55) What is the first step in the ranking method of job evaluation?
A) developing class or grade descriptions
B) selecting and ranking jobs by department
C) identifying appropriate compensable factors
D) gathering job information from a job analysis
56) Which of the following statements is most likely TRUE about the ranking method of job
evaluation?
A) Jobs are typically ranked based on the whole job.
B) Several compensable factors are commonly used to rank jobs.
C) The ranking method is typically more time consuming than other methods.
D) Ranking is usually appropriate for large employers because of the method’s cost.
57) What is a drawback associated with the ranking method of job evaluation?
A) high costs
B) subjective aspects
C) time-consuming
D) highly complex
58) A ________ pay system involves setting pay rates based on a comparison between internal
pay and external pay.
A) ranking
B) salary survey
C) market-competitive
D) compensable factor
59) The purpose of conducting a salary survey is to ________.
A) compare internal and external equity
B) determine prevailing wage rates
C) identify compensable factors
D) rank benchmark jobs
60) What is the first step in creating a market-competitive pay plan?
A) choosing benchmark jobs
B) selecting compensable factors
C) reviewing relevant job descriptions
D) evaluating external and internal wage curves
61) Kayla, an HR manager, is in the process of creating a market-competitive pay plan. For an
accounting job at the firm, she has assigned the following weights: 70% for job complexity, 25%
for effort, and 5% for working conditions. What is the next step Kayla must take in the process?
A) drawing the internal and external wage curves
B) converting percentage weights into point values
C) defining the degree for each compensable factor
D) reviewing job descriptions and specifications
62) ________ involve(s) determining the “worth” to the employer of each of its jobs and then
pricing these jobs.
A) Job equity
B) Job evaluation methods
C) Job comparisons
D) Job analysis
63) Employers use salary surveys in all the following ways EXCEPT to ________.
A) collect employee benefits data
B) price jobs in the marketplace
C) price benchmark jobs
D) create wage curves
64) A(n) ________ wage curve would most likely indicate whether a firm’s pay rates are too low
compared to what other firms pay.
A) current
B) internal
C) factored
D) market
65) Which term refers to a series of steps or levels within a pay grade and is usually based on
years of service?
A) wage grade
B) pay range
C) compa ratio
D) wage curve
66) Which of the following equals an employee’s pay rate divided by the pay range midpoint for
his or her pay grade?
A) pay grade
B) rate range
C) wage curve
D) compa ratio
67) The U.S. government uses all of the following compensable factors to writ a grade definition
EXCEPT ________.
A) difficulty and variety of work
B) supervision received and exercised
C) accountability
D) knowledge required
68) Mario, an HR specialist, is conducting a job evaluation. Mario ranks different components of
the job, including complexity, experience, and education required, and then adds up the points
for each component. Mario is most likely using the ________ method of job evaluation.
A) ranking
B) job classification
C) factor comparison
D) alternative point
69) What is a disadvantage of the job classification method?
A) vague benchmarking
B) reliance on competencies
C) complexity of grouping jobs
D) difficulty writing grade descriptions
70) What is the benefit of using pay ranges for each pay grade?
A) facilitates the administration of a total rewards system
B) gives employers more flexibility in the labor market
C) identifies and corrects out-of-line pay rates
D) gives employers less flexibility in the labor market
71) The Equal Pay Act focuses on three compensable factors—know-how, problem solving, and
accountability.
72) Unlike other job evaluation methods, the ranking method relies heavily on job specifications.
73) When splitting each factor into degrees in the process of creating a market-competitive pay
plan, the number of degrees should not exceed two or three in most cases.
74) Why do employers use pay ranges for each pay grade?
75) After establishing a market-competitive pay plan, an employer realizes that some employees
are being underpaid and some are being overpaid. How should these two situations be
addressed?
76) What are the similarities and differences between developing compensation plans for
professionals and lower-level employees? What role does job evaluation play in each?
77) What is comparable worth? Discuss the connection between comparable worth and the point
method.
78) Supplemental executive retirement plans and supplemental life insurance are classified as
________ in executive compensation packages.
A) base salary
B) short-term incentives
C) deferred long-term incentives
D) executive benefits and perks
79) Why would a firm most likely offer executive stock options in a compensation package?
A) to offer the executive long-term retirement security
B) to provide the executive with guaranteed bonuses
C) to encourage the executive to increase the firm’s value
D) to prevent the executive from negotiating with other firms
80) Which of the following is most likely a short-term incentive given to top executives?
A) pension plans
B) stock bonuses
C) life insurance
D) stock options
81) According to research, what is the LEAST likely factor that determines CEO pay?
A) ability to pay
B) job complexity
C) job evaluation
D) human capital
82) Tighter restrictions on what firms pay top executives have been triggered by ________.
A) job analysis
B) ranking methods
C) publicized demotions
D) shareholder activism
83) Which of the following most likely indicates that an employee is a professional under the
law?
A) holds a college degree
B) works overtime hours
C) manages other workers
D) earns at least $245 per week
84) What method is used by most employers to price professional jobs?
A) ranking method
B) point method
C) market-pricing approach
D) job classification method
85) The Sarbanes-Oxley Act of 2002 makes board members personally liable for violating their
fiduciary responsibilities to their shareholders.
86) The compensation for top executives at most firms consists of four components: short-term
incentives, long-term incentives, executive benefits and perks, and base pay.
87) How is executive pay typically determined? Why are boards of directors tightening down on
executive pay in recent years?
88) A company using competency-based pay compensates employees for all of the following
EXCEPT ________.
A) behaviors
B) job title
C) knowledge
D) skills
89) 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 decision by Homelife executives to implement
competency-based pay?
A) In an effort to save money, Homelife will be reducing the employee training budget over the
next 3 years.
B) Most Homelife managers are men, but executives hope to increase the number of minority
women working for the company.
C) Homelife sales associates currently receive base salaries in addition to sales commissions, but
they have monthly sales quotas.
D) Homelife plans to organize employees into teams, provide regular training, and frequently
assess workers’ skills and knowledge.
90) ________ means collapsing salary grades and ranges into just a few wide levels or bands,
each of which contains a relatively wide range of jobs and salary levels.
A) Comparable worth
B) Strategic compensation
C) Broadbanding
D) Job grading
91) High-performance work systems typically use competency-based pay because employees
________.
A) participate in training and development workshops
B) receive frequent performance appraisals
C) rotate among different jobs
D) need technical skills
92) What is the primary disadvantage of traditional grade pay plans?
A) inflexibility
B) reliability
C) validity
D) subjectivity
93) County of Washington v. Gunther was an important case regarding ________.
A) collective bargaining
B) comparable worth
C) equal opportunity
D) affirmative action
94) Which job evaluation method is associated with most comparable worth court cases?
A) market-based approach
B) job classification
C) ranking method
D) point method
95) According to research, U.S. women earn approximately ________ as much as men.
A) 50%
B) 65%
C) 80%
D) 95%
96) Which of the following makes executives personally liable for corporate financial oversight
lapses?
A) Sarbanes-Oxley Act
B) McCain-Feingold Act
C) Davis-Bacon Act
D) Walsh-Healey Act
97) The primary advantage of broadbanding is that it provides greater flexibility with employee
assignments.
98) Competencies are demonstrable characteristics of a person including knowledge, skills, and
behaviors.
99) Broadbanding refers to the requirement to pay men and women equal wages for jobs of
comparable value to the employer.
100) Mark’s employer uses a competency-based pay system, so Mark is paid for his skills and
knowledge rather than his job responsibilities.
101) Competency- or skill-based pay programs contain five elements: defining skills and
choosing a skill-based payment method, followed by training and testing. The work is designed
for job rotation.
102) What is broadbanding? Why and how do firms use broadbanding?
103) What is a total rewards pay program? What components might be included in a total
rewards plan?
104) Discuss the fundamental components and uses of competency-based pay systems.
105) A total rewards package encompasses not only compensation and benefits but also personal
and professional growth opportunities.