Compensation and Benefits: Exam 4/Chapter 14 - Compensation of Special Groups

The differential between supervisors' base pay and their highest paid subordinate is typically _____ percent. A. 0 to 5 B. 5 to 30 C. 30 to 50 D. 50 to 90

B. 5 to 30

At the time it is granted, which of the following has no tax implications for an executive? A. Phantom stock plans B. Incentive stock options C. Stock appreciation rights D. Performance share/unit plans

B. Incentive stock options

Today, top executive pay is more than _____ times the pay of the average worker. A. 1,500 B. 2,000 C. 900 D. 300

D. 300

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

D. Average value of benefits for low-paid employees must be at least 90 percent of that for highly paid employees.

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

D. dual-career ladder

Working through a temporary-help agency usually means: A. high recognition for the work done. B. lower work stress in comparison to permanent employees. C. higher benefits in comparison to permanent employees. D. low pay in administrative or day labor positions.

D. low pay in administrative or day labor positions.

A(n) _____ awards cash or stock if specific goals are achieved. A. nonqualified stock option B. incentive stock option C. restricted stock plan D. performance share plan

D. performance share plan

Which of the following is the most popular executive perk offered by most companies? A. Executive physicals B. Payment of club dues C. Family spousal travel D. Corporate housing

A. Executive physicals

The _____ component of executive compensation has grown the most since 2012. A. long-term incentives B. bonus C. short-term incentives D. base salary

A. long-term incentives

Popular stereotypes of salespeople characterize them as being heavily motivated by _____. A. financial compensation B. personal growth and job security C. recognition and appreciation D. promotional opportunities

A. financial compensation

A recent article analyzing the results from over 100 executive pay studies shows that the best predictor of executive pay, by far, is _____. A. firm size B. the number of insiders on the board of directors C. the industry in which the firm operates D. firm performance

A. firm size

The biggest trend in supervisory pay centers on _____. A. increased use of variable pay B. payment of wages that equal subordinate pay C. paying a wage that is above the highest paid superior D. payment of higher wages without benefits

A. increased use of variable pay

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

A(n) _____ awards cash or stock that is determined by an increase in stock price at a fixed future date. A. phantom stock plan B. incentive stock option C. restricted stock plan D. nonqualified stock option

A. phantom stock plan

Executives, supervisors, and sales staff often receive special compensation treatment because _____. A. these jobs face conflicting demands B. these jobs are exempt under FLSA C. recruitment and retention are always difficult for these jobs D. these jobs are covered under the Sarbanes-Oxley Act

A. these jobs face conflicting demands

In which of the following situations would the engineering jobs be most likely treated as a special compensation group? A. Mechanical engineers employed by a large city corporation B. Computer engineers employed at a software firm C. Biomolecular engineers employed at a farm equipment manufacturer D. Acoustical engineers at a waste disposal company

B. Computer engineers employed at a software firm

Which of the following is NOT a reason for companies to hire contingent workers? A. Contingent workers help save costs. B. Employees who accept the idea of bounded careers view contingent status as part of a fast-track developmental sequence. C. Such employment offers added flexibility to employers. D. Companies hire contingent workers as a way to insulate themselves in a volatile economy.

B. Employees who accept the idea of bounded careers view contingent status as part of a fast-track developmental sequence.

A useful tool for determining the true worth of an entire executive compensation package is _____. A. the program evaluation and review technique (PERT) B. a tally sheet C. a Gantt chart D. the graphical evaluation and review technique (GERT)

B. a tally sheet

If improved account retention became a major focus of attention, the performance measure stressed would be _____. A. gross margin on sales or price per unit B. percentage account erosion C. a volume measure D. a customer satisfaction index

B. percentage account erosion

When designing a sales compensation plan, it should be kept in mind that: A. salespeople rank recognition as their number-one motivator. B. salespeople under an incentive system will view customer service as an imposition. C. compensation systems are independent of the nature of a product or service. D. commissions for sales volume reduces the incentive to sell.

B. salespeople under an incentive system will view customer service as an imposition.

With easily sold products: A. companies prefer a more aggressive sales force. B. the base compensation tends to be more important. C. the incentives provided in the form of commissions tend to be more important. D. companies tend to set lower sales targets.

B. the base compensation tends to be more important.

The most common approach to motivating executives to make decisions that are in the best interests of stockholders is _____. A. high base salaries with few bonuses B. average base salaries with significant firm performance bonuses C. a long-term incentive plan using stock options D. average base salary with performance-based perks

C. a long-term incentive plan using stock options

The _____ theory argues that executive pay rises to maintain the same relative relationship with the salaries of lower-level employees. A. economic approach B. team production C. social comparison D. agency

C. social comparison

All of the following EXCEPT _____ would be considered a special compensation group. A. sales staff B. contingent workers C. unpaid interns D. professional employees

C. unpaid interns

_____ curve expresses the relationship between years since last degree, performance, and salary. A. The Phillips B. The marginal productivity C. A tenure D. A maturity

D. A maturity