The By Product of Supply and Demand in The Labor Market

UCLA The By Product of Supply and Demand in The Labor Market Questions

1. Compensation is:

The best way to motivate employees

 The by-product of supply and demand in the labor market

Part of the relational return for the employee value proposition.

A combination of cash, benefits and relational returns.

 2. Variable pay _____.

is paid in the form of bonus, merit increases and stock options is primarily used for commissioned employees in sales roles is a way to help manage the ebb and flow of business returns has decreased in popularity over the past several years

3. When designing a compensation strategy with a large mix of variable pay, employers should:

Ensure they are not promoting unethical behaviors.

Define the minimum amount that is promised to employees.

Put a larger amount into stock options for employees.

Keep the variable pay discretionary.

4. The degree to which pay influences individual and aggregate motivation among employees at any point in time is referred to as a(n):

sorting effect.

incentive effect.

turnover effect.

directional effect.

5. Gamblers Inc. is a company that views high risk with high gain and they compensate their sales employees with a competitive commission structure in hopes to attract and retain only the best salesforce. Gamblers Inc. looks for employees who are driven, have good customer service skills and aren’t afraid of taking a chance. Employees who are risk averse and hesitate to bet big, don’t last. This is an example of: A. B. C. D.

 Incentive effect

Variable incentives

Sorting effect

Employee contributions

6. Managers seek internal alignment within their organization by:

matching the competitors' pay rates.

following FLSA guidelines.

using fair merit increases.

paying on the basis of similarities or differences among jobs.

7. Whole Foods' shared-fate philosophy of limiting executive salaries to no more than 19 times the average pay of full-time employees is an example of which strategic pay decision?

External competitiveness

Employee contributions

Corporate responsibility

Internal alignment

8. In regards to virtuous and vicious cycles, when organization performance declines

a virtuous circle may be created.

performance-based pay plans do not pay off.

managers must avoid changing the pay practices.

employee attrition rate declines considerably.

9. Which of the following is not one of the four employee behaviors that HR strategy works to achieve?

Attracting employees to join the organization.

Getting employees to perform well in their jobs.

Retaining good employees after they join.

Furthering employees financial understanding of work impact.

10. Michael is a Compensation Manager at ABC Company and he is leading a project to help define the company’s total rewards strategy. He has included managers from various areas of the business to help provide broad perspectives. Based on the feedback from the managers, Michael realizes that the needs of their employee-base are diverse and wide-ranging. In step one of the compensation strategy process, assess total compensation implications, Michael should specifically focus attention on:

Culture and values reflected in the pay system

Social and political context

Employee preferences

Peer competitive dynamics

11. Which of the following is not one of the three tests you should consider when determining if your compensation strategy provides a competitive advantage?

Is it objective?

Does it add value?

Does it differentiate?

 Is it aligned?

12. Content refers to the

worth of the work.

work performed in a job and how it gets done.

 relative contribution of the work to the organization objectives.

different pay level policies.

13. Most unions prefer which of the following?

Small pay differences among jobs and seniority-based promotions

Large pay differences among jobs and seniority-based promotions

Large pay differences among jobs and performance-based promotions

Equal pay raises for employees

14. Nina is a high-performing individual who works best alone. Which of the following companies is the most appropriate for her?

A. A company that uses an egalitarian pay structure

B. A company that pays its employees based on their seniority rather than their performance

C. A company that uses a hierarchical pay structure to pay its employees based on performance

D. A company that pays all its employees the same amount of money

15. Which theory predicts that individual performance will be maximized when the pay differentials between job levels is large?

Tournament theory

Equity theory

 Marginal productivity theory

Reinforcement theory

16. The process of collecting information that identifies the similarities and differences among jobs is known as _____. job performance job analysis use value evaluation exchange value analysis

17. When determining how to value your jobs to create an internal job structure of relative value, you should follow the below sequence:

Job analysis, job evaluation, job description, job structure

Job description, job analysis, job structure,

job evaluation Job analysis, job description, job evaluation, job structure

Job evaluation, job analysis, job description, job structure

18. Job analysis is important for both managers and employees because it is

 the basis for a work-related rationale for pay differences.

an important result of the job evaluation process.

required under the Fair Labor Standards Act.

required for increasing employee turnover rates.

19. Engineering, sales, and maintenance are examples of _____.

tasks job families job dimensions appraisals

20. The ADA has directly led many employers to _____.

A. only use the task inventory method for job analysis

B. only use the PAQ method for job analysis

C. modify special benefits so that allowances can be made for people with disabilities as required by the law

D. modify the format of their job descriptions to specifically call out the essential elements

21. One of the more readily accessible sources for generic job descriptions is the _____.

Bureau of National Affairs

Department of Labor

O*NET

Dictionary of Occupational Titles

22. Gina announces that she could lose her job as her company is considering to offshore her job to another country. In this case, Gina is most likely to be working in a job that requires her to: devise advertising campaigns for his or her company.

curate art pieces in a museum.

promote the image of his company to the public.

codes and audits data for accuracy

23. Which of the following would likely create an undue hardship under the ADA for an employer:

A. Allowing an employee to have a flexible schedule to accommodate frequent doctor’s appointments.

B. Purchasing large computer monitors for an employee who has impaired vision.

C. Asking a small startup company to spend $30,000 on automatic door openers.

D. Allowing an employee to bring a service animal to the workplace, providing an area for the animal and allowing breaks to take the animal outside to use the bathroom.

24. Apart from being reliable, a job analysis is also considered valid if:

 the results of the job analysis are consistent among various analysts.

 the results of the job analysis are consistent among various methods.

the job analysis is found to be acceptable.

the results converge among various sources of data and methods.

25. _____ is the process of systematically determining the relative worth of jobs for the purpose of creating an organization's job structure.

Performance evaluation

Job restructuring

Job evaluation

Point factor evaluation

26. The exchange value of a job is its _____.

content value

performance value

internal market value

external market value

 27. Which of the following statements is true of a job evaluation plan?

It is developed using benchmark jobs and then applied to nonbenchmark jobs.

It excludes the pay decisions made by a company.

It provides the impetus to increase job levels and titles.

It is always carried out separately for major domains of work.

28. KayDen Corp., a small organization with 15 employees, conducts job evaluation using the least expensive method for the first time. In this case, KayDen is most likely to have used the _____.

classification method

point method

ranking method

Hay plan

29. A job description is compared to class descriptions in the _____ of job evaluation.

 Position Analysis Questionnaire method

point method

Hay Group Guide Chart—Profile MethodSM

classification method

30. Which of the following is a disadvantage of the point method?

It can leave too much room for manipulation.

It can become bureaucratic and rule-bound.

It does not allow for comparisons.

 It does not communicate what is valued.

 31. Most compensable factor scales have _____ degrees.

10-12

4-8

1-3

20-40

32. Which of the following is an advantage of skill-based pay plans?

They guarantee a low rate of employee turnover.

They aid in deploying workers in a way that better matches the work flow.

They are less expensive than job-based plans.

They are viewed more favorably by courts than any other type of pay plans.

33. Compensable factors, skill blocks, and competency sets are used for:

assessing relative value.

collecting work content information.

determining what to value.

completely different purposes.

34. _____ is a crucial factor that affects the perception of fairness of a skill-based plan.

The design of the certification process

The number of compensable factors

The extent of alignment with an organization's strategy

 The number of weights and factor degrees

35. Who among the following is examining the validity of a job evaluation?

Keira, who is measuring the degree to which the job evaluation plan matches an agreed-upon pay structure for benchmark jobs

Laila, who is measuring the effectiveness of a formal appeals process

Keith, who is surveying employee attitudes about the job evaluation plan

Rita, who is requesting the management for a reanalysis and a reevaluation of the required skills as she feels her job is evaluated incorrectly

Short Answer Please note: You must write a MINIMUM of 200 words per question. Points will be deducted for writing less than 200 per question, but please feel free to write much more.

1. Pay objectives guide the design of the pay system and are standards for judging success. They are made up of 4 key elements: efficiency, fairness, ethics, and compliance. Describe each of the 4 elements (i.e. what do they each mean?).

2. Describe the differences between job analysis, job description, and job specification (if it is easier, list the definitions of each term and discuss).

3. List an advantage and a disadvantage of each of the following person-based structures: job based, skill based, and competency based.