51. A market pay policy line:
A. is developed using nonkey jobs.
B. can be generated using a statistical procedure called regression analysis.
C. requires market pay rate data on all jobs in the organization.
D. is always expressed as a linear relationship between job evaluation points and pay rates.
Basically, a market pay policy line is developed based on the key jobs.
52. Which of the following is NOT a pay-setting approach to developing pay structure?
A. Market survey data
B. Pay remuneration
C. Pay policy line
D. Pay grades
The approach with the greatest emphasis on external comparisons, market survey data, is achieved by directly basing pay on market surveys that cover as many key jobs as possible.
53. Pay grades are desirable pay structures when:
A. there are only a few jobs in the organization.
B. there are broad distinctions between jobs within a pay grade.
C. there is concern about overpaying some jobs.
D. an organization desires greater flexibility in moving employees.
In pay grades jobs of similar worth or content are grouped together for pay administration purposes.
54. A disadvantage of using the pay-setting approach that groups jobs into a smaller number of pay grades is that:
A. it increases administrative burden.
B. it permits less flexibility in moving employees from job to job.
C. it results in some jobs being underpaid and others overpaid.
D. it increases costs of surveying the market.
In pay grades jobs of similar worth or content are grouped together for pay administration purposes.
55. Pay rate range spreads:
A. are usually larger at higher grade levels.
B. represent the distance between the midpoint and the maximum pay rates in each grade.
C. represent a measure of the range of pay rates paid across an entire organization.
D. are usually largest for blue-collar jobs in unionized settings.
Range spread is the distance between the minimum and maximum amounts in a pay grade.
56. The compa-ratio:
A. measures the degree to which actual pay is consistent with pay policy.
B. is defined as actual average pay for the grade divided by the minimum pay for the grade.
C. can range from 0 to 100 percent.
D. uses data from market pay surveys.
Compa-ratio is an index of the correspondence between actual and intended pay.
57. Actual pay is lagging behind the pay policy when the compa-ratio is:
A. greater than 1.00.
B. less than 1.00.
C. greater than 100.
D. in the range of 1 to 10.
Compa-ratio is an index of the correspondence between actual and intended pay.
58. Which of the following compa-ratios would be of greatest concern to a management team in a tight product market environment?
A. 1.00
B. 0.85
C. 1.25
D. 1.11
Compa-ratio is an index of the correspondence between actual and intended pay.
59. Compensation management could be improved in most organizations by:
A. improving the technical merit of compensation decisions.
B. developing better theoretical bases for pay decisions.
C. increasing employee participation in compensation decision making.
D. offering better justification for the selection of compensation programs.
Employee participation in compensation decision making can take many forms.
60. As in other areas of human resource management, _____ are typically responsible for making policies work.
A. top management teams
B. team leaders
C. consultants
D. line managers
It is important to distinguish between participation by those affected by policies and those who must actually implement the policies. Managers are in the latter group. Line manager's intimate involvement in any change to existing pay practices is, of course, necessary.