Chapter 11 - Establishing a Pay Structure Chapter 11 Establishing a Pay Structure True / False Questions 1. Pay level is the average amount, including wages, salaries, and bonuses, the organization pays for a particular job. True False 2. An organization's pay structure and pay levels are policies of the organization, rather than the amount a particular employee earns. True False 3. Equal-pay-for-equal-work rules have resulted in pay equity for men and women, whites and minorities, and other groups within the United States. True False 4. States may enact their own minimum wage rates, in which case employers must pay whichever rate is higher—the federal or state. True False 5. Paying a salary does not necessarily mean a job is exempt. True False 6. Under the FLSA, children aged 14 and 15 may not be employed in any work associated with interstate commerce. True False 7. The FLSA requires federal contractors to pay local or area prevailing wage rates. True False 11-1
Chapter 11 - Establishing a Pay Structure 8. An important influence on price is the cost to produce the goods and services for sale. True False 9. Product markets place an upper limit on the pay organizations can offer employees. True False 10. When labor costs are a large part of an organization's total costs and when its customers place great importance on price, the organization is most likely to select an above-market pay level. True False 11. In terms of compensation, benchmarking involves the use of market surveys. True False 12. Employees usually evaluate their pay relative to the pay of employees with similar job descriptions in rival firms. True False 13. Under a two-tier wage plan, employees doing the same job are paid two different rates, depending on their background and training. True False 14. In the past, when gathering wage and salary data was inexpensive, employers had more leeway in negotiating with individual employees. True False 11-2
Chapter 11 - Establishing a Pay Structure 15. Compensable factors are job characteristics that an organization values and chooses to pay for. True False 16. Key jobs have relatively stable content and are common to many organizations. True False 17. When job structure and market data conflict, the best approach to resolve the two would be for organizations to base pay entirely on market forces. True False 18. Pay grades allow rates of pay for individual jobs to be more precisely matched to market rates and the organization's job structure. True False 19. A survey of businesses in the United States found that almost 50 percent have a policy of providing pay differentials based on demographics. True False
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