Compensation & Benefits (3)

Front 1

The parable of the vineyard owner and compensation paid to the laborers illustrated:

Back 1

ignorance of the owner towards the content of work.

Front 2

Common bases for modern pay structures include all but which of the following?

Back 2

External competitiveness and equity

Front 3

_____ should support the organization strategy, support the work flow and motivate behavior toward organization objectives.

Back 3

The pay structure

Front 4

In the strategic approach to pay, internal alignment is the _____ issue to be decided.

Back 4

second

Front 5

Which of the following is not part of the description of a pay structure?

Back 5

Performance pay

Front 6

Lockheed's structure of 6 levels of engineers illustrates all of the following except ___________.

Back 6

external equity

Front 7

Which of the following is an not intention of differentials?

Back 7

Motivating worker by productivity incentives

Front 8

When employees can see the relationships between their work, the work of others and the organization's objectives, this is called

Back 8

line-of-sight.

Front 9

The most common bases for determining internal structures are:

Back 9

work content and its value

Front 10

Content refers to the

Back 10

work performed in a job and how it gets done.

Front 11

A pay structure based upon the relative contribution of skills, tasks and responsibilities to the organization's goals is called the _____ approach.

Back 11

value

Front 12

The pay for the job of accountant in London, Los Angeles and Berlin is likely to be different due to

Back 12

exchange value.

Front 13

Most job structures are best described as

Back 13

both person- and job-based.

Front 14

Organization factors that shape internal pay structures include all but ____.

Back 14

economic pressures

Front 15

Organization factors that shape internal pay structures include all but ____.

Back 15

culture and customs

Front 16

Marginal productivity theory argues that employers pay ______.

Back 16

use value

Front 17

Which of the following is not a factor in defining equal work in the Equal Pay Act?

Back 17

Knowledge

Front 18

The effect of "living wage" laws is ___ pay structures. _____.

Back 18

flatter more compressed

Front 19

Unions prefer which of the following?

Back 19

Small pay differences between jobs and seniority-based promotions

Front 20

The modern concept of a "living wage" is most similar to ____.

Back 20

just wage doctrine

Front 21

Which of the following is not a component of human capital?

Back 21

Seniority level

Front 22

Pay for temporary workers is based upon

Back 22

the internal structure of their home employer.

Front 23

Which of the following is not one of the changes in organization design that may affect pay structures?

Back 23

Dual careers

Front 24

The number of job and pay levels in an organization is an example of ____.

Back 24

human resource policies

Front 25

Which of the following concepts best explains why newly hired workers may be paid more than longer tenure workers performing very similar work?

Back 25

Internal labor market

Front 26

Which of the following pay structure procedures would not increase perceptions of pay fairness?

Back 26

Consultants develop the pay structure

Front 27

James says, "I don't trust the way the company determines pay rates in my department." James is most concerned about ____.

Back 27

procedural justice

Front 28

Victoria says, "I don't like it that those jobs that are a lot like mine pay more than my job." Victoria is expressing concern about ____.

Back 28

distributive justice

Front 29

If a manager wants employees to accept the organization's pay structure, the best strategy is to

Back 29

explain to them how pay was determined.

Front 30

Which of the following is not a characteristic of an aligned pay structure?

Back 30

Complies with the Fair Labor Standards Act

Front 31

All of the following statements regarding aligned structures are true except they _____________

Back 31

are externally competitive.

Front 32

The well-defined jobs at McDonald's and their small differences in pay are an example of a(n) _____ internal pay structure.

Back 32

closely tailored

Front 33

Organizations in a turbulent and unpredictable environment requiring flexibility in jobs and work processes are likely to be more successful with a(n) _____ internal pay structure.

Back 33

loosely coupled

Front 34

Egalitarian pay structures have all but which of the following characteristics?

Back 34

Supports individual performers

Front 35

Hierarchical pay structures have all but which of the following characteristics?

Back 35

Supports cooperation

Front 36

Many levels is to opportunities for promotion as fewer levels is to ___________

Back 36

cooperation.

Front 37

A problem faced by some organizations using an egalitarian pay structure is ____.

Back 37

difficulty in external recruitment

Front 38

The need to explain the rationale for compensation choices to employees is consistent with ____________ theory.

Back 38

equity

Front 39

Which of the following is not a comparison employees use to judge the fairness of their organization's pay structure?

Back 39

Comparing their pay raises to others in their organization

Front 40

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

Back 40

Tournament

Front 41

When cooperation is important for successful organization performance, the best form of pay is ____.

Back 41

egalitarian

Front 42

There is evidence that a relatively poor performing team member's performance will improve under a(n) _____ pay structure.

Back 42

egalitarian

Front 43

Which of the following is not true?

Back 43

Tournament theory raises performance of the top performers but reduces motivation of poorer performers.

Front 44

The institutional model ____.

Back 44

refers to firms that copy innovative practices adopted by other organizations

Front 45

In firefighting and rescue squads and global software design teams, a(n) _____ structure is associated with higher performance.

Back 45

egalitarian

Front 46

Which of the following are related to greater performance when the work flow depends on individual contributors?

Back 46

Hierarchical

Front 47

All of the following except __________ are consequences of an aligned structure.

Back 47

increase cooperation

Front 48

Internal alignment is sometimes called internal equity.

Back 48

True

Front 49

The attitudes of the workers in the vineyard parable may be explained by equity theory.

Back 49

True

Front 50

A pay structure refers to the array of pay rates for different work or skills within a single organization.

Back 50

True

Front 51

Pay structure refers to the array of pay rates for different work or skills between competing companies.

Back 51

False

Front 52

A well-designed pay structure is the major factor affecting an organization's external competitiveness.

Back 52

False

Front 53

Pay differences between levels in an organization are called differentials.

Back 53

True

Front 54

The content and value of work are the most common bases for determining internal structures.

Back 54

True

Front 55

Exchange value is always higher than use value.

Back 55

False

Front 56

The content of a job refers to the relative contribution of skills, tasks and responsibilities to the organization's goals.

Back 56

False

Front 57

Job structures based on relative contribution may include market rates.

Back 57

True

Front 58

A job-based structure focuses on the skills, knowledge and competencies employees possess.

Back 58

False

Front 59

Both external and organizational factors shape internal pay structures.

Back 59

True

Front 60

According to marginal productivity theory, employers pay use not exchange value.

Back 60

True

Front 61

Supply and demand for labor, but not supply and demand for products and services affect internal structures.

Back 61

False

Front 62

Wage legislation affects the wage structure at both the minimum and the maximum pay level.

Back 62

True

Front 63

Technology influences organization design, the work and ultimately, the pay structure.

Back 63

True

Front 64

Self-managed work teams and outsourcing can affect the pay structure.

Back 64

True

Front 65

An organization's pay structure is affected more by the pay levels and benefits offered by competitors than its human capital.

Back 65

False

Front 66

Pay structures with more levels, though relatively small pay differences between levels, offer a sense of career progress.

Back 66

True

Front 67

The phenomena of newly hired engineers receiving salaries higher than longer tenure engineers in an organization is consistent with the concept of internal labor markets.

Back 67

True

Front 68

Experienced workers judge the fairness of their pay by developing an intuitive sense of what is fair pay.

Back 68

False

Front 69

When employees compare the fairness of their pay, they focus primarily on how their job compares with similar jobs in other organizations.

Back 69

False

Front 70

Distributive justice is more important than procedural justice for employee acceptance of their pay.

Back 70

False

Front 71

Recent pay research shows that employee participation is the most important factor influencing employee perceptions of procedural justice.

Back 71

False

Front 72

Organizations are more likely to be successful when their pay structures are in internal alignment.

Back 72

True

Front 73

Egalitarian pay structures send the message that the organization values differences in work content, individual skills and contributions to the organization.

Back 73

False

Front 74

CEOs of organizations with egalitarian pay structures usually have higher salaries than CEOs in hierarchical pay structures.

Back 74

False

Front 75

Egalitarian pay structures may be characterized as delayered or compressed.

Back 75

True

Front 76

Egalitarian pay structures are built using person-based criteria.

Back 76

False

Front 77

A potential problem in egalitarian pay structures is high performing employees may feel underpaid and quit.

Back 77

True

Front 78

Equity theory research shows that an egalitarian pay structure will be seen as more fair than a hierarchical structure.

Back 78

False

Front 79

Teachers whose pay is relatively low in their pay structure will feel their pay structure is fair if they work in a high-paying district.

Back 79

True

Front 80

According to recent research, employees make internal pay comparisons more frequently than external.

Back 80

False

Front 81

Research shows that one quarter to one third of employees question the fairness of their pay frequently.

Back 81

True

Front 82

Greater pay dispersion is related to lower turnover among executives.

Back 82

False

Front 83

The institutional model predicts that it is best to wait for other organizations to adopt innovative practices.

Back 83

False

Front 84

There is little evidence that adding additional levels and titles to a career path but without significant pay increases, motivate employees.

Back 84

False

Front 85

Labor unions support small pay differentials.

Back 85

True

Front 86

Write a short note on pay structure.

Back 86

Pay structure refers to the array of pay rates for different work or skills within a single organization. The number of levels, the differentials in pay between the levels, and the criteria used to determine those differences describe the structure.

Front 87

List and explain the various aspects of an internal pay structure.

Back 87

An internal pay structure can be defined by (1) the number of levels of work, (2) the pay differentials between the levels, and (3) the criteria used to determine those levels and differentials.(1) Number of Levels - One feature of any pay structure is its hierarchical nature: the number of levels and reporting relationships. Some are more hierarchical, with multiple levels; others are compressed, with few levels.(2) Differentials - It may be defined as the pay differences among levels. One intention of differentials is to motivate people to strive for promotion to a higher-paying level.(3) Criteria: Content and Value - Work content and its value are the most common bases for determining internal structures. Content refers to the work performed in a job and how it gets done. Value refers to the worth of the work: its relative contribution to the organization objectives. A structure based on content typically ranks jobs on skills required, complexity of tasks, problem solving, and/or responsibility. In contrast, a structure based on the value of the work focuses on the relative contribution of these skills, tasks, and responsibilities to the organization's goals.

Front 88

State the theory of marginal productivity.

Back 88

The theory of marginal productivity says that employers pay use value. Unless an employee can produce a value equal to the value received in wages, it will not be worthwhile to hire that worker. One job is paid more or less than another because of differences in relative productivity of the job and/or differences in how much a consumer values the output.

Front 89

What is the significance of internal labor markets in an organization?

Back 89

Internal labor markets combine both external and organizational factors. Internal labor markets refer to the rules and procedures that (1) determine the pay for the different jobs within a single organization and (2) allocate employees among those different jobs.

Front 90

How do employees judge the fairness of their pay?

Back 90

Employees judge the fairness of their pay through comparisons with the compensation paid to others for work related in some fashion to their own. Accordingly, an important factor influencing the internal pay structure is its acceptability to the employees involved. Employees make multiple pay comparisons to assess the fairness of an internal pay structure. They compare both with other jobs in the same internal structure and with the pay for their job in the external market (i.e., at competing employers).Two sources of fairness are important: the procedures for determining the pay structure, called procedural justice; and the results of those procedures—the pay structure itself—called distributive justice.Procedural justice refers to the process by which a decision is reached: the right to an attorney, the right to an impartial judge, and the right to receive a copy of the arresting officer's statement. Distributive justice refers to the fairness of the decision: guilty.

Front 91

According to the text, when are pay procedures perceived as being fair?

Back 91

Pay procedures are perceived as fair (1) if they are consistently applied to all employees, (2) if employees participated in the process, (3) if appeals procedures are included, and (4) if the data used are accurate.

Front 92

Explain tailored and loosely coupled structures.

Back 92

Tailored structure - A low-cost, customer-focused business strategy is supported by a closely tailored structure. Jobs are well defined with detailed tasks or steps to follow. The pay structures are similar. All the jobs are very well defined in order to eliminate variance in how they are performed. It seems hard to make a mistake in these jobs. Differences in pay among jobs are very small.Loosely coupled structure-This business strategy requires constant product innovation and short product-design-to-market cycle times. The competitive environment is turbulent and unpredictable. No steps at all are laid out. Employees work on several teams developing several products at the same time. The pay structures are more loosely linked to the organization in order to provide flexibility.

Front 93

What are the advantages of an egalitarian structure over a hierarchical structure?

Back 93

The advantages of an egalitarian structure over a hierarchical structure are as follows:

i. An egalitarian structure, several levels of work are removed so that all employees at all levels become responsible for a broader range of tasks but also have greater freedom to determine how best to accomplish what is expected of them. Hierarchical structures have many levels of work.

ii. An egalitarian structure sends the message that all employees are valued equally. The assumption is that more equal treatment will improve employee satisfaction, support cooperation, and therefore affect workers' performance.

iii. Egalitarian structures have a sizable effect on individual performance. A mediocre performer improves more on a team with an egalitarian structure than on a team with a hierarchical structure. The egalitarian pay structure reflects a more flexible, supportive organization culture in which a mediocre employee is given the training and support needed to improve.

Front 94

Write a short note on institutional model.

Back 94

The institutional model predicts that very few firms are "first movers"; in this model, firms copy innovative practices after innovators have learned how to make the practices work. The copiers have little concern for alignment and even less for innovative pay practices.

Front 95

Describe the importance of an internal structure.

Back 95

Internal structure is important for an organization because it brings efficiency, fairness, and compliance to the pay structure.

Efficiency - (i) An aligned structure can lead to better organization performance. If the structure does not motivate employees to help achieve the organization's objectives, then it is a candidate for redesign. (ii) Internal pay structures imply future returns. The size of the differentials between the entry level in the structure and the highest level can encourage employees to remain with the organization, increase their experience and training, cooperate with co-workers, and seek greater responsibility. (iii) The number of levels and titles in a career path may be rewarding beyond the pay attached to the titles.

Fairness - (i) Departures from an acceptable wage structure will result in turnover, grievances, and diminished motivation. (ii) If fair (i.e., sizable) differentials among jobs are not paid, individuals may harbor ill will toward the employer, resist change, change employment if possible, become depressed, and "lack that zest and enthusiasm which makes for high efficiency and personal satisfaction in work." (iii) Labor unions, argue for only small differentials within pay levels and for similar work, in the belief that more egalitarian structures support cooperation and commitment and improve performance.

Compliance - Internal pay structures must comply with the regulations of the countries in which the organization operates.