Question 1

Jasmine Black believes that the company should share part of the risk for her sales position.Which sales compensation plan should she pursue?

Accepted Answer

A) salary-plus-bonus 
B) salary-plus-commission 
C) commission-plus-draw 
D) commission-only

Question 2

This type of pay rate applies to an employee who is demoted but is paid more than the maximum rate for the pay grade he is now in.

Accepted Answer

A) graduated 
B) green circle 
C) red circle 
D) multi-tier

Question 3

Midpoint,minimum,and maximum are values used to define which of the following?

Accepted Answer

A) pay grades 
B) pay ranges 
C) pay structures 
D) pay levels

Question 4

________,or lump sum bonuses,lend themselves well to cost containment since these bonuses are not permanent percentage increases.

Accepted Answer

The answer of ________,or lump sum bonuses,lend themselves well to...

Question 5

What are the differences between pay grades and pay ranges?

Accepted Answer

The answer of What are the differences between pay grades...

Question 6

This federal act requires contractors with federal contracts worth over $2,000 to pay wages at least equal to those prevailing in the area where the work is being done.

Accepted Answer

A) Fair Labor Standards Act 
B) Davis-Bacon Act 
C) Equal Pay Act 
D) Civil Rights Act of 1964

Question 7

Which of the following theories suggests that an employee must regard his own ratio of merit increase pay to performance as similar to the ratio for other comparably performing people in the company?

Accepted Answer

A) comparable ratio theory 
B) comparable pay theory 
C) equality theory 
D) equity theory

Question 8

A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

Accepted Answer

The answer of A ________ is the difference between the...

Question 9

With which sales compensation plan does the level of pay not vary when sales volume does vary?

Accepted Answer

A) commission-only 
B) salary-only 
C) salary -plus-bonus 
D) salary plus-commission

Question 10

How are compa-ratios calculated?

Accepted Answer

A) the green circle rates midpoint divided by the normal pay range 
B) the pay rate divided by the market line rate 
C) the pay rate divided by the pay range midpoint 
D) the red circle rates divided by the normal pay range

Question 11

What is pay compression and how can companies minimize the occurrence of it?

Accepted Answer

The answer of What is pay compression and how can...

Question 12

Wherever proprietary information is the subject of training,a company most often relies on which of the following sources of expertise?

Accepted Answer

A) expertise in university professors 
B) expertise within the company 
C) both expertise within and outside the company to provide training 
D) expertise in competitor companies

Question 13

When ________ spreads are used to develop pay grade widths,the grades are based on a set number of job evaluation points for each grade that increases as an employee moves up the pay structure.

Accepted Answer

A) pay rate 
B) percentage-based job evaluation point 
C) pay range 
D) absolute job evaluation points

Question 14

What are the three considerations used in determining fixed pay and the compensation mix in sales compensation plans?

Accepted Answer

The answer of What are the three considerations used in...

Question 15

For the purpose of applying pay policies,this term refers to the groupings of jobs based on compensable factors.

Accepted Answer

A) market lines 
B) market-competitive pay structures 
C) pay grades 
D) pay ranges

Question 16

________ assign different pay rates for jobs of unequal worth and provide the basic framework for recognizing differences in individual contributions.

Accepted Answer

The answer of ________ assign different pay rates for jobs...

Question 17

A 10 percent merit pay increase budget tells us which of the following?

Accepted Answer

A) The minimum pay increase amounts to 10 percent. 
B) The maximum pay increase amounts to 10 percent. 
C) The average pay increase amounts to 10 percent. 
D) The standard deviation of any pay increase cannot be more than 10 percent below or above the average.

Question 18

Which scenario would be appropriate for using a salary-only plan?

Accepted Answer

A) The salesperson is selling high-priced products 
B) The salesperson has substantial influence over sales 
C) The company wants to save money due to budget constraints 
D) The company wants to create competition among its sales staff

Question 19

________ describe the allocation of monetary resources to fund pay structures.

Accepted Answer

The answer of ________ describe the allocation of monetary resources...

Question 20

This term describes a set of skills necessary to perform a specific job or a group of similar jobs.

Accepted Answer

A) skill range 
B) skill grade 
C) skill block 
D) skill structure

Exam 8: Building Pay Structures That Recognize Individual Contributions