Deck 13: Base Wage and Salary Systems

Question 1

Job evaluation is a systematic determination of the value of each job in relation to other jobs outside an organization.

Answer 1

False
Explanation: Job evaluation is a systematic determination of the value of each job in relation to other jobs in an organization. This process is used for designing a pay structure, not for appraising the performance of employees holding the jobs.

Question 2

The first step in a job evaluation program is to gather information on the jobs being evaluated.

Answer 2

True
Explanation: The first step in a job evaluation program is to gather information on the jobs being evaluated. Normally, information is obtained from current job descriptions.

Question 3

The job classification method of job evaluation is also called job grading.

Answer 3

True
Explanation: In the job classification, or job grading, method an evaluator determines the relative worth of a job by comparing it to a predetermined scale of classes or grades of jobs.

Question 4

It is generally recognized that skill-based pay systems work well in unionized organizations.

Question 5

In a market-based pay system,demonstrable characteristics of a person,including knowledge,skills,and behaviors,that enable performance are used as the base for deciding compensation.

Question 6

Under a typical skill-based pay system,companies hire employees at above-market rates.

Question 7

Ideally,the job evaluation process in an organization should ensure external equity,while wage surveys should ensure internal equity.

Question 8

The most widely acknowledged shortcoming of wage and salary surveys is that it is difficult to find jobs that are directly comparable.

Question 9

Base wages and salaries are the hourly,weekly,or monthly pay that employees receive in exchange for their work.

Question 10

Broadbanding provides less formal structure and allows organizations to react quicker to changes.

Question 11

The factor comparison method of job evaluation is similar to the point method with the exception that the factor comparison method eliminates the use of a monetary scale.

Question 12

In the point method of job evaluation,after the point scale has been agreed on,point values are derived for key jobs by examining the job descriptions.

Question 13

The intent of the total rewards approach to base wage/salary structure is to place more emphasis on lower-cost rewards and provide a flexible and broad array of rewards.

Question 14

In the job ranking method of job evaluation,jobs are ranked from the simplest to the most difficult.

Question 15

Most wage and salary systems establish pay ranges for jobs based on the relative worth of the job to an organization.

Question 16

When the point method of job evaluation is used,all jobs in an organization must be examined and evaluated.

Question 17

The job classification and ranking methods of evaluating the worth of jobs are both examples of qualitative or nonquantitative techniques.

Question 18

The most reliable and least expensive method of surveying wage data is the personal interview.

Question 19

There is a universal set of compensable factors that can be used by all organizations when developing methods for determining the value of various jobs.

Question 20

Wage and salary surveys are used to collect comparative information on the policies,practices,and methods of wage payment from selected organizations in a particular type of industry.

Question 21

Which of the following is an advantage of the point method of job evaluation?

A) The system is relatively inexpensive.
B) It is usually easier to develop than the factor comparison method.
C) The system is easy to keep current as jobs change.
D) It evaluates jobs only in comparison to the other positions in an organization.

Question 22

A major disadvantage of the point method of job evaluation is that it:

A) evaluates a job only in comparison to other positions.
B) is relatively time-consuming and costly to develop.
C) is not detailed and specific.
D) fails to allow evaluators to assign monetary values to jobs.

Question 23

JF Software Inc.has decided to use the factor comparison technique for job evaluation.This method will require evaluators in the organization to conclude the evaluation by linking each compensable factor to a:

A) social grid.
B) growth matrix.
C) monetary scale.
D) point scale.

Question 24

The ____ of determining job value is objective and quantitative.

A) ranking method
B) job slotting method
C) point method
D) job classification method

Question 25

What is the most reliable and most expensive method of surveying wage data?

A) Telephone interviews
B) Personal interviews
C) Mailed questionnaires
D) Controlled experimentation

Question 26

Which of the following is a disadvantage of the factor comparison method of job evaluation?

A) It disregards external market wage rates.
B) It is complicated because it breaks down compensable factors into subfactors.
C) It is not easily adapted to changes in the jobs being evaluated.
D) It fails evaluate jobs on a component basis.

Question 27

Which of the following is a disadvantage of the job classification method of job evaluation?

A) It is susceptible to abuse by evaluators due to generalities.
B) It needs to be updated frequently because classifications are specific and not broad.
C) It is limited to smaller organizations where employees are very familiar with various jobs.
D) It assumes equal intervals between the rankings, and this is usually not true.

Question 28

A good rule of thumb when doing a wage survey in conjunction with either the point or factor comparison method is that a minimum of ____ percent of the jobs in an organization should be surveyed to make a fair evaluation of the organization's pay system.

A) 5
B) 50
C) 20
D) 30

Question 29

Which of the following is an advantage of the job ranking method of job evaluation?

A) It is objective in nature.
B) It evaluates jobs against a predetermined scale.
C) It is easily adaptable to large organizations.
D) It is easy to explain.

Question 30

In the ____ of job evaluation,job subfactors are used to describe compensable factors in detail.

A) ranking method
B) job classification method
C) point method
D) factor comparison method

Question 31

The primary method for determining the relative worth of jobs to an organization is termed:

A) job evaluation.
B) job positioning.
C) job scoping.
D) job enrichment.

Question 32

Classes of jobs that for pay purposes are grouped on the basis of their worth to an organization are called:

A) pay slots.
B) pay ranges.
C) pay grades.
D) pay bands.

Question 33

The following guidelines should be followed when conducting wage and salary surveys EXCEPT:

A) assess the participating companies for comparability.
B) compare more than base wage or salary.
C) disregard variations in job descriptions.
D) correlate survey data with adjustment periods.

Question 34

A graphical depiction of the relationship between the relative worth of jobs and their wage rates is termed:

A) comparable worth matrix.
B) pay compatibility index.
C) wage and salary curve.
D) job value grid.

Question 35

Characteristics of jobs that an organization deems important to the extent that it is willing to pay for them are termed:

A) compensable factors.
B) hygiene factors.
C) point values.
D) motivators.

Question 36

Which of the following is true about the job ranking method?

A) It is the most often used job evaluation technique.
B) It produces an ordering of jobs.
C) It evaluates jobs against a predetermined scale or class.
D) It is used to indicate the relative degree of difference among jobs.

Question 37

Ordinarily,the largest portion of an employee's total compensation consists of:

A) deferred bonuses.
B) base wages or salaries.
C) fringe benefits.
D) incentives or commissions.

Question 38

In this method of job evaluation,certain classes of jobs are defined on the basis of differences in duties,responsibilities,skills,working conditions,and other job-related factors.Identify the method.

A) Job grading
B) Job ranking
C) Point method
D) Factor comparison method

Question 39

To keep its compensation system fair and competitive,GD Systems Inc.has developed a new base wage and salary system.The primary objective of this system should be to establish an equitable compensation for employees based on ____.

A) the demand for a job in the market
B) the prevailing cost-of-living alone
C) their jobs and levels of performance
D) their seniority alone

Question 40

Which of the following is a potential use of job evaluations?

A) To eliminate the need to compare jobs and pay rates with those of other organizations
B) To reduce pay grievances by reducing their scope
C) To develop a pay structure based on seniority alone
D) To appraise the performance of employees holding the jobs

Question 41

What is the primary objective of any wage and salary system?

Question 42

What are degree statements?

Question 43

An organization's compensation system should produce a base wage/salary structure that is:

A) internally regressive.
B) externally equitable.
C) characterized by many "green circled jobs".
D) characterized by many "red circled jobs".

Question 44

What is the purpose of wage and salary surveys?

Question 45

Noba Products Inc.has decided to take the total rewards approach to designing a base wage/salary structure.Which of the following will be true of Noba Products Inc?

A) The company will rely only on pay and benefits when developing a strategy to motivate employees.
B) The company will not be able to effectively engage a diverse workforce.
C) The company will place more emphasis on lower-cost rewards rather than compensation and benefits.
D) The company will provide a limited array of rewards to its employees.

Question 46

Market-based pay systems focus on:

A) external equity.
B) internal equity.
C) traditional pay grades.
D) traditional pay ranges.

Question 47

Distinguish between skill-based pay and competency-based pay systems.

Question 48

List the possible topics to be included in a wage survey.

Question 49

Describe broadbanding.What are its advantages?

Question 50

Describe the point method of job evaluation.

Question 51

Discuss the job ranking method of job evaluation.

Question 52

Skill-based pay systems are also referred to as:

A) competency-based pay systems.
B) knowledge-based pay systems.
C) market-based pay systems.
D) seniority-based pay systems.

Question 53

Averno Inc.wants to create a flexible base wage/salary structure.Which of the following will be true if the company decided to use the broadbanding approach?

A) Managers will find it difficult to move employees around in the organization.
B) Employees will become reluctant to take a lateral move or a downgrade along the pay structure.
C) Unnecessary distinctions among jobs will be created.
D) Managers will have autonomy in setting pay rates.

Question 54

Which of the following is NOT a benefit of a skill-based pay system?

A) Works well in unionized organizations
B) Inspires higher quality and quantity productivity levels
C) Decreases labor costs
D) Improves understanding of a company's operation

Question 55

The human resource department at Blue Artic Inc.is planning a new base wage and salary structure for the company.Discuss the policy issues the human resource department needs to consider in developing and implementing a base wage and salary structure.
Some policy issues that the company needs to consider when developing and implementing a base wage and salary structure are:
• What is the lowest rate of pay that can be offered for a job that will entice the quality of employees the organization desires to have as its members?
• What is the rate of pay that must be offered to employees to ensure that they remain with the organization?
• Does the organization desire to recognize seniority and meritorious performance through the base pay schedule?
• Is it wise or necessary to offer more than one rate of pay to employees performing either identical or similar work?
• What is considered to be a sufficient difference in base rates of pay among jobs requiring varying levels of knowledge and skill and of responsibilities and duties?
• Does the organization wish to recognize dangerous and distressing working conditions in their base pay schedule?
• Should there be a difference in base pay progression opportunities among jobs of varying worth?
• Do employees have a significant opportunity to obtain higher-level jobs?
• Will policies and regulations permit employees to earn rates of pay higher than established maximums and lower than established minimums?
• How will the pay structure accommodate across-the-board,cost-of-living,or other adjustments not related to employee tenure,performance,or responsibility and duty changes?

Question 56

Broadbanding:

A) reduces the number of pay grades in a salary system.
B) results in narrow categories or groups of jobs.
C) introduces unnecessary distinctions among jobs.
D) prevents the overlapping of pay ranges between two salary bands.

Question 57

The ____ rewards employees based on knowledge,skills,and behaviors that result in performance.

A) demand-based pay system
B) market-based pay system
C) seniority-based pay system
D) competency-based pay system

Question 58

Conventional base pay systems compensate employees based on the work required to do a specific job as determined by job evaluations.Which of the following approaches was created to provide additional flexibility to conventional base pay systems?

A) Competence-based pay
B) Skill-based pay
C) Crowdsourcing
D) Broadbanding

Question 59

Which of the following is true about pay grades and ranges?

A) One approach for establishing pay grades and ranges is to have a relatively large number of grades with identical rates of pay for all jobs within each grade.
B) When an employee reaches the top of the range for a given pay grade, he or she will not be allowed to move to a higher grade.
C) Ranges within pay grades are set up so that homogeneity can be achieved among employees within grades.
D) In establishing pay grades and ranges, one method is to have a small number of grades with a relatively narrow dollar range for each grade.

Question 60

Harry,a human resource executive at SWR Inc.,wants to conduct a job evaluation so that all employees within the organization are compensated fairly.However,his manager thinks the evaluation process will be a waste of time and other resources.What reasons can Harry provide to convince and persuade his manager?