Human Resource Management, 12e (Dessler) Chapter 11 Establishing Strategic Pay Plans
1) Which of the following terms refers to all forms of pay or rewards going to employees and arising from their employment? A) salary B) employee compensation C) wage reimbursement D) employee benefits E) remuneration Answer: B Eplanation: Employee compensation refers to all forms of pay going to employees and arising from their employment! "t has two main components# direct financial payments $wages# salaries# incenti%es# commissions# and bonuses) and indirect financial payments $financial benefits li&e employer'paid insurance and %acations)! Diff: 1 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept 0) Direct financial payments include all of the following ECE(2 33333 333! A) wages B) insurance C) salaries D) incenti%es E) commissions Answer: B Eplanation: Employee compensation refers to all forms of pay going to employees and arising from their employment! "t has two main components# direct financial payments $wages# salaries# incenti%es# commissions# and bonuses) and indirect financial payments $financial benefits li&e employer'paid insurance and %acations)! Diff: 1 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept
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*) Which of the following terms refers to pay in the form of financial benefits# such as insurance? A) direct financial payments B) out'of'poc&et epenses C) indirect financial payments D) sales commission E) merit raise Answer: C Eplanation: Employee compensation has two main components: direct financial payments $wages# salaries# incenti%es# commissions# and bonuses) and indirect financial payments $financial benefits li&e employer'paid insurance and %acations)! Diff: 1 (age ef: *+,# *+6 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 7) 8ohn is a sales representati%e in a .ewelry store! 9e typically wor&s 75 hours per wee& and an d his pay is completely based on his sales! 9e earns a ; commission for e%ery sale he ma&es! Which Which of the following terms best describes 8ohnation
*) Which of the following terms refers to pay in the form of financial benefits# such as insurance? A) direct financial payments B) out'of'poc&et epenses C) indirect financial payments D) sales commission E) merit raise Answer: C Eplanation: Employee compensation has two main components: direct financial payments $wages# salaries# incenti%es# commissions# and bonuses) and indirect financial payments $financial benefits li&e employer'paid insurance and %acations)! Diff: 1 (age ef: *+,# *+6 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 7) 8ohn is a sales representati%e in a .ewelry store! 9e typically wor&s 75 hours per wee& and an d his pay is completely based on his sales! 9e earns a ; commission for e%ery sale he ma&es! Which Which of the following terms best describes 8ohnation
,) Which of the following was enacted in 1@*1 for the purpose of setting wage rates for laborers and mechanics employed by contractors wor&ing for the federal go%ernment? A) Walsh'9ealey Walsh'9ealey (ublic Contract B) air =abor /tandards Act C) air Wages Act D) Ci%il ights Act E) Da%is'Bacon Act Answer: E Eplanation: 2he 1@*1 Da%is'Bacon Act allows the secretary of labor to set wage rates for laborers and mechanics employed by contractors wor&ing for the federal go%ernment! Amendments pro%ide for paid employee benefits! 2he 1@*, Walsh'9ealey Walsh'9ealey (ublic Contract Act sets basic labor standards for employees wor&ing on any go%ernment contract that amounts to more than 15#555 and addresses wages# safety# safety# and o%ertime! Diff: 0 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept 6) 2he 33333333 sets basic labor standards for employees wor&ing on any go%ernment contract that amounts to more than 15#555! A) Da%is'Bacon Act B) Walsh'9ealey Walsh'9ealey (ublic Contract C) air Wages Act D) Ci%il ights Act E) air =abor /tandards Act Answer: B Eplanation: 2he 1@*, Walsh'9ealey Walsh'9ealey (ublic Contract Act sets basic labor standards for employees wor&ing on any go%ernment contract that amounts to more than 15#555 and addresses wages# safety# safety# and o%ertime! Diff: 0 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept
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+) Which compensation'related law contains pro%isions for minimum wage# maimum hours# o%ertime pay# eual pay# record'&eeping# and child labor? A) Da%is'Bacon Act B) Ci%il ights Act C) air Wages Act D) air =abor /tandards Act E) Walsh'9ealey Walsh'9ealey (ublic Contract Answer: D Eplanation: 2he air =abor /tandards Act# originally passed in 1@*+ and since amended many times# contains minimum wage# maimum hours# o%ertime pay# eual pay# record'&eeping# and child labor pro%isions that are familiar to most wor&ing people! "t co %ers the ma.ority of !/! wor&ers %irtually all those engaged in the production andor sale of goods for interstate and foreign commerce! Diff: 0 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept @) All of the following issues are addressed by the air =abor /tandards Act ECE(2 33333333! A) minimum wage B) record'&eeping C) o%ertime pay D) child labor E) termination Answer: E Eplanation: 2he air =abor /tandards Act# originally passed in 1@*+ and since amended many times# contains minimum wage# maimum hours# o%ertime pay# eual pay# record'&eeping# and child labor pro%isions that are familiar to most wor&ing people! 2he termination of an employee is not addressed by the =/A! Diff: 1 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept
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15) Which law ma&es it illegal to discriminate against any indi%idual with respect to compensation because of race# color# religion# se# or national origin? A) air =abor /tandards Act B) 2itle F"" of the Ci%il ights Act C) Wagner Act D) Eual (ay Act E) 2aft'9artley Act Answer: B Eplanation: 2itle F"" ma&es it unlawful for employers to discriminate against any indi%idual with respect to hiring# compensation# terms# conditions# or pri%ileges of employment becau se of race# color# religion# se# or national origin! Diff: 0 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept 11) According to the air =abor /tandards Act# if a wor&er co%ered by the act wor&s more than 75 hours# he or she will recei%e o%ertime pay at a rate of 33333333 of normal pay for any hours wor&ed o%er 75 in a wor&wee&! A) 5; B) 155; C) 10; D) 15; E) 055; Answer: D Eplanation: A pro%ision in the =/A go%erns o%ertime pay! "t says employers must pay o%ertime at a rate of at least one'and'a'half times normal pay for any hours wor&ed o%er 75 in a wor&wee&! Diff: 0 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept
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10) 8ill wor&s as a cashier at a grocery store! /he earns 15 an hour $or 755 for a 75'hour wee&)! =ast wee&# she wor&ed 7, hours! What is the minimum amount that 8ill earned last wee&? A) 7*5 B) 7,5 C) 7@5 D) 05 E) 5 Answer: C Eplanation: 2he =/A says employers must pay o%ertime at a rate of at least one'and'a'half times normal pay for any hours wor&ed o%er 75 in a wor&wee&! 8ill wor&ed 7, hours in one wee&# so she was paid for , of those hours at a rate eual to one'and'a'half times the hourly rate of 15! 2he , o%ertime hours were at a rate of 1# so 8ill earned at least 7@5! Diff: * (age ef: *+, AAC/B: Analytic /&ills Chapter: 11 -b.ecti%e: 1 /&ill: Application 1*) 8ac& wor&ed , hours of o%ertime this wee& but has decided to ta&e time off instead of o%ertime pay! 9ow many hours will 8ac& recei%e in time off from wor&? A) * hours B) , hours C) @ hours D) 10 hours E) 1+ hours Answer: C Eplanation: According to the =/A# if an employee recei%es time off for o%ertime hours instead of money# the employer must compute the number of hours granted off at the one'and'a' halftimes rate! 8ac& would get @ hours off for the , hours of o%ertime! Diff: * (age ef: *+,'*+6 AAC/B: Analytic /&ills Chapter: 11 -b.ecti%e: 1 /&ill: Application
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17) Which of the following is true for employers who use independent contractors? A) air =abor /tandards Act o%ertime reuirements do not apply! B) /ocial /ecurity taes are higher than for regular employees! C) ederal income taes are charged at a reduced rate! D) /tate income taes are charged at a higher rate! E) (ayroll taes are paid by the employer! Answer: A Eplanation: or employers# there are ad%antages to claiming that someone is an independent contractor! or one thing# the =/Aed as noneempt from the o%ertime pay pro%isions of the air =abor /tandards Act? A) scientist B) taicab dri%er C) personnel director D) newspaper writer E) computer systems analyst Answer: D Eplanation: Gewspaper writers are usually considered noneempt# so they may earn o%ertime pay! /cientists# cab dri%ers# personnel directors# and computer systems analysts are typically eempt employees who are not eligible for o%ertime pay! Diff: 0 (age ef: *+@ Chapter: 11 -b.ecti%e: 1 /&ill: Concept 6 Copyright 4 0511 (earson Education# "nc!
16) Which of the following is the best source for managers to use when determining whether or not a position is eempt or noneempt under the air =abor /tandards Act? A) organi>ational chart B) performance appraisal C) 9 metric D) business plan E) .ob description Answer: E Eplanation: "n all but the clearest situations# managers should carefully re%iew the .ob description to determine if a .ob is eempt or noneempt! Ha&e sure# for instance# that the .ob currently does# in fact# reuire that the person perform# say# an eempt'type super%isory duty! Diff: 0 (age ef: *+@ Chapter: 11 -b.ecti%e: 1 /&ill: Concept 1+) Which of the following states that employees of one se may not be paid wages at a rate lower than that paid to employees of the opposite se for doing roughly eui%alent wor&? A) Americans with Disabilities Act B) 2itle F"" of the Ci%il ights Act C) /ocial /ecurity Act D) Eual (ay Act E) Da%is'Bacon Act Answer: D Eplanation: 2he Eual (ay Act# an amendment to the air =abo r /tandards Act# states that employees of one se may not be paid wages at a rate lower than that paid to employees of the opposite se for doing roughly eui%alent wor&! Diff: 1 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 1@) Which act regulates %esting rights and portability rights? A) air =abor /tandards Act B) 2itle F"" of the Ci%il ights Act C) Employer etirement "ncome /ecurity Act D) Eual (ay Act of 1@,* E) Da%is'Bacon Act Answer: C Eplanation: 2he Employee etirement "ncome /ecurity Act $E"/A) pro%ided for the creation of go%ernment'run# employer'financed corporations to protect employees against the failure of their employers< pension plans! "n addition# it sets regulations regarding %esting rights and regulates portability rights $the transfer of an employeeation to another)! Diff: 0 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept + Copyright 4 0511 (earson Education# "nc!
05) Which of the following terms refers to the ownership employees build up in their pension plans should their employment with a firm end prior to retirement? A) portability B) euity C) %esting D) shares E) stoc&s Answer: C Eplanation: E"/A sets regulations regarding %esting rights! Festing refers to the euity or ownership the employees build up in their pension plans should their employment terminate before retirement! Diff: 1 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 01) All of the following laws influence compensation decisions ECE(2 the 33333333! A) Americans with Disabilities Act B) =abor Hanagement elations Act C) Employer etirement "ncome /ecurity Act D) amily and Hedical =ea%e Act E) Age Discrimination in Employment Act Answer: B Eplanation: 2he ADA# E"/A# amily and Hedical =ea%e Act# and the Age Discrimination in Employment Act all impact compensation decisions made by organi>ations! 2he =abor Hanagement elations Act prohibited unfair union labor practices and enumerated the rights of employees as union members and has no impact on compensation issues! Diff: 0 (age ef: *@5'*@1 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 00) According to the amily and Hedical =ea%e Act# eligible employees can ta&e up to 33333333 wee&s of unpaid# .ob'protected lea%e for the birth of a child or for the care of a child# spouse# or parent! A) two B) four C) si D) twel%e E) siteen Answer: D Eplanation: 2he amily and Hedical =ea%e Act aims to entitle eligible employees# both men and women# to ta&e up to 10 wee&s of unpaid# .ob protected lea%e for the birth of a child or for the care of a child# spouse# or parent! Diff: 1 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept @ Copyright 4 0511 (earson Education# "nc!
0*) 2he 33333333 ga%e employees the right to organi>e# bargain collecti%ely# and engage in concerted acti%ities for the purpose of collecti%e bargaining! A) air =abor /tandards Act B) Ci%il ights Act C) Employer etirement "ncome /ecurity Act D) Eual (ay Act E) Gational =abor elations Act Answer: E Eplanation: 2he Gational =abor elations Act of 1@* $Wagner Act) and related legislation and court decisions legitimi>ed the labor mo%ement! "t ga%e unions legal protection# and granted employees the right to unioni>e# to bargain collecti%ely# and to engage in concerted acti%ities for the purpose of collecti%e bargaining or other mutual aid or protection! Diff: 1 (age ef: *@1 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 07) Which of the following has historically been the primary issue in collecti%e b argaining? A) safety B) wage rates C) income security D) health care benefits E) cost'of'li%ing ad.ustments Answer: B Eplanation: 9istorically# the wage rate has been the main issue in collecti%e bargaining! 9owe%er# unions also negotiate other pay'related issues# including time off with pay# income security# cost'of'li%ing ad.ustments# and health care benefits! Diff: 0 (age ef: *@1 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 0) nions typically negotiate all of the following issues ECE(2 33333333! A) wage rates B) income security C) time off with pay D) health care benefits E) unpaid medical lea%e Answer: E Eplanation: 9istorically# the wage rate has been the main issue in collecti%e bargaining! 9owe%er# unions also negotiate other pay'related issues# including time off with pay# income security# cost' of'li%ing ad.ustments# and health care benefits! npaid medical lea%e is addressed by the amily and Hedical =ea%e Act! Diff: 0 (age ef: *@1 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 15 Copyright 4 0511 (earson Education# "nc!
0,) Which of the following terms refers to a compensation plan that ad%ances a firm
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0+) 8ennifer has wor&ed at Ban& of America for si years as a loan officer! 2ina was recently hired by Ban& of America as a loan officer# and 2ina
*1) What theory of moti%ation states that people are strongly moti%ated to maintain a balance between what they percei%e as their contributions and their rewards? A) Haslow
*7) 8ason is an information systems technician in a town in Gorth Carolina with a population of 155#555! 9e recei%es an annual salary of *#555! 9e recently found out that a nearby town with a similar population pays people in the same position 75#555 annually! With which of the following is 8ason most concerned? A) distributi%e B) procedural C) internal D) eternal E) indi%idual Answer: D Eplanation: Eternal euity refers to how a .ob
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*,) 2re%or# a sales manager at "BH# recently learned that an "BH human resources manager with comparable responsibilities and spans of control earns a higher salary than 2re%or! Which form of euity is of most concern to 2re%or? A) eternal B) internal C) distributi%e D) indi%idual E) procedural Answer: B Eplanation: "nternal euity refers to how fair the .ob
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*+) Audrey is a lawyer in a mid'si>e firm in Chicago! /he recently learned that another lawyer who .oined the firm at the same time earns a lower salary than she does! Which form of euity is most rele%ant to Audrey
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75) Eternal euity refers to 33333333! A) how a .obational charts C) incenti%e pay D) salary sur%eys E) 9 scorecards Answer: A Eplanation: Hanagers use .ob analysis and .ob e%aluation comparisons of each .ob to maintain internal euity! 2hey use salary sur%eys to monitor and maintain eternal euity! 2hey use performance appraisal and incenti%e pay to maintain indi%idual euity! Diff: 0 (age ef: *@7 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 16 Copyright 4 0511 (earson Education# "nc!
7*) Hanagers use performance appraisals and incenti%e pay to maintain 33333333 euity! A) internal B) eternal C) indi%idual D) procedural E) group Answer: C Eplanation: Hanagers use performance appraisal and incenti%e pay to maintain indi%idual euity! Hanagers use .ob analysis and .ob e%aluation comparisons of each .ob to maintain internal euity# and they use salary sur%eys to monitor and maintain eternal euity! Diff: 0 (age ef: *@7 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 77) What is the first step in the process of establishing pay rates to ensure e ternal euity? A) using wage cur%es to price each pay grade B) analy>ing a scatter plot of employee pay C) comparing performance appraisals D) conducting a salary sur%ey E) chec&ing online pay sites Answer: D Eplanation: 2he first step in establishing pay rates in%ol%es conducting a salary sur%ey of what other employers are paying for comparable .obs to ensure eternal euity! (erformance appraisals are used to maintain indi%idual euity# and online pay sites ma&e it simple for employees to disco%er what they could earn at other firms! Diff: * (age ef: *@7 Chapter: 11 -b.ecti%e: 1 /&ill: Concept
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7) 9omelife# a national chain of high'end furniture stores# employs nearly +55 wor&ers! "n the past few years# the company
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7,) 9omelife# a national chain of high'end furniture stores# employs nearly +55 wor&ers! "n the past few years# the companyed by the Eual (ay Act! C) Computeri>ed .ob e%aluation systems will be used by 9omelife to generate uestionnaires! D) A wage cur%e needs to be established by 9omelife for the purpose of federal compliance! E) -nly 9omelife store managers are classified as professional # so .ob e%aluation is unnecessary! Answer: A Eplanation: Employers use salary sur%eys to price benchmar& .obs! Benchmar& .obs are the anchor .obs around which they slot their other .obs# based on each .ob
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7+) Which of the following terms refers to a systematic comparison done in order to determine the worth of one .ob relati%e to another? A) .ob rotation B) .ob analysis C) .ob e%aluation D) .ob description E) .ob classification Answer: C Eplanation: 8ob e%aluation aims to determine a .obed in the Eual (ay Act? A) s&ills B) effort C) accountability D) responsibility E) wor&ing conditions Answer: C Eplanation: 2he Eual (ay Act emphasi>es four compensable factorss&ills# effort# responsibility# and wor&ing conditions! 2he method populari>ed by the 9ay consulting firm emphasi>es three factors: &now'how# problem sol%ing# and accountability! Diff: 0 (age ef: *@6 Chapter: 11 -b.ecti%e: 0 /&ill: Concept
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5) Central basic factors that establish how se%eral .obs compare to one another and that determine the pay for each .ob are called 33333333! A) compensable factors B) .ob e%aluation factors C) comparison factors D) ran&ing factors E) analysis factors Answer: A Eplanation: irms can compare se%eral .obs by focusing on certain basic factors the .obs ha%e in common! Compensation management specialists call these compensable factors! 2hey are the factors that establish how the .obs compare to one another# and that determine the pay for each .ob! Diff: 1 (age ef: *@6 Chapter: 11 -b.ecti%e: 0 /&ill: Concept 1) "n most cases# the ma.ority of the %oting members on a .ob e%aluation committee are 33333333! A) managers B) employees C) 9 specialists D) industry eperts E) union representati%es Answer: B Eplanation: A .ob e%aluation committee usually consists of about fi%e members# most of whom are employees! Hanagement has the right to ser%e on such committees# but employees may %iew this with suspicion! 9owe%er# a human resource specialist can usually be .ustified as perhaps being more impartial than line managers and may ser%e in a non%oting capacity! nion representation is possible# but unions usually reser%e the right to appeal actual .ob pricing decisions through grie%ance or bargaining channels! Diff: 0 (age ef: *@+ Chapter: 11 -b.ecti%e: 0 /&ill: Concept
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0) Which of the following is G-2 one of the typical methods used by .ob e%aluation committees to determine the worth of a .ob? A) ran&ing method B) point method C) .ob classification D) paired comparison E) factor comparison Answer: D Eplanation: A .ob e%aluation committee will probably use one of the following methods: ran&ing# .ob classification# point method# or factor comparison! (a ired comparison is a method for ran&ing employee performance! Diff: 0 (age ef: *@+ Chapter: 11 -b.ecti%e: 0 /&ill: Concept *) When using the .ob classification method of .ob e%aluation# raters categori>e .obs into groups of similar .obs called 33333333! A) classes B) grades C) sections D) schedules E) cohorts Answer: A Eplanation: 8ob classification is a simple# widely used method in which raters categori>e .obs into groups with roughly the same %alue for pay purposes! 2he groups are called classes if they contain similar .obs or grades if they contain .obs that are similar in difficulty but otherwise different! Diff: 1 (age ef: 755 Chapter: 11 -b.ecti%e: 0 /&ill: Concept 7) Which of the following best describes the point method of .ob e%aluation? A) comparing the importance of each compensable factor B) ran&ing each .ob relati%e to all other .obs based on pay grade C) categori>ing .obs into grades and classes based on specific rules D) deciding which .obs ha%e a higher number of compensable factors E) identifying and uantifying the compensable factors present in a .ob Answer: E Eplanation: 2he point method is a uantitati%e techniue that in%ol%es identifying se%eral compensable factors# each ha%ing se%eral degrees# as well as the degree to which each of these factors is present in the .ob! Diff: 0 (age ef: 755'751 Chapter: 11 -b.ecti%e: 0 /&ill: Concept 0* Copyright 4 0511 (earson Education# "nc!
) Which .ob e%aluation method is a uantitati%e techniue in%ol%ing the identification of se%eral compensable factors and the degree to which each of these factors is present in the .ob? A) ran&ing method B) point method C) factor comparison D) .ob grading method E) .ob classification method Answer: B Eplanation: 2he point method is a uantitati%e .ob e%aluation method in which a number of compensable factors are identified and then the degree to which each of these factors is present on the .ob is determined! Diff: 1 (age ef: 755'751 Chapter: 11 -b.ecti%e: 0 /&ill: Concept ,) Which of the following best describes the factor comparison method of .ob e%aluation? A) identifying se%eral compensable factors and the degree to which each factor is present in the .ob B) ran&ing each .ob relati%e to all other .obs based on se%eral compensable factors C) determining the most important compensable factors for a specific .ob D) categori>ing .obs into groups# grades# and classes E) classifying each .ob based on an o%erall factor Answer: B Eplanation: 2he factor comparison method is a refinement of the ran&ing method! With the ran&ing method# you generally loo& at each .ob as an entity and ran& the .obs on some o%erall factor li&e .ob difficulty! With the factor comparison method# you ran& each .ob se%eral times once for each of se%eral compensable factors! Diff: 0 (age ef: 751 Chapter: 11 -b.ecti%e: 0 /&ill: Concept 6) What are the two primary components of computer'aided .ob e%aluations? A) benchmar& .obs and statistical models B) compensable factors and benchmar& .obs C) grade definitions and factor comparisons D) structured uestionnaires and statistical models E) structured uestionnaires and grade definitions Answer: D Eplanation: Host computer'aided .ob e%aluation systems ha%e two main components! A structured uestionnaire and a statistical model streamline the .ob e%aluation process! Diff: 0 (age ef: 751 AAC/B: se of "2 Chapter: 11 -b.ecti%e: 0 /&ill: Concept 07 Copyright 4 0511 (earson Education# "nc!
+) A 33333333 is comprised of .obs of approimately eual difficulty or importance as established by .ob e%aluation! A) pay group B) benchmar& C) pay grade D) class E) wage cur%e Answer: C Eplanation: A pay grade is comprised of .obs of approimately eual difficulty or importance as established by .ob e%aluation! Jrouping similar .obs into pay grades is the third step in establishing pay rates! Diff: 1 (age ef: 751 Chapter: 11 -b.ecti%e: * /&ill: Concept @) Which of the following shows the relationship between the %alue of the .ob and the a%erage pay for this .ob? A) pay group B) benchmar& C) pay grade D) scatter plot E) wage cur%e Answer: E Eplanation: 2he wage cur%e shows the pay rates currently paid for .obs in each pay grade# relati%e to the points or ran&ings assigned to each .ob or grade by the .ob e%aluation! Kou
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,1) "f the current rate being paid for a .ob falls significantly below the wage line# what step should be ta&en by an employer? A) enact a pay free>e for that .ob B) assess a decrease in wages C) conduct a .ob e%aluation D) pay a one'time bonus E) pro%ide a pay raise Answer: E Eplanation: "f the current rates being paid for any of your .obs or grades fall well abo%e or below the wage line# raises or a pay free>e for that .ob may be in order! Diff: * (age ef: 750 Chapter: 11 -b.ecti%e: * /&ill: Concept ,0) Which of the following terms refers to a series of steps or le%els within a pa y grade? A) pay metric B) pay range C) wage class D) wage cur%e E) salary sur%ey Answer: B Eplanation: 2he term pay range refers to a series of steps or le%els within a pay grade! (ay ranges are usually based upon years of ser%ice! Diff: 1 (age ef: 75* Chapter: 11 -b.ecti%e: * /&ill: Concept ,*) All of the following are typical forms of compensation used for a company
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,7) What is the primary purpose of offering an eecuti%e stoc& options in a compensation pac&age? A) pro%iding the eecuti%e with guaranteed bonuses B) encouraging the eecuti%e to increase the firm
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,,) 9omelife# a national chain of high'end furniture stores# employs nearly +55 wor&ers! "n the past few years# the companye employees into teams# pro%ide regular training# and freuently assess wor&ers< s&ills and &nowledge! E) "n an effort to sa%e money# 9omelife will be reducing the employee training budget o%er the net three years! Answer: D Eplanation: When used in con.unction with team'building and wor&er in%ol%ement programs# competency'based pay appears to lead to higher uality and lower absenteeism! Comparable worth and minority hiring are irrele%ant to competency'based p ay! Choice C relates to performance'based pay rather than competency'based pay! Diff: * (age ef: 715 AAC/B: Analytic /&ills Chapter: 11 -b.ecti%e: /&ill: Critical 2hin&ing ,6) 33333333 means collapsing salary grades and ranges into .ust a few wide le%els # each of which contains a relati%ely wide range of .obs and salary le%els! A) Comparable worth B) /trategic compensation C) 8ob e%aluation D) Broadbanding E) 8ob grading Answer: D Eplanation: Broadbanding means collapsing salary grades into .ust a few wide le%els or bands# each of which contains a relati%ely wide range of .obs and pay le%els! A company may create broadbands for all its .obs# or for specific groups such as managers or professionals! Diff: 1 (age ef: 710 Chapter: 11 -b.ecti%e: , /&ill: Concept
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,+) Which of the following terms refers to the reuirement to pay men and women eual wages for .obs of roughly eui%alent %alue to the employer? A) strategic compensation B) comparable worth C) .ob e%aluation D) broadbanding E) .ob grading Answer: B Eplanation: Comparable worth refers to the reuirement to pay men and women eual wages for .obs that are of comparable $rather than strictly eual) %alue to the employer! Comparable worth may in%ol%e comparing uite dissimilar .obs! Diff: 1 (age ef: 71* Chapter: 11 -b.ecti%e: , /&ill: Concept ,@) Which of the following .ob e%aluation methods is associated with almost e%ery comparable worth lawsuit? A) factor comparison method B) .ob classification method C) .ob grading method D) ran&ing method E) point method Answer: E Eplanation: Firtually e%ery comparable worth case that reached a court in%ol%ed the use of the point method of .ob e%aluation! By assigning points to dissimilar .obs# point plans facilitate comparability ratings among different .obs! Diff: 0 (age ef: 71* Chapter: 11 -b.ecti%e: , /&ill: Concept 65) According to many eperts# which of the following would most li&ely reduce the wage gap between men and women? A) eperience B) education C) union inter%ention D) federal legislation E) competency'based pay Answer: B Eplanation: Education may reduce the wage gap! /tudies suggest that schooling
61) inancial benefits li&e employer'paid insurance and %acations are not a part of employee compensation! Answer: A=/E Eplanation: Employee compensation refers to all forms of pay going to employees and arising from their employment! "t has two main components# direct financial payments $wages# salaries# incenti%es# commissions# and bonuses) and indirect financial payments $financial benefits li&e employer'paid insurance and %acations)! Diff: 1 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept 60) "ndirect payments that contribute to an employee
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6) According to the Da%is'Bacon Act# when employees wor& more than 75 hours per wee&# employers must pay o%ertime at a rate of at least one and a half times the normal pay for any hours wor&ed o%er 75 in a wor&wee&! Answer: A=/E Eplanation: According to pro%isions in the air =abor /tandards Act# employers must pay o%ertime at a rate of at least one'and'a'half times normal pa y for any hours wor&ed o%er 75 in a wor&wee&! 2he Da%is'Bacon Act sets wage rates for laborers employed by contractors wor&ing for the federal go%ernment! Diff: 0 (age ef: *+, Chapter: 11 -b.ecti%e: 1 /&ill: Concept 6,) Employers prefer to gi%e time off in lieu of o%ertime pay because they only ha%e to grant the same number of hours off as the employee wor&ed o%ertime while o%ertime pay is calculated at 15; of normal pay! Answer: A=/E Eplanation: According to the =/A# both o%ertime pay and time off for o%ertime wor& must be calculated at the one'and'a'half times rate! Diff: 0 (age ef: *+,'*+6 Chapter: 11 -b.ecti%e: 1 /&ill: Concept 66) Because the minimum wage is set by the air =abor /tandards Act# there is no %ariation from state to state in the minimum wage paid to hourly wor&ers! Answer: A=/E Eplanation: 2he =/A sets a minimum wage# which sets a floor for employees co%ered by the act! Hany states and cities ha%e their own minimum wage laws# so the minimum wage %aries from state to state! Diff: 0 (age ef: *++'*+@ Chapter: 11 -b.ecti%e: 1 /&ill: Concept 6+) According to the =/A# agricultural employees# li%e'in maids# and tai dri%ers are always eligible for o%ertime pay! Answer: A=/E Eplanation: 9owe%er# certain employees are always eempt from o%ertime pay pro%isions! 2hey include# among others# agricultural employees# li%e'in household employees# taicab dri%ers# and motion picture theater employees! Diff: 0 (age ef: *+@ Chapter: 11 -b.ecti%e: 1 /&ill: Concept
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6@) 2he Eual (ay Act states that employees of one se may not be paid wages at a rate lower than that paid to employees of the opposite se for doing roughly eui%alent wor&! Answer: 2E Eplanation: 2he Eual (ay Act is an amendment to the air =abor /tandards Act! 2he Eual (ay Act states that employees of one se may not be paid wages at a rate lower than that paid to employees of the opposite se for doing roughly eui%alent wor&! Diff: 1 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept +5) (ortability rights refer to an employeeation to another! Answer: 2E Eplanation: E"/A sets regulations regarding %esting rights and portability rights! Festing refers to the euity or ownership the employees build up in their pension plans should their employment terminate before retirement# and portability rights is an employeeation to another! Diff: 1 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept +1) While laws eist to protect against discrimination in compensation based on gender and age# no law protects against such discrimination against persons with disabilities! Answer: A=/E Eplanation: 2he Americans with Disabilities Act prohibits discrimination against ualified persons with disabilities in all aspects of employment# including compensation! Diff: 1 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept +0) 2he pro%ision of the amily and Hedical =ea%e Act that entitles employees to ta&e up to 10 wee&s of unpaid# .ob'protected lea%e for the birth of a child only applies to women! Answer: A=/E Eplanation: 2he amily and Hedical =ea%e Act aims to entitle eligible employees# both men and women# to ta&e up to 10 wee&s of unpaid# .ob protected lea%e for the birth of a child or for the care of a child# spouse# or parent! Diff: 1 (age ef: *@5 Chapter: 11 -b.ecti%e: 1 /&ill: Concept
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+*) According to the court system# the test that distinguishes an independent contractor from an employee is whether or not the firm pro%ides the wor&er with health insurance benefits! Answer: A=/E Eplanation: 2here is no single rule or test for determining whether an indi%idual is an independent contractor or a bona fide employee! "nstead# the courts will loo& at the total acti%ity or situation! 2he ma.or consideration is this: 2he more the employer controls what the wor&er does and how he or she does it# the more li&ely it is that the courts will find the wor&er is actually an employee! 9ealth insurance benefits are not a distinguishing factor! Diff: 0 (age ef: *+6 Chapter: 11 -b.ecti%e: 1 /&ill: Concept +7) 2he typical penalty for an employer that misclassifies an employee as an independent contractor is a fine of up to #555! Answer: A=/E Eplanation: (enalties for the employer who misclassifies an employee as an independent contractor can be se%ere! or eample# the employer can be liable retroacti%ely for the "/ taes that it did not withhold $plus penalties)# as well as for o%ertime pay# unemployment compensation taes# and bac& /ocial /ecurity taes plus interest! Diff: 0 (age ef: *++ Chapter: 11 -b.ecti%e: 1 /&ill: Concept +) Wage rate has been the main issue negotiated by unions in collecti%e bargaining! Answer: 2E Eplanation: 9istorically# the wage rate has been the main issue in collecti%e bargaining! 9owe%er# unions also negotiate other pay'related issues# including time off with pay# income security# cost'of' li%ing ad.ustments# and health care benefits! Diff: 1 (age ef: *@1 Chapter: 11 -b.ecti%e: 1 /&ill: Concept +,) A union is entitled to &now the salary of each employee it is representing! Answer: 2E Eplanation: 2he Wagner Act created the Gational =abor elations Board $G=B) to o%ersee employer practices and ensure that employees recei%e their rights! Employers must gi%e the union a written eplanation of the employer
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+6) Host epatriate salaries are set using the host'country base pay! Answer: A=/E Eplanation: Host multinational enterprises set epatriates< salaries according to their home' country base pay! 2hus# a rench manager assigned to Nie% by a !/! multinational will generally ha%e a base salary that reflects the salary structure in the manager
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@1) 2he Eual (ay Act focuses on three compensable factors&now'how# problem sol%ing# and accountability! Answer: A=/E Eplanation: 2he Eual (ay Act emphasi>es four compensable factorss&ills# effort# responsibility# and wor&ing conditions! 2he method populari>ed by the 9ay consulting firm emphasi>es three factors: &now'how# problem sol%ing# and accountability! Diff: 0 (age ef: *@6 Chapter: 11 -b.ecti%e: 0 /&ill: Concept @0) An ad%antage of the .ob classification method is that the ob.ecti%e nature of the system ma&es it easy to write the class and grade descriptions! Answer: A=/E Eplanation: 2he disad%antage of the classification method is that it is difficult to write the class or grade descriptions# and considerable .udgment is reuired to apply them! Ket many employers use this method with success! Diff: 0 (age ef: 755 Chapter: 11 -b.ecti%e: 0 /&ill: Concept @*) "f a .ob e%aluation committee uses the ran&ing method# then the pay grade consists of all .obs that fall within two or three ran&s! Answer: 2E Eplanation: A pay grade is comprised of .obs of approimately eual difficulty or importance as established by .ob e%aluation! With the ran&ing method# the grade consists of all .obs that fall within two or three ran&s! Diff: 0 (age ef: 751 Chapter: 11 -b.ecti%e: * /&ill: Concept @7) 8ob e%aluations are used to determine the pay scale of all employees in an organi>ation from hourly wor&ers to the CE-! Answer: A=/E Eplanation: or top eecuti%e .obs $especially the CE-)# .ob e%aluation typically has little rele%ance# but .ob e%aluations are used for other positions in a firm! 2op eecuti%e compensation depends on .ob compleity# the employer
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@) Host organi>ations use a mar&et'pricing approach when determining compensation for professional employees such as engineers and scientists! Answer: A=/E Eplanation: Host employers use a mar&et'pricing approach when compensating professional employees! 2hey price professional .obs in the mar&etplace as best they can# to establish the %alues for benchmar& .obs! 2hen they slot these benchmar& .obs and their other professional .obs into a salary structure! Diff: 0 (age ef: 75+ Chapter: 11 -b.ecti%e: 7 /&ill: Concept @,) Ad%ocates of competency'based pay assert that the system encourages employees to de%elop the &nowledge# s&ills# and beha%iors a firm needs to achie%e its strategic goals! Answer: 2E Eplanation: Eperts assert that paying for competencies enables companies to encourage employees to de%elop the competencies the companies reuire to achie%e their strategic aims! Diff: 0 (age ef: 715 Chapter: 11 -b.ecti%e: /&ill: Concept @6) 2he primary ad%antage of broadbanding is that it pro%ides greater fleibility into employee assignments! Answer: 2E Eplanation: Companies create broadbands for se%eral reasons! 2he basic ad%antage is that it in.ects greater fleibility into employee assignments! "t is especially sensible where firms organi>e into self'managing teams! Diff: 0 (age ef: 710 Chapter: 11 -b.ecti%e: , /&ill: Concept @+) Broadbanding and competency'based pay are increasingly popular among employers because both methods eliminate the need for e%aluating the worth of one .ob relati%e to others! Answer: A=/E Eplanation: E%en with competences&ill'based pay and broadbanding# ,5; to 65; of !/! firms use uantitati%e point and factor comparison plans to create pay structures! 8ob e%aluation
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@@) "n the broadest sense# comparable worth may mean comparing .obs that are %ery dissimilar such as nursing to fire fighting! Answer: 2E Eplanation: Comparable worth refers to the reuirement to pay men and women eual wages for .obs that are of comparable $rather than strictly eual) %alue to the employer! 2hus# comparable worth may mean comparing uite dissimilar .obs# such as nurses to truc& mechanics or secretaries to technicians! Diff: 0 (age ef: 71* Chapter: 11 -b.ecti%e: , /&ill: Concept 155) A &ey issue in comparable worth is whether women should be paid eual wages for .obs that are truly eual to men
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150) What are the ad%antages for employers of claiming that someone doing wor& for them is an independent contractor rather than an employee? Answer: 2here are many ad%antages! 2he air =abor /tandards Act does not apply to independent contractors! 2he employer does not ha%e to pay unemployment compensation payroll taes# /ocial /ecurity taes# or city# state# and federal income taes! Diff: 0 (age ef: *+6'*++ Chapter: 11 -b.ecti%e: 1 /&ill: Application 15*) What are your compensation options if you are an employer who needs to transfer an employee from a low cost'of'li%ing area to a high cost'of'li%ing area? Answer: Employers ha%e different ways of handling cost'of'li%ing differentials! -ne is to gi%e the transferred person a nonrecurring payment in a lump sum amount! Another is to pay a differential for ongoing costs in addition to a one time allocation! -thers simply raise the employee
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15) "n a brief essay# discuss the purpose of .ob e%aluations! Discuss the similarities and differences between .ob e%aluations conducted for managerial positions and lower le%el positions at a firm! Answer: 8ob e%aluation aims to determine a .ob
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156) "n a brief essay# compare and contrast the use of pay ranges with broadbanding! Answer: 2here are se%eral reasons to use pay ranges for each pay grade! irst# it lets the employer ta&e a more fleible stance in the labor mar&et! or eample# it ma&es it easier to attract eperienced# higher'paid employees into a pay grade at the top of the range# since the starting salary for the pay gradee into self'managing teams! 9owe%er# broadbanding can be unsettling# particularly for new employees! or eample# 2he 9ome De pot has used broadbanding for more than 15 years# and Iwhen employees want to learn something new# they play to the le%el Oon that pro.ectP that theyarI was soon o%erseeing certain pay awards in firms which had !/! treasury loans! As of 0556# the /ecurities and Echange Commission $/EC) reuired filing more compensation'related information# including a detailed listing of all indi%idual Iper&sI or benefits if they total more than 155#555! As of 055# the inancial Accounting /tandards Board reuired that most public companies recogni>e as an epense the fair %alue of the stoc& options they grant! 2he /arbanes' -ley Act ma&es eecuti%es personally liable# under certain conditions# for corporate financial o%ersight lapses! Diff: * (age ef: 756# 717 AAC/B: eflecti%e 2hin&ing Chapter: 11 -b.ecti%e: 7# , /&ill: /ynthesis 75 Copyright 4 0511 (earson Education# "nc!
