Question 1

Which of the following would NOT be considered as an advantage of broadbanding?

Accepted Answer

A) elimination of narrow bands broadens employees' job duties and responsibilities 
B) reduced organizational hierarchies that support job promotions 
C) reduced management layers that promotes quicker decision making cycles 
D) greater responsibility for supervisors for administering each employee's compensation within the confines of the broadbands

Question 2

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

Accepted Answer

A) commission-only plan 
B) salary-only (base pay)plan 
C) salary (base pay)-plus-bonus plan 
D) salary (base pay)-plus-commission plan

Question 3

If the company adopts a market lead policy,how will that company's pay range midpoint compare to the market average?

Accepted Answer

A) The midpoint will be the same as the market average. 
B) not enough information to determine 
C) The midpoint will be higher than the market average. 
D) The midpoint will be lower than the market average.

Question 4

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

Question 5

If the company adopts a market lag policy,how will that company's pay range midpoint compare to the market average?

Accepted Answer

A) The midpoint will be the same as the market average. 
B) not enough information to determine 
C) The midpoint will be higher than the market average. 
D) The midpoint will be lower than the market average.

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

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 8

This type of sales incentive compensation plan offers the sales person a salary and further compensation if they meet a specific,exceptional sales goal.

Accepted Answer

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

Question 9

________ makes sure that employees have at least a minimally acceptable level of skill proficiency upon completion of a training unit.

Accepted Answer

The answer of ________ makes sure that employees have at...

Question 10

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

Accepted Answer

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

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

A recently opened car dealer uses an incentive compensation plan for its sales people.The dealer provides money to its salespeople to cover basic living expenses and then shares a fixed percentage of the selling price of each car that a salesperson sells.However,the salesperson should repay the subsistence pay component within a year;otherwise he/she cannot continue in the employment of this dealer.What type of sales compensation plan does this dealer adopt?

Accepted Answer

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

Question 13

________ represent the vertical dimension of pay structures.

Accepted Answer

The answer of ________ represent the vertical dimension of pay...

Question 14

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

Accepted Answer

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

Question 15

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

Accepted Answer

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

Question 16

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 17

In establishing pay grades,which pay rate is established first?

Accepted Answer

A) minimum pay rate 
B) midpoint 
C) third quartile 
D) maximum pay rate

Question 18

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

Accepted Answer

A) the salesperson is selling high-priced products with long lead times 
B) the salesperson has substantial influence over sales 
C) the company is looking to save money due to budget constraints 
D) the company is looking to create competition among its sales staff

Question 19

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 20

Richard's job has a compa-ratio of 0.85.What does this ratio tell about Richard's pay rate?

Accepted Answer

A) Richard's pay is highly competitive with the market. 
B) Richard's pay is not competitive with the market. 
C) There is no way to judge the competitiveness of Richard's pay. 
D) You need more information to be able to judge Richard's pay.

Exam 8: Building Pay Structures That Recognize Individual Contributions