61. In a recent research study, more effective communication of the reasons for an organization's pay-cuts had:
A. little effect on employees' attitudes and behaviors.
B. a negative effect on employee retention rates.
C. a large effect on reducing employee theft rates.
D. no effect on employees' perceived equity of pay.
Managers play the most crucial communication role because of their day-to-day interactions with their employees. Therefore, they must be prepared to explain why the pay structure is designed as it is and to judge whether employee concerns about the structure need to be addressed with changes to the structure.
62. Research on the effects of two-tier wage plans has found that:
A. lower-paid employees were less satisfied on average than higher-paid employees.
B. those in the lower tier used lower comparison standards than those in the higher tier.
C. lower-paid employees compared their pay to those in the higher tier.
D. lower-paid employees expected over time to be promoted into the second tier.
The lower-tier employees compared their jobs with unemployment or lower-paying jobs they had managed to avoid. As a result, they were more satisfied, despite being paid less money for the same work.
63. _____ play the most crucial communication role because of their day-to-day interactions with employees.
A. Managers
B. Owners
C. Subordinates
D. Competitors
Managers must be prepared to explain why the pay structure is designed as it is and to judge whether employee concerns about the structure need to be addressed with changes to the structure.
64. Which of the following is not a recognized limitation of a job-based pay structure?
A. It encourages a bureaucratic orientation due to its reliance on inflexible job descriptions.
B. It reinforces top-down decision making and information flow.
C. It may not reward desired behaviors, particularly in a rapidly changing environment.
D. It is difficult to explain to employees.
Job-based pay structure encourages bureaucracy. It also encourages lack of flexibility and a lack of initiative on the part of employees. The structure's hierarchical nature reinforces a top-down decision making and information flow as well as status differentials. The job-based pay structure may not reward desired behaviors, particularly in a rapidly changing environment where the knowledge, skills, and abilities needed yesterday may not be very helpful today and tomorrow.
65. _____ is reducing the number of job levels to achieve more flexibility in job assignments and in assigning merit increases.
A. Remunerating
B. Reorganization
C. Downsizing
D. Delayering
In response to the problems caused by job-based pay structures, some organizations are delayering.
66. A broad band:
A. is a combination of pay grades that reduces the number of levels in a pay structure.
B. refers to the distance between the minimum and maximum pay rate in a pay grade.
C. is the salary range attached to white-collar jobs.
D. reduces flexibility in assigning merit increases.
Broad bands, with their greater spread between pay minimums and maximums, can also lead to weaker budgetary control and rising labor costs.
67. Which of the following is a possible disadvantage of delayering and banding?
A. They do not work for a small sample of jobs.
B. There is a reduced opportunity for promotion.
C. They do not permit the organization to reward employees for learning.
D. The lesser spread does not allow managers to recognize high performers.
To the extent that there are separate ranges within bands, the new structure may not represent as dramatic a change as it might appear. These distinctions can easily become just as entrenched as they were under the old system.
68. Competency-based pay is generally directed toward:
A. nonexempt employees.
B. international employees.
C. exempt employees.
D. unionized employees.
The basic idea of exempt employees is that if you want employees to learn more skills and become more flexible in the jobs they perform, you should pay them to do it.
69. Skill-based and competency-based approaches have all but one of the following potential disadvantages. Name the exception.
A. Increased bureaucracy.
B. The challenge an organization faces in terms of using new skills effectively.
C. Decreased worker flexibility.
D. Employees "topping out."
Skill-based and competency-based approaches have potential disadvantages. Although the plan will likely enhance skill acquisition, the organization may find it a challenge to use the new skills effectively. If pay growth is based entirely on skills, problems may arise if employees "top out" by acquiring all the skills too quickly, leaving no room for further pay growth. Skillbased plans may generate a large bureaucracy—usually a criticism of job-based systems.
70. Skill-based pay systems generally are not appropriate for organizations that:
A. desire worker flexibility.
B. rely on market-based rates.
C. emphasize decentralization of decision making.
D. desire a climate of learning.
Skill-Based Pay is based on the skills employees acquire and are capable of using.