Compensation/Pay structure

1. Which of the following is an example of wage criteria bias?

A. Rich doesn’t give Suzanne a high increase in pay because
he feels that a woman isn’t an effective employee.
B. Rich doesn’t give Suzanne a high increase in pay because
Suzanne’s pay is already at a low rate due to a poorly
designed job evaluation.
C. Rich doesn’t give Suzanne a high increase in pay because
Suzanne hasn’t performed as well as is required for her
job.
D. Rich doesn’t give Suzanne a high increase in pay because
there’s not enough money in the budget to give every employee a raise.

2. A skill plan that’s based on depth rather than breadth focuses on the skills required to

A. manage a warehouse.
B. drive a forklift.
C. manage people.
D. perform all of the accounting tasks for an organization.

3. Andrew is performing a job evaluation using the point method. He just created a list
of the different levels of skills required for each factor. Which step did Andrew just
complete?

A.Conduct the job analysis.
B. Determine compensable factors.
C. Scale the factors.
D. Weigh the factors according to importance.

4. Kurt is currently working with the labor union that represents the employees in his
organization on developing a compensation strategy. Which step of the total compensation
strategy formulation is he executing?

A. Assessing total compensation implications
B. Mapping a total compensation strategy
C. Implementing the strategy
D. Reassessing the strategy

5. Teresa is developing a Web site that will explain the organization’s pay and benefits
package to its employees. Which step of the total compensation strategy formulation
is she executing?

A. Assessing total compensation implications
B. Mapping a total compensation strategy
C. Implementing the strategy
D. Reassessing the strategy

6. Stephanie works in the 2” -bolt manufacturing division and Christine works in the 6”
-bolt manufacturing division. Stephanie earns a higher wage than Christine because the 2”
bolts are manufactured in an area where the cost of living is much higher than the area
where the 6” bolts are manufactured. Which of the following is this an example of?

A. Content          C. Use value
B.Relative contribution      D.Exchange value

7. Which of the following is an example of the ranking method being used to perform a
job evaluation?

A. Using the job definitions that are provided on the Department of Labor Web site to
create the different levels of positions within an organization
B.Creating 16 different descriptions in which each job within the organization will fit
C.Creating a list of specific tasks for each job and placing a value on each one based
on how much they contribute to the organization’s mission
D. Creating a list of specific skills required for each job and placing a value on each
based on how much they contribute to the organization’s mission

8. Kevin just completed a job evaluation for his organization. After presenting his findings
to the HR director, he was told that the position of vice president didn’t have a high
enough salary based on its level of responsibility and the position of maintenance
worker didn’t have a high enough salary based on its level of responsibility. Which
of the following was missing from Kevin’s evaluation?

A. Supports organizational strategy
B.Supports work flow
C.Fair to employees
D. Motivates behavior toward organizational objectives

9. Shanda is performing a job analysis, and she sent a questionnaire to all the employees
in the accounting department inquiring about the work that they perform. She noticed
that there was a great deal of variance among different people who all hold the same
position. None of them could agree on the work that they perform. Which of the
following is missing from her job analysis?

A. Reliability
C.Acceptability
B. Validity
D. Usefulness

10. Brittany is collecting data for a job analysis, and she just finished collecting data on
how store managers teach selling skills to their new sales associates so that they will
be able to meet their individual daily sales goals. This is an example of which kind of
information?

A. Identification        C.  Employee data
B.Content                 D.Essential elements

11. Which of the following is an example of higher wages based on human capital?

A. Gus earns more than Seymour because Gus is a member of a labor union and
Seymour isn’t.
B.Gus earns more than Seymour because Gus is much better at negotiating salary
increases than Seymour.
C. Gus earns more than Seymour because Gus has been trained on all of the
machines that are used on his manufacturing line.
D. Gus earns more than Seymour because Gus has missed fewer days of work than
Seymour.

12. Forrest just gave his assistant a 3% raise because his assistant just took on the
responsibility of department budgeting. Which of the following policy choices did
Forrest just make?

A. Internal alignment  C.Employee contributions
B.External competitiveness         D.Management

13. Ana Lisa has a company credit card on which she is allowed to purchase gas for her
car because her job requires her to drive a lot. This is an example of which form of
pay?

A. Long-term incentive         C. Benefits: work/life balance
B.Benefits: income protection         D. Benefits: allowances

14. Paul works in a manufacturing plant where he is paid an hourly wage. In addition to
his hourly wage, he is also paid a bonus amount based on the amount of minutes that
he can reduce his per unit manufacturing time. Which of the following best describes
Paul’s incentive plan?

A. The pay is a constant function of production level, and the focus is on units of
production per time period.
B. The pay is a constant function of production level, and the focus is on time period
per units of production.
C. The pay varies as a function of production level, and the focus is on units of
production per time period.
D. The pay varies as a function of production level, and the focus is on time period per
units of production

15. The Jeffreys Company has a dynamic workforce that deals with constantly changing
objectives that aren’t always easy to understand. It’s also a seasonal business, and
organizational success can change on an annual basis. For example, last year was its
best year ever, but the year before was the worst year ever due to one season. What
would be the best strategy for the Jeffreys Company to pursue regarding rewards?

A. Focus on a wide range of nonmonetary rewards and include a large bonus potential.
B.Focus on a wide range of nonmonetary rewards but focus on higher base pay and
lower incentives.
C.Focus on large monetary rewards with a large bonus potential.
D.Focus on large monetary rewards but focus on higher base pay and lower incentives

 16. Chuck is an appliance salesman who is considered a risk taker. Which type of compensation
plan would best motivate Chuck?

A.A flat hourly wage so that Chuck is paid based on the amount of time he works
B. An annual salary so that Chuck is paid the same amount regardless of the amount
of time he works
C.A pure commission schedule so that Chuck is paid based on the amount of
merchandise that he sells
D.An hourly wage plus a small quarterly bonus based on store sales

17. Which of the following types of plans saw an increase in use between 1996 and 2002?

A. Special recognition plans   C.Gain-sharing plans
B.Cash profit-sharing plans    D. Stock option plans

18. The McKinney Company can produce 200 printed shirts per day. It sells those shirts for
$10 each to retailers, who then sell them for $15 each. It costs the McKinney Company
$5 to produce one shirt. The McKinney Company just hired Sam as a machine operator,
and it can now produce 230 shirts per day. What is the marginal revenue of Sam’s
labor?

A.$150              C.$450
B.$300              D. $2,300

19. The McKinney Company can produce 200 printed shirts per day. It then sells those
shirts for $10 each to retailers, who then sell them for $15 each. It costs the McKinney
Company $5 to produce one shirt. The McKinney Company just hired Sam as a
Machine operator, and it can now produce 230 shirts per day. What is the
marginal product of Sam’s labor?

A.30 shirts            C. 200 shirts
B.170 shirts         D. 230 shirts