Question 1

What opportunities do pay ranges provide managers?

Accepted Answer

Pay ranges provide managers the opportunity to:
 1. Recognize individual performance differences with pay.
2. Meet employees' expectations that their pay will increase over time, even while holding the same job. 
3. Encourage employee commitment to remain with the organization.

Question 2

reflects the cash value of the job plus bonuses paid to incumbents; it excludes stock options.

Accepted Answer

A)  Total compensation
B)  Incentive
C)  Benefit
D)  Base cash
E)  Total cash E

Question 3

Pay ranges:

Accepted Answer

A)  do not use pay to recognize individual performance differences
B)  may vary for jobs within a single pay grade
C)  exist whenever two or more rates are paid to employees performing the same job
D)  reduce managers' flexibility to deal with pressures from external markets
E)  fix a single rate to be paid to all employees performing the same job C

Question 4

Which of the following is the first important decision involved in determining pay levels and designing pay structures?

Accepted Answer

A)  constructing an internal pay policy line that reflects external pay policy
B)  specifying the employer's external pay policy
C)  designing the survey
D)  defining the purpose of the compensation survey
E)  choosing relevant market competitors to survey

Question 5

In most organizations, the responsibility for managing the compensation survey lies with the chief financial officer.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true of market pay line?

Accepted Answer

A)  A market pay line is a line of consumers in a market.
B)  A market pay line links a company's benchmark jobs on the vertical axis with market rates paid by competitors on the horizontal axis.
C)  A market pay line is constructed by adjusting pay policy line.
D)  A market pay line reflects a firm's competitive position in the market.
E)  A market pay line is adjusted in order to construct a pay policy line.

Question 7

One of the important questions asked while designing a compensation survey is: "Who should be involved in the survey design?"

Accepted Answer

A) True 
 B)False

Question 8

Which of the following represents the relationship between pay ranges and pay grades?

Accepted Answer

A)  The midpoints for each pay grade usually correspond to the points where the pay policy line crosses each range.
B)  A pay grade is expressed as a percentage above the midpoint of the pay range.
C)  Grades set the ceiling and floor on what the employer is willing to pay for the work; ranges refer to grouping of jobs.
D)  Pay ranges set an upper and lower limit between which all wages for all jobs in a particular grade are expected to fall.
E)  The competitive pay level for each range becomes the midpoint of the pay grade for that range.

Question 9

What needs to be considered before designing a survey?

Accepted Answer

The answer of What needs to be considered before designing...

Question 10

Compensation surveys provide the data for translating a policy into pay levels, pay mix, and structures.

Accepted Answer

A) True 
 B)False

Question 11

What is market pricing?

Accepted Answer

The answer of What is market pricing?...

Question 12

Describe the steps involved in market pricing.

Accepted Answer

The answer of Describe the steps involved in market pricing....

Question 13

A high degree of overlap among job ranges makes it more difficult to move employees from one range to another.

Accepted Answer

A) True 
 B)False

Question 14

In a survey report, when an employer's data is substantially out of line from other employers, it is called a(n):

Accepted Answer

A)  congruity
B)  synchronicity
C)  anomaly
D)  conformity
E)  normality

Question 15

What are the two steps in broadbanding?

Accepted Answer

The answer of What are the two steps in broadbanding?...

Question 16

The first major decision in designing pay structures pertains to defining the purpose of a compensation survey.

Accepted Answer

A) True 
 B)False

Question 17

The mix of different forms of pay and their relative importance makes up the ___________.

Accepted Answer

A)  pay level
B)  pay package
C)  base pay
D)  pay band
E)  pay grade

Question 18

The amount of cash that competitors decide each job is worth is called:

Accepted Answer

A)  a bonus
B)  a fringe benefit
C)  an incentive
D)  piece rate
E)  base pay

Question 19

Trending is a process by which jobs considered substantially equal for pay purposes are grouped together.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following steps involved in determining pay levels and designing pay structures immediately follows defining the purpose of a compensation survey?

Accepted Answer

A)  selecting relevant market competitors to survey
B)  setting a competitive pay policy
C)  analyzing data statistically
D)  interpreting survey results
E)  designing the compensation survey

Exam 8: Designing Pay Levels, Pay Mix, and Pay Structures

What opportunities do pay ranges provide managers?

reflects the cash value of the job plus bonuses paid to incumbents; it excludes stock options.

Pay ranges:

Which of the following is the first important decision involved in determining pay levels and designing pay structures?

In most organizations, the responsibility for managing the compensation survey lies with the chief financial officer.

Which of the following statements is true of market pay line?

One of the important questions asked while designing a compensation survey is: "Who should be involved in the survey design?"

Which of the following represents the relationship between pay ranges and pay grades?

What needs to be considered before designing a survey?

Compensation surveys provide the data for translating a policy into pay levels, pay mix, and structures.

What is market pricing?

Describe the steps involved in market pricing.

A high degree of overlap among job ranges makes it more difficult to move employees from one range to another.

In a survey report, when an employer's data is substantially out of line from other employers, it is called a(n) :

What are the two steps in broadbanding?

The first major decision in designing pay structures pertains to defining the purpose of a compensation survey.

The mix of different forms of pay and their relative importance makes up the ___________.

The amount of cash that competitors decide each job is worth is called:

Trending is a process by which jobs considered substantially equal for pay purposes are grouped together.

Which of the following steps involved in determining pay levels and designing pay structures immediately follows defining the purpose of a compensation survey?