83) Which of the following most likely indicates than an employee is a professional under the
law?
A) holds a college degree
B) works overtime hours
C) manages other workers
D) earns at least $245 per week
Chapter: 10
LO: 10.3: Explain how to price managerial and professional jobs.
Skill: Concept
84) What method is used by most employers to price professional jobs?
A) ranking method
B) point method
C) market-pricing approach
D) job classification method
Chapter: 10
LO: 10.3: Explain how to price managerial and professional jobs.
Skill: Concept
85) The Sarbanes-Oxley Act of 2002 makes board members personally liable for violating their
fiduciary responsibilities to their shareholders.
Chapter: 10
LO: 10.3: Explain how to price managerial and professional jobs.
Skill: Concept
31
86) The compensation for top executives at most firms consists of four components: short-term
incentives, long-term incentives, executive benefits and perks, and base pay.
Chapter: 10
LO: 10.3: Explain how to price managerial and professional jobs.
Skill: Concept
87) How is executive pay typically determined? Why are boards of directors tightening down on
executive pay in recent years?
AACSB: Analytical Thinking
Chapter: 10
LO: 10.3: Explain how to price managerial and professional jobs. 10.4: Explain the difference
between competency-based and traditional pay plans.
Skill: Synthesis
32
88) A company using competency-based pay compensates employees for all of the following
EXCEPT ________.
A) behaviors
B) job title
C) knowledge
D) skills
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
89) Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the
past few years, the company’s market share has dropped significantly, and employee turnover has
increased. Upper management is considering the implementation of a new compensation policy
in its efforts to turn the company around. Historically, the company has paid all employees
similarly with some variation for seniority but no distinction between high and low performers.
Which of the following, if true, supports the decision by Homelife executives to implement
competency-based pay?
A) In an effort to save money, Homelife will be reducing the employee training budget over the
next 3 years.
B) Most Homelife managers are men, but executives hope to increase the number of minority
women working for the company.
C) Homelife sales associates currently receive base salaries in addition to sales commissions, but
they have monthly sales quotas.
D) Homelife plans to organize employees into teams, provide regular training, and frequently
assess workers’ skills and knowledge.
AACSB: Analytical Thinking
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Critical Thinking
33
90) ________ means collapsing salary grades and ranges into just a few wide levels or bands,
each of which contains a relatively wide range of jobs and salary levels.
A) Comparable worth
B) Strategic compensation
C) Broadbanding
D) Job grading
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
91) High-performance work systems typically use competency-based pay because employees
________.
A) participate in training and development workshops
B) receive frequent performance appraisals
C) rotate among different jobs
D) need technical skills
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
92) What is the primary disadvantage of traditional grade pay plans?
A) inflexibility
B) reliability
C) validity
D) subjectivity
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
34
93) County of Washington v. Gunther was an important case regarding ________.
A) collective bargaining
B) comparable worth
C) equal opportunity
D) affirmative action
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
94) Which job evaluation method is associated with most comparable worth court cases?
A) market-based approach
B) job classification
C) ranking method
D) point method
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
95) According to research, U.S. women earn approximately ________ as much as men.
A) 50%
B) 65%
C) 80%
D) 95%
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
35
96) Which of the following makes executives personally liable for corporate financial oversight
lapses?
A) Sarbanes-Oxley Act
B) McCain-Feingold Act
C) Davis-Bacon Act
D) Walsh-Healey Act
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
97) The primary advantage of broadbanding is that it provides greater flexibility with employee
assignments.
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
98) Competencies are demonstrable characteristics of a person including knowledge, skills, and
behaviors.
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
36
99) Broadbanding refers to the requirement to pay men and women equal wages for jobs of
comparable value to the employer.
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
100) Mark’s employer uses a competency-based pay system, so Mark is paid for his skills and
knowledge rather than his job responsibilities.
AACSB: Application of knowledge
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Application
101) During difficult economic times, firms are more likely to base pay on competencies rather
than job evaluations.
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Concept
37
102) What is broadbanding? Why and how do firms use broadbanding?
AACSB: Application of knowledge
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Critical Thinking
103) What is a total rewards pay program? What components might be included in a total
rewards plan?
AACSB: Application of knowledge
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Application
38
104) Discuss the fundamental components and uses of competency-based pay systems.
AACSB: Application of knowledge
Chapter: 10
LO: 10.4: Explain the difference between competency-based and traditional pay plans.
Skill: Application
105) A total rewards package encompasses not only compensation and benefits but also personal
and professional growth opportunities.
Chapter: 10
LO: 10.5: Explain the importance of total rewards for improving employee engagement.
Skill: Concept
39