Chapter 12
Which of the following U.S. organizations conducts an ongoing National Compensation Survey measuring wages, salaries, and benefits paid to the nation's employees? A. Bureau of Labor Statistics B. Society for Human Resource Management C. American Management Association D. AFL-CIO E. Bureau of Economic Analysis
A. Bureau of Labor Statistics
Mark and Chloe hold the same position at Rue & West Bros. However, Mark earns more than Chloe. Which of the following will justify the organization's decision to pay Mark more than Chloe? A. Mark meets higher productivity targets than Chloe. B. Mark comes from an economically weaker background. C. Mark is male. D. Chloe is younger than Mark. E. Chloe is not a U.S. citizen.
A. Mark meets higher productivity targets than Chloe.
Executive pay has drawn public scrutiny in recent years. Which of the following statements best explains the reason? A. Top executives' pay is much higher than average workers' pay. B. Most of the top executives' pay is in the form of a salary. C. Top executives come under the category of exempt employees. D. Top executives are paid in the form of commissions. E. Executives are denied short-term or long-term incentives with their pay.
A. Top executives' pay is much higher than average workers' pay
The _____ requires employers to make jobs available to their workers when they return after fulfilling military duties for up to five years. A. Uniformed Services Employment and Reemployment Rights Act B. Fair Labor Standards Act C. Equal Employment Opportunity Act D. National Labor Relations Board E. Family and Medical Leave Act
A. Uniformed Services Employment and Reemployment Rights Act
Pay ranges are most common for _____. A. white-collar jobs B. piece-rate jobs C. jobs that are covered by union contracts D. automotive workers E. construction workers
A. white-collar jobs
Which of the following elements establish an organization's pay structure? A. pay ranges and pay differentials B. cost control and equity C. legal requirements and job descriptions D. individual salaries of its employees E. job structure and pay level
E. job structure and pay level
Compa-ratio A. is defined as the ratio of average pay to the midpoint of the pay range. B. is defined as the ratio of the average pay for the grade divided by the minimum pay for the grade. C. can range from 0 to 100 percent. D. uses data from market-pay surveys. E. measures the degree to which new skills learnt are consistent with the increases in pay.
A. is defined as the ratio of average pay to the midpoint of the pay range.
Under the FLSA, exempt status of employees depends on their A. job responsibilities and salary. B. organizational commitment. C. job title. D. work experience. E. job qualifications.
A. job responsibilities and salary
Employees' conclusions about equity depend on A. what they choose as a standard of comparison. B. how much money they think the company CEO makes. C. what level of income they believe they should be at by this point in their lives. D. what benefits they receive. E. if they think they can bargain for a higher rate of pay.
A. what they choose as a standard of comparison.
Which of the following is a federal law that establishes a minimum wage and requirements for overtime pay and child labor? A. Fair Labor Standards Act B. Americans with Disabilities Act C. Family and Medical Leave Act D. Employee Retirement Income Security Act E. Equal Pay Act
A. Fair Labor Standards Act
Inverness Inc., a manufacturing company, believes that pay is an investment that can generate returns in attracting, retaining, and motivating a high-quality workforce. In this case, which of the following statements is true about Inverness? A. It considers its employees as resources. B. It gives the least importance to profits. C. It is a customer-friendly firm. D. It tries to keep its labor costs minimal. E. It helps employees find higher-paying jobs.
A. It considers its employees as resources.
Which of the following best defines an organization's job structure? A. It consists of the relative pay for different jobs within the organization. B. It is the average amount an organization pays for a particular job. C. It comprises the characteristics of jobs that the organization values and chooses to pay. D. It comprises regular pay, overtime pay, and bonuses. E. It refers to the standard amount that employers must pay under federal and state
A. It consists of the relative pay for different jobs within the organization.
Which of the following is a characteristic of delayering? A. It increases an organization's flexibility. B. It increases the opportunities for promoting employees. C. It sets pay according to the employees' level of knowledge. D. It encourages a climate of learning. E. It decreases the flexibility of managers in making assignments.
A. It increases an organization's flexibility.
Trevor, the human resource manager at XTech, is advising the company's business executives that paying more for labor than competitors can support the company's strategy. Under what conditions might Trevor's idea be most valid? A. XTech pays more to attract top talent, applying employees' knowledge to be more innovative than competitors. B. XTech intends to charge more for than competitors for the same kinds of products. C. XTech hopes other companies will eventually match XTech's pay scale. D. Labor costs are a large part of XTech's total costs. E. XTech is developing a low-price strategy that will generate more sales.
A. XTech pays more to attract top talent, applying employees' knowledge to be more innovative than competitors.
Which of the following will most likely be a result of using an unplanned approach, in which each employee's pay is independently negotiated? A. dissatisfied employees B. equal pay distribution C. rates that are stable D. easy employment E. cost control
A. dissatisfied employees
Which of the following statements is true about labor markets? A. Organizations compete to sell labor in the labor market. B. Competition for labor establishes the minimum an organization must pay to hire an employee for a particular job. C. Changes in the CPI do not affect the labor market. D. Cost-of-living considerations have little impact on labor-market rates. E. An organization's competitors in labor markets only include companies with different products.
B. Competition for labor establishes the minimum an organization must pay to hire an employee for a particular job.
Which of the following statements is true according to the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936? A. Under these laws, individuals aged 18 and 19 may not be employed in hazardous occupations defined by the Department of Labor. B. Federal contractors must pay their employees at rates at least equal to the prevailing wages in the area. C. The overtime rate applies to the hours worked beyond 45 in one week. D. Employers must pay a training wage to workers under the age of 15 for a period of up to 60 days. E. Organizations can defend themselves against claims of discrimination by showing
B. Federal contractors must pay their employees at rates at least equal to the prevailing wages in the area.
Which of the following statements is true about the Consumer Price Index (CPI)? A. The CPI helps organizations in the product markets decide an upper limit on the pay they will offer. B. Following and studying changes in the CPI helps employers prepare for changes in the demands of the labor market. C. The CPI helps organizations lure top-quality employees. D. The CPI helps control labor markets' demand for pay increases. E. The CPI helps organizations to compete with companies in other industries that hire similar employees.
B. Following and studying changes in the CPI helps employers prepare for changes in the demands of the labor market.
Which of the following statements is true of equal employment opportunity laws? A. These laws guarantee equal pay for whites and minorities. B. The goal of these laws is for employers to provide equal pay for equal work. C. Job descriptions and job structures cannot help organizations demonstrate that they are upholding these laws. D. These laws guarantee equal pay for men and women. E. Under these laws, employers cannot tie differences in pay to business-related considerations.
B. The goal of these laws is for employers to provide equal pay for equal work.
Which of the following statements is true of compensable factors? A. They are generally statistically derived. B. They are the characteristics of a job that a firm values and chooses to pay for. C. They refer to the factors that are important for setting the two-tier wage system. D. They describe all aspects of the jobs being evaluated. E. They are used to ensure equity among employees.
B. They are the characteristics of a job that a firm values and chooses to pay for.
Which of the following is the result of combining more assignments into a single layer, thus giving managers more flexibility in making assignments and awarding pay increases? A. outsourcing B. broad bands C. rightsizing D. benchmarks E. downsizing
B. broad bands
A pay policy line A. shows the mathematical relationship between the minimum pay and the maximum pay in an organization. B. can be generated using a statistical method called regression analysis. C. requires market-pay-rate data on all jobs in the organization. D. can seldom provide information on the market pay level for a given job evaluation. E. reflects the pay structure in the market, which always matches rates in the organization.
B. can be generated using a statistical method called regression analysis.
According to _____, people measure outcomes such as pay in terms of their inputs. A. expectancy theory B. equity theory C. retributive justice theory D. progressive justice theory E. economic theory
B. equity theory
Research on the effects of two-tier wage plans found that A. lower-paid employees were less satisfied on average than higher-paid employees. B. lower-paid employees were more satisfied on average than higher-paid employees because they made comparisons with lower-paying alternatives for themselves. C. lower-paid employees expected to be promoted into the second tier in a short time span. D. equity theory did not come into play for either group and neither group experienced more or less job satisfaction than the other. E. both existing employees and new employees have a similar pay rate.
B. lower-paid employees were more satisfied on average than higher-paid employees because they made comparisons with lower-paying alternatives for themselves.
Which of the following provisions is included in the Fair Labor Standards Act (FLSA)? A. personal finance B. minimum wage C. wage discrimination D. environmental hazards E. retirement plans
B. minimum wage
Which of the following is an adjustment to a pay rate to reflect differences in working conditions or labor markets? A. bonus B. pay differential C. green-circle rate D. rank-and-file adjustment E. red-circle rate
B. pay differential
Which of the following is a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job? A. pay grade B. pay range C. pay differential D. compa-ratio E. compensation differential
B. pay range
Overlapping _____ give the organization more flexibility in transferring employees among jobs, because transfers need not always involve a change in pay. A. pay rates B. pay ranges C. pay policies D. pay differentials E. pay ranks
B. pay ranges
An organization's choices about _____ are limited by its response to the economic forces of product markets and labor markets. A. pay rates B. pay structure C. pay differentials D. pay grades E. pay ranges
B. pay structure
Which of the following is a disadvantage of a pay structure that rewards employees for winning promotions? A. It does not focus on setting pay for groups of jobs. B. It does not make adjustments to a pay rate to reflect differences in labor markets. C. It discourages employees from gaining valuable experience through lateral career moves. D. It rewards employees for acquiring skills but does not provide a way to ensure that employees can use their new skills. E. It places the employer at an economic disadvantage relative to other employers that pay the market rate by raising the pay for some jobs.
C. It discourages employees from gaining valuable experience through lateral career moves.
Which of the following is an advantage of a two-tier wage system? A. It helps move jobs out of the country. B. It helps eliminate jobs without any legal hassles. C. It helps reduce labor costs without cutting employees' existing salaries. D. It helps provide more pay to new employees. E. It provides better standards for benchmarking.
C. It helps reduce labor costs without cutting employees' existing salaries.
Which of the following is a disadvantage of skill-based pay systems? A. It makes organizations inflexible. B. It reduces employee empowerment. C. It may result in paying employees for skills they don't use. D. It reduces opportunities for promoting employees. E. It limits the number of pay levels by delayering.
C. It may result in paying employees for skills they don't use
Which of the following statements is true about a product market? A. The cost of labor does not affect the product market because it is an insignificant part of an organization's costs. B. Product-market considerations are of particular concern to a company when its customers place greater importance on product rather than price. C. Organizations in a product market are competing to serve the same customers. D. Product markets typically place a lower limit on the pay an organization will offer its employees. E. Organizations in a product market must increase the cost of labor every quarter.
C. Organizations in a product market are competing to serve the same customers.
Which of the following statements is true of the FLSA requirements for overtime pay? A. The overtime rate is one and a half times the employee's hourly rate, excluding any bonuses or piece-rate payments. B. Time worked includes hours spent on production or sales, but not on activities such as attending required classes, cleaning up the work site, and so on. C. Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours. D. Everyone is eligible for overtime pay. E. Most workers paid on an hourly basis are exempt and therefore not subject to the laws governing overtime pay.
C. Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours.
Under the FLSA, which of the following statements is true of child labor? A. Children aged 18 and 19 may not be employed in hazardous occupations defined by the Department of Labor. B. Children aged 14 and 15 may not be employed in any work associated with interstate commerce. C. The FLSA's restrictions on the use of child labor apply to children younger than 18. D. Children aged 18 and 19 may work only outside school hours, in jobs defined as nonhazardous, and for limited time periods. E. All the states have laws requiring working papers or work permits for minors.
C. The FLSA's restrictions on the use of child labor apply to children younger than 18.
Which of the following is a drawback of setting pay rates based strictly on a pay policy line? A. It increases the administrative burden of managing the compensation system. B. Employees have difficulty interpreting regression analysis. C. The estimated pay for a job may not reflect conditions in the labor market. D. It increases the costs of surveying the market. E. It groups jobs, which will result in rates of pay for individual jobs that precisely match the levels specified by the market.
C. The estimated pay for a job may not reflect conditions in the labor market.
According to the FLSA, which of the following individuals is most likely a nonexempt employee? A. the CEO B. a senior administrative employee C. an hourly paid employee D. an HR manager E. the director of marketing
C. an hourly paid employee
Although labor and product markets limit organizations' choices about pay levels, there is a range within which organizations can make decisions. The size of this range depends on the A. minimum and maximum wages fixed by the government. B. pay of federal contractors. C. organization's competitive environment. D. quality of employees. E. organization's global reputation.
C. organization's competitive environment.
Organizations under pressure to cut labor costs may respond by A. retaining staff levels. B. providing pay increases to prevent employee turnover. C. postponing hiring decisions. D. requiring employees to bear less of the cost of benefits such as insurance premiums. E. avoiding automation of routine tasks.
C. postponing hiring decisions
Which of the following sentences best describes a situation that comparable-worth policies were designed to address? A. In a manufacturing company, there are no female managers. B. A consumer products company has been sued for racial discrimination. C. An agency works with a supermarket's HR department to design a job that could be held by people with mental disabilities. D. In a city government, positions mostly held by women pay less than positions mostly held by men. E. At a utility company, jobs that involve physical strain and danger pay more than office jobs.
D. In a city government, positions mostly held by women pay less than positions mostly held by men.
Which of the following statements is true about job-based pay structures? A. A pay structure that rewards employees for winning promotions will encourage them to gain valuable experience through lateral career moves. B. Their focus on higher pay for higher status can work in favor of efforts for empowerment. C. They typically reward desired behaviors, particularly in a rapidly changing environment. D. Organizations may avoid change because it requires repeating the time-consuming process of creating job descriptions and related paperwork. E. They always encourage flexibility, innovation, quality, and customer service.
D. Organizations may avoid change because it requires repeating the time-consuming process of creating job descriptions and related paperwork.
Which of the following statements is true about skill-based pay? A. Skill-based pay provides a way to ensure that employees can use their new skills. B. Gathering market data about skill-based pay is easy. C. Skill-based pay ensures that the employer pays the employee for learning skills that benefit the employer. D. Skill-based pay does not necessarily provide an alternative to the bureaucracy and paperwork of traditional pay structures. E. Skill-based pay does not require records related to skills, training, and knowledge acquired.
D. Skill-based pay does not necessarily provide an alternative to the bureaucracy and paperwork of traditional pay structures.
Which of the following statements is true about pay ranges? A. Pay ranges are most common for blue-collar jobs and those covered by union contracts. B. Pay ranges are widest for employees who are at lower levels in terms of their job evaluation points. C. Pay ranges generally are designed so that they do not overlap. D. The market rate or the pay policy line generally serves as the midpoint of a range for the job. E. The less overlap, the more flexibility in transferring employees among jobs.
D. The market rate or the pay policy line generally serves as the midpoint of a range for the job.
Which of the following is a disadvantage of broad bands? A. They reduce managers' flexibility in making assignments. B. They always result in pay decreases. C. They increase the number of levels in the organization's job structure. D. They reduce the opportunities for promoting employees. E. They discourage employees from gaining valuable experience through lateral career moves.
D. They reduce the opportunities for promoting employees.
Assuming an organization wants to motivate employees through promotions, and assuming enough opportunities for promotions are available, the organization would want to A. increase the overlap from one level to the next. B. reduce its compa-ratio to less than 1. C. implement a broadband pay structure. D. limit the overlap from one pay range to the next. E. use a fixed interval promotion policy.
D. limit the overlap from one pay range to the next.
Which of the following statements is true about key jobs? A. Organizations usually have no survey data available for key jobs. B. Key jobs are jobs that have highly unstable content. C. Key jobs are jobs that are unique among organizations and are rare to obtain. D. Organizations make the process of creating a pay structure more impractical by defining key jobs. E. A job with a higher evaluation score than a particular key job would receive higher pay than that key job.
E. A job with a higher evaluation score than a particular key job would receive higher pay than that key job.
Which of the following is a drawback of a minimum wage in terms of social policy? A. It assumes people will take differences in pay into account when they choose a career. B. It is one and a half times the employee's usual hourly rate. C. It applies only to the hours worked beyond 40 in one week. D. It places the employer at an economic disadvantage relative to employers that pay the living wage. E. It tends to be lower than the earnings required for a full-time worker to rise above the poverty level.
E. It tends to be lower than the earnings required for a full-time worker to rise above the poverty level.
Which of the following is a drawback of a comparable-worth policy? A. A free-market economy assumes people will not take differences in pay into account when they choose a career. B. Employees may conclude that pay rates are unfair. C. The courts prohibit organizations from defending themselves against claims of discrimination by showing that they pay the going market rate. D. Grouping jobs will result in rates of pay for individual jobs that do not precisely match the levels specified by the market and the organization's job structure. E. Raising pay for some jobs places the employer at a disadvantage relative to employers that pay the market rate.
E. Raising pay for some jobs places the employer at a disadvantage relative to employers that pay the market rate.
_____ means that an employee is paid a given amount regardless of the number of hours worked or quality of the work. A. Pay level B. Nonexemption C. Pay policy line D. Piecework rate E. Salary basis
E. Salary basis
Spark Inc., a manufacturing company, hires employees ranging in age from 14 to 25. Which of the following practices by Spark would ensure that it complies with child labor laws? A. The employees are all paid the same amount. B. The teenage employees earn a training wage for the first year. C. Only the workers over 20 earn overtime pay. D. All the employees have part-time schedules. E. The employees aged 14 and 15 work only in office jobs and for limited time periods
E. The employees aged 14 and 15 work only in office jobs and for limited time periods
The Walsh-Healy Public Contracts Act of 1936 A. requires that a lower "training wage" be paid to workers under the age of 20 for a period of up to 90 days. B. mandates that employers pay higher wages for overtime, defined as hours worked beyond 40 hours per week. C. covers construction contractors that receive more than $2,000 in federal money. D. requires general contractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the prevailing local wage rates. E. covers all government contractors receiving $10,000 or more in federal funds.
E. covers all government contractors receiving $10,000 or more in federal funds
The Davis-Bacon Act of 1931 A. requires that a lower "training wage" be paid to workers under the age of 20 for a period of up to 90 days. B. mandates that employers pay higher wages for overtime, defined as hours worked beyond 40 hours per week. C. requires general contractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates found prevailing in the locality. D. covers all government contractors receiving $10,000 or more in federal funds. E. covers construction contractors that receive more than $2,000 in federal money.
E. covers construction contractors that receive more than $2,000 in federal money
Pay policies are one of the most important human resource tools for A. reducing competition in the product market. B. automating routine activities. C. persuading customers that high quality is worth a premium price. D. making decisions about product pricing. E. encouraging desired employee behaviors.
E. encouraging desired employee behaviors.