Question 1

In evaluating a new compensation system, two main sets of employee attitudes should be examined-job attitudes and compensation attitudes.

Accepted Answer

A) True 
 B)False

Question 2

As a result of focusing your recruitment efforts on attracting recent university graduates, your workforce has become younger. What impact does this change have on your compensation system?

Accepted Answer

A)  It needs greater focus on pension plans and retirement income. 
B)  It needs to offer more cash and family benefits. 
C)  It needs to adopt a job evaluation system. 
D)  It needs to adopt a new managerial strategy.

Question 3

Which of the following is NOT an indicator of membership behaviour?

Accepted Answer

A)  the number of applicants job postings attract 
B)  the number of useful employee suggestions submitted 
C)  absenteeism 
D)  employee turnover

Question 4

Which of the following is NOT a key aspect of developing the implementation plan?

Accepted Answer

A)  the training plan 
B)  preparing the compensation budget 
C)  the plan for communicating the new system 
D)  the plan for evaluating the new system

Question 5

Which of the following situations may account for higher-than-budgeted compensation expenditures?

Accepted Answer

A)  initial dip 
B)  spiral career paths 
C)  overgenerous job evaluation system 
D)  excessive accumulation

Question 6

Which of the following factors is NOT normally a consideration when organizations make the decision to outsource human resource functions?

Accepted Answer

A)  the size of the organization 
B)  the activities competitors are undertaking with their human resource functions 
C)  the level of internal expertise 
D)  the strategic role played by compensation in the organization

Question 7

Of all the human resource functions, payroll activities were one of the first functions to be computerized in medium and large organizations in Canada.

Accepted Answer

A) True 
 B)False

Question 8

Identify and describe the steps necessary for implementing a compensation system.

Accepted Answer

The answer of Identify and describe the steps necessary for...

Question 9

What are the primary areas for computer applications in a compensation system?

Accepted Answer

The answer of What are the primary areas for computer...

Question 10

Often, organizations will contract out a portion of their benefits administration to "product providers."

Accepted Answer

A) True 
 B)False

Question 11

Why is a bottom-up approach for compensation budgeting favoured by the textbook author?

Accepted Answer

A)  Its simplicity is advantageous. 
B)  It supports the strategic pay notion. 
C)  It fits with other strategic aspects of the organization. 
D)  It is more compatible with new human resource information systems.

Question 12

In regard to compensation communication, which of the following is NOT true?

Accepted Answer

A)  Employers may be found legally liable for poor benefits communication. 
B)  Two-way communication is extremely important. 
C)  The move towards defined contribution plans has increased the need for effective communication. 
D)  Employees who understand their compensation system are less satisfied with it.

Question 13

Why is it useful to conduct surveys of key employee attitudes before system implementation?

Accepted Answer

A)  to provide information about the new system 
B)  to have a baseline for future comparisons 
C)  to solicit recommendations for changes 
D)  to create perception of employee involvement

Question 14

What main indicators should firms examine in the process of examining compensation costs?

Accepted Answer

A)  budgeted costs and actual costs 
B)  compensation cost ratios and budget ratios 
C)  net profit per employee and average employee earnings 
D)  compensation cost ratios and average employee earnings

Question 15

Your organization launches a new compensation system. Within six months, compensation costs are below budget. Which of the following variables would you NOT look at as a viable explanation for this surplus?

Accepted Answer

A)  training costs 
B)  turnover rates 
C)  administrative costs 
D)  compensation budget, which was likely too conservative

Question 16

Two aspects of compensation system documentation include the compensation system itself and a process to document assignment of specific tasks.

Accepted Answer

A) True 
 B)False

Question 17

Identify the four key aspects that need to be considered in planning the infrastructure for compensation administration.

Accepted Answer

The answer of Identify the four key aspects that need...

Question 18

According to a recent survey of HR professionals, what is the predominant use of human resources management systems?

Accepted Answer

A)  planning and research 
B)  time and attendance 
C)  payroll 
D)  benefits

Question 19

When evaluating a new compensation system, you notice that the compensation cost ratio increased, while total compensation or average earnings remained static. Which of the following is a likely explanation?

Accepted Answer

A)  All employees have received some kind of raise. 
B)  Total costs and/or revenues have decreased. 
C)  Benefits have been removed from total compensation. 
D)  There is an error in the data; this situation is not possible.

Question 20

Discuss the advantages and disadvantages of outsourcing compensation administration, as well as the factors involved in deciding outsourcing policy.

Accepted Answer

The answer of Discuss the advantages and disadvantages of outsourcing...

Exam 13: Activating and Maintaining an Effective Compensation System

In evaluating a new compensation system, two main sets of employee attitudes should be examined-job attitudes and compensation attitudes.

As a result of focusing your recruitment efforts on attracting recent university graduates, your workforce has become younger. What impact does this change have on your compensation system?

Which of the following is NOT an indicator of membership behaviour?

Which of the following is NOT a key aspect of developing the implementation plan?

Which of the following situations may account for higher-than-budgeted compensation expenditures?

Which of the following factors is NOT normally a consideration when organizations make the decision to outsource human resource functions?

Of all the human resource functions, payroll activities were one of the first functions to be computerized in medium and large organizations in Canada.

Identify and describe the steps necessary for implementing a compensation system.

What are the primary areas for computer applications in a compensation system?

Often, organizations will contract out a portion of their benefits administration to "product providers."

Why is a bottom-up approach for compensation budgeting favoured by the textbook author?

In regard to compensation communication, which of the following is NOT true?

Why is it useful to conduct surveys of key employee attitudes before system implementation?

What main indicators should firms examine in the process of examining compensation costs?

Your organization launches a new compensation system. Within six months, compensation costs are below budget. Which of the following variables would you NOT look at as a viable explanation for this surplus?

Two aspects of compensation system documentation include the compensation system itself and a process to document assignment of specific tasks.

Identify the four key aspects that need to be considered in planning the infrastructure for compensation administration.

According to a recent survey of HR professionals, what is the predominant use of human resources management systems?

When evaluating a new compensation system, you notice that the compensation cost ratio increased, while total compensation or average earnings remained static. Which of the following is a likely explanation?

Discuss the advantages and disadvantages of outsourcing compensation administration, as well as the factors involved in deciding outsourcing policy.