Quiz 7: Building Market-competitive Compensation Systems

Strategic Compensation

Business
43
Questions
0
True/False
30
Choices
13
Essay
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Questions

Q1
Free

This term is defined as an in-depth examination of the external and internal environmental factors that are likely to have the greatest impact on the future of the company.

Multiple Choice
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A) market-competitive pay structure
B) regression analysis
C) competitive strategy
D) strategic analysis
Answer:
D) strategic analysis
Q2
Free

Compensation surveys are typically focused on which two factors?

Multiple Choice
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A) competitors' promotion and advancement opportunities
B) internal promotion and advancement opportunities
C) competitors' wage and salary practices
D) internal wage and salary practices
Answer:
C) competitors' wage and salary practices
Q3
Free

When examining competitors' compensation offerings this term is used to describe the percentage of employer compensation costs that are applied to compensation and benefits.

Multiple Choice
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A) mix
B) quartile
C) standard percentile
D) nominal dollars
Answer:
A) mix
Q4

As of September 2010, U.S. companies spent approximately how much per employee for discretionary benefits?

Multiple Choice
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A) $28,995
B) $19,000
C) $3,050
D) $1,200
Answer:

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Q5

This BLS survey provides the quarterly measure of changes in labor and compensation costs, and is used as the principle economic indicator for the Federal Reserve.

Multiple Choice
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A) National Compensation Survey
B) Employment Cost Index
C) Employer Costs for Employee Compensation
D) National Benefit Index
Answer:

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Q6

The NCS provided incidence and extensive data on which two types of compensation benefits?

Multiple Choice
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A) health insurance & retirement
B) retirement & stock options
C) health insurance & pay
D) pay & stock options
Answer:

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Q7

These are reference points against which jobs within the company are judged.

Multiple Choice
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A) benchmark jobs
B) relevant labor markets
C) internal labor markets
D) human resource capabilities
Answer:

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Q8

These are used as reference points for setting pay levels.

Multiple Choice
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A) mean pay
B) median pay
C) market-competitive pay
D) benchmark jobs
Answer:

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Q9

When using compensation survey data, statistical analyses are used to integrate this with the external market, in order to determine pay rates.

Multiple Choice
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A) internal pay scales
B) nominal pay rates
C) internal pay benchmarks
D) internal job structures
Answer:

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Q10

This causes compensation survey data to become obsolete fairly quickly.

Multiple Choice
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A) the lag time between when the data was collected and used
B) pay compression
C) changes in the unemployment rate
D) changes in the geographic location of the company
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Q11

What would Yolanda's salary of $165,000 be considered if the means salary for B42DA, Inc., is $30,000 and the median salary is $32,000?

Multiple Choice
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A) overlie
B) outsider
C) outlier
D) over layer
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Q12

In statistical analysis, this term is used to signify the possible extreme observations.

Multiple Choice
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A) deviations
B) extremities
C) outliers
D) variants
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Q13

These are the two types of central tendency measures that are pertinent to compensation.

Multiple Choice
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A) mode and arithmetic mean
B) median and mode
C) mode and quartile
D) arithmetic mean and median
Answer:

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Q14

Which of the following are the three measures of dispersion?

Multiple Choice
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A) percentile standard, deviation, arithmetic mean
B) standard deviation, quartile, percentile
C) quartile, arithmetic mean, standard deviation
D) arithmetic mean, percentile, quartile
Answer:

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Q15

Suppose that a compensation professional would like to calculate the median salary. He/she orders four salaries as follows: $20,000, $22,000, $24,000, $26,000. What is the median salary for this data set?

Multiple Choice
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A) $21,000
B) $22,000
C) $23,000
D) $24,000
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Q16

These are tools used by employers to determine the pay levels needed to recruit highly qualified employees.

Multiple Choice
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A) strategic surveys
B) external market surveys
C) compensation surveys
D) internal market surveys
Answer:

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Q17

This term refers to the distance of each salary figure from the mean.

Multiple Choice
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A) standard deviation
B) quartile
C) percentile
D) deviated mean
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Q18

Jose Escobar conducts a survey of salaries at UB2 Enterprises and finds that 50% of the workers fall below the market pay average of $32,000. In which quartile do the workers at ERL Enterprises fall?

Multiple Choice
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A) first
B) second
C) third
D) fourth
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Q19

What does Quartile 3 represent?

Multiple Choice
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A) the number of figures that are above 25%
B) the number of figures that fall below 25%
C) the number of figures that are above 75%
D) the number of figures that fall below 75%
Answer:

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Q20

What does it mean when the distribution of data is skewed to the right?

Multiple Choice
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A) There is a lower frequency of larger values and the median is greater than the mean.
B) There is a higher frequency of larger values and the median is greater than the mean
C) There is a lower frequency of larger values and the mean is greater than the median.
D) There is a higher frequency of larger values and the mean is greater than the median
Answer:

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Q21

How often is the Consumer Price Index calculated for the United States?

Multiple Choice
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A) daily
B) weekly
C) monthly
D) twice a year
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Q22

The Consumer Price Index represents the average price changes for the price of goods and services in how many regions?

Multiple Choice
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A) 2
B) 4
C) 6
D) 8
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Q23

In the regression analysis formula, what does the X represent?

Multiple Choice
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A) predicted salary
B) job evaluation points
C) the slope
D) the Y intercept
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Q24

In regression, what does it mean when the R2 = 1?

Multiple Choice
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A) All of the variation in market pay can be explained by the company's job structure.
B) None of the variation in market pay can be explained by the company's job structure.
C) All of the variation in market pay can be explained by the company's external pay rates.
D) All of the variation in market pay can be explained by the benchmark rates.
Answer:

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Q25

Compensation professionals in XYZ Company use regression analysis to determine the pay rates of its marketing professionals. There are 4 different marketing job titles in XYZ Company. Compensation professionals use job evaluation points assigned to each marketing job title and a salary survey data. In other words, they regress job evaluation points on the salary data. What does it mean when the R2 value of this regression turns out to be 0.85?

Multiple Choice
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A) All of the variation in market pay can be explained by the company's job structure.
B) None of the variation in market pay can be explained by the company's job structure.
C) A large amount of the variation in market pay can be explained by company's job structure.
D) A small amount of the variation in market pay can be explained by company's job structure
Answer:

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Q26

XYZ Company is a world leader in medical device manufacturing. Aiming to continue its market position in this industry, XYZ Company pursues differentiation strategy. As a result, in order to attract and retain best employees, this company compensates its employees higher than almost all competitors. What kind of pay level policy does XYZ Company follow?

Multiple Choice
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A) market match
B) market lag
C) market lead
D) market pay line
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Q27

XYZ Inc. pursues a low-cost strategy in its industry and generally needs lower skilled employees. As a result, their management team decided to establish a compensation policy that pays less than the marketplace. In recent years the company became susceptible to labor shortages and high turnover. What kind of pay level policy does XYZ Inc. follow?

Multiple Choice
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A) market match
B) market lag
C) market lead
D) market pay line
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Q28

Market match policies are generally set to which quartile in the salary survey?

Multiple Choice
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A) 1st
B) 2nd
C) 3rd
D) 4th
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Q29

Market lag policies are generally set to which quartile in the salary survey?

Multiple Choice
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A) 1st
B) 2nd
C) 3rd
D) 4th
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Q30

Companies pursuing a differentiation strategy are most likely to use which pay level policy?

Multiple Choice
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A) market lead
B) market average
C) market lag
D) market match
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Q31

________ represent the fields of potentially qualified candidates for particular jobs.

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Q32

________ refers to a group of two or more jobs that are based on similar work characteristics, duties, and responsibilities.

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Q33

HR professionals rely on ________ jobs as reference points for setting pay levels.

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Q34

The ________ is the middle value in an ordered sequence of numerical data.

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Q35

________ represents the amount of spread or dispersion in a set of data.

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Q36

________ allow compensation professionals to describe the distribution of data based on four groupings.

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Q37

The ________ is the most commonly used method for tracking cost changes throughout the United States.

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Q38

________ analyses enable compensation professionals to establish pay rates for a set of jobs that are consistent with typical pay rates for jobs in the external market.

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Q39

The market ________ policy distinguishes a company from competition by compensating employees less than most competitors.

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Q40

The market ________ policy most closely follows the typical market pay rates because companies pay according to the market pay line.

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Q41

Explain the role of compensation surveys. Why is it important to update survey data?

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Q42

Explain market pay line. How is it used in the context of pay level policies such as market lead, market lag, and market match?

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Q43

Elaborate on the link between a company's pay level policy and its strategic mandate.

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