MGT 421: COMPENSATION AND
BENEFITS EXAM 2 QUESTIONS WITH
100% CORRECT ANSWERS LATEST
VERSION 2025/2026.
Compensation survey: how they're formulated, strengths and weaknesses - ANS Serve 2
essential functions:
Define the relevant labor market.
Help choose the benchmark jobs for comparison.
Strengths: Able to gain valuable data on competitors compensation plans and trends from base
wages to discretionary benefits and how compensation plans are mixed between the two
(example: 60% wages, 40% benefits). Helps compensation professionals set compensation for
their employees and stay competitive in the marker.
Weaknesses: Compensation surveys contain a massive amount of data that can be
overwhelming to analyze without the use of statistics. Usually a large amount of variation in
comp between companies can make it hard to build a market competitive plan for your
company. Surveys often have outdated data as it takes a while to compile wages and benefits to
make the survey.
Evaluating raw compensation survey data (4 steps) - ANS 1.) measures of central tendency:
mean, median, mode
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, 2.) measures of variation: standard deviation
3.) aging data (using CPI)
4.) performing regression analysis
Benchmark jobs - ANS contents well known, relatively stable, agreed upon by employees
common across different employers
represents the entire range of jobs that are being evaluated within a company
generally accepted in the labor market for the purpose of setting pay levels
Median vs. mean - ANS Median: the middle value of a data set, regardless of magnitude
Mean: the average value of a data set, influenced by magnitude
Understanding the significance of quartiles - ANS Quartiles are useful for understanding the
spread of data based on a particular value; i.e. if the 25th quartile is $30,000 that means 25% of
people surveyed make less than or equal to $30,000.
Pay policies: market lead, market match, market lag - ANS Lead: distinguishes a company
from competition by compensating employees more highly than most competitors
Match: typically follows the market pay rates along the market pay line
Lag: distinguishes a company from competition by compensating employees less than most
competitors
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
BENEFITS EXAM 2 QUESTIONS WITH
100% CORRECT ANSWERS LATEST
VERSION 2025/2026.
Compensation survey: how they're formulated, strengths and weaknesses - ANS Serve 2
essential functions:
Define the relevant labor market.
Help choose the benchmark jobs for comparison.
Strengths: Able to gain valuable data on competitors compensation plans and trends from base
wages to discretionary benefits and how compensation plans are mixed between the two
(example: 60% wages, 40% benefits). Helps compensation professionals set compensation for
their employees and stay competitive in the marker.
Weaknesses: Compensation surveys contain a massive amount of data that can be
overwhelming to analyze without the use of statistics. Usually a large amount of variation in
comp between companies can make it hard to build a market competitive plan for your
company. Surveys often have outdated data as it takes a while to compile wages and benefits to
make the survey.
Evaluating raw compensation survey data (4 steps) - ANS 1.) measures of central tendency:
mean, median, mode
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, 2.) measures of variation: standard deviation
3.) aging data (using CPI)
4.) performing regression analysis
Benchmark jobs - ANS contents well known, relatively stable, agreed upon by employees
common across different employers
represents the entire range of jobs that are being evaluated within a company
generally accepted in the labor market for the purpose of setting pay levels
Median vs. mean - ANS Median: the middle value of a data set, regardless of magnitude
Mean: the average value of a data set, influenced by magnitude
Understanding the significance of quartiles - ANS Quartiles are useful for understanding the
spread of data based on a particular value; i.e. if the 25th quartile is $30,000 that means 25% of
people surveyed make less than or equal to $30,000.
Pay policies: market lead, market match, market lag - ANS Lead: distinguishes a company
from competition by compensating employees more highly than most competitors
Match: typically follows the market pay rates along the market pay line
Lag: distinguishes a company from competition by compensating employees less than most
competitors
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
