Question 1

What represents the relationship between a company's valuation of jobs based on job evaluation and the valuation of jobs within the external market as assessed by compensation surveys?

Accepted Answer

A)  market-competitive pay structure
B)  pay grade
C)  pay range
D)  market pay line D

Question 2

The HR manager of a company thinks that they have too many narrow pay grades within the organization.By getting the support from upper management,they decided to consolidate existing pay grades and ranges into fewer pay grades and broader pay ranges in order to create a flatter organization in terms of compensation.This is an example of which pay structure variation?

Accepted Answer

A)  broadbanding
B)  two-tier pay system
C)  pay compression
D)  multiple-tier pay system A

Question 3

Jasmine Black believes that the company should share part of the risk for her sales position.Which sales compensation plan should she pursue?

Accepted Answer

A)  salary-plus-bonus plan
B)  salary-plus-commission plan
C)  commission-plus-draw plan
D)  commission-only plan B

Question 4

A company adopting a commissions-oriented sales compensation plan would most likely be pursing which type of competitive strategy?

Accepted Answer

A)  highest quality
B)  lowest-cost
C)  differentiation
D)  fairest-price

Question 5

What is broadbanding? What are its limitations?

Accepted Answer

The answer of What is broadbanding? What are its limitations?...

Question 6

A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

Accepted Answer

The answer of A ________ is the difference between the...

Question 7

Which of the following represents the horizontal dimension of pay structures?

Accepted Answer

A)  pay ranges
B)  pay grades
C)  job evaluation points
D)  pay spreads

Question 8

What types of companies are most likely to utilize two-tier wage systems?

Accepted Answer

A)  unionized firms
B)  sales firms
C)  public sector companies
D)  private sector companies

Question 9

What are the differences between pay grades and pay ranges?

Accepted Answer

The answer of What are the differences between pay grades...

Question 10

Which of the following is a loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it?

Accepted Answer

A)  commission-plus-draw plan
B)  a recoverable draw
C)  a non-recoverable draw
D)  an interest-free loan

Question 11

Alejandro Martinez is responsible for setting up the pay structure for his company.He believes that newly hired employees should not be paid as much as established employees.Accordingly,what type of pay structure should Mr.Martinez use?

Accepted Answer

A)  broadbanding
B)  sales incentives
C)  two-tiered
D)  merit pay

Question 12

Midpoint,minimum,and maximum are values used to define which of the following?

Accepted Answer

A)  pay grades
B)  pay ranges
C)  pay structures
D)  pay levels

Question 13

John is just hired by a software company as a programmer.He is also a part-time student at the local college and needs just a few credits to graduate from this college.A college degree is required in order to work as a programmer in this software company.Therefore,John receives below-minimum pay rate until he graduates from college.What type of pay rate does John receive?

Accepted Answer

A)  green circle rates
B)  red circle rate
C)  midpoint pay rate
D)  two-tier pay rate

Question 14

This type of pay rate applies to an employee who is demoted but is paid more than the maximum rate for the pay grade he is now in.

Accepted Answer

A)  graduated pay
B)  green circle
C)  red circle
D)  multi-tier pay

Question 15

Money that covers the basic living expenses of sales professionals is better known as a ________.

Accepted Answer

The answer of Money that covers the basic living expenses...

Question 16

________ rates pay wages higher than the maximum listed in order to help retain valued employees fielding big job offers elsewhere.

Accepted Answer

The answer of ________ rates pay wages higher than the...

Question 17

This type of commission draw acts as a salary because employees are not obligated to repay the loans if they do not sell enough to cover the amount.

Accepted Answer

A)  nonrecurring draw
B)  safe draw
C)  nonrecoverable draw
D)  graduated draw

Question 18

How are compa-ratios calculated?

Accepted Answer

A)  dividing the green circle rates midpoint by the normal pay range
B)  dividing the employee's pay rate by the market line rate
C)  dividing an employee's pay rate by the pay range midpoint
D)  dividing the red circle rates by the normal pay range

Question 19

When these spreads are used to develop pay grade widths,the grades are based on a set number of job evaluation points for each grade that increases as an employee moves up the pay structure.

Accepted Answer

A)  pay rate spreads
B)  percentage-based job evaluation point spreads
C)  pay range spreads
D)  absolute job evaluation points spreads

Question 20

Which term is used to describe the situation where the pay spread between newly hired employees and more qualified job incumbents is small?

Accepted Answer

A)  pay structures
B)  pay compression
C)  red circle pay rates
D)  green circle pay rates

Exam 8: Building Pay Structures That Recognize Individual Contributions