Managing Human Capital – C202 – Western Governors University – 2025 – Complete Exam Review
with Questions and Answers
Direct financial compensation - (ANSWER)compensation received in the form of salary, wages,
commissions, stock options or bonuses
indirect financial compensation - (ANSWER)all the tangible and financially valued rewards that are not
included in direct compensation including free meals, vacation time and health insurance
nonfinancial compensation - (ANSWER)rewards and incentives given to employees that aren't financial
in nature
base pay - (ANSWER)reflects the size and scope of an employee's responsibilities
severance pay - (ANSWER)give to employees upon termination of their employment
fixed pay - (ANSWER)pays employees a set amount regardless of performance
variable pay - (ANSWER)bases some or all of an employee's compensation on employee, team, or
organizational
pay structure - (ANSWER)the array of pay rates for different work or skills within a single organization
pay mix - (ANSWER)the relative emphasis give to different compensation components
pay leader - (ANSWER)organization with a compensation policy of giving employees greater rewards
than competitors
pay follower - (ANSWER)an organization that pays its front-line employees as little as possible
resource dependence theory - (ANSWER)proposition that organizational decisions are influenced by
both internal and external agents who control critical resources
,Managing Human Capital – C202 – Western Governors University – 2025 – Complete Exam Review
with Questions and Answers
wage differentials - (ANSWER)differences in wage between various workers, groups of workers, or
workers within a career field
labor market - (ANSWER)all of the potential employees located within a geographic area from which the
organization might be able to hire
cost of living allowances - (ANSWER)clauses in union contacts that automatically increase wages base on
the U.S. Bureau of Labor Statistics' cost of living index
market pricing - (ANSWER)uses external sources of information about how others are compensating a
certain position to assign value to a company's similar job
Compensation surveys - (ANSWER)surveys of other organizations conducted to learn what they are
paying for specific jobs or job classes
benchmark jobs - (ANSWER)jobs that tend to exist across departments and across diverse organizations
allowing them to be used as a basis for compensation comparisons
job evaluation - (ANSWER)a systematic process that uses expert judgement to assess differences in
value between jobs
ranking methos - (ANSWER)subjectively compares jobs to each other based on their overall worth to the
organization
job classification method - (ANSWER)subjectively classifies jobs into an exiting hierarchy of grades and
categories
point factor method - (ANSWER)uses a set of compensable factors to determine a job's value. skill, resp,
effort, working cond.
compensable factor - (ANSWER)any characteristic used to provide a basis for judging a job's value
,Managing Human Capital – C202 – Western Governors University – 2025 – Complete Exam Review
with Questions and Answers
skills, responsibilities, effort, working conditions - (ANSWER)Four categories of compensable factors
Hay Group Guide Chart - Profile Method - (ANSWER)a point-factor system is used to produce both a
profile and a point score for each position.
know how
problem solving
accountability
working conditions
Know-how, problem solving, accountability, working conditions - (ANSWER)Hay Group Method based on
four main factors
Position Analysis Questionnaire - (ANSWER)a structured job evaluation questionnaire that is statistically
analyzed to calculate pay rates based on how the labor market is valuing worker characteristics. a
copyrighted, standardized, structured job analysis questionnaire. 6 sections covering 187 job elements.
job pricing - (ANSWER)the generation of salary structures and pay levels for each job based on the job
evaluation data
single rate system, pay grades and broadbanding - (ANSWER)Three most common job pricing systems
pay grade (pay scale) - (ANSWER)the range of possible pay for a group of jobs
broadbanding - (ANSWER)using very wide pay grades to increase pay flexibility
internal equity - (ANSWER)when employees perceive their pay to be fair relative to the pay of other jobs
in the organization
, Managing Human Capital – C202 – Western Governors University – 2025 – Complete Exam Review
with Questions and Answers
employee equity - (ANSWER)the perceived fairness of the relative pay between employees performing
similar jobs for the same organization
external equity - (ANSWER)when an organization's employees believe that their pay is fair when
compared to what other employers pay their employees who perform similar jobs
comparable worth - (ANSWER)if two jobs have equal difficulty requirements, the pay should be the
same, regardless of who fills them
wage rate compression - (ANSWER)starting salaries for new hires exceed the salaries paid to
experienced employees
golden parachute - (ANSWER)lucrative benefits given to executives in the event the company is taken
over
Cost-of-living adjustments - (ANSWER)pay increases to account for a higher cost of living in one country
versus another
Housing allowance - (ANSWER)payments to subsidize or cover housing and related costs
hardship premiums - (ANSWER)increased salary for living in an area with a lower quality of life, less
safety, etc.
tax equalization payments - (ANSWER)increased salary to make up for higher taxes that reduce take-
home pay and decrease employee's purchasing power
inflation adjustments - (ANSWER)larger and/or more frequent raises to maintain employee's purchasing
power in the face of inflation
Fair Labor Standards Act of 1938 - (ANSWER)a federal law that sets standards for minimum wages,
overtime pay, and equal pay for men and women performing the same jobs
with Questions and Answers
Direct financial compensation - (ANSWER)compensation received in the form of salary, wages,
commissions, stock options or bonuses
indirect financial compensation - (ANSWER)all the tangible and financially valued rewards that are not
included in direct compensation including free meals, vacation time and health insurance
nonfinancial compensation - (ANSWER)rewards and incentives given to employees that aren't financial
in nature
base pay - (ANSWER)reflects the size and scope of an employee's responsibilities
severance pay - (ANSWER)give to employees upon termination of their employment
fixed pay - (ANSWER)pays employees a set amount regardless of performance
variable pay - (ANSWER)bases some or all of an employee's compensation on employee, team, or
organizational
pay structure - (ANSWER)the array of pay rates for different work or skills within a single organization
pay mix - (ANSWER)the relative emphasis give to different compensation components
pay leader - (ANSWER)organization with a compensation policy of giving employees greater rewards
than competitors
pay follower - (ANSWER)an organization that pays its front-line employees as little as possible
resource dependence theory - (ANSWER)proposition that organizational decisions are influenced by
both internal and external agents who control critical resources
,Managing Human Capital – C202 – Western Governors University – 2025 – Complete Exam Review
with Questions and Answers
wage differentials - (ANSWER)differences in wage between various workers, groups of workers, or
workers within a career field
labor market - (ANSWER)all of the potential employees located within a geographic area from which the
organization might be able to hire
cost of living allowances - (ANSWER)clauses in union contacts that automatically increase wages base on
the U.S. Bureau of Labor Statistics' cost of living index
market pricing - (ANSWER)uses external sources of information about how others are compensating a
certain position to assign value to a company's similar job
Compensation surveys - (ANSWER)surveys of other organizations conducted to learn what they are
paying for specific jobs or job classes
benchmark jobs - (ANSWER)jobs that tend to exist across departments and across diverse organizations
allowing them to be used as a basis for compensation comparisons
job evaluation - (ANSWER)a systematic process that uses expert judgement to assess differences in
value between jobs
ranking methos - (ANSWER)subjectively compares jobs to each other based on their overall worth to the
organization
job classification method - (ANSWER)subjectively classifies jobs into an exiting hierarchy of grades and
categories
point factor method - (ANSWER)uses a set of compensable factors to determine a job's value. skill, resp,
effort, working cond.
compensable factor - (ANSWER)any characteristic used to provide a basis for judging a job's value
,Managing Human Capital – C202 – Western Governors University – 2025 – Complete Exam Review
with Questions and Answers
skills, responsibilities, effort, working conditions - (ANSWER)Four categories of compensable factors
Hay Group Guide Chart - Profile Method - (ANSWER)a point-factor system is used to produce both a
profile and a point score for each position.
know how
problem solving
accountability
working conditions
Know-how, problem solving, accountability, working conditions - (ANSWER)Hay Group Method based on
four main factors
Position Analysis Questionnaire - (ANSWER)a structured job evaluation questionnaire that is statistically
analyzed to calculate pay rates based on how the labor market is valuing worker characteristics. a
copyrighted, standardized, structured job analysis questionnaire. 6 sections covering 187 job elements.
job pricing - (ANSWER)the generation of salary structures and pay levels for each job based on the job
evaluation data
single rate system, pay grades and broadbanding - (ANSWER)Three most common job pricing systems
pay grade (pay scale) - (ANSWER)the range of possible pay for a group of jobs
broadbanding - (ANSWER)using very wide pay grades to increase pay flexibility
internal equity - (ANSWER)when employees perceive their pay to be fair relative to the pay of other jobs
in the organization
, Managing Human Capital – C202 – Western Governors University – 2025 – Complete Exam Review
with Questions and Answers
employee equity - (ANSWER)the perceived fairness of the relative pay between employees performing
similar jobs for the same organization
external equity - (ANSWER)when an organization's employees believe that their pay is fair when
compared to what other employers pay their employees who perform similar jobs
comparable worth - (ANSWER)if two jobs have equal difficulty requirements, the pay should be the
same, regardless of who fills them
wage rate compression - (ANSWER)starting salaries for new hires exceed the salaries paid to
experienced employees
golden parachute - (ANSWER)lucrative benefits given to executives in the event the company is taken
over
Cost-of-living adjustments - (ANSWER)pay increases to account for a higher cost of living in one country
versus another
Housing allowance - (ANSWER)payments to subsidize or cover housing and related costs
hardship premiums - (ANSWER)increased salary for living in an area with a lower quality of life, less
safety, etc.
tax equalization payments - (ANSWER)increased salary to make up for higher taxes that reduce take-
home pay and decrease employee's purchasing power
inflation adjustments - (ANSWER)larger and/or more frequent raises to maintain employee's purchasing
power in the face of inflation
Fair Labor Standards Act of 1938 - (ANSWER)a federal law that sets standards for minimum wages,
overtime pay, and equal pay for men and women performing the same jobs
