Question 1

Which of the following is not a key factor that needs to be considered when deciding whether to outsource?
A) company size
B) internal capabilities
C) vendor relationship challenges
D) the strategic importance of compensation

Accepted Answer

The answer of Which of the following is not a...

Question 2

Which of the following situations may account for higher-than-budgeted compensation expenditures?
A) initial dip
B) spiral career paths
C) job evaluation system
D) excessive accumulation

Accepted Answer

The answer of Which of the following situations may account...

Question 3

Which of the following groups is not considered a key part of the training plan for implementation of a new compensation system?
A) key support people in HR department
B) managers and supervisors
C) those who have role in operating the system
D) all employees covered by the new system

Accepted Answer

While all employees will eventually be affected by the new compensation system, they are not considered a key part of the training plan for implementation. The key groups mentioned are those who will be directly involved in the operation of the system, such as key support people in HR and managers/supervisors who will be responsible for administering the system.

Question 4

Why is it useful to conduct surveys of key employee attitudes before system implementation?
A) To provide information about the new system
B) To have a baseline for future comparisons
C) To solicit recommendations for changes
D) To create perception of employee involvement

Accepted Answer

Conducting surveys of key employee attitudes before system implementation can provide a baseline for future comparisons, allowing organizations to assess the impact of the system on employees over time. This can be useful in determining whether the system has achieved its intended aims and identifying areas for improvement. While information about the new system, recommendations for changes, and creating a perception of employee involvement may also be useful, they are not the primary purposes of conducting surveys of key employee attitudes before system implementation.

Question 5

Compared to last year's high school grades,your marks declined during the first semester of university. What phenomenon has taken place?
A) socialization
B) initial dip
C) integration
D) freedom to act

Accepted Answer

The phenomenon that has taken place is the initial dip, which refers to a temporary decline in academic performance during the transition from high school to university. This is a common trend among students due to the higher demands and greater autonomy in university.

Question 6

Compared to last year's results you have determined an increase in your compensation cost ratio.What does this tell you?
A) This is a sign of greater productivity.
B) Managers have inconsistently applied the new system.
C) The typical employee is earning more money.
D) Noncompensation costs have increased.

Accepted Answer

An increase in compensation cost ratio means that the organization is spending a higher percentage of its revenue on compensating its employees. This could only happen due to an increase in the typical employee's earnings. It is important for organizations to assess their compensation cost ratio to ensure they remain competitive in the job market and retain talent.

Question 7

What main indicators should firms examine in the process of examining compensation costs?
A) budgeted costs and actual costs
B) compensation cost ratios and budget ratios
C) net profit per employee and average employee earnings
D) compensation cost ratios and average employee earnings

Accepted Answer

The main indicators that firms should examine in the process of examining compensation costs are compensation cost ratios and average employee earnings. Compensation cost ratios show the proportion of a firm's revenue that is being spent on compensation, while average employee earnings give an insight into how much each employee is being paid on average. By examining these two indicators, firms can get a clear view of the cost structure of their compensation system and identify areas where they can cut costs or improve the value of compensation for their employees.

Question 8

A good employee threatens to leave your firm because she has received a higher pay offer from a competitor.The offer is well outside your company's pay range for the job the employee is performing.What should you tell the employee?
A) You will match the other offer.
B) You will beat the other offer, to be sure you won't lose her.
C) You will try to get her job put into a higher pay grade.
D) You wish her all the best in her new job at the competitor.

Accepted Answer

The employee is threatening to leave because she has received a higher pay offer from a competitor. The offer is well outside your company's pay range for the job the employee is performing. You cannot match the offer, and you cannot beat the offer. You cannot get her job put into a higher pay grade. Therefore, you should wish her all the best in her new job at the competitor.

Question 9

Which of the following actions is not a way to contain compensation costs?
A) Enact a hiring freeze.
B) Contain benefit costs.
C) Replace some raises with bonuses.
D) Replace variable pay with fixed pay.

Accepted Answer

Replacing variable pay with fixed pay can increase compensation costs, as fixed pay is a guaranteed expense, whereas variable pay can be adjusted based on performance and company profitability.

Question 10

In regard to evaluating the compensation system,which of the following is false?
A) Most organizations don't even try to evaluate their systems.
B) A slipshod attempt at evaluation may do more harm than good.
C) Compensation costs below budgeted levels should make you happy.
D) If the budget was not realistic in the first place comparisons are meaningless.

Accepted Answer

Compensation costs below budgeted levels may indicate that the organization is not able to attract and retain talented employees, or that there may be a lack of competitiveness in the market. Therefore, it is not necessarily a positive outcome and should not make the organization "happy."

Question 11

As a small firm business owner,which of the following is a valid concern you may have about the outsourcing of benefits administration?
A) You may not be able to spend more time on strategic pay practices.
B) You may lose touch with emerging problems and issues.
C) Training costs will be higher.
D) Employees do not want their personal information shared with an outside provider.

Accepted Answer

Outsourcing benefits administration may result in losing touch with emerging problems and issues because the outsourcing provider may not have the same level of familiarity with the company culture and workforce dynamics. It is important to maintain a close relationship with employees to address any potential issues that may arise. Concerns about training costs and employees' personal information can be addressed through careful selection of a reputable outsourcing provider and effective communication with employees. The concern about not being able to spend more time on strategic pay practices is not directly related to outsourcing benefits administration.

Question 12

In regard to compensation communication,which of the following is false?
A) Employers may be found legally liable for poor benefits communication.
B) Two types of ongoing compensation communication are important.
C) There are new guidelines on employer duties for educating pension plan members.
D) One problem is that employees who understand their compensation system are less satisfied with it.

Accepted Answer

This statement is false. Research has shown that employees who understand their compensation system are more satisfied with it.

Question 13

As a result of focusing your recruitment efforts on attracting recent university graduates your workforce has become younger. What impact does this change have on your compensation system?
A) greater focus on pension plans and retirement income
B) offer more cash and family benefits
C) adopt job evaluation system
D) adopt new managerial strategy

Accepted Answer

With a younger workforce, offering more cash and family benefits can be an effective way to attract and retain employees. Recent graduates may be more focused on starting their families and building their finances, making benefits like parental leave or paid time off more valuable to them than a pension plan or retirement income. Adopting a job evaluation system or new managerial strategy may be beneficial in general, but not necessarily a direct result of a younger workforce.

Question 14

Which of the following is not one of the steps in implementing the compensation system?
A) Establish the implementation task forces.
B) Decide on the compensation level.
C) Test the system.
D) Conduct the training.

Accepted Answer

While deciding on the compensation level is certainly an important consideration in designing a compensation system, it is not one of the steps in implementing the system. The steps typically involve establishing task forces or committees to oversee the implementation process, testing the system to ensure that it works as intended, conducting training for managers and employees on how the system works, and communicating the new system to all stakeholders.

Question 15

Which of the following is not considered a way to evaluate the impact of the compensation system?
A) impact on compensation objectives
B) impact on compensation costs
C) impact on employee behaviours and attitudes
D) impact on key strategies

Accepted Answer

Evaluating the impact on key strategies is not a direct way to assess the compensation system; it focuses more on broader organizational goals rather than specific compensation outcomes.

Question 16

Which of the following is not a key aspect of developing the implementation plan?
A) the training plan
B) preparing the compensation budget
C) the plan for communicating the new system
D) the plan for evaluating the new system

Accepted Answer

While preparing the compensation budget may be important for the overall project, it is not a key aspect of developing the implementation plan, which primarily focuses on detailed strategies for implementing the new system. The other three options - training, communication, and evaluation - are all crucial components of a successful implementation plan.

Question 17

Which of the following is not an indicator of membership behaviour?
A) number of applicants job postings attract
B) number of useful employee suggestions submitted
C) absenteeism
D) employee turnover

Accepted Answer

The answer of Which of the following is not an...

Question 18

What aspect of compensation management is most neglected?
A) evaluating the compensation system
B) keeping employees informed
C) ensuring employee privacy rights
D) budget planning

Accepted Answer

Evaluating the compensation system is often neglected because organizations may focus more on implementing and maintaining the system rather than regularly assessing its effectiveness and fairness.

Question 19

Which of the following is not an external circumstance that can trigger the need to change the compensation system.
A) labour market changes
B) legislative and tax changes
C) changes in economic conditions
D) business strategy changes

Accepted Answer

Business strategy changes are not an external circumstance that can trigger the need to change the compensation system. Business strategy changes are internal circumstances that may require a re-evaluation of the compensation system in relation to the strategic objectives. The other options - A, B, and C - are external circumstances that can influence the compensation system, such as market conditions, government policy changes, and economic factors.

Question 20

Which of the following is true of outsourcing compensation administration?
A) Most organizations outsource at least some aspect of their benefits administration.
B) It has been gaining momentum in recent years.
C) It is generally an all-or-nothing proposition.
D) New human resources information systems make it more likely.

Accepted Answer

Most organizations outsource at least some aspect of their benefits administration to manage costs and improve efficiency.

Quiz 13: Activating and Maintaining an Effective Compensation System

Which of the following is not a key factor that needs to be considered when deciding whether to outsource?

Which of the following situations may account for higher-than-budgeted compensation expenditures?

Which of the following groups is not considered a key part of the training plan for implementation of a new compensation system?

Why is it useful to conduct surveys of key employee attitudes before system implementation?

Compared to last year's high school grades,your marks declined during the first semester of university. What phenomenon has taken place?

Compared to last year's results you have determined an increase in your compensation cost ratio.What does this tell you?

What main indicators should firms examine in the process of examining compensation costs?

A good employee threatens to leave your firm because she has received a higher pay offer from a competitor.The offer is well outside your company's pay range for the job the employee is performing.What should you tell the employee?

Which of the following actions is not a way to contain compensation costs?

In regard to evaluating the compensation system,which of the following is false?

As a small firm business owner,which of the following is a valid concern you may have about the outsourcing of benefits administration?

In regard to compensation communication,which of the following is false?

As a result of focusing your recruitment efforts on attracting recent university graduates your workforce has become younger. What impact does this change have on your compensation system?

Which of the following is not one of the steps in implementing the compensation system?

Which of the following is not considered a way to evaluate the impact of the compensation system?

Which of the following is not a key aspect of developing the implementation plan?

Which of the following is not an indicator of membership behaviour?

What aspect of compensation management is most neglected?

Which of the following is not an external circumstance that can trigger the need to change the compensation system.

Which of the following is true of outsourcing compensation administration?