Question 1

What term describes the process of adjusting survey results to account for the dated nature of compensation surveys,while at the same time,taking into consideration potential market increases in the following year?

Accepted Answer

Aging the data refers to the process of adjusting survey results to account for the dated nature of compensation surveys. This process takes into consideration the potential market increases in the following year, thus making it the best fit for the given description. The other options do not accurately describe the process described in the question.

Question 2

Compensation surveys reflect the value placed on jobs by the labour market,but this does not always mean that the market values jobs fairly.

Accepted Answer

Compensation surveys are a reflection of the value placed on jobs by the labour market, but this does not necessarily mean that the market values jobs fairly. Many factors can influence the value placed on a job, including supply and demand, industry trends, and historical wage patterns, among others. Therefore, compensation surveys can be useful in determining market value, but they should not be the sole basis for determining fair compensation for a particular position.

Question 3

It is easier to use third-party surveys and data than to design and conduct an in-house survey.

Accepted Answer

Designing and conducting an in-house survey requires a lot of effort and resources, including identifying the target audience, designing the survey questions, collecting, analyzing, and interpreting the data. Third-party surveys and data, on the other hand, are readily available and can provide valuable insights without the need for resources and expertise necessary for conducting an in-house survey.

Question 4

Which statement best describes the compa-ratio?

Accepted Answer

The compa-ratio is calculated by dividing an employee's mean base pay by the midpoint of the pay range for their job. It is a useful tool for measuring how an employee's pay compares to the midpoint of the pay range for their position.

Question 5

You have determined that the lowest-paying employer pays it secretaries a mean total compensation of $30,000,and the highest-paying employer pays its secretaries a mean total compensation of $42,000.What is the dispersion in secretarial compensation across firms?

Accepted Answer

The dispersion in secretarial compensation across firms is calculated as the difference between the highest-paying and lowest-paying employers divided by the average of the two. In this case, the dispersion is ($42,000 - $30,000) / (($42,000 + $30,000) / 2) = $12,000 / $36,000 = 0.4, or 40%.

Question 6

The compa-ratio is calculated by taking the average pay of all employees holding a particular job title and then dividing this by the midpoint of the pay range for that job.

Accepted Answer

The compa-ratio is indeed calculated by taking the average pay of all employees holding a particular job title and dividing this by the midpoint of the pay range for that job.

Question 7

You determined that $65,000.00 in salary represents the 85th percentile of total compensation paid by employers for the heavy-duty mechanic job in British Columbia.Which statement is most accurate,given the aforementioned statement?

Accepted Answer

If $65,000 is the 85th percentile, it means that 85% of the salaries are below this amount, and thus, 15% are above it.

Question 8

In broad terms,wages paid for a particular "labourer" depend on the relationship between supply and demand for labour,and a specific company's ability to pay.

Accepted Answer

The wages paid for a particular "labourer" are determined by the market forces of supply and demand for labour, as well as the specific company's ability to pay. The relationship between these factors affects the wage rate for a particular worker.

Question 9

A very large interquartile quotient tends to indicate that all jobs in the sample are equivalent.

Accepted Answer

A large interquartile range (IQR) indicates a wide spread of data points, which suggests that there is significant variability in the data. This means that the jobs in the sample are not equivalent and differ from each other in some way. A small IQR, on the other hand, suggests that the data points are tightly clustered around the median and are similar to each other. Therefore, a small IQR would indicate that the jobs in the sample are more likely to be equivalent.

Question 10

Which of the following is generally NOT a determinant of employees' pay in the public sector?

Accepted Answer

In the public sector, employees' ability to generate revenues is generally not a determinant of their pay. Other factors such as collective bargaining, employers' ability to pay, and available budget for pay increases typically have a greater influence on public sector salaries.

Question 11

For public sector organizations,the key factor determining wages is the employees' ability to generate revenue.

Accepted Answer

In public sector organizations, the wages are determined by factors such as job classification and level of responsibility, rather than the employee's ability to generate revenue. Revenue generation is more relevant to private sector organizations.

Question 12

In conducting a compensation survey,the first step should be to identify the jobs to be surveyed.

Accepted Answer

Before conducting a compensation survey, it is important to first identify the jobs to be surveyed. This allows for a more focused and accurate survey, as similar jobs can be compared and evaluated against each other.

Question 13

In order to calibrate a compensation system,a sample of 25 to 45 percent of sample of jobs should be a minimum.

Accepted Answer

The specific percentage of jobs required to calibrate a compensation system can vary widely depending on the organization's size, the complexity of its job structures, and the methodology used. There is no universally prescribed minimum percentage of jobs that must be sampled for calibration purposes.

Question 14

In analyzing compensation data that include extreme values,what would be an advisable measure of central tendency to use?

Accepted Answer

When analyzing compensation data that includes extreme values, the median is a better measure of central tendency than the mean. The median is the middle value in a dataset when all values are arranged in order. It is less affected by extreme values than the mean, which can be skewed by outliers. Therefore, the median provides a more accurate representation of the typical value in the dataset.

Question 15

Which condition tends to explain why jobs in the higher hierarchy positions of the public sector tend to be paid less than similar positions in the private sector?

Accepted Answer

Publicly visible salaries in the public sector often lead to lower pay for higher hierarchy positions compared to the private sector, as there is greater scrutiny and pressure to justify compensation to taxpayers, leading to more moderate salary levels.

Question 16

What is a potential drawback associated with using compensation consultants to gather labour market information?

Accepted Answer

Compensation consultants usually gather data from their client firms, which may not necessarily represent the entire labour market. This may result in a biased or incomplete sample, which can be a potential drawback associated with using compensation consultants to gather labour market information.

Question 17

The textbook identifies two in-house methods that may be used to collect compensation data.Which of the following is classified as an "in-house" source?

Accepted Answer

Formal surveys are the in-house methods that may be used to collect compensation data. Government agencies, consultants, and industry groups are external sources.

Question 18

Existing companies tend to lower wages when demand for labour exceeds supply.

Accepted Answer

Existing companies may offer higher wages to attract workers when demand for labor exceeds supply. Lowering wages may result in a shortage of personnel and reduced productivity.

Question 19

Informal surveys have poor reliability and validity.

Accepted Answer

Informal surveys often lack proper sampling techniques and unbiased questions, leading to unreliable and invalid results.

Question 20

Which measure can be used to assess the central tendency of pay?

Accepted Answer

The mean is the most commonly used measure of central tendency and calculates the average pay of the employees.

Quiz 9: Evaluating the Market