Exam 9: Managing Compensation

In collective agreements, what are escalator clauses associated with?

Some organizations can choose a strategy to pay higher than market wages and salaries. Which of the following will this likely help them do?

Jambrone Foods and CUPE Local 5000 have a collective agreement in place that allows for wages to be paid at more than the minimum wage set by the Employment Standards Act. Which of the following best describes this agreement?

As the year 2000 approached, many organizations hired "young" and "inexperienced" information technology (IT) specialists to help address the Y2K problem. Many of these new hires were paid high compensation that brought them very close to the compensation earned by experienced IT specialists working with these companies. Which of the following can such a practice lead to?

Indirect compensation includes bonuses and commissions.

Wage compression can be avoided by granting wage increases solely on the basis of the CPI.

Job ranking is a simple method that provides a precise measure of each job's worth.

HR professionals establish predetermined wage grades as a basis for evaluating jobs in the job classification system of job evaluation.

Both Sam and Samantha work as cashiers at Modelo Hot Dogs. They do work of equal value to the firm, yet Sam receives less pay than Samantha. Sam is not happy because he perceives the system as being unfair to him. Which theory can you use to explain Sam's perceptions?

What is a key implication of expectancy theory when applied to pay systems?

The Hay profile method is used for clerical employees only.

Briefly discuss the provisions of the employment standards acts pertaining to employee compensation.

Crystal Ball Inc. is a large information technology firm with many levels of management. The company would like to compensate its managers on factors such as knowledge and accountability. Which system would you recommend?

In developing a wage curve, what are market wage rates plotted against?

Strategic compensation may involve market pricing.

The use of job evaluation is widespread in the private sector but is rarely used in the public sector.

Accounting clerks, pay clerks, and junior secretaries are all classed in Grade 2 at Metroland Inc. Which of the following should apply to all these jobs?

Pay equity is achieved when the compensation of female job classes is equal to male jobs of comparable worth.

When employees are paid according to the skills and knowledge they have rather than the specific jobs they perform, they are paid according to competency-based compensation.

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. What type of pay system is D&D Inc. currently using to compensate its employees?