Exam 9: Managing Compensation

The worth of a job is determined formally through the wage and salary survey.

Elaine sometimes checks work-related e-mail from home on the weekend and follow up on it, even when her supervisor does not specifically ask her to. Under the Fair Labor Standards Act (FLSA), her employer must pay her for this work.

An advantage of competence-based pay from the employee's perspective is that there is no limit to what they can earn by learning new skills.

The measure of the average change in prices over time in a fixed "market basket" of goods and services is known as

Because it makes managers responsible for how they spend company money, a compensation scorecard can cloud the transparency of how people are rewarded.

Marni works for a company that uses a job-based compensation system. The very nature of this system encourages her to learn new skills, which will expand her career options and also increase her value to the company.

Nonexempt employees are covered by the Fair Labor Standards Act and must be paid at the rate of a rate of one and a half times their regular pay rate for time worked in excess of forty hours in their workweek.

The new management at LennoCorp felt that the company had too many salary grades, making the compensation system overly complex and encouraging an obsession with pay grade rather than skill development. They are collapsing the salary grades into a few wide salary bands in a process known as

Randall is a clerk in the accounting group at LennoCorp. At a recent lunch with colleagues, who are all clerks in different departments at LennoCorp, Randall discovered that the clerks in the development teams earn higher wages than he does. In this situation, Randall learned that he does not have internal pay equity.