OBHR 82171

Understanding international compensation begins with recognizing differences and similarities and figuring out how to best manage them.

When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.

An organization defines its strategy through the tradeoffs it makes in choosing what to do and what not to do.

Managers often regard external market data as more objective than internal job evaluation.

Distributive justice is more important than procedural justice for employee acceptance of their pay.

Many contracts specify a premium be paid above the worker’s base wage for working nonstandard shifts.

Strategy refers to the fundamental direction that an organization chooses.

In automatic progression, seniority is used as the basis for movement through the job classifications.

A compensation strategy should reflect an organization’s values.

Regression smoothes large amounts of data while minimizing variations.

In Germany, an employee’s pay is affected by his or her age.

The level at which an analysis begins affects whether the work is similar or dissimilar.

Since the Japanese system is so seniority-based, labor costs decrease as the average age of the workforce increases.

MBO is particularly well suited as a basis for administrative decisions such as pay raises.

A job ad stating generous benefits leads applicants to place higher value on benefits in choosing among jobs.

Risk-sharing plans include a provision for cuts in base pay that are only recaptured in years when an organization meets performance objectives.

In the formula “Behavior = f (M, A, E),” M denotes monetary incentives.

A compa-ratio greater than 1 means that, on average, the rates exceed the intended policy.

Incentive stock options may be deducted as a company expense.

Rather than define employment as hours of work, number of employees is often used.

When pay raises are based on events over which employees lack significant control, they are likely to regard the system as unfair.

Performance-standard training provides raters with a standard of comparison or frame of reference for making appraisals.

The central issue involving merit pay is how to get employees to view raises as a reward for performance.

Vesting refers to the length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan.

A job structure based upon job value orders jobs on the basis of the relative contribution of the skills, duties, and responsibilities of each job to the organization’s goals.

Employers tend to overestimate the importance of pay to employees and underestimate the role of relationships with the supervisor.

The trend today is toward less stable and less secure compensation packages.

A potential disadvantage of skill-based pay is that labor costs can be a source of competitive disadvantage.

An important implication of reinforcement theory is that the timing of payouts to employees is very important.

Employers are more likely to collect task-level job information if the jobs are flexible and fast-changing.

Compared to an on-demand review of certifications, scheduling fixed review points makes it easier to budget and control payroll increases.

Exit incentives is likely to result in the loss of high-performing employees.

The Americans With Disabilities Act’s essential-elements requirement for hiring and promotion decisions seems to require less detail than what is required for pay decisions.

The CPI accurately reflects an individual employee’s cost of living.

A horn error occurs when an employee is:
A. consistently rated higher than deserved.
B. given a favorable rating on all job duties based on his or her impressive performance in just one job function.
C. downgraded across all performance dimensions because of poor performance on one dimension.
D. consistently rated lower than deserved.

The most frequently used incentive system is the:
A. standard hour plan.
B. straight piecework system.
C. Merrick system.
D. Taylor differential piece-rate plan.

Which of the following statements about anchoring/framing is true?
A. It states that initial data strongly affect decisions/beliefs.
B. It is the reluctance to accept evidence that contradicts existing beliefs.
C. It refers to the tendency to follow fashions in programs/techniques.
D. It states that people discover patterns in random events.

The _____ theory is the most influential in explaining pay-level differences.
A. human capital
B. marginal productivity
C. efficiency-wage
D. signaling

According to the _____ theory, relative pay is important as employees evaluate their pay-effort balance in comparison to other employees.
A. equity
B. expectancy
C. agency
D. reinforcement

The most common form of outcomes-based appraisal is:
A. the essay method.
B. MBO.
C. the performance standards review.
D. the BARS.

An employee who changes jobs four or more times during his or her career will likely receive a pension approximately _____ as that of an employee whose working career is spent with one employer, assuming that both employees have the same starting salary and receive annual increases equal to inflation rate.
A. twice as large
B. the same size
C. one-fourth the size
D. half the size

In the regression equation, y = a + bx, job evaluation points are denoted by _____.
A. a
B. b
C. x
D. y

The _____ minimizes the distortion of the central tendency caused by outliers.
A. weighted mean
B. mean
C. mode
D. median

The process of collecting information that identifies the similarities and differences among jobs is known as _____.
A. job performance
B. job analysis
C. use value evaluation
D. exchange value analysis

Popular stereotypes of salespeople characterize them as being heavily motivated by _____.
A. financial compensation
B. personal growth and job security
C. recognition and appreciation
D. promotional opportunities

Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.
A. turnover
B. productivity
C. job description
D. total cost

The Web page for the compensation society is _____.
A. Society for Human Resource Management
B. American Compensation Association
C. International Compensation and Benefits Society
D. WorldatWork

Unionization rates are higher in Europe than in Asia.

Which of the following statements regarding wage differences in industries and firms is NOT true?
A. Wages of men in large firms are 54 percent higher than wages of men in small firms.
B. Hispanic men are concentrated in construction and service firms.
C. Female employment is more heavily concentrated in large firms.
D. The pay premium associated with changing jobs is enjoyed primarily by white males.

Which of the following is true regarding a gain-sharing plan?
A. It prevents union members from sharing the wealth.
B. It creates difficulty in maintaining employment levels in marginal organizations.
C. It becomes ineffective when union members participate in plan development.
D. Not all unions would be in favor of this type of plan.

External factors are dominant influences on jobs filled via:
A. demotions.
B. promotions.
C. transferring employees.
D. hiring graduates.

Droppiece Inc. is a company that provides more performance-based pay and less base pay than its competitors. Who among the following is most likely to join Droppiece?
A. George, a recently married man who wants a stable income
B. Stella, a recent college graduate who loves to take on a challenge
C. Mark, a musician who wants to supplement his income
D. Sara, a senior citizen who wants a job only to keep herself busy

_____ relieve an employer’s liability when a pre-employment injury combines with a work-related injury to produce a disability greater than that caused by the latter alone.
A. Collateral funds
B. Second-injury funds
C. Insolvency funds
D. Pre-employment funds

Which of the following is true of hiring LCNs?
A. Companies incur relocation expenses and other substantial expenses associated with the use of LCNs.
B. Companies have to be concerned about LCNs’ adapting to the local culture.
C. Only rarely do organizations decide that hiring LCNs is appropriate.
D. Employment of LCNs satisfies nationalistic demands for hiring locals.

Which of the following is a policy, and NOT an objective, in the pay model?
A. Ethics
B. Competitiveness
C. Efficiency
D. Fairness

Which of the following statements about reliability of job analysis is true?
A. It is a measure of the practicality of the information collected.
B. It reflects whether there is a convergence of results among sources of data and methods.
C. It is a necessary condition for validity.
D. It is a sufficient condition for validity.

MaxTrain Corp. recognizes that its competitor GlasWell Corp., which is unionized, offers higher wages and benefits. To avoid unionization demands from its workers, MaxTrain decides to offer the same wages and benefits to its employees as GlasWell. Which of the following phenomena is exemplified in this case?
A. The sorting effect
B. The halo effect
C. The leniency effect
D. The spillover effect

TreeWind Inc. is a bookstore that uses skill and responsibility as its compensable factors. It assigns 20 percent weight to responsibility and 80 percent weight to skill. If the responsibility factor scores a 60 after multiplying the subfactors with their corresponding weights, and if the skill factor has two subfactors that are rated as 4 and 5, what is the total weightage given to the job?
A. 40
B. 120
C. 420
D. 990

Leah, the CEO of SteadyResults Corp., feels that she is underpaid, so she hires a compensation consultant to survey actual competitors of the company. According to agency theory, if SteadyResults performs poorly, her salary will most likely:
A. remain the same as CEO salary is based only on performance.
B. be withheld and paid at a later date as the company is doing poorly.
C. be increased in order to retain her.
D. remain the same as the company is doing poorly.

Which of the following statements is true about market pricers?
A. They align pay structures with the business strategy.
B. Their pay structures are unique and difficult to imitate.
C. They assume that little value is added through internal alignment.
D. They emphasize pay structures based on unique technology or the way work is organized.

Today, job analysis is typically performed by _____.
A. experienced job incumbents
B. new employees
C. HR generalists and supervisors
D. experienced workers

The parable of the vineyard owner and the compensation paid to the laborers illustrated:
A. the payment to the laborers according to their productivity.
B. the payment to the laborers based upon the content of the job.
C. the payment to the laborers based upon the hours of work.
D. the ignorance of the owner toward the content of work.

Who among the following is most likely to be working for a company that uses a competency-based pay plan?
A. Julia, who focuses on getting promoted to get a pay increase
B. Faiza, a manager, who focuses on choosing the employees best suited for job roles
C. Juan, a manager, who focuses on controlling costs through budgets and work assignments
D. Carlos, who focuses on obtaining certifications in her field to get a pay increase

Company X pays for performance. Allan, an employee of the company, is not in favor of this reward system and, therefore, leaves Company X in search of another company with different rules for getting rewards. This is an example of the:
A. design effect.
B. compensation effect.
C. sorting effect.
D. incentive effect.

One of the most preferred benefits is _____.
A. stock plans
B. profit sharing
C. shorter working hours
D. early retirement

Lisa is a manager at Trell Inc. When she hires her employees, she focuses on finding the right job for the right person. Which of the following pay plans is her employer most likely using?
A. Skill-based pay plan
B. Competency-based pay plan
C. Aptitude-based pay plan
D. Job-based pay plan

The alignment test
A. is difficult to imitate.
B. is the most difficult test.
C. helps ensure passing the differentiation test.
D. becomes difficult if the differentiation test is not clear.

What predictions can be made about performance-based pay based on Maslow’s theory?

Compare risk-sharing and success-sharing plans.

What should the manager do if employees and their supervisors do not agree on what is part of the job?

Explain the dimensions of national cultural attributes proposed by Hofstede.

What are the eligibility requirements for unemployment insurance?

What are the major disadvantages of a flexible benefits package?

What is the top-down method of budgeting?

What is the balance sheet approach? What is its objective?

List the basic elements of the pay model.

Write short notes on virtuous and vicious circles.

Briefly summarize the degree to which the social contract constrains the employment relationship in organizations with an example.

What is the purpose of the HIPAA?

Briefly describe gain-sharing plans.

Explain the low-high approach in selecting jobs for inclusion in a compensation survey.

Discuss SVOP.

Briefly explain the concept of flexible compensation.

What are the four major administration issues that arise in setting up a benefit package?

What is the turnover effect?Explain how it is calculated with an example.