MNGT 433 - Chapters 7-18

False

A 401 (k) is an example of a defined benefit plan.

A. Red circle

A ____ rate is when an employee is paid more than the maximum of their pay grade. A. Red circle B. Yellow circle C. Blue circle D. Green triangle

B. Lump-sum bonus

A _____ requires annually "re-earning" the added pay. A. Success sharing plan B. Lump-sum bonus C. Profit-sharing plan D. Individual inventive plan

True

An IRA is retirement savings plan that is not managed by an employer.

True

Contingent workers are usually considered candidates for special compensation.

A. Financial; the balanced scorecard

Dissatisfaction with ______ performance indicators for group incentives has led to greater use of _____. A. Financial; the balanced scorecard B. Human resource capabilities; financial measures C. Financial; customer-focused measures D. The balanced scorecard; resource utilization measures

False

Generally, team-based incentives are more attractive than individual incentives.

False

Halo error is when performance at the end of a rating period has a large influence on the rating for the entire period.

False

If a man's wife died while driving a truck for her employer, and if she was responsible for the accident, the husband is not eligible to receive compensation for the loss.

True

If federal and state minimum wage laws cover the same job, workers should be paid at or above the higher rate.

C. Alternation

In _______ ranking, raters look at a list of employees, decide who the best employee is, and cross that person's name off the list. From the remaining names, the manager decides who the worst employee is and crosses that name off the list - and so forth. A. Paired-comparison B. Straight C. Alternation D. Forced distribution

A. Defined benefit

In a ____ plan an employer agrees to provide a specific level of retirement pension, which is expressed as either a fixed dollar or a percentage-of-earnings amount that may vary (increase) with years of seniority in the company. A. defined benefit B. Noncontributory benefit C. 401 (k) D. Shared-benefit

True

Keeping a performance diary helps employers defend against discrimination charges stemming from performance ratings.

True

Risk-sharing plans include a provision for cuts in base pay that are only recaptured in years when the organization meets performance objectives.

True

The Pension Benefit Guarantee Corporation protects vested benefits of people in terminated pension plans.

D. Market pricing

The ____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment. A. Job structure B. Broad banding C. Reference rate D. Market pricing

D. Tenure

The balanced scorecard includes all of the following performance categories except: A. Innovation B. Customer service C. Process improvements D. Tenure

True

The basic purpose of Social Security is to provide basic financial security for Americans and their families.

A. Increased use of variable pay

The biggest trend in supervisory pay is ______. A. Increased use of variable pay B. paying overtime at time-and-a-half C. Maintaining a differential above the highest paid subordinate D. Offering stock options and enhanced benefits

C. Hybrid

The most common pay policy is _____. A. Lead B. Lag C. Hybrid D. Match

False

The two types of discrimination recognized in law are valuation discrimination and disparate treatment.

True

When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey.

1. Social Security 2. Unemployment 3. Workers' Compensation

Which are the benefits required by statutory law? (3)

Lump-sum costs less over time

Why do companies prefer lump-sum pay over merit pay increases?

A. An acceptable appraisal system

A key factor in increasing trust in top management is _____. A. An acceptable appraisal system B. High base pay C. Stock options D. A well-designed price rate system

D. Reduction in force

A major advantage of a ____ is that it reduces benefits costs, something that the other options ordinarily do not achieve. A. Reduction in hours B. Furlough C. Pay cut D. Reduction in force

True

A major problem with Social Security is a rising number of retirees without a corresponding increase in contributors.

B. Links a company's benchmark jobs with market rates paid by competitors

A market pay line _____. A. Reflects an organization's internal alignment policy B. Links a company's benchmark jobs with market rates paid by competitors C. Provides an accurate prediction of an organization's entry level pay rates D. Compares an organization's minimum and maximum pay rates for each skill level

A. Lead

A pay policy most likely to reduce pay dissatisfaction is ____. A. Lead B. Employer of choice C. Hybrid D. Match

True

A pay range exists when at least two employees in the same job are paid different rates.

D. Pay similar wages

A relevant labor market includes all employers who compete in one or more of the following areas except _____. A. Employees in the same geographic area B. The same occupations or skills C. The same products and services D. Pay similar wages

A. Less productive

A small lawn care company has two mowers and four employees. If it hires another employee, how productive will productivity of the fifth employee compare to the current four employees? A. Less productive B. More productive C. The same D. There is not enough information to determine productivity

C. Workers covered by the ADA

All of the following except ____ would be considered a special compensation group. A. Sales staff B. Contingent workers C. Workers covered by the ADA D. Professionals

True

An important implication of reinforcement theory is that when employees receive pay is important

False

An individual employee cannot earn more pay than the maximum of the pay grade of their current job.

D. Contingent worker

Anyone hired through a temporary-help agency, on a on-call basis, or as an independent contractor is a _____. A. Primary worker B. Regular worker C. Permanent worker D. Contingent worker

False

As benefit costs have skyrocketed, especially health care, the popularity of employee benefits have declined.

A. Spent too much time preparing the ratings.

As the compensation manager for a small company, the CEO has asked you to explain why an experienced supervisor gave many employees who reported to her inaccurate performance ratings this year. Which of the following factors is not a likely cause for the behavior? The supervisor: A. Spent too much time preparing the ratings B. Feels guilty C. Dislikes confrontation D. Failed to observe actual performance

A. Ageing, trending

Because employers are raising employee pay at various times during the year, survey data must be updated using a process called ______ or ______. A. Ageing, trending B. Ageing, smoothing C. Trending, leveling D. Gaining, smoothing

True

Benefits can be an effective tool to attract and retain employees when benefits address needs of a target group.

True

Both pay level and pay mix decisions focus on two objectives: (1) control costs and increase revenues and (2) attract and retain employees.

C. Sorting effect

Company X pays for performance. Allan, an employee of the company, is not in favor of this reward system, and, therefore, leaves Company X in search of another company with different rules for getting rewards. This is an example of the: A. Design effect B. Compensation effect C. Sorting effect D. Incentive effect

Disparate treatment is an intentional treatment or action against a protected class; disparate impact is a policy or procedure that negatively impacts a protected class, whether intentionally or unintentionally.

Compare and contrast disparate treatment and disparate impact.

Risk-sharing plans share both, gains and losses; success-sharing plans share only gains

Compare risk sharing and success-sharing plans.

A. Give employers and employees the option of trading overtime pay for time off

Compensatory time off would _____. A. Give employers and employees the option of trading overtime pay for time off B. Provide employees overtime pay after 8 hours for a 10-hour workday C. Allow an employer flexibility in the use of "on-call" employees D. Enable employers to monitor the employment practices of subcontractors

D. Fewer, less

Contingent workers receive ___ benefits than regular workers; contingent workers' benefits cost employers ___ than regular workers. A. more, less B. Fewer, more C. More, more D. Fewer, less

A. Access

Denial of jobs, promotions, or training opportunities to qualified women or minorities are examples of _____ discrimination. A. Access B.Valuation C. Disparate treatment D. Preferential treatment

False

Disparate treatment occurs when a seemingly neutral employment practice disproportionately excludes a protected group from employment opportunities.

True

Employers who have frequent layoffs pay higher unemployment rates than those with few layoffs.

D. Supervisors

Equity is the major compensation challenge for _____. A. Sales staff B. Professionals C. Executives D. Supervisors

A. These jobs face conflicting demands

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

1. Employee development potential 2. Easy to administer 3. Personnel research potential 4. Cost 5. Validity

How do you define a good appraisal format? (5)

True

In determining the compensation strategy, a major strategic decision is whether to mirror what competitors are paying.

False

In the formula (behavior = f(M, A, E)), M stands for monetary incentives

B. Management by objectives

In what type of system are annual goals established and passed down through the organization? A. Performance standards review B. Management by objectives C. Forced distribution D. Total Quality Management

True

Incentive effect means pay can motivate people to perform better.

True

Independent contractors generally are less expensive for employers since they receive no benefits.

True

Individual incentives yield higher productivity gains.

A. She will likely receive workers' compensation benefits.

Jennifer is hurt at work while driving a forklift. Her employer claims that she was driving too fast and therefore she is responsible for her own injury and is not eligible for workers' compensation. What will be the outcome of the employer's challenge to her worker's compensation claim? A. She will likely receive workers' compensation benefits. B. She will get nothing C. Jennifer and her employer will share the blame and split the costs. D. The employer has the final word in determining Jennifer's eligibility.

C. Job evaluation

Job structure is to ____________ as pay structure is to pay-policy line. A. market line B. Pay surveys C. Job evaluation D. Reference rates

D. Spillover

Last year your performance was not very good and your performance rating was below average, but this year you have done very well exceeding your performance goals. To your surprise, your boss gives your just an average performance rating. What error has your boss most likely committed? A. Horn B. Halo C. Severity D. Spillover

True

Many employers achieve flexibility and control employment costs by utilizing contingent workers rather than expanding and contracting the core workforce.

True

Market lines may be constructed by either freehand drawing or linear regression.

False

Medicare is not part of Social Security.

True

Most employers prefer defined contribution pension plans to defined benefit plans.

B. The marginal product of labor

Output associated with hiring an additional person, holding constant other production factors, is referred to as: A. Productivity B. The marginal product of labor C. Incremental productivity D. The marginal revenue product of labor

True

Over time, lump-sum bonuses cost employers less than merit pay.

B. Labor costs

Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the: A. Margins B. Labor costs C. Return on investments D. Fixed costs

True

Pay ranges for managerial jobs are larger than ranges for other jobs because these jobs have greater opportunity for both discretion and performance than lower level jobs.

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

Pay ranges: A. Are flexible enough to deal with differences in quality, but not with the productivity or value of these quality variations. B. Usually lead to an increase in employee turnover. C. Reflect the differences in performance or experience that an employer wishes to recognize with pay. D. Cause employees to believe that their compensation can increase by only a limited amount.

True

Pay surveys include information about all forms of cash compensation and benefits.

True

Performance-dimension training provides raters with a standard of comparison or frame of reference for making appraisals.

True

Requiring raters to provide written justification of their ratings improves rating accuracy.

False

Stores that label each item's price or ads that list a job opening's starting wage are examples of bourses.

True

Supervisors' ratings are less likely to terminate employees for performance when unemployment is low.

B. Are anomalies

Survey data from one or a few employers that are significantly out of line with other employers _____. A. Are deviant data B. Are anomalies C. Reflect a diverse sample D. Are standard deviations

False

The Employee Retirement Income Security Act states that employers must offer a retirement plan to their employees if they work at least 1,250 hours per year.

False

The Employment Retirement Income Security Act (1974) requires employers to offer some form of pension.

C. Design grades and ranges

The final major decision in pay-level determination is _____. A. Interpret and apply results of survey B. Obtain top-management acceptance of final decisions C. Design grades and ranges D. Draw policy lines

False

The first question in designing merit guidelines is how much of an increase does it take for employees to recognize the raise as a real increase.

A. Check for the accuracy of job matches

The first step in interpreting survey data is _____/ A. Check for the accuracy of job matches B. Seek out non-respondents C. Check for fraudulent data D. Remove the top and bottom paying companies

A. Specify pay-level policy

The first step in setting competitive pay and designing a pay structure is _____. A. specify pay-level policy B. Conduct job evaluation C. Draw policy lines D. Specify relevant market

D. Objectives, measures, eligibility, and funding

The key to designing a pay-for-performance system rests on standards. Specifically, managers need to be concerned about the: A. Objectives, structure, eligibility, and funding B. Strategy, measures, structure, and equity C. Structure, efficiency, equity, and funding D. Objectives, measures, eligibility, and funding

C. Appraisals are too subjective

The major complaint of both managers and employees regarding the appraisal process is that: A. Appraisals were not helpful in guiding improvement B. Reviews don't differentiate between poor, average, and good performance C. Appraisals are too subjective D. Rating forms are too complex and time consuming

D. Federal legislation mandating these provisions

The major reasons motivating U.S. corporations to provide domestic partner benefits include all of the following except: A. Fairness to all employees regardless of their sexual orientation or marital status B. Market competition C. Diversity in today's tight labor market D. Federal legislation mandating these provisions

False

The percent of companies using some form of variable pay is declining because many employees prefer base wages.

True

The point of the behavior = f(M, A, E) model is that, though very important, compensation alone cannot change employee behavior.

B. Define purpose of survey

The second major decision in pay-level determination is _____. A. Specify relevant market B. Define purpose of survey C. Design and conduct survey D. Select product and labor market competitors

True

To be eligible for FMLA, an employee has to have worked for an employer at least 1,250 hours in the previous year.

D. Employer taxes paid to both federal and state funds

Unemployment insurance is usually financed by: A. Joint contributions by employee and employer B. Employer, employee, and state contributions C. Federal, state, and employee contributions D. Employer taxes paid to both federal and state funds

False

Unlike employment tests, performance appraisals are not subject to the same EEO regulations.

B. Individual spot awards

Usually _____ are awarded for exceptional performance, often on special projects or for performance that so exceeds expectations as to be deserving of an add-on bonus. A. Variable pay awards B. Individual spot awards C. Lump-sum bonuses D. Merit pay

True

Vesting is the amount of time an employee must work for ab employer to be entitled to their employer's contributions to a pension.

1. Employers always seek to maximize profits 2. People are homogeneous & therefore interchangeable 3. Pay rates reflect all costs associated with employment 4. Markets faced by employers are competitive

What are the basic assumptions of labor market theories? (4)

1. Objectives 2. Measures 3. Eligibility 4. Funding

What are the four standards managers need to focus on when designing a pay-for-performance system?

1. Regulatory requirements 2. Employee relations 3. Voluntary turnover 4. Costs 5. Little room for reduction in lean companies

What are the potential problems associated with headcount reductions? (5)

A positively sloped line that summarizes the distribution of going rates paid by competitors in the market by linking benchmark jobs with market rates.

What is a market line?

Begins with an estimate from top management of the pay increase budget for the entire organization

What is the top-down method of budgeting?

B. HIPPA

Which of the following acts has caused HR and information technology staff considerable difficulty regarding compliance and privacy? A. COBRA B. HIPPA C. FMLA D. ERISA

B. Pensions

Which of the following benefits are not mandated by state or federal legislation? A. Workers' compensation B. Pensions C. Social Security D. Unemployment insurance

D. A product on Amazon

Which of the following is an example of a quoted-price? A. A product on e-Bay B. A product on Priceline C. A used car D. A product on Amazon

C. Pension and retirement benefits

Which of the following is not a benefit that is required by statutory law? A. Workers' compensation B. Social Security C. Pension and retirement benefits D. Unemployment compensation

C. Competitor production costs are lower

Which of the following is not a reason a company might pay base wages above market competitors? A. Employees are more productive B. Turnover will be lower C. Competitor production costs are lower D. To attract more job applicants

C. Quartiles and percentiles

Which of the following is often used to set pay ranges? A. Median B. Weighted mean C. Quartiles and percentiles D. Standard deviation

C. They assume that little value is added through internal alignment.

Which of the following statements is true about market pricers? A. They align pay structures with the business strategy. B. Their pay structures are unique and difficult to imitate. C. They assume that little value is added through internal alignment. D. They emphasize pay structures based on unique technology or the way work is organized.

C. Standard deviation

Which of the following statistical measures shows how similar or dissimilar the market rates are from each other? A. Weighted mean B. Mean C. Standard deviation D. Median

True

Workers' compensation covers the costs of both medical expenses and rehabilitation for work-related injuries.

D. Workers' compensation

____ has been described as a major cost of doing business. A. Social Security B. Unemployment insurance C. FMLA D. Workers' compensation

D. Motivation

_____ involves identifying what is important to a person and offering it to them in exchange for some desired behavior. A. Conditioning B. Goal setting C. Empathy D. Motivation

B. The total compensation for a top athlete

_____ is an example of a bourse. A. The stated starting wage of a job in an ad B. The total compensation for a top athlete C. The price of a product on Amazon D. The price of a box of cereal at a grocery store

B. Top-down budgeting

_____ is the budgetary approach that begins with an estimate from top management of the pay increase budget for the entire organization. A. Bottom-up budgeting B. Top-down budgeting C. Managerial plan D. Executive estimate budgeting

D. Pay level

_____ refers to the average of the array of rates paid by an employer. A. Cost to the company B. Remuneration C. Compensation D. Pay level

C. HIPPA

_____ was designed to reduce an employer's ability to deny coverage to an employee based upon a preexisting condition. A. COBRA B. OSHA C. HIPPA D. FMLA

D. COBRA 1984

______ allows employees who have resigned or were laid off to continue to purchase health insurance under their employer's plan. A. Health Maintenance Act 1973 B. FLSA 1938 C. Tax reforms of 1982, 1986 D. COBRA 1984

C. Lump-sum bonus

______ is an individual level form of performance pay. A. Risk sharing B. Gain sharing C. Lump-sum bonus D. Success sharing

A. The balanced scorecard

______ offers a reward pool based upon achieving performance targets and communicates organizational priorities. A. The balanced scorecard B. Stock options C. Deferred profit sharing D. Cash profit sharing

C. FMLA 1993

_______ mandates 12 weeks of leave for all workers at companies that employ 50 or more people. A. Health Maintenance Act 1973 B. FLSA 1938 C. FMLA 1993 D. COBRA 1984