Ch8 Test Bank + Answers + Designing Pay Levels, Mix, And Pay

1.

The first step in setting competitive pay and designing a pay structure is to _____. 
 

2.

The second major decision in pay-level determination is to _____. 
 

3.

The final major decision in pay-level determination is to _____. 
 

4.

Which of the following is true regarding the Employment Cost Index (ECI)? 
 

5.

Which of the following jobs would most likely fall into a fuzzy market? 
 

6.

In most organizations, the responsibility for managing a pay survey lies with _____. 
 

7.

The _____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data. 
 

8.

A company using a skill-based pay system prices the job of lead assembler between $10 and $22 per hour. Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour. The company is using the _____ method of job matching. 
 

9.

For organizations using a skill-competency-based pay system or generic job descriptions, the best approach for pricing jobs is _____. 
 

10.

_____ measures reveal competitors' use of performance-based cash payments. 
 

11.

A common first step in interpreting survey data is to _____. 
 

12.

The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called _____. 
 

13.

All of the following are examples of potential anomalies EXCEPT _____. 
 

14.

Which of the following is often used to set pay ranges? 
 

15.

The _____ minimizes the distortion of the central tendency caused by outliers. 
 

16.

Which of the following statistical measures shows how similar or dissimilar the market rates are from each other? 
 

17.

Because employers are raising employee pay at various times during the year, survey data must be updated using a process called _____ or _____. 
 

18.

A survey conducted in January 2013 found that the median pay effective January 1, 2013, for a clerk was $22,000 and that the forecast rate of wage increases in the market for 2013 was 5 percent and another 5 percent for 2014. An employer choosing to follow a lead strategy of 4 percent above the market for the plan year will need to _____. 
 

19.

Gramhold Inc., a pharmaceutical company, reduces its 10 salary grades to just three broad bands. Which of the following statements is most likely to be true in this case? 
 

20.

Which of the following is an example of a company that uses broad banding? 
 

21.

A market pay line _____. 
 

22.

In the regression equation, y = a + bx, job evaluation points are denoted by _____. 
 

23.

Aging the market data to a point halfway through a plan year is called _____. 
 

24.

Mark and Steve work as crane operators in a construction company called Asai Corp. Asai uses a skill-based plan that establishes single flat rates for each skill level. Mark performs better than Steve even though Steve has more seniority. Which of the following statements is most likely to be true in this scenario? 
 

25.

Pay ranges: 
 

26.

Pay ranges for office and production work commonly range between _____ and _____ percent. 
 

27.

Size of pay differentials between grades should _____. 
 

28.

Which of the following statements is true regarding broad bands? 
 

29.

The _____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment. 
 

30.

Which of the following statements is true about market pricers? 
 

31.

The final step in determining externally competitive pay levels and structures is the merging of internal and external pressure. 
 
True    False

32.

Adjustments to forms of pay occur more often than adjustments to overall pay level. 
 
True    False

33.

Many employers use market surveys to validate their own job evaluation results. 
 
True    False

34.

When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey. 
 
True    False

35.

It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditionally relevant markets. 
 
True    False

36.

Identifying pay survey participants by company name is considered price fixing under the Sherman Act. 
 
True    False

37.

If the purpose of a survey is to price the entire structure of a job, then benchmark jobs can be selected to include the entire job structure. 
 
True    False

38.

Turnover and organizational revenues are examples of survey data collected to gather competitive intelligence. 
 
True    False

39.

In cases where the content of an organization's jobs does not sufficiently match that of the jobs in the salary survey, an effort can be made to quantify the difference via benchmark conversion. 
 
True    False

40.

Regression smoothes large amounts of data while minimizing variations. 
 
True    False

41.

Aging the market data to a point halfway through the plan year is called lead/lag. 
 
True    False

42.

A pay range exists when at least two employees in the same job are paid different rates. 
 
True    False

43.

Pay ranges for top-level management positions are smaller than the pay ranges for entry-level managerial positions. 
 
True    False

44.

Pay ranges for managerial jobs are larger than the ranges for other jobs because these jobs have greater opportunity for both discretion and performance than lower-level jobs. 
 
True    False

45.

Smaller pay ranges may reduce the opportunities for promotion. 
 
True    False

46.

Skill-based plans establish single flat rates for each skill level regardless of performance or seniority. 
 
True    False

47.

Career moves between bands are more common than within bands. 
 
True    False

48.

Managers often regard external market data as more objective than internal job evaluation. 
 
True    False

49.

A pure market pricing strategy carried to its extreme tends to ignore internal alignment completely. 
 
True    False

50.

Market pricers emphasize any unique or difficult-to-imitate aspects of an organization's pay structure. 
 
True    False

51.

What is a survey? What purpose does it serve in terms of compensation? 
 

52.

Who should be involved in designing a compensation survey? 
 

53.

Explain the low-high approach in selecting jobs for inclusion in a compensation survey. 
 

54.

Explain the difference between standard deviation and quartiles and percentiles. 
 

55.

What is a market line?