Deck 9: Compensation

Question 1

Two major objectives of compensation management are to reward desired behaviour and control costs.Human resource specialists often find that

A)these two goals are always mutually exclusive
B)these two objectives can often be in conflict
C)these two objectives are seldom in conflict
D)the two objectives are one and the same
E)it is usually impossible to reward desired behaviour

Answer 1

B

Question 2

Effective compensation management include all following objectives except

A)to reward desired behaviour
B)to encourage unproductive employees to leave
C)to ensure internal equity
D)to attract qualified applicants
E)to ensure external equity

Answer 2

B

Question 3

Absolute pay levels primarily affect such employee needs as

A)esteem needs
B)physiological needs only
C)security needs only
D)both physiological and security needs
E)belonging needs

Answer 3

D

Question 4

Regardless of all the tradeoffs involved in compensation management,an overriding objective is

A)to maintain internal equity
B)to further administrative efficiency
C)to maintain legal compliance
D)control costs
E)develop satisfied employees

Question 5

A job evaluation system where jobs in an organization are placed subjectively on a scale in accordance to their importance in comparison with other jobs is called

A)job grading
B)job progression ladder scaling
C)job ranking
D)job factoring
E)job description comparison technique

Question 6

The job grading method of job evaluation is also known as

A)job ranking
B)job classification
C)job posting
D)job listing
E)job comparison

Question 7

The job evaluation method that assesses the relative importance of a job's key factors to arrive at the relative worth of that job within the organization is called

A)job ranking
B)job grading
C)the point system
D)job classification
E)the relative importance technique

Question 8

One way for managers to be certain that employees will be motivated by rewards is to

A)always offer money
B)ascertain the needs and reward preferences of individual employees
C)ascertain the needs and reward preferences of groups of employees
D)predetermine what will be offered as rewards
E)restrict rewards to only the very best employees

Question 9

Relative pay levels affect such employee needs as

A)physiological and security needs
B)social and esteem needs
C)basic survival needs
D)health needs
E)love and affection needs

Question 10

A form of job evaluation that assigns jobs to predetermined job classifications according to their relative worth to the organization is known as the __________ method

A)job ranking
B)job grading
C)point system
D)job description
E)administrative

Question 11

The point system for job evaluation is the most widely used system in Canada due to

A)ease of communicating the job evaluation process to employees
B)the fact that it is the easiest to develop
C)it being a far more simple system than either job ranking or job grading
D)the need to conform to pay equity legislation and the provision,relatively,of the best information about job values
E)the fact that generic computerized plans can be purchased

Question 12

A systematic procedure to determine the relative worth or value of jobs is called

A)job evaluation
B)job analysis
C)job standard measurement
D)performance evaluation
E)job intrinsic valuation determination

Question 13

The most commonly used job evaluation method today is,by far,the

A)job ranking method
B)point system
C)the job grading method
D)the job analysis system
E)job description method

Question 14

The reason that the point system has become the major job evaluation method is because of

A)the fact that it provides the best information regarding job values
B)the Charter of Rights and Freedoms
C)the Human Rights Act
D)the ease with which it can be developed and applied
E)its relative inexpensiveness when compared to other systems

Question 15

Among the objectives of effective compensation management are all the following except

A)ensure equity
B)control costs
C)reward desired behaviour
D)evaluate training programs
E)retain present employees

Question 16

All of the below are steps that compensation specialists go through to set wages/salaries for each job,except for

A)job analysis information
B)wage and salary surveys
C)demographic lifestyle analysis
D)job evaluation
E)pricing jobs

Question 17

Job evaluation methods can include all the below except

A)job ranking
B)job grading
C)job classification
D)point system
E)job analysis

Question 18

Compensation systems are intended to do all of the following except

A)satisfy employees
B)tie rewards to the achievement of company objectives
C)reimburse employees for their work
D)motivate employees
E)replace performance appraisals

Question 19

With regard to compensation programs,dissatisfaction can arise because employee needs are affected by

A)absolute rates of pay only
B)corporate culture
C)relative rates of pay only
D)job analysis
E)both absolute and relative rates of pay

Question 20

The job ranking method of job evaluation is

A)the simplest method relative to other methods,but the least precise
B)a complex and yet imprecise method
C)a complex method relative to other methods but very precise method
D)a simple and relatively precise method
E)the only method that relies on the allocation of points for every job

Question 21

Rankings established through the job evaluation process are used by organizations to determine

A)any job's relative worth
B)any job's absolute worth
C)any job's variable value
D)any job's worth as perceived by the jobholder
E)any job's worth as perceived by the manager

Question 22

The final step in the point system job evaluation method is

A)training managers on the system
B)determining compensable factors
C)applying the point system
D)developing the point manual
E)determining levels of factors

Question 23

The following list gives some of the steps in the point system method of job evaluation.The steps are in sequence from the start of the process,except for one step that is out of sequence.Indicate that step:

A)determine compensable factors
B)determine levels of factors
C)develop the point manual
D)allocate points to subfactors
E)allocate points to levels

Question 24

In obtaining wage and salary information,regardless of the source,it is always most important to ensure that

A)the information is printed and not simply verbal
B)the information is in both English and French
C)the information is legally valid under the Human Rights Act
D)the information offers comparisons between similar jobs and not just similar titles
E)the information is in accordance with salaries as laid out in the Employment Equity Act

Question 25

The major problem for human resource departments when dealing with the variety of published wage and salary surveys can be that

A)despite similar titles,analysts cannot always be certain that their jobs actually match those being reported
B)the surveys are usually biased toward management level jobs
C)the surveys are often biased towards industrial and less skilled jobs
D)the surveys are usually unreliable
E)it is too costly to subscribe to the reports

Question 26

Pay levels for an organization can be determined by utilizing a graph called a __________ that puts pay rates on one axis,job evaluation points on the other,then plots for each key job and finally produces a wage-trend line

A)pay rate graph
B)wage-trend chart
C)wage-point matrix
D)scattergram
E)telegram

Question 27

One thing all job evaluations have in common is that they all result in an ordering of jobs based upon

A)their perceived relative worth
B)the opinions of the incumbents
C)the opinions of human resource specialists
D)definitions laid out in the Canada Labour Code
E)seniority

Question 28

In pricing jobs,the appropriate pay level for any job reflects

A)the job's relative worth only
B)the job's absolute worth only
C)the intrinsic value of the employee occupying the job
D)what a manager determines to be appropriate
E)both the job's relative and absolute worth

Question 29

In the point system method of job evaluation,the listing of critical factors down one side and corresponding levels across the top is called a

A)point system matrix
B)point system graph
C)point system ranking or grading
D)point system manual
E)point system factor-level list

Question 30

To determine a fair rate of employee compensation,most firms rely on

A)retention targets
B)wage and salary surveys
C)historical records
D)Cartesian labour analysis
E)Brownian motion studies

Question 31

Perceived fairness of job rankings within an organization is referred to as

A)external equity
B)internal equity
C)labour harmony
D)unionization
E)turnover

Question 32

The point system of job evaluation

A)involves simply evaluating the critical factors of a job
B)involves evaluating the critical factors of a job and determining different levels or degrees for each factor and then allocating points to each level or degree
C)is also called job grading
D)involves ranking jobs numerically
E)involves assigning jobs to various classifications that have been predetermined by the human resource department

Question 33

Through the dots that represent key jobs on a scattergram,a __________ is drawn as close to as many points as possible.

A)wage-trend line
B)scatterline
C)pay rate line
D)pay-point line
E)job evaluation curve

Question 34

Some sources of information on wage and salary benchmark data include all the below except

A)Human Resources and Social Development Canada
B)compensation specialists and consultants
C)Canada Human Resource Centres
D)employer and professional associations
E)internal salary matrices

Question 35

In a point system matrix for evaluating any particular job,compensable factors could possibility include all of the following except

A)level of responsibility
B)skill requirements
C)working conditions
D)employee goals
E)effort needed

Question 36

While flat wage rates are easier to administer they can obstruct rewarding employees.One way organizations avoid such problems is by utilizing

A)individual rates
B)rate ranges
C)random wages
D)not rewarding exceptional performance
E)allowing employees to set their own wage rates

Question 37

The point system of job evaluation requires __________ steps to implement

A)two
B)four
C)six
D)eight
E)ten

Question 38

Wage and salary surveys are used by organizations to determine

A)any job's relative worth
B)any job's absolute worth
C)any job's variable value
D)any job's worth as perceived by the jobholder
E)any job's worth as perceived by the manager

Question 39

External equity in job evaluation may be defined as

A)perceived fairness of a pay system relative to others within the organization
B)a situation where job descriptions match those of other similar organizations within a specific area
C)perceived fairness in pay relative to what other employers are paying for the same type of work
D)being treated as an equal regardless of personal characteristics when being evaluated for a job
E)the fact that an employee is still seen as equal to others even outside the job

Question 40

Among the steps required by the point system of job evaluation include all of the following except

A)determination of compensable factors
B)allocation of points to levels (degrees)
C)determination of levels (degrees)associated with each factor
D)allocating points to subfactors
E)allocating points based on job comparisons

Question 41

The difference between the concepts of equal pay for work of equal value,and equal pay for equal work,is

A)the latter came after the former and expands on it
B)the former came later and expands on the latter
C)the latter considers the comparable worth of jobs rather than just the same or similar jobs
D)the former only applies to women while the latter only applies to visible minorities
E)negligible as the two concepts are,for all intents and purposes,identical

Question 42

Employee stock ownership plans can be modeled to fit all the following needs except

A)to motivate employees and improve their productivity
B)as a percentage for exceeding predetermined levels of output
C)to attract and retain employees
D)as a source of additional financing
E)as an alternative to wage and salary increases

Question 43

The principle of equal rates of pay for all employees in an organization performing the same kind and amount of work,regardless of any personal characteristics that are not job-related,is called

A)equal pay for work of equal value
B)pay equity
C)equal pay for equal work
D)non-discriminatory job-related pay rates
E)reverse discrimination

Question 44

What makes the issue of equal pay for work of equal value a difficult concept to deal with?

A)it only covers women in the marketplace and ignores other protected classes
B)generally a company will not know how much it pays its female versus male employees
C)the concept (and laws)do not clearly define "equal value" and how it can be measured
D)it conflicts with equal pay for equal work laws
E)it relates only to certain groups of people as specified by the federal government

Question 45

Pay equity legislation defines some factors that can justify differences in wages for jobs of equal value,including all of the following except

A)different performance ratings (based on formal appraisals)
B)seniority
C)demotion pay procedures
D)actual supply and demand of labour in any geographic area
E)rehabilitation assignment (after sick leave)

Question 46

In 1977 Part I of the Canada Labour Code was repealed and replaced by

A)the Charter of Rights and Freedoms
B)the Canadian Human Rights Act
C)the Canada Labour Code Part I-A
D)the Employment Equity Act
E)the Labour Relations Act

Question 47

Individual pay incentive plans can include all of the below except

A)piecework
B)production bonuses
C)commissions
D)executive incentives
E)profit-sharing plans

Question 48

Studies indicate that one reason that women are often paid less,or earn less,than men is due to

A)intentional discrimination in organization compensation policies
B)the fact that men generally work harder
C)women's job choices are often being influenced by their roles as homemaker and mother
D)males desire to join organizations with higher risks
E)minimum wage legislation

Question 49

The Canadian Human Rights Act of 1978 makes it illegal

A)to discriminate on the basis of job description
B)to discriminate on the basis of job value or content
C)to discriminate on the basis of skill or responsibility
D)to discriminate on the basis of performance merit
E)to discriminate on the basis of seniority

Question 50

Piecework is an individual incentive plan which pays employees

A)for exceeding a specific level of output
B)a percentage or flat amount for each unit sold
C)for saving production time
D)for each unit of output produced
E)based on an individually designed compensation package

Question 51

If,for a particular job class,the average hourly wage rate is $13,but a less average employee can be paid $11 and an exceptional employee $15,then this is an example compensation policy utilizing __________ within job classes.

A)flat rates
B)disbursed rates
C)modified rates
D)rate ranges
E)employee non-evaluated rates

Question 52

No matter what pay rate methods are used to set wages and salaries,they must all be tempered by a variety of challenges including all the following except

A)organizational policies
B)union power
C)level of productivity
D)prevailing wage rates
E)manager's personal opinion

Question 53

All of the following are government restraints on an organization's wage and salary policies except

A)human rights legislation
B)pay equity
C)union policies
D)child labour laws
E)minimum wage

Question 54

When a company increases employee compensation,this has the effect on the wage-trend line of

A)moving it to the right
B)moving it upwards
C)moving it downwards
D)reversing the direction of its slope
E)moving it to the left

Question 55

In order to ensure that a company's pay system is in line with government legislation,all of the following measures are suggested except

A)review the philosophy and rationale of the current job evaluation plan
B)contact the Ministry of Labour to review salary ranges
C)review recruiting and promotional decisions
D)examine the differential between the earnings of male and female employees
E)review human resource planning techniques and procedures

Question 56

The principle of equal pay for men and women in jobs with comparable worth to the organization is called

A)equal pay for equal work
B)equal pay for work of equal value
C)employment equity
D)fair pay
E)fair employment pay

Question 57

Government constraints on wage and salary policies include all of the following except

A)minimum wage
B)overtime pay
C)equal pay
D)productivity incentives
E)maximum weekly hours

Question 58

Although companies utilize a variety of methods to set pay rates,other factors can challenge organizational plans and policies concerning wages and salaries,including all of the below except

A)government regulations
B)union strength
C)the organization's level of productivity
D)recruiting policies
E)organization's wage and salary policies

Question 59

A pay raise given to an employee according to a performance evaluation is referred to as a

A)merit raise
B)seniority raise
C)bonus
D)promotion
E)step increase

Question 60

Group or team based incentive plans include all of the following except

A)profit-sharing plans
B)production incentive plans
C)commissions
D)employee stock options
E)team results

Question 61

One difficulty with compensation management is that objectives can often (and easily)conflict with each other.

Question 62

When absolute pay levels are too low,employees have difficulty meeting security and physiological needs.

Question 63

New pay concepts such as skill or knowledge-based pay require that human resource departments do all of the following except

A)identify the tasks that have to be performed
B)identify skills required to complete tasks
C)price skills for pay rates
D)ideally,provide incentives for continuous horizontal and vertical learning
E)be prepared to significantly enlarge the workforce

Question 64

Compensation programs help to maintain an organization's human resources.

Question 65

The overriding objective of effective compensation management is to continually further the administrative efficiency of compensation programs.

Question 66

Among the objectives of effective compensation administration are included the desire to control costs,reward behaviours,and ensure equity.

Question 67

If a recruiter offers a higher than normal (for the organization)salary to a qualified recruit in a labour-competitive market,this can cause a conflict with internal equity policies.

Question 68

Internal equity in relation to compensation involves the idea that pay be related to the relative worth of jobs.

Question 69

There are several new approaches to paying employees which include

A)skills or knowledge based pay and employee stock ownership plans
B)variable pay and piecework
C)profit sharing and skills or knowledge based pay
D)variable pay and skills or knowledge based pay
E)piecework and profit sharing

Question 70

Consolidating a large number of pay grades into a fewer number of (larger)categories is called

A)broadbanding
B)widebanding
C)flatstructuring
D)de-grading
E)wage rationalization

Question 71

When relative pay is too low,employees cannot meet their physiological and security needs.

Question 72

The compensation model known as the "total reward model"

A)rewards everything an employee values including social interaction and workload
B)is based on a performance linked compensation approach
C)encourages employees to broaden their skills and abilities
D)pays employees based on the total output of their work group
E)bases an employee's compensation on a combination of fixed and variable pay

Question 73

Compensation does not include non-cash rewards employees receive in exchange for their work .

Question 74

In order to develop a strategic pay plan,Lawler suggests concentrating on a limited number of areas that affect pay systems.That number is

A)five (5)
B)seven (7)
C)four (4)
D)eight (8)
E)three (3)

Question 75

In Canada,absolute pay tends to cause more dissatisfaction than relative pay.

Question 76

Internal equity in compensation requires that pay be directly related to the rate perceived as fair in the local marketplace.

Question 77

Employee dissatisfaction can arise because needs are affected by both relative and absolute levels of pay.

Question 78

In compensation management,internal equity is also referred to as internal consistency.

Question 79

Absolute pay levels serve employee social and self-esteem needs.

Question 80

According to Lawler all the following areas that affect pay systems should be given particular importance except

A)relate rewards to performance
B)motivate skill and knowledge development
C)foster attraction and retention
D)identify valued rewards
E)establish year-end bonuses