CHAPTER 2
1. The task of designing and managing a reward system that encourages employee contributions and
performance within organizational cost constraints is a difficult and complex task because of:
(a) problems related to defining exempt and nonexempt employees
(b) the variety of human qualities, job requirements, and situational demands involved
(c) government legislation
(d) limited funds available for rewarding employees
2. An organization designs and implements a reward system to
(a) provide a medium of exchange of the income of an organization to its employees for
their monetary and in-kind claims on goods and services
(b) promote the comradeship of workplace associates
(c) focus worker attention on the specific behaviors the organization considers necessary to
achieve its desired objectives and goals
(d) require employees to perform assignments for which they are best suited
3. Money provides a measure of an employee’s worth that is
(a) exact
(b) motivational
(c) qualifiable
(d) quantifiable
4. Claims on goods and services made available and paid for either totally or in some percentage by
the employer are
(a) monetary rewards
(b) in-kind rewards
(c) noncompensation rewards
(d) nonfinancial rewards
5. Which of the following is not a part of the compensation system?
(a) health insurance
(b) cheerfully decorated work station
(c) company car
(d) vacation pay
6. Which of the following is a noncompensation benefit rather than a compensation benefit?
(a) paid holidays
(b) unemployment insurance
(c) office Christmas party
(d) medical insurance
7. Which of the following is not an example of a noncompensation reward?
(a) providing a training program
(b) providing a safe workplace
(c) providing a life insurance plan
(d) providing the resources necessary to perform job assignments successfully
8. Employers and employees both benefit by providing goods and services in lieu of additional
wages for all but which one of the following reasons?
(a) economies of scale are available through group purchasing
(b) goods and services escape individual income tax
(c) legislation requires the provision of certain benefits
(d) employees may not be able to acquire certain goods and services individually
9. A company car, a company credit card, and subsidized food services are all examples of which
one of the following forms of payment?
(a) deferred income
(b) family income
(c) income equivalent
(d) incentive income
Match the noncompensation reward component listed in the right-hand column with the noncompensation
dimension that it would most closely relate to that is listed in the left-hand column:
Noncompensation Dimension Noncompensation Component
10. Enhance dignity and satisfaction (a) Rotate work assignments
from work performed
11. Promote constructive social (b) Allow sufficient time to get the
relationships with co-workers job done
12. Allocate sufficient resources (c) Opportunity to participate in a
to perform work assignments flexible work plan
13. Grant sufficient control over the (d) Maximize opportunities for
job to meet personal demands cooperative activities
14. Design jobs that require adequate (e) Show appreciation for employee
attention and effort efforts and contributions
Match the compensation component listed in the right-hand column that would be most appropriately
grouped with the compensation dimension listed in the left-hand column:
Compensation Dimension Compensation Component
15. Pay for Work and Performance (a) SUB
16. Pay for Time Not Worked (b) Subsidized parking
17. Loss-of-Job Income Continuation (c) Social Security
18. Spouse/Family Income Continuation (d) Overtime premium
19. Income Equivalent Payment (e) Jury Duty pay
Chapter 2