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Test Bank for Compensation, 13th Edition, Barry Gerhart, Jerry Newman, George Milkovich

Test Bank for Compensation, 13th Edition, Barry


Gerhart, Jerry Newman, George Milkovich

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Compensation, 13e (Gerhart)
Chapter 6 Person-Based Structures

1) The roots of job-based pay structures are traced to


A) Frederick Taylor.
B) Karl Marx.
C) Adam Smith.
D) Ronald McFreyer.

Answer: A
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

2) Routine work is also termed


A) transactional work.
B) hygiene work.
C) tacit work.
D) system work.

Answer: A
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

3) ________ are often linked to mission statements that express an organization's philosophy,
values, business strategies, and plans.
A) Job-based systems
B) Bureaucratic systems
C) Skill-based systems
D) Core competencies

Answer: D
Difficulty: 1 Easy
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

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4) According to Frito-Lay's list of competencies for managerial work, the behavior of modeling,
teaching, and coaching company values is linked to the ________ competency dimension.
A) leading for results
B) doing it the right way
C) leveraging technical and business systems
D) building workforce effectiveness

Answer: B
Difficulty: 2 Medium
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

5) Which of the following is an advantage of skill-based pay plans?


A) They guarantee a low rate of employee turnover.
B) They aid in deploying workers in a way that better matches the work flow.
C) They are less expensive than job-based plans.
D) They are viewed more favorably by courts than any other type of pay plans.

Answer: B
Difficulty: 2 Medium
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

6) The majority of applications of skill-based pay have been in:


A) education industries.
B) manufacturing industries.
C) health-care industries.
D) service industries.

Answer: B
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

7) An employee's focus in a job-based approach is to


A) seek promotions to earn more pay.
B) acquire skills.
C) acquire competencies.
D) utilize skills efficiently.

Answer: A
Difficulty: 1 Easy
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

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written consent of McGraw-Hill Education.
8) Compensable factors, skill blocks, and competency sets are used for:
A) assessing relative value.
B) collecting work content information.
C) determining what to value.
D) completely different purposes.

Answer: C
Difficulty: 1 Easy
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

9) Employees in a multiskill system earn pay increases:


A) by increasing their productivity.
B) based on job content.
C) based on job assignments.
D) by acquiring new knowledge.

Answer: D
Difficulty: 2 Medium
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

10) Which of the following is least likely to be used in establishing skill-based certification
methods?
A) Tests
B) College degree
C) Peer review
D) On-the-job demonstration

Answer: B
Difficulty: 2 Medium
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

11) ________ is a crucial factor that affects the perception of fairness of a skill-based plan.
A) The design of the certification process
B) The number of compensable factors
C) The extent of alignment with an organization's strategy
D) The number of weights and factor degrees

Answer: A
Difficulty: 2 Medium
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

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written consent of McGraw-Hill Education.
12) A camper is an employee who ________ in a skill-based pay system.
A) tops out
B) is a jack-of-all-trades
C) does not want to rotate jobs
D) moves too quickly from job to job

Answer: C
Difficulty: 2 Medium
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

13) Skill-based plans tend to work best in organizations using a(n) ________ strategy.
A) innovator
B) defender
C) laissez-faire
D) cost-cutter

Answer: D
Difficulty: 2 Medium
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

14) ________ are the observable behaviors that indicate the level of competency within each
competency set.
A) Competency generators
B) Core competencies
C) Competency indicators
D) Behavior scale points

Answer: C
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

15) ________ translate each core competency into action.


A) Competency indicators
B) Multifunctional skills
C) Skill-based structures
D) Competency sets

Answer: D
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

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written consent of McGraw-Hill Education.
16) The process of identifying competencies in person-based structures resembles identifying
________ as part of job evaluation in job-based structures.
A) compensable factors
B) job descriptions
C) employee requirements
D) work flow outlays

Answer: A
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

17) Which of the following reasons makes competencies a risky foundation for a pay system?
A) The number of stakeholders and the lack of a global standard
B) Openness and nonquantifiable nature
C) Vagueness and subjectivity
D) Lack of motivation and objectivity

Answer: C
Difficulty: 2 Medium
Topic: "How-To": Competency Analysis
Accessibility: Keyboard Navigation

18) The organization specific group for classifying competencies generally includes
A) customer orientation.
B) personal integrity.
C) flexibility.
D) maturity of judgement.

Answer: A
Difficulty: 1 Easy
Topic: "How-To": Competency Analysis
Accessibility: Keyboard Navigation

19) Leadership, customer orientation, and functional expertise are examples of which group of
competencies?
A) Personal characteristics
B) Visionary
C) Organization specific
D) Team dynamics

Answer: C
Difficulty: 1 Easy
Topic: "How-To": Competency Analysis
Accessibility: Keyboard Navigation

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written consent of McGraw-Hill Education.
20) Competencies are derived from the ________ beliefs about the organization and its strategic
intent.
A) executive leadership's
B) stakeholders'
C) competitors'
D) customers'

Answer: A
Difficulty: 1 Easy
Topic: "How-To": Competency Analysis
Accessibility: Keyboard Navigation

21) Most studies report that when different people rank-order jobs, the correlations are between:
A) .15 and .36.
B) .35 and .46.
C) .55 and .66.
D) .85 and .96.

Answer: D
Difficulty: 2 Medium
Topic: Administering and Evaluating the Plan
Accessibility: Keyboard Navigation

22) The reliability of job evaluation techniques is measured by:


A) determining if different evaluators produce the same results.
B) asking the question "What does the evaluation measure?"
C) determining hit rates.
D) surveying employee attitudes about the evaluation.

Answer: A
Difficulty: 2 Medium
Topic: Administering and Evaluating the Plan
Accessibility: Keyboard Navigation

23) Who among the following is examining the validity of a job evaluation?
A) Keira, who is measuring the degree to which the job evaluation plan matches an agreed-upon
pay structure for benchmark jobs
B) Laila, who is measuring the effectiveness of a formal appeals process
C) Keith, who is surveying employee attitudes about the job evaluation plan
D) Rita, who is requesting the management for a reanalysis and a reevaluation of the required skills
as she feels her job has been evaluated incorrectly

Answer: A
Difficulty: 3 Hard
Topic: Administering and Evaluating the Plan
Accessibility: Keyboard Navigation

6
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written consent of McGraw-Hill Education.
24) A study of 400 compensation specialists revealed that:
A) job evaluation data had a larger effect on pay decisions than market data.
B) current pay data had a larger effect on pay decisions than market data.
C) job titles had a larger effect on pay decisions than job evaluation data.
D) market data had a substantially larger effect on pay decisions than job evaluation data.

Answer: D
Difficulty: 2 Medium
Topic: Bias in Internal Structures
Accessibility: Keyboard Navigation

25) Which of the following is the reason why skill-based pay plans have maximum flexibility?
A) They pay employees for the highest level of skill they have achieved regardless of the work
they perform.
B) They focus on placing the right people in the right job.
C) They only pay as much as the work performed is worth, regardless of any greater skills the
employee may possess.
D) They encourage employees to focus on how to get promoted rather than on how to get the
required competencies.

Answer: A
Difficulty: 2 Medium
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

26) Managers whose employers use ________ plans focus on placing the right people in the right
job.
A) person-based
B) skill-based
C) competency-based
D) job-based

Answer: D
Difficulty: 1 Easy
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

7
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written consent of McGraw-Hill Education.
27) A ________ approach controls costs by paying only as much as the work performed is worth,
regardless of any greater skills the employee may possess.
A) performance-based
B) competency-based
C) job-based
D) skill-based

Answer: C
Difficulty: 1 Easy
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

28) Which of the following is an advantage of the skill-based structure?


A) Pay based on value of work performed
B) Continuous learning flexibility
C) Cost control via certification
D) Lateral movement

Answer: B
Difficulty: 2 Medium
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

29) Lisa is a manager at Trell, Inc. When she hires her employees, she focuses on finding the right
job for the right person. Which of the following pay plans is her employer most likely using?
A) A skill-based pay plan
B) A competency-based pay plan
C) An aptitude-based pay plan
D) A job-based pay plan

Answer: D
Difficulty: 3 Hard
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

30) Who among the following is most likely to be working for a company that uses a
competency-based pay plan?
A) Julia, who focuses on getting promoted to get a pay increase
B) Faiza, a manager who focuses on choosing the employees best suited for job roles
C) Juan, a manager who focuses on controlling costs through budgets and work assignments
D) Carlos, who focuses on obtaining certifications in her field to get a pay increase

Answer: D
Difficulty: 3 Hard
Topic: The Perfect Structure
Accessibility: Keyboard Navigation

8
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written consent of McGraw-Hill Education.
31) Transactional work is typically paid more than tacit work.

Answer: FALSE
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

32) Fundamental skills include familiarity with company forms and procedures, basic product
knowledge, safety, basic computer usage, and so on.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

33) Skill-based pay plans can focus on both the depth and breadth of work.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

34) By encouraging employees to take charge of their own development, skill-based plans may
give them more control over their work lives.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

35) Person-based plans have the potential to clarify new standards and behavioral expectations.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

36) Compared to an on-demand review of certifications, scheduling fixed review points makes it
easier to budget and control payroll increases.

Answer: TRUE
Difficulty: 1 Easy
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

9
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written consent of McGraw-Hill Education.
37) Skill-based plans are generally well accepted by employees because it is easy to see the
connection between the plan, the work, and the size of the paycheck.

Answer: TRUE
Difficulty: 1 Easy
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

38) There is far less uniformity in the use of terms in person-based plans than there is in job-based
plans.

Answer: TRUE
Difficulty: 1 Easy
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

39) Skill-based plans become increasingly economical as the majority of employees become
certified at the highest pay levels.

Answer: FALSE
Difficulty: 1 Easy
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

40) Scaled competency indicators are similar to degrees of compensable factors.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

41) As experience with competencies has grown, organizations are placing greater emphasis on
business-related descriptions of behaviors.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

42) While competencies hone in on information about specific tasks, skill- and job-based systems
take the opposite approach.

Answer: FALSE
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

10
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written consent of McGraw-Hill Education.
43) Advocates of competencies say that by focusing on optimum performance rather than average
performance, competencies can help employees maintain their marketability.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

44) Core competencies are often linked to mission statements that express an organization's
philosophy, values, business strategies, and plans.

Answer: TRUE
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

45) Basing pay on race or gender seems appalling today, but basing pay on someone's judgment of
another person's integrity is considered the norm nowadays.

Answer: FALSE
Difficulty: 1 Easy
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

46) In virtually all the studies on job evaluation, job-based evaluation is treated as a measurement
device.

Answer: TRUE
Difficulty: 1 Easy
Topic: Administering and Evaluating the Plan
Accessibility: Keyboard Navigation

47) Validity refers to the degree to which an evaluation assesses the relative worth of jobs to an
organization.

Answer: TRUE
Difficulty: 1 Easy
Topic: Administering and Evaluating the Plan
Accessibility: Keyboard Navigation

11
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written consent of McGraw-Hill Education.
48) Communication and employee involvement are crucial for acceptance of resulting pay
structures.

Answer: TRUE
Difficulty: 1 Easy
Topic: Administering and Evaluating the Plan
Accessibility: Keyboard Navigation

49) The reliability of a job evaluation can be improved by using evaluators who are familiar with
the work and trained in the job evaluation process.

Answer: TRUE
Difficulty: 1 Easy
Topic: Administering and Evaluating the Plan
Accessibility: Keyboard Navigation

50) Defining the compensable factors and scales to include the content of jobs held predominantly
by women is one of the methods to ensure that job evaluation plans are bias-free.

Answer: TRUE
Difficulty: 1 Easy
Topic: Bias in Internal Structures
Accessibility: Keyboard Navigation

51) How do modern organizations analyze work processes?

Answer: In today's organizations, the work process is analyzed with an eye toward increasing
competitiveness and success. Routine work (transactional work) is separated from more complex
work (tacit work). The more routine work generates lower revenues and requires less knowledge.
Once fragmented, work processes can be rebundled into new, different jobs. Pay structures based
on each person's skills/knowledge/experience offer flexibility to align talent with continuously
redesigned workplaces.
Difficulty: 2 Medium
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

52) What is the relevance of certification in a multiskill system?

Answer: Employees in a multiskill system earn pay increases by acquiring new knowledge, but
the knowledge is specific to a range of related jobs. Pay increases come with certification of new
skills, rather than with job assignments. Employees can then be assigned to any of the jobs for
which they are certified, based on the flow of work.
Difficulty: 2 Medium
Topic: Person-Based Structures: Skill Plans
Accessibility: Keyboard Navigation

12
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written consent of McGraw-Hill Education.
Test Bank for Compensation, 13th Edition, Barry Gerhart, Jerry Newman, George Milkovich

53) How do skill-based plans motivate employees?

Answer: Skill-based plans are generally well accepted by employees because it is easy to see the
connection between the plan, the work, and the size of the paycheck. Consequently, the plans
provide strong motivation for individuals to increase their skills.
Difficulty: 2 Medium
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

54) What is relevance of flexibility in skill-based plans?

Answer: Research suggests that the greatest impact on results occurs immediately after just a
small amount of increased flexibility. Greater increments in flexibility achieve fewer
improvements. There may be an optimal number of skills for any individual to possess. Beyond
that number, productivity returns are less than the pay increases. Additionally, some employees
may not be interested in giving up the job they are doing.
Difficulty: 2 Medium
Topic: "How To": Skill Analysis
Accessibility: Keyboard Navigation

55) How are organizations redefining the original definition of competencies?

Answer: As experience with competencies has grown, organizations are moving away from the
vagueness of self-concepts, traits, and motives. Instead, they are placing greater emphasis on
business-related descriptions of behaviors. Competencies are becoming "a collection of
observable behaviors (not a single behavior) that require no inference, assumption or
interpretation."
Difficulty: 2 Medium
Topic: Person-Based Structures: Competencies
Accessibility: Keyboard Navigation

13
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written consent of McGraw-Hill Education.

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