Question 1

Which of the following employees will be qualified for the LARGEST pay raise according to a typical pay adjustment matrix? An employee with

Accepted Answer

A)  a compa-ratio of 85 who meets performance expectations. 
B)  a compa-ratio of 85 who exceeds performance expectations. 
C)  a compa-ratio of 115 who meets performance expectations. 
D)  a compa-ratio of 115who exceeds performance expectations.

Question 2

A third-quartile approach is a compensation strategy

Accepted Answer

A)  in which the company pays higher wages than its competitors do. 
B)  to pay below the average in the labor market. 
C)  where one-third of the competitors in the labor market pay higher wages than what the company does. 
D)  in which the company pays the median of what its competitors pay.

Question 3

Justin is an hourly employee of Furnace Brick,a company that manufactures a special high-heat-resistant brick for industrial kilns.Justin is unhappy with the new compensation system introduced by the company's new plant manager and HR director.This system has eliminated the practice of annual raises,the Christmas bonus,and raises based on seniority for a new system that ties every employee's raise to how well Furnace Brick is performing in the market.Moreover,the plant manager has announced that twenty percent of the employees in the plant will receive no raise at all this year,regardless of the company's performance.Furnace Brick has moved from a/an ____ compensation philosophy,to a/an____ compensation philosophy.

Accepted Answer

A)  wage-based, salary-based 
B)  paternalistic, competitive 
C)  entitlement, performance 
D)  meet-the-market, lag-the-market

Question 4

Josephine has been a high performing employee for Clockman Publications for many years.She has a compa-ratio over 115.Clockman Publications uses the pay adjustment matrix method for calculating raises.Clockman has had a highly profitable year.Josephine should expect a significant pay increase this year..

Accepted Answer

A) True 
 B)False

Question 5

All the following are likely outcomes when an organization's compensation is viewed by employees and outsiders as lacking external equity EXCEPT

Accepted Answer

A)  increased turnover among high quality employees. 
B)  lower organizational performance. 
C)  increased likelihood of pay discrimination complaints to the EEOC. 
D)  difficulty recruiting qualified and high-demand employees

Question 6

Paul is a single parent.He received consistently high performance appraisals from his employer,until the company went bankrupt.Now,Paul is looking for a new job.As the recruiter at MilqueMaid Chocolate,you are very interested in Paul.But,your firm has a lag-the-market compensation strategy.You know that Paul has had an offer from a firm that has a meet-the-market strategy.You are not authorized to offer Paul a market-level salary.Your best way to lure Paul to MilqueMaid is to

Accepted Answer

A)  point out MilqueMaid's broad-based performance incentive programs. 
B)  emphasize MilqueMaid's entitlement compensation philosophy. 
C)  discuss the method that MilqueMaid used to determine its quartile strategy. 
D)  discuss MilqueMaid's broadband pay structure.

Question 7

Compensation practices are simplified as organizations shift to using work teams,because each team member receives identical pay.

Accepted Answer

A) True 
 B)False

Question 8

An indication that the organization's compensation system is ineffective includes all of the following EXCEPT

Accepted Answer

A)  lower proportion of job applicants who are made offers by the organization. 
B)  high turnover of valuable employees. 
C)  retention of poor performing employees. 
D)  high performing employees who are dissatisfied with their pay.

Question 9

Of the following methods of job evaluation,the ____ method is the most subjective.

Accepted Answer

A)  classification 
B)  point 
C)  factor-comparison 
D)  Hay system

Question 10

What is meant by equity? Is equity an important consideration in compensation?

Accepted Answer

The answer of What is meant by equity? Is equity...

Question 11

Performance and talent management fits into the total rewards approach in all of the following ways EXCEPT

Accepted Answer

A)  performance reviews for the basis for employee raises and promotions. 
B)  in a total rewards approach, traditional "membership" benefits such as insurance can be tied to performance levels. 
C)  employees with high potential future value to the organization are rewarded with career planning for organizational advancement. 
D)  goal setting to direct the efforts of employees with poor performance is tied to their future rewards.

Question 12

In the last decade the pressures of the U.S.economy have compelled most private-sector,for-profit organizations to eliminate the entitlement approach to compensation and to change to true pay-for-performance compensation systems.

Accepted Answer

A) True 
 B)False

Question 13

All of the following are compensation objectives of the organization EXCEPT

Accepted Answer

A)  legal compliance with relevant laws and regulations. 
B)  internal, external and individual equity for employees. 
C)  the lowest total cost of compensation among direct competitors. 
D)  performance enhancement for the organization.

Question 14

Typical compensation appeals procedures require the employee to discuss the problem first with

Accepted Answer

A)  the organizational ombuds. 
B)  the EEOC. 
C)  the HR department. 
D)  his/her supervisor.

Question 15

In a job evaluation,every job in an organization is examined and wages are set according to

Accepted Answer

A)  the educational qualifications needed for employment. 
B)  the relative worth of the job to the organization. 
C)  the value of employees holding the job. 
D)  the job's level in the organizational hierarchy.

Question 16

The CEO of your company wants to move to a pure market pricing approach to compensating all the employees.She argues that it is foolish to pay more for any resource (including human resources)than they are worth on the open market.She argues that a pure market pricing approach would be the most efficient use of organizational funds.It is her idea to review the market price for each job in the company annually,and revise the employees' pay up or down as indicated.She knows this is an unconventional idea,but she is convinced it would work.You make all the following arguments EXCEPT

Accepted Answer

A)  a pay structure based entirely on market pricing would be hard to defend in court against charges of discrimination. 
B)  employees' pay may fluctuate wildly from year to year. 
C)  it will not be possible to find pay survey data for jobs that are unique to your company. 
D)  for many jobs there is little pay survey data that is gathered in a methodologically-sound manner.

Question 17

A non-exempt,private sector employee must receive overtime pay under the FLSA.He/she cannot take compensating time off at one and half times the number of hours in lieu of overtime pay.

Accepted Answer

A) True 
 B)False

Question 18

Lucy is a nurse at Mountaineer Assisted Living.She works three 12-hour days in a row and receives 40 hours pay for 36 hours of work.Lucy also receives 12 hours of time and a half overtime pay per week for the four hours over 8 she works on each of her three workdays.Which of the following statements is TRUE?

Accepted Answer

A)  Medical workers are not covered by the FLSA. They are covered by a separate law. 
B)  This is an allowable arrangement under the FLSA. 
C)  The FLSA requires hospitals to use a 14-day period for calculating overtime so Lucy is not entitled to overtime pay for the number of hours over 8 she works in a day. 
D)  Lucy could receive 12 hours of compensating time off instead of the overtime pay if she requested it.

Question 19

Larry has decided to go back to his hometown of Mellonburg and set up an architectural design business for "green" homes.Mellonburg is a depressed farming community of 1,351 residents.It is 20 miles from the nearest restaurant,70 miles from the nearest Starbucks coffee shop,and the local schools are the worst in the state.The winters are severe,the summers are oppressive.Few single people live there,and the social and cultural life is negligible.In order to attract good quality architects,Larry will probably

Accepted Answer

A)  need to ignore the market compensation for architects and pay the architects on an entitlement basis. 
B)  be able to lag the market significantly in pay because of the low cost of living. 
C)  have pay more than the market because of the unappealing location. 
D)  make market comparisons irrelevant by hiring the architects as independent contractors.

Question 20

An organization can benefit from a properly designed and implemented competency-based pay system through

Accepted Answer

A)  lower overall labor costs. 
B)  reduction of overtime costs by the move to an all-salaried workforce. 
C)  greater workforce skills and knowledge. 
D)  higher employee satisfaction with pay.

Exam 11: Total Rewards and Compensation

Which of the following employees will be qualified for the LARGEST pay raise according to a typical pay adjustment matrix? An employee with

A third-quartile approach is a compensation strategy

All the following are likely outcomes when an organization's compensation is viewed by employees and outsiders as lacking external equity EXCEPT

Compensation practices are simplified as organizations shift to using work teams,because each team member receives identical pay.

An indication that the organization's compensation system is ineffective includes all of the following EXCEPT

Of the following methods of job evaluation,the ____ method is the most subjective.

What is meant by equity? Is equity an important consideration in compensation?

Performance and talent management fits into the total rewards approach in all of the following ways EXCEPT

In the last decade the pressures of the U.S.economy have compelled most private-sector,for-profit organizations to eliminate the entitlement approach to compensation and to change to true pay-for-performance compensation systems.

All of the following are compensation objectives of the organization EXCEPT

Typical compensation appeals procedures require the employee to discuss the problem first with

In a job evaluation,every job in an organization is examined and wages are set according to

A non-exempt,private sector employee must receive overtime pay under the FLSA.He/she cannot take compensating time off at one and half times the number of hours in lieu of overtime pay.

An organization can benefit from a properly designed and implemented competency-based pay system through