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54. ______ legislation has been proposed as a solution to the problem of persistent
gender inequity in pay.
A. Expectancy theory
B. Pay structure
C. Comparable worth
D. Equity theory
55. According to the U.S. Senate, women earn an average of ______ for every dollar
that men earn.
A. 50 cents
B. 95 cents
C. 90 cents
D. 79 cents
56. When Stefania compares the work required in her job to the work required in
Heather’s job, she finds that the two jobs are similar. While the work in the jobs is
different, the jobs involve similar responsibility, skills, and working conditions. However,
Heather is paid $2 an hour more than Stefania is paid. Stefania’s findings appear to
reveal a violation of ______.
A. pay secrecy
B. comparable worth
C. equal pay
D. market rates
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57. If two jobs are similar but not the same, then an organization should pay a(n)
______ wage but not necessarily exactly the same wage.
A. lower
B. extra
C. dissimilar
D. similar
58. A(n) ______ approach to pay determination involves finding out what other
organizations pay for the same or similar jobs through available pay surveys, and it sets
pay levels based on market pricing.
A. lateral
B. internal
C. external
D. vertical
59. The vast majority of organizations use a(n) ______ approach to identifying pay
levels.
A. internal
B. external
C. rate
D. range
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60. A(n) ______ approach to pay determination uses job evaluation.
A. external
B. internal
C. pay
D. structure
61. ______ is the process of determining the worth of each position relative to the other
positions within the organization.
A. Job evaluation
B. Pay structure
C. Rate range
D. Minimum wage
62. Judi is looking at each job in her organization and comparing its value relative to
every other job in the organization. When she completes this exercise, she will have
done a ______.
A. job evaluation
B. wage compression
C. pay structure
D. rate range
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63. ______ is simply the process of putting jobs in order from lowest to highest, or vice
versa, in terms of value to the company.
A. Wage compression
B. Job evaluation
C. Job ranking
D. Job hierarchy
64. ______ is the easiest and fastest method of job evaluation.
A. Job ranking
B. Wage compression
C. Job evaluation
D. Job hierarchy
65. Kristine is conducting a job evaluation. She has identified benchmark jobs, analyzed
and rank-ordered them. Next, she will compare all other jobs in the organization to the
benchmark jobs to determine where each one fits in the rankings. Kristine is using the
______ method of job evaluation.
A. job ranking
B. point-factor
C. factor comparison
D. job hierarchy
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66. Tamar is conducting a job evaluation by putting each job in the organization in order
from lowest to highest in terms of value to the organization. Tamar is using the ______
method of job evaluation.
A. job ranking
B. point-factor
C. factor comparison
D. job hierarchy
67. ______ methods of job evaluation attempt to be completely objective in form.
A. Equity theory
B. Pay structure
C. Point-factor
D. Rate range
68. Gugu is conducting a job evaluation in her organization. Her first step is to identify a
group of benchmark jobs. Gugu is using the ______ method of job evaluation.
A. job ranking
B. point-factor
C. factor comparison
D. job hierarchy
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69. Maria is conducting a job evaluation in her organization by breaking each job down
into component skills or abilities. After she completes that task, she will assign points to
each skill or ability based on its difficulty. Maria is using the ______ method of job
evaluation.
A. job ranking
B. point-factor
C. factor comparison
D. job hierarchy
70. ______ methods of job evaluation break a job down into components like particular
skills or abilities, and then they assign a number of points to each component based on
its difficulty.
A. Rate range
B. Pay structure
C. Point-factor
D. Equity theory
71. The components in point-factor method of job evaluation are usually referred to as
______ factors.
A. compensable
B. noncompensable
C. pay
D. rate
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72. The ______ comparison method of job evaluation combines the job ranking and
point-factor methods to provide a more thorough form of job evaluation.
A. rate
B. factor
C. point
D. pay
73. Mia is conducting a job evaluation for her organization. First, Mia identified several
benchmark jobs. Next, she analyzed those jobs based on the skills and abilities required
to do the jobs. Finally, she ranked the jobs in order and compared them to all other jobs
in the organization. Mia is using the ______ method of job evaluation.
A. job ranking
B. point-factor
C. factor comparison
D. job hierarchy
74. The ______ comparison method of job evaluation is more time consuming because
it is tailored to the individual organization and to the jobs within the organization.
A. pay
B. rate
C. point
D. custom factor
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75. ______ is a hierarchy of jobs and their rates of pay within the organization.
A. Rate range
B. Wage compression
C. Pay structure
D. Overtime
76. A ______ is composed of both a job structure and pay levels.
A. pay structure
B. rate range
C. point factor
D. wage compression
77. ______ competition is labor supply versus demand for labor.
A. Compensation
B. Performance
C. Training
D. Labor market
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78. A ______ provides the maximum, minimum, and midpoint of pay for a certain group
of jobs.
A. rate range
B. pay structure
C. wage compression
D. minimum wage
79. ______ is the process of changing the company structure to get rid of some of the
vertical hierarchy (reporting levels) in an organization.
A. Delayering
B. Layering
C. Banding
D. Broadbanding
80. Kelli is working to lower the number of pay levels at Acme Global. There are
currently 20 pay levels and Kelli is working to combine multiple pay levels until there are
only five pay levels at Acme Global. What Kelli is doing is called ______.
A. banding
B. broadbanding
C. layering
D. delayering
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True/False
1. Compensation costs are frequently the largest part of total production costs at today’s
business organizations.
2. All rewards that can be classified as monetary payments and in-kind payments
constitute the compensation component of the compensation system.
3. Efficiency wage theory says that if a company pays higher wages, it can generally
hire better people who will in turn be more productive.
4. Pay structure is the process of determining the worth of each position relative to the
other positions within the organization.
Lussier, Human Resources Management 3e
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5. Wage compression occurs when new employees require higher starting pay than the
historical norm, causing narrowing of the pay gap between experienced and new
employees.
6. Starting salary is the lowest hourly rate of pay generally permissible by federal law.
7. Equity theory is the principle that when jobs are distinctly different but entail similar
levels of ability, responsibility, skills, and working conditions, they are of equal value and
should have the same pay scale.
8. The custom factor comparison method of job evaluation is tailored to the individual
organization and to the jobs within the organization.
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9. A rate range provides the maximum, minimum, and midpoint of pay for a certain
group of jobs.
10. Broadbanding is the process of changing the company structure to get rid of some
of the vertical hierarchy (reporting levels) in an organization.
Essay
1. Describe the four components of a compensation system.
2. Describe how expectancy and equity theories apply to compensation.
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3. Identify the seven basic issues that make up an organization’s compensation
strategy.
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4. Discuss the three major provisions of the FLSA—minimum wage rates, overtime
rates, and child labor requirements—and the penalties for misclassification of
employees.
5. Briefly describe the concept of comparable worth in compensation.
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6. Describe the three types of job evaluation—job ranking, point-factor, factor
comparison—and discuss whether they are more objective or subjective in form.
7. Briefly describe the concepts of job structure, pay levels, product market competition,
and labor market competition.
8. Describe the concept of a pay structure, including broadbanding and delayering.
Lussier, Human Resources Management 3e
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9. Describe the issues of independent contractors versus employees.
10. Describe the problem of the gender wage gap.
Lussier, Human Resources Management 3e
SAGE Publishing, 2019