29. The most common cost-of-living adjustments are ____ cent per hour for each .3-point or .4-point
change in the CPI.
a.
1
b.
2
c.
3
d.
4
30. For real wages to increase, which of the following must be true?
a.
An employee’s wage increase must be greater than the increase in the CPI.
b.
An employee must receive a lump-sum wage increase equal to the increase in the CPI.
c.
An employee’s wage must simply increase.
d.
The CPI must increase at least as much as the employee’s wage.
31. Wages gained through collective bargaining extend:
a.
to hourly employees only.
b.
to both hourly and management employees.
c.
beyond the segment of the labor force that is unionized.
d.
to both exempt and nonexempt employees.
32. Job evaluation helps to establish:
a.
job classifications
b.
the organization’s ability to pay
c.
internal equity
d.
labor market conditions that affect pay
33. With respect to Pay Equity Theory, which of the following is NOT considered an input?
a.
salary
b.
ability
c.
skill
d.
experience
34. Which is the simplest and oldest method of job evaluation?
a.
job worth system
b.
job ranking system
c.
job grade system
d.
point system
35. Which system of job evaluation is being used when cards that list the duties and responsibilities of the
job are arranged by raters in order of the importance of the job?
a.
point method
b.
job ranking
c.
job grade system
d.
factor comparison method
36. Which of the following is NOT a form of pay equity?
a.
internal equity
b.
external equity
c.
collective equity
d.
individual equity
37. Which system of job evaluation is being used when jobs are classified according to a series of
predetermined wage grades?
a.
Hay profile method
b.
job ranking
c.
factor comparison method
d.
job classification system
38. Elements of the compensation package are said to have _____ when an employee’s high performance
leads to monetary rewards that are valued.
a.
validity
b.
motivational value
c.
instrumentality
d.
reliability
39. The federal civil service job classification system uses which type of job evaluation system?
a.
point method
b.
job ranking
c.
factor comparison method
d.
job classification system
40. A quantitative job evaluation procedure that determines a job’s relative value on the basis of
quantitative assessments of specific job elements is known as:
a.
the point system.
b.
the job ranking system.
c.
the factor comparison method.
d.
the job grade system.
41. Elements of the job such as skills, efforts, responsibilities, and working conditions are referred to as:
a.
job specifications
b.
job classification factors
c.
compensable factors
d.
factor comparisons
42. Which of the following is a common major compensable factor?
a.
leadership
b.
fiscal accountability
c.
teamwork
d.
responsibility
43. Using the point method of job evaluation requires that managers:
a.
select key jobs for comparison purposes.
b.
compare job requirements against degree descriptions.
c.
link point totals to the wage curve.
d.
rank jobs by compensable factors.
44. The relative worth of a job evaluated using the point manual is determined by:
a.
benchmark jobs contained in the point manual
b.
the wage mix
c.
the number of steps within the pay grade
d.
the total points that have been assigned to that job
45. The job evaluation system that seeks to measure a job’s worth through its value to the organization is
known as:
a.
the point method.
b.
the job ranking system.
c.
the work valuation system.
d.
the Hay profile method.
46. Which job evaluation system serves to direct compensation dollars to the type of work pivotal to
organizational goals?
a.
the point method
b.
job ranking
c.
work valuation
d.
the Hay profile method
47. Because of its focus, the Hay profile method is most useful for evaluating which type of jobs?
a.
blue-collar jobs
b.
entry level
c.
executive and managerial positions
d.
sets of jobs within a specific wage range
48. The Hay profile method uses which three factors for evaluating jobs?
a.
knowledge, skill, and responsibility
b.
responsibility, mental ability, and skill
c.
responsibility, knowledge, and mental ability
d.
knowledge, accountability, and mental ability
49. The area from which employers obtain certain types of workers is known as the:
a.
labor market.
b.
region.
c.
recruiting area.
d.
supply region.
50. In conducting a wage and salary survey for the job of engineer, the relevant labor market to be
surveyed is most likely:
a.
regional.
b.
local.
c.
national.
d.
international.
51. In conducting a wage and salary survey for office personnel, the relevant labor market to be surveyed
is most likely:
a.
regional.
b.
local.
c.
national.
d.
international.
52. A U.S. survey found that _____ of employees say they work in a place where discussions of pay are
“formally prohibited and/or employees caught discussing wages could be punished.”
a.
19 percent
b.
38 percent
c.
57 percent
d.
76 percent
53. Wage survey data will normally be collected with the use of:
a.
low-rated jobs.
b.
key jobs.
c.
high-rated jobs.
d.
strategic jobs.
54. The relationship between the relative worth of jobs and their wage rates can be represented by means
of a:
a.
regression line.
b.
wage survey.
c.
salary progression chart.
d.
wage curve.
55. Employers wishing to encourage employees to accept a promotion to a job in a higher grade would:
a.
increase the size of successive rate ranges.
b.
increase the point spread of pay grades.
c.
decrease the size of successive rate ranges.
d.
decrease the point spread of pay grades.
56. Jobs that are grouped into the same pay grade should:
a.
all receive the same wage rate in order to achieve equality.
b.
be paid within a range that does not overlap with bordering job grades so that distinctions
between grades are maintained.
c.
be paid within a range that may overlap with adjoining grades, so that an employee with
experience can be paid as much as or more than a newer employee in a higher grade.
d.
be paid at different wage rates because the worth of these jobs to the organization may
differ.
57. Red circle rates above the maximum for the range can result because:
a.
promotional opportunities are plentiful
b.
employees have high seniority
c.
employees are demoted
d.
grades are added to the range
58. The predominant approach to employee compensation is:
a.
pay-for-performance
b.
competence-based pay
c.
job-based pay
d.
individual contract
59. Compensation programs that compensate employees for the knowledge they possess are known as:
a.
competence-based pay plans.
b.
performance-based pay plans.
c.
merit-based pay plans.
d.
seniority-based pay plans.
60. _____ is a pay system in which employees are paid according to the number of units
they produce.
a.
Piecework
b.
Hourly work
c.
Non-exempt work
d.
Exempt work
61. Another basis for compensation centers on whether employees are classified as nonexempt or exempt
under the _____.
a.
Equal Pay Act
b.
Fair Labor Standards Act
c.
Taft-Hartley Act
d.
Employment Classification Act
62. Which of the following is NOT an internal factor affecting the pay mix?
a.
worth of job
b.
cost of living
c.
employer’s ability to pay
d.
employee’s relative worth
63. The biggest challenge with competence-based pay is:
a.
encouraging employees to take advantage of it
b.
reduction in organizational flexibility
c.
loss of productivity
d.
developing appropriate measures of skills and competencies
64. Collapsing many salary grades into a few wide salary bands is known as:
a.
red circling
b.
broadbanding
c.
pay ranging
d.
factor comparison
65. ____ helps eliminate the obsession with grades and, instead, encourages employees to move to jobs
they can develop in their careers and add value to the organization.
a.
Red circling
b.
Broadbanding
c.
Pay ranging
d.
Factor comparison
66. In a 2010 survey of more than 1,000 entrepreneurs, 35 percent of all small businesses in the United
States had to make pay cuts
a.
10 percent
b.
35 percent
c.
50 percent
d.
65 percent
67. The federal wage law that is criticized for a rule that allows minimum pay to be based on the
prevailing rate, which often includes higher, union wages, is:
a.
Equal Pay Act.
b.
Davis-Bacon Act.
c.
Fair Labor Standards Act.
d.
Walsh-Healy Act.
68. The federal wage law that may require government contractors to pay overtime for work more than
eight hours a day is:
a.
Equal Pay Act.
b.
Davis-Bacon Act.
c.
Fair Labor Standards Act.
d.
Walsh-Healy Act.
69. The major provisions of which act are concerned with minimum wage rates and overtime payments,
child labor, and equal rights?
a.
Equal Pay Act
b.
Davis-Bacon Act
c.
Fair Labor Standards Act
d.
Walsh-Healy Act
70. Which of the following is NOT a component of the Consumer Price Index?
a.
Clothing
b.
Automobiles
c.
Charges for medical services
d.
Transportation fares
71. The Fair Labor Standards Act prohibits the employment of anyone ages ____ in hazardous
occupations such as mining, logging, and meatpacking.
a.
14-21
b.
16-18
c.
16-21
d.
less than21
72. The simplest and oldest system of job evaluation is the _____, which arrays jobs on the basis of their
relative worth.
a.
job valuation system
b.
point system
c.
job classification system
d.
job ranking system
73. A system of job evaluation in which jobs are classified and grouped according to a series of
predetermined wage grades.
a.
point system
b.
job valuation system
c.
job classification system
d.
job ranking system
74. The Equal Pay Act prohibits wage discrimination based on:
a.
seniority
b.
gender
c.
merit
d.
individual incentive
75. A job evaluation system that seeks to measure a job’s worth through its value to the organization is
known as:
a.
job ranking
b.
job classification
c.
work valuation
d.
the point system
76. The ___ collects and displays the results for all the measures that a company uses to monitor and
compare compensation among internal departments or units.
a.
red circle rate
b.
competence-based pay system
c.
compensation scorecard
d.
point system
77. According the compensation scorecard, functions with a compa ratio below ______ are considered to
be paying their employees below the company norm.
a.
25 percent
b.
50 percent
c.
75 percent
d.
100 percent
78. The Fair Labor Standards Act permits employers to pay a “training wage” of _____ per hour for
employees younger than the age of twenty during their first ninety days of employment, provided their
employment does not displace other workers.
a.
$5.26
b.
$5.76
c.
$6.16
d.
$6.56
79. Employers may ________ their workforce to help them identify the most valuable contributors.
a.
segment
b.
reorganize
c.
educate
d.
overhaul
80. ____________ may create problems for managers who wish to maintain pay secrecy among
employees.
a.
NASDAQ information
b.
Internet salary survey data
c.
FLSA requirements
d.
Davis-Bacon standards
81. Most pay increases may lack motivational value to employees when ________________.
a.
legality is questionable
b.
they are too large
c.
salary budgets are low
d.
benefits are insignificant
82. When cost-of-living pay increases are given routinely, employees may view them as ___________.
a.
insults
b.
entitlements
c.
highly motivating
d.
long overdue
ESSAY
1. Briefly discuss the motivating value of pay equity and pay expectancy for employees.
2. What are some of the factors that can influence wage rates in a firm?
ANS:
3. Discuss some of the common goals of a strategic compensation policy.
ANS:
4. Briefly discuss the three main laws that protect against employment discrimination.
ANS:
5. Explain competence-based pay including its advantages and disadvantages. Include in your discussion
the practice of broadbanding.
6. Briefly discuss the legal requirements of the Fair Labor Standards Act used to regulate employee
compensation.