Skip to content
Home
FAQs
Resources
Articles
Events
Recommended Salary Surveys
Local Total Rewards Associations
Study Guides
Job Board
Contact
Sign In
Compensation Tool
Home
FAQs
Resources
Articles
Events
Recommended Salary Surveys
Local Total Rewards Associations
Study Guides
Job Board
Contact
Sign In
Study Guides
Managing Base Pay
Test 1
Test 2
A pay structure that uses salary surveys is a ______________ approach
Job Content emphasis
Market data emphasis
Benchmark emphasis
Competitive emphasis
Which approach to developing a salary structure places the greatest emphasis on internal equity?
Point factor
Market data
Equal pay for equal work
Hybrid approach
In a point factor approach, which role is most likely to have 880 points, out of 1000
Administrative Assistant
CEO
VP of Operations
Sr Marketing Manager
Which of the following is NOT a characteristic of a Market-Based approach to developing a pay structure?
Complex to administer
Easy to understand
Responsive to market changes
Requires regular updates
Job points are used primarily to
Assign a pay range to the job
Determine FLSA status
Establish internal equity
Create career mapping
A hybrid point factor and market data approach values both internal equity and market data.
True
False
The process of developing a new salary structure differs from updating an existing structure because
Market values change every year, or more frequently
New jobs have to be included in the updated structure
Point factors are not changed during the update process
The processes for building and updating are almost the same
Midpoint progression is:
The difference between the minimum and midpoint, or the midpoint and the maximum
The overall spread between the minimum and maximum
The percent an employee's salary is, compared to the midpoint
The difference between midpoints in adjacent grades
Which of the following should NOT be considered when developing a base pay policy line?
Total points assigned from a point factor review
Current salaries
Market rates for jobs
All of the above should be considered
The base pay line should be created before the compensation philosophy is determined.
True
False
_____________ typically have the largest midpoint progressions and widest range spreads
Clerical roles
Professional roles
Management roles
Executive roles
A range spread is defined as:
The difference between the minimum of the lowest grade and the maximum of the highest grade
The difference between the minimum and maximum of the same grade
The differential between two pay structures
The difference between midpoints in adjacent grades
The formula to calculate range spread is:
(Maximum - Minimum) / Minimum
(Maximum - Minimum) / Maximum
(Maximum - Midpoint) / (Midpoint - Minimum)
(Maximum - Minimum) / (Maximum - Midpoint)
20% - 35% midpoint differentials are most common in what level of roles?
Clerical
Professional
Management
Executive
Which level of roles typically have the greatest pay range overlap?
Clerical
Professional
Management
Executive
Which level of roles typically have the least pay range overlap?
Clerical
Professional
Management
Executive
What is the typical range spread in broad band grades?
20%
50%
75%
100%
Broadbands supports which of the following:
Improves competitive advantage
May better support culture
Creates a flatter organization with less focus on promotion
Increased flexibility in pay
All of the above
Which of the following is NOT a disavantage of broad bands
They lack structure due to the range
Greater compensation knowledge and expertise is required
Salary increases are less structured
They do not consider external market data
A single rate of pay for everyone in the same job is known as:
Single rate of pay
Fixed rate of pay
Market based pay
Union Pay
A job that is repetitive in nature with a short learning curve and minimal performance variations are best paid with what kind of rate?
Pay for performance
Broad bands
Single-rate of pay
Commission based pay
Which of the following is a true statement?
Step-rates are a kind of a single-rate of pay
Single-rates of pay are best suited for temporary roles
Step-rates are better instruments to manage internal equity
Single-rates of pay consider seniority whereas step-rates do not
What is the most common difference between steps in a step rate scale?
0% - 1%
2% - 5%
4% - 6%
8% - 12%
When an employee is paid a premium for working a night shift, this is an example of a:
Differential
Short Term Bonus
promotion
COLA
Pay differences for the same job in different cost of living areas is what type of diffrential?
Premium
Expatriate Pay
Geographic
Step
An employee that works for an off-shore oil rig, and receives a pay increase due to inclement weather is receiving what type of differential
Geographic
Hazard
Expatriate
Shift
Which of the following is the least reliable to consult when determining whether or not to apply a differential?
Market data/salary surveys
The consumer price index
Union contracts
Incumbents
What kind of pay increase is most common when an employee is paid over the max of their pay range?
Merit increase
Spot increase
Lump-sum increase
Market adjustment increase
What is one of the biggest disadvantages of cost of living increase?
They are extremely expensive to administer
There is too much discretion
Low performers may not receive a fair increase
They create a sense of entitlement
