Quiz 9: Compensation Management

Compensation does not include non-cash rewards employees receive in exchange for their work.

Compensation programs help to maintain an organization's human resources.

Employee dissatisfaction can arise because needs are affected by both relative and absolute levels of pay.

When relative pay is too low,employees cannot meet their physiological and security needs.

In Canada,absolute pay tends to cause more dissatisfaction than relative pay.

Among the objectives of effective compensation administration are included the desire to control costs,reward behaviours,and ensure equity.

If a recruiter offers a higher than normal (for the organization)salary to a qualified recruit in a labour-competitive market,this can cause a conflict with internal equity policies.

Internal equity in compensation requires that pay be directly related to the rate perceived as fair in the local marketplace.

In compensation management,internal equity is also referred to as internal consistency.

Job evaluations are systematic procedures to determine the relative worth or value of jobs.

The purpose of job evaluation is to identify which jobs should be paid more than others.

Job evaluation methods include job ranking,job grading,and the point system.

Pay equity legislation has dramatically increased the use of the job ranking and job grading methods as the most effective means of evaluating jobs.

There are six steps required to implement the point system of job evaluation.

The first step in the point system of job evaluation is to determine compensable factors.

In the point system of job evaluation,listing job factors down one side and point levels across the top results in a point system matrix.

The point system for job evaluation cannot be applied until the point matrix and the point manual are ready.

All job evaluation techniques result in a ranking of jobs that assures internal equity.

External equity is fairness of pay relative to what other employers are publishing as their pay ranges.

Wage and salary surveys are studies of what other organization are paying within the employer's labour market.

For confidentiality reasons private consultants are usually the poorest source of compensation information.

Pricing jobs involves two activities: establishing an appropriate pay level for each job and grouping the pay levels into a manageable structure.

Wage and salary surveys are also known as pricing jobs.

A job's relative worth is determined by what the labour market pays and its absolute worth by the internal job evaluation.

Relative and absolute job information can be combined by means of a graph called a scattergram.

Wage-trend lines are plotted on a scattergram by using non-key jobs and then are used to determine wage rates for key jobs.

Although many businesses complain about minimum wage legislation,government requirements such as this actually have little or no direct effect on organizational compensation policies.

Pay equity and the concept of equal pay for equal work are the same.

The concept of equal pay for work of equal value is known as pay equity.

The concept of pay equity was repealed by the Human Rights Act in 1978,and replaced with the non-discriminatory concept of equal pay for equal work.

One reason that women's wages or earnings are less then men's is very often influenced by their roles as mothers and homemakers.

Performance can be defined as the accomplishment of assigned tasks,while productivity can be defined as a measure of output.

Piecework,bonuses,and commissions can all be considered types of individual incentive plans.

Group incentive plans have been developed to provide incentives for teamwork.

New approaches to compensation include both variable pay and broadbanding.

The total reward model of compensation includes rewarding everything employees value in an employment relationship.

The biggest problem with broadbanding as a salary structure is that it emphasizes promotions and makes organizations somewhat less flexible.

To maintain a competitive advantage,organizations must develop strategic pay plans.

Organizations have to make sure that their reward system allows for occasional failures if they want to reward an entrepreneurial culture.

Pay is not an important motivator for employees.

Wage dissatisfaction can be caused by employee needs (e.g.social and security)not being met by both __________ and _________ levels of pay. A)absolute;relative B)corporate;social C)absolute;needs D)basic;relative E)absolute;basic

Rankings established through the job evaluation process are used by organizations to determine: A)any job's relative worth B)any job's absolute worth C)any job's variable value D)any job's worth as perceived by the jobholder E)any job's worth as perceived by the manager

The final step in the point system job evaluation method is: A)training managers on the system B)determining compensable factors C)applying the point system D)developing the point manual E)determining levels of factors

A pay raise given to an employee according to a performance evaluation is referred to as: A)merit raise B)seniority raise C)bonus D)promotion E)step increase

Which of the following are sources of information on wage and salary benchmark data? A)Employment and Social Development Canada B)compensation specialists and consultants C)Canada Human Resource Centres D)employer and professional associations E)all of the choices

Individual pay incentive plans can include which of the following EXCEPT: A)piecework B)production bonuses C)commissions D)executive incentives E)profit-sharing plans

Group or team based incentive plans include all of the following EXCEPT: A)profit-sharing plans B)production incentive plans C)commissions D)employee stock options E)team results

All of the below are steps that compensation specialists go through to set wages/salaries for each job,EXCEPT for: A)job analysis information B)wage and salary surveys C)demographic lifestyle analysis D)job evaluation E)pricing jobs

Pay equity legislation defines some factors that can justify differences in wages for jobs of equal value,including which of the following? A)all of the choices B)seniority C)demotion pay procedures D)different performance ratings (based on formal appraisals) E)rehabilitation assignment (after sick leave)

Which of the following are steps required by the point system of job evaluation? A)determination of compensable factors B)allocation of points to levels (degrees) C)determination of levels (degrees)associated with each factor D)allocating points to sub factors E)all of the choices

The following list gives some of the steps in the point system method of job evaluation.The steps are in sequence from the start of the process,except for one step that is out of sequence.Indicate that step. A)determine compensable factors B)determine levels of factors C)develop the point manual D)allocate points to sub factors E)allocate points to levels

The principle of equal pay for men and women in jobs with comparable worth to the organization is called: A)equal pay for equal work B)equal pay for work of equal value C)employment equity D)fair pay E)fair employment pay

The principle of equal rates of pay for all employees in an organization performing the same kind and amount of work,regardless of any personal characteristics that are not job-related,is called: A)equal pay for work of equal value B)pay equity C)equal pay for equal work D)non-discriminatory job-related pay rates E)reverse discrimination

Consolidating a large number of pay grades into a fewer number of (larger)categories is called: A)broadbanding B)wide banding C)flatstructuring D)de-grading E)wage rationalization

Piecework is an individual incentive plan which pays employees: A)for exceeding a specific level of output B)a percentage or flat amount for each unit sold C)for saving production time D)for each unit of output produced E)based on an individually designed compensation package

According to Lawler all the following areas that affect pay systems should be given particular importance EXCEPT: A)relate rewards to performance B)motivate skill and knowledge development C)foster attraction and retention D)identify valued rewards E)establish year-end bonuses

In order to develop a strategic pay plan,Lawler suggests concentrating on a limited number of areas that affect pay systems.That number is: A)five (5) B)seven (7) C)four (4) D)eight (8) E)three (3)

To determine a fair rate of employee compensation,most firms rely upon: A)retention targets B)wage and salary surveys C)historical records D)Cartesian labour analysis E)Brownian motion studies

The point system for job evaluation is the most widely used system in Canada due to: A)ease of communicating the job evaluation process to employees B)the fact that it is the easiest to develop C)it being a far more simple system than either job ranking or job grading D)the need to conform to pay equity legislation and the provision,relatively,of the best information about job values E)the fact that generic computerized plans can be purchased

The job grading method of job evaluation is also known as: A)job ranking B)job classification C)job posting D)job listing E)job comparison

A job evaluation system where jobs in an organization are placed subjectively on a scale in accordance to their importance in comparison with other jobs is called: A)job grading B)job progression ladder scaling C)job ranking D)job factoring E)job description comparison technique

A systematic procedure to determine the relative worth or value of jobs is called: A)job evaluation B)job analysis C)job standard measurement D)performance evaluation E)job intrinsic valuation determination

Perceived fairness of job rankings within an organization is referred to as: A)external equity B)internal equity C)labour harmony D)unionization E)turnover

No matter what pay rate methods are used to set wages and salaries,they must all be tempered by a variety of challenges including which of the following? A)organizational policies B)union power C)level of productivity D)prevailing wage rates E)all of the choices

If,for a particular job class,the average hourly wage rate is $13,but a less average employee can be paid $11 and an exceptional employee $15,then this is an example compensation policy utilizing __________ within job classes. A)flat rates B)disbursed rates C)modified rates D)rate ranges E)employee non-evaluated rates

When a company increases employee compensation,this has the effect on the wage-trend line of: A)moving it to the right B)moving it upwards C)moving it downwards D)reversing the direction of its slope E)moving it to the left

Through the dots that represent key jobs on a scattergram,a __________ is drawn as close to as many points as possible. A)wage-trend line B)Scatterline C)pay rate line D)pay-point line E)job evaluation curve

External equity in job evaluation may be defined as: A)perceived fairness of a pay system relative to others within the organization B)a situation where job descriptions match those of other similar organizations within a specific area C)perceived fairness in pay relative to what other employers are paying for the same type of work D)being treated as an equal regardless of personal characteristics when being evaluated for a job E)the fact that an employee is still seen as equal to others even outside the job

A form of job evaluation that assigns jobs to predetermined job classifications according to their relative worth to the organization is known as the __________ method. A)job ranking B)job grading C)point system D)job description E)administrative

New pay concepts such as skill or knowledge-based pay require that human resource departments do all of the following EXCEPT: A)identify the tasks that have to be performed B)identify skills required to complete tasks C)price skills for pay rates D)ideally,provide incentives for continuous horizontal and vertical learning E)be prepared to significantly enlarge the workforce

There are several new approaches to paying employees which include: A)skills or knowledge based pay and employee stock ownership plans B)variable pay and piecework C)profit sharing and skills or knowledge based pay D)variable pay and skills or knowledge based pay E)piecework and profit sharing

While flat wage rates are easier to administer they can obstruct rewarding employees.One way organizations avoid such problems is by utilizing: A)individual rates B)rate ranges C)random wages D)not rewarding exceptional performance E)allowing employees to set their own wage rates

Compensation systems are intended to do all of the following EXCEPT: A)satisfy employees B)tie rewards to the achievement of company objectives C)reimburse employees for their work D)motivate employees E)replace performance appraisals

In order to ensure that a company's pay system is in line with government legislation,which of the following measures are suggested? A)review the philosophy and rationale of the current job evaluation plan B)all of the choices C)review recruiting and promotional decisions D)examine the differential between the earnings of male and female employees E)review human resource planning techniques and procedures

Companies utilize a variety of methods to set pay rates.Which factors can challenge organizational plans and policies concerning wages and salaries? A)child labour laws B)production bonuses C)scatterlines D)government regulations E)the British North-America Act

Absolute pay levels primarily affect such employee needs as: A)esteem needs B)physiological needs only C)security needs only D)both physiological and security needs E)belonging needs

What makes the issue of equal pay for work of equal value a difficult concept to deal with? A)it only covers women in the marketplace and ignores other protected classes B)generally a company will not know how much it pays its female versus male employees C)the concept (and laws)do not clearly define "equal value" and how it can be measured D)it conflicts with equal pay for equal work laws E)it relates only to certain groups of people as specified by the federal government

The reason that the point system has become the major job evaluation method is because of: A)the fact that it provides the best information regarding job values B)the Charter of Rights and Freedoms C)the Human Rights Act D)the ease with which it can be developed and applied E)its relative inexpensiveness when compared to other systems

In obtaining wage and salary information,regardless of the source,it is always most important to ensure that: A)the information is printed and not simply verbal B)the information is in both English and French C)the information is legally valid under the Human Rights Act D)the information offers comparisons between similar jobs and not just similar titles E)the information is in accordance with salaries as laid out in the Employment Equity Act

In pricing jobs,the appropriate pay level for any job reflects: A)the job's relative worth only B)the job's absolute worth only C)the intrinsic value of the employee occupying the job D)what a manager determines to be appropriate E)both the job's relative and absolute worth

The most commonly used job evaluation method today is,by far,the: A)job ranking method B)point system C)the job grading method D)the job analysis system E)job description method

One thing all job evaluations have in common is that they all result in an ordering of jobs based upon: A)their perceived relative worth B)the opinions of the incumbents C)the opinions of human resource specialists D)definitions laid out in the Canada Labour Code E)seniority

The job evaluation method that assesses the relative importance of a job's key factors to arrive at the relative worth of that job within the organization is called: A)job ranking B)job grading C)the point system D)job classification E)the relative importance technique

Two major objectives of compensation management are to reward desired behaviour and control costs.Human resource specialists often find that: A)these two goals are always mutually exclusive B)these two objectives can often be in conflict C)these two objectives are seldom in conflict D)the two objectives are one and the same E)it is usually impossible to reward desired behavior

Employee stock ownership plans can be modeled to fit all the following needs EXCEPT: A)to motivate employees and improve their productivity B)as a percentage for exceeding predetermined levels of output C)to attract and retain employees D)as a source of additional financing E)as an alternative to wage and salary increases

The Canadian Human Rights Act of 1978 makes it illegal: A)to discriminate on the basis of job description B)to discriminate on the basis of job value or content C)to discriminate on the basis of skill or responsibility D)to discriminate on the basis of performance merit E)to discriminate on the basis of seniority

Effective compensation management include all following objectives EXCEPT: A)to reward desired behaviour B)to encourage unproductive employees to leave C)to ensure internal equity D)to attract qualified applicants E)to ensure external equity

Regardless of all the trade-offs involved in compensation management,an overriding objective is: A)to maintain internal equity B)to further administrative efficiency C)to maintain legal compliance D)control costs E)develop satisfied employees

Which of the following are NOT government restraints on an organization's wage and salary policies? A)human rights legislation B)pay equity C)union policies D)child labour laws E)minimum wage

In a point system matrix for evaluating any particular job,which compensable factors could be included? A)level of responsibility B)skill requirements C)working conditions D)effort needed E)all of the choices