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1. What implications would
a company in the growth phase of the business life-cycle find in its
compensation strategy?
A. Base pay is low, indirect compensation is increasing, short-term
incentives are low
B. Base pay is low, indirect compensation is high, short-term incentives
are very high
C. Base pay is increasing, indirect compensation is increasing, short-term
incentives are high
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2. If you use a 5%
difference between midpoints of adjacent grades within the pay structure,
what is the likely result?
A. There will be too many grades.
B. You will not be able to use a job content job evaluation plan.
C. There will be more job grades than a 10% difference.
D. There will be an increase in the accuracy of ranges relative to market
pay levels. |
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3. In a traditional
pay range structure, which of the following best describes a midpoint
progression of 30%?
A. Best suited for hourly production jobs
B. Suitable for a clerical job family
C. Workable for executive/upper management jobs |
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4.
If a company bases pay on the duties an employee is capable of performing,
rather than on current job duties, how is that best described?
A. Costly and inefficient
B. A characteristic of skill-based pay
C. A form of merit pay based on potential
D. A characteristic of effective performance management |
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5.
Skill- and competency-based pay are both examples of what pay delivery
approach?
A. Job-based pay
B. Merit-based pay
C. Person-based pay
D. Results-oriented or performance-dependent pay |
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6.
An employee with a pay rate of $22,000 assigned to a pay range of $20,000-$24,000-$28,000
has which of the following?
A. A compa-ratio of 92
B. A compa-ratio of 100
C. Penetrated 15% of the range
D. Penetrated 50% of the range |
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7. When calculating the
costs of merit increase guidelines, which of the following will you
need to take into account?
A. The distribution of managers to employees
B. The distribution of performance ratings
C. The distribution of employee total annual compensation or earnings
(i.e., base salary plus incentives plus overtime earnings)
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8. Which of the
following is a typical approach used to correct red circle rates?
A. Reduce pay to the range midpoint
B. Give two increases a year rather than one
C. Freeze pay until the range catches up
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9. What is an approach
to reducing supervisor and subordinate pay compression?
A. Ensure that supervisor and subordinate midpoints are 5% apart
B. Include supervisors in an incentive plan
C. Eliminate overtime opportunities for nonexempt employees
D. Offer spot bonuses to top performing nonexempt employees |
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10. What is the first step
in developing an evaluation model?
A. Reviewing organization elements (i.e., mission, culture, strategy)
and identifying changes
B. Selecting evaluation criteria
C. Choosing the evaluators
D. Reviewing the compensation strategy |
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