CODESP Classification and Compensation Studies 4 — Questions and Answers
Question 1: Which method of job evaluation assigns predetermined point values to compensable factors such as skill, effort, and responsibility?
- Factor comparison method
- Point-factor method (Correct answer)
- Job ranking method
- Classification method
Correct answer: Point-factor method
The point-factor method assigns numerical points to each compensable factor, and the total points determine the job's relative worth.
Question 2: In a broadbanding compensation structure, how does the number of pay grades compare to a traditional structure?
- Broadbanding uses more pay grades with narrower ranges
- Broadbanding uses fewer pay grades with wider salary ranges (Correct answer)
- Both structures use the same number of pay grades
- Broadbanding eliminates pay grades entirely
Correct answer: Broadbanding uses fewer pay grades with wider salary ranges
Broadbanding consolidates many traditional pay grades into fewer, wider bands to allow greater flexibility in pay decisions.
Question 3: What is the primary purpose of a 'red-circle' rate in compensation administration?
- It identifies employees eligible for promotion
- It flags an employee whose pay exceeds the maximum of their pay grade (Correct answer)
- It marks positions approved for market premium pay
- It designates high-potential employees for accelerated increases
Correct answer: It flags an employee whose pay exceeds the maximum of their pay grade
A red-circle rate occurs when an employee's salary is above the maximum of the assigned pay grade, typically frozen until the range catches up.
Question 4: When conducting a classification study, which document is the primary source of information about a position's duties and responsibilities?
- Organizational chart
- Employee performance appraisal
- Position description or job description (Correct answer)
- Salary survey data
Correct answer: Position description or job description
The position description captures actual duties, responsibilities, and qualifications and is the foundation for classification decisions.
Question 5: The 'lead-lag' pay strategy in compensation means an organization:
- Pays above market at the start of the year and falls to market by year-end (Correct answer)
- Lags the market initially, then leads after annual merit increases
- Alternates between leading and lagging the market each fiscal year
- Sets pay to exactly match the market median at all times
Correct answer: Pays above market at the start of the year and falls to market by year-end
A lead-lag strategy sets pay above market at implementation so the average pay across the year aligns with market midpoint as pay ages.
Question 6: Which legal principle requires that men and women in the same organization be paid equally for jobs requiring substantially equal skill, effort, and responsibility under similar working conditions?
- Title VII of the Civil Rights Act
- The Equal Pay Act of 1963 (Correct answer)
- The Fair Labor Standards Act
- Executive Order 11246
Correct answer: The Equal Pay Act of 1963
The Equal Pay Act of 1963 specifically prohibits wage discrimination based on sex for substantially equal work performed under similar conditions.
Question 7: In job analysis, the term 'KSA' refers to which set of worker attributes evaluated for classification purposes?
- Knowledge, Standards, and Accountability
- Knowledge, Skills, and Abilities (Correct answer)
- Key Selection Attributes
- Knowledge, Scope, and Authority
Correct answer: Knowledge, Skills, and Abilities
KSAs—Knowledge, Skills, and Abilities—are the worker requirements identified through job analysis and used to classify and staff positions.
CODESP Classification and Compensation Studies 4
Which method of job evaluation assigns predetermined point values to compensable factors such as skill, effort, and responsibility?