CH8 Flashcards
(30 cards)
What is the first major decision in setting externally competitive pay?
Specify the employer’s competitive pay policy.
What is the second major decision in setting externally competitive pay?
Define the purpose of the survey.
What is the final major decision in setting externally competitive pay?
Design grades and ranges or bands.
What does the Employment Cost Index allow a firm to do?
It allows a firm to compare changes in its average costs to an all-industry or specific-industry average.
When specifying relevant markets, which area should NOT be included?
Total revenues.
Who is typically responsible for managing a pay survey in most organizations?
The compensation manager.
What is a major source of publicly available pay data in the United States?
Bureau of Labor Statistics.
A company using a skill-based pay system prices the job of lead assembler between $10 and 22 per hour. Survey data showed that the job of assembler averages $10 per hour in the job of assembly supervisor averages 22 per hour. The company is using the blank method of job matching.
Low High
Survey data showed that the job of assembler averaged $10 per hour and the job of assembly supervisor averaged $22 per hour. The company is using the low-high method of job matching.
What is the best approach for pricing jobs in a skill-competency-based pay system?
The low-high approach.
Blank measures reveal competitors’ use of performance-based cash payments
Total Cash
What basic calculation is provided by revenue divided by number of employees?
Productivity.
What is the process of matching survey jobs called?
Benchmark conversion.
What does the weighted mean capture in survey data analysis?
It captures the size of supply and demand in a market.
What statistical measures are often used to set pay ranges?
Quartiles and Percentiles.
Blank minimizes the distortion of the central tendency caused by outliers
Median
What statistical measure shows the similarity or dissimilarity of market rates?
Standard deviation.
What process must be used to update survey data due to varying pay raises?
Aging or trending.
What is a key difference between ranges and bands?
Ranges offer recognition via titles or career progression, whereas bands offer cross-functional experience and lateral progression.
What is likely true if a pharmaceutical company reduces its salary grades to three broad bands?
Gramhold will experience more career moves within bands than career moves between bands.
What is an example of a company that used broad banding?
A company in which there is more lateral movement with no pay adjustments and few promotions.
What does a market pay line do?
Links a company’s benchmark jobs with market rates paid by competitors.
In the regression equation y = a + bx, what do job evaluation points denote?
They are denoted by x.
What is aging market data to a point halfway through a plan year called?
Lead/lag.
In a skill-based plan, if Mark performs better than Steve, what is likely true?
Both Mark and Steve will be paid the same amount.
