MGT of Compensation Chapter 16

Which of the following are included in the employment relationship as part pf the social contract?

-All enterprise owners -The government -All employees

Which of the following are the determinants of base pay in Japanese pay systems?

-Career category -Years of service -Skill/performance level

Which of the following limit managerial autonomy?

-Governments -Trade unions -Corporate policies

Which of the following are the determinants of base pay in German pay systems?

-Job descriptions -Job evaluations -Employee age

Identify the "three pillars" of Japan's employment relationships.

-Lifetime security within the company -Enterprise unions -Seniority-based pay and promotion systems

Which of the following institutional factors are specifically related to international compensation?

-Social contracts -Cultures -Trade unions -Employer federations

Which of the following have brought changes to traditional German pay systems?

-Technological changes -Global competitive pressures

What are the advantages of hiring local country nationals?

-They are familiar with local conditions and have associations with local customers, suppliers, and government regulators. -They help the company save on relocation expenses and other major expenses associated with the hiring of expatriates.

What are the objectives of the balance sheet approach?

-To ensure that expatriates neither gain nor lose financially -To ensure mobility of people to global assignments

What are the legally mandated benefits in Japan?

-Unemployment compensation -Social security -Workers' compensation

Individualistic national cultures such as the United States, United Kingdom, and Hong Kong (features of different types of countries)

A pay structure that features person-based pay and performance-based increases is appropriate for these countries.

Which of the following is a change introduced in the Japanese pay system?

Some companies have eliminated seniority-based pay.

Localization (meanings of alternatives to the balance sheet approach)

This associates salary to the host country's salary scales and provides some cost-of-living allowances for taxes, housing, and dependents.

Negotiation (meanings of alternatives to the balance sheet approach)

This means an employer and employee find a mutually agreeable package.

Bind Communications Corp., a major telecommunications equipment manufacturer, restructures its business by relocating its hardware and equipment manufacturing division to a low-wage country. In this scenario, which of the following is true of the company's strategy?

This strategy is likely to help the company reduce labor costs.

Nationalistic demands of hiring locals can be satisfied by providing employment to local country nationals.

True (avoids concerns about employees adapting to the local culture. Employment of LCNs satisfies nationalistic demands for hiring locals. Only rarely do organizations decide that hiring LCNs is inappropriate.)

Workers in Japanese pay systems receive annual wage increments irrespective of the degree of their performance until age 50.

True (salary increases with age until workers are 50 years old, when it is reduced. Employees can expect annual increases no matter what their performance level until age 50, although the amount of increase varies according to individual skills and performance.)

Which of the following statements is true of countries with centralized pay-setting?

Wage bargaining occurs primarily at the industry level.

Which of the following statements is true of countries with decentralized pay-setting?

Wage bargaining occurs with little government participation.

In German pay systems, various ____ ____ are worked out for all industrial sectors by employers and unions.

tariff agreements

Most employers pay income tax dues to the host country and/or the home country through ____ ____

tax equalization

To comprehend international compensation, organizations must first ascertain _____.

the degree to which certain contextual factors constrain their compensation decisions and practices

Pay systems in Germany (features of different traditional pay systems)

They tend to be more bureaucratic and rule-bound.

Companies adjust the pay of employees who transfer among different countries in order to maintain the same level of ____ ____

purchasing power

Which of the following is true of norms in the balance sheet approach to determine expatriate compensation?

They are based on surveys conducted by consulting firms.

Pay systems in the United States (features of different traditional pay systems)

They are consistent with higher turnover and greater skepticism about change.

Pay systems in Japan (features of different traditional pay systems)

They are consistent with low turnover/high commitment and high security.

In the context of pay systems, which of the following is a feature of exporters?

They develop a total pay system at headquarters that is to be used at all global locations.

In the context of pay systems, which of the following is true of globalizers?

They pursue a system that can be used to support consistency across all global locations.

The variations in wage flexibility across countries are not related to regulatory restrictions.

False (degree of bargaining centralization and regulatory restrictions)

Low-power-distance nations such as Australia and the Netherlands (features of different types of countries)

An egalitarian approach to pay structures is appropriate for these countries.

Which of the following companies is most likely to reduce its labor costs?

Anertia Inc., an American laptop manufacturer that has decided to outsource the assembly of its products to China

Which of the following is true of employee benefits and allowances in Japanese pay systems?

Company housing usually takes the form of dormitories for single employees.

Which of the following is a feature of Japanese pay systems?

Emphasis on the person rather than the job

A relatively inflexible labor market in Germany has made it harder for employers to expand to other EU countries.

False (A relatively inflexible labor market means that employers are finding it easier to move to (or expand in) other EU countries (e.g., just across the border to countries like Poland where labor costs are much lower) as well as to China and India.)

High-power-distance nations, such as Malaysia and Mexico (features of different types of countries)

Hierarchical pay structures are appropriate for these countries.

In the context of the employment relationship, which of the following is true of the social contract in the United States?

It is characterized by the expansion of the role of government in the automobile and financial services industries.

Julia is a systems architect at a global information technology company. The company intends to relocate Julia from Palo Alto, California to one of its units in Manila. Before doing so, the company compares the living costs and standards between Palo Alto and Manila and appropriately decides on a compensation package. In this scenario, what is the intent of the company in comparing living costs and standards between the two cities?

It is meant to maintain the same level of purchasing power.

_____ are citizens of a foreign nation where a parent employer operates.

Local country nationals

Which of the following is a feature of German pay systems?

Over 90 different laws apply to pay decisions.

Pay systems in Japan (pay objectives of different traditional pay systems)

Pay objectives focus on the long term (age and security) and support high commitment (seniority-based/ability-based).

Pay systems in the United States (pay objectives of different traditional pay systems)

Pay objectives focus on the shorter term (less job security), are market-sensitive, and emphasize cost control (variable pay based on performance).

Pay systems in Germany (pay objectives of different traditional pay systems)

Pay objectives include mutual long-term commitment, security, egalitarian pay structures, and cost control through tariff agreements.

Which of the following is true of bonuses in a traditional German pay system?

Performance-based bonuses have not been part of a traditional German pay system for unionized workers.

Which of the following can be considered an indicator of employment regulation?

The flexibility that employers have to hire and fire workers

Which of the following is true of bonuses in Japanese pay systems?

They are a form of supplementary pay equivalent to 1 to 5 months of annual salary.

Most North American, European, and Japanese global firms combine the elements of expatriate compensation in a ____ ____ ____

balance sheet approach

The _____ sets wages according to the home-country system and provides employees large amounts of money to offset variations in standards of living.

cafeteria approach

In the context of the balance sheet approach to determine expatriate compensation, norms are meant to reflect _____ in the home country for an individual at a particular salary level with a particular family pattern.

consumption patterns

____ is defined as shared mental programming which is rooted in the values, beliefs, and assumptions held in common by a group of people and which influences how information is processed.

culture

____ are workers temporarily working and residing in a foreign nation.

expatriates

Global Supply Chain Associates Corp., a multinational logistics company, uses ____ ____ ____ ____, which essentially use pay for performance, worker engagement in decisions, use of teams, and ability/performance-based recruitment and growth.

high performance work systems

Goodspro Inc., a global manufacturing firm, uses management practices that involve hiring and promoting employees based on ability and performance, paying employees based on their performance, and including employees in decision-making processes. In this scenario, Goodspro Inc. most likely uses a(n) _____.

high-performance work system

The base salary and incentives for expatriate jobs is usually ascertained through _____ or some system of "job leveling."

job evaluation

Faced with the pressures of controlling labor costs and/or increasing productivity, many Japanese companies are trying to maintain ____-____ ____ and are finding ways to reward less senior employees.

long-time employment

The extent of discretion managers possess to make total compensation a strategic tool is referred to as ____ ____

managerial autonomy