Chapter 8

Question 1

The pay rates from minimum to maximum set for a pay grade or
class. It puts limits on the rates an employer will pay for a particular job

Answer 1

ranges

Question 2

the systematic process of collecting and making judgements about the compensation paid by other employers

Answer 2

survey

Question 3

The collection and analysis of information about external conditions and
competitors that will enable an organization to be more competitive.

Answer 3

competitive intelligence

Question 4

A major source of publicly available pay data. It also calculates the
consumer price index

Answer 4

bureau of labor statistics

Question 5

Process of matching survey jobs by applying the employer’s plan to the
external jobs and then comparing the worth of the external job with its
internal “match.”

Answer 5

benchmark conversation

Question 6

The extras bestowed on top management, such as private dining rooms,
company cars, and first-class airfare

Answer 6

perquisites

Question 7

Using key/benchmark jobs, it shows external market pay survey data as a function of internal job
evaluation points. In many cases, the it is obtained
by using regression analysis, determining the predicted pay for each job can be obtained.

Answer 7

market pay line

Question 8

An extreme value that may distort some measures of central tendency.

Answer 8

outliers

Question 9

A statistical technique for relating present-pay differentials to some criterion, that is, pay rates in the external market, rates for jobs held predominantly by men, or factor weights that duplicate present rates for all jobs in the
organization

Answer 9

regression

Question 10

A midpoint in a group of measures.

Answer 10

central tendency

Question 11

how tightly all the rates are clustered around the mean

Answer 11

standard deviation

Question 12

order all the data points from lowest to highest then convert into percentages

Answer 12

quartiles and percentiles

Question 13

total of all rates divided by total number of employees

Answer 13

weighted mean

Question 14

the distribution of rates around a measure of central tendency

Answer 14

variation

Question 15

A measure of the changes in prices in a fixed market basket of goods and
services purchased by a hypothetical average family. Not an absolute
measure of living costs; rather, a measure of how fast costs are changing.
Published by the Bureau of Labor Statistics, U.S. Department of Labor

Answer 15

consumer price index

Question 16

links a company’s benchmark jobs on the horizontal axis (internal structure) with market rates paid by competitors (market survey) on the vertical axis

Answer 16

market line

Question 17

aging the market data to a point halfway through the plan year

Answer 17

lead/lag

Question 18

Representation of the organization’s pay-level policy relative to what
competitors pay for similar jobs.

Answer 18

pay-policy line

Question 19

One of the classes, levels, or groups into which jobs of the same or similar
values are grouped for compensation purposes. All jobs in this have
the same pay range—maximum, minimum, and midpoint.

Answer 19

pay grades

Question 20

The salary midway between the minimum and maximum rates of a salary
range. Usually set to correspond to the pay-
policy line and represents the rate paid for satisfactory performance on the job

Answer 20

range midpoint

Question 21

Collapsing a number of salary grades into a smaller number of broad
grades with wide ranges

Answer 21

broad banding

Question 22

Ranges of pay used as controls or guidelines within pay bands that can keep the system more
structurally intact. Maximums, midpoints, and minimums provide guides to appropriate pay
for certain levels of work.

Answer 22

zones

Question 23

Relationship among jobs inside an organization, based on work content
and each job’s relative contribution to achieving the organization’s
objectives

Answer 23

job structure

Question 24

The array of pay rates for different jobs within a single organization; they
focus attention on differential compensation paid for work of unequal worth.

Answer 24

pay structure

Question 25

What is the equation of market pay

Answer 25

intercept + slope x job evaluation points

Question 26

The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called _______________.

Answer 26

point factor adjustment

Question 27

Basic elements of a pay survey:

Answer 27

nature of the organization
HR outcomes
total compensation