1. Variable pay depends on performance and is not added to: a) overtime pay b) employee's base pay c) commission pay d) incentive pay e) piece rate earnings 2. Which is NOT true about job evaluation? a) it specifies the content of individual jobs b) it helps to establish internal equity c) it provides a basis for deciding the relative importance of jobs d) it establishes a mutually acceptable criteria for determining job value e) it positions jobs along a hierarchy
3. The ideal compensation system: a) emphasizes pay for performance b) controls labour cost by paying below the market c) is typically designed and administered at the individual plant level d) will vary with organizational strategy and context e) will be more expensive than what most employers could afford
4. Which is NOT a problem with merit pay? a) it is difficult for employees to connect today's pay increase with behaviour that occurs months ago b) annual wage increases result in too large a change in the weekly paycheck c) the pay differentials across performance levels are too narrow d) it does not motivate employees whose performance exceeds expectations e) the performance ratings on which merit pay is based may not be accurate
5. A compa-ratio greater than 1.00 typically means that: a) employees are overpaid b) intended policy line has been violated c) a majority of workers are being paid above intended policy d) most employees are new entrants e) turnover is high

Compensation 2014
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6. When job analysis is done for compensation purposes, data collected must focus on: a) type of training needed to perform the job effectively b) establishing job similarities and differences c) the typical career path that encompasses the job d) performance levels of incumbents e) task inventories
7. According to Expectancy Theory, the valence of an outcome is the: a) probability that the outcome will occur b) probability that a behaviour will be rewarded c) degree to which an outcome is desired/valued d) size of the financial reward associated with an outcome e) relationship between the behaviour and achieving the outcome
8. Which is not a factor in the definition of work of equal value under the Pay Equity Act of Ontario? a) working conditions b) education/skills required c) responsibility d) effort required e) value of the product/service produced

9. Which of the following is an advantage of a defined contribution pension plan? a) company absorbs risk associated with changes in inflation or interest value b) more favourable to short term employees c) provides explicit benefit that is easy to communicate d) more favourable to long term employees e) none of the above
10. The use of stock options: a) is designed to motivate employees to increase the value of the firm b) has been criticized because of the excessive downside risk c) forces employees to buy company stock at a predetermined price d) receives very little attention when the stock market is rising e) is more common in smaller than larger firms