Question 1

________ is a form of compensation based upon a percentage of the selling price of a product or service.

Accepted Answer

The answer of ________ is a form of compensation based...

Question 2

Which scenario would be appropriate for using a salary-only plan?

Accepted Answer

A)   the salesperson is selling high-priced products with long lead times
B)   the salesperson has substantial influence over sales
C)   the company is looking to save money due to budget constraints
D)   the company is looking to create competition among its sales staffE) A) and B)
F) C) and D)

Question 3

The ________ pay value is the halfway mark between the range minimum and maximum rates.

Accepted Answer

The answer of The ________ pay value is the halfway...

Question 4

Richard's job has a compa-ratio of 0.85.What does this ratio tell about Richard's pay rate?

Accepted Answer

A)   Richard's pay is highly competitive with the market.
B)   Richard's pay is not competitive with the market.
C)   There is no way to judge the competitiveness of Richard's pay.
D)   You need more information to be able to judge Richard's pay.E) B) and D)
F) A) and D)

Question 5

This type of commission draw acts as a salary because employees are not obligated to repay the loans if they do not sell enough to cover the amount.

Accepted Answer

A)   nonrecurring draw
B)   safe draw
C)   nonrecoverable draw
D)   graduated drawE) B) and C)
F) A) and C)

Question 6

This is a loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it.

Accepted Answer

A)   commission-plus-draw plan
B)   a recoverable draw
C)   a non-recoverable draw
D)   an interest-free loanE) B) and C)
F) All of the above

Question 7

Briefly discuss designing job-based pay system (i.e.merit pay,sales incentive pay)and person-focused programs.What considerations arise when making a transition from using a job-based pay system to using pay-for-knowledge?

Accepted Answer

There are three matters that compensatio...

Question 8

If the company adopts a market lag policy,how will that company's pay range midpoint compare to the market average?

Accepted Answer

A)   The midpoint will be the same as the market average.
B)   not enough information to determine
C)   The midpoint will be higher than the market average.
D)   The midpoint will be lower than the market average.E) A) and D)
F) A) and C)

Question 9

This theory suggests that an employee must regard his own ratio of merit increase pay to performance as similar to the ratio for other comparably performing people in the company.

Accepted Answer

A)   comparable ratio theory
B)   comparable pay theory
C)   equality theory
D)   equity theoryE) B) and D)
F) None of the above

Question 10

How are compa-ratios calculated?

Accepted Answer

A)   dividing the green circle rates midpoint by the normal pay range
B)   dividing the employee's pay rate by the market line rate
C)   dividing an employee's pay rate by the pay range midpoint
D)   dividing the red circle rates by the normal pay rangeE) None of the above
F) A) and D)

Question 11

Which of the following would NOT be considered as an advantage of broadbanding?

Accepted Answer

A)   elimination of narrow bands broadens employees' job duties and responsibilities
B)   reduced organizational hierarchies that support job promotions
C)   reduced management layers that promotes quicker decision making cycles
D)   greater responsibility for supervisors for administering each employee's compensation within the confines of the broadbandsE) A) and B)
F) A) and C)

Question 12

Money that covers the basic living expenses of sales professionals is better known as a ________,

Accepted Answer

The answer of Money that covers the basic living expenses...

Question 13

This federal Act requires contractors with federal contracts worth over $2,000 to pay wages at least equal to those prevailing in the area where the work is being done.

Accepted Answer

A)   Fair Labor Standards Act
B)   Davis-Bacon Act
C)   Equal Pay Act
D)   Civil Rights Act of 1964E) A) and D)
F) B) and C)

Question 14

A recently opened car dealer uses an incentive compensation plan for its sales people.The dealer provides money to its salespeople to cover basic living expenses and then shares a fixed percentage of the selling price of each car that a salesperson sells.However,the salesperson should repay the subsistence pay component within a year; otherwise he/she cannot continue in the employment of this dealer.What type of sales compensation plan does this dealer adopt?

Accepted Answer

A)   salary-plus-bonus
B)   salary-plus-commission
C)   commission-plus-draw
D)   commission onlyE) A) and D)
F) A) and C)

Question 15

In establishing pay grades,which pay rate is established first?

Accepted Answer

A)   minimum pay rate
B)   midpoint
C)   third quartile
D)   maximum pay rateE) A) and D)
F) None of the above

Question 16

________ represent the vertical dimension of pay structures.

Accepted Answer

The answer of ________ represent the vertical dimension of pay...

Question 17

Alejandro Martinez is responsible for setting up the pay structure for his company.He believes that newly hired employees should not be paid as much as established employees.Accordingly,what type of pay structure should Mr.Martinez use?

Accepted Answer

A)   broadbanding
B)   sales incentives
C)   two-tiered
D)   merit payE) All of the above
F) C) and D)

Question 18

________ assign different pay rates for jobs of unequal worth,and provide the basic framework for recognizing differences in individual's contributions.

Accepted Answer

The answer of ________ assign different pay rates for jobs...

Question 19

A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

Accepted Answer

The answer of A ________ is the difference between the...

Question 20

With which sales compensation plan does the level of pay not vary when sales volume does?

Accepted Answer

A)   commission-only plan
B)   salary-only (base pay)  plan
C)   salary (base pay) -plus-bonus plan
D)   salary (base pay) -plus-commission planE) C) and D)
F) B) and D)

Exam 8: Building Pay Structures that Recognize Individual Contributions

This type of commission draw acts as a salary because employees are not obligated to repay the loans if they do not sell enough to cover the amount.

Correct Answer
verified

With which sales compensation plan does the level of pay not vary when sales volume does?

Correct Answer
verified

Richard's job has a compa-ratio of 0.85.What does this ratio tell about Richard's pay rate?

Correct Answer
verified

This federal Act requires contractors with federal contracts worth over $2,000 to pay wages at least equal to those prevailing in the area where the work is being done.

Correct Answer
verified

In establishing pay grades,which pay rate is established first?

Correct Answer
verified

Money that covers the basic living expenses of sales professionals is better known as a ________,

Correct Answer
verified

This is a loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it.

Correct Answer
verified

Alejandro Martinez is responsible for setting up the pay structure for his company.He believes that newly hired employees should not be paid as much as established employees.Accordingly,what type of pay structure should Mr.Martinez use?

Correct Answer
verified

A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

Correct Answer
verified

Briefly discuss designing job-based pay system (i.e.merit pay,sales incentive pay)and person-focused programs.What considerations arise when making a transition from using a job-based pay system to using pay-for-knowledge?

Correct Answer
verified
There are three matters that compensatio...
View Answer

The ________ pay value is the halfway mark between the range minimum and maximum rates.

Correct Answer
verified

Which of the following would NOT be considered as an advantage of broadbanding?

Correct Answer
verified

________ assign different pay rates for jobs of unequal worth,and provide the basic framework for recognizing differences in individual's contributions.

Correct Answer
verified

If the company adopts a market lag policy,how will that company's pay range midpoint compare to the market average?

Correct Answer
verified

Which scenario would be appropriate for using a salary-only plan?

Correct Answer
verified

This theory suggests that an employee must regard his own ratio of merit increase pay to performance as similar to the ratio for other comparably performing people in the company.

Correct Answer
verified

________ represent the vertical dimension of pay structures.

Correct Answer
verified

How are compa-ratios calculated?

Correct Answer
verified

Correct Answer
verified

________ is a form of compensation based upon a percentage of the selling price of a product or service.

Correct Answer
verified

Exam 8: Building Pay Structures that Recognize Individual Contributions

This type of commission draw acts as a salary because employees are not obligated to repay the loans if they do not sell enough to cover the amount.

Correct AnswerverifiedShow Answer

With which sales compensation plan does the level of pay not vary when sales volume does?

Correct AnswerverifiedShow Answer

Richard's job has a compa-ratio of 0.85.What does this ratio tell about Richard's pay rate?

Correct AnswerverifiedShow Answer

This federal Act requires contractors with federal contracts worth over $2,000 to pay wages at least equal to those prevailing in the area where the work is being done.

Correct AnswerverifiedShow Answer

In establishing pay grades,which pay rate is established first?

Correct AnswerverifiedShow Answer

Money that covers the basic living expenses of sales professionals is better known as a ________,

Correct AnswerverifiedShow Answer

This is a loan from the company to the employee that is carried forward indefinitely until the employee sells enough to repay it.

Correct AnswerverifiedShow Answer

Alejandro Martinez is responsible for setting up the pay structure for his company.He believes that newly hired employees should not be paid as much as established employees.Accordingly,what type of pay structure should Mr.Martinez use?

Correct AnswerverifiedShow Answer

A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

Correct AnswerverifiedShow Answer

Briefly discuss designing job-based pay system (i.e.merit pay,sales incentive pay)and person-focused programs.What considerations arise when making a transition from using a job-based pay system to using pay-for-knowledge?

Correct AnswerverifiedThere are three matters that compensatio...View AnswerShow Answer

The ________ pay value is the halfway mark between the range minimum and maximum rates.

Correct AnswerverifiedShow Answer

Which of the following would NOT be considered as an advantage of broadbanding?

Correct AnswerverifiedShow Answer

________ assign different pay rates for jobs of unequal worth,and provide the basic framework for recognizing differences in individual's contributions.

Correct AnswerverifiedShow Answer

If the company adopts a market lag policy,how will that company's pay range midpoint compare to the market average?

Correct AnswerverifiedShow Answer

Which scenario would be appropriate for using a salary-only plan?

Correct AnswerverifiedShow Answer

This theory suggests that an employee must regard his own ratio of merit increase pay to performance as similar to the ratio for other comparably performing people in the company.

Correct AnswerverifiedShow Answer

________ represent the vertical dimension of pay structures.

Correct AnswerverifiedShow Answer

How are compa-ratios calculated?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

________ is a form of compensation based upon a percentage of the selling price of a product or service.

Correct AnswerverifiedShow Answer

Correct Answer
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There are three matters that compensatio...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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