11 Dess Hrm14Ce TB Ch11-No Key

Human Resources Management in Canada, 14e (Dessler)
Chapter 11 Strategic Pay Plans
1) Which of the following are the two main components of employee compensation?
A) Payroll costs and government taxes
B) Direct and indirect financial payments
C) Regular pay and bonuses
D) Salary or wages and overtime pay
E) Earnings and incentives
Answer:
Type: MC
Learning Objective: 11.1: Explain the strategic importance of total rewards.
2) Wages, salaries, incentives, commissions, and bonuses are known as which of the following?
A) Indirect deposits
B) Indirect financial payments
C) Variable payments
D) Direct deposits
E) Direct financial payments
Answer:
Type: MC
3) Victoria has been a contract worker for a construction company and has just been offered a
full-time, non-contract position. She will now receive additional benefits, such as employer-paid
insurance and vacation; what are these components of employee compensation called?
A) Indirect deposits
B) Indirect financial payments
C) Variable payments
D) Direct deposits
E) Direct financial payments
Answer:
Type: MC
4) Which of the following refers to the creation of a compensation package that produces the
employee behaviours that a company requires in order to achieve their competitive strategy?
A) Cost-effective compensation plan
B) Aligned reward strategy
C) Hybrid pay structure
D) Dual salary/commission plan
E) Total benefits package
Answer:
Type: MC
1
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5) According to the recent study conducted by Towers Watson referenced in the textbook, what
is the most important factor in retaining employees?
A) Excellent career opportunities
B) Competitive base pay
C) Interaction with co-workers
D) Bonuses and benefits
E) Relationship with their immediate manager
Answer:
Type: MC
6) According to the recent study conducted by Towers Watson referenced in the textbook, what
is the most important factor in attracting employees to an organization?
A) Excellent career opportunities
B) Competitive base pay
C) Interaction with co-workers
D) Bonuses and benefits
E) Relationship with their immediate manager
Answer:
Type: MC
7) The term "total rewards" refers only to the monetary components of compensation.
Answer:
Type: TF
8) An employer ensures that they are gender-neutral in devising salaries for jobs that are both
male- and female-dominated. Which type of legislation is the employer adhering to?
A) Comparable worth
B) Pay equity
C) External equity
D) Internal inequity
E) Broadbanding
Answer:
Type: MC
Learning Objective: 11.2: Describe four core considerations an organization needs to make
when determining compensation decisions.
2
9) Fareena runs a small manufacturing company. A worker hurt his hand on a vertical grinding
machine. Fareena filed the proper legal documents quickly so that the worker could receive
benefits while recovering from his injury. Which type of legislation did Fareena adhere to?
A) Pay equity
B) Workers compensation
C) Human rights
D) Overtime pay
E) Pensions
Answer:
Type: MC
10) When Mary started her web application company one of her goals was to ensure job
applicants and employees would not experience discrimination as it related to their pay and
opportunities for advancement. Which type of legislation did Mary adhere to?
A) Equity theory
C) Human rights
D) Overtime pay
E) Pensions
Answer
Type:
11) Pay equity laws were enacted in order to specifically redress which of the following?
A) Pay discrimination against senior citizens
B) The variety of compensable factors being used to evaluate jobs
C) The historical undervaluing of female-dominated job classes
D) Pay discrimination against people with disabilities
E) The variety of job evaluation systems being used to evaluate jobs
Answer:
Type: MC
Learning Objective: 11.3: Define pay equity and explain its importance today.
12) According to the textbook, which of the following do unions believe will be the best able to
judge the relative value of a job?
A) The immediate manager
B) The HR manager
C) The top company executives
D) The workers themselves
E) A third-party labour consultant
Answer:
Type: MC
3
13) According to the textbook, who usually writes the compensation policies for a company?
A) The Chief Executive Officer
B) The Chief Financial Officer
C) The mid-level managers
D) An external labour consultant
E) An HR or compensation manager in partnership with senior management
Answer
Type: MC
14) Justin used to assemble 18 desks per hour during his shift for the furniture company he
works for; then he found out that other workers who only assemble 13 to 15 desks per hour were
receiving the same compensation as he was. Justin now assembles 14 desks per hour. Which of
the following would help to explain Justin's behaviour?
A) Pay scales
C) Human rights
D) Equity theory
E) Piece work
Answer:
Type: MC
Learning Objective: 11.4: Explain equity theory of motivation and how an organization can
address feelings of inequity.
15) Julien and Bernard, friends in the same commerce program, find similar summer jobs at
different banks at the end of their winter school terms. Julien learns that Bernard's compensation
is 11% more than what he is being paid. Julien feels that his employer provides unfair
compensation and begins looking for a new job; what is this an example of?
A) Pay equity legislation
B) Controllable equity
C) External equity
D) Comparable equity
E) Internal equity
Answer:
4
16) Which of the following components of equity theory specifically refers to the perceived
fairness of the processes used to make decisions regarding the allocation of pay?
B) Procedural equity
C) External equity
D) Individual equity
E) Internal equity
Answer:
Type: MC
17) According to the textbook, which of the following do managers use to monitor and maintain
external equity?
A) Salary surveys
B) Pay equity legislation
C) Human rights acts
D) Performance appraisals
E) Employee grievances
Answer:
Learning Objective: 11.5: Explain in detail each of the three stages in establishing pay rates.
18) Elaine runs a call centre in Calgary. She is worried that her employees will leave for a
similar role at another call centre nearby. What tool will help her determine if her employees are
being paid competitively?
A) Employee grievances
B) Pay equity legislation
C) Human rights acts
D) Performance appraisals
E) Salary surveys
Answer:
Type: MC
19) Up to how many weeks does the Employment Insurance Act provide compensation for
workers that are unemployed through no fault of their own?
A) 58
B) 45
C) 35
D) 28
E) 18
Answer: Type: MC
5
20) Which of the following components of equity theory specifically refers to the fairness of an
employee's pay compared with what his or her coworkers are earning for the same or very
similar jobs within the company, based on each employee's performance?
B) Procedural equity
C) External equity
D) Individual equity
E) Employment equity
Answer:
Type: MC
21) The purpose of pay equity legislation is to eliminate discrimination based on age and culture.
Answer:
Type: TF
22) Most of the pay equity acts in Canada focus on four listed below except
A) skill.
B) effort.
C) responsibility.
D) working conditions.
E) customers.
Answer:
Type: MC
23) What does job evaluation determine?

A) Performance appraisals of individuals to the group
B) Promotability of employees who are not yet managers
C) Merit reviews of individuals to the group
D) The relative value of an individual's career earnings to the group's
E) The relative worth of jobs within a firm
Answer:
Type: MC
24) The job evaluation committee typically includes several employees and has the important
task of evaluating the worth of each job using which of the following?
A) Job variety
B) Job design
C) Comparable worth
D) Behavioural anchors
E) Compensable factors
Answer:
Type: MC
6
25) Jeffrey is the newly hired HR professional who is responsible for evaluating compensation
practices at the company. To determine if there are issues with internal equity, he has chosen to
conduct a job evaluation according to the method popularized by the Hay Group consulting firm;
which of the following are the compensable factors that this specific method uses in order to
evaluate jobs?
A) Skill, effort, problem solving, and working conditions
B) Responsibility, skill, effort, and working conditions
C) Know-how, problem solving, accountability, and working conditions
D) Effort, responsibility, authority, and working conditions
E) Knowledge, problem solving, responsibility, and working conditions
Answer:
Type: MC
26) When using a job evaluation method, such as the ranking method, which of the following is
the eventual result of that approach?
A) Job hierarchy
B) Promotion process
C) Equity theory
D) Human rights
E) Compensable factors
Answer:
Type: MC
27) What is the term used to describe jobs that represent all of the various business units and
departments in an organization, jobs that are drawn from all levels of an organization, and jobs
that are clear and well known in the industry?
A) Standard jobs
B) Benchmark jobs
C) Equitable jobs
D) Comparable jobs
E) Common jobs
Answer:
Type: MC
7
28) What is the term used to describe a diverse group established to ensure the fair and
comprehensive representation of the nature and requirements of a job in question for the
purposes of determining compensation?
A) Performance appraisal committee
B) Job evaluation committee
C) Union negotiating team
D) Management negotiating team
E) Position review committee
Answer:
Type: MC
29) According to the textbook, which of the following most commonly uses the
classification/grading job evaluation method in order to categorize jobs into groups?
A) Small businesses
B) Leading-edge Fortune 500 businesses
C) The public sector
D) The private sector
E) Non-profit charitable organizations
Answer:
30) What is the job evaluation method that intuitively rates each job relative to all other jobs,
usually based on some overall factor like "more important" or "of greater value or worth"?
A) Critical incidence method
B) Factor comparison method
C) Classification method
D) Point method
E) Ranking method
Answer:
Type: MC
31) The classification/grading method of job evaluation involves categorizing jobs into which of
the following?
A) Teams
B) Groups
C) Hierarchies
D) Occupations
E) Departments
Answer:
Type: MC
8
32) Which of the following is another way of categorizing jobs when undertaking the job
classification/grading method, other than using class descriptions and placing jobs into classes
based on their correspondence to these descriptions?
A) Draw up a set of classifying rules for each class and then categorize the jobs according to
these rules.
B) Rank jobs by classifying factors.
C) Rank jobs against other classes of jobs.
D) Assign points to various job classes.
E) Rank jobs from lowest to highest class.
Answer:
Type: MC
33) Which of the following is mentioned in the textbook as a disadvantage associated with using
the job classification/grading method in job evaluation?
A) Not all jobs will be grouped into classes.
B) This method creates an unmanageable amount of jobs.
C) Most companies do not have readily available job descriptions.
D) Considerable judgment is required in applying the class or grade descriptions.
E) Most employers do not end up classifying jobs anyway.
Answer:
Type: MC
34) Which job evaluation method identifies compensable factors in a job as well as the degree to
which each of these factors is present in the job and then calculates a value for each job?
A) Factor comparison method
B) Ranking method
C) Point method
D) Hay plan method
E) Job classification method
Answer:
Type: MC
35) According to the textbook, the most important function of a job evaluation committee is
which of the following?
A) Determining contracts for each job
B) Determining pay ranges for each job
C) Actually evaluating the total rewards for each job
D) Determining the job classes for each job
E) Actually evaluating the worth of each job
Answer
Type: MC
9
36) According to the textbook, which of the following are the most popular job evaluation
methods that can be applied to compensation decisions?
A) The classification and ranking methods
B) The classification and point methods
C) The ranking and point methods
D) The factor comparison and point methods
E) The ranking and factor comparison methods
Answer:
Type: MC
37) What are the three stages in establishing pay rates as discussed in the textbook?
A) Job evaluation, conducting salary surveys, and combining job evaluation and salary survey
results
B) Consulting with industry, determining salaries for executive positions, and deciding on a
benefits plan
C) Pricing of benchmark jobs, collecting data on insurance benefits, and evaluating benefits
packages
D) Collecting data on insurance benefits, creating a salary survey, and hiring external consultants
E) Collecting data used to price every job in the organization, working with a compensation
consultant, and working with a benefits specialist
Answer:
Type: MC
38) Which of the following is comprised of jobs of approximately the same value or importance,
as determined by job evaluation?
A) Salary grade
B) Wage grade
C) Pay grade
D) Classification grade
E) Point grade
Answer:
Type: MC
39) The argument that the way in which most compensation surveys are constructed, interpreted,
and used leads almost invariably to a situation in which firms set higher wages than they
otherwise might is reflective of which of the following terms?
A) Employee discrimination
B) Upward bias
C) Systemic undervaluing
D) Stereotyping of data
E) Report bias
Answer:
Type: MC
10
40) Which of the following is an example of an informal compensation survey conducted by an
employer?
A) Governmental agency surveys
B) Professional association surveys
C) Telephone surveys
D) Industry-wide surveys
E) Commercial firm surveys
Answer:
Type: MC
41) According to the textbook, which of the following conducts five compensation surveys
annually covering executive; management; professional, supervisory, and sales; information
technology; and administrative and support positions?
A) Statistics Canada
B) Statistics Ontario
C) Statistics Toronto
D) The Toronto Board of Trade
E) The Toronto Board of Commerce
Answer:
Type: MC
Learning Objective: 11.6: Describe the elements of compensation for special positions:
executives, managers, and professionals.
42) Which of the following is the term used to describe the graphical depiction of the
relationship between the value of the job and the average wage paid for that job?
A) Pay grade chart
B) Wage curve
C) Rate range graph
D) Wage chart
E) Pay grade curve
Answer:
Type: MC
43) According to the textbook, assigning pay rates to each pay grade (or to each job) is usually
accomplished with which of the following?
A) A rate range
B) A job analysis
C) A wage grade
D) A wage curve
E) A performance appraisal
Answer:
Type: MC
11
44) The purpose of the wage curve is to show which of the following?
A) The relationship between the value of the job and the employee's performance
B) The relationship between the value of the job and the current average pay rates for each job or
grade
C) The relationship between the value of the job and the company's performance
D) The relationship between the current average pay rates for each job or grade and the
employee's satisfaction
E) The relationship between the current average pay rates for each job or grade and the
employee's seniority
Answer:
Type: MC
45) Pay ranges are a series of steps or levels of pay within a pay grade. According to the
textbook, what are the ranges usually based on?
A) Peer appraisals
B) Years of education
C) Years of service
D) Teamwork
E) Amount of responsibility
Answer:
Type: MC
46) An advantage of using pay ranges for each pay grade is that it allows for which of the
following?
A) Age differences
B) Gender differences
C) Appraisal biases
D) Employer inflexibility
E) Performance differences between employees within the same grade
Answer:
Type: MC
47) What is the term for reducing the number of salary grades and ranges into just a few wide
levels?
A) Broadbanding
B) Job specialization
C) Departmentalization
D) Job classification
E) Position grading
Answer:
Type: MC
12
48) According to the textbook, what is the basic advantage of broadbanding?
A) Facilitates internal and external equity
B) Encourages human rights adherence by the employer
C) Eliminates upward bias in job evaluation
D) Injects greater flexibility into employee compensation
E) Works well with highly specialized jobs
Answer:
Type: MC
49) A major financial institution is moving from nine levels in the organization to six. Another
term for this is
A) broadbanding.
B) job specialization.
C) departmentalization.
D) job classification.
E) position grading.
Answer:
Type: MC
50) Describe two advantages of broadbanding?

Answer: Two points for two of the following:
Broadbanding's basic advantage is that it injects greater flexibility into employee compensation.
The new broad salary bands can include both supervisors and those reporting to them.
Broadbanding also facilitates less specialized, boundaryless jobs and organizations. Less
specialization and more participation in cross-departmental processes generally mean enlarged
duties or capabilities and more possibilities for alternative career tracks.
Type: ES
51) Underpaid employees should have their wages raised to which of the following?
A) An external industry pay grade system
B) The midpoint of an employee's pay grade
C) The minimum of the rate range for their pay grade
D) The maximum of the rate range for their pay grade
E) The maximum of the next highest pay grade
Answer:
Type: MC
13
52) What is the term for rates of pay that are above the pay range maximum?
A) Red circle pay rates
B) Premium job pay rates
C) Excessive pay rates
D) Overage pay rates
E) Outlier pay rates
Answer:
Type: MC
53) ABC Healthcare has a pay range for its occupational therapists which is $55,000 to $75,000.
A small ground of employees who merged with the company during a recent acquisition are paid
$80,000 and above. What is the term to define their circumstance?
A) Red circle pay rates
B) Premium job pay rates
C) Excessive pay rates
D) Overage pay rates
E) Outlier pay rates
Answer:
Type: MC
54) Job evaluation committees do not include managers because this would constitute a conflict
of interest.
Answer:
Type: TF
55) A benchmark job is a job held by the top performers of a company.

Answer:
Type: TF
56) Suzy recently joined an organization as an IT Consultant. The pay range for the role is
$60,000 to $80,000. What is the minimum amount that Suzy should be paid?
A) $50,000
B) $60,000
C) $70,000
D) $80,000
E) $90,000
Answer:
Type: MC
14
57) The point method of job evaluation involves identifying several compensable factors, each
having several degrees, as well as the degree to which each of these factors is present in the job.
Answer:
Type: TF
58) According to the textbook, most employers rely heavily on formal or informal surveys of
what other employers are paying.
Answer:
Type: TF
59) Point systems used in job evaluation are not very time consuming or difficult to develop.
Answer:
Type: TF
60) A pay grade comprises jobs of varying value and importance to the company.
Answer:
Type: TF
61) Dominique has just been hired as the HR manager for a small but growing manufacturing
company. Up until now, pay rates have been determined at the time of hire and are loosely based
on "market" pay rates. Dominique has already noticed that some employees don't think the rates
of pay are fair. How should Dominique go about establishing pay rates that are both externally
and internally equitable? In your answer, indicate the issues that may arise if this is not done.
Answer: Three points each for identifying and describing each of the stages:
1. Determining job worth through a method of job evaluation to insure internal equity
2. Conducting wage/salary surveys to determine external equity
3. Combining the information to establish pay rates for each job.
One point for a good rationale for doing this (reduce turnover, reduce adverse impact on
motivation, etc.).
Type: ES
62) Identify the four major compensable factors used in most point method job evaluation
plans and identify and describe two sub-factors that might be used for each of the four
major compensable factors.
Answer: One point for each major factor plus up to one and a half (1.5) points for the
identification and brief description of relevant sub-factors for each factor: skill (education,
experience, interpersonal skills), effort (physical, mental), responsibility (people, tools,
equipment, budgets), and working conditions (physical Environment, travel)
Type: ES
15
63) What are "pay-for-knowledge" systems also known as when they are used for management
and professional employees?
A) Education-based pay
B) Skill-based pay
C) Competency-based pay
D) Experience-based pay
E) Performance-based pay
Answer:
Type: MC
Learning Objective: 11.7: Discuss competency-based pay.
64) Pay-for-knowledge systems meet pay equity requirements in Canada.

Answer:
Type: TF
65) Executive compensation tends to emphasize performance incentives less than typical
employee pay plans.
Answer:
Type: TF
66) Describe pay-for-knowledge compensation systems as they relate to competencies and

describe what a pay-for-knowledge program should include.
Answer: One point for defining pay-for-knowledge systems.
One point each for defining core competencies, functional competencies, and behavioural
competencies.
Two points each for stating the three requirements of a pay-for-knowledge program:
competencies and skills, new and different competencies, and on-the-job training.
Type: ES
67) According to the textbook, which of the following is the cornerstone of executive
compensation because it is the element on which the others are layered?
A) Prestige
B) Benefits
C) Incentives
D) Bonuses
E) Salary
Answer:
Type: MC
16
68) In practice, traditional methods of job evaluation are rarely used for professional jobs such as
scientists and engineers, because it is so difficult to identify compensable factors and degrees of
factors that meaningfully capture the value of professional work.
Answer:
Type: TF
69) Most employers use a(n) ________ approach to determine compensation for professional
jobs.
A) market-pricing
B) job evaluation
C) internal benchmarking
D) incentive-based
E) wage gap
Answer:
Type: MC
70) Sarah works for a software development company. Her CEO has asked her to make a salary
recommendation with regard to incoming engineers. She is most likely to use which approach?
A) Market-pricing
B) Job evaluation
C) Internal benchmarking
D) Incentive-based
E) Wage gap
Answer:
Type: MC
71) Tyrique has been asked to make a recommendation to his CEO with regard to how to pay
construction workers being hired for a specific project. He is most likely to use which approach?
A) Skill-based pay
B) Job evaluation
C) Internal benchmarking
D) Market pricing
E) Wage gap
Answer:
Type: MC
17
72) There are five elements in an executive/managerial compensation package: salary, benefits,
short-term incentives, long-term incentives, and perquisites.
Answer:
Type: TF
18

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Human Resources Management in Canada, 14e (Dessler)

Chapter 11 Strategic Pay Plans

23) What does job evaluation determine?

50) Describe two advantages of broadbanding?

55) A benchmark job is a job held by the top performers of a company.

64) Pay-for-knowledge systems meet pay equity requirements in Canada.

66) Describe pay-for-knowledge compensation systems as they relate to competencies and

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