US expatriates believe their organizations do not value their international expertise.
Answer:
Group incentive pay increases turnover of better performers while individual incentive
increases turnover of poorer performers.
Answer:
Pay-for-knowledge plans pay new employees for the skills that they have learned at
their previous employment or at recognized education school.
Answer:
Distributive justice is more important than procedural justice for employee acceptance
of their pay.
Answer:
The component of compensation most likely subject to unethical practices are employee
profit-sharing payouts and executive stock valuations.
Answer:
Generally, it is difficult to compare total compensation of a U.S. firm with a foreign
competitor.
Answer:
One approach to both improving and measuring the level of acceptance of job
evaluation is to establish a formal appeals process.
Answer:
Toyota and Toshiba, leading Japanese manufacturers, use very similar pay systems.
Answer:
Stores that label each item’s price or ads that list a job opening’s starting wage are
examples of bourses.
Answer:
If adverse selection occurs for one or more benefits in a flexible benefits plan, the
higher cost will likely lead to those benefits being dropped from the plan.
Answer:
The total quality management advocates contend that telling raters that much of
performance is caused by the system rather than the individual employee makes ratings
less accurate.
Answer:
Compensation packages for salespeople must be competitive because salespeople tend
to compare their pay with competitors.
Answer:
Unions prefer individual to group incentive pay plans since members can earn more
money.
Answer:
The smallest unit in the job analysis process is the task.
Answer:
When employees earn a lot from sales incentives, customer service will also be very
good.
Answer:
When Microsoft replaced stock options with stock awards, they were asking employees
to put more ‘skin in the game”.
Answer:
Evidence suggests that skill-based pay may not increase productivity.
Answer:
Setting your company’s base pay to competitors’ total compensation risks high fixed
costs.
Answer:
The biggest current trend in health care is market-based or customer-driven.
Answer:
The product market sets the floor on the minimum wage required to attract sufficient
numbers of employees.
Answer:
There is far greater uniformity in the use of terms in person-based plans than there is in
job-based plans.
Answer:
According to agency theory, because employees prefer a salary, they demand higher
total pay if performance-based pay is used.
Answer:
A financial expert concluded that misaligned incentive programs were a major cause of
the recent crisis in the US financial system.
Answer:
Compensation strategy should reflect the organization’s values.
Answer:
Both pay level and pay mix decisions focus on two objectives: (1) control costs and
increase revenues and (2) attract and retain employees.
Answer:
The major reason for the growth of executive compensation has been granting stock
options.
Answer:
Segmenting sources of labor is a means of reducing labor costs.
Answer:
Signaling theory applies to both the demand and supply side.
Answer:
In merit guidelines, employees low in the pay range receive higher percentage increases
than employees higher in the range.
Answer:
Which of the following statements regarding allowing employees choice in their pay
mix is not true?
A.A wide-range of choices is difficult to manage
B.It provides an employer a clear competitive advantage
C.Unlimited choice is difficult to design
D.Too many choices can confuse people
Answer:
Which of the following is not true?
A.More companies are using pay based upon individual, group and organization
performance.
B.Workers with high security needs may accept lower pay for pay security.
C.Workers may need higher pay to stay and perform in an at-risk pay company.
D.Companies are moving back to entitlement-oriented pay to reduce turnover.
Answer:
All of the following except ___________are consequences of an aligned structure.
A.increase experience
B.increase cooperation
C.reduce work stoppages
D.facilitate career progression
Answer:
The number of job and pay levels in an organization is an example of _____.
A.organization strategy
B.human capital
C.human resource policies
D.work design
Answer:
All of the following are likely consequences of inadequate detail in job analysis
information except _____.
A.high labor costs
B.unhappy employees
C.lawsuits
D.unhappy customers
Answer:
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.
Answer:
Job analysis is important for both managers and employees because it is
A.the basis for a work-related rationale for pay differences.
B.an important result of the job evaluation process.
C.required under the Fair Labor Standards Act.
D.required for performance appraisal.
Answer:
Which of the following statements about anchoring/framing is true?
A.Initial data strongly affect decisions/beliefs.
B.Reluctance to accept evidence that contradicts existing beliefs.
C.Following fashions in programs/techniques.
D.People “discover” patterns in random events.
Answer:
__________ theory is the basis for the sorting effect pay strategy has on the
composition of a workforce/
A.human capital
B.signaling
C.marginal productivity
D.efficiency wage
Answer:
_______ require(s) companies set policies to take back executive compensation if it
was based on financial information that did not comply with accounting standards.
A.The Executive Compensation Disclosure
B. TARP
C.The financial Accounting Standards Board Statement 123R
D.Clawbacks
Answer:
The second major decision in job evaluation is to:
A.obtain involvement of relevant stakeholders.
B.select single or multiple plans.
C.choose among alternative approaches.
D.establish purpose of evaluation.
Answer:
_____ is the most important factor affecting perception of fairness of a skill-based plan.
A.The design of the certification process
B.The rate of movement through the skill blocks
C.Extent of alignment with the organization’s strategy
D.The time and effort required to learn skill blocks
Answer:
All of the following are potential problems with headcount reductions except _____.
A.regulatory requirements make it difficult to make targeted cuts
B.workforce reductions, especially if not handled well, can harm employee relations
C.organizations that make greater involuntary workforce reductions also experience
greater voluntary turnover
D.RIFs are very costly in tangible terms up front due to increases in workers
compensation insurance.
Answer:
All of the following are major factors used to manage total labor costs except _____.
A.average employment level
B.average cash compensation
C.number of overtime hours
D.average benefits costs
Answer:
Most union contracts recognize that different occupations should receive _____ wage
rates.
A.equal
B.different
C.experience
D.merit
Answer:
In the point method, the second step in designing the plan is to:
A.conduct job analysis.
B.scale the factors.
C.determine compensable factors.
D.prepare job evaluation manual.
Answer:
Which of the following relationships within a pay system is accurate?
A.Compensation objectives shape pay policies.
B.Pay policies determine the objectives of the pay system.
C.Organization strategies determine employee pay needs.
D.Pay policies form the compensation strategy of the organization.
Answer:
According to the text, which of the following decisions should be made jointly?
A.Internal alignment and Management.
B.External competitiveness and Employee contribution
C.Employee contribution and Internal alignment
D.Management and External competitiveness
Answer:
Skill blocks are to job evaluation as _____ is to factor degrees and weights.
A.certification process
B.competency sets
C.skill analysis
D.core competencies
Answer:
Which of the following includes restrictions on executive pay that are designed to
discourage executives from taking “unnecessary and excessive risks”?
A.Corporate Welfare Program
B.Employee Welfare Program
C.Troubled Asset Relief Program
D.Corporate Liability Relief Program
Answer:
A problem faced by some organizations using an egalitarian pay structure is _____.
A.difficulty in external recruitment
B.maintaining cooperation among employees
C.perception of excessive CEO pay
D.difficulty in team work
Answer:
The total cost of employee benefits in the U. S. is _____ dollars.
A.two trillion
B.one trillion
C.four trillion
D.one billion
Answer:
The biggest trend in supervisory pay is _____.
A.increased use of variable pay
B.paying overtime at time-and-a-half
C.maintaining a differential above the highest paid subordinate
D.offering stock options and enhanced benefits
Answer:
Which of the following statements about single rates is true?
A.Single rates are usually specified for workers within a particular job classification.
B.Single-rate agreements differentiate wages on the basis of seniority.
C.Workers with varying years of experience and output receive different single rates.
D.Single-rate agreements differentiate wages on the basis of merit.
Answer:
Traditionally, Japan’s employment relationships were supported by _____.
A.lifetime security within the company
B.performance-based pay systems
C.centralized unions representing workers within a single company
D.performance-based promotion systems
Answer:
Common bases for modern pay structures include all but which of the following?
A.Content of the work
B.Skills and knowledge required to perform the work
C.External competitiveness and equity
D.Relative value for achieving organizational objectives
Answer:
Issues of transparency, technology, and choice are examples of choices related to the
_____ strategy choice of total compensation.
A.objectives
B.management
C.employee contributions
D.internal alignment
Answer:
Which of the following is not a consequence of level of competitiveness of total
compensation?
A.Increase probability of union-free status
B.Increase organization profitability
C.Reduce voluntary turnover
D.Reduce pay-related work stoppages
Answer:
Pay for temporary workers is based upon
A.the internal structure of their home employer.
B.the internal structure of the temporary workplace.
C.strict legislative requirements.
D.education and experience.
Answer:
Which of the following is the largest component in an executive pay package?
A.Base pay
B.Stock options
C.Merit pay
D.Perks
Answer:
In _____ theory, pay is described as noncompensatory.
A.efficiency wage
B.signaling
C.reservation wage
D.marginal productivity
Answer:
The _____ minimizes distortion of the central tendency caused by outliers.
A.weighted mean
B.mean
C.mode
D.median
Answer:
(p. 10-11) Costco has higher labor costs than Walmart and Sam’s Club. The result is
Costco has better performance in all but which of the following?
A. turnover
B. profit
C. customer satisfaction
D. sales/square foot
Answer: