Module 11- Pay Structure Decisions

Question 2

Pay can do what?

Answer 2

Attract talent, retain talent, decrease sick days, reward performance

Question 3

Define equity theory

Answer 3

Relational satisfaction employees get from pay and inputs

Question 4

Define expectancy theory

Answer 4

Employees will put in effort based on expected compensation

Question 5

Define reinforcement theory

Answer 5

High performance is rewarded

Question 6

Define needs theory

Answer 6

Employees have need for achievement and is validated by pay

Question 7

Pay is a motivation tool for _____

Answer 7

aligning employees interests with the broader organization

Question 8

Pay is a significant ___

Answer 8

Organizational cost

Question 9

Policies regarding wages, salaries and other earnings affect ____

Answer 9

Overall income and standard of living

Question 10

Pay level such as average pay looks at ____ and focuses on ____

Answer 10

External market: external equity

Question 11

Job structure such as relative pay looks at _____

Answer 11

Job relative to other job in org

Question 12

Individual pay is a function of ____

Answer 12

Pay structure= pay level + job structure

Question 13

People compare their own ratio of perceived outcomes to perceived inputs to ___

Answer 13

The ratio of a comparison other

Question 14

What is the equity theory and fairness?

Answer 14

If p’s is smaller than the comparison other others (o’s) ratio, then a perception of under-reward inequity results. If p’s ratio is larger than over reward inequity results

Question 15

What does external equity focus on?

Answer 15

What employees in other orgs are paid for doing the same job

Question 16

What does internal equity focus on?

Answer 16

What employees in same org are paid

Question 17

Pay level goes with ____ equity

Answer 17

External

Question 18

Pay structure goes with ___ equity

Answer 18

Internal

Question 19

Market pressures (product market competition) places an upper bound on ____

Answer 19

Labor costs and compensation

Question 20

Labor costs include

Answer 20

Direct and indirect payments, staffing levels

Question 21

Labor market competition reflects

Answer 21

Number of workers available relative to number of jobs available

Question 22

Shortages and surpluses influences

Answer 22

Pay levels

Question 23

Orgs not competitive in labor market will not ____

Answer 23

Attract and retain employees of sufficient numbers and quality

Question 24

Labor market competition places a lower bound on ___

Answer 24

Pay levels

Question 25

Invest in employees and expect___

Answer 25

Valuable returns

Question 26

Range of pay depends on the___

Answer 26

Competitive environment

Question 27

What is the efficiency wage theory

Answer 27

Paying workers above the marketing clearing wage can increase a firms productivity and profitability. Higher wages reduce employee turnover and reduce slaking off

Question 28

What is benchmarking?

Answer 28

Comparing an organizations practices against those of the competition

Question 29

Pay surveys require answers to:

Answer 29

1) which employee should be included in the survey 2) which jobs are included in the survey 3) if multiple surveys are used, how are all the rates of pay weighted and combined?

Question 30

What do rate ranges (pay grades) do?

Answer 30

Permit company to recognize differences in employee performance, seniority, training in setting individual pay

Question 31

Key jobs are

Answer 31

Benchmark jobs and common to many orgs

Question 32

Non key jobs are

Answer 32

Unique to orgs and cannot be valued directly or through market surveys

Question 33

Job evaluation is composed of

Answer 33

Commendable factors and a weighting scheme and input from many people

Question 34

The point factor system for developing a job structure includes

Answer 34

1- priori weights can be assigned 2- weights can be derived empirically based on how important each factor seems in determining pay in the labor market

Question 35

What are some of the factors in the point factor job evaluation

Answer 35

Skull, physical effort, mental effort, responsibility, working conditions

Question 36

Marker survey data has the greatest emphasis on

Answer 36

External comparisons

Question 37

What does the pay policy line do?

Answer 37

Combines external and internal comparisons to derive pay rates for both key and non key jobs

Question 38

The pay policy line does not use___

Answer 38

Actual market rates since there is a greater degree of internal consistency

Question 39

Each job within a grade has the same ___

Answer 39

Rate range

Question 40

Pay grades permit greater

Answer 40

Flexibility in moving employees from job to job

Question 41

Range spread is higher at ____

Answer 41

Higher levels of

Question 43

Most organizations emphasize ___ comparisons / ____ pricing

Answer 43

External ; market

Question 44

Pay structure represents orgs _____ policy but actual practice may not ____

Answer 44

Intended: coincide

Question 45

What is the grade compa-ratio?

Answer 45

Actual average pay for grade/ pay midpoint for grade

Question 46

What is a compa ratio?

Answer 46

Short for comparative ratio, a metric that compares an employees salary to the midpoint of their positions salary range, indicating whether they are paid above or below market rates

Question 47

Expatriate pay is

Answer 47

Total rewards and benefits offered to employees who move abroad for work

Question 48

Expatriate pay is more closely linked to

Answer 48

Home country

Question 49

What are the problems with job based pay structure ?

Answer 49

It may encourage bureaucracy, reinforces top down decision making, may not reward desired behaviors/ innovation, encourages promotion seeking behavior but discourages lateral employee movement

Question 51

What does delaying and banding do?

Answer 51

Reduces opportunities for promotion and weaken budgetary control - leads to rising labor costs

Question 53

What is competency based pay?

Answer 53

Pay for Skill, knowledge, competency

Question 55

What does skill based pay do?

Answer 55

Increased workforce flexibility and gives employees broader view of org functions

Question 56

What does executive pay do?

Answer 56

Influences organizations performance, set tone or culture of org

Question 57

Long term compensation is usually ___

Answer 57

Stock plans

Question 58

As of 2014 ratio of top executive pay to average worker is

Answer 58

281:1

Question 59

Most of a CEO pay comes from

Answer 59

Stock and options

Question 60

What does the EEO equal employment opportunity do?

Answer 60

Prohibits gender and Race based differences in employment outcomes such as pay

Question 61

Executive order 11246 did what

Answer 61

Prohibited Race or gender based systemic compensation discrimination

Question 62

Executive order 14173 is what

Answer 62

Replaced 11246. Removed affirmative action requirements for federal contractors

Question 63

2009 Lilly Ledbetter fair pay act

Answer 63

Offense based on pay checks impacted vs when decision was made and added retroactive provision

Question 64

1938 fair labor standards act (FLSA)

Answer 64

Established a minimum wage, requires paying over time after 40 hours in a week. and state minimum wage: states set their own can be higher or lower than federal

Question 65

FLSA established national minimum wage of

Answer 65

$7.25 an hour

Question 66

FLSA permits a lower “training wage”

Answer 66

85% of minimum wage, paid to workers under age of 20 for up to 90 days

Question 67

What is the minimum wage of Florida

Answer 67

$14

Question 68

How to calculate overtime pay? And total weekly pay

Answer 68

Standard hourly rate * regular hours = X * 1.5* overtime hours =Y* 5= answer Answer + X= total weekly pay

Question 69

What is non exempt?

Answer 69

Must be paid over time

Question 71

What is exempt?

Answer 71

Salaried, no overtime

Question 72

What is a living wage

Answer 72

The minimum hourly wage of a full time worker must earn to cover their family basic needs in a specific location, includes housing, healthcare, childcare, transportation