approach to compensation.

Question 2

A broad band:

Accepted Answer

Broad banding is a compensation strategy that consolidates a large number of pay grades into fewer bands, thus reducing the number of levels in a pay structure.

Question 3

Actual pay is lagging behind the pay policy when the compa-ratio is:

Accepted Answer

The compa-ratio compares the actual pay with the targeted pay for a particular position. When the compa-ratio is less than 1.00, it means that actual pay is below the targeted pay, and therefore, actual pay is lagging behind the pay policy. A compa-ratio greater than 1.00 indicates that actual pay is higher than the targeted pay, which would imply that pay policy is being exceeded. A compa-ratio greater than 100 is not a valid measure as it is mathematically incorrect. A compa-ratio in the range of 1 to 10 is also not a useful measure as it does not provide enough information to assess pay levels.

Question 4

All of the following are ways of enhancing the organization's competitive position in the product market EXCEPT:

Accepted Answer

Staff expansion can actually increase an organization's operational costs rather than enhancing its competitive position in the product market. In contrast, wage and salary freezes, hiring freezes, and sharing benefits costs with employees are cost-saving measures that can improve a company's competitive stance by reducing expenses.

Question 5

Who are employees who are not eligible for overtime pay?

Accepted Answer

Exempt employees are not eligible for overtime pay as they are usually salaried employees who are exempt from minimum wage and overtime laws due to their job duties and responsibilities. Employees paid via skill-based, knowledge-based, or job-based systems can still be eligible for overtime pay if they meet the criteria for non-exempt employees under the Fair Labor Standards Act.

Question 6

Comparable worth is a public policy that:

Accepted Answer

Comparable worth is a policy that advocates for equal pay for jobs that require similar levels of skill, effort, and responsibility, regardless of gender. It seeks to remedy the undervaluation of women's jobs by comparing them to male-dominated jobs that may require similar skills and effort but receive higher pay. While equal pay for equal work is a related concept, comparable worth specifically addresses job valuation based on gender discrimination. It has not been consistently upheld in court rulings, but remains a topic of debate in public policy.

Question 7

__________ is pay based on the skills employees acquire and are capable of using.

Accepted Answer

Skill-based pay is a form of compensation that acknowledges the skills that employees acquire on the job or through training programs. This form of pay rewards employees for the skills they possess and are able to utilize on the job, instead of just based on their job title or seniority.

Question 8

Which of the following is not a true statement concerning product market competition?

Accepted Answer

Product market competition refers to the competition among companies that produce similar goods or services. The statement in option C refers to labor market competition, which is a different concept altogether. In product market competition, organizations compete on multiple dimensions, such as quality, service, and price. In the absence of clear evidence of productivity differences, costs need to be closely monitored, and it places an upper bound on labor costs and compensation.

Question 9

Company Ontarioba has an average pay of 3,500 for the Human Resources Specialist with a midpoint of 3,400 and an average pay of 2,000 for the Human Resources Generalist with a midpoint of 3,000.According to the compa-ratio the:

Accepted Answer

The compa-ratio is calculated by dividing an employee's actual salary by the salary midpoint for their job. A compa-ratio of 1.0 indicates that the employee is being paid exactly at the midpoint of their salary range. Anything over 1.0 means the employee is being paid above the midpoint, and anything below 1.0 means the employee is being paid below the midpoint.

For the HR Specialist, the average pay of $3,500 is above the midpoint of $3,400, so the compa-ratio is greater than 1.0, indicating that the Specialist is exceeding.

For the HR Generalist, the average pay of $2,000 is below the midpoint of $3,000, so the compa-ratio is less than 1.0, indicating that the Generalist is lagging behind.

Therefore, the best choice is A: HR Specialist is exceeding and the HR Generalist is lagging.

Question 10

Minimum wage,hours of work,and overtime are a few examples of minimum standards that employers must adhere to under the:

Accepted Answer

The Employment Standards Act sets out minimum standards that employers must follow in Ontario, including minimum wage, hours of work, and overtime. The Employment Equity Act aims to achieve equality in the workplace for four designated groups (women, Aboriginal peoples, persons with disabilities, and visible minorities) and the Equal Employment Act and Equal Pay Act are US federal laws that prohibit discrimination in employment practices based on various factors including race, gender, religion, etc.

Question 11

The issue of ___________ has received widespread attention in the press although there are very few top executives and their compensation accounts for only a small share of an organization's total labour costs.

Accepted Answer

The statement mentions "executive pay" and how it has received widespread attention in the press. Additionally, it notes that top executives' compensation only accounts for a small share of the organization's total labour costs. Therefore, executive pay is the most relevant issue discussed in the statement. The other options, such as expense accounts, retirement plans, and buyouts, are not mentioned in the statement and are not related to the issue being discussed.

Question 12

Which of the following statements about exemption is TRUE?

Accepted Answer

Exempt employees are typically higher level employees who are not eligible for overtime pay under the Fair Labor Standards Act (FLSA). The criteria for exempt status includes factors such as job duties, salary level, and authority within the organization, not qualifications or experience. Exempt employees are also not covered by certain provisions of the Employee Standards Act.

Question 13

Compensation management could be improved in most organizations by:

Accepted Answer

Increasing employee participation in compensation decision making can lead to greater transparency and understanding of pay decisions, which can improve overall satisfaction and motivation among employees. While technical merit, theoretical bases, and justification for compensation programs are all important factors, employee participation can have a significant impact on the effectiveness of compensation management.

Question 14

_____ pay comparisons focus on what employees within the same organization,but in different jobs,are paid.

Accepted Answer

Internal equity pay comparisons focus on what employees within the same organization, but in different jobs, are paid. External equity pay comparisons, on the other hand, focus on what employees in similar jobs are paid in competing organizations. Interior incentive and exterior incentive are not commonly used terms in HR and compensation management.

Question 15

A disadvantage of using the pay-setting approach that groups jobs into a smaller number of pay grades is that:

Accepted Answer

When jobs are grouped into a smaller number of pay grades, certain jobs may be overpaid or underpaid relative to other jobs within the same pay grade. This can lead to employee dissatisfaction and morale issues, potentially leading to turnover and difficulty attracting new talent. Additionally, it can be challenging to accurately group jobs into a limited number of pay grades, requiring thorough job analysis and market research, which can further increase administrative burden and costs.

Question 16

Implications of the equity theory for managing employee compensation include all but one of the following.Name the exception.

Accepted Answer

The exception is option B, as the equity theory suggests that employees compare their pay with what others get paid (option A), their attitudes and behaviors are influenced by these comparisons (option C), and their perception of pay fairness determines their pay evaluations (option D). However, the theory does not emphasize intrinsic aspects of work when considering employee compensation.

Question 17

Competency-based pay is generally directed toward:

Accepted Answer

Competency-based pay is often used for exempt or salaried employees who are in professional or managerial positions. This type of pay is based on their individual skills, knowledge, and performance, rather than their job titles or job descriptions. It is not typically used for non-exempt employees who are paid hourly or unionized employees who have negotiated pay structures. International employees may be covered by competency-based pay systems, but it is not inherently directed toward them.

Question 18

Which pay-setting approach places the highest relative emphasis on external comparisons?

Accepted Answer

Basing pay on market surveys that cover as many key jobs as possible places the highest relative emphasis on external comparisons, as it relies heavily on comparing the pay rates for specific jobs with external pay rates for similar jobs in the market. This approach often dictates pay rates for an organization in relation to other organizations in the same market or industry.

Question 19

Which of the following is not a recognized limitation of a job-based pay structure?

Accepted Answer

Job-based pay structures are generally easy to explain to employees as they are based on their job description and the skills and qualifications required for it. The other options listed are recognized limitations of job-based pay structures.

Question 20

Which theory states that market forces provide the most efficient means of pricing and allocating people to jobs?

Accepted Answer

Economic theory, also known as the neoclassical theory, is based on the idea that market forces, such as supply and demand, provide the most efficient means of pricing goods and services, including labor, and allocating resources in the economy. This theory argues that the free market will naturally adjust to balance supply and demand for labor, resulting in wages that accurately reflect the value of an individual's skills and productivity.

Quiz 8: Pay Structure Decisions