study 78

1. A general flat increase tends to ________ the distance between grade levels.

a) increase

b) decrease

c) maintain

2. What's the basic reason for making salary adjustments at least once every year?

a) remaining competitive in the labor market

b) making employees happy

c) keeping up with the cost of living

3. Why would a company use a general increase?

a) a manufacturing company wants to reward its hourly employees

b) the company is below market

c) employees are typically long-term and high paid

d) all of the above.

4. Why would a company use a lump sum salary increase?

a) they are not a fixed cost and may support in rewarding and recognizing high-paid employees

b) they are an excellent use of fixed compensation expenses

c) they support in rewarding employees with a low compa-ratio

d) they can be used in lieu of variable compensation

5. A compa-ratio of .95 indicates an employee is paid:

a) 5% above the market

b) competitively to his/her peers

c) 5% below the market

d) competitively to the marketplace

6. A market movement of salaries of 10% in the United States might occur for the following reason:

a) low inflation

b) financial crisis

c) high inflation

d) recovering economy

7. A 5% raise given on July 1 is a:

a) 2.5% raise this calendar year and 5% the next calendar year

b) 2.5% raise both years, adding up to 5%

c) 5% raise just this year

d) 5% raise both years

8. To be at the market rate at the end of the year, an organization should establish a pay policy of:

a) lagging the market

b) leading the market at the beginning of the year and lagging the market at the end of the year

c) leading the market

9. Annual salary increase budgeting includes:

a) merit increases

b) general increases

c) lump sum increases

d) all of the above

10. Before changing salary survey data to account for the projected labor market changes in the coming year, this survey data needs to be:

a) validated by comparing with the company's current salary structure

b) subjected to a number of statistical techniques

c) compared to last year's survey data

d) aged to bring it up to date or to a common point in time