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Instruck Inc.is a real estate firm based in Colorado.The company ensures that employees' pay is dependent on what they are capable of doing.The company also supports efforts to empower its employees by encouraging them to be independent and to make decisions in various areas.This,in turn,ensures job enrichment.Based on this information,identify the pay structure being utilized by Instruck.


A) straight piecework plan
B) skill-based pay systems
C) merit pay system
D) differential piece rates
E) standard hour plan

F) D) and E)
G) B) and E)

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Which of the following is a disadvantage of skill-based pay systems?


A) It makes organizations inflexible.
B) It reduces employee empowerment.
C) It may result in paying employees for skills they don't use.
D) It reduces opportunities for promoting employees.
E) It limits the number of pay levels by delayering.

F) None of the above
G) A) and C)

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Product markets place an upper limit on the pay an organization will offer.This upper limit is significant when the organization's total costs are mainly comprised of labor costs,and when price is a significant factor for the organization's consumers.

A) True
B) False

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Perlis Inc.is a whole-foods distributor.Its human resource department gathers the following data for computing compa-ratios of some positions.Based on the data,for which position is Perlis most likely underpaying for human resources?


A) shipping clerks: average salary of $22,000,range midpoint of $24,000
B) inventory clerks: average salary of $20,000,range midpoint of $30,000
C) order packers: average salary of $24,000,range midpoint of $22,000
D) purchasing agents: average salary of $30,000,range midpoint of $20,000
E) warehouse workers: average salary of $20,000,range midpoint of $20,000

F) All of the above
G) C) and D)

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Under the FLSA,children aged 14 and 15 may not be employed outside school hours.

A) True
B) False

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Organizations use pay surveys to benchmark compensation.

A) True
B) False

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What is a pay policy line? What is its relevance?

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Mathematically,a pay policy line shows t...

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Which of the following best defines an organization's job structure?


A) It consists of the relative pay for different jobs within the organization.
B) It is the average amount an organization pays for a particular job.
C) It comprises the characteristics of jobs that the organization values and chooses to pay.
D) It comprises regular pay,overtime pay,and bonuses.
E) It refers to the standard amount that employers must pay under federal and state law.

F) D) and E)
G) B) and C)

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Pay ranges are most common for _____.


A) white-collar jobs
B) piece-rate jobs
C) jobs that are covered by union contracts
D) automotive workers
E) construction workers

F) None of the above
G) A) and E)

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Cindy and Alex execute the same roles and responsibilities at their organization.However,Alex earns more than Cindy.Under the laws governing equal employment opportunity,which of the following statements will justify the organization's decision to pay Alex more than Cindy?


A) Alex is white,and Cindy is black.
B) Alex has more experience than Cindy.
C) Cindy has a hearing impairment.
D) Men have more stamina,so they can work longer hours.
E) Cindy is an immigrant.

F) None of the above
G) A) and B)

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Which of the following statements is true of the FLSA requirements for overtime pay?


A) The overtime rate is one and a half times the employee's hourly rate,excluding any bonuses or piece-rate payments.
B) Time worked includes hours spent on production or sales,but not on activities such as attending required classes,cleaning up the work site,and so on.
C) Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours.
D) Everyone is eligible for overtime pay.
E) Most workers paid on an hourly basis are exempt and therefore not subject to the laws governing overtime pay.

F) A) and B)
G) B) and E)

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Which of the following statements is true about labor markets?


A) Organizations compete to sell labor in the labor market.
B) Competition for labor establishes the minimum an organization must pay to hire an employee for a particular job.
C) Changes in the CPI do not affect the labor market.
D) Cost-of-living considerations have little impact on labor-market rates.
E) An organization's competitors in labor markets only include companies with different products.

F) C) and E)
G) A) and B)

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When job structure conflicts with market data,organizations should base their pay only on market forces because this approach does not have any practical drawbacks.

A) True
B) False

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The Davis-Bacon Act of 1931


A) requires that a lower "training wage" be paid to workers under the age of 20 for a period of up to 90 days.
B) mandates that employers pay higher wages for overtime,defined as hours worked beyond 40 hours per week.
C) requires general contractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates found prevailing in the locality.
D) covers all government contractors receiving $10,000 or more in federal funds.
E) covers construction contractors that receive more than $2,000 in federal money.

F) B) and C)
G) B) and D)

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The laws governing Equal Employment Opportunity guarantee equal pay for all employees of an organization.

A) True
B) False

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Pentrall,a healthcare company,provides a lower training rate to its employees belonging to the age group of 18 to 19 years.The rate is applicable for a period of 90 days.In this case,which of the following laws will justify the organization's decision to pay the lower pay?


A) laws governing equal employment opportunity
B) Fair Labor Standards Act (FLSA) provisions for minimum wage
C) Fair Labor Standards Act (FLSA) provisions for overtime
D) laws governing prevailing wages
E) Fair Labor Standards Act (FLSA) provisions for child labor

F) B) and E)
G) A) and E)

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According to equity theory,employees evaluate job outcomes such as compensation in terms of outputs.

A) True
B) False

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John is the head of the insurance claims department.John works for longer hours than his subordinates,however,he is not paid overtime for working more than 40 hours per week.Under the FLSA,which of the following will justify the organization's decision not to give John overtime pay?


A) John is not a U.S.citizen.
B) John comes from an economically strong background.
C) John is unmarried.
D) John is considered as an exempt employee.
E) John has lower educational qualifications than his subordinates.

F) B) and D)
G) None of the above

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Teno Industries Inc.is a manufacturing company based in Texas.In the year after Teno Industries implemented a comparable-worth policy,its expenses increased,and as a result,profits declined.What difficulty of comparable-worth policies does this example illustrate?


A) The employer is at an economic disadvantage because of increased pay for some jobs.
B) The policy overlooks the undervalued work performed by women.
C) The policy uses job enrichment to establish a pay structure based on market rates.
D) The employer ignores the evaluation points for each job.
E) Employees in lower-paid jobs are encouraged to meet the goal of comparable worth.

F) B) and E)
G) B) and D)

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Which of the following is a drawback of setting pay rates based strictly on a pay policy line?


A) It increases the administrative burden of managing the compensation system.
B) Employees have difficulty interpreting regression analysis.
C) The estimated pay for a job may not reflect conditions in the labor market.
D) It increases the costs of surveying the market.
E) It groups jobs,which will result in rates of pay for individual jobs that precisely match the levels specified by the market.

F) C) and D)
G) B) and E)

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