Deck 11: Strategic Pay Plans

Question 1

According to the recent study conducted by Towers Watson referenced in the textbook,what is the most important factor in attracting employees to an organization?

A) Excellent career opportunities
B) Competitive base pay
C) Interaction with co-workers
D) Bonuses and benefits
E) Relationship with their immediate manager

Answer 1

B

Question 2

Which of the following components of equity theory specifically refers to the fairness of an employee's pay compared with what his or her coworkers are earning for the same or very similar jobs within the company,based on each employee's performance?

A) Pay equity legislation
B) Procedural equity
C) External equity
D) Individual equity
E) Employment equity

Answer 2

D

Question 3

Victoria has been a contract worker for a construction company and has just been offered a full-time,non-contract position.She will now receive additional benefits,such as employer-paid insurance and vacation; what are these components of employee compensation called?

A) Indirect deposits
B) Indirect financial payments
C) Variable payments
D) Direct deposits
E) Direct financial payments

Answer 3

B

Question 4

The term "total rewards" refers only to the monetary components of compensation.

Question 5

Which of the following refers to the creation of a compensation package that produces the employee behaviours that a company requires in order to achieve their competitive strategy?

A) Cost-effective compensation plan
B) Aligned reward strategy
C) Hybrid pay structure
D) Dual salary/commission plan
E) Total benefits package

Question 6

Up to how many weeks does the Employment Insurance Act provide compensation for workers that are unemployed through no fault of their own?

A) 58
B) 45
C) 35
D) 28
E) 18

Question 7

Which of the following components of equity theory specifically refers to the perceived fairness of the processes used to make decisions regarding the allocation of pay?

A) Pay equity legislation
B) Procedural equity
C) External equity
D) Individual equity
E) Internal equity

Question 8

When Mary started her web application company one of her goals was to ensure job applicants and employees would not experience discrimination as it related to their pay and opportunities for advancement.Which type of legislation did Mary adhere to?

A) Equity theory
B) Workers compensation
C) Human rights
D) Overtime pay
E) Pensions

Question 9

According to the textbook,which of the following do managers use to monitor and maintain external equity?

A) Salary surveys
B) Pay equity legislation
C) Human rights acts
D) Performance appraisals
E) Employee grievances

Question 10

Wages,salaries,incentives,commissions,and bonuses are known as which of the following?

A) Indirect deposits
B) Indirect financial payments
C) Variable payments
D) Direct deposits
E) Direct financial payments

Question 11

Julien and Bernard,friends in the same commerce program,find similar summer jobs at different banks at the end of their winter school terms.Julien learns that Bernard's compensation is 11% more than what he is being paid.Julien feels that his employer provides unfair compensation and begins looking for a new job; what is this an example of?

A) Pay equity legislation
B) Controllable equity
C) External equity
D) Comparable equity
E) Internal equity

Question 12

According to the textbook,which of the following do unions believe will be the best able to judge the relative value of a job?

A) The immediate manager
B) The HR manager
C) The top company executives
D) The workers themselves
E) A third-party labour consultant

Question 13

Which of the following are the two main components of employee compensation?

A) Payroll costs and government taxes
B) Direct and indirect financial payments
C) Regular pay and bonuses
D) Salary or wages and overtime pay
E) Earnings and incentives

Question 14

Pay equity laws were enacted in order to specifically redress which of the following?

A) Pay discrimination against senior citizens
B) The variety of compensable factors being used to evaluate jobs
C) The historical undervaluing of female-dominated job classes
D) Pay discrimination against people with disabilities
E) The variety of job evaluation systems being used to evaluate jobs

Question 15

Elaine runs a call centre in Calgary.She is worried that her employees will leave for a similar role at another call centre nearby.What tool will help her determine if her employees are being paid competitively?

A) Employee grievances
B) Pay equity legislation
C) Human rights acts
D) Performance appraisals
E) Salary surveys

Question 16

An employer ensures that they are gender-neutral in devising salaries for jobs that are both male- and female-dominated.Which type of legislation is the employer adhering to?

A) Comparable worth
B) Pay equity
C) External equity
D) Internal inequity
E) Broadbanding

Question 17

According to the recent study conducted by Towers Watson referenced in the textbook,what is the most important factor in retaining employees?

A) Excellent career opportunities
B) Competitive base pay
C) Interaction with co-workers
D) Bonuses and benefits
E) Relationship with their immediate manager

Question 18

According to the textbook,who usually writes the compensation policies for a company?

A) The Chief Executive Officer
B) The Chief Financial Officer
C) The mid-level managers
D) An external labour consultant
E) An HR or compensation manager in partnership with senior management

Question 19

Fareena runs a small manufacturing company.A worker hurt his hand on a vertical grinding machine.Fareena filed the proper legal documents quickly so that the worker could receive benefits while recovering from his injury.Which type of legislation did Fareena adhere to?

A) Pay equity
B) Workers compensation
C) Human rights
D) Overtime pay
E) Pensions

Question 20

Justin used to assemble 18 desks per hour during his shift for the furniture company he works for; then he found out that other workers who only assemble 13 to 15 desks per hour were receiving the same compensation as he was.Justin now assembles 14 desks per hour.Which of the following would help to explain Justin's behaviour?

A) Pay scales
B) Workers compensation
C) Human rights
D) Equity theory
E) Piece work

Question 21

The purpose of pay equity legislation is to eliminate discrimination based on age and culture.

Question 22

What is the term used to describe a diverse group established to ensure the fair and comprehensive representation of the nature and requirements of a job in question for the purposes of determining compensation?

A) Performance appraisal committee
B) Job evaluation committee
C) Union negotiating team
D) Management negotiating team
E) Position review committee

Question 23

What is the term used to describe jobs that represent all of the various business units and departments in an organization,jobs that are drawn from all levels of an organization,and jobs that are clear and well known in the industry?

A) Standard jobs
B) Benchmark jobs
C) Equitable jobs
D) Comparable jobs
E) Common jobs

Question 24

According to the textbook,the most important function of a job evaluation committee is which of the following?

A) Determining contracts for each job
B) Determining pay ranges for each job
C) Actually evaluating the total rewards for each job
D) Determining the job classes for each job
E) Actually evaluating the worth of each job

Question 25

Which of the following is mentioned in the textbook as a disadvantage associated with using the job classification/grading method in job evaluation?

A) Not all jobs will be grouped into classes.
B) This method creates an unmanageable amount of jobs.
C) Most companies do not have readily available job descriptions.
D) Considerable judgment is required in applying the class or grade descriptions.
E) Most employers do not end up classifying jobs anyway.

Question 26

According to the textbook,which of the following most commonly uses the classification/grading job evaluation method in order to categorize jobs into groups?

A) Small businesses
B) Leading-edge Fortune 500 businesses
C) The public sector
D) The private sector
E) Non-profit charitable organizations

Question 27

Which of the following is comprised of jobs of approximately the same value or importance,as determined by job evaluation?

A) Salary grade
B) Wage grade
C) Pay grade
D) Classification grade
E) Point grade

Question 28

The job evaluation committee typically includes several employees and has the important task of evaluating the worth of each job using which of the following?

A) Job variety
B) Job design
C) Comparable worth
D) Behavioural anchors
E) Compensable factors

Question 29

Jeffrey is the newly hired HR professional who is responsible for evaluating compensation practices at the company.To determine if there are issues with internal equity,he has chosen to conduct a job evaluation according to the method popularized by the Hay Group consulting firm; which of the following are the compensable factors that this specific method uses in order to evaluate jobs?

A) Skill, effort, problem solving, and working conditions
B) Responsibility, skill, effort, and working conditions
C) Know-how, problem solving, accountability, and working conditions
D) Effort, responsibility, authority, and working conditions
E) Knowledge, problem solving, responsibility, and working conditions

Question 30

What are the three stages in establishing pay rates as discussed in the textbook?

A) Job evaluation, conducting salary surveys, and combining job evaluation and salary survey results
B) Consulting with industry, determining salaries for executive positions, and deciding on a benefits plan
C) Pricing of benchmark jobs, collecting data on insurance benefits, and evaluating benefits packages
D) Collecting data on insurance benefits, creating a salary survey, and hiring external consultants
E) Collecting data used to price every job in the organization, working with a compensation consultant, and working with a benefits specialist

Question 31

Which job evaluation method identifies compensable factors in a job as well as the degree to which each of these factors is present in the job and then calculates a value for each job?

A) Factor comparison method
B) Ranking method
C) Point method
D) Hay plan method
E) Job classification method

Question 32

According to the textbook,which of the following are the most popular job evaluation methods that can be applied to compensation decisions?

A) The classification and ranking methods
B) The classification and point methods
C) The ranking and point methods
D) The factor comparison and point methods
E) The ranking and factor comparison methods

Question 33

When using a job evaluation method,such as the ranking method,which of the following is the eventual result of that approach?

A) Job hierarchy
B) Promotion process
C) Equity theory
D) Human rights
E) Compensable factors

Question 34

What does job evaluation determine?

A) Performance appraisals of individuals to the group
B) Promotability of employees who are not yet managers
C) Merit reviews of individuals to the group
D) The relative value of an individual's career earnings to the group's
E) The relative worth of jobs within a firm

Question 35

Which of the following is an example of an informal compensation survey conducted by an employer?

A) Governmental agency surveys
B) Professional association surveys
C) Telephone surveys
D) Industry-wide surveys
E) Commercial firm surveys

Question 36

Most of the pay equity acts in Canada focus on four compensable factors listed below except

A) skill.
B) effort.
C) responsibility.
D) working conditions.
E) customers.

Question 37

The classification/grading method of job evaluation involves categorizing jobs into which of the following?

A) Teams
B) Groups
C) Hierarchies
D) Occupations
E) Departments

Question 38

What is the job evaluation method that intuitively rates each job relative to all other jobs,usually based on some overall factor like "more important" or "of greater value or worth"?

A) Critical incidence method
B) Factor comparison method
C) Classification method
D) Point method
E) Ranking method

Question 39

The argument that the way in which most compensation surveys are constructed,interpreted,and used leads almost invariably to a situation in which firms set higher wages than they otherwise might is reflective of which of the following terms?

A) Employee discrimination
B) Upward bias
C) Systemic undervaluing
D) Stereotyping of data
E) Report bias

Question 40

Which of the following is another way of categorizing jobs when undertaking the job classification/grading method,other than using class descriptions and placing jobs into classes based on their correspondence to these descriptions?

A) Draw up a set of classifying rules for each class and then categorize the jobs according to these rules.
B) Rank jobs by classifying factors.
C) Rank jobs against other classes of jobs.
D) Assign points to various job classes.
E) Rank jobs from lowest to highest class.

Question 41

An advantage of using pay ranges for each pay grade is that it allows for which of the following?

A) Age differences
B) Gender differences
C) Appraisal biases
D) Employer inflexibility
E) Performance differences between employees within the same grade

Question 42

According to the textbook,assigning pay rates to each pay grade (or to each job)is usually accomplished with which of the following?

A) A rate range
B) A job analysis
C) A wage grade
D) A wage curve
E) A performance appraisal

Question 43

According to the textbook,most employers rely heavily on formal or informal surveys of what other employers are paying.

Question 44

The purpose of the wage curve is to show which of the following?

A) The relationship between the value of the job and the employee's performance
B) The relationship between the value of the job and the current average pay rates for each job or grade
C) The relationship between the value of the job and the company's performance
D) The relationship between the current average pay rates for each job or grade and the employee's satisfaction
E) The relationship between the current average pay rates for each job or grade and the employee's seniority

Question 45

Suzy recently joined an organization as an IT Consultant.The pay range for the role is $60,000 to $80,000.What is the minimum amount that Suzy should be paid?

A) $50,000
B) $60,000
C) $70,000
D) $80,000
E) $90,000

Question 46

According to the textbook,what is the basic advantage of broadbanding?

A) Facilitates internal and external equity
B) Encourages human rights adherence by the employer
C) Eliminates upward bias in job evaluation
D) Injects greater flexibility into employee compensation
E) Works well with highly specialized jobs

Question 47

What is the term for rates of pay that are above the pay range maximum?

A) Red circle pay rates
B) Premium job pay rates
C) Excessive pay rates
D) Overage pay rates
E) Outlier pay rates

Question 48

Pay ranges are a series of steps or levels of pay within a pay grade.According to the textbook,what are the ranges usually based on?

A) Peer appraisals
B) Years of education
C) Years of service
D) Teamwork
E) Amount of responsibility

Question 49

According to the textbook,which of the following conducts five compensation surveys annually covering executive; management; professional,supervisory,and sales; information technology; and administrative and support positions?

A) Statistics Canada
B) Statistics Ontario
C) Statistics Toronto
D) The Toronto Board of Trade
E) The Toronto Board of Commerce

Question 50

What is the term for reducing the number of salary grades and ranges into just a few wide levels?

A) Broadbanding
B) Job specialization
C) Departmentalization
D) Job classification
E) Position grading

Question 51

Describe two advantages of broadbanding?

Question 52

Underpaid employees should have their wages raised to which of the following?

A) An external industry pay grade system
B) The midpoint of an employee's pay grade
C) The minimum of the rate range for their pay grade
D) The maximum of the rate range for their pay grade
E) The maximum of the next highest pay grade

Question 53

Which of the following is the term used to describe the graphical depiction of the relationship between the value of the job and the average wage paid for that job?

A) Pay grade chart
B) Wage curve
C) Rate range graph
D) Wage chart
E) Pay grade curve

Question 54

Point systems used in job evaluation are not very time consuming or difficult to develop.

Question 55

A major financial institution is moving from nine levels in the organization to six.Another term for this is

A) broadbanding.
B) job specialization.
C) departmentalization.
D) job classification.
E) position grading.

Question 56

A pay grade comprises jobs of varying value and importance to the company.

Question 57

The point method of job evaluation involves identifying several compensable factors,each having several degrees,as well as the degree to which each of these factors is present in the job.

Question 58

ABC Healthcare has a pay range for its occupational therapists which is $55,000 to $75,000.A small ground of employees who merged with the company during a recent acquisition are paid $80,000 and above.What is the term to define their circumstance?

A) Red circle pay rates
B) Premium job pay rates
C) Excessive pay rates
D) Overage pay rates
E) Outlier pay rates

Question 59

A benchmark job is a job held by the top performers of a company.

Question 60

Job evaluation committees do not include managers because this would constitute a conflict of interest.

Question 61

Tyrique has been asked to make a recommendation to his CEO with regard to how to pay construction workers being hired for a specific project.He is most likely to use which approach?

A) Skill-based pay
B) Job evaluation
C) Internal benchmarking
D) Market pricing
E) Wage gap

Question 62

There are five elements in an executive/managerial compensation package: salary,benefits,short-term incentives,long-term incentives,and perquisites.

Question 63

According to the textbook,which of the following is the cornerstone of executive compensation because it is the element on which the others are layered?

A) Prestige
B) Benefits
C) Incentives
D) Bonuses
E) Salary

Question 64

Sarah works for a software development company.Her CEO has asked her to make a salary recommendation with regard to incoming engineers.She is most likely to use which approach?

A) Market-pricing
B) Job evaluation
C) Internal benchmarking
D) Incentive-based
E) Wage gap

Question 65

Pay-for-knowledge systems meet pay equity requirements in Canada.

Question 66

Identify the four major compensable factors used in most point method job evaluation plans and identify and describe two sub-factors that might be used for each of the four major compensable factors.

Question 67

Most employers use a(n)________ approach to determine compensation for professional jobs.

A) market-pricing
B) job evaluation
C) internal benchmarking
D) incentive-based
E) wage gap

Question 68

Executive compensation tends to emphasize performance incentives less than typical employee pay plans.

Question 69

What are "pay-for-knowledge" systems also known as when they are used for management and professional employees?

A) Education-based pay
B) Skill-based pay
C) Competency-based pay
D) Experience-based pay
E) Performance-based pay

Question 70

Dominique has just been hired as the HR manager for a small but growing manufacturing company.Up until now,pay rates have been determined at the time of hire and are loosely based on "market" pay rates.Dominique has already noticed that some employees don't think the rates of pay are fair.How should Dominique go about establishing pay rates that are both externally and internally equitable? In your answer,indicate the issues that may arise if this is not done.

Question 71

In practice,traditional methods of job evaluation are rarely used for professional jobs such as scientists and engineers,because it is so difficult to identify compensable factors and degrees of factors that meaningfully capture the value of professional work.

Question 72

Describe pay-for-knowledge compensation systems as they relate to competencies and describe what a pay-for-knowledge program should include.