Question 1

Describe how executives ensure themselves high compensation.

Accepted Answer

Agency theory incorporates the political motivations that are an inevitable part of the corporate world.Sometimes, CEOs make decisions that are not in the economic best interest of the firm and its shareholders.One variant on this view suggests that the normal behavior of a CEO is self-protective.CEOs will make decisions to solidify their positions and to maximize the rewards they personally receive.As evidence of this self-motivated behavior, consider the following description of how executives ensure themselves high compensation:
1.If the CEO is truly underpaid: A compensation consultant is hired to survey actual competitors of the company.The consultant reports to the board of directors that the CEO is truly underpaid.Salary is increased to a competitive or higher level.
2.If the CEO is not underpaid and the company is doing well: A compensation consultant is hired.Specific companies are recommended to the consultant as appropriate for surveying.The companies tend to be selected because they are on the top end in terms of executive compensation.The consultant reports back to the board that its CEO appears to be underpaid.Salary is increased.
3.If the CEO is not underpaid and the company is doing poorly: A compensation consultant is hired.The CEO laments with the consultant that wages are so low for top management that there is a fear that good people will start leaving the company and going to competitors.The result is that the consultant recommends a wage increase to avoid future turnover.

Question 2

Annual bonuses often play a major role in executive compensation and are primarily designed to _____.

Accepted Answer

A) motivate better short-term performance 
B) reduce overtime pay 
C) decrease pay differentials between supervisors and subordinates 
D) increase employee turnover 
A) motivate better short-term performance 
B) reduce overtime pay 
C) decrease pay differentials between supervisors and subordinates 
D) increase employee turnover A

Question 3

Who are special groups? What are the characteristics that special groups share?

Accepted Answer

Special treatment, either in the form of add-on packages not received by other employees or in the form of compensation components entirely unique in the organization, tends to focus on a few specific groups.The text argues that special groups share two characteristics.First, special groups tend to be strategically important to the company.If they don't succeed at their jobs, success for the whole organization is in jeopardy.Second, their positions tend to have built-in conflict, conflict that arises because different factions place incompatible demands on members of the group.

Question 4

At least for high-skilled contingent workers, it is increasingly popular to view careers as a series of opportunities to acquire valuable increments in knowledge and skills.

Accepted Answer

A) True 
 B)False

Question 5

The most popular method of providing special compensation to supervisors is by paying overtime.

Accepted Answer

A) True 
 B)False

Question 6

What is a tally sheet and what is it used for?

Accepted Answer

Recently, companies have begun to captur

Question 7

In recent years, some firms have tried to deal with the plateau effect and also accommodate the different career motivations of mature scientists and engineers through a(n) _____.

Accepted Answer

A) individual-career ladder 
B) alternative career path 
C) military-style career ladder 
D) dual-career ladder 
A) individual-career ladder 
B) alternative career path 
C) military-style career ladder 
D) dual-career ladder

Question 8

A(n) _____ awards cash or stock if specific goals are achieved.

Accepted Answer

A) nonqualified stock option 
B) incentive stock option 
C) restricted stock plan 
D) performance share plan 
A) nonqualified stock option 
B) incentive stock option 
C) restricted stock plan 
D) performance share plan

Question 9

In maturing markets, companies focus both on performance-based pay tied to customer satisfaction and on greater.

Accepted Answer

A) True 
 B)False

Question 10

The most recent trend in executive compensation is an increased use of stock options.

Accepted Answer

A) True 
 B)False

Question 11

If improved account retention became a major focus of attention, the performance measure stressed would be _____.

Accepted Answer

A) gross margin on sales or price per unit 
B) percentage account erosion 
C) a volume measure 
D) a customer satisfaction index 
A) gross margin on sales or price per unit 
B) percentage account erosion 
C) a volume measure 
D) a customer satisfaction index

Question 12

Hannah is the CEO of JF Corp., a steel manufacturing company.She finds that the market is exhibiting the signs of a maturing market.She wants to revise the compensation package for her sales employee to adapt to the changing market conditions.In this case, Hannah is most likely to:

Accepted Answer

A) increase base pay. 
B) provide a commission-based incentive plan. 
C) provide incentives based on new customer generation. 
D) include a significant incentive component. 
A) increase base pay. 
B) provide a commission-based incentive plan. 
C) provide incentives based on new customer generation. 
D) include a significant incentive component.

Question 13

Unlike executives, scientists and engineers are less likely to receive lavish athletic facilities and large offices.

Accepted Answer

A) True 
 B)False

Question 14

_____ curve expresses the relationship between years since last degree, performance, and salary.

Accepted Answer

A) The Phillips 
B) The marginal productivity 
C) A tenure 
D) A maturity 
A) The Phillips 
B) The marginal productivity 
C) A tenure 
D) A maturity

Question 15

The differential between supervisors' base pay and their highest paid subordinate is typically _____ percent.

Accepted Answer

A) 0 to 5 
B) 5 to 30 
C) 30 to 50 
D) 50 to 90 
A) 0 to 5 
B) 5 to 30 
C) 30 to 50 
D) 50 to 90

Question 16

Incentive stock options may be deducted as a company expense.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is NOT one of the clauses relating to the benefits employers can provide executives?

Accepted Answer

A) Benefit plans must cover 80 percent of employees. 
B) Benefit plans must be determinable. 
C) Benefit plans must meet specific vesting requirements. 
D) Average value of benefits for low-paid employees must be at least 90 percent of that for highly paid employees. 
A) Benefit plans must cover 80 percent of employees. 
B) Benefit plans must be determinable. 
C) Benefit plans must meet specific vesting requirements. 
D) Average value of benefits for low-paid employees must be at least 90 percent of that for highly paid employees.

Question 18

Which of the following is NOT a reason for the recent decline in the use of stock options in executive pay?

Accepted Answer

A) There has been a growing pressure to expense stock options in annual reports. 
B) In a falling market, stock options are underwater-the market price is below the exercise price. 
C) Financial Accounting Standard Number 313 raises the cost of using stock options. 
D) Stock options do not pay for executive performance. 
A) There has been a growing pressure to expense stock options in annual reports. 
B) In a falling market, stock options are underwater-the market price is below the exercise price. 
C) Financial Accounting Standard Number 313 raises the cost of using stock options. 
D) Stock options do not pay for executive performance.

Question 19

All of the following EXCEPT _____ would be considered a special compensation group.

Accepted Answer

A) sales staff 
B) contingent workers 
C) unpaid interns 
D) professional employees 
A) sales staff 
B) contingent workers 
C) unpaid interns 
D) professional employees

Question 20

NaxWell Corp.sells a smart wristband that, apart from monitoring heart rate and blood pressure, also reminds users to stand and walk every half hour.As part of its promotional efforts, a celebrity starts wearing the wristband, thereby increasing its popularity and ease of sale.Which of the following is most likely to happen?

Accepted Answer

A) NaxWell will set lower sales targets for its employees. 
B) NaxWell is likely to increase base salaries and decrease incentives. 
C) NaxWell is likely to lower its executive compensation in order to increase stock price. 
D) NaxWell will hire only contingent workers. 
A) NaxWell will set lower sales targets for its employees. 
B) NaxWell is likely to increase base salaries and decrease incentives. 
C) NaxWell is likely to lower its executive compensation in order to increase stock price. 
D) NaxWell will hire only contingent workers.

Describe how executives ensure themselves high compensation.

Annual bonuses often play a major role in executive compensation and are primarily designed to _____.

Who are special groups? What are the characteristics that special groups share?

At least for high-skilled contingent workers, it is increasingly popular to view careers as a series of opportunities to acquire valuable increments in knowledge and skills.

The most popular method of providing special compensation to supervisors is by paying overtime.

What is a tally sheet and what is it used for?

In recent years, some firms have tried to deal with the plateau effect and also accommodate the different career motivations of mature scientists and engineers through a(n) _____.

A(n) _____ awards cash or stock if specific goals are achieved.

In maturing markets, companies focus both on performance-based pay tied to customer satisfaction and on greater.

The most recent trend in executive compensation is an increased use of stock options.

If improved account retention became a major focus of attention, the performance measure stressed would be _____.

Hannah is the CEO of JF Corp., a steel manufacturing company.She finds that the market is exhibiting the signs of a maturing market.She wants to revise the compensation package for her sales employee to adapt to the changing market conditions.In this case, Hannah is most likely to:

Unlike executives, scientists and engineers are less likely to receive lavish athletic facilities and large offices.

_____ curve expresses the relationship between years since last degree, performance, and salary.

The differential between supervisors' base pay and their highest paid subordinate is typically _____ percent.

Incentive stock options may be deducted as a company expense.

Which of the following is NOT one of the clauses relating to the benefits employers can provide executives?

Which of the following is NOT a reason for the recent decline in the use of stock options in executive pay?

All of the following EXCEPT _____ would be considered a special compensation group.

Pay-For-Performance: The Evidence

Strategy: The Totality of Decisions

Defining Internal Alignment

R: Job Analysis

Job-Based Structures and Job Evaluation

Person-Based Structures

Defining Competitiveness

Designing Pay Levels, Mix, and Pay

Pay-For-Performance: the Evidence

Pay-For-Performance Plans

Performance Appraisals

The Benefit Determination Process

Benefit Options

Union Role in Wage and Salary Administration

International Pay Systems

Government and Legal Issues in Compensation

Management: Making It Work

Filters

Exam 14: Compensation of Special Groups

Describe how executives ensure themselves high compensation.

Annual bonuses often play a major role in executive compensation and are primarily designed to _____.

Who are special groups? What are the characteristics that special groups share?

At least for high-skilled contingent workers, it is increasingly popular to view careers as a series of opportunities to acquire valuable increments in knowledge and skills.

The most popular method of providing special compensation to supervisors is by paying overtime.

What is a tally sheet and what is it used for?

In recent years, some firms have tried to deal with the plateau effect and also accommodate the different career motivations of mature scientists and engineers through a(n) _____.

A(n) _____ awards cash or stock if specific goals are achieved.

In maturing markets, companies focus both on performance-based pay tied to customer satisfaction and on greater.

The most recent trend in executive compensation is an increased use of stock options.

If improved account retention became a major focus of attention, the performance measure stressed would be _____.

Hannah is the CEO of JF Corp., a steel manufacturing company.She finds that the market is exhibiting the signs of a maturing market.She wants to revise the compensation package for her sales employee to adapt to the changing market conditions.In this case, Hannah is most likely to:

Unlike executives, scientists and engineers are less likely to receive lavish athletic facilities and large offices.

_____ curve expresses the relationship between years since last degree, performance, and salary.

The differential between supervisors' base pay and their highest paid subordinate is typically _____ percent.

Incentive stock options may be deducted as a company expense.

Which of the following is NOT one of the clauses relating to the benefits employers can provide executives?

Which of the following is NOT a reason for the recent decline in the use of stock options in executive pay?

All of the following EXCEPT _____ would be considered a special compensation group.

Pay-For-Performance: The Evidence

Strategy: The Totality of Decisions

Defining Internal Alignment

R: Job Analysis

Job-Based Structures and Job Evaluation

Person-Based Structures

Defining Competitiveness

Designing Pay Levels, Mix, and Pay

Pay-For-Performance: the Evidence

Pay-For-Performance Plans

Performance Appraisals

The Benefit Determination Process

Benefit Options

Union Role in Wage and Salary Administration

International Pay Systems

Government and Legal Issues in Compensation

Management: Making It Work

Filters