Question 1

Which statement best explains the reason for the decrease in popularity of "defined benefit plans" by employers in Canada?

Accepted Answer

A)  There has been increased longevity of employees. 
B)  Defined benefit plans are simply not popular among employees. 
C)  They help organizations plan more accurately; hence,they make it easier to fund these liabilities. 
D)  Employers believe defined contribution plans are much more unpredictable from a funding perspective. 
A)  There has been increased longevity of employees. 
B)  Defined benefit plans are simply not popular among employees. 
C)  They help organizations plan more accurately; hence,they make it easier to fund these liabilities. 
D)  Employers believe defined contribution plans are much more unpredictable from a funding perspective. A

Question 2

Research cited in the textbook suggests that performance pay plans have relatively high discontinuation rates.

Accepted Answer

A) True 
 B)False  True

Question 3

According to the textbook,what are the key conditions for using output-related pay?

Accepted Answer

Necessary conditions include: 
a)The job output is easily measurable. 
b)The output is easily calculable in value to the employer. 
c)The output is easily attributable to specific employees. 
d)The output is controllable by the individual employee. 
e)It is not highly unstable.

Question 4

Which of the following is NOT a key issue in competency-based pay systems?

Accepted Answer

A)  identifying competencies that demonstrably affect performance 
B)  devising methods to measure achievement of each competency 
C)  providing learning opportunities 
D)  developing the merit pay grid 
A)  identifying competencies that demonstrably affect performance 
B)  devising methods to measure achievement of each competency 
C)  providing learning opportunities 
D)  developing the merit pay grid

Question 5

Why might employees prefer base pay over performance pay?

Accepted Answer

A)  Performance pay is more predictable. 
B)  Base pay is directly related to their performance level. 
C)  They dislike uncertainty about their compensation. 
D)  Market conditions are always changing. 
A)  Performance pay is more predictable. 
B)  Base pay is directly related to their performance level. 
C)  They dislike uncertainty about their compensation. 
D)  Market conditions are always changing.

Question 6

Competency-based pay is usually applied at the managerial and professional levels.

Accepted Answer

A) True 
 B)False

Question 7

Which statement best describes the difference between pay for knowledge systems (PKS)and job-based pay systems?

Accepted Answer

A)  Pay for knowledge systems involve basing pay on the capabilities of individuals,and job-based pay is based on the characteristics of the job. 
B)  Pay for knowledge systems are applied to managerial employees,and job-based pay is applied to operational-level employees. 
C)  Pay for knowledge systems are more widely used by Canadian firms than job-based pay systems, 
D)  Pay for knowledge systems involve low training costs and are easier to administer than job-based pay systems, 
A)  Pay for knowledge systems involve basing pay on the capabilities of individuals,and job-based pay is based on the characteristics of the job. 
B)  Pay for knowledge systems are applied to managerial employees,and job-based pay is applied to operational-level employees. 
C)  Pay for knowledge systems are more widely used by Canadian firms than job-based pay systems, 
D)  Pay for knowledge systems involve low training costs and are easier to administer than job-based pay systems,

Question 8

Which condition make it impractical to use output-related pay?

Accepted Answer

A)  Output is easy to measure. 
B)  Output is very stable. 
C)  Output cannot be controlled by the individual employee. 
D)  Output is easy to price in terms of its value to the employer. 
A)  Output is easy to measure. 
B)  Output is very stable. 
C)  Output cannot be controlled by the individual employee. 
D)  Output is easy to price in terms of its value to the employer.

Question 9

A particular organization wants to include in their compensation system some element of organizational performance linkage,while at the same time it wants to encourage employee commitment.In addition to base pay,what would most likely be included in this compensation mix?

Accepted Answer

A)  merit pay 
B)  piece rates 
C)  profit sharing 
D)  targeted incentives 
A)  merit pay 
B)  piece rates 
C)  profit sharing 
D)  targeted incentives

Question 10

Briefly discuss the advantages and disadvantages of using indirect pay.

Accepted Answer

The possible advantages of indirect pay

Question 11

Pay for knowledge systems are beneficial for organizations that require great task flexibility from their labour force.

Accepted Answer

A) True 
 B)False

Question 12

Why can medical and dental coverage can be purchased more cheaply by the employer than the employee?

Accepted Answer

A)  indexation 
B)  economies of scale 
C)  utility 
D)  dividends 
A)  indexation 
B)  economies of scale 
C)  utility 
D)  dividends

Question 13

Which of the following steps is NOT considered in designing a compensation system?

Accepted Answer

A)  determining actual dollar values for jobs and individual employees 
B)  determining the total level of compensation to provide 
C)  determining how each of the mix choices should be structured 
D)  determining the mix of compensation components 
A)  determining actual dollar values for jobs and individual employees 
B)  determining the total level of compensation to provide 
C)  determining how each of the mix choices should be structured 
D)  determining the mix of compensation components

Question 14

What are two key advantages of market pricing?

Accepted Answer

A)  simplicity and cost 
B)  equity and fairness 
C)  equity and efficiency 
D)  range and depth 
A)  simplicity and cost 
B)  equity and fairness 
C)  equity and efficiency 
D)  range and depth

Question 15

The two key questions that must be addressed in designing any compensation system are: a)What role should each of the three compensation components play in the compensation mix? and b)What total level of compensation should be provided?

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a group performance pay plan?

Accepted Answer

A)  gain sharing 
B)  profit sharing 
C)  stock options 
D)  piece rates 
A)  gain sharing 
B)  profit sharing 
C)  stock options 
D)  piece rates

Question 17

For the majority of employees in Canada,what is the largest component of the pay package?

Accepted Answer

A)  benefits 
B)  performance pay 
C)  indirect pay 
D)  base pay 
A)  benefits 
B)  performance pay 
C)  indirect pay 
D)  base pay

Question 18

In Canada approximately what percentage of an employer's total compensation costs are employee benefits?

Accepted Answer

A)  10-20 
B)  20-30 
C)  30-40 
D)  40-50 
A)  10-20 
B)  20-30 
C)  30-40 
D)  40-50

Question 19

An advantage of indirect pay is that benefits receive more favourable income tax treatment than direct pay.

Accepted Answer

A) True 
 B)False

Question 20

One major advantage of job evaluation programs is that they require the use of comprehensive job descriptions.

Accepted Answer

A) True 
 B)False

Which statement best explains the reason for the decrease in popularity of "defined benefit plans" by employers in Canada?

Research cited in the textbook suggests that performance pay plans have relatively high discontinuation rates.

According to the textbook,what are the key conditions for using output-related pay?

Which of the following is NOT a key issue in competency-based pay systems?

Why might employees prefer base pay over performance pay?

Competency-based pay is usually applied at the managerial and professional levels.

Which statement best describes the difference between pay for knowledge systems (PKS)and job-based pay systems?

Which condition make it impractical to use output-related pay?

A particular organization wants to include in their compensation system some element of organizational performance linkage,while at the same time it wants to encourage employee commitment.In addition to base pay,what would most likely be included in this compensation mix?

Briefly discuss the advantages and disadvantages of using indirect pay.

Pay for knowledge systems are beneficial for organizations that require great task flexibility from their labour force.

Why can medical and dental coverage can be purchased more cheaply by the employer than the employee?

Which of the following steps is NOT considered in designing a compensation system?

What are two key advantages of market pricing?

The two key questions that must be addressed in designing any compensation system are: a)What role should each of the three compensation components play in the compensation mix? and b)What total level of compensation should be provided?

Which of the following is a group performance pay plan?

For the majority of employees in Canada,what is the largest component of the pay package?

In Canada approximately what percentage of an employer's total compensation costs are employee benefits?

An advantage of indirect pay is that benefits receive more favourable income tax treatment than direct pay.

One major advantage of job evaluation programs is that they require the use of comprehensive job descriptions.

A Road Map to Effective Compensation

A Strategic Framework for Compensation

A Behavioural Framework for Compensation

Performance Pay Choices

Formulating the Reward and Compensation Strategy

Evaluating Jobs: the Job Evaluation Process

Evaluating Jobs: the Point Method of Job Evaluation

Evaluating the Market

Evaluating Individuals

Designing Performance Pay Plans

Designing Indirect Pay Plans

Activating and Maintaining an Effective Compensation System

Filters

Exam 4: Components of Compensation Strategy

Which statement best explains the reason for the decrease in popularity of "defined benefit plans" by employers in Canada?

Research cited in the textbook suggests that performance pay plans have relatively high discontinuation rates.

According to the textbook,what are the key conditions for using output-related pay?

Which of the following is NOT a key issue in competency-based pay systems?

Why might employees prefer base pay over performance pay?

Competency-based pay is usually applied at the managerial and professional levels.

Which statement best describes the difference between pay for knowledge systems (PKS)and job-based pay systems?

Which condition make it impractical to use output-related pay?

A particular organization wants to include in their compensation system some element of organizational performance linkage,while at the same time it wants to encourage employee commitment.In addition to base pay,what would most likely be included in this compensation mix?

Briefly discuss the advantages and disadvantages of using indirect pay.

Pay for knowledge systems are beneficial for organizations that require great task flexibility from their labour force.

Why can medical and dental coverage can be purchased more cheaply by the employer than the employee?

Which of the following steps is NOT considered in designing a compensation system?

What are two key advantages of market pricing?

The two key questions that must be addressed in designing any compensation system are: a)What role should each of the three compensation components play in the compensation mix? and b)What total level of compensation should be provided?

Which of the following is a group performance pay plan?

For the majority of employees in Canada,what is the largest component of the pay package?

In Canada approximately what percentage of an employer's total compensation costs are employee benefits?

An advantage of indirect pay is that benefits receive more favourable income tax treatment than direct pay.

One major advantage of job evaluation programs is that they require the use of comprehensive job descriptions.

A Road Map to Effective Compensation

A Strategic Framework for Compensation

A Behavioural Framework for Compensation

Performance Pay Choices

Formulating the Reward and Compensation Strategy

Evaluating Jobs: the Job Evaluation Process

Evaluating Jobs: the Point Method of Job Evaluation

Evaluating the Market

Evaluating Individuals

Designing Performance Pay Plans

Designing Indirect Pay Plans

Activating and Maintaining an Effective Compensation System

Filters