Deck 7: Building Market-Competitive Compensation Systems

Question 1

Compensation surveys are typically focused on which two factors?

A) competitors' promotion and advancement opportunities
B) internal promotion and advancement opportunities
C) competitors' wage and salary practices
D) internal wage and salary practices

Answer 1

C

Question 2

What does it mean when the distribution of data is skewed to the right?

A) There is a lower frequency of larger values and the median is greater than the mean.
B) There is a higher frequency of larger values and the median is greater than the mean
C) There is a lower frequency of larger values and the mean is greater than the median.
D) There is a higher frequency of larger values and the mean is greater than the median

Answer 2

C

Question 3

These are reference points against which jobs within the company are judged.

A) benchmark jobs
B) relevant labor markets
C) internal labor markets
D) human resource capabilities

Answer 3

A

Question 4

These are used as reference points for setting pay levels.

A) mean pay
B) median pay
C) market-competitive pay
D) benchmark jobs

Question 5

These are tools used by employers to determine the pay levels needed to recruit highly qualified employees.

A) strategic surveys
B) external market surveys
C) compensation surveys
D) internal market surveys

Question 6

When using compensation survey data,statistical analyses are used to integrate this with the external market,in order to determine pay rates.

A) internal pay scales
B) nominal pay rates
C) internal pay benchmarks
D) internal job structures

Question 7

These are the two types of central tendency measures that are pertinent to compensation.

A) mode and arithmetic mean
B) median and mode
C) mode and quartile
D) arithmetic mean and median

Question 8

In statistical analysis,this term is used to signify the possible extreme observations.

A) deviations
B) extremities
C) outliers
D) variants

Question 9

The NCS provided incidence and extensive data on which two types of compensation benefits?

A) health insurance & retirement
B) retirement & stock options
C) health insurance & pay
D) pay & stock options

Question 10

Suppose that a compensation professional would like to calculate the median salary.He/she orders four salaries as follows: $20,000,$22,000,$24,000,$26,000.What is the median salary for this data set?

A) $21,000
B) $22,000
C) $23,000
D) $24,000

Question 11

This term is defined as an in-depth examination of the external and internal environmental factors that are likely to have the greatest impact on the future of the company.

A) market-competitive pay structure
B) regression analysis
C) competitive strategy
D) strategic analysis

Question 12

This term refers to the distance of each salary figure from the mean.

A) standard deviation
B) quartile
C) percentile
D) deviated mean

Question 13

Jose Escobar conducts a survey of salaries at UB2 Enterprises and finds that 50% of the workers fall below the market pay average of $32,000.In which quartile do the workers at ERL Enterprises fall?

A) first
B) second
C) third
D) fourth

Question 14

When examining competitors' compensation offerings this term is used to describe the percentage of employer compensation costs that are applied to compensation and benefits.

A) mix
B) quartile
C) standard percentile
D) nominal dollars

Question 15

This causes compensation survey data to become obsolete fairly quickly.

A) the lag time between when the data was collected and used
B) pay compression
C) changes in the unemployment rate
D) changes in the geographic location of the company

Question 16

This BLS survey provides the quarterly measure of changes in labor and compensation costs,and is used as the principle economic indicator for the Federal Reserve.

A) National Compensation Survey
B) Employment Cost Index
C) Employer Costs for Employee Compensation
D) National Benefit Index

Question 17

What would Yolanda's salary of $165,000 be considered if the means salary for B42DA,Inc.,is $30,000 and the median salary is $32,000?

A) overlie
B) outsider
C) outlier
D) over layer

Question 18

Which of the following are the three measures of dispersion?

A) percentile standard, deviation, arithmetic mean
B) standard deviation, quartile, percentile
C) quartile, arithmetic mean, standard deviation
D) arithmetic mean, percentile, quartile

Question 19

As of September 2010,U.S.companies spent approximately how much per employee for discretionary benefits?

A) $28,995
B) $19,000
C) $3,050
D) $1,200

Question 20

What does Quartile 3 represent?

A) the number of figures that are above 25%
B) the number of figures that fall below 25%
C) the number of figures that are above 75%
D) the number of figures that fall below 75%

Question 21

In the regression analysis formula,what does the X represent?

A) predicted salary
B) job evaluation points
C) the slope
D) the Y intercept

Question 22

The ________ is the most commonly used method for tracking cost changes throughout the United States.

Question 23

The Consumer Price Index represents the average price changes for the price of goods and services in how many regions?

A) 2
B) 4
C) 6
D) 8

Question 24

XYZ Company is a world leader in medical device manufacturing.Aiming to continue its market position in this industry,XYZ Company pursues differentiation strategy.As a result,in order to attract and retain best employees,this company compensates its employees higher than almost all competitors.What kind of pay level policy does XYZ Company follow?

A) market match
B) market lag
C) market lead
D) market pay line

Question 25

Companies pursuing a differentiation strategy are most likely to use which pay level policy?

A) market lead
B) market average
C) market lag
D) market match

Question 26

The ________ is the middle value in an ordered sequence of numerical data.

Question 27

________ represents the amount of spread or dispersion in a set of data.

Question 28

________ represent the fields of potentially qualified candidates for particular jobs.

Question 29

XYZ Inc.pursues a low-cost strategy in its industry and generally needs lower skilled employees.As a result,their management team decided to establish a compensation policy that pays less than the marketplace.In recent years the company became susceptible to labor shortages and high turnover.What kind of pay level policy does XYZ Inc.follow?

A) market match
B) market lag
C) market lead
D) market pay line

Question 30

HR professionals rely on ________ jobs as reference points for setting pay levels.

Question 31

How often is the Consumer Price Index calculated for the United States?

A) daily
B) weekly
C) monthly
D) twice a year

Question 32

________ refers to a group of two or more jobs that are based on similar work characteristics,duties,and responsibilities.

Question 33

Market match policies are generally set to which quartile in the salary survey?

A) 1st
B) 2nd
C) 3rd
D) 4th

Question 34

The market ________ policy most closely follows the typical market pay rates because companies pay according to the market pay line.

Question 35

In regression,what does it mean when the R2 = 1?

A) All of the variation in market pay can be explained by the company's job structure.
B) None of the variation in market pay can be explained by the company's job structure.
C) All of the variation in market pay can be explained by the company's external pay rates.
D) All of the variation in market pay can be explained by the benchmark rates.

Question 36

Compensation professionals in XYZ Company use regression analysis to determine the pay rates of its marketing professionals.There are 4 different marketing job titles in XYZ Company.Compensation professionals use job evaluation points assigned to each marketing job title and a salary survey data.In other words,they regress job evaluation points on the salary data.What does it mean when the R2 value of this regression turns out to be 0.85?

A) All of the variation in market pay can be explained by the company's job structure.
B) None of the variation in market pay can be explained by the company's job structure.
C) A large amount of the variation in market pay can be explained by company's job structure.
D) A small amount of the variation in market pay can be explained by company's job structure

Question 37

The market ________ policy distinguishes a company from competition by compensating employees less than most competitors.

Question 38

________ analyses enable compensation professionals to establish pay rates for a set of jobs that are consistent with typical pay rates for jobs in the external market.

Question 39

________ allow compensation professionals to describe the distribution of data based on four groupings.

Question 40

Market lag policies are generally set to which quartile in the salary survey?

A) 1st
B) 2nd
C) 3rd
D) 4th

Question 41

Elaborate on the link between a company's pay level policy and its strategic mandate.

Question 42

Explain the role of compensation surveys.Why is it important to update survey data?

Question 43

Explain market pay line.How is it used in the context of pay level policies such as market lead,market lag,and market match?