MGT 308 Test 2

Today, top executive pay is more than _____ times the pay of the average worker.

300

Which of the following is a disadvantage of gain-sharing plans?

Payouts can occur even if a company's financial performance is poor.

_____ are NOT used for determining employee benefit preferences.

Product market share data

_____ have the disadvantage of requiring employees to spend money to obtain their incentive.

Stock options plans

The final major decision in pay-level determination is to _____.

design grades and ranges or bands

The first issue in setting up a benefits package is:

finding out who should be protected or benefited.

The biggest trend in supervisory pay centers on _____.

increased use of variable pay

The typical employee can recall _____ percent of the benefits he or she receives.

less than 15

A market pay line _____.

links a company's benchmark jobs with market rates paid by competitors

The _____ component of executive compensation has grown the most since 2012.

long-term incentives

A survey shows that the majority of employers are responding to increased benefit costs by _____.

requiring employees to pay higher deductibles and copays

A recent survey shows employees ranking employee benefits _____ in explaining job satisfaction.

second

The _____ theory argues that executive pay rises to maintain the same relative relationship with the salaries of lower-level employees.

social comparison

Maxwell Construction Corp. employs a lot of uneducated laborers. The company wants to introduce a variable-pay plan that is easy to understand and does not cost much to administer. Which of the following variable-pay plans is Maxwell most likely to introduce?

Cash profit sharing plan

At the time it is granted, which of the following has no tax implications for an executive?

Incentive stock options

The most frequently used incentive system is the:

Straight Piecework System

Which of the following statements is true of individual spot awards?

They are given to employees for exceptional performance as an add-on bonus.

Components identified as vital to the success of both Scanlon and Rucker plans are:

a productivity norm and effective worker committees.

How many weeks of leave does Family Medical Leave Act (1993) mandate for all workers at companies that employ 50 or more people?

12 weeks

In 1959, benefits were approximately _____ percent of payroll and in 2010 it was approximately _____ percent of payroll.

25; 30

The differential between supervisors' base pay and their highest paid subordinate is typically _____ percent.

5 to 30

Menthorp Inc. wants to design a variable-pay plan that fosters teamwork and business knowledge of its employees. In order to ensure maximum motivation, Menthorp wants its variable-pay plan to show a clear performance-reward link. Which of the following plans is most suitable for Menthorp?

Cash profit sharing plan

For any task completed in standard time or less, earnings are pegged at 120 percent of the time saved under the _____ plan.

Gantt

Gramhold Inc., a pharmaceutical company, reduces its 10 salary grades to just three broad bands. Which of the following statements is most likely to be true in this case?

Gramhold will experience career moves within bands more than career moves between bands.

Which of the following statements is true of employee benefits?

Group insurance benefits has relatively easy qualification standards.

Which of the following is an advantage of providing stock ownership options as variable pay to employees?

It defers a portion of taxes to employees.

The _____ requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship.

Patient Protection and Affordable Care Act

Which of the following is often used to set pay ranges?

Quartiles and percentiles

A useful tool for determining the true worth of an entire executive compensation package is _____.

a tally sheet

One common feature of all types of incentive plans is:

an established standard of performance that is used to determine the magnitude of the incentive pay.

If a benefit forecast suggests future cost containment may be difficult, the benefit should:

be offered to employees only on a cost-sharing basis.

By limiting liability for an employee's hospital stay costs to $200,000, an employer is using a cost-containment measure known as:

benefit ceiling.

A common first step in interpreting survey data is to _____.

check for the accuracy of job matches

All of the following are advantages of flexible benefits EXCEPT:

decreased administrative expenses.

The second major decision in pay-level determination is to _____.

define the purpose of a survey

Trumbrella Corp. is a pharmaceuticals company. One of its employees reports that he had an on-the-job injury caused by slippery factory floor that broke his back. When Trumbrella initiates its claims processing, it should first:

determine whether the accident happened.

In recent years, some firms have tried to deal with the plateau effect and also accommodate the different career motivations of mature scientists and engineers through a(n) _____.

dual-career ladder

Popular stereotypes of salespeople characterize them as being heavily motivated by _____.

financial compensation

A recent article analyzing the results from over 100 executive pay studies shows that the best predictor of executive pay, by far, is _____.

firm size

When a firm is _____ on business risk, and its outcomes are _____, its performance is more likely to be higher without any incentive plans.

high; uncertain

The _____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment.

market pricing

The _____ minimizes the distortion of the central tendency caused by outliers.

median

DrenchFort Corp. is a small company that pays high wages. As its wages are high, it does not provide any benefits. Recently, it has noticed that its employee turnover has increased, so it decides to provide benefits to retain employees. Which of the following benefits is most likely to reduce turnover?

medical coverage

Surveys show that the most highly valued benefit is:

medical insurance

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

motivate better short-term performance

The biggest cost-containment strategy in recent years is the movement to:

outsourcing

Various studies have found that only two specific benefits curtailed employee turnover: _____ and _____.

pensions; medical coverage

If improved account retention became a major focus of attention, the performance measure stressed would be _____.

percentage account erosion

A(n) _____ awards cash or stock that is determined by an increase in stock price at a fixed future date.

phantom stock plan

All of the following are cost-containment practices designed to reduce benefit costs EXCEPT:

provision of skills development training.

Pay ranges:

reflect the differences in performance or experience that an employer wishes to recognize with pay.

The first step in setting competitive pay and designing a pay structure is to _____.

specify a pay-level policy

A team leader with a free-rider problem in his team can most likely maximize the performance of his team by:

specifying performance levels and due dates.

If you had repair work done on your car, the shop most likely used the _____ plan to pay the mechanic.

standard hour

TreeDen Corp. experiences an increase in employee turnover rate. Upon investigating, it discovers that employees are dissatisfied with the company's pay. Employees cannot see a direct link between their performance and their pay. They are also unhappy about having to pay out of their pockets to obtain grants. In this case, TreeDen is most likely using a _____.

stock ownership plan

All of the following support the use of individual incentives EXCEPT:

the presence of an union

Paying a dime for every bottle collected and turned into a collection center is an example of a:

straight piecework system.

Size of pay differentials between grades should _____.

support career movement through the pay structure

With easily sold products:

the base compensation tends to be more important.

In most organizations, the responsibility for managing a pay survey lies with _____.

the compensation manager

_____ is the most frequently used medium for communicating employee benefits.

An employee benefit handbook

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

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

As part of the efforts to bring down the employee benefits cost to the company, GrindStop Corp. restricts the number of visits to the dentists covered in the dental plan to two per year. Which of the following cost-containment strategies is used by GrindStop?

Benefit limitation

Mark and Steve work as crane operators in a construction company called Asai Corp. Asai uses a skill-based plan that establishes single flat rates for each skill level. Mark performs better than Steve even though Steve has more seniority. Which of the following statements is most likely to be true in this scenario?

Both Mark and Steve will be paid the same amount.

The _____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data.

Bureau of Labor Statistics

_____ allows employees who have resigned or have been laid off through no fault of their own to continue receiving health coverage under their employer's plan at a cost borne by the employee.

COBRA (1984)

In which of the following situations would the engineering jobs be most likely treated as a special compensation group?

Computer engineers employed at a software firm

Which of the following is the most commonly used team incentive performance standard?

Customer satisfaction measures

Which of the following companies uses probationary periods as a cost-containment measure?

DLG Corp. excludes its new recruits from benefit coverage until they complete a year

Which of the following is NOT an advantage of team incentives?

Easy to set equitable targets for all teams

Which of the following is the most popular executive perk offered by most companies?

Executive physicals

Which of the following is NOT true of merit bonuses?

They are more expensive than merit pay in the long run.

Which of the following is an advantage of gain-sharing plans?

They increase employees' knowledge of business.

Which of the following is an advantage of flexible benefit plans?

They increase the involvement of employees in choosing benefit plans.

In the regression equation, y = a + bx, job evaluation points are denoted by _____.

X

A benefit plan that allocates a set dollar amount to employees and allows them to select benefits is called _____ plan.

a flexible benefit

The most common approach to motivating executives to make decisions that are in the best interests of stockholders is _____.

a long-term incentive plan using stock options

Executives, supervisors, and sales staff often receive special compensation treatment because _____.

these jobs face conflicting demands

All of the following EXCEPT _____ would be considered a special compensation group.

unpaid interns

The authors argue that for merit pay to live up to its potential, all of the following should be done EXCEPT _____.

using more peer raters than supervisor raters

Which of the following benefits is NOT mandated by state or federal legislation?

work/life balance