1. Strategic compensation is the term used for all the processes used to determine the market rates to pay employees.
a.
True
b.
False
2. If rates of pay are high, which creates a large applicant pool, then organizations may choose to raise their selection
standards.
a.
True
b.
False
True
Easy
3. Raising selection standards and hiring better-qualified employees can reduce training costs.
a.
True
b.
False
True
Easy
4. A Bloomberg National Poll showed that most Americans believe that large bonuses for Wall Street companies that
took taxpayer bailouts should be prohibited.
a.
True
b.
False
True
Easy
False
Easy
5. Rewarding an employee’s past performance is not a goal of a strategic compensation policy.
a.
True
b.
False
6. Among the goals of a strategic compensation policy are rewarding past performance, attracting new employees, and
reducing turnover.
a.
True
b.
False
True
Easy
7. A formal statement of compensation policy would typically include the rate of pay within the organization and whether
it is to be above, below, or at the prevailing market rate.
a.
True
b.
False
True
Moderate
8. Pay-for-performance programs have little, if any, effect on employee productivity.
a.
True
b.
False
False
Easy
False
Easy
9. While most managers agree that pay should be linked to performance, employees do not.
a.
True
b.
False
10. Pay equity is achieved when employees’ compensation is equal to the value of the work they perform.
a.
True
b.
False
True
Easy
11. Expectancy theory predicts that people expect to be paid as much or more than individuals in a similar job class.
a.
True
b.
False
False
Easy
12. The expectancy theory of motivation predicts that one’s level of motivation depends on the attractiveness of the
rewards sought by employees and the probability of obtaining those rewards.
a.
True
b.
False
True
Easy
13. The compensation scorecard creates a comparative tool within the organization that can reinforce desired outcomes
False
Easy
that are unique to the company’s strategy.
a.
True
b.
False
14. Managers in companies with compensation scorecards often struggle to know if the promotions, raises, bonuses, and
pay adjustments they make are in line with the rest of the organization and its strategy.
a.
True
b.
False
False
Moderate
MGHR.SNEL.17.9-4
15. Pay secrecy is still prevalent in organizations despite its negative effect on motivation and employee trust.
a.
True
b.
False
True
Easy
16. Employees who are compensated on an hourly basis are referred to as salary earners.
a.
True
b.
False
False
Easy
17. Nonexempt employees are not covered by overtime requirements under the Fair Labor Standards Act.
True
Easy
a.
True
b.
False
18. Nonexempt employees are covered by the Fair Labor Standards Act and must be paid at the rate of a rate of one and a
half times their regular pay rate for time worked in excess of forty hours in their workweek.
a.
True
b.
False
True
Easy
19. Exempt employees are not covered by the overtime provisions under the Fair Labor Standards Act.
a.
True
b.
False
True
Easy
20. Under the Fair Labor Standards Act, most of hourly workers involved in interstate commerce are considered
nonexempt.
a.
True
b.
False
True
Easy
21. Internal factors that influence wage rates include the worth of a job and the employer’s ability to pay.
False
Easy
a.
True
b.
False
22. The worth of a job is determined formally through the wage and salary survey.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-2
23. The worth of a job, as it is determined by its comparative worth with jobs in other firms, is an external factor in the
wage mix.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-2
24. American President Obama enacted a five-year freeze on federal salaries to help the government achieve its objectives
of reducing the deficit.
a.
True
b.
False
False
Easy
25. A critical concern for a successful pay-for-performance system is the perceived fairness of the pay decision.
True
Easy
MGHR.SNEL.17.9-2
a.
True
b.
False
26. Pay levels are limited in part by profitability of the firm and productivity of employees.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-2
27. The consumer price index tracks the change in price over time of a “market basket” of goods and services.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-2
28. The consumer price index is available in separate indexes by size of city and region of the country.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-2
29. Real wages represent the difference between wage increases and cost–of-living increases.
a.
True
b.
False
True
Easy
30. Wages of unionized employees are generally higher than those of nonunion employees.
a.
True
b.
False
True
Moderate
MGHR.SNEL.17.9-2
31. Job evaluation is a non-systematic, qualitative process of determining the relative worth of jobs in order to establish a
comparison with the prevailing market and regional value of a job within a job family.
a.
True
b.
False
False
MGHR.SNEL.17.9-2
32. The job ranking system ranks jobs on the basis of relative worth and can be done by a single person familiar with all
jobs.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-2
33. Job ranking is a simple method that provides a precise measure of each job’s worth.
a.
True
b.
False
False
True
Moderate
MGHR.SNEL.17.9-2
34. The job classification system is a quantitative job evaluation procedure that determines a job’s relative value by
calculating the total points assigned to it.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-2
35. The job classification system is used commonly by smaller employers.
a.
True
b.
False
False
MGHR.SNEL.17.9-2
36. The point system of job evaluation permits jobs to be evaluated quantitatively based on compensable factors.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-2
37. Compensable factors include skills, efforts, responsibilities, and working conditions.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-2
38. Point manuals contain job descriptions and the number of points assigned to each job type.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-2
39. A point manual can be used to determine the external equity of a job.
a.
True
b.
False
False
Moderate
MGHR.SNEL.17.9-2
40. The Hay profile method is useful for evaluating jobs of all types and levels.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
41. The three factors that constitute the evaluation in the Hay profile method are knowledge, mental activity, and
accountability.
a.
True
b.
False
True
Easy
Easy
MGHR.SNEL.17.9-2
42. Employers refer to the area from which they obtain certain types of workers as the labor market.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
43. Equity theory is also referred to as distributive fairness.
a.
True
b.
False
True
Easy
44. The National Compensation Survey published by the Bureau of Labor Statistics can provide local, regional, and
national compensations statistics.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
45. An advantage of published wage surveys is compatibility with the organization‘s jobs.
a.
True
b.
False
False
Moderate
MGHR.SNEL.17.9-3
MGHR.SNEL.17.9-2
46. For employees, pay equity is achieved when the compensation received is equal to the value of the work performed.
a.
True
b.
False
True
Easy
47. The wage curve represents the wages paid to jobs after adjustment for cost-of-living.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-3
48. Managers group similar jobs into a pay grade in order to help with the setting of wages for all jobs.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
49. Employees are likely to accept a promotion if succeeding rate ranges are larger in size.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
50. Steps within a rate range allow pay increases based on merit or seniority.
a.
True
b.
False
True
Moderate
MGHR.SNEL.17.9-2
51. Red circle rates are above the maximum for the pay range and are often frozen until the range shifts upward through
market wage adjustments.
a.
True
b.
False
True
Moderate
MGHR.SNEL.17.9-3
52. When employees are paid according to the skills and knowledge they have rather than the specific jobs they perform,
they are paid according to competence-based compensation.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
53. One of the major criticisms of job-based compensation systems is that they often fail to reward employees for their
skills or the knowledge they possess.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
54. A major benefit of job-based compensation systems is that they encourage employees to learn new skills and
capabilities.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-3
55. An advantage of competence-based pay from the employee’s perspective is that there is no limit to what they can earn
by learning new skills.
a.
True
b.
False
False
Moderate
MGHR.SNEL.17.9-3
56. A major criticism of competence-based pay systems is that after achieving the top wage, employees may be reluctant
to continue their educational training.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
57. Broadbanding refers to collapsing of many traditional salary grades into a few wide salary bands.
a.
True
b.
False
Easy
MGHR.SNEL.17.9-3
58. Pay secrecy seems to be an accepted practice in many organizations.
a.
True
b.
False
True
Easy
59. Companies are more heavily scrutinized than they have been historically by shareholders, government, and the public
for how much they pay their people.
a.
True
b.
False
True
Easy
60. Strategic compensation is the compensation of employees in ways that enhance motivation and growth while
concurrently aligning their efforts with the goals of the organization.
a.
True
b.
False
True
Easy
61. Because management positions are more difficult to evaluate and involve certain demands not found in jobs at the
lower levels, some organizations do not attempt to include them in their job evaluation programs for hourly employees.
a.
True
b.
False
True
Easy
62. Under the Fair Labor Standards Act (FLSA), an employer must pay an employee for whatever work the employer
“suffers or permits” the employee to perform, even if the work is done away from the workplace and even if it is not
specifically expected or requested.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
63. Indirect compensation includes healthcare benefits and commissions.
a.
True
b.
False
False
Easy
64. Seniority, merit, and individual incentive plans are factors affected under the Equal Pay Act.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-3
65. Wages paid above the range maximum are called blue square rates.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-2
66. Competence-based pay systems represent a fundamental change in the attitude of management regarding how work
should be organized and how employees should be paid for their work efforts.
a.
True
b.
False
True
Easy
MGHR.SNEL.17.9-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
67. A compensation scorecard can cloud the transparency of how people are rewarded and makes managers responsible
for how they spend company money.
a.
True
b.
False
False
Easy
MGHR.SNEL.17.9-4
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
68. Which of the following is an example of a nonfinancial compensation?
a.
Bonuses
b.
Commissions
c.
Health insurance
d.
Employee recognition programs
Easy
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
69. _____ encompasses employee wages and salaries, incentives, bonuses, and commissions.
a.
Nonfinancial compensation
b.
Indirect compensation
c.
Direct compensation
MGHR.SNEL.17.9-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
d.
Component compensation
70. _____ includes employee recognition programs, rewarding jobs, organizational support, work environment, and
flexible work hours to accommodate personal needs.
a.
Financial compensation
b.
Nonfinancial compensation
c.
Direct compensation
d.
Indirect compensation
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
71. A Bloomberg National Poll showed that more than _____ of Americans thought big bonuses should be banned for
Wall Street companies that took taxpayer bailouts.
a.
90 percent
b.
80 percent
c.
85 percent
d.
70 percent
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
72. Pay-for-performance programs:
a.
b.
c.
d.
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
73. The term pay-for-performance can encompass all of the following EXCEPT:
a.
merit pay.
b.
base salary.
c.
cash bonuses.
d.
gainsharing plans.
b
1
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
74. Which of the following compensation options would not qualify under the term pay-for-performance?
a.
Seniority-based pay
b.
Group incentive
c.
Pay banding
d.
Gainsharing plans
1
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
75. Which of the following is NOT a common goal of a strategic compensation policy?
a.
To reward employees’ past performance
b.
To mesh employees’ past performance with organizational goals
c.
To remain competitive in the labor market
d.
To attract new employees
b
1
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
76. The fact that people make comparisons to others is central to:
a.
expectancy theory.
b.
the need for pay secrecy.
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
c.
pay-for-performance programs.
d.
equity theory.
77. When the organization pays wages that are relatively equal to that of other employers for similar work, it is the basis
of:
a.
comparable worth.
b.
external equity.
c.
compensable factors.
d.
equal pay.
Easy
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
78. The concept that employees should exert greater work effort if they have reason to expect it will result in a valued
reward forms the basis of:
a.
expectancy theory.
b.
equity theory.
c.
instrumentality.
d.
internal equity.
a
Easy
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge
79. Instrumentality refers to:
a.
wage rates of acceptable level.
b.
development of both internal and external pay equity.
c.
wage rates above the pay range maximum.
d.
rewards that are valued and motivate employees.
Easy
Easy
MGHR.SNEL.17.9-1 – MGHR.SNEL.17.9-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – OH – DISC: HRM
Bloom’s: Knowledge