Deck 1: The Pay Model

Question 1

Which form of pay is likely to be least expensive for employers?

A) Incentive
B) Merit pay
C) Cost-of-living adjustments
D) Base pay

Answer 1

A

Question 2

Recent surveys show the average merit raise for an outstanding performer is ______ and average performers receive and poor performers receive 0.4%.

A)10.5,7
B)8.4,5.2
C)6.7,4.2
D)4.4,2.8

Answer 2

D

Question 3

_____ would be most concerned about compensation as a major expense.

A) Managers
B) Employees
C) Society
D) Stockholders

Answer 3

A

Question 4

Employees who want to be sure their good performance will be rewarded will prefer

A) merit pay.
B) team incentives.
C) individual incentives.
D) across-the-board pay increases

Question 5

Which of the following includes restrictions on executive pay that are designed to discourage executives from taking "unnecessary and excessive risks"?

A) Corporate Welfare Program
B) Employee Welfare Program
C) Troubled Asset Relief Program
D) Corporate Liability Relief Program

Question 6

One of the reasons 8 in 10 working families have no health insurance is because ______

A) many large employers do not offer health insurance
B) health insurance is more costly at large employers
C) many small employers do not offer health insurance
D) most workers decline health insurance when offered by their employer

Question 7

The degree to which pay influences individual and aggregate motivation among the employees at any point in time is referred to as:

A) sorting effect.
B) incentive effect.
C) motivational effect.
D) directional effect.

Question 8

Costco has higher labor costs than Walmart and Sam's Club.The result is Costco has better performance in all but which of the following?

A) turnover
B) profit
C) customer satisfaction
D) sales/square foot

Question 9

Employers' annual cost per employee to provide family health care coverage is approximately ______________

A) $5000 B, $10000
C) $15000
D) $20000

Question 10

According to the text,if women had the same education,experience,and union coverage as men and also worked in the same industries and occupations,they would be expected to earn about _____ of what men earn.

A) 62%
B) 70%
C) 80%
D) 90%

Question 11

Which of the following are given as increments to the base pay in recognition of past work behavior?

A) Base pay
B) Cost-of-living adjustments
C) Merit pay
D) Incentives

Question 12

In China,compensation,dai yu,has come to mean

A) entitlement and benefits.
B) cash compensation.
C) returns and entitlement.
D) cash compensation and relational returns.

Question 13

"Say on pay" is part of a law designed to protect the interests of ___________

A) Employees
B) Managers
C) Society
D) Shareholders

Question 14

Which of the following is an example of a relational return?

A) Short-term incentives
B) Recognition and status
C) Work-life balance
D) Income protection

Question 15

Variable pay may also be called

A) exempt
B) non-exempt
C) stock options
D) incentives

Question 16

The primary reason compensation is important to managers is because:

A) employees regard it as a reward.
B) it influences employee behavior.
C) it is a larger cost than benefits.
D) stock holders dislike high compensation costs.

Question 17

Which of the following is the largest component in an executive pay package?

A) Base pay
B) Stock options
C) Merit pay
D) Perks

Question 18

Employees view compensation as all but which of the following?

A) A return
B) An entitlement
C) A reward
D) An investment

Question 19

In Japanese companies,the concept of teate is consistent with which of the following?

A) Sophisticated performance appraisal systems
B) A strong emphasis on performance pay
C) Family, housing and commuting allowances
D) Rapid promotions

Question 20

Employers spend ____ cents for benefits in addition to each dollar of wages or salaries.

A) 44
B) 34
C) 24
D) 14

Question 21

Which of the following is not a policy in the pay model?

A)Fairness
B)Competitiveness
C)Contributions
D)Alignment

Question 22

33 (p.22)Which of the following policy choices has the greatest effect on employees' decisions to stay with the organization and to seek additional training and responsibilities?

A)External competitiveness
B)Employee contributions
C)Internal alignment
D)Job evaluation

Question 23

Which of the following decisions answers the "So What" question?

A) Internal alignment
B) Employee contributions
C) External competitiveness
D) Management

Question 24

_____ refers to comparisons among jobs or skills inside a single organization.

A) External competitiveness
B) Internal alignment
C) Pay structure
D) Equitable contributions

Question 25

Which of the following policy decisions directly affects employees' attitudes and work behaviors?

A) Employee contributions
B) Internal alignment
C) External competitiveness
D) Management

Question 26

34 Managers seek internal alignment within their organization by:

A)matching competitors' pay rates.
B)following FLSA guidelines.
C)using fair merit increases.
D)paying on the basis of similarities among jobs.

Question 27

You are an HR manager and your boss has told you to find the best way to raise job performance.After some research you find that _____ produce(s)the largest and most reliable performance increases.

A) high base pay
B) great benefits that attract and retain workers
C) a combination of goal setting and job enrichment
D) monetary incentives

Question 28

35 Compensation policy choices affecting pay level are most closely associated with _____.

A)internal alignment
B)external competitiveness
C)contributions
D)management

Question 29

All of the following have direct financial costs for an employer except:

A) benefits
B) relational returns
C) work-life balance
D) income protection

Question 30

Cost is to change in the pay model as ______________ are to policy lines.

A) market definitions
B) surveys
C) descriptions
D) incentives

Question 31

36 Sam's Club matches the pay of other similar businesses,Whole Foods uses base pay and team incentives and Medtronic emphasizes work and life balance.These illustrate _____ pay policy choices.

A)cost control
B)internal alignment
C)contributions
D)external competitiveness

Question 32

Which of the following is not an objective of the pay model?

A) Ethics
B) Competitiveness
C) Efficiency
D) Fairness

Question 33

A company that says its relatively low starting pay will be offset by larger future pay increases is using the concept of _____.

A)present-value
B)merit pay
C)incentives
D)deferred benefits

Question 34

According to the text,which of the following decisions should be made jointly?

A) Internal alignment and Management.
B) External competitiveness and Employee contribution
C) Employee contribution and Internal alignment
D) Management and External competitiveness

Question 35

Which of the following is not an objective in the pay model?

A) Fairness
B) Compliance
C) Efficiency
D) Productivity

Question 36

Market definitions are to competitiveness as performance based is to _____.

A) alignment
B) compliance
C) efficiency
D) contribution

Question 37

If an organization allows workers to get rewards such as stock options due to illegal and unethical means,this reflects a failure of which policy choice?

A) Internal alignment
B) Efficiency
C) Employee contributions
D) Management

Question 38

Costs are to management as _____ is to alignment.

A) work analysis
B) communication
C) surveys
D) merit guideline

Question 39

(p18)Seniority based,incentive and merit guidelines are components of the ____________ policy.

A) internal alignment
B) management
C) competitiveness
D) management

Question 40

Choices among pay for performance,flat rate pay and profit sharing are examples of _____ policy decisions.

A) internal alignment
B) efficiency
C) employee contributions
D) management

Question 41

Employees classified as non-exempt under FLSA are paid a salary,not wages.

Question 42

Most U.S.firms use merit pay increases.

Question 43

Base wage reflects both the value of the work and individual employee skills and experience.

Question 44

Compensation is important to managers' success because it is a major cost and it influences employee behavior.

Question 45

When unemployment increases,the proportion of the population covered by health insurance decreases.

Question 46

In jobs paid a base wage,the wage is the same for everyone with the same job title.

Question 47

The degree to which pay influences individual and aggregate motivation among employees is called the sorting effect.

Question 48

Since the U.S.has the highest hourly compensation costs for manufacturing workers of any industrialized nation,executives could minimize total labor costs by producing in low cost countries such as China and Mexico.

Question 49

The degree to which pay influences individual and aggregate motivation among employees is called the sorting effect.

Question 50

Companies that pay high wages compared to their industry competitors,such as Nucor Steel and General Motors did for many years,are likely to go bankrupt.

Question 51

The U.S.has the highest hourly compensation costs for manufacturing workers of any industrialized nation.

Question 52

A bonus promised by your boss if costs are below your budget is a merit increase.

Question 53

Challenging work and employment security are examples of total compensation.

Question 54

Which of the following is not a guideline for determining if research has value?

A) Is the research useful
B) Can alternative explanations be ruled out
C) Was the research conducted by Ph D researchers
D) Is correlation separated from causation

Question 55

The best way to establish _____ is to account for competing explanations,either statistically or through control groups.

A) causation
B) profitability
C) correlation coefficient
D) internal alignment

Question 56

Total compensation includes relational returns,cash compensation and benefits.

Question 57

A measure of how changes in one variable are related to changes in another variable is:

A) standard deviation
B) analysis of variance
C) correlation coefficient
D) regression analysis

Question 58

A financial expert concluded that misaligned incentive programs were a major cause of the recent crisis in the US financial system.

Question 59

If you often had to work 50 or more hours per week at an assembly job,you would probably prefer to that your job is classified as exempt under the FLSA.

Question 60

Commissions are an example of incentives.

Question 61

Since HR research contains information useful to managers,most managers read research in HR,management and compensation journals.

Question 62

Contributions refers to employees' perceptions of the fairness of pay differences among different jobs within their organization.

Question 63

Management of the pay system focuses on cost control and employee perceptions of fairness since they are most important to management.

Question 64

Internal alignment refers to comparisons among jobs or skill levels inside a single organization.

Question 65

(p20-21)Compensation professionals' conduct is guided by the American Compensation Association's Code of Ethics.

Question 66

The objective of compliance suggests the way a pay decision is made may be as important to employees as the results of that decision.

Question 67

In practice,there is no real difference between merit pay increases and cost-of-living adjustments.

Question 68

Objectives guide the design of pay systems and provide standards for evaluating their effectiveness.

Question 69

Management and HR research has conclusively shown that goal setting and job enrichment produce the largest and most reliable increases in job performance.

Question 70

(p.22External competitiveness decisions focus on both pay levels.

Question 71

Pension and health benefits are a very large component of total compensation for many large companies such as American Airlines and GM.

Question 72

The policy choice of management means ensuring that the right people get the right pay for achieving the right objectives in the right way.

Question 73

A study found that there is only a very small amount of change in CEO pay is related to changes in company performance.

Question 74

)Monetary incentives produce the biggest increases in job performance.

Question 75

The objective of procedural fairness suggests the way a pay decision is made may be as important to employees as the results of that decision.

Question 76

If an objective is to increase customer satisfaction,then incentive programs and merit pay might be used to pay for performance.

Question 77

An important criteria for determining the value of research is/are there alternative explanations for the research findings?

Question 78

The most important of the pay model policies for assuring fairness is contributions.

Question 79

A major challenge facing most employers is the rising cost of health care benefits.

Question 80

An important criteria for determining the value of research is whether the research is useful.