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CHARTERED INSTITUTE OF
PERSONNEL MANAGEMENT OF NIGERIA
PROFESSIONAL EXAMINATIONS

FEBRUARY 2019

CIPM/PE2/004: LABOUR MARKET ANALYSIS (Regular)

Instruction: Answer all Questions in Section A, and any other four Complete Questions of
your choice in Section B.

Time Allowed: 3 hours

SECTION A

MULTIPLE CHOICE QUESTIONS

Choose the correct answer from the list of options provided

1. All of the following are characterized by the major area of formal sector except:

(A) Capital intensive unit

(B) Vertically integrated job structure
(C) High labour production
(D) Labour are highly heterogeneous

2. Which of the following excludes effect of unemployment?

(A) Increase in crime rate
(B) Loss of confidence in government
(C) Loss of potential output in the economy
(D) Higher wage bargaining power for labour union

3. Which of the following is consumer price index (CPI) meant to measure?

(A) Gross Domestic Product
(B) Per capital income
(C) Inflation
(D) Labour force

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4. An unemployment which occurs when a firm could not access raw materials for
production is called __________

(A) disguised
(B) frictional
(C) seasonal
(D) none of the above

5. Workers mobility may also be referred to as __________

(A) labour transfer

(B) staff training
(C) staff appraisal
(D) job description

6. Method of measuring national income by value added approach is __________

(A) income method

(B) output method
(C) expenditure method
(D) all of above

7. Marginal propensity to consume is __________

(A) the ratio of change in consumption to change in income

(B) the ratio of change in income to change in consumption
(C) the ratio of consumption expenditure to any particular level of income
(D) the ratio of income to any particular level of consumption.

8. Which of the following is a type of unemployment?

(A) Structural unemployment

(B) Categorical unemployment
(C) Persuasive unemployment
(D) Economic unemployment

9. Nigeria Security and Mint Corporation is an example of __________

(A) Oligopoly
(B) Monopoly
(C) Monospony
(D) None of the above

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10. The managerial skill which involves the use of techniques, principles, tools and procedures
of a specialized field is called __________

(A) Conceptual skill

(B) Technical skill
(C) Design skill
(D) Human relation skill

11. The examination and evaluation of existing or proposed method of performing a specific
task is called __________
(A) Labour market
(B) Job design
(C) Job specification
(D) Institutional effect

12. Employees compensation consists of which of the following three major components?

(A) basic pay, pension scheme and salary

(B) salary, incentive and basic pay
(C) pension scheme, incentive and basic pay
(D) basic pay, the performance incentive, and fringe benefit

13. Which of the following is not the component of employee performance incentive?

(A) 13th month pay

(B) Tax reliefs
(C) Profit sharing
(D) Welfare packages

14. The study of population and its characteristics is known as __________

(A) Geography
(B) Social science
(C) Demography
(D) Antropolgy

15. Which of the following describes the international movement of skilled and highly
educated labour force?

(A) Migration
(B) Brain drain
(C) International mobility
(D) Emigration

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16. Boom and slums are economic terms describing a __________ of the economy at some
point in time

(A) State
(B) Rate
(C) Flow
(D) Cyclical movement

17. Which of the following is commonly used in organization where workers are non-
unionized of ineffectively unionized?

(A) Negotiation
(B) Deputation
(C) Joint consultation
(D) None of the above

18. Classical economists regard the demand for labour as the function of __________

(A) Wage price flexibility

(B) Real wage rate
(C) Good market equilibrium
(D) Total output

19. A labour market is a market

(A) Where knowledge, skills, abilities and human experience are presented in exchange
for wages
(B) Dealing in tangible goods
(C) That trades in stocks and bonds
(D) All of the above

20. Division of labour leads to __________

(A) Job enrichment

(B) Complex task
(C) Specialization
(D) Decreased efficiency
[20 marks]

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SECTION B

Answer any other four complete questions from this section.

QUESTION 2:

Wage and salary administration means establishing a relationship between the employee’s
contribution and the wage and salary received. It also means ranking jobs in some fashion that
corresponds to their contribution. Workers must perceive compensation, as having a relationship
to what they feel is commensurate with their contribution.

The organisation’s wage scale must not also fail to relate to the external market, for instance, the
scale or payment of competitors. Nevertheless, payments must not be made in excess of what the
job is worth. At the same time, the wage and salary scale must not be so low that it fails to attract
or retain workers. Making these determinations when labour union is involved results to
complicating dimension.

Required:
(a) In what ways do you think compensation is important to employees? [6 marks]
(b) Briefly describe the objectives of remunerating workers. [8 marks]
(c) Explain the methods of wage remuneration known to you. [6 marks]
[Total = 20 marks]

QUESTION 3

There has been a growing tension between the organisation management and trade union on the
best approach by which workers performance in an organisation would be achieved. Often
agreements are reached between management and labour but sometimes employees and
management find it difficult to agree.

For there to be an efficient and effective employee performance in an organisation. There has to
be a mutual relationship between management and employees. Unfortunately, most
organisations fail to achieve this mutual relationship and peaceful coexistence. Wages are issues
mostly discussed in bargaining talk. It is also mostly likely issue that leads to dispute between
the management and employees.

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Poor motivation is a challenge to workers which must be addressed properly in an organisation

because when fringe benefits, pensions, health insurance, unemployment benefits, etc. are not
provided; can lead to negative impact on employees.

(a) Briefly describe the major roles of Labour Union [8 marks]

(b) The trade union and the employer have certain strategies and tactics usually
employed to extract concession from each other. Enumerate these strategies. [12 marks]
[Total = 20 marks]

QUESTION 4

Unemployment has been one of the most persistent and unmanageable problems facing most
countries of the world. At the same time. The goal of public policy has been to remove or reduce
unemployment and to achieve full employment in such countries.

(a) How would you explain the distinction between unemployment and full employment?
[5 marks]
(b) In clear terms, describe the various types of unemployment known to you? [15 marks]
[Total = 15 marks]
QUESTION 5

When prices start rising, production is encouraged. Producers thereby earn wind-fall profits.
They invest more in anticipation of higher profit in the future. This tends to increase
employment, production and income but this is only possible up to the full employment level.

(a) In the light of the above, what do you consider to be the adverse effects of inflation on
production? [15 marks]

(b) Explain the two ways to measure the effects of inflation on income and wealth distribution
in the society? [5 marks]
[Total = 20 marks]

QUESTION 6

Recruitment takes place after a comprehensive human resource planning and job analysis have
been done.

(a) As a human resource practitioner, what do you consider to be the merits of internal
recruitment? [6 marks]

(b) With your wealth of experience as an HR professional, highlight and discuss seven
methods of recruiting externally? [14 mark]
[Total = 20 marks]

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QUESTION 7

Theories of wages are helpful in providing a basis for developing a workable and realistic
compensation policies. Which may vary from salary increment policy to overtime pay policy and
from, probationary pay policy to severance pay policy.

(a) In clear terms explain your understanding of compensation policies [6 marks]

(b) Discuss the various factors that determine basic pay in an organisation. [14 marks]
[Total = 20 marks]

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