MGT 461 exam 3

There is evidence that every 10 percent increase in the bonus paid to employees by a firm yields a _____ percent increase in ROA to the firm.

1.5

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

12 weeks

Most experts agree that employees do not begin to consider changing their behaviors unless payouts are at least _____ percent higher.

20

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

25; 30

A study of ratings of managers found that approximately only _____ percent of the managers were rated below average.

5

Which of the following is NOT true about individual spot awards?

A majority of companies do not feel that these awards are effective.

hich of the following is NOT true about individual spot awards?

A majority of companies do not feel that these awards are effective.

In which of the following jobs is it most appropriate to use behaviorally anchored rating scales?

An assembly line job that requires tightening nuts on an engine

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

An employee benefit handbook

Which of the following is an example of the sorting effect in action?_____ is an individual level form of performance pay.

An employee leaving a high-paying job for one that provides more work/life balance

When a job involves very routine, mechanistic tasks, the most appropriate appraisal format is:

BARS

_____ is the best appraisal format across the five criteria for evaluating rating formats.

BARS

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

Benefit limitation

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

COBRA (1984)

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

Cash profit sharing plan

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

Cash profit sharing plan

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

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

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

Easy to set equitable targets for all teams

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

Gantt

Which of the following statements is true of employee benefits?

Group insurance benefits has relatively easy qualification standards.

_____ theory states that success-sharing plans will be motivating, whereas at-risk plans will be demotivating.

Herzberg's two-factor

Which of the following is NOT a long-term incentive plan?

Improshares

Which of the following is a negative outcome of the management by objectives method?

Increase in performance pressure and stress

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

It defers a portion of taxes to employees.

Which of the following is statements is true of leniency errors?

It is the error of consistently rating someone higher than is deserved.

Louie received the highest performance rating and is in the second quartile of his pay range. He received a pay increase of 8 percent. Bart also received the highest performance rating and is in the fourth quartile. Given the way most merit increase grids work, what size of pay increase would you expect Bart to receive?

Less than 8 percent

The most common form of outcomes-based appraisal is

MBO

Which of the following is NOT a disadvantage of flexible benefit programs?

New benefits are more difficult to introduce.

Which of the following types of rankings would be least preferred by managers of more than 10-15 employees?

Paired-comparison ranking

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

Patient Protection and Affordable Care Act

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

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

_____ are NOT used for determining employee benefit preferences.

Product market share data

Which of the following statements about merit pay is NOT true?

Removal of merit pay lowers satisfaction but not performance.

Droppiece Inc. is a company that provides more performance-based pay and less base pay than its competitors. Who among the following is most likely to join Droppiece?

Stella, a recent college graduate who loves to take on a challenge

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

Stock options plans

According to research, which of the following is NOT one of the most important factors for employees influencing their pay systems?

Team-based pay

Which of the following is NOT a strength of supervisors as raters?

Their ratings are immune to halo and leniency errors.

Which of the following is NOT true regarding self-ratings?

They are immune to leniency errors.

Which of the following is NOT true of merit bonuses?

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

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

They increase employees' knowledge of business.

Which of the following statements is true regarding rater training?

Training to reduce halo errors and improve accuracy has been most successful.

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

Work/life balance

When an organization's performance has regular and large swings and individual performance is unclear and hard to measure, the most effective compensation mix is to offer _____.

a base pay with low incentives and a variety of rewards

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

a flexible benefit

When an organization's performance has frequent highs and lows, but individual performance is fairly stable, and performance measures are clear, the most effective compensation mix is to offer _____.

a large base pay and low-incentive pay

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

a productivity norm and effective worker committees.

In situations where the nature of the task is so uncertain that it may be difficult to specify expected goals, the most appropriate rating format is _____.

a standard rating scale

The most obvious sorting factor is _____.

ability

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.

alternation

One common feature of all types of incentive plans is:

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

Subordinate ratings _____.

are likely to be inflated if they are not anonymous

A major criticism of standard rating scales is that:

aters have different definitions of scale levels.

All of the following are categories of rater training EXCEPT _____ training.

behavior modeling

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

benefit ceiling.

During the performance review of her employees, Sarah gives higher ratings to employees from her hometown, Oklahoma, as she believes that people from Oklahoma are hard working and trustworthy. Which of the following rating errors is Sarah exhibiting?

clone error

All of the following EXCEPT _____ require periodically re-earning the added pay.

cost-of-living increases

All of the following are advantages of flexible benefits EXCEPT:

decreased administrative expenses.

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

determine whether the accident happened.

The amount of fairness given to employees refers to _____.

distributive justice

A horn error occurs when an employee is:

downgraded across all performance dimensions because of poor performance on one dimension.

According to the _____ theory, relative pay is important as employees evaluate their pay-effort balance in comparison to other employees.

equity

Which of the following theories states that people choose the behavior that leads to the greatest reward?

expectancy theory

All of the following factors are reasons for the growth of benefits EXCEPT:

foreign lawsuits

Among peer raters, the most objective evaluations are given by:

high-performing workers.

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

high; uncertain

When a company moves from an individual incentive plan to a group incentive plan, the company is most likely to experience _____.

higher turnover among high performers

Grabhouse Inc. is experiencing an increase in turnover rates of its top employees. Upon consulting with its managers for the reasons for this increase, Grabhouse finds that employees are uneasy with the current pay mix as it involves too many risky elements. In order to make its pay mix less risky, Grabhouse needs to:

increase the base pay component of its pay mix.

The first issue in setting up a benefits package is:

inding out who should be protected or benefited.

In gain-sharing plan formulas, _____ are in the numerator and _____ are in the denominator.

labor inputs; productivity outcomes

Telling raters that sometimes the work environment and system affect job performance more than the individual employee's behavior:

leads to higher ratings.

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

less than 15

Surveys show that the most highly valued benefit is:

medical insurance.

_____ is an individual level form of performance pay.

merit bonus

An incentive system with three piecework rates is the _____ plan.

merrick

Which of the following does NOT provide for incentives based on standards that are expressed in terms of time period per unit of production?

merrick system

When employee performance is easily measured and the organization's performance is fairly stable over time, the most effective type of compensation is to offer _____.

monetary rewards with large incentives

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

pensions; medical coverage

Available evidence indicates managers believe the most important factor for pay increases is _____.

performance

Teaching raters what constitutes good, average, and poor performance is _____ training.

performance-standard

When pay is based on individual performance, turnover tends to be highest among _____.

poor performers

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

provision of skills development training.

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

requiring employees to pay higher deductibles and copays

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

second

The ability triangle includes _____.

selection

Jake's new car was dented by his employee, Steve. Ever since then, Jake has been consistently giving lower ratings to Steve during performance reviews to get back at him. Which of the following errors has been exhibited by Jake?

severity error

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:

sorting effect

Surveys show the most popular type of variable pay plans are _____.

special recognition plans

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

specifying performance levels and due dates.

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

stock ownership plan

One of the most preferred benefits is _____.

stock plans

he best appraisal format for employee development is:

the MBO format.

The most widely used benefit survey is conducted by:

the U.S. Chamber of Commerce.

Deming's major argument regarding performance appraisals is that:

the work situation is the major determinant of performance.

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

using more peer raters than supervisor raters

____ is the value employees attach to the organization rewards offered for satisfactory job performance.

valence

Which of the following is the best appraisal format in terms of legal defensibility?

BARS

When employee performance measures are ambiguous and vary from time to time, but the organization's performance is fairly stable over time, the most effective type of compensation is to offer _____.

a variety of rewards with significant incentive pay

The corporate performance of Yellow Corp. is fairly stable. However, it is difficult to measure individual performance. In this case, the most effective compensation mix is to offer _____.

a wide range of awards beyond just money

_____ theory argues that performance-based pay is the optimal compensation choice for complex jobs, where monitoring employee performance is difficult.

agency

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

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

A _____ plan requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action.

bedeaux

Last year your performance was not very good and your performance rating was below average, but this year you have done very well by exceeding your performance goals. To your surprise, your boss gives you just an average performance rating. What error has your boss most likely committed?

spillover error