Quiz 3

Question 1

T or F: Compensation surveys provide the data for translating a policy into pay levels, pay mix and structures.

Answer 1

True

Question 2

T or F: A compensation survey is the systematic process of collecting & making judgements about the compensation paid by other employers

Answer 2

True

Question 3

T or F: The first major decision in designing pay structures pertains to defining the purpose of a compensation survey.

Answer 3

False

Question 4

T or F: In most organizations, the responsibility for managing the compensation survey lies with the chief financial officer.

Answer 4

False

Question 5

T or F: One of the most important questions asked while designing a compensation survey is “who should be involved in the survey design?”

Answer 5

True

Question 6

T or F: “Trending” is a process by which jobs considered substantially equal for pay purposes are grouped together

Answer 6

False

Question 7

T or F: A market pay line is a way to set the external competitive position by adjusting the pay policy line.

Answer 7

False

Question 8

T or F: Grades and ranges offer managers the flexibility to deal with pressures from external markets and within the organization.

Answer 8

True

Question 9

T or F: Because future cost estimates may be difficult to project, it is imperative that benefits administrators reduce uncertainty.

Answer 9

True

Question 10

T or F: Benefits need not be externally equitable.

Answer 10

False

Question 11

T or F: Any evaluation of employee benefits must be placed in the context of total compensation costs.

Answer 11

True

Question 12

T or F: Claims processing determines whether an employer has an obligation to fulfil a promise of payment when an employee asserts that disability or hospitalisation has occurred.

Answer 12

True

Question 13

T or F: Disability income payments cannot be limited to some maximum percentage of income.

Answer 13

False

Question 14

T or F: In a defined benefit plan, employees assume the risks associated with changes in inflation and interest rates.

Answer 14

False

Question 15

MC: Which of the following statements about external competitiveness is true?

Answer 15

External competitiveness refers to an organizations pay relative to other organizations

Question 16

MC: External competitiveness is expressed in practice by:

Answer 16

Setting a pay level that is above, below or equal to competitors

Question 17

MC: The mix of the various types of payments that make up total compensation is known as:

Answer 17

Pay forms

Question 18

MC: The average of the array of rates paid by an employer- i.e. the sum of base, bonuses, benefits and options- is referred to as:

Answer 18

Pay level

Question 19

MC: Which of the following is an assumption of economic theories of labour markets?

Answer 19

People are homogenous and therefore interchangeable

Question 20

MC: The marginal revenue of labour refers to:

Answer 20

The additional output from the employment of one additional person

Question 21

MC: The additional income generated when a firm employs one additional unit of human resources, with other production factors held constant is known as the marginal ___

Answer 21

Revenue of Labour

Question 22

MC: The additional output associated with the employment of one additional human resources unit, with other production factors held constant, is known as the ___

Answer 22

Marginal product of labour

Question 23

MC: Which of the following statements about employee benefits is true?

Answer 23

Employee benefits are mostly not taxable

Question 24

MC: Which method of financing benefit plans allows costs to be shared between employer and employee?

Answer 24

Contributory

Question 25

MC: Which of the following factors relate to employee preferences in determining desirable components of a benefits package?

Answer 25

Percieved fairness