27) All of the following duties most likely indicate that an employee is exempt EXCEPT
________.
A) making sales outside of the office
B) performing manual office work
C) designing computer systems
D) managing subordinates
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
28) Financial benefits like employer-paid insurance and vacations are not a part of employee
compensation.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
29) Indirect payments that contribute to an employee’s compensation include variable pay like
commissions and bonuses.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
11
30) When nonexempt employees work more than 40 hours per week, employers must pay
overtime at a rate of at least one-and-a-half times the normal pay for any hours worked over 40
in a workweek.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
31) Because the minimum wage is set by the Fair Labor Standards Act, there is no variation
among states in regarding the minimum wage paid to hourly workers.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
32) The Equal Pay Act states that employees of one sex may not be paid wages at a rate lower
than that paid to employees of the opposite sex for doing roughly equivalent work.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
33) The provision of the Family and Medical Leave Act that entitles employees to take up to 12
weeks of unpaid, job-protected leave for the birth of a child only applies to women.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
12
34) External equity refers to how fair the job’s pay rate is when compared to other jobs within the
same company.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
35) An exempt employee is eligible for overtime pay.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
36) Taxi drivers and agricultural workers are always considered exempt employees.
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Concept
37) As an HR manager, how would you establish pay rates while ensuring external, internal,
individual and procedural equity?
AACSB: Analytical Thinking
Chapter: 10
LO: 10.1: List the basic factors determining pay rates.
Skill: Application
13
38) What federal laws stipulate how employers compensate employees? How does an employer
determine the monetary value of a job?
AACSB: Application of knowledge
Chapter: 10
LO: 10.1: List the basic factors determining pay rates. 10.2: Define and give an example of how
to conduct a job evaluation and set pay rates.
Skill: Synthesis
39) Lisa is an HR manager who has been assigned the task of establishing pay rates to ensure
external equity. What should Lisa most likely do first?
A) conduct a salary survey
B) compare performance appraisals
C) analyze a scatter plot of employee pay
D) use wage curves to price each pay grade
AACSB: Application of knowledge
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Application
14
40) Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the
past few years, the company’s market share has dropped significantly, and employee turnover has
increased. Upper management is considering the implementation of a new compensation policy
in its efforts to turn the company around. Historically, the company has paid all employees
similarly with some variation for seniority but no distinction between high and low performers.
Which of the following, if true, best supports the argument that Homelife executives should
primarily address internal equity issues when developing a new compensation plan?
A) Most of Homelife’s former employees are now employed at competitors’ stores in similar
positions.
B) Homelife employees receive annual performance appraisals at which time they set career
goals.
C) Salary surveys indicate dissatisfaction among the Homelife managers in different
departments.
D) Homelife pays its sales managers commissions in addition to base salaries and health
benefits.
AACSB: Analytical Thinking
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Critical Thinking
15
41) Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the
past few years, the company’s market share has dropped significantly, and employee turnover has
increased. Upper management is considering the implementation of a new compensation policy
in its efforts to turn the company around. Historically, the company has paid all employees
similarly with some variation for seniority but no distinction between high and low performers.
Which of the following, if true, supports the argument that Homelife should distribute salary
surveys before establishing new pay rates?
A) Homelife executives want to identify benchmark jobs before determining the worth of other
jobs.
B) Computerized job evaluation systems will be used by Homelife to generate questionnaires.
C) Homelife executives plan to use the compensable factors emphasized by the Equal Pay Act.
D) A wage curve needs to be established by Homelife for the purpose of federal compliance.
AACSB: Application of knowledge
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Critical Thinking
42) ________ is a formal and systematic comparison of jobs to determine the worth of one job
relative to another.
A) Job analysis
B) Job evaluation
C) Job description
D) Job classification
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
16
43) Which of the following is NOT one of the compensable factors emphasized in the Equal Pay
Act?
A) skills
B) effort
C) accountability
D) responsibility
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
44) Which of the following is used to anchor the employer’s pay scale?
A) grades
B) job aid
C) benchmark jobs
D) human resource metric
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
45) Basic factors that establish how several jobs compare to one another and that determine the
pay for each job are called ________.
A) compensable factors
B) job evaluation factors
C) ranking factors
D) analysis factors
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
17
46) When using the job classification method of job evaluation, raters categorize jobs into groups
of similar jobs called ________.
A) classes
B) grades
C) sections
D) cohorts
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
47) Which of the following best describes the point method of job evaluation?
A) comparing the importance of each compensable factor
B) ranking each job relative to all other jobs based on pay grade
C) identifying and quantifying the compensable factors present in a job
D) deciding which jobs have a higher number of compensable factors
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
48) Which job evaluation method is a quantitative technique involving the identification of
several compensable factors and the degree to which each of these factors is present in the job?
A) ranking method
B) point method
C) factor comparison
D) job classification method
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
18
49) A ________ is comprised of jobs of approximately equal difficulty or importance as
established by job evaluation.
A) pay group
B) benchmark
C) pay grade
D) class
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
50) Which of the following shows the relationship between the value and average pay of a job?
A) pay group
B) pay grade
C) benchmark
D) wage curve
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
51) What is the purpose of the wage curve?
A) to show the relationship between the value of the job and the current average pay rates
B) to equate jobs of similar difficulty or importance as established by job evaluation
C) to cluster jobs into logical groupings for pay purposes
D) to choose benchmark jobs within each pay grade
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
19
52) Which of the following most likely indicates the need for job evaluation?
A) work stoppages
B) low turnover rates
C) vertical promotions
D) part-time employees
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
53) HR managers and supervisors at Coffman Enterprises have identified a need for job
evaluation and have gained the cooperation of employees. What is the next step in preparing for
the job evaluation process?
A) separating exempt and nonexempt jobs
B) selecting a job evaluation committee
C) identifying benchmark jobs
D) ranking jobs by grade
AACSB: Application of knowledge
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Application
54) Which job evaluation method is considered the simplest and least expensive?
A) job classification method
B) comparison method
C) ranking method
D) point method
Chapter: 10
LO: 10.2: Define and give an example of how to conduct a job evaluation and set pay rates.
Skill: Concept
20