Question 1

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

Accepted Answer

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

Question 2

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.

Accepted Answer

An accurate job or position description is essential for any job evaluation system. The job description should detail the tasks and responsibilities of a job and from this information a job evaluation system can determine the relative worth of that job using one of the available job evaluation methods. If the job description is accurate it will identify in detail the individual tasks and responsibilities of a position and provide the needed data for determining how this job differs or is similar to other positions and thus enable an accurate job evaluation to be conducted and from this an appropriate remuneration for the position can be allocated. All job evaluation methods are based on the assumption that jobs can be differentiated by evaluating the information in a job description. They are especially important in traditional job based systems of job evaluation such as ranking, job grading and the points system which require an emphasis on the characteristics of the job outlined in the job description.

Question 3

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

Accepted Answer

Traditionally, Australian organisations have not linked their remuneration systems to employee performance believing that it strikes at the heart of egalitarianism and worker solidarity and causes employees to compete with each other. However there are three reasons why public and private sector organisations in Australia have been more interested in using forms of incentive remuneration. Firstly, Australians are increasingly coming to appreciate the opportunity to be rewarded for their individual contribution to an organisation's success. Secondly, the onset of enterprise bargaining in Australian workplaces has placed more reliance on productivity gains as a trade-off or requirement of increased remuneration. This has led organisations to review their work practices and to introduce some variable pay components based upon performance. Thirdly, there is an increasing demand for pay structures to provide a more direct link between employee rewards and organisational objectives. Organisations feel there is a need to reward those employees directly who most contribute to the achievement of the organisation's goals. Moreover such incentive schemes, if properly designed, can act as a motivator for improved employee performance.

Question 4

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

Accepted Answer

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 5

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

Accepted Answer

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 6

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

Accepted Answer

The answer of What are the strengths and limitations of...

Question 7

An example of a voluntary benefit is:

Accepted Answer

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

Question 8

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

Accepted Answer

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 9

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

Accepted Answer

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 10

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

Accepted Answer

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

Question 11

The pay range:

Accepted Answer

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 12

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

Accepted Answer

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

Question 13

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

Accepted Answer

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

Question 14

For job grading to be accurate:

Accepted Answer

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 15

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

Accepted Answer

The answer of Outline examples of both mandatory benefits and...

Question 16

Incentive pay plans are used by organisations because:

Accepted Answer

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 17

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

Accepted Answer

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 18

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

Accepted Answer

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

Question 19

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

Accepted Answer

The answer of Outline the importance of linking an organisation's...

Question 20

Which is NOT a guaranteed remuneration?

Accepted Answer

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

Exam 11: Rewarding Human Resources