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Base pay administration and pay for
performance. Exam Questions and Answers
100% Pass
3 types of base pay - ANS 1. Salary
2. Hourly
3. Piece rate
What are the two job evaluation methods? - ANS 1. Market pricing
2. Job content
What is job evaluation - ANS A systematic method and process for determining and
comparing the relative value of one job to others
What is the market data approach to job evaluation? - ANS - Job descriptions are used to
match survey data
- Benchmark jobs are arranged into a hierarchy based on an analysis of market data
- Jobs with no market data or slide it in using job contact to determine relative worth
What is the job content approach to job evaluation - ANS Relative internal value is
determined between jobs based in the nature and level of work
Some jobs are priced as anchor points
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Why is job hierarchy important? - ANS Because it helps establish a relationship between
various jobs, allowing groupings of similar jobs
Helps compensation professionals, determine how various jobs can be classified within the
organization
Also creates the foundation of a base pay system
Why is job hierarchy used? - ANS Do you determine and ensure internal and/ or external
equity, among both positions and groups of positions
What is a base pay structure? - ANS A management tool that reflects the collection and
organization of internal and external compensation data to support job values. It consist of a
series of pay ranges that represent jobs of similar internal, and or external worth.
What are the three objectives of a base pay structure? - ANS 1. Create alignment between
work and rewards.
2. Help achieve organizational objectives; affective compensation tools for supporting the
organization.
3. Reflect the companies desired position with respect to competitive pay at a certain point in
time.
What are the two types of base pay structures? - ANS 1. Market data emphasis. (Market
based approach)
2. Job content emphasis (point factor)
What is the market based approach? - ANS Uses external comparisons to create a pay
structure. Involves completing a market pricing analysis of benchmark jobs, creating a market
based job, hierarchy, and assigning benchmark and non-benchmark jobs to the pay structure.
What are the characteristics of market pricing and sliding? - ANS 1. Simple to administer.
2. Easy to understand.
, ©THESTAR 2025 ALL RIGHTS RESERVED
3. No job evaluation points.
4. Responsive to market changes.
What is the point factor approach? - ANS Involves assigning a point value to specific jobs in
the company.
What are the two approaches that can be used to develop a point system pay structure? -
ANS 1. Continuum approach.
2. Pay structure approach.
What is the continuum approach? - ANS Internal equity is the priority
No job grades - develop a base pay policy line by regressing job evaluation points with
competitive market rates for each benchmark job.
Each point value will have its own salary range
What is the pay structure approach? - ANS Develop job grades
Based on job evaluation, or internal value
Integrating market data into point factor - ANS Values both internal and external
relationships
Uses formal job evaluation system and market data
Pay Structure Design Considerations - ANS * strategic issues
*competitive practices
*the organizations job and workplace design approach
* organization's administrative policies
* the funds available for compensation plan
*the value the program adds
Base pay administration and pay for
performance. Exam Questions and Answers
100% Pass
3 types of base pay - ANS 1. Salary
2. Hourly
3. Piece rate
What are the two job evaluation methods? - ANS 1. Market pricing
2. Job content
What is job evaluation - ANS A systematic method and process for determining and
comparing the relative value of one job to others
What is the market data approach to job evaluation? - ANS - Job descriptions are used to
match survey data
- Benchmark jobs are arranged into a hierarchy based on an analysis of market data
- Jobs with no market data or slide it in using job contact to determine relative worth
What is the job content approach to job evaluation - ANS Relative internal value is
determined between jobs based in the nature and level of work
Some jobs are priced as anchor points
, ©THESTAR 2025 ALL RIGHTS RESERVED
Why is job hierarchy important? - ANS Because it helps establish a relationship between
various jobs, allowing groupings of similar jobs
Helps compensation professionals, determine how various jobs can be classified within the
organization
Also creates the foundation of a base pay system
Why is job hierarchy used? - ANS Do you determine and ensure internal and/ or external
equity, among both positions and groups of positions
What is a base pay structure? - ANS A management tool that reflects the collection and
organization of internal and external compensation data to support job values. It consist of a
series of pay ranges that represent jobs of similar internal, and or external worth.
What are the three objectives of a base pay structure? - ANS 1. Create alignment between
work and rewards.
2. Help achieve organizational objectives; affective compensation tools for supporting the
organization.
3. Reflect the companies desired position with respect to competitive pay at a certain point in
time.
What are the two types of base pay structures? - ANS 1. Market data emphasis. (Market
based approach)
2. Job content emphasis (point factor)
What is the market based approach? - ANS Uses external comparisons to create a pay
structure. Involves completing a market pricing analysis of benchmark jobs, creating a market
based job, hierarchy, and assigning benchmark and non-benchmark jobs to the pay structure.
What are the characteristics of market pricing and sliding? - ANS 1. Simple to administer.
2. Easy to understand.
, ©THESTAR 2025 ALL RIGHTS RESERVED
3. No job evaluation points.
4. Responsive to market changes.
What is the point factor approach? - ANS Involves assigning a point value to specific jobs in
the company.
What are the two approaches that can be used to develop a point system pay structure? -
ANS 1. Continuum approach.
2. Pay structure approach.
What is the continuum approach? - ANS Internal equity is the priority
No job grades - develop a base pay policy line by regressing job evaluation points with
competitive market rates for each benchmark job.
Each point value will have its own salary range
What is the pay structure approach? - ANS Develop job grades
Based on job evaluation, or internal value
Integrating market data into point factor - ANS Values both internal and external
relationships
Uses formal job evaluation system and market data
Pay Structure Design Considerations - ANS * strategic issues
*competitive practices
*the organizations job and workplace design approach
* organization's administrative policies
* the funds available for compensation plan
*the value the program adds
