85. Senior management in your organization wants you to explain to the board of directors the key concept that makes
compensation systems work. It would be correct to tell them that the ideal compensation system must
a. keep labor costs as low as possible.
b. provide for employees needs while keeping labor costs within reasonable limits.
c. pay the highest wages in the industry.
d. encourage employees to work for as little as possible to keep company profits as high as possible.
e. focus attention on benefits rather than on salaries, which are kept low on purpose.
86. You have been asked to develop an effective reward system for Kroger stores. In designing such a system, you
should strive to meet all of the following objectives except
a. enabling employees to satisfy their basic needs.
b. providing rewards comparable to those offered by other firms.
c. distributing rewards fairly within the organization.
d. recognizing that different people have different needs.
e. maximizing the amount spent on compensation.
87. A collection of data on prevailing wage rates in an industry or geographic area is called a(n)
a. wage survey.
b. job evaluation.
c. job analysis.
d. performance appraisal.
e. industry average.
88. Which of the following is not a compensation decision?
a. The wage-level decision
b. The individual-wage decision
c. The wage-cut decision
d. The wage-structure decision
e. Both C and D
89. Whether or not secretaries are paid more than file clerks depends on the nature of a firm’s structure.
a. promotion
b. wage
c. organizational
d. evaluation
e. profit–sharing
90. Job evaluation is almost always the basis for developing a
a. wage survey.
b. wage structure.
c. bonus system.
d. profit-sharing program.
e. performance appraisal.
91. The process of determining the relative worth of various jobs in a firm is called
a. job evaluation.
b. wage structure.
c. job analysis.
d. job specification.
e. a benefits plan.
92. If Regency Electronics, a maker of consumer electronic products such as stereos, wanted to determine the relative
worth of jobs within its organization, it would
a. develop job descriptions.
b. develop job specifications.
c. develop a job evaluation.
d. conduct a wage survey.
e. conduct a job analysis.
93. As a result of the carried out at Weston Company, the position of vice president of marketing was
determined to be relatively more important than the position of vice president of finance.
a. wage survey
b. job evaluation
c. job analysis
d. performance appraisal
e. industry average
94. You have been charged with finding out whether your company has violated the concept of comparable worth.
After gathering all the facts, you find the company guilty because
a. jobs requiring about the same level of training and skill receive significantly different pay.
b. equal jobs are paid equally.
c. unequal jobs are paid unequally.
d. equal jobs are paid unequally.
e. jobs requiring about the same education receive the same pay.
95. Critics of comparable worth argue that
a. laws should be enacted to assist the market’s pricing mechanism.
b. the market has determined the worth of certain female-dominated jobs.
c. artificially inflating salaries for female-dominated occupations would bring about equality.
d. states have not enacted laws requiring equal pay for comparable work in government positions.
e. this issue encourages women to keep their low-paying jobs rather than seek higher-paying ones.
96. An employee’s initial wage rate is determined by
a. whether the employee is male or female.
b. his or her wage rate at his or her previous job.
c. the results of a wage survey pertaining to the employee‘s job.
d. the experience, qualifications, and expected performance of that employee.
e. the employee’s measured productivity.
97. A wage is a specific amount of money paid per
a. month.
b. week.
c. hour.
d. year.
e. minute.
98. A type of compensation that is some percentage of sales revenue is
a. an hourly wage.
b. a bonus.
c. profit-sharing.
d. a commission.
e. salary.
99. Breakfast cereal maker General Mills periodically gives lump-sum payments to employees. The amount depends on
job performance, with more productive employees receiving a larger sum than less productive employees. This
motivational tool is
a. a violation of the concept of comparable worth.
b. illegal under the Equal Pay Act.
c. profit–sharing.
d. acceptable under the employment-at-will clause of the Equal Pay Act.
e. an incentive payment.
100. is a payment representing some percentage of sales revenue.
a. Profit-sharing
b. A bonus
c. A salary
d. A commission
e. A wage
101. All of the following are usually paid an hourly wage except workers in
a. clerical positions.
b. retailing.
c. management.
d. assembly lines.
e. fast food.
102. Fred Saunders receives $50,000 a year as a manager. This type of compensation is called
a. benefits.
b. bonus.
c. shift premium.
d. salary.
e. time wage.
103. A specific amount of money paid for each hour of work is called
a. salary.
b. wage.
c. benefits.
d. bonus.
e. compensation.
104. Which of the following type of worker is usually paid on a salary plan?
a. Clerical
b. Retail
c. Fast-food
d. Manager
e. Assembly–line
105. Wanda Zarky is paid a specific amount of money for work during a set calendar period, regardless of the actual
number of hours worked. This money is called
a. a wage.
b. benefits.
c. a salary.
d. compensation.
e. a bonus.
106. The type of pay raise in which the employee can receive the entire amount of the increase at the beginning of the
year is called a(n)
a. incentive payment.
b. lump–sum salary increase.
c. commission salary increase.
d. gain-sharing salary increase.
e. percentage-of–salary payment.
107. Sally earned a 10 percent increase in her salary and received the entire increase at the beginning of the year, with
the stipulation that she would not leave the company in that year. Five months later, she quit her job and went to
work for a competitor. She had to return the 10 percent payment she had received because she had violated a rule
for
a. lump-sum salary increase.
b. profit-sharing.
c. commission.
d. employee benefit.
e. wage compensation.
108. The distribution of a percentage of a firm’s profits among its employees is called
a. an incentive payment.
b. employee benefits.
c. a tax shelter.
d. remuneration.
e. profit–sharing.
109. Employee benefits are
a. nonmonetary rewards.
b. monetary rewards.
c. required.
d. usually not viewed as being part of one’s total compensation.
e. temporary incentives.
110. All of the following are examples of employee benefits except
a. an end-of-year bonus.
b. health insurance packages.
c. pay for time not worked.
d. workers’ compensation insurance.
e. unemployment insurance.
111. Peter Shelly was hurt on the job last week. His medical bills for this injury are covered under
a. employee retirement income security.
b. vacation time.
c. workers’ compensation insurance.
d. life insurance.
e. Social Security.
112. An indirect reward given in addition to an employee’s regular pay is known as
a. profit–sharing.
b. a lump-sum salary increase.
c. an employee benefit.
d. pay for time not worked.
e. commission.
113. All employers are required by law to provide certain benefits to their employees. An example of such a benefit
would be
a. health insurance.
b. unemployment insurance.
c. reduced-price cafeterias.
d. pension programs.
e. life insurance.
114. The average cost of employee benefits is about percent of total compensation.
a. 8
b. 21
c. 29
d. 33
e. 36
115. When Russell Meyer started his new job, he was offered a cafeteria plan from which he could choose items such
as health care, vision care, child care, life insurance, and membership at the company’s gym. This is likely a type of
a. employee benefit.
b. employee orientation.
c. flexible benefit plan.
d. employee empowerment.
e. incentive payments.
116. A form of compensation whereby the employee receives a predetermined amount of benefit dollars to spend on a
benefits package he or she has selected to meet individual needs is called a(n)
a. flexible compensation plan.
b. employee benefits plan.
c. Social Security account.
d. flexible benefit plan.
e. optional benefits package.
117. One of the main reasons employers offer employees flexible benefits plans is
a. to keep them healthier so that they will not be out sick as much.
b. to cut costs of benefits administration.
c. because most people have fairly similar needs and thus want the same benefits.
d. employers cannot afford to offer employees any and all benefits.
e. because employees have diverse needs, and choosing their own benefits package will better meet those
needs.
118. Training may be used in an organization to educate employees on all of the following except
a. product information.
b. motivation.
c. business ethics.
d. customer service.
e. technical aspects of the job.
119. Over the years, EnterBank management has successfully used the process of preparing managers and other
professionals to assume increased responsibility in present and future positions. This practice is referred to as
a. employee training.
b. simulation training.
c. job orientation.
d. skills inventorying.
e. management development.
120. Teaching employees new jobs, skills, and more effective ways of doing their present jobs is called
a. employee training.
b. job evaluation.
c. performance appraisal.
d. compensation system.
e. skills inventory.
121. Dunn & Company wants to use a training method to help managers understand and cope with employees’
problems. What method would you suggest?
a. Simulation training
b. Classroom training
c. Seminar training
d. On–the-job training
e. Role-playing
122. As a form of training and development, Harry attended a gathering where he listened to a speech from someone
who was twenty years his senior and had been in the business for forty years. Harry was engaged in what form of
training and development?
a. Classroom lecture
b. On–the-job learning
c. Conference and seminars
d. Role-playing
e. Simulations
123. Ford recently hired twenty employees to work in various departments of the company. On the first day, all twenty
had the same orientation and attended the same training and development sessions. They were most likely engaged
in what form of training?
a. Classroom teaching and lectures
b. Role-playing
c. Conference and seminars
d. On–the-job methods
e. Simulations
124. A situation in which participants act out the roles of others so that they can better understand those roles is called
a. simulation training.
b. conferences.
c. on-the-job training.
d. role-playing.
e. seminars.