Deck 16: International Pay Systems

Question 1

The degree of discretion managers have to make total compensation a strategic tool is _____.

A) managerial accountability
B) democratic accountability
C) managerial autonomy
D) managerial efficiency

Answer 1

C

Question 2

Which of the following statements about the role of works councils in Germany is true?

A) A works council may be formed by employees in any business unit having 10 or more permanent employees.
B) It operates together with the trade union and collective bargaining process.
C) The works council has "veto rights and rights of consent."
D) In general,the German works council deals with issues of an individualistic nature.

Answer 2

C

Question 3

One of the main reasons the European Union is trying to provide common labor standards for all members is to _____.

A) make mobility easier for workers
B) make it easier for companies to manage benefits
C) increase tax revenues for retirees
D) avoid social dumping

Answer 3

D

Question 4

Uncertainty avoidance is _____.

A) the distribution of emotional roles between the genders
B) the extent to which a culture programs its members to accept delayed gratification of their material needs
C) the extent to which the less powerful members of organizations accept and expect that power is distributed unequally
D) the extent to which a culture programs its members to feel either uncomfortable or comfortable in unstructured situations

Question 5

Trade unions and employer federations are examples of _____ factors in international compensation.

A) economic
B) employee
C) organizational
D) institutional

Question 6

Which of the following countries has the highest number of people in the workforce belonging to unions?

A) Japan
B) Sweden
C) Italy
D) The United Kingdom

Question 7

_____ is an example of a country with a highly decentralized approach to pay setting with little government involvement.

A) Netherlands
B) Germany
C) Finland
D) The United States

Question 8

Which of the following is true of bonuses paid in Japan? They are _____.

A) between 10 and 20 percent of annual salary
B) typically paid once a year
C) not an expectable additional payment
D) not necessarily related to performance

Question 9

According to Hofstede's cultural dimensions,in Malaysia and Mexico where there is high power distance,_____ pay structures are appropriate.

A) equitable
B) hierarchical
C) egalitarian
D) parallel

Question 10

According to Hofstede's cultural dimensions,in low-power-distance nations such as Australia and the Netherlands,_____ pay structures are appropriate.

A) egalitarian
B) variable
C) hierarchical
D) inequitable

Question 11

Which of the following is a factor determining base pay in the Japanese national system?

A) Job evaluation
B) Career category
C) Market pricing
D) Specific job title

Question 12

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

Question 13

Which of the following statements about ownership and financial markets is true?

A) In the United States,corporate ownership and access to capital is far more concentrated than in most other countries.
B) Ninety percent of American households own stock in companies either directly or indirectly through mutual funds and pension funds.
C) Recent tax law changes in many countries have made stock options more attractive,but limited ownership of many companies remains the rule.
D) Linking performance bonuses to increased shareholder value makes sense in the large conglomerates in Germany.

Question 14

The purpose of examining the price of a Big Mac in other countries is to _____ for expatriates.

A) determine food budgets
B) determine tax levels
C) set a benefits package
D) maintain the same level of purchasing power

Question 15

Companies operating in nations with "collectivistic" cultures should use _____.

A) individual-based pay increases
B) inequitable pay increases
C) group-based performance incentives
D) hierarchical pay structures

Question 16

All of the following are reasons why companies may make changes in their pay systems except _____.

A) to increase consistency across subsidiaries
B) acquisition of former global competitors
C) major sociopolitical changes
D) to raise productivity

Question 17

Individualism is _____.

A) the degree to which individuals are supposed to look after themselves or remain integrated into groups,usually around the family
B) the distribution of emotional roles between the genders
C) the extent to which a culture programs its members to accept delayed gratification of their emotional needs
D) the extent to which a culture programs its members to feel either uncomfortable or comfortable in unstructured situations

Question 18

Which of the following is not true of tariff agreements in Germany?

A) Small organizations use them as guidelines
B) Managerial jobs are covered by the agreements
C) Job evaluation methods are part of the agreements
D) Tariff agreements are different for each industrial sector

Question 19

The employment relationship includes all of the following except _____.

A) the exchange between employee and employer
B) the International Labor Organization
C) the government
D) all enterprise owners

Question 20

In comparing the pay systems of two well-known Japanese companies,Toyota and Toshiba,Toyota _____.

A) places greater emphasis on external market rates
B) places lesser emphasis on individual-based merit pay
C) uses far more levels in its structure
D) places lesser emphasis on individual-based performance pay

Question 21

Which of the following ties salary to a region?

A) The cafeteria approach
B) The localization approach
C) The modified balance sheet approach
D) The lump-sum approach

Question 22

Which of the following is an advantage of the U.S.approach to total pay?

A) Supports commitment and security
B) Focus on short-term payoffs
C) Greater predictability for companies and employees
D) Companies do not compete with pay

Question 23

A French citizen working for IBM in Canada is _____.

A) host-country national
B) third-country national
C) expatriate
D) local-country national

Question 24

The approach to international compensation in which headquarters and foreign units are networked and share ideas is the _____.

A) globalizer
B) matrix
C) exporter
D) "think global,act local"

Question 25

This approach sets salaries according to the home-country system and simply offers employees a one-time payment of money to offset differences in standards of living.

A) The modified balance sheet approach
B) The localization approach
C) The lump-sum/cafeteria approach
D) The balance sheet approach

Question 26

Which of the following statements about evolution and change in the traditional German model is true?

A) Nearly one in 10 German adults own stock.
B) High birth rates are pushing up the costs of the social support system.
C) A relatively flexible labor market means that employers are finding it easier to move to other EU countries.
D) Many of the changes in Germany are the result of technological changes.

Question 27

A(n)_____ approach designs a total pay system at headquarters and applies it globally.

A) centralized
B) globalizer
C) localizer
D) exporter

Question 28

The salary for expatriates is usually determined by _____.

A) job evaluation
B) market pay
C) competitors' pay level in the host country
D) international pay schedules

Question 29

When taxes are deducted from employees' earnings up to the same amount of taxes they would pay had they remained in their home country,it is known as _____.

A) expat tax
B) tax equalization
C) compensatory tax
D) tax protection

Question 30

A(n)_____ pay system is consistent with local conditions.

A) exporter
B) globalizer
C) localizer
D) decentralized

Question 31

In Japan,internal alignment based on _____ is far more important than the other factors.

A) skills
B) jobs
C) accountabilities
D) seniority

Question 32

The pay objectives in traditional German systems include _____.

A) a flexible work force
B) meritocracy
C) a long-term commitment
D) controlling cash flow with bonuses

Question 33

The two most common reasons for using expats in foreign assignments are _____.

A) for sales and management development
B) to protect company interests and sales
C) to train locals and specific expertise
D) to broaden international perspectives and new ventures

Question 34

Slow economic growth in Japan during the past decade has led companies to _____ to retain younger workers.

A) use more performance-based pay
B) change their mix of benefits
C) raise base wages
D) offer benefits such as gyms,dating services,and exotic vacations

Question 35

Which of the following is based on the premise that employees on overseas assignments should have the same spending power as they would in their home country?

A) The assets-liability approach
B) The balance sheet approach
C) The local plus approach
D) The income statement approach

Question 36

External competitiveness in the United States is _____.

A) market determined
B) consistent with competitors
C) tariff based
D) the same as competitors

Question 37

A Japanese citizen working for Toyota in Georgetown,Kentucky is a(n)_____.

A) host-country national
B) third-country national
C) expatriate
D) local-country national

Question 38

Which of the following is an advantage of hiring LCNs?

A) The company incurs relocation expenses and other substantial expenses associated with the use of expatriates.
B) The company has concerns about employees adapting to the local culture.
C) Only rarely do organizations decide that hiring LCNs is appropriate.
D) Employment of LCNs satisfies nationalistic demands for hiring locals.

Question 39

A downside of the localization approach to expat compensation is _____.

A) it is more expensive than the balance sheet approach
B) it is more complex than the lump-sum cafeteria approach
C) that salaries will vary by location
D) it is more difficult for expats to understand

Question 40

Which of the following is not true of expats?

A) Sixty-eight percent of expats don't know what their next job will be when they return
B) Only 5 percent believe their company values their overseas experience
C) Eleven percent are promoted when they return
D) Forty-nine percent of expats are women

Question 41

Base pay for a Japanese employee of a major company varies between 60 and 80 percent of monthly pay.

Question 42

Neither works councils or co-determination are legally required in the United States and are quite rare.

Question 43

It is easier and less complex to compare living costs across countries than total compensation.

Question 44

Generally,it is difficult to compare total compensation of a U.S.firm with a foreign competitor.

Question 45

The highest percent of unionized workers in Europe is France with 90 percent.

Question 46

Japanese pay systems typically emphasize pay based upon competitors' market rates rather than internal alignment.

Question 47

Japanese pay systems are more person-based than job-based.

Question 48

In China,state-owned enterprises employee two-thirds of all workers,but WOFEs account for half of all profits.

Question 49

Toyota and Toshiba,leading Japanese manufacturers,use very similar pay systems.

Question 50

In designing pay systems to fit the cultures of other countries,the important question is,"What are the cultural differences among nations?"

Question 51

The assumption that pay systems must be designed to fit different national cultures assumes most inhabitants share a national character.

Question 52

Leading companies in Asia are moving away from seniority-based reward systems toward merit-based systems.

Question 53

Volkswagen would find it easier and less complex to reduce their labor costs than Toyota.

Question 54

The four factors of the global compensation guide are more important than understanding the range of individuals within a country.

Question 55

Unionization rates are higher in Europe than Asia.

Question 56

Understanding international compensation begins with recognizing differences and similarities and figuring out how to best manage them.

Question 57

In Malaysia and Mexico,egalitarian pay structures fit best with the culture.

Question 58

Managing employee compensation in any country involves understanding the social contract of that country.

Question 59

A study of both U.S.and Slovenian MBAs found that risk taking was higher among Slovenians.

Question 60

Companies in the United States,United Kingdom,and some central European countries will most likely have centralized wage bargaining.

Question 61

Explain the three general compensation strategies used by companies with worldwide operations.

Question 62

In Japan,bonuses are primarily used to control the company's cash flow rather than to motivate better performance.

Question 63

One of the primary objectives of the balance sheet approach to expat compensation is to motivate performance.

Question 64

Seventy-seven percent of expats have less disposable income when they return.

Question 65

Briefly explain the tariff agreements used in the traditional German pay systems.

Question 66

Explain the dimensions of national cultural attributes proposed by Hofstede.

Question 67

Approximately 20 percent of expats leave their company within a year of their return to the U.S.

Question 68

In Germany,an employee's pay is affected by their age.

Question 69

The need for expatriate relocation incentives is because organizations do not value the international expertise expats acquire.

Question 70

Under a tax equalization policy,the company retains the difference in taxes when an expat from a high taxation country is on assignment in a lower tax country.

Question 71

What are the basic components of Japanese pay systems? Explain at least one of them.

Question 72

Distinguish between expatriates,local nationals,and third-country nationals with examples.

Question 73

What is the balance sheet approach? What is its objective?

Question 74

Briefly summarize the degree to which the social contract constrains the employment relationship in organizations with an example.

Question 75

What were the "three pillars" of Japan's employment relationships?

Question 76

A Japanese employee who receives "A" performance ratings will move to the next class faster than an employee who receives "C" or "D" ratings.

Question 77

How do the differences in the ownership and financing of companies around the world impact international pay?

Question 78

The sociopolitical and cultural systems reduce managers' ability to use pay as a source of competitive advantage.

Question 79

Employer allowances for commuting,housing and family,are common in many Asian countries,but are uncommon in Japan.

Question 80

Compare and contrast the pay objectives of Japanese,German and U.S.pay systems.