MGMT 494 Final
Under cliff vesting arrangement, after how many years must full vesting rights be granted?
3
Which of the following is covered by Medicare Part A?
Inpatient hospital care
This term refers to the minimum pay increase that employees view as a significant change in their compensation account
Just-meaningful pay increase
Many people are concerned that raising the minimum wage rate will do which of the following?
Lead to higher unemployment
Which set of rules prohibit employers from discriminating in favor of highly compensated employees in contributions or benefits, availability of benefits, rights, or plan features?
Nondiscrimination rules
Who is ultimately responsible for making compensation policy decisions?
Top management
Which one of the following racial groups is expected to have the slowest labor force participation growth rate through the year 2022?
white
Under which pay system do employers feel that hourly costs, training costs, and overhead costs can be high?
Person-focused pay
________ group jobs based on similar compensable factors for the purpose of pay policy application.
Pay grades
Tuition reimbursement and day care assistance fall under which of the following categories?
Service practices
John has been employed for 15 years with a textile company that produces men's shirts. John has received incentive pay for most of the 15 years of his employment. What is the term an economist would use to classify this longevity of employment?
Sorting effect.
Minimum wage, overtime pay, and child labor provisions are covered by which federal law?
The Fair Labor Standards Act of 1938
Which of the following would be correct regarding person-focused pay programs?
The stair-step model addresses depth, while the skill blocks model emphasizes both horizontal and vertical skills
When awarding person-focused pay to autonomous work teams, which types of skills are emphasized for team members?
Vertical skills
Companies traditionally competed for qualified candidates on the basis of ________.
base pay
A key difference between merit pay and incentive pay is that supervisors generally ________.
communicate in advance about the incentive pay amounts, but do not communicate in advance about the merit awards
One of the advantages of introducing incentive pay instead of merit pay for cyclical industries such as retail sales is that ________.
compensation expenses can be minimized with incentive pay
One of the threats unions face is offshoring, which is part of the globalization phenomenon. Offshoring refers to the migration of all or a significant part of the development, maintenance, and delivery of services to a company in another ________.
country
Pay mix policy may be expressed in ________.
currency or as a percentage of total dollars spent on compensation
A relevant labor market can be defined on the basis of all of the following EXCEPT ________.
customer type
When workers in Los Angeles, California, make 20% more than workers nationwide, this is an example of ________.
relative pay differential
Martina is a sales manager in a major department store. Two independent job analysts have listed Martina's duties, which match the sales manager job description. This approach is known as the ________.
reliable job analysis method
Sams' hourly pay rate is $10. She worked 45 hours this workweek. How much should she be paid?
$475 (time and a half)
A worker, who is considered part-time, works less than how many hours a week?
35
Compensation professionals must be aware of certain characteristics of compensation surveys. Which statement about compensation surveys is FALSE?
Compensation surveys represent real-time data.
A company using this competitive strategy seeks to offer a product or service that is completely unique from other competitors in their market segment
Differentiation strategy
Intentionally treating women less favorably than men solely based upon their gender would be what form of discrimination?
Disparate treatment
Which of the following is NOT considered a long-term implication of underemployment?
Higher spending by companies
This agreement describes the terms of employment that are set between management and union bargaining representatives
Collective bargaining agreement
Which term refers to an incentive compensation based on the percentage of the selling price of a product or service?
Commission
This formula for calculating profit sharing awards gives the employees a higher percentage of the profits as the profits increase
Graduated first-dollar-of-profits
John is just hired by a software company as a programmer. He is also a part-time student at the local college and needs just a few credits to graduate from this college. A college degree is required in order to work as a programmer in this software company. Therefore, john receives below-minimum pay rate until he graduates from college. What type of pay rate does John receive?
Green circle rates
Mary works at a pharmaceuticals company as a customer service representative. Her employer allows her to choose the set of benefits she will receive on top of pre established sets of benefits, such as medical insurance and term life insurance. The company gave her credits equal to 6% of her salary with which she decided to purchase dental and vision insurance. This pharmaceutical company uses what kind of benefits plan?
Core plus option
The ________ survey is a monthly survey of the payroll records of businesses establishments that provides national estimates of average weekly hours and average hourly earnings for the private sector for all employees and for production and nonsupervisory employees.
Current Employment Statistics
Which of the following is NOT a reason why seniority pay is expected to disappear in the future?
Employee belief that workers become more valuable over time
There is evidence that well-designed person-focused programs lead to greater employee commitment, motivation, and satisfaction. What is the main reason why employees feel the way they do in person-focused pay programs?
Employees can attain more skills and autonomy in this system.
Quarters allowance is the U.S. Department of State's nomenclature for which expatriate cost provision?
Housing and utilities allowance
Which of the following enables companies to generate income, higher company stock prices, economic value, strong positive brand identity, and reputation?
Human capital
This type of pay is defined as added pay for employees that have reached the maximum of a pay grade and are unlikely to move into higher pay grades
Longevity pay
Employees would need to learn these types of skills in order to develop self-managed work teams
Vertical
Harry has worked as a junior clerk for XYZ Company for three months, starting at $10 per hour. In the next five to seven years, if Harry continues to perform well and is willing and able, he can more than likely expect ________.
an increase in seniority pay and a promotion
In a pay-effort bargain, the basis for employee compensation is ________.
an employee's job performance level
According to the Americans with Disabilities Act, employees ________.
are protected from discrimination based on a disability, if they are qualified, with the employer providing reasonable accommodation
A greater number of employees are becoming eligible for incentive pay. The key reason behind this phenomenon is that ________.
companies want to control costs and motivate employees
Pay rates that fall along the market pay line represent ________.
competitive pay rates based on relevant labor market
Custom compensation surveys designed by consulting firms for clients may be superior to existing surveys because they ________.
include questions specifically designed to meet client needs, unlike existing surveys
Each of the following is true of a company-wide incentive plan EXCEPT ________.
individual performance is measured in support of company goals
Utility companies overall in 2007 paid their employees more than did companies in the leisure and hospitality industry. This phenomenon can be attributed to a(n) ________.
interindustry wage differential
A problem associated with ________ is that they often lead to bureaucracy that can lead to higher fixed costs and a less competitive position.
internally consistent compensation systems
The difference between relative pay differential and pay rate differential is that ________.
relative pay is based on the comparison of a geographic region to the United States, and pay rate is based on the occupation in a geographic region
One of the disadvantages of person-focused pay programs is that it is hard to assign a monetary value to skill and knowledge sets. This is because compensation surveys ________.
report the value of entire jobs rather than of individual skill sets
Marketing-for-All relies on its employees developing certain skills that address the key concerns of the company, like customer relations skills. The company rewards its employees by assigning points to skills such as customer relations, communication skills, and creativity. Which type of person-focused pay program is Marketing-for-All more than likely following?
Job-point accrual model
Which is true of profit-sharing plans?
Profit-sharing plans pay a part of the company's profit to the employees.
Which of the following are used by the State Department to determine the per diem schedules?
Location, family size
Mary's employer rewards employees with periodic additions to base pay according to employees' length of service in performing their jobs. What type of pay system is the organization utilizing?
Longevity pay
What is the benefit of including an incentive component in the core compensation program offered to employees in an industry that experiences cyclical demand, such as retail sales?
Lowering payroll costs during lean periods
Ryanair uses one type of aircraft in its fleet and requires their passengers to carry their luggage to the plane. Ryanair's decision exemplify which of the following competitive strategies?
Lowest-cost strategy
XYZ Inc. pursues a low-cost strategy in its industry and generally needs lower skilled employees. As a result, their management team decided to establish a compensation policy that pays less than the marketplace. In recent years, the company became e susceptible to labor shortages and high turnover. Which kind of pay level policy does XYZ Inc. follow?
Market lag
Which of the following represents the relationship between a company's valuation of jobs based on job evaluation and the valuation of jobs within the external market as assessed by compensation surveys?
Market pay line
Jasmine Black believes that the company should share part of the risk for her sales position. Which sales compensation plan should she pursue?
Salary-plus-commission plan
The point method is a job-content valuation technique. What is the first step when using this technique?
Selecting benchmark jobs
What is the sixth and final step in the job evaluation process?
Setting up the appeals process
What is the reason many companies use a market-based evaluation plan when conducting job evaluation?
Market-based evaluation plans determine appropriate pay rates relative to the market.
Which of the following statements is true?
Person-focused pay and incentive pay do not mesh well together.
Which statement about person-focused pay systems is FALSE?
Person-focused pay systems create the need for more workers.
What type of a compensation plan is best suited for a salesperson who dislikes having to attain a specific volume of sales and who prefers concentrating on presale and post-sale activities?
Salary-based sales plan
Under the Family and Medical Leave Act, how many hours would Pierre have had to work in the previous 12 months in order for him to take time off to care for his wife and new child?
1,250
Andre is going to be stationed overseas for about 18 months, so his foreign service premium will increase his base pay by about how much?
10-30%
What is the minimum amount that companies are permitted to charge COBRA beneficiaries?
102 percent of the cost of health insurance to the beneficiary under the employee's plan.
Which of the following best defines group incentives?
A program that rewards employees for their collective performance
Which of the following organizations will most likely utilize a longevity pay program 10 years from now?
A public elementary school
The motivational benefit of merit pay can be perceived differently by employees and employers. Of the following factors of merit pay, which one is perceived differently by employers and employees?
Amount of merit pay increase
Which of the following example is NOT considered a compensable work activity?
An employee travels from home before the regular workday and returns to his/her home at the end of the workday
Which of the following statements is true of an occupation?
An occupation is a group of jobs found at more than one company.
In order to remain competitive, how often should companies update their pay systems?
Annually
Which of the following jobs would most likely use incentive pay as the base compensation plan?
Automobile salespersons
Which term refers to money received by employees on a recurring basis for performing their jobs?
Base pay
Among the various performance appraisal techniques, this appraisal system is considered the most defensible in court because it's based on objective performance behaviors
Behaviorally anchored rating scale
Which statement about benchmark jobs is true?
Benchmark jobs are common across many different employers.
Which of the following is true in regard to benefits?
Benefits costs have increased, giving rise to greater variability in benefits among companies.
The halo effect and similar-to-me effects are considered examples of which type of rating error?
Bias errors
Under SEC rules, which of the following is true?
Board of director members may be subject to personal liability for paying excessive executive compensation.
The HR manager of a company thinks that they have too many narrow pay grades within the organization. By getting the support from upper management, they decided to consolidate existing pay grades and ranges into fewer pay grades and broader pay ranges in order to create a flatter organization in terms of compensation. This is an example of which pay structure variation?
Broadbanding
Which term refers to the set of data that clusters around a typical numerical value?
Central tendency
Which two factors should compensation professionals consider before endorsing the use of merit pay systems?
Commitment from top management and job design
In which type of document do compensation professionals represent the selection and implementation of pay level and pay mix policies over a specified time period, usually one year?
Compensation plan
Which of the following is NOT considered a bias error?
Contrast effect
Which of the following factors contributes to the short-term costs of engaging contingent workers?
Downtime while employees are participating in training
What type of test is used to determine if an independent contractor is financially dependent?
Economic realities test
Which of the is NOT a provision of the Employee Retirement Income Security Act?
Employer matching contributions
Which statement about extrinsic compensation is true?
Extrinsic compensation includes both monetary and nonmonetary rewards.
Which law established criteria for determining whether employees should be paid hourly or by salary?
Fair Labor Standards Act
Workers earning less than $23,600 a year are guaranteed overtime protection under what guidelines?
Fair Pay Rules
Chris has been working Vancover, Canada, at an accounting firm for the last 10 years. Which of the following is false regarding his paid time off benefits?
He is entitled to 8 weeks of paid leave to care for a seriously ill family member (ie spouse, common law partner, children parents)
Which base-pay method works best for expatriates that move from one foreign assignment to another and rarely, if ever, work in their home countries?
Headquarters-based
Which of the following refers to knowing that one's work matters in the lives of others?
Intrinsic compensation
Which is true of the minimum wage?
In general, federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage.
What was the main effect created by the revision to the ADA regulations passed in 2008?
It is now easier for an individual seeking protection under the ADA to establish a disability within the meaning of the ADA
________ refers to the job duties and tasks as well as such pertinent factors as the skill and effort needed to perform a job adequately.
Job content
What term refers to a job design approach that creates a more intrinsically motivating and interesting work environment?
Job enrichment
Richard's job has a compa-ratio of 0.85. What does this ratio tell about richard's pay rate?
Richard's pay is not competitive with the market
Which of the following do qualified plans provide?
Substantial tax breaks to employers and employees
Which approach provides expatriates the standard of living that they normally enjoy in the United States?
The balance sheet approach
If the company adopts a market lead policy, how will that company's pay range midpoint compare to the market average?
The midpoint will be higher than the market average
What does the term market pay line imply when conducting a regression analysis?
The typical market pay rates expressed as a mean or median
If an employee is rated as outstanding on her leadership ability, she was probably rated using which appraisal system?
Trait system
Before investing time and money into compensation surveys, which question is most important for compensation professionals to consider?
What does the company want to gain from the survey?
Which is NOT a true statement regarding wage levels and supply and demand for labor?
When the supply of qualified labor is greater than the demand for labor, there is an upward pressure on wages.
One of the essential skills that software development engineers must have is the proficiency in at least one of the modern computer programming languages, such as Java or C++. This must be indicated in which part of the job analysis description?
Worker requirement
Which of the following is a list of educational qualifications, KSAs, and other qualifications an individual must possess to perform a job adequately?
Worker specifications
In traditional pay plans, employees are paid ________.
a fixed hourly rate or annual salary
When setting up an appeals process for employees to challenge the job evaluation process, it is best to have ________ be present.
a group of compensation professionals, supervisors, and employees
The chief reason that human resource and compensation professionals in today's work environment need to think like CEOs is to ________.
accomplish strategic organizational goals
When companies strive to achieve the lowest cost of production or product differentiation, they are mainly trying to ________.
achieve competitive advantage
Monetary compensation is best described as ________.
an employee's core compensation
Incentive or variable pay is defined as compensation, other than ________ that fluctuate(s) according to employees' attainment of some standard, such as a pre-established formula, individual or group goals, or company earnings.
base wages or salaries
Income, higher company stock prices, economic value, strong positive brand identity, and reputation can all be generated by acquiring ________.
capital
Questionnaires, interviews, observations, and participation are methods for ________.
collecting information for job analysis
Collective bargaining ________.
describes the terms of employment
A job evaluation committee frequently uses the point method as a job valuation technique. When using the point method, an evaluation committee examines the importance of a factor to the overall value of the job, which means the committee is ________.
determining the weight
The disadvantage of profit-sharing plans for employees is that ________.
employees find it difficult to predict their earnings from year to year
During collective bargaining, compensation professionals ensure that ________.
employees receive cost-of-living adjustments and seniority pay increases
Corporate strategy formulation is typically based on ________, which help determine threats and opportunities.
environmental scanning activities
Within the HR profession, a(n) ________ is a top-level manager who reports directly to the corporation's CEO or to the head of a major division.
executive
The Standard Occupational Classification System, trade associations, professional societies, and trade unions are ________.
external sources that job analysts can use to find pertinent job information to conduct job analysis
When sales professionals are required to perform a significant amount of nonsales duties, they should be compensated primarily with ________.
fixed pay
Personal effectiveness and academic and workplace competencies can be grouped as ________.
foundational competencies
A hospital that has been looking to fill the position for a neurosurgeon (a highly skilled and specialized job where demand is high and supply is low) would more than likely define its relevant labor market in terms of ________.
geography
Incentive plans that promote collaborative behavior are called ________.
group incentive plans
The error that occurs when a rater generalizes an employee's good or bad behavior on one aspect of the job to all aspects of the job is known as ________.
halo effect
The "equal benefit or equal cost principle" is part of which Act?
he Older Workers Benefits Protection Act (OWBPA)
Economists call the sets of collective skills, knowledge, and abilities of employees ________.
human capital
The level of risk increases for employees as incentive pay becomes a greater proportion of total compensation. Generally this perceived level of risk ________.
is higher for higher-ranked employees
Internally consistent compensation systems facilitate the use of lowest cost strategy for companies because ________.
job duties and responsibilities are clearly defined with a focus on efficiency
All of the following are effective goals and objectives for sales professionals EXCEPT ________.
keeping current distribution channels
Noor, an HR specialist, has expertise in labor laws due to his master's degree in HR and years of experience in the field. According to the EEOC, Noor's HR expertise is considered ________.
knowledge
All of the following activities are part of designing a market-competitive pay system EXCEPT ________.
matching job descriptions to pay levels
The data collected on compensation by professional and industry association members tends to be accurate because ________.
members themselves stand to benefit from the data
When compensation analysts use regression analysis, they are trying to ________.
predict the values of one variable from another
The National Labor Relations Act of 1935 requires ________.
private-sector employers to enter into good-faith negotiations with employees over employment terms
All of the following are examples of differentiation strategies EXCEPT ________.
producing low-cost, standardized goods
One of the key advantages of person-focused pay for employees is that it ________.
provides job enrichment
The company ends up being less flexible in responding to its competitor's pay practices.
simple ranking plan
Pay rate differentials are ________.
statistics based on particular geographic regions and the United States
Person-focused pay programs are innovative because they ________.
treat compensation as a reward rather than an entitlement
Robert prefers to work full-time as a business analyst, but he is forced to work part-time for economic reasons because he is unable to find a full-time job. Which of the following best describes this situation?
underemployment
Utility companies generally pay higher wages than companies in other industries because ________.
utility companies have high barriers to entry, no foreign competition, and high profits
Employees are rewarded in a company-wide incentive plan ________.
when the company exceeds the minimum acceptable performance standard
According to the safe harbor rules, leased employees can make up no more than what percentage of your company's "nonhighly compensated" workforce?
20%
The gap between productivity and real hourly compensation was the highest during which of the following periods?
2000-2011
In Germany, an employee can request up to how many year(s) of child-rearing leave?
3 years
XYZ Movers, a professional relocation company, has 3-person teams for their moving services. The company asks customers to complete a satisfaction survey regarding their recent move. For an employee's performance appraisal, customer satisfaction surveys are also considered in addition to his/her supervisor and team member ratings. Which of the following best describes this situation?
360-degree performance appraisal
Benjamin is going on his first expatriate assignment to a country considered a hardship location. About how much will you have to increase his base pay?
5-35%
How many months in a year must seasonal employees work to qualify for protection under the FLSA overtime and minimum wage provisions?
7
Compensation professionals in XYZ Company use regression analysis to determine the pay rates of its marketing professionals. There are 4 different marketing job titles in XYZ Company. Compensations professionals use job evaluation points assigned to each marketing job title and a salary survey data. In other words, they regress job evaluation points on the salary data. What does it mean when the R2 value of this regression turns out to be 0.80?
A large amount of the variation in market pay can be explained by company's job structure
When these are used to develop pay grade widths, the grades are based on a set number of job evaluation points for each grade that increases as an employee moves up the pay structure
Absolute job evaluation points spreads
Which statement is correct?
Accurate and effective performance appraisals are key for effective merit pay programs.
The R2 statistic tells us how well the variation in the company's valuation of jobs based on job evaluation points explains the variation in market pay rates from the compensation survey. What does it mean when the R2 = 1?
All of the variation in market pay rates can be explained by the company's job structure
Which of the following is an example of a non-monetary reward?
All of these (medical insurance, vacations, day care assistance)
Which of the following is NOT a step that compensation professionals use to begin plans for setting the merit pay grid?
Ask managers for the names of employees receiving merit pay increases
What is the balance that companies must strike when it comes to designing a differentiation pay strategy?
Attracting and retaining qualified candidates with sufficient pay and giving them adequate resources with which to work
What are the most common problems associated with merit pay programs?
A supervisor's unwillingness to participate in a merit pay program
A manager uses the following form in evaluating her employees: #3 The incumbent is expected to complete the task in a timely fashion. 1 2 3 4 5 Never Almost Never Sometimes Fairly Often Very Often What type of performance appraisal method is the manager using?
BARS
Which of the following ensures that employees possess at least a minimally acceptable level of skill proficiency upon completion of a training unit?
Certification
Which of the following factors is the biggest threat to McDonald's success?
Changing consumer preferences
The XYZ Co. took back performance-based compensation of $1.2 million from their CEO because of his decision of the buyout of another firm that eventually lowered the overall value of XYZ Co.. Which of the following compensation agreements allowed the board of directors to take back the $1.2 million?
Clawback provisions
Profit sharing plans and employee stock option plans are incentives on what level?
Company wide
Valid and reliable job evaluation result from which two conditions?
Data from multiple sources; using multiple collection methods
The IRS considers Sylvia to be a highly compensated employee for Beautiful Pictures, Inc., which means that she met which one of the following criteria (assume that the previous year was 2015)?
Either an annual salary of more than $170,000 or in the previous year, a 5% owner or a 1% owner of the employer's business whose annual pay was greater than $150,000.
Employers may count discretionary bonuses and incentives toward 10% of the standard salary level test as long as those payments are paid on a quarterly or more frequent basis.
False
Differences in employee preferences and needs based on life stage and life circumstances call for which of the following?
Flexible benefits
Jose invested $2,000 in pre-tax income into this healthcare plan but lost the $780 unspent balance remaining at the end of the year. What type of plan was it?
Flexible spending account
There are 15 animal keeps working for the XYZ Company. Their supervisor is required to rate the performance of these workers based on the following criteria. 30% of the animal keepers will be rated as below average, 40% of the animal keepers will be rated as average, and 30% of the animal keepers will be rated as above average. What type of performance appraisal is used?
Forced distribution
Gunther Rohn was rewarded for making a suggestion that saved Ewe and Eye Electronics thousands of dollars. Which type of incentive compensation approach might have worked best?
Gain sharing plan
In which country do companies incur the highest hourly cost for employing a manufacturing worker?
Germany
Of the following types of businesses, which one will benefit the most from the cross-departmental model of person-focused pay?
Gift store selling holiday items
After the recent merger of ABC and XYZ Airlines, the former CFO of XYZ Airlines, John, lost his employment in the newly merged airfine. Which compensation agreement extends pay and benefits for John?
Golden parachute
What is one of the most difficult tasks managers face when they guide employees towards person-focused pay?
Helping employees understand the basic performance appraisal system
Which of the following is a possible advantage of raising the overtime pay threshold?
Higher discretionary income for the additional workers who meet the new exemption criteria
Offering relevant employee benefits can lead to which of the following outcomes?
Higher return on investment
________ is one of the key features of person-focused pay that makes it costly for employers.
Higher training costs
Which of the following is typically the case for companies that operation product markets where there is a relatively little compensation from other companies?
Higher wages and higher profits
When a filing clerk is trained to maintain employee attendance records, it is an example of acquiring which type of skills?
Horizontal
Which of the following countries has the lowest per capita GDP?
India
Which of the following is NOT true for internally consistent compensation systems?
Internally consistent compensation systems may increase a company's flexibility to respond to changes in competitor's pay practices
Empowering employees to conduct self-appraisals is a strategy to strengthen the pay-for-performance link. What is the key advantage of this strategy?
It leads to self-corrective responses to supervisory feedback.
What is the primary limitation of a two-tiered pay structure?
It limits the company's ability to recruit and retain qualified workers.
What is the requirement of the Davis-Bacon Act?
It requires private contractors to provide wages that are equal to or above the prevailing wage rates in the area where work is being performed.
What do compensation managers use to recognize differences in the relative worth of jobs and to establish pay differentials based upon management priorities?
Job evaluation
What do compensation professionals use to establish pay differentials among employees within a company?
Job evaluation
Who should be involved in job leveling in a company?
Job incumbents and supervisors
________ is when companies make corrections for differences between their jobs and external benchmark jobs.
Job leveling
What is it called when Tanesha and Jaunita both work part-time to complete the duties of one full-time position?
Job sharing
Which of the following is NOT a characteristic of NAFTA?
Only Mexico and United States are members
If the means salary for B42DA, Inc., is $30,000 and the median salary is $32,000, what would Yolanda's salary of $165,000 be considered?
Outlier
Kendra needs to evaluate her 9 subordinates. She makes a chart of all possible pairs of employees for each trait being evaluated. Then, she indicates the better employee of each pair with a mark on the chart. Finally, she totals the number of marks for each employee. Which method of performance appraisal has Kendra used?
Paired comparison
John is a design engineer in an auto manufacturer's research and development department. In addition to his normal duties, he is assigned to a team of other engineers developing a high automated assembly line for the new model of a passenger car. To which type of team is John assigned?
Parallel
Which term is used to describe the situation where the pay spread between newly hired employees and more qualified job incumbents is small?
Pay compression
Which statement is true of pay differences between occupations?
Pay differences between occupations depend on knowledge, skills, and abilities that define jobs.
Which is the most common area of negotiation between management and union workers?
Pay raises and benefits
Compensation professionals integrate the internal job structure with the external market pay rates identified through compensation surveys, and this integration reveals which of the following?
Pay rates that reflect both the company's and the external market's valuations of jobs
What represents the pay rate differences for jobs and employee contributions of unequal worth to a company?
Pay structures
Which of the following measures the purchasing power of a dollar?
Real compensation
This type of pay rate applies to an employee who is demoted but is paid more than the maximum rate in his new pay grade
Red circle
Wei is the HR manager of a manufacturing facility that has used the cross-departmental system and has noticed that absenteeism rates have been significantly lower since implementing this system. As a result, Wei may tell the managers that the company is able to do which of the following?
Reduce the size of the workforce
Which of the following is a true statement regarding the National Labor Relations Board (NLRB) and its enforcement of the National Labor Relations Act (NLRA)?
The NLRA covers most private-sector employees.
This act strengthened the Equal Pay Act of 1963 by requiring employers to show that pay disparities are job related rather than sex-based. This act also prohibits employers from retaliating against employees who share their salary information
The Paycheck Fairness Act
The Rucker plan and the Scanlon plan are similar gain-sharing plans. What is the key difference between the two plans?
The Rucker plan uses the value-added formula, and the Scanlon plan uses the sales value of production formula.
Which statement about the skills and education of global workers is FALSE?
The U.S. provides highly successful apprenticeship programs to both high school students and continuing education employees.
This model is geared to promoting staffing flexibility in a company by training employees in one department with some of the critical skills that are needed to perform effectively in another department
The cross-departmental
Which would be an example of an employee receiving merit pay in an appropriate and typical manner?
The employer adjusts the worker's base pay to account for inflation and then awards the worker an additional 2.5% increase based on a positive subjective evaluation.
Why has HR traditionally been viewed as an administrative or support function?
The financial or marketing value of HR was not as apparent
Which statement about commissions is true?
The intrinsic motivation of some sales professionals is undermined by commission-only plans.
Which of the following best explains the concept of an internally consistent compensation system?
The relative value and corresponding compensation associated with each job is determined by compensation professionals in an organization.
What is the best approach to producing valid job descriptions?
The results obtained from multiple data sources and multiple methods should converge.
Which of the following best describes what a well-designed pay structure promotes?
The retention of valued employees
Which scenario would be appropriate for using a salary-only plan?
The salesperson is selling high-priced products with long lead times
Many nonunion companies offer higher compensation than they would if unions were nonexistent. What is this phenomenon called?
The spillover effect
Which of the following is an advantage of seniority pay systems?
They reward employees on an objective basis
If your company hired a Canadian Manager to work in your plant in Taiwan, she would be considered which type of international employee?
Third country national
In the end, Yolanda beat Tristan and Michel in a series of competencies among top-level managers to become CEO of National LemGlass. Which compensation theory did the company probably use?
Tournament
The first 4 quarters of the last 5 completed calendar quarters in the previous year is the base period for which benefit?
Unemployment insurance
What types of companies are most likely to utilize two-tier wages systems?
Unionized firms
Temporary employment agencies are responsible for complying with all federal employment legislation except which one?
Worker's compensation
When an HR specialist continues to take courses and acquire additional experience in the benefits area, that specialist is ________.
acquiring depth of skills
Jane works for a private employer that does not follow the seniority pay system, but Alex, her friend, works for the federal government, which awards seniority pay. Alex has an advantage over Jane because ________.
he knows that he will be treated fairly because seniority pay will be based on objective standards, rather than subjective standards
Jill works at a factory where she is responsible for producing collector dolls. More than likely, Jill's employer uses ________.
individual incentive plans
The index component of National Compensation Data, the Employer Cost Index (ECI), measures changes in ________.
labor costs
Seniority pay is based on ________.
length of service
Jane holds a doctoral degree in sociology and works as a taxi driver. Which of the following best describes this situation?
malemployment
A key difference between knowledge-based pay and merit pay is that ________.
merit pay is for job performance, and knowledge-based pay is for potential future performance
Generally, the greater the influence of the salesperson on the buying decision, the ________.
more emphasis on incentive pay in the compensation mix
Interindustry wage differential can best be defined as ________.
pay and benefits associated with characteristics of industries
Merit pay systems use ________ to determine employees' performance.
performance appraisals
Compensation specialists hope to gain information regarding ________ from compensation surveys.
competitors' base pay and mix of total monetary compensation
When determining pay structure based on geographical consideration, many employers consider the ________.
cost-of-living adjustment for a certain area
The focus of the ________ model is to promote staffing flexibility by training employees in one department with critical skills they would need to perform effectively in other departments.
cross-departmental
Dysfunctional turnover is best defined as the departure of ________.
high-quality employees due to inadequate pay
Seniority pay, merit pay, and incentive pay are forms of ________.
job-based pay
The ________ model is a person-focused pay plan that encourages employees to develop skills and learn to perform jobs from different job families.
job-point accrual
When an employee receives a minimum pay increase that is perceived as significant, it is known as ________.
just-meaningful
Capital intensity is best defined as the extent to which a company's operations depend on ________.
large-scale equipment
In a ________, employees earn a higher rate of commission for all sales made in a given period if the sales level exceeds a predetermined level.
multiple-tiered commission plan
Pay-for-knowledge, skill-based pay, and competency-based pay are forms of ________.
person-focused pay
When designing incentive plans, it is important to keep time horizons in mind. Most HR professionals follow the general guideline that ________.
short-term goals can be achieved in 5 years or less and long-term goals take longer than 5 years
There are 15 classifications in the General Schedule for government employees. These classifications are based on ________.
skill, education, and experience levels
Which type of incentive would be most applicable for a company that values employees with exemplary attendance records?
Behavioral encouragement plan
To have better safety records, XYZ Company gives monetary incentive awards to its workers for lower accident rates due to improper use of heavy equipment. Which of the following incentive plans describes this example?
Behavioral encouragement plans
Which of the following is LEAST likely to explain why employees of Boeing, an aircraft manufacturer, receive higher wages than Walmart employees?
Boeing operates in a non-capital-intensive industry
An employee living in which place would benefit most from telecommuting due to minimizing expenses and commute time?
Boston
How do compensation professionals serve executives in a company?
By designing sound compensation systems
A recently opened car dealership uses an incentive compensation plan for its salespeople. The dealer provides money to is salespeople to cover basic living expenses and then shares a fixed percentage of the selling price of each car sold. However, the salesperson should repay the subsistence pay component within a year; otherwise he/she cannot continue in the employment of this dealer. Which type of sales compensation plan does this dealer adopt?
Commission-plus-draw
Jill and her colleagues have received an annual merit pay increase on June 15 for the last two years. What is the term used to define the date when Jill and her colleagues receive the annual merit increase?
Common review date
Typically, companies in profitable industries pay higher compensation than companies in less profitable industries. What is the main reasoning behind this phenomenon?
Companies in profitable industries typically have productive employees with skills and abilities that contribute to company success.
Why are commission-only sales plans best suited for companies that are pursuing lowest-cost strategies?
Companies using commission-only plans have compensation expenditures that vary with sales revenue.
Which of the following is rationale to apply a probationary period prior to permitting participation in an employee benefits plan?
Companies view such periods as an opportunity to ensure they have made sound hiring decisions
These are the salient job characteristics that are the general basis for job evaluation and are used to establish relative pay rates
Compensable factors
Which of the following is a true statement about compensation?
Compensation offers both intrinsic and extrinsic rewards.
Which of the following are responsible for proving that alleged discriminatory pay practices are not discriminatory?
Compensation professionals
In order to establish an internally consistent compensation system, which of the following is absolutely necessary?
Conducting job analyses
What are the components of a pay mix?
Core compensation and benefits
When does the new Overtime provision law go into effect?
December 1st, 2016
The XYZ Company pays a portion of company profits to its employees. The management offers this incentive plan as one kind of retirement program. Which kind of company wide incentive plan does XYZ Co. offer?
Deferred profit sharing
What type of pension plan commonly includes profit-sharing plans, stock bonus plans, and employee stock ownership plans?
Defined contribution
What is the first step in the job evaluation process?
Determining single versus multiple job evaluation techniques
Which of the following is important for successful pay-for-knowledge programs?
Developing and implementing systematic training programs
Maria and Jill have been employed for three years at an accounting firm. In the last quarter, both received the same merit raise, although Maria has been a star performer and has not missed any deadlines, while Jill has missed deadlines on multiple occasions. On which aspect of the pay-for-performance link should the supervisor focus in this scenario so that this situation does not occur in the future?
Differentiate among performers.
Until recently, ACME Manufacturing granted every employee one week of paid vacation each year. The company now offers substantially more weeks or paid vacation to employees with high seniority (greater than 5 years). The average seniority of female employees at ACME is 2.5 years, while the average seniority for male employees is 7.5 years. Which form of discrimination is the policy at risk of creating?
Disparate impact
The XYZ Company provides a program for its employees who need help dealing with the effects of domestic violence. The XYZ Company can offer this kind of service through which of the following programs?
Employee assistance program
Which stipulation is NOT part of the National Labor Relations Act of 1935?
Employer-appointed representative for workers
An appropriate pay mix should consider the relative worth of jobs within a structure. Keeping this in mind, most of the bonus compensation in a technology company like Intel would likely be given to which of the following groups?
Engineers
Which of the following is a major challenge associated with the implementation of the Fair Labor Standards Act for workers employed on a flexible basis?
Ensuring that overtime pay rates are calculated correctly
Matt, Juan, Linda, and Ming are working on a new product for their company that will be launched in the near future. Management wants to reinforce cohesiveness among the team. Which type of group incentive plan would be best suited for attaining the management objective?
Equal incentive payments approach
This type of appraisal error takes place when managers rate employees' performance more highly than they should compared with objective criteria. This type of appraisal error takes place when managers rate employees' performance more highly than they should compared with objective criteria.
Errors of leniency
What one of these issues is NOT addressed by the Fair Labor Standards Act of 1938?
Executive compensation
AT&T plans on sending R.J. to Peru for at least 3 years. They will probably use which method to set his base pay?
Host-country based
Which strategy would help certain workers' compensation costs?
Implementing health promotion programs
The XYZ Manufacturing Co. uses a gainsharing plan that gives incentives to employees to finish products rather than to incentivize dollar savings. Therefore, this company measures productivity as the ratio of standard labor hours and actual labor hours. Which kind of gain sharing program does XYZ Manufacturing Co. use?
Improshare
Which statement about job-based pay and person-focused pay is true?
In a person-focused pay system, employees tend to have more job variety and job enrichment than in a job-based system.
What type of pay system rewards employees for partially or completely attaining a predetermined work objective?
Incentive pay
Which statement about incentive pay is correct?
Incentive pay is a one-time payment that augments an employee's base pay.
Which of the following is NOT one of the direct or indirect reasons of rising wages in China?
Increasing cost of experts
Which type of jobs would be best suited for person-focused pay programs?
Jobs in manufacturing
Which statement is true regarding the knowledge, skills, and abilities (KSAs) required to perform a job?
Jobs that are based on KSAs that require higher education typically pay more.
What is the fundamental principle of internally consistent compensation system?
Jobs that require higher qualifications should be paid more than jobs that require lower qualifications
Josh works at a U.S. construction company as a civil engineer. The hypothetical tax paid by his company on his behalf turned out to be less than his actual income tax. In this situation,
Josh reimburses his employer
ARAMARK, who provides cafeteria service workers to a client company, is an example of the utilization of which type of employment?
Leased employees
Joanna believes her employer is discriminating against her by paying her a lower salary than a male co-worker. Which legislation states that Joanna must file a pay discrimination charge within 180 days of receiving a discriminatory paycheck?
Lilly Ledbetter Fair Pay Act
John was disappointed when he saw a negligible increase in his paycheck after he was awarded merit pay. This problem can be attributed to which of the following problems with merit pay?
Little motivational value of merit pay
Which type of individual incentive plan requires the achievement of multiple, complex objectives without compromising the quality and quantity of output that is generated by employees?
Management incentive plans
Which of the following type of job evaluation plans is used with the company chooses to assign job pay rates that are neither too low nor too high relative to the market?
Market-based
These compensation systems go a long way in attracting and retaining the most qualified employees and are based upon market surveys and compensation surveys.
Market-competitive pay systems
Jason is generally considered unfriendly at work. His supervisor rates him lower on the trait "gets along well with others" but also rates him lower on other traits unrelated to socialization at work. Jason's performance appraisal may be unfair due to _________.
Negative halo effect
Jason works at a call center for insurance company and he has been answering calls regarding auto insurance. Recently, he started to attend a training program about home insurance. Upon successful completion of this training program. Jason will be able to handle home insurance questions and queries as well. If this insurance company has a compensation policy that rewards Jason's completion of this training, then what type of pay system does it employ?
Pay-for-knowledge
What is the primary method used by companies to purchase the use of human capital?
Paying wages and benefits
Which of the following laws permit employers to automatically enroll employees in a defined contribution plan?
Pension Protection Act
Which of the following is NOT a limitation of merit pay programs?
Performance measures are based on job analysis
In which type of selling situation will salary represent a significant pay component?
Pharmaceutical sales
Construction contractors, working on government contracts valued at more than $2,000, must pay for their laborers and mechanics what type of wage?
Prevailing wage
Which of the following is a major challenge in setting up skill-based pay programs?
Pricing individual skill blocks
When designing an incentive pay plan, the time horizon of the plan becomes a major issue. Of the following, which is true?
Production workers' performance is sometimes judged on periods as short as one hour.
Consumer driven health care strives to achieve which of the following objective?
Provide employees with greater choices while also containing costs
Which is true of using alternative job-content evaluation approaches by compensation specialists?
Ranking plans use neither job analyses nor job descriptions, which makes them harder to defend legally.
Performance targets establish effective appraisals, which strengthen the pay-for-performance link. What is the best way to establish performance targets?
Refer to the performance standards listed within job descriptions.
Java Jazz is a company known for superior pay and good benefits. Java Jazz is having a hard time finding qualified employees, and it is experiencing high growth. Which type of incentive is it most likely to offer?
Referral plan
Which is true when comparing pay rate differentials and relative rate differentials?
Relative pay differentials measure the control for the influence of various variables, but pay rate differentials do not.
Which is true of merit pay increases?
Research shows that boosting merit pay will not necessarily increase productivity.
Jose Escobar conducts a survey of salaries of ERL Enterprises and finds that 50% of the workers fall below the market pay average of $32,000. In which quartile do the workers of ERL Enterprises fall?
Second
Jack gives the employees is his running club slightly more favorably ratings than those employees who are not known to exercise. What kind of rating error has Jack made?
Similar-to-me effect
George owns a small public relations firm, and a customer courtesy is considered to be the most important factor in all of the jobs. Which job-content evaluation approach is George likely to use?
Simple ranking plans
In the garment factory of XYZ Co. line workers are trained to be able to work at different manufacturing steps such as grading, cutting, sewing and assembling, pressing, etc. XYZ Co.'s strategy of training its workers to do different tasks is an example of which following term?
Skill variety
Which of the following is an example of a monetary reward?
Spot bonus
These rights provide employees with an opportunity to purchase stock shares at a designated price or whenever the stock price increases, usually, within a specified period of time.
Stock option
__________ is defined as an in-depth examination of the external and internal environmental factors that are likely to have the greatest impact on the future of the company
Strategic analysis
Which of the following would be the best source of information for providing information on the interrelationship among jobs when conducting a job analysis?
Supervisors
Who determines the particular objectives in a management by objectives (MBO) appraisal system?
Supervisors and employees
Market-based job evaluation uses which approach to collect date to determine prevailing pay rates?
Surveys
Which two forces have contributed to a strategic approach towards HR?
Technological advances and global competition
As a result of this law, employers must now show that employment practices that create disparate impact are a business necessity. This law also made it legal for U.S. citizens working abroad for U.S. companies to the file suit.
The Civil Rights Act of 1991
Which one of the following would be correct regarding person-focused pay programs?
The stair-step model addresses depth, while the skill blocks model emphasizes both horizontal and vertical skills
Marco is employed as a production worker at TVX Industries. Marco is best described as a ________.
line employee
A software company is launching its new product line. The performance standards of the salespeople responsible for promoting the software should be judged based on ________.
linking their performance to the company's business strategy or goals
Before merit pay can be awarded, it is important that companies first ________.
make permanent adjustments to base pay for inflation
When the pay spread between newly hired or less qualified employees and more qualified job incumbents is small, it is known as ________.
pay compression
In a merit pay program, there must be explicit ________ that specify the procedures or outcome against which employees' job performance can be clearly evaluated.
performance standards
Cost-of-living adjustments represent ________.
periodic base pay increases
Generally, supervisors give merit raises based on a subjective assessment of the employee's performance. It is therefore essential that ________.
supervisors conduct accurate performance appraisals for merit pay to be effective
Marco likes to note several positive and negative behaviors and their outcomes when it comes to documenting performance appraisals of his employees. However, Matt never has enough time to record all the details. Marco is more than likely using ________.
the critical incident technique
There is a basic principle that companies rely on for building an internally consistent compensation system. This principle states that ________.
the greater the responsibilities and complexities of a job the greater the pay
The key difference between the stair-step model and the skill blocks model is that ________.
the skill blocks model addresses both horizontal and vertical skills, but the stair-step model addresses skill depth only
Mary has applied for an entry-level position in a marketing firm. She believes she meets the minimum qualifications for the job and that she has the knowledge, skills, and abilities to perform the job well. In other words, Mary believes she has the necessary ________.
worker requirements
The social context within which waiters in a restaurant interact with guests, or tax accountants in a tax preparation office interact with clients, is known as the ________.
working conditions
Which type of performance appraisal method relies on many sources for information (employees, supervisors, coworkers, etc.)?
360-degree
What is the difference between person-focused pay and incentive pay?
Person-focused pay is for skill development, but incentive pay is one-time pay for the attainment of goals communicated in advance.
Companies generally institute incentive pay programs to control payroll costs and motivate employee productivity. Of the following, which would be an example of an incentive pay program element that could help an organization meet those objectives?
Profit-sharing program
Which term refers to a salesperson receiving a set salary plus a single payment for the achievement of specific, exceptional goals?
Salary-plus-bonus plan
Dee Ann and her supervisor Andy both attend the same church and share similar points of view on many issues. It is possible for Andy to commit which type of error when judging Dee Ann's performance?
Similar-to-me bias error
Which of the following statements is true?
Team-based pay plans should compensate employees for achieving group objectives as well as assuming their respective roles in a team.
What is the biggest drawback for a company that follows a tightly defined job description based on an internally consistent pay system?
The company ends up being less flexible in responding to its competitor's pay practices.
These represent additional paid time off for employees working in hardship locations.
Rest and relaxation leave benefits
Anna is a new graduate with a B.S. degree in Business Management and is entering the workforce. Which type of competencies will a future employer expect Anna to demonstrate?
Foundational competencies
What is a draw?
Money to cover basic living expenses
Which of the following costs is NOT associated with the use of person-focused pay programs?
Recruitment
Which of the following rewards newly hired employees less than established or tenured employees?
Two-tiered pay structures
