MGMT 383 Test 3

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employee cost factor formula

total compensation and benefits / FTEs

T/F A green-circled employee is an incumbent whose pay raises should be accelerated so that he/she can reach the pay grade minimum..

True

During the performance appraisal process, employees tend to focus on a. whether they will get a raise or not. b. the emotional content of their supervisor's communications. c. their areas of weaknesses as shown by the performance appraisal. d. the suggestions for future development contained in the performance appraisal.

____ are payments directly calculated on the amount of time worked. a. Salaries b. Wages c. Stipends d. Bonuses

Charlene, the director of compensation, wishes to estimate the administrative costs of the current benefits program, so that she can use that as a basis for evaluating alternative administrative methods. One of the most useful calculations Charlene can make is a. HR compensation and benefits staff salaries divided by total expenditures on benefits. b. HR staff time spent on benefit issues multiplied by their pay and benefits costs per hour. c. the multiyear pattern of benefits as a percentage of payroll. d. benefits costs by employee group.

Of all the benefits paid by employers, on average ____ make up the largest proportion of costs. a. paid leaves, including sick leave b. health insurance c. retirement plans d. long-term disability

Of the types of employees listed below, the management by objective process would work best for a. assembly line employees at a commercial bakery. b. commercial loan officers in a national bank. c. police dispatchers at in an urban police department. d. emergency room physicians.

One of the performance criteria for a sales representative who covers Saskatchewan as the sole Western Canadian representative is "relationship with co-workers." This criterion results in a performance measure that is a. distorted. b. contaminated. c. deficient. d. objective.

When promoting family-friendly benefits to top management, the director of HR's most accurate argument for their effectiveness is in a. recruiting top quality candidates. b. aiding employee retention. c. increasing productivity of employees with families. d. reducing the number of complaints, grievances, and lawsuits by employees with families.

"Multisource" rating, also called ____, recognizes that employee performance crosses departmental, organizational and, in some cases, global boundaries. a. team appraisal b. global rating c. field review d. 360° feedback

T/F Gainsharing plans are considered successful if they "self-liquidate,' meaning that all the gains from increased employee productivity are distributed to the employees.

True

T/F George retired from a tire manufacturing company after 35 years. He has a union-negotiated defined-benefit plan. Even with the economic downturn, George still receives the same amount of pension every month.

True

___________: What an organization pays an employee to do.

job duties

_____________ are important elements in a given job as identified from job descriptions.

job duties

T/F Although healthcare costs have increased significantly, they have risen approximately the same as inflation.

False

T/F 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.

True

T/F Pay secrecy systems have been consistently upheld as legal in the courts.

False

T/F The "employee cost factor" is total compensation and benefits per employee.

True

A/an ____ is an indirect reward given to an employee or group of employees because they are members of the organization. a. incentive b. bonus c. benefit d. motivator

Formula for calculating human value added

revenue - operating expense - pay and benefits = adjusted profit / full-time-equivalent employees (FTEs)

All of the following are potential outcomes of a successful pay-for-performance plan EXCEPT a. greater predictability of employee pay. b. retention of high performers. c. improved safety records. d. aligning employee behavior with organizational business goals.

All of the following are requirements of the Employee Retirement Income Security Act (ERISA) EXCEPT a. employers may offer retirement plans to certain classes of employees as a tool to aid retention of top-performing employees. b. pension plans must meet minimum funding requirements. c. employers must pay termination insurance to ensure employee pensions will be there even if the company goes out of business. d. accrued benefits in the pension plan must be given to employees when they retire or leave.

All of the following are typical performance measures in gainsharing plans EXCEPT a. fixed costs. b. labor costs. c. overtime hours. d. quality levels.

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 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.

As director of compensation and benefits, you are deciding whether you should purchase a new pay survey. You consider all the of following characteristics of pay surveys in your decision EXCEPT a. On what dates were the survey data gathered? b. Is the survey focused exclusively on companies of your size, the city in which you operate, and your industry? c. Are you familiar with the reputation of the company or organization that produced the survey? d. Does the survey include data from companies with which you compete for employees?

In most developed countries, ____ provide/s most health and retirement benefits for citizens. a. employers b. the government c. non-governmental organizations, such as charities d. workers' unions

Management-by-objectives is best for a. reducing interrater reliability problems. b. linking individual performance to organizational goals. c. minimizing instrument development time. d. evaluating non-exempt employees.

Clara is running a 102 degree fever and she suspects she has the flu. But, Clara comes to work, anyway. Clara has large unpaid balances on her credit cards, and she plans to take no sick leave this year so that at the end of the year, her employer will "buy back" her unused sick leave. Clara will thus be receiving a. sick leave rebates. b. paid time off. c. well-pay. d. FMLA pay.

Roger's mother is in the early stages of Alzheimer's disease, and Roger's father also died of Alzheimer's. Roger, who is 55, is very concerned that he will develop this disease as well. Roger would be most pleased if his company offered a. an integrated disability management plan. b. employee wellness programs. c. long-term care insurance. d. flexible spending accounts.

Terri is a salaried line worker at Chicken Delight Poultry Processors. Terri joking refers to herself as a "chicken dis-assembler." She often works more than 40 hours a week, and is not paid overtime. a. Terri's pay is consistent with the FLSA because she is a salaried worker. b. Terri should be paid overtime according to the FLSA because she is an exempt employee. c. Terri's pay is not consistent with the FLSA because she is a non-exempt employee. d. Terri should be given compensatory time off but not overtime because she is a salaried worker.

The 360° rating method appears to be less threatening to employees when it is used for ____ purposes. a. administrative b. customer relations c. development d. benchmarking

The most frequently used form of sales compensation is the a. salary only. b. straight commission. c. salary plus commission. d. differential commission.

The most widely used long-term performance incentives for executives is/are a. generous perquisites. b. 401ks. c. stock options. d. annual cash incentives.

The performance appraisal interview is a type of feedback system. The components of a feedback system include all of the following EXCEPT a. evaluation of data. b. data. c. acceptance of the evaluation as fair. d. action based on the evaluation.

The two basic compensation philosophies, which should be seen as opposite ends of a continuum, are the ____ and the ____ orientations. a. competency, productivity b. exempt; non-exempt c. entitlement; performance d. market-driven, equity-driven

The two general uses of performance appraisal, which are often in conflict, are a. salary administration and discipline. b. training and development. c. administrative and development. d. coaching and career planning

All of the following are common criteria of employee performance EXCEPT a. meeting deadlines. b. achieving quality standards. c. being present at work. d. acting in accordance with ethical principles.

All of the following are recommendations for making a performance appraisal system more effective and more defensible legally EXCEPT a. the use of specific, objective criteria and standards. b. involve employees in planning and designing the program. c. train managers and review their ratings to ensure favoritism is not involved. d. use multisource methods of performance appraisal.

Martha has been a professor at a major state university for 20 years. Martha loves her work and is satisfied with the university. Because of her high level of publications and her high quality of teaching, Martha has received the highest raises possible every year. Since this a public university, Martha has access to all the salary data for all her fellow professors. She has learned that the last three professors hired in her field at her level were paid one-quarter more than she is paid. This amounts to tens of thousands of dollars. Martha is shocked and gathers data on the job market in her field. She finds that her pay is much lower than the market rate. Martha has encountered a. the failure of step progression. b. gender- or race-based pay discrimination. c. the realization that she is a "red-circled" employee. d. pay compression.

Ultimately, performance management links organizational strategy to organizational a. culture. b. goal setting. c. rewards. d. results.

Which of the following statements is FALSE regarding FMLA. a. Employees without families who are required to pick up the slack for employees taking family leave can be resentful. b. Employers often do not understand FMLA requirements. c. Employees caring for a family member who is an injured veteran are eligible for 26 weeks leave. d. Fitness-for-duty tests are illegal for employees returning from FMLA leave for personal medical conditions.

____ is the amount estimated to allow an individual to meet his/her basic needs of food, clothing and shelter. a. An honest wage b. A fair wage c. The minimum wage d. The living wage

T/F An attractive aspect of employer educational assistance is that in most cases the aid is not considered taxable income for the employee.

False

T/F CEO performance is meaningfully measured only if financial objectives such as return on investment are considered. Non-financial measures are too easily manipulated to accurately reflect CEO performance.

False

T/F Category scaling methods are easy to develop and they help guard against leniency bias by supervisors by forcing the supervisors to rank subordinates against one another on each performance category.

False

T/F Every person who works (legally) in the U.S. is protected by the Fair Labor Standards Act and must be paid the minimum wage..

False

T/F If a supervisor is considering recommending that an employee be terminated for poor performance, the supervisor should make certain that performance appraisals of this employee are well-documented.

False

T/F If the performance appraisal system in an organization is properly designed and administered, it will not be a stressful experience for either managers or their subordinates.

False

T/F In general, a single criterion should be used for measuring sales staff performance. .

False

T/F Many court decisions have upheld the use of trait-based performance appraisals if the traits are clearly quantifiable.

False

T/F Some form of individual performance incentive is appropriate for every organization.

False

T/F Stock option plans are restricted to employees who are managers or executives.

False

T/F Team harmony is enhanced when team members decide as a group how to distribute performance bonuses to each team member because each member understands what he/she has contributed to the group's performance.

False

T/F The Equal Pay Act of 1963 was passed to achieve pay equity between men and women.

False

T/F The ranking method typically ranks jobs in value to the organization based on three or four compensable factors.

False

T/F Bringing in an outside consultant to interpret peer/team ratings is one way to overcome the tendency of some employees to attack one another in the ratings.

True

T/F Jerry is a non-exempt employee who has been sent for training in using a new software package. Jerry must be paid his regular wages for all the time he spends in the training sessions, all of which are held during regular working hours.

True

All of the following are drawbacks of profit-sharing plans EXCEPT a. profits of the organization are not entirely under employees' control. b. they are not self-funding. c. employees' rewards usually come a long time after their improved performance. d. management may resist disclosing financial and profit information.

An effect of variable pay plans is that ____ incentives increase the competition among individual employees. a. profit-sharing b. individual c. work team d. organizational

In order to translate organizational strategies in to employee behaviors that support these strategies, performance management systems use a variety of techniques at the individual employee level. These techniques include all of the following EXCEPT a. informing the employee of the expected performance levels. b. rewarding the individual employee based on his/her performance. c. ensuring that the individual employee is satisfied with his/her performance appraisal. d. providing feedback on individual employee performance.

Of the following steps in the development of an MBO performance appraisal system, _____________ falls earliest in the process. a. continuous performance discussions between the subordinate and the supervisor. b. setting objectives for individual employees based on organizational objectives. c. developing accurate job descriptions d. devising performance standards

Of the following, which type of pay adjustment has the most ability to reward employee performance? a. cost-of-living adjustments. b. seniority increases c. lump-sum increases d. across-the-board increases

One of the main responsibilities that managers have regarding benefits administration is to a. monitor benefits usage of their subordinates. b. answer technical questions on benefits. c. coordinate the use of time-off benefits. d. assist employees in filing benefit claims.

Rapid increases in the costs of health benefits are having all of the following effects EXCEPT a. some employers are dropping health benefits for employees. b. employers requiring retirees to pay more for continued health benefits. c. causing employers to lobby for national, universal health insurance. d. employers substituting mini-health insurance plans for traditional health coverage.

A____ is a group of jobs having common organizational characteristics. a. market band b. occupational category c. benchmark group d. job family

Long-term disability insurance a. is a mandatory security benefit for non-governmental employers with over 50 employees. b. allows employees to accrue sick leave for time-limited emergency needs. c. pays for long term care such as nursing home, assisted living, and home health-care for disabled persons. d. provides continuing income protection for employees who become are unable to work because they are disabled.

T/F Bernardette has been told that her health benefits will not cover treatment for her recently-diagnosed multiple sclerosis. It is the utilization review specialist who has made this decision.

False

T/F Broadbanding is most appropriate in a traditional, hierarchical organization where the managers have careers based on steady advancement and promotions.

False

T/F Collette received a $2,500 lump-sum increase for her performance last year. This increased her base pay by $2,500.

False

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

False

T/F Typically, clerical and professional jobs are classified in the same job family because they are both white-collar, office occupations.

False

T/F On average, U.S. workers do not take three of the vacation days to which they are entitled.

True

T/F At Minotaur Consulting, consultants are evaluated primarily on the dollar amount of client revenue they generate each month. This makes unethical behavior by the consultants a concern.

True

A compensation philosophy in which each employee who has gained another year of seniority should have an increase in pay is called the ____ philosophy. a. entitlement b. commitment c. paternalistic d. the equity-based

A disadvantage of "employee of the month" type awards is that a. they can be seen as favoritism. b. they are typically awarded on the basis of objective criteria. c. it is difficult to link these awards with specific performance criteria. d. eventually all employees will have been employee of the month and the award will have lost its distinctiveness.

A plan that allows employees to contribute pre-tax dollars to buy additional benefits is called a a. flexible spending account. b. health reimbursement arrangement. c. tax-deferred benefit option. d. cafeteria-style plan.

A system in which the employer makes contributions to each employee and the employee decides how to use this to cover his/her health-related expenses is called a/an ____ plan. a. consumer-driven health b. contributory health insurance c. self-directed health d. individual HMO

A third-quartile approach is a compensation strategy 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.

A typical abuse-control measure to keep employees from taking excessive time off around holidays is to a. require employees to work the first and last scheduled workdays around the holiday. b. allow only employees with significant seniority (e.g., five years) to combine holidays with vacation days to extend the employees' time off. c. pay employees time-and-a-half for working the days immediately following and preceding a holiday. d. allow employees to "bank" holidays and take the days off at less busy times of year.

Abundance Nurseries needs large numbers of unskilled employees every spring and summer to plant, maintain, and harvest the flower fields. Abundance is located in an area where there is a large supply of unskilled workers, and it has few problems recruiting workers as needed. It would be reasonable for Abundance Nurseries to position its pay for these workers in the ____ -quartile of the labor market. a. first b. second c. third d. fourth

According to the overtime provisions of the FLSA all of the following are true regarding non-exempt employees EXCEPT a. they do not receive overtime pay for training that is not directly job related even if the training is outside of regular working hours. b. they must receive overtime pay if they are driving a vehicle to a meeting during regular work hours. c. they do not qualify for overtime pay if they are traveling by bus to another work location during normal work hours. d. they must have their incentive pay added to their base pay used for calculating overtime.

After working five years as a service coordinator at BlueBottle Enterprises, Mandy has developed some timesaving shortcuts that allow her to process a higher volume of work than the other service coordinators. If Mandy would train her co-workers in her techniques, the entire department could be more efficient. The performance incentive system that would be LEAST likely to encourage Mandy to share her expertise with her co-workers would be a/an a. individual-level incentive system. b. team-based incentive system. c. organization-level incentive system. d. gain-sharing plan.

All of the following are reasons to have subordinates evaluate the performance of their supervisors EXCEPT a. compensation for managers tends to be more equitable when subordinates have input into these decisions. b. employee ratings can identify competent managers. c. when subordinates rate managers, managers become more responsive to their subordinates. d. subordinates can identify areas for growth for their managers.

All of the following statements are true about team-based performance appraisal EXCEPT a. team performance appraisal is most effective in the administrative aspect of performance management. b. teams tend to avoid awarding individual team members larger or smaller pay increases based on performance. c. team members are often more familiar with a team member's work performance than the supervisor is. d. team members may use the team performance appraisal as a way to attack other team members.

An appraisal interview technique that encourages employees to identify their own performance deficiencies is termed a/an ____________ approach. a. self-auditing b. confessional c. introspective d. analytic

An artist has been a visiting instructor at a noted art academy for three years. The academy's process for moving a temporary/visiting instructor to regular faculty status is to have the artist's portfolio of work examined by a panel of noted artists who are not affiliated with the academy. This is a version of a/an a. field review. b. external audit. c. body-of-work appraisal. d. team appraisal.

An individual's ____ is that employee's current pay level divided by the midpoint of the pay range. a. compa-ratio b. market ratio c. target ratio d. matrix ratio

Why do workers who do not have health insurance cause the health insurance rates to rise for employers who provide insurance for their workers? a. Health care providers pass the cost of serving uninsured people on to employers in the form of higher prices for their services. b. Health care costs for uninsured patients are pro-rated among insurance companies operating in the state based on the number of individuals the companies insure, thus increasing insurance companies costs. c. Workers who do not have health insurance do not receive basic health care, making them sicker. When they eventually get jobs with insurance, they have very high usage of medical services for which their insurance pays. d. Workers without health insurance tend to contract contagious illnesses, including drug-resistant tuberculosis. Consequently, insured workers and their families, who would otherwise remain healthy, catch these illnesses and require more medical care.

The Pension Protection Act of 2006 a. requires employers to increase funding to cover unfunded liabilities. b. mandates that retirees cannot be discriminated against on the basis of previous union membership. c. allows employers to "cash out" faltering pension plans, by making one-time cash payments to retirees who can then invest the funds as individuals. d. requires employers with excessive unfunded pension liabilities to give control of the pension fund to the Department of Labor.

The ____ type of pay-for-performance system is most likely to induce employees to behave unethically. a. sales commission b. ESOP c. differential piece-rate d. gainsharing

The auditors in a public accounting firm are assigned to new project teams as their current projects end. Consequently, an auditor may work on one project for an entire year or the auditor may be assigned to several different shorter-term projects during a year. All of the following are behaviors that would be important to encourage through the performance appraisal system EXCEPT a. competitiveness. b. achievement orientation. c. initiative. d. information-seeking.

Which of the following is characteristic of graphic rating scales? a. Descriptive words used may have different meanings to different raters. b. Graphic rating scales are difficult to develop. c. Raters typically try to place the same number of employees at each level of scale. d. Raters can use these scales without training because they are self-explanatory.

Which of the following statements is FALSE about Health Savings Accounts? a. HSAs require participants to "use it or lose it" in that unused funds cannot be rolled over to the next year. b. Individual employees can set aside pre-tax dollars for medical care thus reducing the cost of healthcare by their tax rate. c. Both employers and employees can make contributions to HSAs. d. HSAs have high annual deductibles which must be paid by the employee participants..

Which of the following statements is TRUE? a. If ethical behavior were evaluated in a performance appraisal system and rewarded, employees would sometimes be rewarded for causing immediate or long-term financial losses to the organization. b. Performance appraisal systems are most effective when the behaviors evaluated are objectively measurable or observable. This is the main reason why most performance appraisal systems do not incorporate specific evaluations of the ethical aspect of employee performance. c. An organization's ethical culture is independent of its performance management system. d. A performance-driven organization culture, especially one using management-by-objective performance appraisal, is incompatible with strict ethical standards for employee behavior.

Which type of compensation is linked directly to individual, team, or organizational performance? a. variable pay b. direct pay c. wages d. salary

A company that structures its compensation system so that half of its competitors pay their employees more than it does and half of its competitors pay less than it does is using a ____ the market strategy. a. lag b. meet c. lead d. follow

A long-time assembly line worker, Ed, and his wife have divorced. Under COBRA rules, who must HR notify of their opportunities for extended health benefits? a. only Ed's wife b. Ed's wife and Ed's dependent children c. Ed's wife, his dependent children, and Ed's dependent elderly parents d. No one, since this is a divorce and not Ed's death.

A true cost-of-living raise a. must be based on the cost of living in the local area where the organization is based. b. must be tied to economic indicators such as the CPI. c. is the same thing as an automatic increase. d. is the same thing as a merit raise.

All of the following are developmental uses for performance appraisals EXCEPT a. selection of training seminars for a particular employee for the upcoming year. b. prioritizing employees for layoffs of various sizes. c. identification of jobs to which the employee could be promoted. d. counseling the employee in more effective interpersonal relations.

All of the following situations would support successful use of group/team incentives EXCEPT a. A group of health-care professionals in different specialties works together to care for a particular patient. b. Sales representatives for veterinary pharmaceuticals are each assigned different geographic territories. c. The organizational culture in an engineering consulting firm promotes cooperation and mutual respect. d. A team of advertising and marketing specialists are working on the same campaign for a client.

An effective performance management system must have all the following characteristics EXCEPT a. it must link organizational strategy to ultimate results. b. it must allow individual employees flexibility in how they will achieve ultimate results. c. it must translate organizational strategies into unit-level actions. d. it must assign unit-level actions to individual employees.

Angela, who lives in Alabama, recently turned down an attractive job offer as director of marketing from a firm in Oregon because it would not provide assistance in finding a job for her husband or assistance in buying a new home in Oregon, where house prices are much higher than in Alabama. It appears that the Oregon firm a. has an entitlement benefits philosophy. b. does not have a relocation assistance program. c. does not offer benefits for domestic partners. d. is discriminating against women.

Seeing other employees receive valuable service awards would be most likely to motivate employees to a. improve their performance. b. remain with the organization. c. work more cooperatively as team members. d. be more psychologically invested in the organization.

Simon is a compensation specialist for Coreopsis, Inc. He is collecting data on compensation rates for workers performing similar jobs at other organizations,. Simon is conducting a a. internal equity study. b. pay survey. c. market review. d. competitive evaluation.

The CEO of BizMark Equipment wants to know what return the firm is getting on the money it is spending on its employees. As the director of HR, you know this is considered return on human capital. You will calculate this as a. Total Compensation and Benefits / FTEs b. Revenue - Operating Expense -Pay and Benefits = Adjusted Profit / Pay and Benefits c. Revenue - Operating Expense - Pay and Benefits + Adjusted Profit / FTEs d. Total Pay and Benefits Expenditures / Operating Expense

The Family and Medical Leave Act (FMLA) defines a ____ as one requiring in-patient, hospital, hospice, or residential medical care or continuing physician care. a. medical leave event b. serious health condition c. life threatening illness d. covered health-related event

The HR director feels it is necessary for each individual employee to analyze his or her personal strengths and weaknesses and set concrete goals for improvement. Consequently, the HR director is designing a ____ program. a. facilitated appraisal b. self-appraisal c. team evaluation d. introspective analysis

The assumption that the performance of employees in a department correspond to the classic "bell shaped curve" is essential to the ____ method of performance appraisal. a. ranking b. forced distribution c. critical incident d. statistical

The director of HR for MCTF Industries is measuring the effectiveness of the benefits at MCTF. She will need to calculate all of the following measures EXCEPT a. benefits as a percentage of payroll over multiple years. b. total cost of benefits compared with total cost of benefits of its main competitors. c. benefits costs per employee group. d. health care costs per participating employee.

The downside of bonuses is that a. they may cause low performing employees to quit. b. employees who are passed over may become jealous of the bonus recipient. c. a well-implemented bonus system may be more expensive to the firm than base pay raises for improved performance. d. employees tend to view bonuses as lucky windfalls rather than a consequence of personal effort.

The last step in establishing a pay structure is to a. compute pay ranges. b. set the pay for individual employees. c. compare current pay to pay ranges. d. establish pay grades.

The main difference between health savings accounts (HSAs) and health reimbursement accounts (HRAs) is that a. unused funds in HSAs cannot be rolled over to the next year by the employee. b. all funds in HRAs are contributed by employers. c. there are no deductibles under HSA plans, whereas HRA plans have high deductibles. d. HSA funds can only be applied to certain "qualified medical expenses," whereas there are fewer restrictions in HRAs.

The main responsibility for conducting performance appraisals lies with a. HR specialists b. managers c. consultants d. top management

The most common type of group/team incentive plan used by organizations is paying a. all team members the same base pay with equal bonuses based on team performance. b. team members different base pay, with equal bonuses based on team performance. c. all team members the same base pay with varying bonuses based on individual contribution to the team's performance. d. team members different base pay, with varying bonuses based on individual contribution to the team's performance.

The performance committee of Everyoung Physical Therapy Associates has identified: (1) the progress of the patient according to medical guidelines, (2) patient satisfaction, (3) meeting treatment deadlines, and (4) therapist presence at work as ____ upon which the committee will base the measure of physical therapist performance. a. job duties b. performance measures c. subjective criteria d. critical incidents

The simplest methods for appraising performance are the a. behaviorally anchored rating scales (BARS). b. category scaling methods. c. comparative methods. d. written methods.

A group of employees has approached the HR manager with a request that the company sponsor a softball league. The HR manager thinks this is a good idea because a company softball team will a. improve employee productivity. b. decrease absenteeism. c. increase team spirit among employees. d. improve employee health and wellness.

A problem with flexible benefits plans is ____, a situation in which only higher-risk employees select certain benefits, such as health insurance, and lower-risk employees do not select these benefits. a. concentration of risk b. perceived invulnerability c. adverse selection d. the skewed distribution effect

A trend in healthcare insurance benefits is a. toward providing higher levels of benefits for higher-performing employees as a motivation tool. b. toward eliminating or reducing benefits for classes of employees who have poorer health. c. transferring more of the cost of health insurance to the employees from the employer. d. toward standardizing benefits to make benefits provision more cost-effective.

A/an ____ is an indirect reward given to an employee or group of employees because they are members of the organization. a. incentive b. bonus c. benefit d. motivator

All of the following are compensation objectives of the organization EXCEPT 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.

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

A ____ is a managed care approach that provides health services to an organization's employees for a fixed period on a prepaid basis. a. contractual medical organization (CMO) b. preferred provider organization (PPO) c. public/private health organization (PPH) d. health maintenance organization (HMO)

A compensation plan for expatriates that equalizes the cost differences between the international assignment and the same assignment in the home country of the individual or the corporation is the ____ approach. a. global market b. cost equalization c. total rewards d. balance sheet

A consultant presenting a plan for a group/team incentive plan stresses that the money to be used as incentive rewards will be generated by improved organizational performance. This aspect of the plan is called the ____ principle. a. liquidating b. zero-sum c. pay-as-you-go d. self-funding

A flexible benefits plan a. allows employees to contribute pre-tax dollars to buy additional benefits beyond the employer's basic package. b. continuously updates benefit options as employee needs and desires change. c. combines all time-off benefits into a total number of hours that employees can take off with pay. d. allows employees to select the benefits they prefer from groups of benefits established by the employer.

A key legal factor in early retirement plans is that they a. be announced 60 days in advance to allow employees to confer with financial advisors and not be pressured into making an immediate decision. b. be offered to both union and non-union employees if the company is unionized. c. be equivalent in amount to what the employee would have received if he/she had retired at 65. d. be voluntary.

A medium-sized law firm every year distributes a bonus to its employees, from clerks to partners, based on the fees it has earned on the cases it has won. Even though every employee has not worked on every case, the senior partners of the law firm feel that such a bonus motivates employees to cooperate with one another and assist each other in times of high work loads. This is a type of ____ incentive. a. group b. team c. individual d. organizational

A program that combines sick leave, vacations, and holidays into a total number of hours or days that employees can take off with pay is called a/an ____ plan. a. consolidated time off b. European c. accumulated leave d. paid time-off

As a vendor providing automated performance appraisal products, you would probably be able to promise purchasers of your system all of the following EXCEPT a. ease of use compared to manual performance appraisal systems. b. time savings compared to manual performance appraisal systems. c. aggregation of performance information. d. lower total costs compared to manual performance appraisal systems.

As director of HR of a company that does not presently use benefits administration software, you want to reduce the number of HR benefits staff. The first area of benefits administration to target would be a. calculating and monitoring employee paid-time-off and FMLA leaves. b. employee benefit education and communication. c. health benefits administration. d. benefits enrollment.

T/F Archie is a security guard. He must monitor displays from multiple security cameras for suspicious behavior by individuals or groups. As long as he is alert and awake, Archie's performance will be adequate. Archie's job is well-suited for an individual incentive.

FAlse

T/F "Performance calibration" refers to the statistical calculations involved in developing a forced ranking system based on a bell-shaped curve.

False

T/F A critical calculation when deciding whether to outsource benefits administration to a consulting firm is benefits expenditure per full-time equivalent employee.

False

T/F A performance management system can be effective even if organizational employees do not generally regard it as fair.

False

T/F Although BARS systems are time-consuming to develop, they are cost-effective in the long run because the same appraisal form can be used for broad job families in an organization, such as all technical jobs and all administrative jobs.

False

T/F Although no federal law requires this, most states have laws that require employers not discriminate against domestic partners and provide them the same benefits as traditional married couples.

False

T/F An advantage of unemployment compensation is that because it is funded by a tax on employers, state unemployment funds are able to remain solvent during economic downturns.

False

T/F As an HR director of an organization with a racially-mixed workforce, you have decided to implement multisource appraisals. You anticipate that the biases of the majority group against the two minority groups with "wash out" when the ratings are combined. You are correct in your assumption.

False

T/F At the end of a negative performance appraisal interview, it is essential that both the manager and the subordinate agree in all areas of the review, otherwise a true "meeting of the minds" has not occurred and the employee will not change his or her behavior.

False

T/F At the present time, WilburAviation has an effective performance appraisal system in place for its employees. It does not train hourly employees who are promoted to supervisor because they have been through many appraisal cycles themselves and have internalized the company's process. This is an acceptable practice because managers and supervisors tend to "repeat the past" and evaluate their subordinates as they have been evaluated.

False

T/F Because of the difficulties of designing a truly functional incentive system, fewer than half of all organizations use variable pay.

False

T/F External benchmarking is a job evaluation method that requires each job in the organization be matched with an equivalent job in the labor market.

False

T/F Graphic rating scales are generic and therefore can be effectively applied to almost any non-managerial job without much customization.

False

T/F If a performance appraisal system faces a legal challenge because there is evidence of disparate impact on protected classes, management could defend against this challenge by showing that supervisors were given wide discretion in how they applied evaluation criteria.

False

T/F If sales staff can rely on receiving bonuses each year, it gives them income security and increases both morale and performance motivation.

False

T/F Jolene, an art restoration specialist, has received an offer from a museum in London. Jolene can expect that the museum will have a generous medical benefits package comparable to competing job offers she has from a museum in New York City.

False

T/F 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..

False

T/F Non-monetary incentives, such as travel awards, will motivate employee retention and will improve an individual's morale, but it will not motivate the individual to exert discretionary effort.

False

T/F One reason that employees take ethical shortcuts in the pursuit of organizational profits is that performance appraisal systems cannot be structured in a way to penalize unethical behaviors.

False

T/F Peggy has taken a summer job before college classes start in the fall. She is working for an organic farm picking produce, packing produce, weeding, watering and doing other farm tasks. Because this is the farm's busy season, Peggy is working 60 hours a week. Peggy is entitled to time and one-half pay for the 20 hours she works extra every week.

False

T/F Research on performance appraisal has shown that it is most effective for the manager to give the employee information about pay decisions immediately in the performance appraisal interview, leaving the rest of the time available for developmental focus and coaching.

False

T/F Since the data pertinent to the employee's performance has been collected and evaluated before the performance appraisal interview is held, it is too late at that point to correct misunderstandings and mistakes.

False

T/F Since the typical employee has only a vague understanding of the benefits provided by his/her employer, organizations rarely view benefits as an effective retention tool.

False

T/F SolarFire Alternative Energy has grown so rapidly in the last five years that the HR director has not been able to keep job descriptions up-to-date. As long as SolarFire managers conduct formal performance evaluations based on documented performance data, there should be no problem if a terminated employee makes a claim of discrimination in performance appraisal.

False

T/F The complexity of the unemployment compensation system and the stigma attached to receiving unemployment compensation mean that most of the people qualified to receive unemployment compensation never actually apply for or receive the unemployment compensation to which they are entitled.

False

T/F The equivalent of a 20/70/10 forced distribution method of performance appraisal applied in a classroom would require 10 percent of the students to be given a failing grade, so that they would be motivated to either improve or to drop the class.

False

T/F The federal government mandates a minimum of two weeks severance pay for employees who are laid off due to no fault of their own.

False

T/F The performance ratings of an employee given by the various evaluators in a multisource performance appraisal system tend to be remarkably consistent with a narrow range of variability.

False

T/F The primacy effect occurs when a rater gives greater weight to events that have happened in the near past when appraising an individual's performance.

False

T/F The purpose of developmental feedback is to clarify to employees how their performance compares with the performance of their co-workers.

False

T/F The use of self-appraisal is a good counterpoint to supervisor appraisal because the subordinate's leniency in self-appraisal offsets the rater bias of the supervisor.

False

T/F Unions typically encourage profit-sharing plans as long as the plans are based on "bottom-line numbers" because this allows employees' total take-home pay to be larger in profitable years.

False

T/F Unisex" mortality tables are no longer legal for calculating pension payments for women, since these tables did not take into account the fact that on average women live longer than men do,

False

T/F Unpaid leaves of absence are popular with employers because they do not cost the firm anything beyond continued benefits for the employee on leave.

False

Alvin, a sales representative for a company making industrial solvents, lost a major customer last month. Until then, Alvin's year has been about average in the dollar amount of sales. Early in the year, Alvin brought in two new customers of about the size of the customer he lost last month. Alvin's supervisor gives Alvin an unsatisfactory rating in his annual performance appraisal. It is likely that Alvin's supervisor has committed the ____ error. a. contrast b. strictness c. recency d. primacy

Amanda is upset because she makes the same salary as Carl does, even though Amanda has 18 clients and Carl has only 11 clients. Amanda is making a judgment about a. discriminatory compensation. b. procedural justice. c. internal equity. d. external equity.

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

Andrew is excited about the new program at work. He will be allowed to purchase 20 shares of stock at $45 per share for a limited period of time. Andrew is planning to take advantage of this ____ plan because he expects that the market price of the stock will far exceed $45 in a couple years. a. windfall incentive b. gainsharing c. stock option d. employee stock ownership (ESOP)

Anne has applied for a job with a company that has a mini-medical plan. Anne is 27 years old, single, has no dependents, and is in robust health. Her family health history is excellent. Anne is an avid snow skier on advanced courses, parasailer and show jumping competitor. Which aspect of the plan would be of the MOST concern to her? a. Only 10 doctor visits per year are covered. b. Only a few prescription drugs are covered. c. Hospital coverage is very limited. d. The choice of physicians is restricted.

As HR director, you are discussing the implementation of a competency-based compensation system with the company's CEO. You point out that in order for the competency system to be effective a. the company must place its base pay in the third quartile. b. the company's pay structure must be broad-banded. c. the company must invest heavily in employee training programs. d. the company must implement work teams.

As a young employee who consistently meets (but does not exceed) performance expectations, which type of pay increase system would most likely be to your personal financial benefit considering that you expect to stay with the company another 10 years? a. broadbanding b. lump sum increases c. across-the-board raises d. second quartile approach

As director of HR for a medium-sized firm, you are implementing your company's first overseas location. You will be transferring ten current employees to the company's foreign location in an underdeveloped country for assignments lasting up to three years. You are considering all of the following factors in these employees' future compensation EXCEPT a. hardship premiums. b. tax equalization. c. cost-of-living adjustments. d. home leave and travel allowances..

If HR experts suggest that a solution for "presenteeism" is employee health-and-wellness programs, this means that these HR experts attribute presenteeism to a. the need to reduce the amount of stress employees are subjected to in their jobs. b. the use of recreational drugs at work. c. employees coming to work when they are sick. d. inadequate employer-provided health insurance.

If employees feel their pay is unfair, they are likely to do or feel all the following EXCEPT a. quit. b. be dissatisfied with their jobs. c. lose self-esteem. d. change their job performance.

In a contributory pension plan, the money for pension benefits is paid by the a. federal government. b. employee through pre-tax deductions from his/her pay. c. both employees and employers. d. by the employer.

In large for-profit organizations, the CEO's base salary is a. typically the largest part of his/her total compensation. b. often deferred until after the CEO retires. c. likely to be less than half of his/her total compensation. d. typically 20 times larger than the salary of the average worker in the organization.

In most companies and for most employees, the typical time period for formal performance appraisals is a. semi-annual. b. monthly c. annual d. continuous

It is important to make sure that what is being rewarded by the compensation system is strongly tied to organizational objectives, because people tend to a. guess what they think management wants done. b. produce what is convenient. c. produce what is measured and rewarded. d. avoid doing unpleasant tasks.

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. a. wage-based, salary-based b. paternalistic, competitive c. entitlement, performance d. meet-the-market, lag-the-market

Phrases such as "Greeted customer within 10 seconds of customer's entry into store," and "Failed to greet customer until customer addressed employee," would be typical of a ____ performance appraisal method. a. forced distribution b. a management by objectives c. behaviorally-anchored rating scale d. ranking

Profit-sharing and ESOPs are ____ -level incentives a. individual b. group c. organizational d. industrial

Research shows that individual pay-for-performance compensation systems work best when they are accompanied by a. high levels of teamwork and cooperation among co-workers. b. directive supervision and strong central leadership. c. an entrepreneurial and individualistic organizational culture. d. employee psychological commitment to the goals of the organization.

__________: The process of evaluating how well employees perform their jobs and then communicating that information to the employees

performance appraisal

______________: Processes used to identify, encourage, measure, evaluate, improve, and reward employee performance

performance management

Formula for calculating pay and benefits as percentage of operating expense

Total pay and benefits expenditures / total operating expenses

T/F A competency-based pay system rewards employees who are versatile and have continued to develop their skills.

True

T/F A manager at your firm has recruited an individual who is an expert in his field, as well as being a strong team player. As the HR director, you think this individual will be a good match with the company because you are about to roll out an organizational level pay-for-performance system.

True

T/F A pet products retail store chain has decided to offer its employees the ability to buy low-cost pet health insurance. This would be primarily a tool to attract certain types of employees to work for the company.

True

T/F Amanda makes notes about each of her subordinates' exceptionally good and poor performance in a performance log. If Amanda subsequently recommends that an employee be terminated, this performance log would serve as documentation in court.

True

T/F Amanda, a CEO of a large marketing firm, is paid bonuses based n quarterly organizational performance. This pay system undermines Amanda's inclination to take the long term view when making important strategic decisions.

True

T/F An advantage of market pricing is that it has high face validity with employees and seems to be more objective than traditional job evaluation methods.

True

T/F An organization which has a compensation system with significant internal inequities is likely to have a "closed" system which prohibits employees from discussing their pay with co-workers.

True

T/F As the new Vice President of HR, you have been asked to implement a profit-sharing program at Megatherium Resources and Exploration. For years Megatherium has been plagued with a contentious relationship between employees and management. The executive committee feels that a profit-sharing plan would improve employee-management relations. You should disagree and argue that Megatherium is not ready for profit-sharing.

True

T/F Beverly is a member of a five-person work team. Beverly is conscientious and reliable, but she works the most slowly of the team members. The team is paid a monthly bonus based on its production numbers. If all team members are paid the same size bonus, Beverly will be subject to social pressure to work faster.

True

T/F Clark's performance incentive is based entirely on the number of and dollar value of customer insurance claims he rejects. Clark will be motivated to reject as many claims as possible, regardless of the validity of the claim.

True

T/F Despite the numerous scandals surrounding executive pay, such as Enron and Tyco, and seemingly excessive compensation to executives in the financial industry, there is no federal law that places restrictions on executive pay or mandates reporting requirements regarding executive pay.

True

T/F Employee performance can be rated by anyone familiar with the performance of the individual. Consequently, customer ratings can provide good sources of performance appraisal information for employees with extensive customer contact.

True

T/F Employers often use outside consultants to conduct pay surveys to avoid charges that the employers are attempting "price fixing" on wages.

True

T/F Fifteen to twenty percent of the U.S. population does not have health insurance, many of whom are American citizens working for companies which do not provide health benefits.

True

T/F For negative feedback in a performance appraisal to cause a subordinate to change his/her behavior, it is necessary for an action plan to be devised, with or without the subordinate's input.

True

T/F From the employer's point of view, two part-time employees making $12 an hour would be cheaper than one full-time employee making $12 an hour because the part-timers would not receive benefits whereas the full-time employee would receive benefits.

True

T/F Gillian, a meteorologist at a regional TV station, is angry that she received a large raise from her boss because she is "cute as a button." Although her income has gone up considerably, Gillian is upset because of a failure of procedural justice.

True

T/F Gloria's employer has instituted a flexible spending account program. Gloria is happy because she will be able to purchase benefits for her two school-age children. Is Gloria correct?

True

T/F If an organization does not have clear organizational objectives, it is impossible to have an effective performance management system.

True

T/F If the employee's company offers legal insurance, it would allow the employee to have access to such services as drawing up a will.

True

T/F If the organization's performance appraisal system is flawed, there are negative effects on the compensation system, job placement decisions, and the ability to defend the organization against charges of discrimination.

True

T/F In a typical division of compensation responsibilities, one of the manager's main responsibility in the compensation system is to evaluate employee performance and recommend pay increases.

True

T/F In many large firms, executive pay is influenced by compensation consultants who are paid large fees by the firm.

True

T/F In order to measure the effectiveness of a new organization-wide incentive plan, a reasonable metric would be average employee productivity change.

True

T/F In the essay approach to performance appraisal, the manager has more flexibility than in other appraisal methods and can provide highly detailed information about the subordinate being rated.

True

T/F Jeremy has been doing a graphic design project for an advertising agency. He purchased an expensive new computer as well as new software in order to complete the project. Jeremy's pay from the advertising agency for the project is not sufficient to cover his expenses, and this equipment will not be applicable to any of his other clients' projects. The advertising agency is not responsible for covering Jeremy's loss.

True

T/F Jessica is in the Army Reserve. When she is required to be away from her job for Reserve training, Jessica cannot be required to use her vacation time. This is a protection for military reservists in federal law.

True

T/F Job evaluation provides a formal, systematic basis for determining the market value of jobs and establishing external pay equity in the organization's compensation system.

True

T/F Junior Birdman Children's Clothing and Toy Company must attract and retain the most creative and talented children's designers in the industry. It probably uses a third-quartile compensation strategy.

True

T/F Kevin is undergoing chemotherapy once a week on Fridays. Kevin has used up all of his personal days and sick leave for the year. He is able to take FMLA leave every Friday and will be able to continue FMLA leave until he has used up all that remain of his 60 days per year of FMLA leave.

True

T/F Most Americans are moving into retirement with such inadequate savings and investments that they will have to rely on Social Security as their main source of financial support.

True

T/F On average, benefits make up 30%-40% of employers' payroll expenses.

True

T/F One advantage of having supervisors and managers rated by their subordinates is that this type of rating program can help make the managers more responsive to employees.

True

T/F Pay compression is the phenomenon of employees with less seniority making a higher salary than high-performing employees with greater seniority.

True

T/F Perquisites may offer substantial tax savings for executives because some perks are not taxed as income.

True

T/F Poorly-designed pay-for-performance systems could cause high-performing employees to leave the organization because of perceived inequity.

True

T/F Ready-Vet, Inc., has a performance-driven organizational culture. All other factors being equal, it is likely that it will have higher financial performance than its chief rival, Vet-Tex, Inc., that has an entitlement culture.

True

T/F Research of compensation databases shows that about one-third of the people who think they are underpaid are actually underpaid.

True

T/F Since most benefits are not treated as income, employees get more dollar value from benefits they receive from their employer, than if the employer gave them an equivalent salary increase.

True

T/F Some states require employers to provide paid FMLA leave, rather than unpaid leave.

True

T/F Some types of compensation are given to employees just for being members of the organization, regardless of their level of performance on the job.

True

T/F Tasha, a Boston native, is the director of benefits for a large manufacturing firm in the Northeast. Tasha has given Walt a below-average performance appraisal because she feels Walt's languid Alabama drawl indicates he is not very bright. In this case, the director has committed the different-from-me rating error.

True

T/F Tax equalization plans require a U.S. citizen working in another country to pay the same amount of taxes he/she would pay if he/she were working in the U.S.

True

T/F Technically, ESOPs are considered employee incentive systems even though the funds are not received by the employee until years or decades after the individual's efforts.

True

T/F The consensus among compensation and motivation experts is that compensation systems strongly affect the types of behavior that employees demonstrate.

True

T/F The practical effect of the halo and horns effect is that the rater makes generalizations about the subordinate based on only one aspect of their job performance.

True

T/F The state in which YellowCraft Boat is located has passed a "super-minimum" wage that is fifty cents higher per hour than the federal minimum wage. YellowCraft Boat must pay its workers at least this super-minimum wage, even though it is engaged in interstate commerce.

True

T/F U.S. workers have half or fewer than half the holidays that their peers in other developed countries.

True

T/F When Paula visited a financial advisor, he warned her that her retirement plans were risky because both her ESOP as well as her salary and benefits depend on her employer's continued survival and profitability. The financial advisor is correct in telling Paula she should diversify her retirement investments.

True

T/F When designing a base pay system, it must be both internally equitable and competitive with the external labor market.

True

T/F When ethical considerations are paramount, paying sales representatives on straight commission is unwise.

True

Wanda has medical insurance through her employer. Whenever she visits the physical therapist for a knee injury, she is charged $25. Her employer's insurance covers the rest of the $150 fee. This is an example of a. a co-payment. b. first-dollar coverage. c. managed care. d. an HMO.

Which of the following is NOT a typical offering of a company child-care benefit? a. providing paid family leave. b. sick-child programs jointly offered with hospitals c. after-school programs, jointly offered with a school system d. subsidized day care

Which of the following is a NOT major objective of the Fair Labor Standards Act? a. to eliminate discrimination in compensation b. to limit the number of hours employees work each week c. to establish a minimum wage d. to discourage oppressive child labor

Which of the following is an assumption of variable-pay systems? a. Some jobs contribute more to organizational success than others. b. Cooperation and teamwork can be enhanced when individuals are rewarded for extra efforts. c. Equality in pay is a strong motivator of exceptional employee performance. d. Both good and poor performing employees will perceive a pay system that rewards high performance as satisfying and equitable.

____ is the concept that the pay for all jobs requiring comparable knowledge, skills, and abilities should be similar even if actual duties and market rates differ significantly. a. Pay equity b. Equal pay for equal work c. Gender-neutral compensation d. Equality in compensation

A ____ job is one that is found in many organizations and performed by several individuals who have similar duties and require similar KSAs. a. comparable b. red-circled c. generic d. benchmark

A/an ____ appraisal is conducted as part of the day-to-day working relationship between a manager and an employee. a. spontaneous b. systematic c. developmental d. informal

T/F In large organizations, the top HR executive sets executive pay with input by the Board of Directors.

False

T/F 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.

False

T/F One of the advantages of the forced distribution approach to performance appraisal is that it can be used in workplaces that have small numbers of employees.

False

T/F The U.S. is relatively unusual in tying significant proportions of executive pay to organizational profitability and value.

False

T/F The biggest cost increases in benefits have been in pension programs, causing employers to reduce pensions for retirees.

False

T/F The total rewards approach to compensation is focused on attracting and retaining employees through a compensation system that rewards membership in the organization through predictable and secure direct and indirect compensation.

False

T/F The trend is for HR performance management specialists to conduct performance appraisals for exempt-level employees because of widespread problems with supervisor-rater bias.

False

T/F The two roles of appraisal, administrative decision making and development often conflict, so the developmental role is gradually being absorbed into the HR function of training and employee development and removed from the supervisor's responsibility.

False

T/F The use of non-numerical performance standards are a sign of a flawed performance appraisal system.

False

T/FFederal law mandates that if employers provide maternity/paternity benefits for biological parents, the same benefits must be provided for employees who adopt children.

False

Traditional compensation systems pay employees differently based on their job responsibilities and base employee increases mainly on a. meeting organizational objectives. b. growth in capabilities and competencies. c. years of seniority. d. changes in the Consumer Price Index.

Traditional ratings of employees by supervisors is based on the assumption that a. employees are more receptive to criticism from their immediate supervisors than from other sources such as co-workers or managers who are not their direct supervisors. b. supervisors have regular day-to-day opportunities for informal appraisals. c. the supervisor is the person most qualified to evaluate the employee's performance realistically and fairly. d. supervisors are more aware of their subordinates' desires and goals than are other potential evaluators.

All of the following are common measures of sales effectiveness EXCEPT a. sales relative to quota. b. sales staff satisfaction. c. increase in average sale. d. account retention.

T/F Subjective measures of performance that require judgment on the part of the evaluator are more difficult to determine than are objective measures.

True

T/F Supervisors who can constructively communicate negative feedback to subordinates is critical to an effective performance appraisal system.

True

A 401(k) plan is an agreement in which a. a percentage of an employee's pay is withheld and invested in a tax-deferred account. b. an employee can pre-pay taxes on future pension income. c. individualized pension plans are established for self-employed people. d. the benefits of the pension plan are guaranteed by the government.

Common ways that benefits can impact organizational performance include all of the following EXCEPT a. minimizing grievances and complaints. b. reducing turnover. c. increasing employee job satisfaction d. improving recruiting success.

Compensatory time-off can be given to non-exempt employees in the private sector a. if it is given to employees at the rate of one and one-half times the hours worked over a 40-hour week. b. if the comp time can be carried over for 60 days. c. if the employee is salaried non-exempt. d. only if the employer is a federal government contractor with contracts over $50,000.

During long-lasting economic declines, a. state unemployment compensation funds often become exhausted. b. the number of weeks of unemployment offered to out-of-work individuals has to be cut to conserve the funds. c. employers are often forced to stop their contributions to unemployment compensation funds because of financial losses. d. the weekly payments to each individual recipient are reduced.

Employee medical insurance paid for by the employer is classified as ____ compensation. a. indirect b. direct c. intangible d. intrinsic

Ernest, a U.S. citizen employee is being assigned to the company's German office in Munich because of his intimate knowledge of the company's main product. Ernest was previously stationed at the company headquarters in Kansas City. Al,l of the following issues should be taken into account when determining Ernest's pay during the years he works in Munich EXCEPT a. the compensation that a German would make in a similar job in Munich. b. German income tax policies. c. cost of living differences between Kansas City and Munich. d. fluctuations between the value of the dollar and the euro.

Gertie is an HR consultant who has been hired to advise a medium-sized company on how to use HR technology to make benefits administration less expensive. Gertie is amazed to find that the company's present HR system is entirely pencil-and-paper. In Gertie's discussions with the HR manager, she indicates that the greatest increase in use of technology by other companies is in a. Web-based benefits enrollment. b. conducting employee surveys. c. monitoring usage of health benefits. d. calculating and monitoring paid-time-off.

If the Wage and Hour Division of the U.S. Labor Department investigates an employer's files looking for violations of the FLSA, it will focus on a. employee time records. b. pay levels for all protected classes c. tax withholding records. d. calculation of compa-ratios.

In a TV interview, the CEO of Trevelyan, Inc., commented that the pay-for-performance system used by her company was effective because, "Now everyone is pulling in the same direction." What does the CEO mean by this observation? a. The pay-for-performance system is linking employee performance and the organization's strategic goals. b. Employees are being motivated to gain more competencies and skills.. c. Employees are receiving higher total compensation under the pay-for-performance system than under the former, traditional compensation system.. d. Important HR objectives have been achieved, such as reduction in turnover and better attendance.

In a competency-based pay system employees are paid a. on the skills and knowledge they have, whether they use these or not. b. according to their job performance, measured either by quality or quantity. c. on the basis of their scores on annual competency tests. d. on whether they have added value to the organization in the last year.

In comparison to some Asian countries such as China and Japan, U.S. a. managers are brutally honest in communicating negative information to employees in performance appraisals. b. performance appraisal systems over-emphasize traits rather than behaviors. c. performance appraisal systems are based on fewer sources of information. d. managers tend to be so tactful in communicating performance decrements to employees that employees often do not know where they stand.

In designing the company's new team incentive plan, the vice president of HR wishes to strongly link the team's efforts with its effective performance. The timing of incentive payouts should be a. monthly. b. quarterly. c. semiannually. d. annually.

In order for employee performance data to be evaluated as evidence of good or poor performance, a. it is necessary for performance standards to be developed. b. the performance data must be quantifiable. c. a specific action plan for performance improvement must result. d. multiple sources of performance data must be combined.

In order to show how the rate of compensation changes compares with the rate of changes in the organization's revenues overall a. compensation metrics should be calculated each year and compared with previous years' metrics. b. compensation metrics should be calculated for regular employees (excluding compensation for part time employees) and compared with previous years' metrics. c. the board of directors should have compensation metrics calculated on a rotating basis: Human value added one year, return on human capital invested the next year, and so forth. This provides the "big picture" strategically. d. total compensation should be charted against total revenues, and any upward change in total compensation should be analyzed.

In terms of procedural justice, the process of determining base pay, allocating pay increases, and measuring performance all must be seen by employees as a. fair. b. legal. c. performance-based. d. non-discriminatory.

The goal in giving pay increases to average performers should be a. to keep their pay competitive with the labor market.. b. on motivating them to perform better. c. on encouraging them to leave the organization. d. on achieving a compa-ratio of 100.

The key factor underlying the management by objectives approach is that a. the manager and subordinate work together to develop the goals. b. the manager has close and daily access to the subordinate in order to monitor his/her progress. c. the goals are subjective and intangible. d. the goals will push the subordinate to the very highest limits of his/her abilities.

The major federal law that regulates compensation in the U.S. is the a. Fair Labor Standards Act. b. Workers' Compensation Act. c. the Sarbanes-Oxley Act. d. Pay Equity Act.

The market line is a. a regression line derived from job evaluation points and the results of the pay survey. b. calculated from the median point in each of the organization's pay ranges. c. a line representing the organization's average pay for each job in a job family graphed against the average pay for each job in the pay survey. d. typically so affected by outliers that it must be adjusted according to the expert judgment of compensation specialists.

The primary objectives of organizational incentive systems includes all of the following EXCEPT a. to attract competitive employees. b. to retain productive employees. c. to increase organizational performance. d. to improve employee morale.

The purpose of organizational-level incentives is to a. reward each employee for the performance of the entire company. b. aid in recruiting individualistic and entrepreneurial employees. c. motivate functional competition among employees to increase total performance. d. create an organizational culture of ethical behavior.

The training of raters should center on minimizing rater errors and a. documenting performance information. b. communicating ratings to subordinates. c. counseling subordinates to improve performance. d. identifying essential performance criteria.

To be eligible for workers' compensation, the worker must a. suffer a work-related injury or illness. b. have purchased workers' compensation insurance. c. not be totally or partially responsible for the accident or injury. d. prove that the accident was caused by employer negligence.

To prevent employees from making inappropriate benefits choices in a flexible benefits plan it is recommended that a. the employees be required to select a core set of benefits. b. the HR department counsel employees in wise benefit selection. c. benefit flexibility be tied to employee seniority. d. hourly employees not be offered flexible benefits.

What is a "draw?" a. an amount advanced to a sales employee and repaid from future commissions b. a system by which sales employees "draw down" their sales quotas c. a type of income equalization for tax purposes in which sales representatives can draw down their earnings from a high-income year and transfer them to a low-income year d. a lump-sum payment or bonus at the end of the month for sales staff who are performing adequately.

What is the purpose of developmental feedback? a. to plan for the employee's future opportunities inside the organization b. to motivate employees to perform at a higher level c. to compare individuals' performance with once another d. to assure that employees know the reasons for changes in their compensation

When using the point method of job evaluation, a ____ factor is used to identify a job value that is commonly present throughout a group of jobs. a. compensable b. Hays c. value d. KSA

Which of the following benefits are NOT mandated by federal legislation? a. health insurance b. unemployment compensation insurance c. continuation of health insurance after layoff d. workers' compensation insurance

Which of the following individuals would NOT receive benefits from the Social Security system? a. a 47-year-old person who has become unemployed through no fault of his/her own. b. a 25 year-old person who was in a car accident and is now paralyzed and unable to hold a job. c. the 70-year-old widower of a woman who was a dentist for 30 years. d. a physical therapist who has stopped working at the age of 69.

Which of the following statements is FALSE? a. Differential piece-rate is easily adapted for production processes or services where high quality is of paramount importance. b. Return on investment metrics can be applied to analyze pay-for-performance systems. c. In jobs where individual employees have little control over the outcomes of their work performance incentives would be dysfunctional. d. An assumption of variable pay systems is that some jobs contribute more to organizational success than do other jobs.

Which of the following statements is FALSE? a. Research has shown little relationship between CEO stock options and firm performance. b. The Sarbanes-Oxley Act was motivated by abuse of stock options by top executives. c. Even at the level of CEO, it is necessary to have formal, measurable performance targets in order for a discretionary bonus system to be effective. d. Perquisites are becoming less-widely used because most of them are now taxed as income to the executive.

Which of the following statements is TRUE regarding informal appraisals? a. Frequent informal feedback to employees can prevent surprises later when the formal evaluation is communicated. b. Well-done and frequent informal appraisals are more easily defended in court than traditional annual performance appraisals. c. Frequent informal performance appraisal can make an annual formal performance appraisal unnecessary. d. The day-to-day working relationship between a manager and an employee is disrupted by unscheduled informal appraisals, so these should be minimized.

"Cost sharing" benefits plans a. involve employers sharing the costs of employee health insurance with government programs such as Medicare and Medicaid. b. require employees to pay a larger proportion of their health benefits costs. c. require insurance companies to share the profits they make with employers who purchase their health insurance plans which results in lower costs for employers. d. will be illegal in 2012 because they have been held to be "kickback" schemes.

A "personal statement of benefits" a. is the annual benefits report from employers to employees required by ERISA. b. shows each employee how much his/her benefits are worth in dollars. c. is a tool that allows employees to choose the type of benefits that best fits their personal needs. d. is given to an employee upon termination so that he/she is knowledgeable about COBRA, severance pay, unemployment compensation, and other continuing benefits.

A ____ approach for compensating sales staff is useful when serving and retaining existing client accounts is significantly more important than generating new sales and accounts. a. straight commission b. salary-only c. salary plus commission d. salary draw

A ____ is committed when an appraiser rates all employees as average. a. contrast error b. central tendency error c. generalization error d. leniency error

All of the following are common reasons why performance appraisal systems are ineffective EXCEPT a. managers lack the courage to tell subordinates they are performing inadequately. b. managers and subordinates collude to inflate performance appraisals. c. managers inflate evaluations to protect subordinates from being fired or losing promotions. d. managers use the performance appraisal system to achieve political goals.

Betty is interviewing for a job with two different firms in the same industry and city. The job description and salary are identical. In one company the job will be unionized. The other company is non-union. Betty can expect that a. the non-union firm will have more generous benefits. b. the unionized firm will have more generous benefits. c. the benefits will be the same at both companies, since benefits are typically based on salary level. d. the unionized firm will likely offer no benefits, because these firms are encountering severe cost-pressures due to global competition.

Common difficulties with team appraisals include all of the following EXCEPT a. some employees may use the appraisal as an excuse to attack a team member. b. team members feel the supervisor is abdicating his/her responsibility to make tough decisions. c. team members may "go easy" on their colleagues to spare feelings. d. potential negative effects on teamwork.

ESOPs, 401(k) plans, and profit-sharing plans are all examples of a. pension plans. b. contributory plans. c. defined-benefit plans. d. cash-balance plans.

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

Use of the company helicopter, country club memberships, first class air travel, and a chauffeured limousine are examples of a. executive mandates. b. perquisites. c. golden handcuffs. d. performance incentives.

Which of the following is NOT a non-monetary reward? a. training and development programs. b. matching stock purchase plans. c. career management services. d. employee recognition.

Which of the following is a TRUE statement about the overtime provisions for non-exempt employees of the Fair Labor Standards Act? a. A manufacturing firm with a 4-day/10-hour schedule must pay overtime for the two hours above 8 each day. b. Overtime pay is set at one and one-half times the regular pay rate for all hours in excess of 40 per week. c. Compensatory time off must be paid at straight time for all hours over 40 in a week or 8 in a day. d. The work week is defined as beginning at 12:01 a.m. Monday and running until midnight Sunday.

Which of the following is a benefit of reducing the number of pay grades and broadening pay ranges? a. It reduces the organization's overall compensation expense. b. It encourages employees to take horizontal job moves. c. It allows employees to have higher raises. d. It increases employee opportunities for upward mobility.

Which of the following is an example of the administrative role of performance appraisal? a. identifying individual subordinate's weaknesses to determine coaching needs b. measuring subordinate's performance for making retention decisions during a layoff c. identifying the organization's training needs d. communicating feedback to the employee

Which of the following is true about using behavior-based information for evaluating job performance? a. The aim is to identify the one critical employee behavior which will lead to job success. b. In effect, behavior-based performance appraisal systems penalize employees who use unusual approaches to gain successful results. c. Behavior-based performance appraisal systems are the easiest to develop. d. Behavior-based information looks at what the outcomes the employee has achieved.

Wimsey Enterprises has announced that it will give all employees a 5% merit increase this year. This increase should really be termed a/an a. cost-of-living adjustment. b. across-the-board increase. c. lump-sum increase. d. market rate alignment.

You are HR director for a U.S. solar panel company that is outsourcing a fabrication plant to India. As director of HR, you must decide how to pay the hourly workers in the Indian plant. You decide to follow the typical pattern for firms outsourcing to a lower-wage country which is a. paying wages negotiated with the local community leaders in India. b. paying the local market rate for the jobs. c. paying the U.S. wage equivalent in Indian rupees. d. paying lower wages than Indian competitors, but offering more generous benefits.

You are a member of the compensation committee of the Board of Directors for a national, for-profit organization. When reviewing the compensation package for the current CEO, Jack Sprat, you must consider all the following questions EXCEPT a. Has Mr. Sprat's performance as a CEO been acceptable to the organization's investors? b. Is Mr. Sprat's compensation no more than ten times larger than the average annual pay of company employees? c. Would another company hire Mr. Sprat as a CEO? d. Is Mr. Sprat's annual compensation consistent with the compensation of executives at competing industry firms?

ll of the following are potential performance measures for an insurance salesperson. a. number of cold calls on potential clients per week b. materials cost per month c. number of direct client-service hours per month d. dollar amount of new contracts written per week

A pension plan in which retirement benefits are based on an accumulation of annual company contributions (as a percentage of the employee's pay) plus interest credited each year is called a ____ plan. a. contributory retirement b. self-funding c. cash balance d. defined-contribution

Financial measures that can be used to judge executive performance include all of the following EXCEPT a. earnings per share. b. net income before taxes. c. market share. d. return on equity.

Which of the following are NOT paid overtime under the Fair Labor Standards Act? a. salaried employees b. nurses c. exempt employees d. public sector employees

Which of the following comments by a supervisor during an appraisal interview illustrates the development function of performance appraisal? a. Unless you are able to meet your quota next quarter, you will be terminated. b. How can I support your sales efforts better in the coming year? c. I am going to pair you with Alex for a month so that you can learn his technique in closing sales. d. Next year the dollar amount of contracts you must sell for an acceptable rating will be increased 10%.

Which of the following individuals is NOT qualified to receive unemployment compensation? a. An individual who was laid off for financial reasons. b. An individual who was fired for poor productivity. c. An individual who would like to work but who has not applied for any jobs in the last two weeks. d. An individual who has been unsuccessfully looking for work for six months.

Which of the following individuals would NOT qualify for COBRA? All of these employers have more than 20 employees. a. the 16-year old daughter of an employee of a medical products company who died of a massive stroke while on company business b. the husband of an employee of a museum who has just taken early retirement c. the secretary of a church congregation who has been laid off because of declining church income d. an employee who quit a job with a movie theater chain

Which of the following is a major drawback to the point method of job evaluation? a. It is too simplified to apply to complex jobs. b. It is too complex to implement in most organizations. c. It reinforces traditional organizational structures. d. It is available only through consulting firms, consequently this system is too expensive for many small employers.

Which of the following is classified as an individual variable pay plan? a. Scanlon plan b. profit-sharing c. sales commission d. an ESOP

You have been hired as the new director of compensation for a large organization. The existing pay-for-performance system consists of annual bonuses for managerial and professional employees. The system has not been reviewed for over five years. In your review, all of the following would be high-priority focuses of your review EXCEPT a. Do employees understand how their bonuses are calculated? b. Do the bonuses link individual performance with organizational objectives? c. Is the existing bonus system typical in the industry? d. Are performance measures realistic?

____ consists of approaches that monitor and reduce medical costs using restrictions and market system alternatives. a. Utilization review b. Medical review programs c. Managed care d. Medical option plans

____ define the level of performance that is expected by an employee. a. Job criteria b. Job expectations c. Performance standards d. Essential elements

____ is a court action in which a portion of an employee's wages is set aside to pay a debt the employee owes to someone. a. Alimony b. Creditor lien c. Garnishment d. Debt deduction

____ is the practice of using fewer pay grades with much wider ranges than in traditional compensation systems. a. Pay system compression b. Flexible grades c. Broadbanding d. Grade shrinkage

Performance appraisals are widely used for all the following types of employees EXCEPT a. non-exempt employees. b. professional employees. c. managers in service industries. d. unionized production employees.

T/F Financial planning and counseling services are especially valuable and most widely used for younger employees who are not used to handling finances and who need to get started on investment programs.

False

T/F The critical incident method can be combined with other performance appraisal methods as a form of documentation.

True

formula for calculating return on human capital invested

revenue - operating expense - pay and benefits = adjusted profit / pay and benefits

The Family and Medical Leave Act requires that eligible employees be permitted to take leave for each of the following except: a. caring for a brother or sister with a serious health condition. b. adoption of a child. c. caring for a parent with a serious health condition. d. serious health condition of the employee.

Angela, one of the company's best administrative employees, has made an appointment with you, the vice president of HR. Angela is extremely upset because she has done an Internet search on compensation levels for her particular job. She has found that her salary falls below both the industry median and industry average, even though she has been with the company for four years and has had outstanding performance reviews. Angela is a valuable employee and she would be difficult to replace. In addition, if Angela's morale declines, her attitude will strongly affect her co-workers. The compensation system at your company has a strong emphasis on internal equity, and it is a solid and legal system. Which of the following arguments would be LEAST effective for retaining Angela and maintaining her morale? a. Tell Angela that the company has done extensive job evaluation studies, and although she is a highly-valued employee, you can't justify paying her any more. b. Demonstrate that your company offers higher benefits than does the average company listed in the surveys she has found. c. Point out to Angela that your company is located in a small, rural town with a low cost of living, and that the data she has gathered from the Internet is based on companies that operate in all geographic locations. d. Explain that Angela's job does not include responsibility for budgeting that the benchmark job in the Internet survey includes.

As director of HR, you have decided to implement a multisource rating system for employee performance. The employee population for which you will use this system numbers about 1,000, with an average of 15 employees in each work unit. Which of the following statements is likely to be TRUE? a. You will need to implement this as a Web-based system. b. This system will be most useful for making compensation decisions affecting employees. c. There will be fewer problems with rater bias because individual biases "wash out" statistically when there are multiple raters. d. Employees tend to rate co-workers more harshly than they rate themselves, so performance ratings will need to be adjusted for rating deflation.

As the director of compensation for a multi-location retailer, Jeff is reviewing the design of his company's benefits. He must answer all of the following questions EXCEPT a. Which of the mandatory benefits can be dropped with the least negative impact on employee attitudes? b. How much total compensation should be offered to employees? c. What is the firm receiving in return for each benefit provided? d. How flexible should the package of benefits be?

At Decahedron Software, Inc., appraisals for non-technical employees are conducted annually. Technical employees receive evaluations every six months. This is probably because the technical employees a. have many job opportunities and semiannual evaluations allows for raises every six months as a retention tool. b. need more performance guidance from their managers than do non-technical employees. c. tend to be younger employees who require more intense management attention. d. have shorter developmental cycles than non-technical employees because technology changes so rapidly in the software industry.

At SafeGreen, Inc., there is little variation in pay among employees within the existing job categories. Raises are essentially the same for average and excellent performers. Although performance appraisals are performed regularly, everyone views the process as paper-shuffling. The from the point of view of its performance appraisal system, the culture of SafeGreen, Inc., can best be described as a. entitlement-based. b. bureaucratic. c. performance-driven. d. equity-driven.

Brian, the director of compensation, has been asked by the board of directors to present the "employee cost factor" for the last 10 years at the next board meeting. Brian needs to do the following calculation for each year: a. total compensation and benefits / FTEs b. revenue - operating expense - pay and benefits = adjusted profit / FTEs c. revenue - operating expense - pay and benefits = adjusted profit / pay and benefits d. total pay and benefits / total operating expenses

Bruce, the director of compensation for a regional medical center, wishes to examine pay survey data for the various classifications of nurses in the organization. Bruce is aware of some concerns over "price fixing" of wages. He decides that he will use all of the following sources of information on nursing pay EXCEPT a. a pay survey of regional healthcare institutions that he will conduct himself during an upcoming conference of healthcare executives. b. nurses' pay data from the National Bureau of Labor Statistics. c. a management consulting firm that specializes in pay surveys of healthcare workers. d. a pay survey conducted by the local HR association.

The HR unit is typically responsible for all of the following EXCEPT a. recommending pay increases for employees. b. analyzing pay structures. c. evaluating jobs. d. administering the compensation system.

Clarence is 59 years old. His employer, Twentieth Century Motors, is offering an early retirement package for workers 58 years old and older. The early retirement package appears financially generous, but in order to receive it, Clarence will be required to sign a waiver that he will not in the future sue Twentieth Century Motors for age discrimination. Clarence's rights in this situation are protected by the a. Older Workers Benefit Protection Act (OWBPA). b. Consolidated Omnibus Budget Reconciliation Act (COBRA) c. Employee Retirement Income Security Act (ERISA) d. Worker Adjustment and Retraining Notification Act (WARN)

Clarice wants to invest in a retirement plan that will allow her to pay the tax on her contributions in the current year. This will reduce the gains that will be taxed when she withdraws the funds when she retires. Clarice should invest in a. a Roth IRA. b. a defined-benefits plan. c. a 403(b). d. a tax-deferred annuity.

Claudia has become vested in her pension plan. This means that a. if Claudia is laid off, she will receive not only the amount of money she has paid into her pension plan but also the funds that her employer contributed. b. if Claudia leaves this employer and takes an opportunity with another company, she can transfer her pension fund balances to that new employer's plan. c. if Claudia remains with her present employer until retirement, she will receive the maximum amount of pension available under the plan. d. Claudia can take the funds she and her employer have invested in the pension plan and move them to a 401(k) or an IRA.

Clementine Import-Export, Inc., has a language-proficiency test for its sales representatives in Latin America. Part of the test requires that sales representatives to be able to ask and answer in Spanish basic questions about prices, quantities, shipping dates and product characteristics. This performance standard can be classified as all of the following EXCEPT a. the standard trait-based. b. the standard is job-related. c. the standard is observable. d. the standard is non-numerical.

In an equity calculation, an employee's base pay, variable pay, and benefits are the ____ he/she receives from a job. a. outcomes b. outputs c. inputs d. motivators

Max is studying the new pay-for-performance incentive plan. Max realizes that under the new standards if he continues his normal rate of production, which takes a steady effort over the work day with few "slack" times where he can rest, he can continue to earn what he earns now. But if he puts forward maximum effort all day long, which will leave him physically and mentally exhausted by the end of the day, he can earn an extra $10 a day before taxes. Max's current pay is about $30 an hour. Max is making enough money that he is saving for a home down payment.. Which of the statements is most likely to be TRUE? a. Max is likely to continue to exert his typical effort. b. No incentive pay system is likely to motivate higher effort from Max. c. If this incentive plan is not effective in motivating extra effort from Max, he is a low-motivation employee whose departure from the firm would be functional. d. Max is likely to exert maximum effort every day in order to earn this production incentive.

Megatherium Industries had a generous defined-benefit pension plan for retirees for the last 50 years. Now, because of declines in the stock market, the investments in the pension plan are not generating enough revenue to fund the plan. Which of the following statement is TRUE? a. Megatherium will probably have to make up the shortfall in the pension fund. b. Megatherium must decrease the amount of pension payments to retirees to the level that is financially-sound based on the amount of money in the pension fund. c. The federal government will step in and make up the shortfall as long as there has been no malfeasance on the part of the company. d. Megatherium can suspend pension payments until the pension fund has recovered.

Melanie has worked for 20 years for a manufacturer of specialized paint for the auto industry. Melanie stayed with the company rather than taking other job offers because of the generous ESOP, which has offset the somewhat lower than market pay. Which of the following statements is FALSE? a. ESOPs are a low-risk way for employees like Melanie to be "capitalists." b. The ESOP probably has made Melanie more focused on the company's performance than she would have been otherwise. c. If the company goes bankrupt, Melanie may lose some or all of her anticipated retirement. d. The ESOP was a successful retention tool in Melanie's situation.

Of the following methods of job evaluation, the ____ method is the most subjective. a. classification b. point c. factor-comparison d. Hay system

Of the following performance appraisal systems, the ones most likely to be the subject of a discrimination lawsuit is/are a. the forced distribution system. b. systems based on critical incidents. c. systems using behaviorally-anchored rating scales. d. systems using numerical measures of performance.

Organizations use pay grades to a. group individual jobs having approximately the same job worth. b. guard against pay differentials based on sex or race. c. compare similar jobs across a variety of organizations. d. offset the effects of pay compression by giving managers a range of pay for each specific job and individual.

Orville Brothers Construction, Inc., is making a bid for a federal government contract to build a bridge. In that bid, the construction company must allow for ____ wages for the employees. a. median national industry b. minimum c. living d. prevailing

Pay increases for individual, non-executive, employees in a compensation system based on individual performance are typically decided by a. operating managers. b. the compensation committee. c. a compensation consultant. d. HR compensation specialists.

SafeCleanGreen, Inc., has used a ________ performance appraisal system for some 10 years. The company uses this for both administrative and development purposes. SafeCleanGreen has terminated Jerry, who belongs to a protected class, because of inadequate performance, especially on the "creative behavior" element of his performance. If Jerry sues the company for discrimination, the courts will likely be unfavorably disposed to SafeCleanGreen's performance appraisal system. a. trait-based b. results-based c. behavior-based d. productivity-based

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 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.

You are the director of benefits for a large, highly-profitable high-technology company widely respected as an employer-of choice. Organizational strategy requires that employees be world-class in their field. You are forming a committee to review the company's benefits design. The committee ought to focus on all of the following issues EXCEPT a. whether the company should offer high pay in lieu of health insurance. b. how flexible the package of benefits should be. c. what proportion of total compensation benefits should comprise. d. which mix of benefits will be most attractive to prospective employees.

____ is the generic term for programs providing employees with assistance in caring for aged relatives. a. Elder care b. Family security c. Care-giver respite d. A hospice program

____ is the main federal legislation providing privacy rights regarding employee medical records. a. HIPAA b. COBRA c. ERISA d. FMLA

____ refers to a feature that allows employees to move their pension benefits from one employer to another. a. Portability b. Mobility c. Vesting d. Transferability

At Artistic Floral Creations, the non-managerial employees all receive the same pay increase every year. Usually this increase is about 5%, but some years it has been as high as 10% depending on changes in the cost-of-living. Artistic Floral Creations has a/an ____ philosophy of compensation. a. performance b. entitlement c. quartile-based d. total rewards

At the heart of most executive performance-based incentive plans is the idea that a. at the executive level, status and image are as important as actual compensation. b. executives should be rewarded if the organization grows in profitability and value over a period of years. c. executive compensation should be based on the organization's current performance in the stock market. d. executives are more focused on their base compensation than they are on the variable pay.

Behemoth Industries has experienced huge losses for the last three years due to collapsing sales of their outdated product line. Behemoth's stock has plummeted on Wall Street because it has not met projected profits for the 24th straight quarter. Behemoth has moved to a pure pay-for-performance system that is tied to achievement of organizational profit goals. Which of the statements below are most likely to be TRUE? a. Only high performers at Behemoth can be certain that they will receive a pay increase. b. No Behemoth employee can expect he/she will receive a pay increase, regardless of his/her performance. c. All employees except those who are the worst performers can expect that they will receive a pay increase. d. Behemoth will be able to attract high performing employees from its competitors.

Bernard is very upset when he learns that the company is changing to a pay-for-performance system where lump-sum bonuses instead of raises will be used. The system will record the performance of each work team and reward everyone on the team equally. All of the following are likely reasons for Bernard to be upset EXCEPT a. Bernard's base pay will be essentially frozen. b. Bernard is a low to average performer on his work team. c. Bernard is the highest individual performer on his team. d. Bernard values team spirit and is concerned this system will induce competition among co-workers.

Comparative methods of rating a. are most acceptable to employees when they are applied to administrative decisions rather than to developmental decisions. b. can either be statistically-based (such as forced distribution) or simply rankings of each employee against his/her co-workers. c. are useful for small groups because the results can be statistically adjusted for small numbers. d. are preferred by managers because the results are easy to explain to subordinates.

Compensation is one of the organization's largest expenditures. Compensation philosophies and systems vary from one organization to the next. Why is that? a. There is no "one right way" to compensate employees. Many systems will work equally well in any organization. b. Different organizations have different organizational objectives and strategies. c. Legal requirements mandate different types of compensation systems depending on the organization's industry. d. Organizations depend heavily on consultants to design their compensation systems, and each consulting firm has its own system.

Compensation plans for internationally-assigned employees that attempt to be comprehensive in providing base pay, incentives, benefits and relocation expenses regardless of the country to which the employee is assigned are called ____ compensation plans. a. balance-sheet b. global market c. tax equalization d. supply and demand

During the appraisal interview with a poor-performing subordinate, the manager should NOT a.focus on future development issues because the performance being evaluated is in the past. b. insist on the subordinate's agreement with the negative evaluation. c. consider his or her own role in the subordinate's poor performance. d. allow the subordinate to respond to negative feedback

Essentially, ____ identify what the organization is paying an employee to do. a. performance measures b. job duties c. job qualifications d. expected performance levels

For the typical employer, the largest proportion of the benefits dollar is spent on a. legally required benefits. b. insurance payments. c. retirement plans. d. paid rest periods.

George is a long-term exceptional performer. He has a compa-ratio of 120 and once again his performance has exceeded expectations. But, George only gets a raise of 3%, which is less than some of his co-workers who have less seniority and whose performance only meets expectations. George is incensed and waiting in your office. As director of HR, how will you explain this situation to George? a. You should discipline George and his co-workers because employees should not discuss their pay. b. You explain that George's compa-ratio shows that he is at the top of his pay range and that he is already earning above the market midpoint set in his pay grade. c. You should describe the reality of pay compression to George and that market rates determine what the organization can pay for a particular job no matter how well carried out. d. You decide to give George a lump-sum increase equivalent to a 10% raise. This will recognize George's exceptional performance without affecting his base pay.

George is a supervisor of 15 employees. Because the company pays wages lower than the average in the locality, many of George's subordinates have substandard skills and poor work habits. George views his department as a training ground, where low-quality workers have the opportunity to become higher-quality workers. Consequently, George takes the approach that performance appraisal a. should show his subordinates how they would compare with employees in a higher-quality organization as well as how they are meeting the expectations of their current employer. b. in this situation is best used as a tool to develop substandard employees into more valuable resources. c. should be a meeting of the minds between himself and the subordinate he is appraising where both agree on the performance appraisal. d. is best used as a disciplinary tool to focus workers' attention on the performance standards required.

Higbee Farm Implements one location, a rural Iowa area. Higbee has been experiencing slow sales of tractors and other expensive large agricultural equipment such as combines over the last few years because of the low profitability of the farms in its sales region. In order to increase its profits by increasing the sales of equipment, Higbee has announced that the salesperson who writes the highest dollar volume in sales contracts will win an all-expense-paid trip to Hawaii for two for a month. Naturally, this has motivated the sales staff. What is the likely result of this contest? a. The Higbee sales staff will work together smoothly as a team to meet local farmers' equipment needs. b. Higbee's salespersons will pressure farmers to buy machinery they do not really need. c. Higbee's system for measuring performance is contaminated. d. This is a "rank and yank" system and will result in Higbee's sales staff becoming demoralized.

How can teams be useful in the appraisal process? a. Team members tend to be more objective in their ratings than are supervisors. b. Team members may have more opportunities to view an employee's performance than does a supervisor. c. Team ratings are useful for development information because the anonymity of the evaluation makes the raters "brutally honest." d. Teams are better able to allocate rewards based on merit than are supervisors.

If managers wish to motivate individual contributions to team performance, an equitable distribution of team incentives would mean that a. each team member gets the same amount of bonus. b. team members are paid incentives which vary according to individual performance. c. teams that are in competition with one another are paid incentives based on their relative performance. d. each team in the company receives the same amount of discretionary incentive dollars to distribute.

In order to lessen the conflict between the administrative and the developmental roles of performance appraisal, the recommended practice is to a. combine both types of feedback into the same appraisal interview, but deal with pay issues first as that is the employee's primary concern. b. separate the administrative feedback and the developmental feedback into different interviews. c. have the employee's manager deliver the administrative feedback, including pay information, and have HR staff address the developmental issues in a separate interview. d. communicate all feedback to the employee in writing two weeks before the appraisal interview so there will be no surprises during the interview.

In the U.S., Japan, Germany, France and other countries, ____ is/are placing significant financial pressures on government-provided retirement security plans. a. a high birth rate b. an aging population c. increasing standards for quality-of-life in old age d. the trend for older workers to work past traditional retirement age

In the U.S., pension plans established and funded by employers are a. mandatory for employers with over 100 employees. b. voluntary on the part of employers. c. are on solid financial footing and retirees with pensions can rely on benefits being paid out. d. not valued by older employees because most prefer higher wages to a pension plan.

In the next five years pay surveys will be a. undergoing a major legal challenge due to widespread accusations of "price-fixing on wages." b. conducted largely electronically, using Web-based technology. c. conducted by linking company payroll databases to the surveying company. d. less widely used because of the way market pricing distorts the internal equity of the compensation system.

In the typical division of appraisal responsibilities, the HR unit is responsible for a. rating performance of employees. b. designing and maintaining the formal system. c. reviewing appraisals with employees. d. providing regular informal appraisals.

Jack and Jerry are twins. Both started working at competing firms in the same industry. Jack and Jerry were given exactly the same starting salary. They have been with their companies for ten years, and both have identical positions and identical performance ratings. Both Jack and Jerry are consistently average performers. Jack works at a company with an entitlement compensation philosophy. Jerry works at a company with a pay-for-performance compensation philosophy. The two companies are identical in revenue and profitability. They allocate the same budget amount for employee raises each year. All other factors remaining equal, which of the following statements is most likely to be true? a. Jerry will have a higher salary than Jack. b. Jack will have a higher salary than Jerry. c. Jerry and Jack will have identical salaries. d. Jerry and Jack will have identical levels of pay satisfaction.

Lucretia Toys is investigating the use of team incentives in its production plant. Each work group is composed of about 25 individuals. As the manager of HR you a. recommend using equal payouts for each team member since it will simplify performance appraisal requirements. b. express concern about the dilution of individual efforts on such large teams. c. urge management to go forward with the plan because every job can benefit from increased teamwork. d. recommend that management wait to implement any team incentive plan because this may trigger a union organizing attempt in a manufacturing environment.

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? 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.

Marcia is very upset. She applied for a waitstaff position at a local restaurant and she was told her base wage would be an amount Marcia knows is lower than the minimum wage. Which of the following statements is TRUE? a. Marcia should report the restaurant to the U.S. Department of Labor for violating the FLSA. b. The wage offered is consistent with the FLSA because Marcia would be in a "tipped" position. c. The wage offered is legal because Marcia's position is "exempt" from coverage by the FLSA since it is part-time. d. Marcia should report the restaurant to the U.S. Department of Labor because this is not a living wage.

Marie has been offered work as an employee trainer for AgriEnterprise. In this job, Marie will use the employer's training materials, and she will train employees at AgriEnterprise's three locations at the times that the company determines. Marie has been promised that the company will continue to use her services as long as her performance is satisfactory. Marie has agreed not to work as a trainer for any other company while she is working for AgriEnterprise. The company is paying Marie as an independent contractor and not contributing to Social Security or providing benefits. Which of the following statements is correct? a. Marie is an independent contractor. b. Marie is really an employee of AgriEnterprise. c. Marie is an independent contractor with only one client. d. Marie would properly be classified as a learned professional employee and non-exempt.

Robert is paid by the number of bicycle tires he attaches to wheel rims. If he attaches more than his daily quota of tires, he receives 75 cents extra per tire over the quota. Robert is paid under a ____ system. a. pro-rated bonus b. differential piece-rate c. straight piece-rate d. commission

Mark has four children under the age of 15. His wife has had a serious health problem that will keep her from working for the next few years. Mark's employer, Megatherium Industries, has moved to a new health insurance plan which involves Megatherium making contributions to an account to which Mark can also make pre-tax contributions. Mark can spend the money in this account on health insurance. The insurance has an $11,600 deductible for Mark's family, so he will be out of pocket over $11,000 before his health insurance coverage starts paying for his family's care. Mark's annual pre-tax salary is $80,000. Which of the following statements is TRUE? a. This plan is illegal under federal laws requiring family health insurance be no more than 10% of the employee's annual salary. b. This is a typical Health Savings Account which is an effective way for Megatherium to reduce its overall health insurance expenditures. c. This is a flexible spending account under Section 125 of the Internal Revenue Code.. d. Megatherium is using an HMO.

Maxine is a single mother with an entry-level management job. She needs to consider her 3-year-old child's future welfare if she should die before her child is self-supporting. Maxine has learned that her company offers group life insurance at the typical level of coverage most companies offer. Maxine will be ____, because the typical level of coverage is ____. a. somewhat disappointed, 10 years of annual salary b. very disappointed, one-and-one-half years of annual salary. c. pleased, 20 years of annual salary. d. pleased, full annual salary until the dependent is 18.

MetroUrban Bank has 27 branches, each with a branch manager. These branches range in size from mini-branches in grocery stores, to large branches with many business and investment clients. Mini-branches may have only three or four employees. Large branches may have as many as fifty employees. Of MetroUrban's branch managers, 15 are female and 12 are male. Female branch managers average pay is 75% of the male branch managers pay. Has the bank violated the Equal Pay Act? a. No. Women branch managers are not a protected class in this case because a majority of branch managers are female. b. No. The bank only began hiring women to be branch managers about 10 years ago. Consequently, the female branch managers have been with the bank a fewer number of years than the males. Typically, the branch managers of the larger branches are bank officers who have more years of experience with the bank. c. No. Business clients prefer to do business with male branch managers. Consequently, the larger branches are assigned male managers. Since these branch manager positions are much more challenging jobs, the bank can legally pay managers at these branches more than they pay managers of other branches. d. No. The female branch managers' job title is "community banking representative" and the male branch managers' job title is "branch manager." Traditionally, the bank has paid "community banking representatives" less than "branch managers."

Michael, the owner of a moving company, has developed a performance appraisal system for his customer representatives and truck drivers. He evaluates each of these employees on accuracy of weight estimates, meeting delivery deadlines, and dollar value of breakage. Michael's performance appraisal system is ____ based. a. trait b. results c. behavior d. productivity

Organizations offer deferred compensation to executives in order to a. emphasize long-term performance of the organization. b. help executives lower their tax liabilities. c. place "golden handcuffs" on key executives to prevent their leaving prematurely. d. hide excessive one-time bonuses earned by executives.

Organizations that have specific policies about where they wish to position themselves in the labor market use a/an ____ strategy. a. industry b. quartile c. benchmarking d. labor market

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

Performance appraisal systems that combine information from team members and other employee "clients" to develop appraisals for individual employees are best used for ____ decisions. a. compensation b. developmental c. promotion d. disciplinary

Potential useful metrics for analyzing variable pay plans include all of the following EXCEPT a. average productivity per employee. b. decrease in compensation per full-time employee. c. growth in numbers of new customers. d. return on investment.

The vice-president of HR for Blue Horizon Mental Health is designing a performance appraisal system that includes subordinate ratings of their supervisors. The supervisors are concerned about this and have raised all of the following objections EXCEPT a. the supervisors are concerned that they will be rated on how nice they are to subordinates rather than on their true supervisory performance. b. the supervisors believe that employee feedback will be overly focused on objective performance criteria and not intangible leadership qualities. c. the supervisors are most opposed to using the evaluations for administrative purposes, although they are more open to using the evaluations for development purposes. d. the supervisors argue that subordinates will not want to give them negative feedback because of fear of reprisals.

To be effective in motivating plant-wide cooperation among employees, an organizational incentive program should a. publicly single out the highest-performing employees for extra rewards.. b. include everyone from non-exempt employees to managers and executives. c. pay out every year regardless of whether the organization is profitable. d. reward the shareholders for investing in the business.

What are the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA) with respect to health care? a. Employers with more than 50 employees must provide medical insurance for all full-time employees. b. Most employers with 20 or more employees must offer extended health-care coverage to employees after they leave the organization. c. Employees on COBRA pay 2% more for health insurance than they paid before going on the COBRA plan. d. Employers offering medical insurance cannot exclude pre-existing conditions from coverage.

What are variable pay plans? a. methods of tying compensation to the Consumer Price Index (CPI) in order to keep up with inflation b. additional tangible rewards given to employees for performance beyond normal expectations c. compensation that increases as employees gain new job-related knowledge, skills, and abilities d. incentives to meet required performance standards

What is the first step in constructing behavioral scales? a. determining a "standard of excellence" for each job dimension b. identifying the most important performance factors in an employee's job description c. assessing the performance of the current job holder(s) d. specifying the performance goals that each employee must meet within stated time deadlines.

What is the principle requirement of the Worker Adjustment and Retraining Notification Act (WARN) of 1988? a. Employers must give severance pay to workers who permanently lose their jobs. b. Most employers must give 60 days' notice if a mass layoff or facility closing is to occur. c. Workers must be given the opportunity to relocate if the company is moving the plant. d. Workers under age 50 are entitled to a retraining allowance if their jobs are eliminated.

What is the usual composition of the compensation committee? a. a subgroup of the Board of Directors including officers of the firm b. a subgroup of the Board of Directors who are not officers of the firm c. executives from other companies who serve on a committee that is separate from the Board of Directors, but which reports to it d. compensation consultants and the head of HR

What is workers' compensation? a. payments provided to employees who are laid off for financial reasons b. benefits provided to persons injured on the job c. lawsuit judgments awarded to workers injured on the job d. the employee's total pay package: wages plus benefits

When Claudette found a flaw in a major outgoing order and corrected it before it was shipped, her boss immediately gave her a voucher to the best day spa in town. This type of incentive is called an a. immediate payout. b. spot bonus. c. golden handshake. d. perk

Which of the following statements is TRUE? a. Anti-discrimination laws require that part-time employees must receive benefits if the company offers full-time employees benefits. b. Employers are required to provide part-time employees government-mandated benefits, but other benefits are voluntary for the employer. c. Part-time employees are typically not interested in benefits because they are usually covered by a spouse's or parents' insurance policies. d. Most employers provide part-time employees pro-rated medical benefits, but no time-off benefits because these employees already work a reduced schedule.

____ are more risky from the point of view of retirees than are ____. a. Defined benefit, defined contribution b. Defined contribution, defined benefit c. Contributory plans, non-contributory plans d. Non-contributory plans, contributory plans

As director of HR you are discussing cost pressures on the company with the CEO and the CFO. Two possible options are suggested: (1) eliminating raises for employees next year or (2) reducing the health benefits for employees. The CEO and CFO ask you which reduction will cause the most dissatisfaction among employees. You say that research has implied that a. employees will be just as upset with either loss of raises or reduced health benefits. b. employees will be more upset with loss of raises because cash raises can be spent in any manner, whereas health benefits may not even be used during the year. c. employees will be more upset with reduced health benefits than by the loss of pay raises. d. employees are so unaware of their health benefits, they won't even notice reductions, whereas elimination of raises is a "high-visibility" change.

At Evergreen Cosmetics, the top executive team's bonus is based on the profitability of the firm. Each executive receives the same percentage bonus as the increase in profits over the previous year. This shows a. a lack of ambition on the part of the executive team. b. a disconnect between executive compensation and the compensation of regular employees. c. the pervasiveness of an entitlement culture even into top management ranks. d. executive commitment to performance management.

At Megatherium Holdings, the employees on work teams receive bonuses based on the extent to which the team reaches the team's goals. Each team member receives the same percentage of their base pay as their bonus. Base pay is a function of seniority with the organization. Which of the following statements is TRUE? a. This would be considered an "equal" bonus because it is an equal percentage of salary. b. This type of bonus is called gainsharing because each member of the team shares in the group bonus. c. This would be considered an "equitable" bonus if team members felt senior employees were more valuable. d. This type of bonus works only in teams with few (under seven) members.

At the annual awards banquet, all employees who have been with the company 30 years or more received their choice of a cruise or a week at a resort. This type of special incentive program rewards a. performance. b. organizational good citizenship. c. seniority. d. teamwork.

Because women live longer than men do a. ERISA allows pension plans to require women to contribute at higher rates to get the same benefits as men. b. ERISA allows pension plans to pay women smaller annual pensions because women will draw on the pension for more years than men will. c. ERISA requires pension plan administrators to use the same "unisex" mortality tables for calculating men's and women's pensions. d. ERISA requires pension plan administrators to offer different choices of pension plans to men and to women so individuals can choose the plan best suited to their anticipated length of retirement.

Caroline works on a design team that develops costumes for historically-based and fantasy movies. The team's designs are executed by professional seamstresses and tailors. Caroline's a. job would be suited for individual pay for performance because one can objectively judge the artistic merits of the costumes. b. individual performance can be isolated and measured separately from her team members' contributions. c. job would not be suited for pay for performance because the quality of the work product of the team is mostly based on subjective judgment. d. individual performance can be measured by the number of design drawings she produces, and her pay could effectively be tied to this number.

Caveat Emptor Services, Inc., is a consulting firm that offers a service to employers that examines all medical work and charges. Caveat reviews the procedures done and the charges for the procedures. As necessary, Caveat obtains a second opinion about the medical procedures performed. Caveat is performing a. medical monitoring. b. reimbursement control. c. a utilization review. d. a medical services audit.

Cheryl, a branch manager at Prairie Ridge Bank, is upset that all the tellers in the various branches will be evaluated by the ranking system. The tellers' raises will be determined by their ranking, and the worst-ranked teller in each branch will be terminated. Cheryl has many concerns about using the ranking method, and she has an appointment with the executive vice president of HR to present her arguments. All of the following are concerns she will raise EXCEPT a. the size of the difference in performance among individuals is not defined in the ranking method. b. Cheryl's worst performing employee may be better than another branch manager's average performing employee. c. It will be too difficult for Cheryl to distinguish between her best and worst performers. d. There are 17 branches and the ranking system will be too unwieldy to use for so many groups.

Chuck has applied to a residential roofing firm for a job as a roofer during school vacation because the pay is very good. Roofing is considered hazardous work. Under the FLSA Chuck cannot be hired unless he is at least ____ years old. a. 14 b. 16 c. 18 d. 21

Clemmie is a non-exempt employee of a large law firm. During a particular trial 15 percent of her employer's staff caught a particularly virulent flu, resulting in everyone else having to do their own work as well as the sick employees' work. One particularly intense week, Clemmie worked 90 hours. Which of the following statements is true? a. Clemmie will be entitled to time and a half overtime for every hour over 8 that she worked each day. b. Clemmie will be entitled to 75 hours of time off which she can take within the calendar year. c. Clemmie will be entitled to time and one half pay for 50 hours. d. Clemmie will have her choice of receiving either 50 hours of overtime pay or 75 hours of compensatory time off.

Colossus Solar Enterprises is moving its headquarters from Los Angeles to Austin. The HR department has been charged with retaining as many of the LA employees as possible by using relocation benefits. The following are all typical relocation benefits EXCEPT a. assistance in finding a job in Austin for the spouse of the employee transferring from LA. b. helping sell the employee's house in LA and buying a house in Austin. c. bonuses for LA employees accepting a transfer to Austin. d. use of a company expense account while the employee is on house or apartment hunting trips to Austin.

During summer vacation, Melinda worked as a "character" at a theme park. The job required her to wear a heavy costume over her body, including over her head. Melinda suffered heat stroke when the temperatures were over 95 degrees at the theme park. Her heat stroke was so severe that she suffered ill-effects for several months. Melinda was not well enough to enroll in school the for the fall semester and lost her college scholarship. Melinda received medical care through her employer's worker's compensation, which was fortunate, because Melinda did not have health insurance. Melinda a. can sue her employer for endangering her health by requiring her to wear the heavy costume in extreme temperatures. b. can sue her employer for loss of educational opportunity and for the amount of her scholarship. c. is prevented from suing her employer by the workers' compensation laws. d. cannot sue her employer because she accepted the medical care provided under workers' compensation rather than paying her medical expenses herself.

Flexible benefits plans have grown more popular because a. changes in the tax code no longer give a cost advantage to standardized benefit packages. b. the decreasing influence of unions in the workplace, which pressured employers to treat all workers the same. c. employee family and work situations are more variable than they were in the past. d. employees are more sophisticated about their needs and do not need the employer's paternalistic guidance necessary in the past.

For a profit-sharing plan to be effective, management must a. increase innovative solutions to technical problems. b. not have high expectations of performance impact in the first year of the program. c. be willing to disclose accurate financial and profit information to employees. d. stabilize profits so that the annual payout is consistent.

For an employer, the primary advantage of classifying a worker as an independent contractor is that a. independent contractors are typically more productive than regular employees. b. independent contractors can be fired at any time, unlike regular employees. c. the employer does not have to pay Social Security, workers' compensation, or unemployment costs. d. employers can legally hire individuals they know do not have U.S. work permits.

Gainsharing plans are designed to elicit ____ effort from employees. a. minimum acceptable b. sustainable c. discretionary d. absolute maximum possible

George and Harriet are getting a divorce after 32 years of marriage. George has been a self-employed architect and does not have a pension plan. Harriet has worked for a car manufacturing company the entire marriage, and she has a generous pension plan. Under _____________ George may have rights to Harriet's pension plan. a. ERISA b. Older Employee Protection Act c. Qualified Domestic Relations Order d. COBRA

George has four children, all with poor vision and crooked teeth. George himself has high blood pressure and an over-active thyroid and takes many prescription medications. In addition, George's wife injured her spine in a sports accident and will require several operations. Consequently, George is looking for a job with an employer with generous benefits. It will be MOST DIFFICULT for George to find an employer with benefits to cover a. the spine surgery. b. the dental and orthodontia expenses. c. the glasses and contacts. d. the prescription drugs.

George, the director of HR, is writing the "Affidavit of Spousal Equivalence" that non-traditional couples will need to sign in order to receive domestic partner benefits. George will require the couples to make all the following affirmations EXCEPT a. each is the other's only spousal equivalent. b. they are not blood relatives. c. that their relationship is permanent. d. the are living together and jointly share responsibility for their common welfare and financial obligations.

Glen is excited because his new employer has a stock purchase plan. This means that a. the employer will include grants of stock to Glen as part of his annual performance-based compensation increase. b. Glen will be able to buy company stock below market price and immediately resell it at market rates. c. Glen's employer will match the money that Glen uses to buy company stock at discounted rates. d. Glen's employer provides financial counseling that includes investing advice.

HR-related performance measures for a variable pay plan include all the following EXCEPT a. absenteeism costs. b. workers compensation claims. c. increase in quantity of output per employee. d. accident rates.

How are Social Security benefits funded? a. an employer tax based on the employer's "experience rating" b. deductions from the employee's paycheck which are transferred to the federal government by the employer c. a federal tax on employee wages and salaries paid equally by employers and employees d. on a state-by-state basis through payroll deductions

Hugo is 45 and has been laid off by his employer, which is moving his job as a customer service representative to a company in India. Hugo figures he will need to work at least 20 more years, and he has little money in savings set aside for retirement. Hugo wants to find a job with an employer with a defined-benefit pension plan. Which of the following employers would be MOST likely to have such a pension plan? a. a start-up wind-energy firm. b. a printing company with 63 employees c. a unionized manufacturing firm with 4,450 employees d. a world-famous restaurant in a popular U.S. vacation spot

Karl handles the HR duties in a small commercial bakery of only 16 employees. Nine of these employees are bakery assistants with the same job duties. Karl has decided to make a list of the bakery assistants placing the best employee at the top and the worst employee at the bottom, with the other bakery assistants placed in between according to how they compare with the best and the worst employees. He is fairly satisfied that this system will work for his small company. Karl is using the ____ system. a. checklist b. graphic rating scale c. ranking d. forced distribution

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 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.

Lisa is a project manager for a large consulting firm. She supervises multiple project teams over a single year. Often, the teams work at distant locations, so Lisa rarely meets with every employee on each project team. Nevertheless, Lisa's company requires her to conduct performance appraisals on each team member. Lisa is concerned that her performance appraisals will not hold up in court if the one of her subordinates later sues for discrimination. Lisa is correct to be concerned because in the present performance appraisal system a. one manager evaluates each employee. b. individuals are being evaluated even though they work on teams. c. the manager has little personal knowledge of and contact with the appraised individual. d. this type of evaluation is prima facie evidence of disparate impact.

Marge is very upset that her employer has begun requiring employees on the health plan to make co-payments for doctor's visits, prescriptions, and other medical services. Marge feels this is unfair. Marge's employer's previous health care plan probably was a/an a. health maintenance organization. b. preferred provider plan. c. first-dollar coverage plan. d. health utilization plan.

Megatherium Industries is experiencing a long-term slowdown in sales. Consequently, it needs to permanently lay off a number of its manufacturing hourly employees and also many operations managers. In order to buffer the impact of the layoff on these workers, Megatherium will voluntarily offer a security benefit known as ____ to its departing employees. a. unemployment insurance b. outplacement compensation c. severance pay d. COBRA benefits

Mike is working for a growing video game design company. One of the reasons he took the job is that if he bought stock in the company, the company would match the amount he invested. Mike feels that this would allow him to benefit from the company's growth, over and above just getting his regular salary and other benefits. This kind of plan is called a/an ____ plan. a. employee-owner b. 401(k) c. stock purchase d. phantom stock

Neil, the director of HR for a paper mill, has found that the supervisors in the company give very generous and lenient appraisals to their subordinates, and it is difficult to determine from these appraisals which employees deserve pay raises more than others. Neil has decided to implement a ____ approach to performance appraisal to address this problem. a. graphic rating scale b. management-by-objectives c. forced distribution d. peer evaluation

Performance appraisals at Swamp Blossom Designs, Inc., always occur on the employee's anniversary of employment. A standard protocol is in place to report managerial impressions and observations on employee performance. This is an example of a. objective evaluation. b. subjective evaluation. c. systematic appraisal. d. informal appraisal.

Performance incentives include all the following EXCEPT a. plane tickets to a resort destination. b. commissions. c. cost-of-living increases. d. profit-sharing.

Performance measures are said to be ____ if they leave out some important job duties. a. subjective b. contaminated c. deficient d. biased

The Board of Directors of Clementine Minerals and Mining has been challenged by shareholders about the total compensation of the CEO. In order to examine whether the CEO's pay is reasonable, the Board of Directors should be able to defend all of the following questions EXCEPT a. Would another company hire this CEO? b. How does the CEO's compensation compare with that of CEOs in other companies in the mining industry? c. Is the CEO's pay approximately 22 times the pay of the average employee at Clementine Minerals and Mining? d. What would an investor pay for the CEO's level of performance?

The CEO of MasterFiber Textiles attended a conference where he spoke with the CEO of Golden Fleece Manufacturing. Golden Fleece has had great success in implementing an individual pay-for-performance system. The CEO of MasterFiber has directed the vice president of HR to implement the Golden Fleece method at MasterFiber. The FIRST concern of the VP of HR should be a. Can current executive compensation be retained under this system? b. Is the plan simple or complex to administer? c. Does the plan fit with the business strategies and culture at MasterFiber? d. Can MasterFiber afford to pay higher compensation to its employees?

The CEO of a major corporation is being interviewed by a reporter from a TV news show. The CEO makes over $150 million a year. The reporter asks, "Are you really worth $150 million a year to your company, especially when your company has lost money the last three years? In fact, most of your employees make minimum wage which is not enough to support a family." All of the following are plausible responses by the executive to the reporter's question EXCEPT a. "I have to make major decisions, and I work endless hours under great pressure." b. "You will find that my compensation is in line with the CEOs of other firms in this industry." c. "This may seem like a lot of money to you, but in comparison to what top executives make in Europe and Asia, my compensation is quite moderate." d. "I have the responsibility for a major corporation. We would have lost even more money if I had not made the changes I did to our operations."

The Family and Medical Leave Act of 1993, requires that employers allow eligible employees to take a total of ____ during any ____ period. a. 12 weeks' paid leave; 12-month b. 24 weeks' paid leave; 24-month c. 12 weeks' unpaid leave; 12-month d. 24 weeks' unpaid leave; 24-month

The Financial Accounting Standards Board (FASB) issued Rule 106 regarding accounting treatment of company liabilities for retiree health benefits because a. many firms were using the funds officially set aside for funding retiree health benefits for other purposes. b. a number of firms have set aside excessive amounts of funds for retiree health benefits and are using this as an accounting ruse to prop up their financial statements. c. many firms do not have enough money set aside to fund their retiree health benefits and this should be reflected in the company's financial statements. d. of massive corporate fraud involving funds set aside to fund retiree health benefits.

The Older Worker Benefit Protection Act (OWBPA) sets forth some very specific conditions that must be met when older workers a. move from full-time to part-time status. b. are denied coverage under an employer's health insurance plan. c. are offered early retirement. d. apply for supplemental social security benefits.

Tom has just taken his first full time job with a salary of $58,000. He knows that he should plan his personal recurring expenses, such as rent and car payments, around this amount because it is his a. total compensation. b. total reward package. c. base pay. d. living wage.

Which of the following is an advantage of a lump-sum increase (LSI) plan compared with traditional raises? a. LSI plans eliminate the need for annual adjustments of the pay matrix. b. Employees are more satisfied with LSIs. c. It heightens employees' awareness of what reward their performance merited. d. It increases the compounding effect of succeeding raises on the employee's base pay.

Which of the following statements about the Lily Ledbetter Fair Pay Act is true? a. This law extends the protection against pay discrimination to men as well as to women. b. This law allows women to file pay discrimination complaints with the EEOC on the basis of violation of pay equity as well as on the basis of equal pay for equal work. c. Women who have been paid less than men have for the same job have no time limits on when they can file a complaint with the EEOC. d. Under this act, the EEOC can award damages to successful plaintiffs as well as making them whole.

Which of the following statements is FALSE about sales incentive plans? a. The Internet has made it easier for managers to track daily sales of sales staff scattered all over the world. b. If sales staff bonuses become viewed as deferred salary, then the bonuses lose their effectiveness in motivating discretionary effort from sales staff. c. It is difficult to motivate the range of behaviors needed of sales staff in a complex environment unless there are at least three sales performance measures in an incentive system. d. Sales incentives must be tied to the organization's broad strategic plans.

Which of the following statements is TRUE about HMOs? a. One of the advantages of HMOs is that they provide care at all levels, from prevention, to maintenance, to treatment of illnesses, to hospitalization, and even to hospice care. b. HMOs are mainly used for preventative medicine and wellness. Employees who are actively ill must use a PPO or POS plan. c. HMOs charge the employer a flat rate per employee or per family. d. HMOs are effective in reducing employee use of health benefits.

Which of the following statements is TRUE? a. Most U.S. citizens over 55 have at least $250,000 in savings and investments. b. Most U.S. workers have pensions through their employers which will help support them in retirement. c. Employers with fewer than 100 workers do not typically offer retirement benefits for their workers. d. U.S. citizens are extremely sensitive to any changes in the federally-provided benefits offered by Social Security.

Which of the following statements is TRUE? a. Mini-medical plans are most appealing to large companies with a high proportion of women employees. b. These plans are popular with retirees who are working part-time because it supplements their Medicare coverage. c. Mini-medical plans are inexpensive for the employer because the services provided are minimal and capped at a low level. d. Mini-medical plans are becoming more popular because although they do not cover minor medical expenses, they do cover catastrophic illnesses or injuries.

Which of the following statements is TRUE? a. Pay-for-performance systems do not work well for CEOs because most CEO performance is not objectively measurable. b. Performance-based pay systems for CEOs typically build in penalties for unethical behavior. c. Performance-based pay systems for CEOs are a key factor in an organization's development of a performance-driven culture. d. Pay-for-performance systems do not work well for CEOs because organizational performance is strongly affected by economic factors beyond the CEO's control

Which of the following statements is TRUE? Under federal law, employers must give employees a. severance pay. b. paid sick leave. c. time off to care for sick children and parents. d. medical insurance.

Why are job-related, non-discriminatory and documented performance appraisals necessary when organizations terminate employees? a. They help explain the connection between merit and seniority. b. They provide developmental information to the employees. c.They are a legal defense if employees sue over such decisions. d. They are an important input to the strategic planning process.

Why do a relatively low percentage of men take paternity leave? a. Men who are not single parents are not covered in the Family and Medical Leave Act. b. Employers can deny FMLA leave if the employee is not replaceable. Men tend to hold jobs that are more critical than women do. c. It is not socially acceptable for men to stay home for child-related reasons. d. Only one parent per family can take FMLA leave, and most couples decide that the mother will be the one to take FMLA leave.

_________________ groups jobs into pay grades based on similar market survey amounts. a. Benchmarking b. A pay matrix c. Market banding d. Broadbanding

Aesthetic Decor, Inc., has made the philosophical decision to have absolute internal equity in its pay structure. To that end, every job in the organization has been rigorously evaluated and assigned points according to the worth of the job to the organization. The result is that many traditionally female-dominated jobs are paid more than what they are typically paid, and some traditionally male-dominated jobs are paid less than what they are typically paid. Which of the statements below is most likely to be TRUE? a. This system is based on the concept of pay equality. b. Although this system looks ethical on its face, it actually violates the Equal Pay Act because it will discriminate against male employees. c. Aesthetic Decor will have a hard time staffing any of the gender-stereotyped jobs in its organization. d. Aesthetic Decor's compensation for traditional male jobs will not be externally competitive.

All of the following are requirements for performance appraisal supported by the courts and the EEOC EXCEPT a. performance criteria must be based on job analysis. b. appraisal activities must be documented. c. the rater must have personal knowledge of and contact with the appraised individual. d. performance criteria must be numerical and objective.

All of the following are ways to reduce an organization's health insurance costs EXCEPT a. programs to give employees financial incentives to lose weight and quit smoking. b. providing gym memberships to employees or exercise equipment at the workplace. c. employing utilization review of healthcare provider services and charges. d. eliminating coverage for psychiatric illnesses and treatment for addiction.

All of the following statements are true about graphic rating scales EXCEPT a. graphic rating scales are easy to develop. b. separate traits or performance factors are sometimes grouped together which leads to inconsistency in how evaluators interpret the scale item. c. graphic rating scales can either use verbal or numerical scales. d. graphic rating scales require less rater training than other methods because the descriptive terms used carry widely-understood interpretations.

Amber is the manager of a popular clothing store. She regularly works over 40 hour a week. But when new styles are coming in requiring new displays, she may put in as many as 60 hours a week. Amber's paycheck is the same regardless of the number of hours she has worked. Amber is paid on a/an a. total compensation arrangement. b. incentive compensation program. c. wage system. d. salary basis.

Ambrose has been recently transferred from the Ohio headquarters of his firm to the European office. He is surprised to learn that instead of the 10 days of vacation per year he receives from his employer, his European colleagues get a. no discretionary vacation, only state holidays off. b. exactly the same amount of vacation he gets in the U.S., but no family leave. c. 20 days of vacation per year, double the Ohio office's practice. d. over 30 vacation days a year.

Ambrose was rated as having average performance levels when he worked in the design department of the Midwestern region of the company. Last year Ambrose was transferred to the Northeastern region where he holds the same job. Although Ambrose's production numbers have been consistent, he has been rated as an outstanding performer this year. It is most likely that Ambrose's varying performance appraisals have been affected by the ____ error. a. central tendency b. primacy c. halo d. contrast

An individual-level pay-for-performance system would be LEAST effective for which of the following employees? a. a dog groomer at a large pet store. b. a sales clerk at a fashionable women's shoe store. c. the CEO of a middle-sized builder of manufactured housing. d. a marketing specialist on a cross-functional product development team.

Anna has been called to serve her tour of duty in Iraq as a reserve officer in the Marines. She is leaving for the war zone in 30 days. Which of the following statements is TRUE? a. Anna's employer is required by federal law to pay her the difference between her military pay and her civilian pay. b. Anna's employer is required to give her military leave. But, if Anna was only called for training, she would have to use personal vacation days rather than leave. c. Anna's employer can require her to use up her three weeks of paid vacation while she is deployed. d. Anna's employer is not required by law to continue her pay either in total or in part.

Arnold sells oil field equipment. He is paid 2 percent of the dollar amount of the sales he has completed each quarter. This is Arnold's only compensation, but he sells several million dollars' worth of equipment each year. He is on the ____ system. a. retainer b. pay-as-you-go c. deferred compensation d. straight commission

As a rule of thumb, the aggregate employer costs for the typical expatriate employee, including all allowances, is about ____ the expatriate's salary. a. 10% of b. half c. double d. three or four times

The most constructive way to view benefits is a. a cost to be minimized. b. a government-mandated burden. c. culturally necessary. d. a tool for competitive advantage.

As director of HR you need to calculate the return on investment of a new differential piece-rate system. To do this you need to calculate a. the ratio of the cost of the old incentive system to the cost of the new incentive system multiplied by the dollar value of the increase in production due to the new system. b. the dollar value of the increase in production divided by the cost of the new incentive system. c. the ratio of the cost savings of the new incentive system compared with the return on investment which the shareholders expect. d. the dollar value of the additional production minus the cost of the new incentive system divided by the cost of the new incentive system

As director of compensation for BlueBottle Enterprises, you have implemented a highly successful pay-for-performance system. This system has worked successfully for three years as measured by a number of financial and non-financial measures. Because of this success you are considering quitting BlueBottle and setting up your own consulting firm to promote this system. Which of the following statements is TRUE? a. This will be a successful undertaking because effective pay-for-performance systems are translatable across industries. b. You should target poor-performing firms as potential clients because most firms' performance will be enhanced by a pay-for-performance system. c. As long as most employees will experience an increase in pay with this system, they will be satisfied with it. d. You need to have a way to evaluate organizational cultures in order to select the organizations in which your pay-for-performance system will be effective.

At High Flyer Airlines, managers rate their subordinates on a continuum from 1 to 7. A score of 1 indicates unsatisfactory performance, and a score of 7 indicates superior performance. High Flyer uses a ____ as its performance appraisal method. a. ranking system b. checklist c. multisource appraisal d. graphic rating scale

At a large on-line catalog retail company, supervisors randomly listen in on calls handled by customer representatives to make sure that the customers are greeted politely, orders are taken accurately, order details are repeated to the customer, and that customers are thanked for their orders. This is a ____ -based type of performance information. a. productivity b. trait c. results d. behavior

Bonuses are less costly to the organization than general wage increases, because a. bonuses receive preferential tax treatment. b. the annual amount given as a bonus tends to be smaller than the annual amount given as a raise. c. bonuses are frequently given in the form of non-cash items. d. bonuses do not become part of employees' base wages.

Brownbrass, Inc., has instituted a multisource rating system. The results will be used for both developmental and administrative purposes, such as compensation and promotion decisions. As an HR consultant hired by the organization, you can predict that a. there will be fewer legal issues with this system than with a supervisory rating system. b. the employees will view the multisource ratings as more valid than if they were rated only by their supervisors. c. there will be little variation in performance ratings across sources. d. the performance ratings will be inflated.

Cost-of-living adjustments are typically tied to changes in the a. consumer interest rate. b. prime interest rate. c. Dow Jones Industrial Average. d. Consumer Price Index.

Counting the number of items a clerk scans per hour is be an example of a/an ____ measure of performance. a. quality b. subjective c. behavior-based d. objective

Curtis supervises a large number of clerical employees. Several of his female subordinates have had babies this year. Curtis has taken this into account when conducting the performance appraisals of these subordinates, because he knows that new mothers are frequently sleep-deprived and that this can negatively affect their accuracy and performance levels. Curtis raises these employees' evaluations higher than what they would have objectively been otherwise. Curtis has committed the error of a. leniency. b. similar to me. c. contrast. d. varying standards.

Employee benefits are a/an a. legal and ethical responsibility of employers. b. type of employer social activism. c. type of corporate charity. d. indirect reward for employees.

For employers, the cost advantages of defined-contribution health plans include all of the following EXCEPT a. increases in health-care costs are shifted to employees. b. employees must control their own health-care usage. c. employer's contributions are limited to a set amount. d. unused funds in employee accounts roll back to the employer at the end of the year.

George supervises the work of 15 subordinates. These individuals are in a state-subsidized work program for the chronically-unemployed that is intended to help them learn good work habits and job skills that will allow them to move into jobs in the local economy. George is required to appraise his subordinates' performance each month. George a. should focus on positive feedback because these employees may have a low sense of self-efficacy and will be discouraged by negative feedback. b. must keep in mind that his performance appraisal may negatively affect the employee's ability to continue in this work program and the employee's ability to actually earn a living in the future. c. must emphasize the performance shortfalls of the employees so that they understand the competitive, win/lose environment they will be in when they get jobs in the local economy. d. owes each of these employees a true picture of his/her performance, no matter how difficult the conversation may be or how difficult the employee is.

George, a compensation specialist for a large frozen foods company, has been asked to identify compensable factors specific to the job of forklift operator in the company's extensive warehouse. This warehouse is one of the largest refrigerated warehouses in the country. George would probably include all the following in his list EXCEPT a. working environment. b. safety hazards. c. use of specialized equipment. d. decision-making responsibility.

Gigantic MotorVehicles, Inc., has more retired employees than currently-employed workers. As part of its generous benefits plan in decades past, it provided all of its retirees with full medical benefits. Most of GMV's retirees are on fixed and limited incomes, and are barely making ends meet with savings, pension, and Social Security. In addition, many of the most elderly of the retirees, those over 80, have significant and expensive medical problems. Most of the retirees spent their entire careers with GMV, and actually took and kept these jobs just so that they could retire with good pensions and benefits. GMV has had disastrous financial performance over the past few years and has been cutting costs as much as possible without destroying the company's ability to perform. As HR director, your face all of the following issues EXCEPT a. cutting health benefits to retirees and facing lawsuits. b. the ethical dilemma of breaking the company's promises to people who are too old to have any other options for health care. c. facing negative press and damaging GMV's image by acting against the interests of elderly and loyal former employees. d. federal prosecution for cutting retiree's health benefits.

Glenda was transferred into her current department in October. In December, Glenda is required to evaluate her subordinates' performance. Glenda's ratings are likely to be affected by a. central tendency error. b. the varying standards effect. c. similar to me error. d. sampling error.

How is workers' compensation usually funded? a. by a tax levied on employers by state governments based on the employer's average monthly number of employees b. by contributions to a pool of funds by organizations in the same industry which purchase insurance for the employers as a group c. through state value-added taxes on goods sold and manufactured d. by insurance purchased by employers from a private carrier or state insurance fund or by self-insurance

If an organization's competitive strategy relies on long-term relationships with the clients who purchase the organization's goods and services, the organization should reward its employees from its executives to its sales staff with incentives based on a. quarterly sales. b. annual profits. c. prices of its stocks in daily trading. d. a rolling five-year measure of financial performance.

If most employees in an organization consider their pay raises inequitable, even though the organization uses performance-based compensation, the most likely cause is that a. the majority of employees are poor performers. b. the organization has an entitlement culture. c. the work performed by the organization does not lend itself to objective performance appraisal. d. some part of the appraisal process has failed.

Imogene's Delectables has announced a competition to reward the store manager with the highest dollar sales in each state with a paid vacation to a luxury resort. Imogene's Delectables' pay-for-performance plan will probably a. encourage cooperation among hourly store employees. b. help retain the store managers who feel they have a chance to win the award in the upcoming year. c. encourage teamwork among the store managers. d. increase morale of store managers in historically low-performing locations.

In a true pay-for-performance system, which of the following employees would qualify for incentive reward? a. Jack has met his sales quota even though he was hospitalized for appendicitis during the year. b. Otto manages to meet the minimum required sales on his store location despite the fact that the business building next door, where he receives most of his customer traffic, has closed. c. Charlene performs up to expectations as a science teacher at a magnet high school. d. Chris brings in 20 percent more new clients for the branch bank than is required.

In a/an ____ plan the employer makes an annual payment of a predetermined amount into an employee's pension account. The retiree's payout will vary depending on the investment returns of the pension account. a. ERISA b. defined-benefit c. non-contributory pension d. defined-contribution

In the ____ method, the manager keeps a written record of both highly favorable and unfavorable actions in an employee's performance during the entire rating period. a. checklist b. paired comparisons c. essay d. critical incident

In which of the following situations would peer ratings be most appropriate? a. A group of salespeople meets monthly as a committee to talk about strategies for improving customer relations. b. The manager is too busy to meet with each subordinate for a formal appraisal interview. c. The members of the work group are highly cohesive and have strong friendships with one another. d. The supervisor manages a large geographical region and travels extensively, while the employees work with each other daily

James is a sales representative for a large international import/export firm. For the past three years James has received an annual bonus, the maximum possible, between $75,000 and $90,000 because he met his sales targets. This year, James is planning on using his bonus to buy a new sports car, so he and his wife have been test driving cars. Which of the following statements is most likely to be TRUE? a. We can be fairly certain that James has exerted intense discretionary effort in the last four years. b. The actual dollar amount of the bonus is less important to James than its "prestige" effect. c. The bonuses paid out by this company are excessive. d. The company has created an entitlement culture and James will be upset if he does not get a large bonus..

Jessica works for one of the largest corporations in the U.S.. She makes the average pay of workers in this organization, $30,000. It would be a good guess that the CEO of Jessica's company makes a. $300,000. b. $1,500,000 c. $3,000,000. d. $10,500,000.

Karen is diabetic. She quit her job as an internal auditor with a bank and two months later found a job as the assistant CFO for a chain of grocery stores. The law that allows Karen to switch her health insurance plan from her former employer to her new employer to get new health insurance that covers her diabetes is a. ERISA b. FMLA c. COBRA d. HIPAA

The most frequently outsourced benefits function is a. managing paid time off plans. b. education and tuition reimbursement programs. c. coordination of FMLA leave. d. the Employee Assistance Plan.

Megatherium Industries organizes its production employees into work teams. Each team member's salary is determined by a combination of his/her seniority in the firm and competencies which he/she has demonstrated. Sissy is angry because she has found out that Max is paid more than she is because he has earned more skill certifications, even though Sissy has consistently worked harder and "gone the extra mile" in completing team projects. Which of the following statements is TRUE? a. Research has shown that where employees work in teams, it is crucial for the pay system to be closed because of these kinds of idiosyncratic equity perceptions. b. Sissy is angry because this situation violates her sense of external equity. c. This is an example of how favoritism can undermine the effectiveness of a compensation system. d. This situation violates Sissy's sense of procedural justice.

Milo works for the state department of transportation as an hourly-employee in the maintenance department. He is surprised to learn that his friend, Annabelle, who is a salaried paralegal for a law firm, does not get compensating time off when she works weekends and evenings. Milo always gets compensating time off when he has to work late. Which of the following statements is FALSE? a. Since Annabelle is an exempt employee, she is paid a set salary regardless of the number of hours she works. b. Private sector employees of for-profit organizations cannot legally be given compensatory time off in lieu of overtime pay. c. Milo gets compensatory time off because he is a public-sector employee. d. Annabelle is a non-exempt employee and should have the choice of either overtime pay or compensatory time off.

Not all of an employee's job duties are equally important. Performance appraisal systems can best take this into account by a. using results-oriented performance measures for the most important duties and behavior-based or trait-based measures for the lesser-important duties. b. measuring performance only for the most important duties. c. using a critical incident method to measure employee performance. d. weighting the more important duties more highly than the less important duties.

One of the items on the performance appraisal form at Bioengineering Devices, Inc., is "The employee demonstrates creativity, inventiveness and openness to new ideas." This can be considered ____ performance information. a. results-oriented b. behaviorally-based c. objectively observable d. trait-based

One of the major differences between individual incentives and group incentives is that a. individual incentives are more likely to be monetary whereas group incentives are more likely to be non-monetary. b. group incentives carry high "trophy" value for the members who receive them. c. incentives for group members tend to be allocated equitably whereas individual incentives tend to be allocated equally among employees. d. group incentives place social pressure on group members whereas individual incentives do not.

OnionDome Manufacturing has suffered major losses in the last few years. Last year the board of directors fired the CEO and hired Simon Simple from one of its major competitors. Simple has laid off 20 percent of the hourly employees and 15 percent of the managers and professional staff in the company. He has sold off two unprofitable subsidiaries, and for the first time in five years the company has posted a small profit. This year the board of directors has given Simple a multi-million dollar bonus. Which of the following statements is TRUE? a. It is unusual for a company that has experienced mass layoffs to give executives large bonuses. b. Simple should not receive a performance bonus this year because the profits are due to accounting manipulations. c. The Sarbanes-Oxley Act prohibits this type of bonus. d. The employees at OnionDome may feel that it is unethical for Simple to have received this bonus.

Paula, the director of employee development for an airline, is designing a tuition aid program for the employees. She wants to assess whether the program will have a good return on investment for the airline. To do so, she is building in a long-range assessment system that will measure all of the following EXCEPT a. employee satisfaction with the program. b. retention of employees who have used tuition aid. c. internal promotions of employees who have used tuition aid. d. grades earned by employees on tuition aid.

Those benefits which employers in the United States are required to provide by law are called ____ benefits. a. obligatory b. federal c. compulsory d. mandated

Pfalz Bakeries, Inc., has experienced problems staffing its operations during the week of Mardi Gras, even though this is a busy and profitable time period for the company. Many employees schedule their vacations during Mardi Gras, but demand for king cakes peaks during this week. The HR manager feels it would have a negative impact on employee morale to ban any vacations during Mardi Gras week. Which of the following is the best option for the HR manager to maintain staffing levels and bakery sales? a. Require employees to work the last scheduled day before Mardi Gras and the first scheduled day after Mardi Gras. b. Give employees free king cakes every day during Mardi Gras week. c. Close down the bakery during Mardi Gras and give employees a week of unpaid vacation. d. Pay employees who work during Mardi Gras week time-and-one-half.

Poseidon Oceanic Supply has introduced a new sales compensation system that rewards sales staff based on a combination of individual goals and group sales goals. Previously, sales staff had been on individual salaries supplemented with subjective annual bonuses. In implementing this program, the management of Poseidon hopes to a. motivate sales staff on the basis of individual entrepreneurialism. b. increase the amount of service to existing Poseidon customers. c. reduce opportunities for unethical behavior by sales staff. d. encourage teamwork among the sales staff.

Results-based information, used for evaluating performance, a. is effective in promoting ethical behavior since lawsuits and regulatory fines are easy to measure. b. is difficult to use for most jobs since few jobs have observable and measurable results. c. is best used on a group or organization-wide basis since few individual employees have a direct effect on organizational success.. d. may cause difficult-to-measure aspects of the work to be neglected by employees.

Simon is outraged that his co-worker Missy was given a raise. Simon believes Missy got the raise because she married the chairman of the board's son. Simon's sense of ____ has been violated. a. compensatory equity b. distributive justice c. external equity d. procedural justice

Statements that describe both desirable and undesirable employee behaviors on a numerical scale are called a. critical incidents. b. categorical descriptions c. MBO targets d. anchors.

T/F Research has shown that performance-driven organizational cultures a. are based on eliminating differentiations among employees and commitment to equality of rewards for employees. b. is typically welcomed by employees when it is instituted in a formerly entitlement-based organizational culture. c. require behavior-based performance measures. d. tend to have significantly higher financial results compared with other types of organizational cultures.

The Equal Pay Act prohibits wage differentials based on a. race. b. job classification. c. job title. d. gender.

The Family and Medical Leave Act (FMLA) of 1993 provides that a. employees must be able to return to their former job following the leave. b. the FMLA leave "clock" begins after all vacation and personal days have been used. c. the leave must be taken as one 12-week block. d. health benefits must be continued during the leave at the same level and conditions.

The ____ shows the relationship between job value, as determined by job evaluation points, and pay survey rates. a. compa-ratio b. isobar c. quartile d. market line

The director of HR at Megatherium Industries knows that there are serious flaws in the company's compensation system. If employees freely discuss their wage or salary levels, raises and bonuses, the director is concerned that there will be widespread dissatisfaction and employee questions that will place the HR department and top management in a bad light. Consequently, Megatherium has a strict pay secrecy policy, and employees who discuss their pay are disciplined. Which of the following statements is TRUE? a. Megatherium's policy of pay secrecy is unusual among U.S. organizations. b. If Megatherium opens its pay policies, employee satisfaction and retention will improve because employees will not have to rely on conjecture and rumor. c. Closed pay systems, such as Megatherium's, are illegal for any company traded on the NY Stock Exchange. d. It is possible that Megatherium's policy violates the National Labor Relations Act.

The main advantage for an employer in setting up an employee stock ownership plan is a. increased protection against union organizing attempts. b. reduction of financial risk for employees and consequent reduction in employee turnover rate. c. increased employee productivity. d. favorable tax treatment on earnings earmarked for use in the ESOP.

The manager of a automotive repair shop keeps a logbook in which she records both especially good and especially poor actions of the mechanics. The manager is using the a. essay. b. forced distribution method. c. BARS method. d. critical incident method.

The most constructive way to view benefits is a. a cost to be minimized. b. a government-mandated burden. c. culturally necessary. d. a tool for competitive advantage.

Traditional job evaluation programs have been criticized as being gender-biased against women. Employers argue that a. female-dominated jobs are concentrated in lower-paying industries and smaller firms which have lower pay levels. b. job evaluation is based on internal equity, and so the resulting pay levels are by definition non-discriminatory. c. male-dominated jobs require physical strength and endurance of severe working conditions, which makes these jobs objectively more valuable to the organization. d. job evaluations reflect the pay rates the "market economy" sets for jobs, so there is no discrimination by the individual organization.

Typical compensation appeals procedures require the employee to discuss the problem first with a. the organizational ombuds. b. the EEOC. c. the HR department. d. his/her supervisor.

Under the FLSA, which of the following would be classified as a non-exempt employee? a. an artist creating murals for a high-end restaurant b. a sales representative who travels 3 days a week to meet prospective clients c. the architect overseeing the construction of a new university library d. an electrician on staff at a casino

What is the basis for determining the employer's cost of unemployment compensation? a. the type of business and industry and its known seasonal fluctuations in employment b. the number of covered employees c. the employer's total payroll cost d. the number of claims filed by former employees

What is the role of a compensation committee of the Board of Directors? a. To assist the HR unit in developing overall pay and benefit programs for the organization. b. To develop a compensation package that ties the organization's overall compensation system to the organization's goals and objectives.. c. To make recommendations to the shareholders on the compensation formula for members of the board of directors. d. To make recommendations to the Board of Directors on overall pay policies, salaries for top officers, stock options, and additional perks for executives.

Which of the following approaches is recommended for bringing a red-circled employee's pay into line? a. Transfer the employee to a lower paying job. b. Promote the employee to a job with the appropriate pay grade. c. Cut the employee's pay so it falls within the range. d. Freeze the employee's pay until the pay range is adjusted upward.

Which of the following best describes the manager's role in the developmental aspect of performance appraisal? a. judge b. parent c. antagonist d. coach

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

Which of the following is FALSE? a. Narrative methods and MBO work better for higher-level jobs than for lower-level jobs. b. Category scaling methods are not helpful in measuring strategic accomplishments of employees. c. The MBO method takes quite a bit of time to define expectations and explain the process to employees. d. It is important to use only one type of performance appraisal method for each category of employee.

Which of the following is NOT a COBRA qualifying event? a. employee moved from full-time with benefits to part-time without benefits b. death of employee c. employee and current spouse become divorced d. employee termination for insubordination

Which of the following is the typical structure of team-based compensation? a. individual pay-for-performance based on team member input b. skill-based pay plus a percentage of base pay c. equal pay for each team member based on team performance d. team-based variable pay on top of individual base pay

Which of the following statements about communication of benefits to employees is TRUE? a. Benefits plans are highly complex and legalistic. Consequently, all written information must be followed up with face-to-face meetings between HR staff and employees. b. Employees place such a low value on their benefits that they tend to ignore communication on this topic. c. The main point that should be stressed in benefits communication is that most benefits, such as health insurance, are voluntary on the part of the employer and can be eliminated at any time.. d. Employees need to be educated on the value of their benefits, the financial cost of benefit to their employer, and why their benefits are being changed.

Which of the following statements is TRUE regarding a 1986 amendment to the Age Discrimination in Employment Act (ADEA). a. Pension plans must be available to employees at the time (and age) that they choose to collect Social Security. b. Claudia has just turned 65. It would be legal for Claudia's employer to reduce her health care benefits since Claudia now qualifies for Medicare. c. Employers can no longer specify a "normal" retirement age. d. Bill is 78 and is working part-time for a "big box" home and garden store. The store manager can not require Bill to retire.

Which of the following statements is TRUE regarding performance management in a global setting? a. Because human psychology is the same worldwide, a well-designed performance management system will work in any cultural setting. b. Business organizations in every culture include some type of formal performance feedback for employees. c. U.S.-style performance management systems are becoming more widely used overseas because of their effectiveness in increasing employee performance. d. U.S. companies may need to eliminate their performance management processes in certain countries.

Which of the following statements is TRUE? a. Organizations operating in China cannot use individual pay-for-performance because it violates cultural norms of equal treatment. b. Global firms can use pay-for-performance systems if the organization has the same competitive strategy in each country in which it operates. c. Variable pay systems are unpopular in Europe because the culture values stability and predictability in compensation systems. d. Global firms can use incentive systems if they are adapted to appropriate goals in different geographic regions.

Which of the following statements is TRUE? a. The only aspect of a compensation system which can be used to shape employee behavior is the structure of variable incentives. All other rewards only encourage continuing membership in the organization. b. Indirect compensation and non-monetary rewards will not overcome the negatives of below-market direct compensation. c. Since employees' understanding of their indirect rewards is so vague, HR managers should focus on the effects of tangible and direct compensation on employee attraction, retention and motivation. d. In a total rewards system the needs and expectations of employees are balanced with the interests and costs of the employers.

Which of the following would be an example of an intrinsic reward? a. a grant of stock options b. additional medical insurance coverage c. a membership in a country club d. satisfaction with meeting a tight deadline.

You are chief operating officer of a small, start-up firm and you must handle HR duties. Right now, the organization has 11 employees, although more employees will be hired about two years from now. In setting up a base pay system you need something simple, quick and inexpensive. It would be most appropriate to use a _______ for evaluating jobs. a. factor-comparison method b. Hay system point method c. classification method adapted from the public sector d. ranking method

You are the director of HR for a medium-sized regional utility company. Your CEO attended a speech by Jack Welch, and now she wants to implement his "differentiation" performance appraisal system in the company. This system is similar to ranking and forced distribution. You have some concerns about the appropriateness this system because a. this system works best in unionized workplaces and your company is nonunion. b. this system can be applied to managerial jobs, but not to non-managerial jobs. c. the performance measures in this system tend to be both contaminated and deficient. d. forced distribution systems have been subjects of discrimination lawsuits.

____ is an example of an organizational-level variable pay system. a. Sales compensation b. Cost reduction c. A piece-rate system d. Deferred compensation

____ is the process of determining how well employees do their jobs relative to a standard and communicating that information to the employee. a. Employee development b. Performance management c. Process improvement d. Performance appraisal

____ is the right of employees to receive benefits from their pension plans if they remain with their employer a certain period of time. a. Qualifying b. Portability c. Entitling d. Vesting

____ specifies the performance goals that an individual and his or her manager agree to try to attain within an appropriate length of time. a. Performance counseling b. Strategic performance management c. The critical incident technique (CIT) d. Management by objectives (MBO)

he Health Insurance Portability and Accountability Act (HIPAA) requires a. employers with more than 50 employees provide medical insurance for all full-time employees. b. employers to offer health coverage to contingent workers if the workers pay 102% of the employer's cost. c. that most employers offer extended health-care coverage to employees after they leave the organization. d. that most employees be able to switch their health insurance from one company to another to get new health coverage, regardless of pre-existing conditions.

Much of the accuracy of the market pricing method of job evaluation depends on a. the industry in which the organization operates. b. whether gender bias can be eliminated from the system. c. the quality of the job matches between the survey and the employer's jobs. d. the depth and appropriateness of the compensable factors used.

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