Managing Base Pay - Compensation Tool

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Managing Base Pay

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

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