Question 1

You work as a human resource professional at a large accounting firm in Ontario.Part of your mandate requires that you investigate processes that will streamline basic human resource functions,including remittance of pay stubs to employees.You are currently contemplating the notion of automating this process.What minimum requirements must you adhere to so as to make this process compliant with Bill 88?
A) Make the statements available via the company's intranet to employees.
B) Send out a quarterly summary to each employee via a "personalized email," and make the biweekly stubs available via the Intranet.
C) It is impossible to be compliant with the act while automating the process.
D) On a biweekly basis,send out the statements to each employee via the company's email platform.

Accepted Answer

Bill 88 requires that employees receive their pay stubs in a timely and accessible manner. Sending out biweekly statements via the company's email platform ensures compliance by providing direct and regular access to pay information.

Question 2

Katrina works at a factory assembling plastic toys.She prides herself in producing the most units with the lowest rejection rates.What kind of behaviour is Katrina displaying?
A) loyalty
B) citizenship
C) membership
D) task

Accepted Answer

Katrina's behaviour is task-oriented, as she focuses on achieving a high level of productivity and quality in her work.

Question 3

Which factor is NOT normally a consideration when organizations make the decision to outsource human resource functions?
A) size of the organization
B) activities competitors are undertaking with their human resource functions
C) level of internal expertise
D) strategic role played by compensation in the organization

Accepted Answer

The activities competitors are undertaking with their human resource functions may be considered as an external factor that could influence the decision to outsource, but it is not a typical consideration when organizations make this decision. Size of the organization, level of internal expertise, and the strategic role played by compensation in the organization are all commonly considered factors when deciding whether or not to outsource human resource functions.

Question 4

What would a human resource professional consider part of documenting the compensation system?
A) ensuring stakeholders have up-to-date job evaluation manuals
B) deciding to use an external service provider
C) designing job evaluation criteria that are valid and reliable
D) deciding on the compensation strategy

Accepted Answer

Ensuring stakeholders have up-to-date job evaluation manuals is part of documenting the compensation system as it involves maintaining records and documentation related to how compensation is determined and evaluated.

Question 5

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

Accepted Answer

The main indicators that firms should examine in the process of examining compensation costs are compensation cost ratios and average employee earnings. Compensation cost ratios indicate the proportion of total compensation costs to the total cost structure of the firm. Average employee earnings give a clear idea of the compensation structure of the company, which includes salaries, bonuses, and benefits. Therefore, these two indicators help in understanding the overall compensation cost of the firm, and how it affects the finances of the company.

Question 6

Which employee attitude towards the compensation system should be evaluated?
A) satisfaction with the process by which compensation is determined
B) work motivation
C) job satisfaction
D) organizational identification

Accepted Answer

Satisfaction with the process by which compensation is determined is the most appropriate employee attitude to evaluate regarding the compensation system. This will reflect how employees perceive the fairness and transparency of the compensation system, which can have a significant impact on their overall job satisfaction and motivation. Evaluating work motivation, job satisfaction, or organizational identification may also provide valuable insights, but these are broader attitudes that may be influenced by many factors beyond the compensation system.

Question 7

A training process is critical to the launch of a new compensation system.The textbook identifies three groups of stakeholders that should be trained so as to facilitate the introduction of an effective compensation system.Which stakeholder should have very detailed system knowledge?
A) recruiters and secretarial personnel
B) front-line supervisors and managers
C) support personnel in the human resource department
D) all customer-facing employees

Accepted Answer

Support personnel in the human resource department should have very detailed system knowledge because they are directly involved in the administration and management of the compensation system, making them key stakeholders in its effective implementation and maintenance.

Question 8

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?
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.

Accepted Answer

Younger employees, especially recent graduates, may prioritize cash and family benefits over other types of compensation. This could include things like healthcare plans, flexible work arrangements, and parental leave policies. Therefore, the compensation system should be adapted to meet these needs in order to attract and retain younger workers. Choice A is not as relevant because younger employees may not be as concerned with pension plans and retirement income at this stage in their careers. Choice C may be necessary but is not directly tied to the impact of younger workers on compensation. Choice D is too vague and doesn't specifically address compensation.

Question 9

Which statement does NOT support the notion of outsourcing some human resource functions to third-party service providers?
A) It provides internal staff with a better sense of issues facing employees.
B) It reduces costs.
C) It leverages the specialized knowledge of external experts.
D) It allows internal staff to focus on strategic human resource activities.

Accepted Answer

This statement suggests that outsourcing HR functions may not provide internal staff with enough insight into employee issues, which goes against the notion of outsourcing HR functions.

Question 10

Which statement best describes outsourcing among Canadian firms?
A) Outsourcing of HR functions is on the decline.
B) Outsourcing of HR functions is increasingly used.
C) Larger firms outsource their HR functions more than smaller firms.
D) Outsourcing does not offer any benefits

Accepted Answer

The answer of Which statement best describes outsourcing among Canadian...

Question 11

Which statement does NOT accurately describe the act of evaluating the compensation system?
A) Most organizations don't even try to evaluate their systems.
B) A slipshod attempt at evaluation may do more harm than good.
C) Compensation costs below budgeted levels should make you happy.
D) If the budget was not realistic in the first place,comparisons are meaningless.

Accepted Answer

Evaluating a compensation system involves assessing its effectiveness and efficiency, not just its adherence to budget. If compensation costs are below budgeted levels, it might indicate underpayment or other issues rather than a cause for happiness. Effective evaluation looks at multiple factors including market competitiveness, employee satisfaction, and alignment with organizational goals.

Question 12

A particular company notices that performance,as measured by the accuracy of entries by managers in a new human resource management system,decreased during the early stages of launch.What phenomenon may account for this decrease in performance?
A) socialization
B) initial dip
C) integration
D) freedom to act

Accepted Answer

The phenomenon that may account for the decrease in performance is the initial dip. It is a common occurrence when a new system or process is introduced, as individuals need time to adjust and adapt to the changes. During this initial period, performance may decrease before eventually improving as individuals become more familiar with the new system.

Question 13

When does communication occur in compensation communications?
A) not until understanding passes from the sender to the receiver
B) once the communication tool,such as a podcast,is launched
C) only after evaluations prove that the communications were effective in increasing employee satisfaction
D) not until employee attitudes are changed

Accepted Answer

Communication occurs when understanding is passed from the sender to the receiver. This means that the recipient has received and comprehended the message.

Question 14

Your organization has asked you to prepare a compensation budget by taking into account the following variables: current employees' wages,anticipated merit increases,seniority increases,as well as expected turnover.What kind of compensation budgeting process is your organization using?
A) zero-based
B) top-down
C) bottom-up
D) break-even

Accepted Answer

The compensation budgeting process used by the organization is bottom-up, because it involves taking into account multiple variables (such as current employee wages, merit increases, seniority increases, and expected turnover) that affect compensation at the individual employee level. This suggests that the budget is being prepared from the ground up, based on input and analysis from the HR department and/or individual managers.

Question 15

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

Accepted Answer

When the compensation cost ratio increases while total compensation or average earnings remain static, it likely means that total costs and/or revenues have decreased. This ratio reflects the proportion of costs or revenues dedicated to compensation, so a rise in the ratio without an increase in compensation suggests a reduction in the overall financial base (costs or revenues) against which the ratio is calculated.

Question 16

What is a major issue for most organizations when planning for information technology?
A) whether to use computers
B) whether to use consultants
C) how advanced the system should be
D) whether to protect employee privacy

Accepted Answer

The level of advancement of the information technology system is a major issue for most organizations because it can impact the cost, effectiveness, and compatibility with other systems. Choosing the right level of advancement requires careful planning and analysis of the organization's needs and resources. Option A is not a relevant choice as using computers is already common practice in most organizations. Option B is a possible issue but not a major one in comparison to the others. Option D is a concern, but privacy protection can and should be incorporated into the planning and implementation of the IT system.

Question 17

Which statement does NOT accurately describe developing a communication plan to introduce a new compensation system?
A) Employees need to know the rationale behind the change.
B) Ensure it is an on-going process; communicate often.
C) Various modes of communications should be used.
D) It is often a recipe for failure if frontline managers are told of impending changes early in the process.

Accepted Answer

It is important to involve frontline managers in the communication process from the beginning to help them understand the changes and effectively communicate them to their teams. Keeping them in the dark can lead to confusion and resistance from employees.

Question 18

What is NOT a key aspect in implementing the compensation system?
A) putting infrastructure in place
B) testing the system
C) conducting job evaluations
D) conducting training

Accepted Answer

Conducting job evaluations is not a key aspect in implementing the compensation system; it is a preliminary step before designing and implementing the system, focusing on assessing the value of each job to determine its appropriate compensation level.

Question 19

A good employee threatens to leave your firm because she has received a higher pay offer from a competitor.The offer is well outside your company's pay range for the job the employee is performing.What should you tell the employee?
A) You will match the other offer.
B) You will beat the other offer to be sure you won't lose her.
C) You will try to get her job put into a higher pay grade.
D) You wish her all the best in her new job with the competitor.

Accepted Answer

Matching or beating the competitor's offer may not be sustainable if it's well outside the company's pay range. Trying to get her job put into a higher pay grade could be seen as an empty promise if not feasible. Wishing her the best acknowledges the situation realistically and maintains a positive relationship.

Question 20

Given changes in financial circumstances of an organization,senior management requests recommendations geared towards containing compensation costs.What would NOT be a recommendation that you would bring forward?
A) Enact a hiring freeze.
B) Contain benefit costs.
C) Replace some raises with bonuses.
D) Replace variable pay with fixed pay.

Accepted Answer

Replacing variable pay (such as bonuses or commissions) with fixed pay could actually increase compensation costs as employees may expect higher base salaries to make up for the loss of variable pay. The other options (enacting a hiring freeze, containing benefit costs, and replacing some raises with bonuses) all focus on controlling costs without increasing compensation expenses.

Quiz 13: Activating and Maintaining an Effective Compensation System

Katrina works at a factory assembling plastic toys.She prides herself in producing the most units with the lowest rejection rates.What kind of behaviour is Katrina displaying?

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

What would a human resource professional consider part of documenting the compensation system?

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

Which employee attitude towards the compensation system should be evaluated?

A training process is critical to the launch of a new compensation system.The textbook identifies three groups of stakeholders that should be trained so as to facilitate the introduction of an effective compensation system.Which stakeholder should have very detailed system knowledge?

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 statement does NOT support the notion of outsourcing some human resource functions to third-party service providers?

Which statement best describes outsourcing among Canadian firms?

Which statement does NOT accurately describe the act of evaluating the compensation system?

A particular company notices that performance,as measured by the accuracy of entries by managers in a new human resource management system,decreased during the early stages of launch.What phenomenon may account for this decrease in performance?

When does communication occur in compensation communications?

Your organization has asked you to prepare a compensation budget by taking into account the following variables: current employees' wages,anticipated merit increases,seniority increases,as well as expected turnover.What kind of compensation budgeting process is your organization using?

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

What is a major issue for most organizations when planning for information technology?

Which statement does NOT accurately describe developing a communication plan to introduce a new compensation system?

What is NOT a key aspect in implementing the compensation system?

A good employee threatens to leave your firm because she has received a higher pay offer from a competitor.The offer is well outside your company's pay range for the job the employee is performing.What should you tell the employee?

Given changes in financial circumstances of an organization,senior management requests recommendations geared towards containing compensation costs.What would NOT be a recommendation that you would bring forward?