Exam 9: Managing Compensation

Scenario 9.2 Calendars "R" Us Ltd. is a small firm that manufactures yearly calendars with a specific focus on middle and high schools in Alberta. They started operations back in 2006 with just 12 employees, two machines, and a small warehouse that served as an office and production and storage facilities. Today, Calendars "R" Us has roughly 60 employees and supplies its calendars to most middle and high schools in Alberta. When employees join they are paid based on their relationship with the owners. Given the rapid growth in its staff complement, and the arbitrary way in which it normally compensates employees, payroll has proven to be quite a challenge for the company as management looks to expand into other provinces. -Refer to Scenario 9.2. Calendars "R" Us wants to develop a set of compensation policies that are internally fair. Which of the following is helpful in making this decision?

Competency-based pay systems compensate employees for the different skills or knowledge they possess rather than for the job they hold in a designated job category.

In Canada, the gender pay gap is larger for women with disabilities versus when all women are considered.

Wages paid above the range maximum are called red circle rates.

Which of the following is job classification often used to help determine pay for?

Strategic compensation links an organization's compensation systems to its mission and business objectives.

Among the goals of strategic compensation policy are rewarding past performance, attracting new employees, and reducing turnover.

Wage-rate compression can occur when organizations grant pay adjustments to lower-rated jobs but do not extend the adjustments up the hierarchy.

When time off is given in exchange for overtime work, it must be given hour-for-hour to the number of hours worked overtime.

To provide compensation estimates and ranges for jobs in an organization, all jobs should be surveyed.

Scenario 9.1 Denton and Denton Inc. (D&D Inc.) is a small graphic design firm that designs tray liners for various small food chains across Canada and a major chain in the United States. D&D currently has 20 employees who are paid hourly rates for time worked, not projects completed. These workers consider themselves valuable, knowledge-based workers, and now that the company is expanding its client base they are not happy with the current pay structure. Management claims that this pay structure, ranging from $20 to $65 per hour, is based on collapsing the pay ranges for four job bands. -Refer to Scenario 9.1. Given that these employees are skilled-based/knowledge workers, which of the following is a more effective way to compensate them?

Which of the following is a component of indirect compensation?

Pay levels are limited in part by profitability of the firm and market pay.

Which of the following is a potential problem of wage and salary surveys?

Mohammed's compensation and benefits are calculated and paid on the basis of monthly periods. How would you classify this employee?

Using job evaluation and wage survey data jointly improves the likelihood of both internal and external equity.

In geography, the water catchment area or watershed refers to the area that channels or supplies a specific area with its water. Catchment areas divide drainage basins. In wage surveys, what is this catchment area similar to?

The point system of job evaluation permits jobs to be evaluated quantitatively based on compensable factors.

Desirée is a female receptionist employed by Trent University in Ontario. John is a male janitor with the same employer. Both jobs are evaluated as having 500 points, yet Desiree is paid less than John. She has decided to legally challenge the employer. Which of the following is relevant in this case?

A point manual can be used to determine the external equity of a job.