Chapter 9

Question 1

Compensating differential

Answer 1

A higher compensation level offered by an employer because on undesirable aspects of the employment (cost of living, poor working conditions, poor industry rep)

Question 2

Sources of compensation data - In house surveys

Answer 2

• Informal surveys - usually simple and quick but have poor reliability and validity
• Formal surveys - can be undertaken by internal staff or contracted
• Main advantage of in-house surveys is that the employer controls the process, ensuring quality and data

Question 3

Third-Party survey

Answer 3

Advantages
- ease and cost
Disadvantages
- May not cover desired jobs, characteristics or employers
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Question 4

Conducting compensation surveys (4)

Answer 4

1. Identify the jobs that are to be surveyed
2. Determine the info to be collected about each job
3. Identify which employers are to be surveyed
4. Determine the method of collection

Question 5

Determine how to collect data (4)

Answer 5

1. Personal interview
2. Telephone interview
3. Questionnaire
4. Internet surveys

Question 6

mean or simple average

Answer 6

Measure of central tendency of a set of values derived by summing the values and dividing by the number or values

Question 7

Weighted mean or average

Answer 7

Measure of central tendency of a set of values that adjusts the average based on the number of cases to which each value pertains

Question 8

Median

Answer 8

The middle value in an ordered list of values

Question 9

Quartiles/deciles

Answer 9

Division of an ordered list of values into either 4 or 10 groups

Question 10

Interquartile range

Answer 10

Measure of pay dispersion across employers, calculated by dividing the difference between the 25 and u5 percentile values of the 25 percentile

Question 11

Compa-ratio

Answer 11

Measure of distribution of employees within their pay range calculated by dividing the mean base pay by the midpoint of the pay range