Chapter 1 The Pay Model TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Paying executives based on company performance measures such as shareholder return can help keep executives focused on the best interests of the company ⊚ ⊚
true false
2) Compensation refers to all forms of non-financial returns and intangible services and benefits that employees receive as part of an employment relationship. ⊚ ⊚
true false
3) Total compensation includes psychological aspects of work such as recognition and status, challenging work, and learning opportunities. ⊚ ⊚
4)
true false
Base pay is the cash compensation an employer pays for the work performed. ⊚ ⊚
true false
5) Cost-of-living adjustment refers to percentage increment to base pay provided to employees based on their performance. ⊚ ⊚
6)
true false
Incentives may be long-term or short-term. ⊚ ⊚
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true false
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7)
Total compensation only includes salary and incentives; not benefits. ⊚ ⊚
8)
Making contributions to Workers' Compensation is at discretion of the employer. ⊚ ⊚
9)
true false
Allowances are rewards given to employees based on their performance. ⊚ ⊚
10)
true false
true false
Compliance means an organization cares about how its results are achieved ⊚ ⊚
true false
11) External competitiveness refers to pay comparisons between different skill levels in an organization. ⊚ ⊚
12)
true false
While external competitiveness directly affects efficiency, it does not affect fairness. ⊚ ⊚
true false
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 13) Which of the following is NOT a contributing factor to wage determination?
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A) gender B) education C) size of organization D) volunteer experience E) tenure
14)
Pay for executives should supposedly to be tied to:
A) the company's financial performance B) the company's reputation C) the financial needs of the employee D) the company's growth potential E) the cost of living index
15)
Which of the following refers to a multiple meaning of compensation?
A) societal B) employee C) stockholder D) relational E) personal
16)
Which of the following is NOT part of an employee's total compensation?
A) paid vacation B) health insurance C) relational returns D) cost-of-living adjustments E) pay
17)
Which of the following best describes relational returns?
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A) all rewards received by employees, including cash compensation, benefits, and psychological returns B) all forms of financial returns and tangible services that employees receive as part of an employment C) programs that help employees better integrate their work and life responsibilities D) one-time payments for meeting previously established performance objectives E) the psychological returns people believe they receive in the workplace
18)
includes cash compensation, benefits, and relational returns.
A) Total compensation B) Total cash benefit C) Total base pay D) Total rewards E) Total incentive
19)
Which of the following is NOT a form of relational return?
A) employment security B) recognition and status C) work-life balance D) challenging work E) learning opportunities
20)
Working with great co-workers is a(n)
.
A) incentive B) entitlement C) relational return D) network of returns E) benefit
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21)
Which of the following statements is true about the forms of pay?
A) Relational returns are more transactional than total compensation. B) Unlike relational returns, total compensation typically refers to the psychological returns people believe they receive in the workplace. C) Base pay, incentives, and cost-of-living adjustments are the typical relational returns. D) Merit increases refer to the same percentage increase that everyone receives regardless of performance in order to maintain pay levels relative to increases in the cost of living. E) Base pay tends to reflect the value of the work or skills and generally ignores differences attributable to individual employees.
22)
A merit increase is best described as:
A) an increment to base pay that recognizes past work behaviour. B) psychological returns employees believe they receive in the workplace. C) a one-time reward for past performance that does not increase base pay. D) percentage increment to base pay provided to all employees regardless of performance. E) compensation given to provide for items that are in short supply.
23)
Which of the following best describes cost-of-living adjustment?
A) one-time payments for meeting previously established performance objectives B) increment to base pay in recognition of past work behaviour C) percentage increment to base pay provided to all employees regardless of performance D) compensation to provide for items that are in short supply E) consolidated pay which is not subject to any change regardless of the cost-of-living
24) objectives.
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A) Cost-of-living adjustments B) Incentives C) Merit increments D) Relational returns E) Allowances
25)
Which of the following is a work/life program?
A) stock options B) health insurance C) telecommuting D) employment Insurance E) cost-of-living adjustment
26)
refers to the compensation given to purchase items that are in short supply.
A) Variable pay B) Incentive C) Cost-of-living adjustment D) Allowance E) Wage
27)
Which of the following is true of the present value perspective?
A) It considers today's initial offers to employees. B) It considers future bonuses, merit increases, and promotions. C) It establishes a limit on the amount spent on benefits. D) It creates an external competitiveness through future promises. E) It assesses the present value of a company to offer stock options to employees.
28)
Which of the following is a form of relational return?
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A) life Insurance B) allowances C) recognition and status D) monitory incentives E) benefits
29)
Internal alignment may be achieved by:
A) creation of cross-functional departments B) matching competitors' wage rates C) paying below-market base wages but offering training and rapid promotion D) compensating employees at above-market rates E) comparing pay between jobs or skill levels inside a single organization
30)
Which of the following is true of internal alignment?
A) It does not influence the company's compensation objectives. B) It compares pay between jobs inside a single organization. C) It uses incentive programs as a technique to implement the policy. D) It places greater emphasis on performance than the other policies. E) It relates to comparison of compensation with that of competitors.
31)
External competitiveness refers to:
A) competitiveness between different departments in a company B) the relative importance of jobs within a company C) comparison of product prices with that of competitors D) comparison of compensation with that of competitors E) inflationary pressure caused by external market factors
32)
Which of the following pay policies lays emphasis on performance?
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A) Employee contributions B) Administration of the pay system C) External competitiveness D) Internal alignment E) Management
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 33) How can a well-designed compensation system help achieve and sustain competitive advantage?
34)
What are some of the main reasons for the gender wage gap?
35)
Explain the two major categories of total rewards.
36)
Why are work-life programs becoming so popular with employers?
37)
What are the differences between short-term and long-term incentives?
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Chapter 6 Person-Based Pay Structures TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A job-based plan pays employees for the job to which they are assigned, regardless of the skills they possess. ⊚ ⊚
true false
2) Skill-based pay structure does not allow people to be deployed in a way that matches the flow of work. ⊚ ⊚
true false
3) One of the main advantages of a skill-based plan is that it can match people to a changing workflow more easily. ⊚ ⊚
true false
4) The skills on which a structure is based should be directly related to the organization's objectives and strategy. ⊚ ⊚
5)
Employees like the control over their work lives that comes with the skill-based structure. ⊚ ⊚
6)
true false
true false
One of the advantages of skill-based pay is continuous learning. ⊚ ⊚
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7) Skill-based plans are generally not well accepted by employees because it is difficult to see the connection between the plan, the work, and the size of the paycheque. ⊚ ⊚
8)
true false
Behavioural descriptors translate the core competencies into specific actions. ⊚ ⊚
true false
9) Advocates of competencies say that they can empower employees to take charge of their own development. ⊚ ⊚
true false
10) Visionary characteristics are the lowest level competencies that can be used to collect information about competencies. ⊚ ⊚
true false
11) The heart of the person-based plan is that employees get paid for the specific skills they use in their jobs, not for the relevant skills or competencies they possess. ⊚ ⊚
true false
12) Employee acceptance is crucial for person-based plans because it is the key to employees' perceptions of fairness regarding the pay structure. ⊚ ⊚
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13) Using evaluators who are familiar with the jobs they are evaluating enhances reliability of the evaluation. ⊚ ⊚
14)
Reliability refers to the degree to which the evaluation achieves the desired results. ⊚ ⊚
15)
true false
true false
A limitation of a competency-based structure is that it requires cost controls. ⊚ ⊚
true false
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 16) Pay structures that link pay to the depth or breadth of the abilities and knowledge a person acquires, which are relevant to work are known as pay structures.
A) job-based B) task-based C) opportunity-based D) skill-based E) mission-based
17) A pay structure in which employees are paid based on the work knowledge that they acquire is known as:
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A) skill-based pay structure B) task-based pay structure C) assignment-based pay structure D) work-based pay structure E) duty-based pay structure
18)
A(n)
system is one where pay increases come with certification of new abilities.
A) assignment-based B) work-based C) multiskill-based D) task-based E) job-based
19)
Employees and managers are the sources of information for all the following EXCEPT:
A) defining the skills B) assessing the skills C) arranging skills into a hierarchy D) bundling skills into skill blocks E) certifying whether a person possesses the skills
20)
Which of the following is true about certification methods?
A) Certification cannot be accomplished through peer review. B) Certification cannot be accomplished through on-the-job demonstrations. C) Newer certification procedures are moving away from on-demand review and towards scheduling fixed-review points. D) Scheduling makes it more difficult to budget and control payroll increases. E) Recertification has been replaced with one-time certification.
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21) The higher labour costs under skill-based pay indicate that it may be a better fit to companies where .
A) labour costs are a small share of total costs B) labour costs are a large share of total costs C) employees lack motivation to increase their skills D) employees focus on seeking promotions to earn more pay E) the focus is on average performance rather than optimum performance
22)
Competency-based pay plans are different from skill-based plans in that:
A) competency-based plans are not very specific; they are more general, paying for underlying, broadly applicable knowledge, skills and behaviour B) competency-based plans are applied only to blue-collar jobs C) competency-based plans eliminate the need to control costs D) competency-based plans do not allow for lateral movement E) competency-based plans are a type of job-based pay structures
23) Observable behaviours that indicate the level of competency within each competency set are known as:
A) cognitive patterns B) competence builders C) core competencies D) behavioural descriptors E) core mnemonics
24)
Which of the following is true about competencies?
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A) They focus on average performance rather than optimum performance. B) They discourage employees from assuming leadership roles. C) They fail to provide a common basis for working together. D) They create risks that need to be managed due to inferred proficiencies. E) They make people lose their focus.
25)
The most important decision in competency analysis is:
.
A) deciding what information to collect B) clarifying the objective of the plan C) deciding who to involve D) establishing certification methods E) conducting research
26)
Which of the following individuals possesses "personal characteristics" competency?
A) Jake demonstrates an uncompromising integrity toward company values. B) Eric works respectfully in multicultural environments. C) Lisa shows interest in developing others. D) Joshua possesses leadership skills. E) Katie works constantly to improve customer interaction.
27)
Which of the following can be classified under visionary competency?
A) respect for others B) loyalty C) flexibility D) personal integrity E) global perspective
28)
The purpose of job-based and person-based procedures is to:
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A) use outside consultants for internal decisions B) understand the level of competition with other organizations C) design and manage an internal pay structure that facilitates an organization's success D) to match pay levels in competing markets E) to exceed the pay levels in competing markets
29)
Lack of reliability with evaluators:
A) is common when evaluators work in similar jobs to those being evaluated B) can be reduced by training C) has little effect on results D) increases when employees are unionized E) is a greater problem in quantitative job evaluation than conventional job evaluation
30)
Determining the relative worth of jobs to the organization is an example of:
A) validity B) consistency C) acceptability D) reliability E) subjectivity
31)
Reliability of job evaluation can be measured by:
A) determining if different evaluators produce the same results B) the degree of agreement between rankings that resulted from the job evaluation C) determining the degree to which the job evaluation achieved the desired results D) determining the degree to which the job evaluation method is accepted by employees E) hit rates—the degree to which the job evaluation plan matches an agreed-upon ranking
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32) If a job evaluation method consistently yields the same results under different evaluators it can be said that the method is:
A) valid B) reliable C) systematic D) random E) unpredictable
33)
In the context of job evaluation, validity is defined as:
A) the degree to which different evaluators produce the same results B) the ability of employees to request a re-evaluation of skills C) the underlying, broadly applicable knowledge needed to perform a job effectively D) a skill-based approach for determining pay E) the degree to which the evaluation achieves the desired results
34)
A key benefit of an appeal process for job evaluation results is to:
A) reduce employee involvement in the job evaluation process B) provide employees' with the opportunity to request skills re-evaluation C) set pay level of the employees below that of the competitors D) ensure that different evaluators produce the same results after job evaluation E) reduce employee interest in unionization
35)
Which of the following is an advantage of the job-based pay structure?
A) flexibility B) sense of progress C) continuous learning D) lateral movement E) reduced workforce
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36)
Which of the following is true about job evaluation?
A) It is not susceptible to gender bias. B) It perpetuates any bias that exists in current wages when structured to mirror existing pay rates. C) It is free of subjectivity. D) It does not bear any influence on skill-based pay structure. E) It involves identifying an employee's visionary competency.
37)
In a skill-based structure, managers' focus is on:
A) linking employees to the job done. B) promotion and placement. C) providing training. D) controlling costs solely via budget increase. E) controlling costs solely via pay for job.
38)
In a skill-based structure:
A) employees are paid for their assigned jobs, regardless of the knowledge they possess B) individuals are paid only for those certified skills that are required to perform their job C) employees seek promotions to earn more pay rather than enhancing their knowledge D) managers focus on providing training rather than promoting E) managers control costs via pay for job rather than certification
39)
Which of the following is an advantage of competency-based systems?
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A) They are free of perceptual biases. B) They eliminate the need to control costs. C) They are free of potential bureaucracy. D) They are more flexible than job-based pay systems. E) They are free of vagueness and subjectivity.
40)
Which of the following is true of competency-based plans?
A) Results of these plans are always reliable and valid. B) These plans are free of biases and judgments. C) These plans eliminate the need to control costs. D) These plans maximize flexibility. E) Managers who use these plans focus on placing the right people in the right job.
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 41) What are the two types of skill plans?
42)
What is the purpose of a skill-based structure?
43)
List the basic decisions involved in determining a skill-based structure.
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44)
What are the three key elements of a competency-based approach?
45)
How do competencies motivate behaviour toward organization objectives?
46) Compare and contrast earlier schools of thought concerning competencies with more recent conceptions.
47) How are "personal characteristics" competencies different from "visionary" competencies?
48)
How is the validity of job evaluation measured?
49) In the context of job evaluation, how can an organization improve employee acceptability?
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50)
What are the recommendations that can ensure that job evaluation plans are bias-free?
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