test your hr knowledge: base pay management

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Test Your Knowledge

Base Pay Management (GR 4)

Instructions: Choose an answer for each question.

 

1. What implications would a company in the growth phase of the business life-cycle find in its compensation strategy?
A. Base pay is low, indirect compensation is increasing, short-term incentives are low
B. Base pay is low, indirect compensation is high, short-term incentives are very high
C. Base pay is increasing, indirect compensation is increasing, short-term incentives are high

 

2. If you use a 5% difference between midpoints of adjacent grades within the pay structure, what is the likely result?
A. There will be too many grades.
B. You will not be able to use a job content job evaluation plan.
C. There will be more job grades than a 10% difference.
D. There will be an increase in the accuracy of ranges relative to market pay levels.

 

3. In a traditional pay range structure, which of the following best describes a midpoint progression of 30%?
A. Best suited for hourly production jobs
B. Suitable for a clerical job family
C. Workable for executive/upper management jobs

 

4. If a company bases pay on the duties an employee is capable of performing, rather than on current job duties, how is that best described?
A. Costly and inefficient
B. A characteristic of skill-based pay
C. A form of merit pay based on potential
D. A characteristic of effective performance management

 

5. Skill- and competency-based pay are both examples of what pay delivery approach?
A. Job-based pay
B. Merit-based pay
C. Person-based pay
D. Results-oriented or performance-dependent pay

 

6. An employee with a pay rate of $22,000 assigned to a pay range of $20,000-$24,000-$28,000 has which of the following?
A. A compa-ratio of 92
B. A compa-ratio of 100
C. Penetrated 15% of the range
D. Penetrated 50% of the range

 

7. When calculating the costs of merit increase guidelines, which of the following will you need to take into account?
A. The distribution of managers to employees
B. The distribution of performance ratings
C. The distribution of employee total annual compensation or earnings
(i.e., base salary plus incentives plus overtime earnings)

 

8. Which of the following is a typical approach used to correct red circle rates?
A. Reduce pay to the range midpoint
B. Give two increases a year rather than one
C. Freeze pay until the range catches up

 

9. What is an approach to reducing supervisor and subordinate pay compression?
A. Ensure that supervisor and subordinate midpoints are 5% apart
B. Include supervisors in an incentive plan
C. Eliminate overtime opportunities for nonexempt employees
D. Offer spot bonuses to top performing nonexempt employees

 

10. What is the first step in developing an evaluation model?
A. Reviewing organization elements (i.e., mission, culture, strategy) and identifying changes
B. Selecting evaluation criteria
C. Choosing the evaluators
D. Reviewing the compensation strategy

 

The Test Your Knowledge questions are intended to provide a small sample of the information covered in a particular course. Passing this test should not be considered an indicator that you also will pass the related certification exam.No portion of this document may be reproduced in any form without express written permission from WorldatWork. Copyright 2005 WorldatWork.

 

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If you are hesitant about answer above 3 questions, you should need the course

 

GR4: Base Pay Management