Deck 11: Rewarding Human Resources

Question 1

Research shows that organisations seeking a competitive advantage employ remuneration practices that:

A) encourage, facilitate and reward desired employee behaviours.
B) keep strictly within the allocated salary budget guidelines.
C) are similar to those employed by competitors in comparable industries.
D) focus on maintaining established relativities between employees.

Answer 1

encourage, facilitate and reward desired employee behaviours.

Question 2

A systematic method of determining the worth to the organisation of a job in relation to other jobs is a:

A) salary survey.
B) job evaluation.
C) job grading.
D) salary formula.

Answer 2

job evaluation.

Question 3

The most common systems of job evaluation are:

A) job review, job ranking, task classification and job audit.
B) job classification, job grading, performance review and task analysis.
C) job ranking, job grading, and points and factor comparison.
D) job grading, job review, job audit and factor comparison.

Answer 3

job ranking, job grading, and points and factor comparison.

Question 4

Which of the following job evaluation systems is quantitative?

A) Job ranking
B) Job grading
C) Factor comparison
D) Job analysis

Question 5

The approach to job evaluation that sizes jobs by placing them in an order is known as:

A) job grading.
B) job structuring.
C) job factor analysis.
D) job ranking.

Question 6

Which of the following job evaluation methods is the simplest, easiest to understand and the oldest?

A) Factor comparison
B) Job grading
C) Hay group method
D) Job ranking

Question 7

For job grading to be accurate:

A) broad experience and knowledge of the job is required by the grader.
B) satisfactory job descriptions have to be written for each of the grades.
C) it is necessary to observe and interview the current job holder.
D) it is important to recognise the differences between jobs.

Question 8

An approach to job evaluation in which numerical values are assigned to specific job factors and the sum of those values provides a quantitative assessment of a job's relative worth is:

A) job rating.
B) job grading.
C) points system.
D) factor comparison.

Question 9

As the points system can be time-consuming, expensive and difficult, many organisations:

A) prefer to use other methods.
B) prefer to adopt methods developed by specialist consultants.
C) make fundamental mistakes in evaluating key jobs.
D) fail to successfully use pay surveys to establish their true market position.

Question 10

A UK study by McNally and Shimmin found that job evaluations showed:

A) consistency in the evaluations of men and women's jobs.
B) a tendency to negatively evaluate men's work and hold relatively positive assumptions about women's jobs.
C) a tendency to positively evaluate men's work and hold relatively negative assumptions about women's jobs.
D) relatively positive assumptions about women's work in non-managerial roles and relatively negative assumptions about managerial work carried out by women.

Question 11

The pay survey provides information on:

A) remuneration packages offered by the competition.
B) minimum award rates as determined by the Government.
C) base salaries and benefits in comparable organisations.
D) bonus and incentive schemes used to enhance employee motivation.

Question 12

Individual pay rates within an organisation are normally determined by:

A) external market factors.
B) the success of union claims for increases in pay levels.
C) job size and employee performance.
D) seniority.

Question 13

An essential tool in salary administration that presents all pay ranges over the whole spectrum of job sizes is:

A) pay structure.
B) graphic rating scales.
C) effort-reward differentiation.
D) a pay review chart.

Question 14

The purpose of the pay line is to show the relationship between:

A) job size and the average remuneration for it.
B) the average pay of all employees in that grade and how it compares to the external market.
C) the number of points for a job and the minimum remuneration paid.
D) the average increase paid within the company for each job type compared to the average increase pay in other companies.

Question 15

The most generally accepted pay range for professional and managerial positions is plus or minus _____ per cent from the midpoint.

A) 5
B) 10
C) 15
D) 20

Question 16

The pay range:

A) graphically depicts the wages and salaries currently being paid for jobs, related to job size.
B) presents all pay ranges over the whole spectrum of job sizes.
C) sets the minimum and maximum scheduled amounts paid for a job at a particular job size.
D) identifies the standard pay, and how much above or below that figure is being paid for each job.

Question 17

The clustering of formerly numerous individual pay grades into a few broad pay grades is known as:

A) salary range.
B) narrow banding.
C) job evaluation.
D) broadbanding.

Question 18

Which of the following is NOT one of the basic market postures that an organisation may use to position itself in the pay market?

A) Pay above market average
B) Pay market average
C) Pay below market average
D) Pay determined by yearly profits

Question 19

A graphical representation of the organisation's predicted pay midpoints for the 12-month period ahead is known as:

A) a pay policy line.
B) a pay structure.
C) a pay range.
D) a pay curve.

Question 20

Which of the following is true in terms of the issue of pay secrecy?

A) Most organisations keep their pay rates confidential.
B) Pay secrecy is the norm in private sector organisations whereas public sector organisations make such information readily available.
C) Pay secrecy is the norm in public sector organisations whereas private sector organisations make such information readily available.
D) Most organisations disclose information about employees' pay rates.

Question 21

A survey of Australia's biggest companies by the University of Sydney Business School found that:

A) the higher the CEO's pay the longer the length of service with an organisation.
B) the higher the CEO's pay the lower the company's profits.
C) there is a close positive relationship between CEO's performance and CEO's pay.
D) there is no obvious relationship between CEO's pay and the performance of Australian companies.

Question 22

Executive remuneration has increased rapidly because of all of the following EXCEPT:

A) talent shortages.
B) performance.
C) executive pay disclosures.
D) globalisation.

Question 23

In the United States, the average CEO earns _________ times the average wage.

A) 83
B) 183
C) 283
D) 383

Question 24

An organisation that uses length of time on the job to determine pay levels and increases is using:

A) seniority-based pay.
B) pay-for-performance.
C) merit-based pay.
D) skill-based pay.

Question 25

Merit pay aims to:

A) develop a productive, efficient, effective organisation that enhances employee motivation and performance.
B) reward employees for their commitment and loyalty to the organisation.
C) encourage employees to gain additional skills, competencies and knowledge that will increase their personal satisfaction and value to the organisation.
D) ensure that salary packages offered by the organisation are competitive.

Question 26

A scheme which gives employees the option to buy shares at a favourable price at some future date is known as:

A) employee share scheme.
B) share options.
C) performance bonus.
D) variable pay.

Question 27

If properly designed, incentive pay schemes can play an important role in:

A) motivating employees and recognising performance.
B) keeping remuneration budgets firmly under control.
C) creating favourable relations between managers and unions.
D) rewarding employees who have provided lengthy service to organisations.

Question 28

A pay plan that is designed to directly link rewards to the contributions made by an individual employee is known as:

A) employee benefit scheme.
B) contribution-based pay.
C) skill-based pay.
D) base salary.

Question 29

All financial rewards that are not paid directly in cash to the employee are:

A) illegal.
B) benefits.
C) performance bonuses.
D) gratuities.

Question 30

Most employee benefits in organisations are determined by:

A) legislation and membership of the organisation.
B) individual work performance.
C) contributions made to organisational objectives.
D) relationships with immediate supervisors.

Question 31

Flexible benefit plans are also known as:

A) non-monetary benefits.
B) voluntary benefits.
C) cafeteria benefits.
D) incentive schemes.

Question 32

An example of a mandatory benefit is:

A) annual leave.
B) a car.
C) a private office.
D) an iPhone.

Question 33

An example of a voluntary benefit is:

A) annual leave.
B) flexible working hours.
C) parental leave.
D) workers compensation.

Question 34

Which of the following leave benefits do most full time employees in Australia NOT receive?

A) Four weeks annual leave.
B) Two weeks public holidays.
C) Three days study leave.
D) Two weeks sick leave.

Question 35

An objective of a benefit program might be to:

A) satisfy internal stakeholders.
B) prevent downsizing of employees.
C) shift the cost to employees.
D) promote diversity and EEO.

Question 36

Which is NOT a guaranteed remuneration?

A) Merit pay.
B) Base pay.
C) Seniority increases.
D) Cost-of-living increases.

Question 37

By rewarding desired results, an organisation's remuneration policies and practices can:

A) attract highly skilled external applicants to the organisation.
B) reinforce employee behaviour that realises its strategic business objectives.
C) encourage employees to work harder and faster for longer periods.
D) stimulate the interest of employees in their tasks and future careers.

Question 38

One of the main criticisms of pay for performance is that it:

A) becomes a financial strain on organisational budgets.
B) undermines collective employment relations.
C) decreases management control of workplace effort.
D) penalises employees who have given lengthy service.

Question 39

An objective for the employee of a remuneration program would be to:

A) control remuneration costs.
B) provide regular salary and performance reviews.
C) motivate employees to improve their performance.
D) comply with legal requirements.

Question 40

When choosing the weights of each job factor, the gradations within each factor, the factors themselves, and the number of factors, the point system of job evaluation becomes flawed due to:

A) objectivity.
B) subjectivity.
C) negativity.
D) reflectivity.

Question 41

A major problem with the factor comparison method of job evaluation is that:

A) it is complex and not easily understood by employees.
B) it has been shown to be an unreliable measure of an employee's worth.
C) it cannot be used in public service sector industries.
D) it is no longer used in major global organisations.

Question 42

The main purpose of a pay survey is:

A) as the vehicle used by most job evaluation systems to translate words into numbers.
B) to relate the organisation's pay rates to those for similar jobs in other organisations.
C) to attract and keep the desired quality mix of employees.
D) to survey current employees about their pay levels.

Question 43

The information provided in the pay survey can be used by the HR manager to:

A) determine overall labour costs and whether remuneration budgets are achievable.
B) highlight how HR activities have reduced annual labour costs.
C) assess the contribution of each job holder to the achievement of organisational objectives.
D) calculate the organisation's competitive position and plan any corrective action required.

Question 44

Organisations wanting to restructure and flatten, redefine career paths and encourage personal growth through lateral job movement may make use of which pay system:

A) standard pay range.
B) broadbanding.
C) job ranking.
D) job evaluation.

Question 45

Pay compression can occur in all of the following circumstances EXCEPT:

A) when pay rates for new staff increase at a faster rate than for existing staff.
B) when pay rates for new staff increase at a slower rate than for existing staff.
C) when pay increases are given for low level jobs without commensurate increases for higher level jobs.
D) when pay rates for unionised employees are increased but not for supervisors.

Question 46

Many employees distrust merit or pay-for-performance plans because:

A) outstanding performers often do not receive significantly greater increases than average or poor performers.
B) it is not always clear why an employee receives a higher or lower increase.
C) some employees perceive the secrecy of the reward as inequity.
D) all of the options listed.

Question 47

Incentive pay plans are used by organisations because:

A) it is a simple, easy to understand method of evaluation.
B) it is a useful way of identifying those employees who are not performing at an acceptable standard.
C) employees who are rewarded in this method are more loyal and committed to the organisation.
D) they can focus employee attention on those objectives that the organisation wishes to reinforce.

Question 48

A benefits program will not improve motivation or be cost effective if:

A) it is tied to employee performance.
B) the benefits offered are not of value to employees.
C) length of service determines benefits.
D) it is poorly designed.

Question 49

A well designed benefits program should:

A) fit with the organisation's strategic business objectives and culture.
B) not be a financial cost to the organisation.
C) be determined through negotiation with employees.
D) provide employees with benefits equivalent to at least 20% of their normal salary.

Question 50

Which of the following is a disadvantage associated with cafeteria benefit plans?

A) They can be administratively complex.
B) They require constant monitoring and updating.
C) Trade unions see them as a management effort to shift costs to employees.
D) All of the options listed.

Question 51

Outline the importance of linking an organisation's remuneration approach to its strategic business objectives.

Question 52

Job evaluation is undertaken to determine the relative worth of jobs within an organisation. Explain the importance of up-to-date, accurate, well-written job descriptions for effective job evaluation.

Question 53

Discuss the difference between pay-for-performance and skill-based pay. Provide examples of when they might be used.

Question 54

What are the strengths and limitations of an organisation taking part in pay surveys?

Question 55

Why have Australian organisations become more interested in incentive remuneration in recent years?

Question 56

Outline examples of both mandatory benefits and voluntary benefits available to employees.