Question 1

What is the first step in creating a market-competitive pay plan?

Accepted Answer

A)   choosing benchmark jobs
B)   selecting compensable factors
C)   reviewing relevant job descriptions
D)   evaluating external and internal wage curves A

Question 2

The provision of the Family and Medical Leave Act that entitles employees to take up to 12 weeks of unpaid,job-protected leave for the birth of a child only applies to women.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following professions is most likely categorized as nonexempt?

Accepted Answer

A)   general manager
B)   pharmacist
C)   paralegal
D)   teacher C

Question 4

Why would a firm most likely offer executive stock options in a compensation package?

Accepted Answer

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

Question 5

Which of the following employees would most likely be categorized as nonexempt?

Accepted Answer

A)   Anna, a registered nurse who earns $59,000/year
B)   Bob, a teacher who earns $56,000/year
C)   Carol, a bookkeeper who earns $23,000/year
D)   Dave, a taxi driver who earns $20,000/year

Question 6

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. All of the following questions are relevant to Homelife's decision to develop an aligned reward strategy EXCEPT ________.

Accepted Answer

A)   What compensation programs should Homelife use to reinforce necessary employee behaviors?
B)   How well does Homelife's current compensation program match the company's strategic aims?
C)   What were the results of the most recent Homelife customer review ratings?
D)   What compensation programs should Homelife use to reinforce desired employee behaviors?

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

Direct financial payments include all of the following EXCEPT ________.

Accepted Answer

A)   commissions
B)   insurance
C)   salaries
D)   incentives

Question 9

________ is a formal and systematic comparison of jobs to determine the worth of one job relative to another.

Accepted Answer

A)   Job analysis
B)   Job evaluation
C)   Job description
D)   Job classification

Question 10

How is executive pay typically determined? Why are boards of directors tightening down on executive pay in recent years?

Accepted Answer

The answer of How is executive pay typically determined? Why...

Question 11

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?

Accepted Answer

The answer of After establishing a market-competitive pay plan,an employer...

Question 12

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 argument that Homelife should distribute salary surveys before establishing new pay rates?

Accepted Answer

A)   Homelife executives want to identify benchmark jobs before determining the worth of other jobs.
B)   Computerized job evaluation systems will be used by Homelife to generate questionnaires.
C)   Homelife executives plan to use the compensable factors emphasized by the Equal Pay Act.
D)   A wage curve needs to be established by Homelife for the purpose of federal compliance.

Question 13

Basic factors that establish how several jobs compare to one another and that determine the pay for each job are called ________.

Accepted Answer

A)   compensable factors
B)   job evaluation factors
C)   ranking factors
D)   analysis factors

Question 14

Which of the following statements is most likely TRUE about the ranking method of job evaluation?

Accepted Answer

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.

Question 15

A company using competency-based pay compensates employees for all of the following EXCEPT ________.

Accepted Answer

A)   behaviors
B)   job title
C)   knowledge
D)   skills

Question 16

The Sarbanes-Oxley Act of 2002 makes board members personally liable for violating their fiduciary responsibilities to their shareholders.

Accepted Answer

A) True 
 B)False

Question 17

Lisa is an HR manager who has been assigned the task of establishing pay rates to ensure external equity.What should Lisa most likely do first?

Accepted Answer

A)   conduct a salary survey
B)   compare performance appraisals
C)   analyze a scatter plot of employee pay
D)   use wage curves to price each pay grade

Question 18

According to the Fair Labor Standards Act,if a worker covered by the act works more than 40 hours,he or she will receive overtime pay at a rate of ________ of normal pay for any hours worked over 40 in a workweek.

Accepted Answer

A)   50%
B)   100%
C)   125%
D)   150%

Question 19

Which of the following has historically been the primary issue in collective bargaining?

Accepted Answer

A)   safety
B)   wage rates
C)   income security
D)   health care benefits

Question 20

________ involve(s)determining the "worth" to the employer of each of its jobs and then pricing these jobs.

Accepted Answer

A)   Job equity
B)   Job evaluation methods
C)   Job comparisons
D)   Job analysis

Exam 10: Developing Compensation Plans