1. How does a broadbanding approach support an egalitarian organization?

A) By decreasing the involvement of line managers
B) By encouraging de-layering efforts
C) By reducing the value of pay ranges
D) By restricting employee movement



2. Compensation Systems An hourly employee is at the maximum level of a pay range. There are no job openings in the next pay range. Which is the best approach to reward the employee for exceptional performance without adjusting the base wage rate?

A) Premium pay
B) Gainsharing
C) Performance bonus
D) Incentive pay



3. How should an HR leader evaluate an organization's return on labor expenses?

A) Through a well-crafted pay-for-performance program that measures performance compared  to goals
B) By the number of high performers compared to low performers in the organization
C) By adding salaries, overtime, benefits, and bonuses and then dividing by total costs
D) By reviewing the overall employee output compared to the overall sales revenue



4. A competency-based pay approach works best in an environment that fosters which of the following?

A) Acquiring knowledge and skill that enhances employee performance and satisfaction
B) Linking measures of quality or goals to individual performance
C) Comparing inputs and outcomes by employees to those of their peers
D) Focusing predominantly on seniority and longevity versus performance



5. A differential piece-rate pay system works best in which type of environment?

A) When the focus is on what  employees can become as opposed to the skills they already have
B) When  managers need flexibility to determine who should be paid what rate when employees are hired
C) When the  current employee skill set needs to be recognized while encouraging individuals to increase skills and knowledge
D) When  a link between the attainment of goals or achievement and the level of desired pay is needed



6. Which is a disadvantage of a time-based pay system?

A) Quantity of work may be favored over quality of work.
B) An enhanced performance management and appraisal system will be required.
C) The organization could be subject to significant equal pay litigation.
D) Pay levels may be raised over time regardless of performance.



7. What is the advantage of nonqualified deferred compensation plans?

A) They protect the plans'  funds from creditors in the event of the failure of the business.
B) They allow all company employees to contribute more than the limits prescribed by qualified plans.
C) They provide more-favorable tax advantages to employers than qualified plans.
D) They provide incentives for key executives to stay with the organization.



8. An organization has been forced to hire new employees at higher pay rates than usual due to a tight labor supply. Employees who have been with the organization for one to three years are earning the same or only slightly more than the new hires they have to train. What is the organization experiencing?

A) Red-circle rates
B) Premium pay
C) Pay compression
D) Competency-based differential



9. An organization implements changes to its pay structure, resulting in new hires now being started at the same wage as workers who have been on the job for two years. What type of pay variation will most likely be created?

A) Green-circle rates
B) Pay compression
C) Red-circle rates
D) Lead-market strategy



10. Benefits and Perquisites HR is in the process of recruiting a senior-level position for a global organization. Which benefit might distinguish the organization from the competition?

A) Club membership
B) Termination payments
C) Unemployment insurance
D) Social security