CCP Market Pricing & Salary Surveys 3 — Questions and Answers
Question 1: The process of matching internal jobs to survey benchmark jobs based on duties and responsibilities is called:
- Job leveling
- Job slotting
- Job matching (Correct answer)
- Job coding
Correct answer: Job matching
Job matching aligns internal positions to survey benchmark jobs by comparing scope, complexity, and accountabilities.
Question 2: If a company's compa-ratio is greater than 1.0, it indicates that:
- Average pay exceeds the midpoint of the pay range (Correct answer)
- Average pay is below the midpoint of the pay range
- The pay range spread is too wide
- The market midpoint has not been updated
Correct answer: Average pay exceeds the midpoint of the pay range
A compa-ratio above 1.0 means average actual pay is above the midpoint, suggesting the workforce is paid above range center.
Question 3: Which survey participant data characteristic should raise the most concern about survey data quality?
- Very small number of incumbents reported per job (Correct answer)
- Large variance in participant company revenue
- Mix of public and private companies
- Inclusion of part-time employees
Correct answer: Very small number of incumbents reported per job
A very small incumbent count means the data is statistically unreliable and could be distorted by a single outlier.
Question 4: A 'broadband' pay structure differs from a traditional grade structure primarily because it:
- Has wider pay ranges with fewer grades (Correct answer)
- Uses market survey data exclusively
- Ties pay directly to performance ratings
- Eliminates job evaluation entirely
Correct answer: Has wider pay ranges with fewer grades
Broadbanding consolidates many traditional grades into a smaller number of wide salary bands.
Question 5: When calculating a 'blended market rate' using multiple surveys, the analyst should weight surveys based on:
- Relevance to the organization's labor market, sample size, and data quality (Correct answer)
- Survey cost and publication date only
- The alphabetical order of survey publishers
- The highest reported pay figures
Correct answer: Relevance to the organization's labor market, sample size, and data quality
Weighting by relevance, sample size, and quality ensures the blended rate best reflects the organization's true competitive market.
Question 6: The 'pay line' or 'market line' in salary survey analysis is derived by:
- Plotting job evaluation points against market pay and fitting a regression line (Correct answer)
- Averaging all survey data across all jobs
- Connecting the midpoints of each pay grade
- Ranking jobs from lowest to highest market pay
Correct answer: Plotting job evaluation points against market pay and fitting a regression line
A regression line through a scatter plot of job evaluation points vs. market rates creates the pay policy line.
Question 7: Which of the following best describes the 'lead-lag' pay strategy?
- Pay leads the market at the start of the year and lags by year-end on average (Correct answer)
- Pay always leads for some jobs and lags for others
- Pay is set below market at hire but increases rapidly
- Pay midpoints are set above market but actual pay lags due to freezes
Correct answer: Pay leads the market at the start of the year and lags by year-end on average
Under a lead-lag strategy, pay is set above market at the start of the year and falls to market level by year-end, averaging market pay.
CCP Market Pricing & Salary Surveys 3
The process of matching internal jobs to survey benchmark jobs based on duties and responsibilities is called: