MGT 559 Exam 3
The duration of short-term international assignments is usually ________ or less.
1 year
Employees in China who have worked for more than 20 years are entitled to paid leave of ________.
15 days
Involuntary part-time employees work fewer than ________ hours per week.
35
Executives must have ________ percent of ownership in a firm before they are classified as a highly compensated employee by the Internal Revenue Code (IRC).
5
An employer-sponsored retirement plan is considered top-heavy when the accrued benefits of key employees exceed ________ percent of the accrued benefits of all employees.
60
What is the length of compassionate care leave provided by the Canadian government to take care of a seriously ill family member?
8 weeks
Based on the criteria for key employees, which of the following positions would be considered a key employee?
CEO
What is one reason that labor is less costly in Mexico?
Mexican labor unions lack strength and bargaining power
Which is true when comparing non-U.S. CEOs with U.S. CEOs?
U.S. CEOs make 300 percent more than non-U.S. CEOs
Which of the following is true about U.S. citizens paying taxes while working overseas for a U.S. corporation?
U.S. citizens are subject to the Federal Unemployment Tax Act (FUTA)
Which country in South America has large oil reserves?
Venezuela
Which of the following would be entitled to receive an international compensation package?
a U.S. citizen who is working at the Italian office of a U.S. company
The total bonus pool is considered when using the predetermined allocation bonus for an executive. What is the key factor that determines the size of the total bonus pool?
a company's profits
Miranda, the CEO of TVX Enterprises, has a compensation arrangement in which the TVX board of directors promises to pay her a bonus in the form of the equivalent of either the value of TVX shares or the increase in that value over a period of time. Which term refers to Miranda's compensation arrangement?
a phantom stock plan
For employees who participate in job sharing, which of the following is a likely benefit?
ability to participate in an employee retirement program
Which statement regarding executive compensation is true?
academic research is not decisive regarding a connection between executive compensation and company performance
The idea behind deferred compensation for an executive is to ________.
align the executive's and shareholders' interests in the long term
The current executive core compensation consists of ________.
annual base pay and bonuses
Part-time employees are eligible for retirement benefits if they ________ and have________.
are 21 years or age or older; 1,000 hours logged in a 12-month period
Unions in the public sector feel that flex schedules ________.
are acceptable, because they raise the productivity of employees, which makes the unions stronger
Minimum wage rates in India ________.
are set by the government and a collective agreement
minimum wage in Germany is established
by the collective bargaining system
Sonia works 40 hours each week at a publishing company. She works Monday through Thursday from 8:00 a.m. until 6:00 p.m. Which term best describes Sonia's work arrangement?
compressed workweek schedule
Why are contingent workers perceived as a threat by most labor unions?
contingent workers tend to threaten members' job security
U.S. companies designing international compensation packages divide the total package into three broad categories, which are ________.
core compensation, employee benefits, and enhanced benefits
Some globally focused companies, such as GE and McDonald's, maintain a strong international presence. Such firms support expatriates by offering ________.
corporate universities that prepare soon-to-be expatriates to work abroad
Which of the following would contain detailed information on the compensation of a firm's CEO and Named Executive Officers?
definitive proxy statement
Companies ________ allowances for discretionary income expenditures for which expats remain responsible in the United States.
do not pay
Many companies use ________ as the pay referent group, where others use ________ as the pay referent group when determining international compensation packages.
domestic employees; local employees
Which is true of Canadian wage rates and benefits?
employees are entitled to have 8 or 9 holidays, 2 weeks of vacation, and a sum of money as vacation pay
Which of the following is a paid time-off benefit in Germany?
employees receive regular pay during illness for up to 6 weeks
Which of the following is an employment stipulation according to the laws of EU member states?
employers must give employees a written document specifying the terms of the employment contract
All of the following are components of the standard benefits package for an expatriate EXCEPT ________.
entertainment allowances
How do executives receive an income tax benefit by participating in incentive stock option plans?
executives do not pay any taxes until they sell their stock, and when they do sell, the tax rates are lower than their income tax
Which of the following describes the agency problem?
executives make decisions in their own self-interests
When referring to executive compensation, what is mean by the term pay-for-failure?
executives receive pay for nonperformance and are given generous amounts to leave the company
Which of the following is a U.S. citizen employed by a U.S. company with a work assignment outside the United States?
expatriate
The balance sheet approach is most appropriate for setting a U.S. expatriate's compensation package when the ________.
expatriate's next assignment will be in the U.S.
What criteria are used by the U.S. Department of State for identifying hardship locations?
extraordinarily difficult living conditions, excessive physical hardships, and notably unhealthy conditions
Labor and employment laws in Canada ________.
fall within provincial jurisdiction
Temporary workers are primarily hired by companies to ________.
fill a need during peak times
Compensation consultants determine executive pay based on a strategic analysis of internal and external factors of an organization. The most important internal factor in determining executive compensation is the ________.
financial condition of the company
Which of the following statements is FALSE regarding flexible work schedules?
flexible work schedules can reduce productivity
Leasing employees to a client company is common in which type of industry?
food
Which statement about the annual base pay for an executive is true?
for most executives, annual base pay represents a small part of their total compensation
________ are monetary payments above and beyond regular base pay that are given for international assignments that last longer than one year.
foreign service premiums
How do employers benefit from compressed workweeks?
greater workplace productivity
What is the term that describes the market value of all goods and services produced in a country in a given year?
gross domestic product
An officer in an organization is someone who _________.
has the title and authority of an officer
Flex work schedules are best for companies that want to promote differentiation strategies. This is because flex schedules ________.
help employees work without being distracted by personal matters
Which method compensates expatriates the same as if they were doing similar work in the United States?
home country-based method
The North American Agreement on Labor Cooperation (NAALC) was created to ________.
improve labor conditions in the United States, Canada, and Mexico
Which statement is true about the Brazilian economy?
in Brazil, all benefits granted by employers are legally part of employee salaries and cannot be abolished
What has been the subject of current debates in Canada?
increasing health care costs
Which authority provides the criteria for defining an executive?
internal revenue code
Which of the following is the most accurate description of why labor union opposition to contingent employees is unlikely to change in the near future?
labor unions see the practice of contingent employees as undermining their efforts to secure high wages and job security for their members
Technically, when contingent workers are placed in an organization, they are ________.
legally accountable to the temporary employment agency that hired them
When an expatriate in China gets fewer yuan in exchange for dollars, the expat is facing ________.
loss in purchasing power
Successful international compensation programs should _________.
minimize an employee's financial risk while overseas
Flextime schedules allow workers to ________.
modify their work schedules within the limits set by the employer
All of the following are true of the ethical considerations regarding executive pay EXCEPT:
most CEOs who are hired form within make more money than those who are recruited from outside the company
It makes sense to use the headquarters-based method in designing an international compensation package when an employee is ________.
moving from one country to another and rarely works in the home country
Many U.S. manufacturing companies have established facilities in Asian countries and in Mexico because these two locations offer ________.
much less expensive labor
Basic medical and hospital care in Canada is ________.
paid from general federal taxation and from provincial taxes
Flex workweek schedules have the greatest impact on ________.
paid time-off benefits
Expatriates who earn higher incomes in the United States generally receive higher incomes and allowances to maintain their lifestyle overseas. However, this also means ________.
paying higher taxes on the income and allowances
What is the key difference between target plan bonus and predetermined allocation bonus?
predetermined allocation bonuses are fixed; target plan bonuses are not
Most economists prefer using ________ when evaluating per capita welfare and when comparing living conditions across countries.
purchasing power parity exchange rates
What has been the effect on wages in the United States, Canada, and Mexico since the passing of NAFTA?
real wages have increased in the three countries since the passage of NAFTA
From an employer's perspective, job sharing is likely to result in ________.
reducing employee training costs
International and domestic benefits differ in terms of allowances and reimbursements. The difference for expatriates is primarily due to higher costs of living and housing, ________, and ________.
relocation expenses; educational allowances for expatriates' children
Which of the following best describes repatriation?
repatriation is the process of making the transition form an international assignment to a domestic assignment
Which statement about returning expatriates is FALSE?
returning expatriates find it easy to participate with collaborative teams
One of the outcomes of globalization is that companies now have to send employees overseas to establish ________.
satellite plants and offices for U.S. companies
Which statement about Asian economies is true?
services are a significant source of growth in the Indian economy
When considering executive compensation, boards of directors are theoretically representing the interests of ________.
shareholders
The Chinese economy in the last couple of decades has ________.
shifted from a centrally planned system to a market-based system
Which is true of pension and health benefits in India?
state governments in India arrange for health care
What are the three main sections of the quarters allowance that the U.S. Department of State uses for determining housing and utilities allowance?
survey date, exchange rate, and annual allowance by family status and salary range
Zachary has a full-time position with an accounting firm. Zachary works in the firm's office when he needs to attend meetings, but the majority of his work is accomplished in his home office. Which term best describes Zachary's work arrangement?
telecommuting
Which statement about temporary employment agencies is true?
temporary agency fees are based on a percentage of a placement's pay rate
Which is true of seasonal workers?
the FLSA's minimum wage and overtime provisions do not apply to some seasonal workers
Which statement about Mexico is FALSE?
the Mexican economy is mainly agricultural
Which of the following is true about expatriates receiving a goods and services allowance?
the allowance uses the Washington, DC, area for cost comparisons
Stock compensation plans generally increase the ownership interest of an executive. What increases the value of a stock?
the gain in company performance
Due to a potential conflict of interest, what is the primary consideration for executive consulting firms when suggesting executive pay?
the public image of the consulting firm
Which statement is FALSE regarding the minimum wage in China?
there is a national minimum wage rate that is set by the central government
How do companies create an ownership interest for an executive?
through granting stock and stock options
Executives are awarded short-term incentive compensation. What is the reason for giving short-term incentive compensation to executives?
to recognize their pursuit of competitive strategy goals
What has been one of the key challenges for the central government in China?
to sustain adequate job growth for the massive population
Job sharing at work is an arrangement where ________
two or more part-time employees perform a single full-time job
What is the overall view of labor unions regarding companies' use of contingent workers and flex schedules?
unions generally do not support contingent work and flex work schedules
Which group of contingent workers chooses to work fewer than 35 hours per regularly scheduled workweek?
voluntary part-time employees
Under the old welfare system in China, workers ________.
were treated as the property of the state
How do companies know when compensation expenditures become excessive?
when compensation expenditure is greater than quantity and quality of labor output
One of the advantages of hiring contingent workers is that it prevents groupthink from occurring in the workplace. Which of the following best describes groupthink?
when groups think alike and have mistaken solutions for existing problems
What is the focus of the economic realities test for independent contractors?
whether the worker is financially dependent on an employer
Canadian pension plans are funded ________.
with matching contributions by employers and employees
The dual employer doctrine law states that temporary workers have a right to _________
workers' compensation
The Mexican social security system is funded by ________.
workers, employers, and the government
