Question 1

Organizations use pay surveys to benchmark compensation.

Accepted Answer

Pay surveys are commonly used by organizations to gather information about industry pay and benefits practices in order to assess their own compensation strategy and stay competitive in the job market.

Question 2

In a two-tier wage system,employees doing the same job are paid two different rates,depending on their technical background and training.

Accepted Answer

In a two-tier wage system, employees doing the same job are paid two different rates based primarily on their date of hire, not their technical background and training.

Question 3

The laws governing Equal Employment Opportunity guarantee equal pay for all employees of an organization.

Accepted Answer

While the laws governing Equal Employment Opportunity prohibit employment discrimination based on race, color, religion, sex, or national origin, they do not guarantee equal pay for all employees. The Equal Pay Act of 1963 requires that men and women be paid equally for doing equal work, but there can be differences in pay if they are based on factors such as seniority, merit, or productivity.

Question 4

According to equity theory,employees evaluate job outcomes such as compensation in terms of outputs.

Accepted Answer

The answer of According to equity theory,employees evaluate job outcomes...

Question 5

Under the FLSA,children aged 14 and 15 may not be employed outside school hours.

Accepted Answer

Children aged 14 and 15 may be employed outside of school hours, but there are limitations on the number of hours and types of jobs they can do.

Question 6

In a product market,different organizations have exclusive customer bases.

Accepted Answer

In a product market, organizations often compete for the same customers, and customer bases can overlap significantly. Exclusive customer bases are rare due to the competitive nature of most markets.

Question 7

Under the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936,employees of federal contractors must receive rates less than the prevailing wages in the area.

Accepted Answer

This statement is false. Under the Davis-Bacon Act and the Walsh-Healy Public Contracts Act, employees of federal contractors must receive rates at least equal to the prevailing wages in the area.

Question 8

Key jobs are uncommon and have unstable content,making them very difficult to evaluate using pay surveys.

Accepted Answer

Key jobs, also known as benchmark jobs, are common in the labor market and have stable content, making them easier to evaluate using pay surveys because they provide consistent data points for comparison.

Question 9

When job structure conflicts with market data,organizations should base their pay only on market forces because this approach does not have any practical drawbacks.

Accepted Answer

While basing pay solely on market data may seem like a practical solution, it disregards important factors such as job structure, internal equity, and individual performance that can impact employee motivation and retention. It is important for organizations to strike a balance between market data and internal factors when determining compensation.

Question 10

Research suggests that employees in the lower tier of the pay structure in a two-tier wage system are less satisfied than the top-tier employees.

Accepted Answer

The answer of Research suggests that employees in the lower...

Question 11

A pay structure helps an organization achieve goals related to cost control.

Accepted Answer

A pay structure can help an organization achieve cost control goals by ensuring that salaries and wages are aligned with budget constraints and performance expectations. It can also prevent wage inflation and ensure that compensation is fair and equitable across the organization, which can help minimize turnover and reduce recruitment costs.

Question 12

Pay level is the total amount an employee pays to the organization.

Accepted Answer

Pay level is the total amount an organization pays to an employee, not the other way around.

Question 13

Product markets place an upper limit on the pay an organization will offer.This upper limit is significant when the organization's total costs are mainly comprised of labor costs,and when price is a significant factor for the organization's consumers.

Accepted Answer

Product markets do place an upper limit on the pay an organization can offer, especially when labor costs are a significant portion of the total costs and price is an important factor for consumers.

Question 14

The job characteristics that an organization deems valuable and decides to pay for are called compensable factors.

Accepted Answer

This statement is true. Compensable factors are those job characteristics that an organization considers important enough to pay for, such as skills, experience, responsibility level, and working conditions.

Question 15

Themost common approach to pay differentials is to move an employee lower in the pay structure to compensate for higher living costs.

Accepted Answer

The most common approach to pay differentials is to adjust pay based on job responsibilities, market demand, and employee performance. Adjusting pay based on cost of living is less common and varies by company and location.

Question 16

Paying a salary does not necessarily mean that a job is exempt from overtime pay.

Accepted Answer

Whether a job is exempt from overtime pay depends on various factors such as the employee's job duties, salary level, and other criteria outlined by the Fair Labor Standards Act (FLSA). Simply paying a salary does not automatically exempt an employee from receiving overtime pay.

Question 17

Implementing broad bands increases the opportunities for promoting employees.

Accepted Answer

The answer of Implementing broad bands increases the opportunities for...

Question 18

Pay grades allow precise matching of pay for individual jobs to market rates and an organization's job structure.

Accepted Answer

The answer of Pay grades allow precise matching of pay...

Question 19

The pay offered by an organization is not limited by its presence in a product market.

Accepted Answer

The pay offered by an organization can be limited by its presence in a product market because the organization's ability to generate revenue and profit from its products or services directly impacts its financial capacity to offer competitive salaries. Market competition, demand for the product, and overall economic conditions in the product market can all influence the organization's pay structure.

Question 20

If state laws specify minimum wages,in addition to the federal level,employees are entitled to receive whichever rate is higher.

Accepted Answer

This is true. If state laws specify a higher minimum wage than the federal level, employees are entitled to receive the state's higher rate.

Quiz 12: Establishing a Pay Structure