MGT 3320 EXAM 4 QUESTIONS WITH VERIFIED
ANSWERS
pay structure - Answers - the relative pay of different jobs (job structure) and how much
they are paid (pay level)
external equity - Answers - ◦Comparing to pay of employees doing the same work in
other organizations
àUse of market pay surveys to determine pay levels in the organizations
internal equity - Answers - ◦Comparing to pay of employees within the organization
(lower, same, and higher levels)
upper bound - Answers - Product market competition places an ____________ on labor
costs and compensation
lower bound - Answers - Labor market competition places a ____________ on pay
levels
range of discretion - Answers - Product market competition and labor market
competition create a ___________________ for pay
above - Answers - Paying _________ market can help attract and retain top talent and
generate positive job attitudes, but also adds cost
efficiency wage theory - Answers - states that workers are more reluctant to shirk
because they wish to retain their jobs
benchmarking - Answers - refers to comparing an organization's practices against those
of the competition.
point-factor system - Answers - ◦yields job evaluation points for each compensable
factor
job evaluation - Answers - an administrative procedure used to measure internal job
worth.
job ranking - Answers - jobs are listed in order from highest to lowest worth to the
company; qualitative approach
Job classification - Answers - broad descriptions for groups of jobs with similar TDRs
and qualifications are developed to assign wages; qualitative approach
, factor comparison - Answers - jobs are ranked in relation to each other on several
factors like mental requirements, physical requirements, etc., then a portion of the
hourly rate for each job is assigned to each factor; quantitative approach
job analysis - Answers - A great source of information for job evaluations is a thoroughly
conducted ___________________.
market survey data - Answers - Emphasis is mainly on external equity
pay policy line - Answers - Combines internal and external equity
pay grades - Answers - Groups jobs with more emphasis on internal equity
compa-ratio - Answers - is an index of the correspondence between actual pay and
intended pay.
delayering - Answers - ◦Reduce the number of job levels within the organization
banding - Answers - ◦Establish broader groupings of jobs, increase spread between
minimum and maximum pay
competency based pay - Answers - ◦Pay structures for exempt employees based on
individual characteristics (i.e., a broader set of KSAOs)
skill based pay - Answers - ◦Pay based on the skills employees acquire and are capable
of using
Causes distrust among employees (like they are hiding something) - Answers - Can you
think of possible negative consequences emerging from pay secrecy policies?
- Help reduce salary gap
- Ability to improve compensation
- Helps build trust with potential employees
- Higher acceptance rate
- Consistency with evaluation roles - Answers - What are the benefits of pay
transparency?
- Candidates know what expected pay they are getting
- Employees may get envious of other employees who get paid more - Answers - What
may be some drawbacks of pay transparency?
$7.25 - Answers - what is the minimum wage?
$35,568 - Answers - what is the minimum salary level?
ANSWERS
pay structure - Answers - the relative pay of different jobs (job structure) and how much
they are paid (pay level)
external equity - Answers - ◦Comparing to pay of employees doing the same work in
other organizations
àUse of market pay surveys to determine pay levels in the organizations
internal equity - Answers - ◦Comparing to pay of employees within the organization
(lower, same, and higher levels)
upper bound - Answers - Product market competition places an ____________ on labor
costs and compensation
lower bound - Answers - Labor market competition places a ____________ on pay
levels
range of discretion - Answers - Product market competition and labor market
competition create a ___________________ for pay
above - Answers - Paying _________ market can help attract and retain top talent and
generate positive job attitudes, but also adds cost
efficiency wage theory - Answers - states that workers are more reluctant to shirk
because they wish to retain their jobs
benchmarking - Answers - refers to comparing an organization's practices against those
of the competition.
point-factor system - Answers - ◦yields job evaluation points for each compensable
factor
job evaluation - Answers - an administrative procedure used to measure internal job
worth.
job ranking - Answers - jobs are listed in order from highest to lowest worth to the
company; qualitative approach
Job classification - Answers - broad descriptions for groups of jobs with similar TDRs
and qualifications are developed to assign wages; qualitative approach
, factor comparison - Answers - jobs are ranked in relation to each other on several
factors like mental requirements, physical requirements, etc., then a portion of the
hourly rate for each job is assigned to each factor; quantitative approach
job analysis - Answers - A great source of information for job evaluations is a thoroughly
conducted ___________________.
market survey data - Answers - Emphasis is mainly on external equity
pay policy line - Answers - Combines internal and external equity
pay grades - Answers - Groups jobs with more emphasis on internal equity
compa-ratio - Answers - is an index of the correspondence between actual pay and
intended pay.
delayering - Answers - ◦Reduce the number of job levels within the organization
banding - Answers - ◦Establish broader groupings of jobs, increase spread between
minimum and maximum pay
competency based pay - Answers - ◦Pay structures for exempt employees based on
individual characteristics (i.e., a broader set of KSAOs)
skill based pay - Answers - ◦Pay based on the skills employees acquire and are capable
of using
Causes distrust among employees (like they are hiding something) - Answers - Can you
think of possible negative consequences emerging from pay secrecy policies?
- Help reduce salary gap
- Ability to improve compensation
- Helps build trust with potential employees
- Higher acceptance rate
- Consistency with evaluation roles - Answers - What are the benefits of pay
transparency?
- Candidates know what expected pay they are getting
- Employees may get envious of other employees who get paid more - Answers - What
may be some drawbacks of pay transparency?
$7.25 - Answers - what is the minimum wage?
$35,568 - Answers - what is the minimum salary level?
