BUSN 222 - Test 1
T/F: a manager can use one of four proven pay techniques that tie basic policies to the pay objectives
False
T/F: commissions are examples of incentives
True
Which of the following is an example of a quoted-price?
a product on Amazon
In a study, causation can be best established by:
analyzing the scope of the study
T/F: base wage reflects both the value of the work and individual employee skills and experience
False
T/F: even if federal compensation laws change, it is necessary to change pay systems to ensure continued compliance
False
T/F: in Japan, the traditional characters for the word "compensation" are based on the symbols for logs and water, suggesting that compensation provides the necessities in life
False
T/F: the R^2, which is an output from a regression analysis, is difference from correlation in that it tells us what percentage of the variation is accounted for by the variables we are using to predict or explain
False
T/F: when looking at the total CEO compensation of U.S. public companies, salary was the largest, most significant compensation component
False
Which of the following companies is taking efforts to improve the work/life balance of its employees?
MH Corp., which increases the number of paid holidays given to its senior employees
The "say on pay" and claw back provisions are included in which of the following federal laws?
The Dodd-Frank Wall Street Reform and Consumer Protection Act
GreenRain Corp. faces an increase in its employee turnover rate. The CEO calls for a board meeting with the senior executives to discuss the issue. Who among the following suggests increasing the relational returns that employers receive to reduce the turnover rate at GreenRain?
Tom, who suggests increasing the decision-making authorities given to the employees to make work more challenging
T/F: consultant surveys are often presented as studies that reveal cause and effect
True
T/F: fairness is affected through employees' comparisons of their pay to the pay of others in the organization
True
T/F: if the objective is to increase customer satisfaction, then incentive programs and merit pay might be used to pay for performance
True
T/F: internal alignment pertains to the pay rates both for employees doing equal work and for those doing dissimilar work
True
T/F: merit bonuses are paid in a lump sum and do not become a permanent part of base salary
True
T/F: most U.S. firms use merit pay increases
True
T/F: objectives guide the design of pay systems and provide standards for evaluating their effectiveness
True
T/F: the relationship between variables is most often addressed through the use of statistical analysis
True
Which of the following is a policy, and NOT an objective, of the pay model?
competitiveness
A measure of how changes in one variable are related to changes in another variable is that:
correlation coefficient
A compensation system that focuses on competitors' labor costs is most closely associated with a ____________________ strategy
cost-cutter
Mich Inc, a hardware store, has a rating system in place that rates employees on their friendliness, usefulness, and product knowledge. Based on the ratings an employee receives, he or she gets an incentive. The compensation strategy followed by Mich is most closely described as a ______________
customer-focused strategy
The problem that is most likely to be faced by organizations using an egalitarian pay structure is:
difficulty in external recruitment
A difference between incentives and merit increases is that incentives:
do not increase the base wage, whereas merit increases increase the base wage
The theory that has the most implications on staffing is that _____________ theory
efficiency wage
When cooperating is important for successful organization performance, which of the following pay structures in more suitable?
egalitarian pay structure
The decisions to implement pay for performance, flat rate pay, and profit sharing are examples of _______________ policy decisions
employee contribution
Which of the following policy decisions directly affects employees' attitudes and work behaviors?
employee contributions
Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that:
employers seek to maximize profits
Which of the following is an example of a relational return?
employment security
Which of the following is not a factor in defining equal work according to the Equal Pay Act?
equal experience
Comparisons based on the forms for compensation used by other companies are part of ____________________
external competitiveness
Compensation policy choices that affect the pay level relative to other companies are most closely associated with the ____________ aspect of the pay model
external competitiveness
Decisions regarding what forms of compensation should be part of ___________________
external competitiveness
Work/life balance is most closely associated with the _____________ aspect of mapping a total compensation strategy
external competitiveness
_______________ focuses attention on the competitive positions reflected in the pay relationships among organizations
external competitiveness
The alignment test:
helps ensure passing the differentiation test
_________________ refers to the education, experience, knowledge, abilities, and skills required to perform work
human capital
The pay policy associated with increased productivity is the ___________ policy
hybrid
"Choosing techniques to fit strategy" is part of which step in developing a total compensation system?
implement strategy
Research investigating high-performance workplaces found that performance-based pay _______________ when combined with other high performance practices
improves attitudes and behaviors
The degree to which pay influences individual and aggregate motivation among employees at any point in time is referred to as an ____________________
incentive effect
Variable pay may also be called ______________
incentives
Robert, the CEO of the Game Track Corp., wants to restructure its pay plan without increasing labor costs in the long run. He is most likely to achieve this, while retaining his top employees by:
increasing base pay and decreasing variable pay
A compensation system using market-based pay is most like to be part of a ______________ strategy
innovator
_____________ refers to comparisons among jobs or skill levels inside a single organization
internal alignment
Which of the following is true of internal alignment?
it addresses pay relationships inside an organization
Which of the following is true of the marginal revenue product model?
it oversimplifies business conditions in the real world
Which of the following is an assumption held by the labor supply model about the behavior of potential employees?
job seekers do not face barriers to mobility
Marie hired on with a tech company offering the usual benefits but paying below-market rates. She took the job because the company was promising generous stock options and hefty yearly bonuses if goals are met. Plus, they are paying her to relocate to Hawaii. Marie's new employer is using a _________________.
lag-pay-level policy
The pay-level policy that is most likely to reduce pay dissatisfaction is a:
lead policy
A small lawn care company has two mowers and four employees. If it hires another employee, how productive will productivity for the fifth employee compare to the current two mowers?
less productive
Issues of transparency, technology, and choice are most closely associated with the _____________ aspect of mapping a total compensation strategy
management
One of the reasons why the great majority of the uninsured in the U.S. are from working families is that:
many small employers are much less likely than larger employers to offer health insurance to their employees
The most common pay policy is ________________
match
Which of the following is given as an increment to base pay in recognition of past work behavior?
merit increases
According to the Hudson Survey, _________________ is the single thing that would make employees happier
more money
Which of the following statements concerning cash compensation and the Fair Labor Standards Act is true?
nonexempt employees have their pay calculated at an hourly wage
Whole Foods' decision to seek and engage employees who are going to help the company make money is an example of which strategic pay decision?
objectives
Unlike merit increases, merit bonuses are:
paid in the form of a lump sum
Which of the following statements is true of pay level?
pay level is directly proportional to labor costs
In the context of pay relationships, which of the following is illegal in the U.S.?
paying on the basis of one's age
Trying to measure ROI for any compensation strategy implies that:
people are "human capital," similar to other factors of production
__________ refers to the process used to make pay decisions
procedural fairness
Evidence shows that in manufacturing, _________________ is positively correlated with hourly wage level
productivity
Which of the following is linked to high pay levels?
reduced vacancy rates
In _________________ theory, pay is described as noncompensatory
reservation wage
___________ theory is the basis for sorting effect pay strategy has on the composition of the workforce
signaling
Total CEO annual compensation at S & P 500 companies is roughly $12.3 million. At just over half that total ($6.5 million), which compensation component comprises the majority of that total compensation amount?
stock grants
Which of the following is often the largest component in an executive pay package?
stock options
Which of the following is not true of the relationship between employee size and its ability to pay?
talented people prefer to work in larger organizations
_______________ is an example of a bourse
the total compensation for a top athlete
Incentives do not permanently increase labor costs because:
they are one-time payments
Which of the following is true of incentives?
they are re-earned each pay period
Which of the following theories predicts that individual performance will be maximized when the pay differentials between job levels are large?
tournament theory
the most common basis for determining internal structures are:
work content and its value
The pay-mix component in which benefits are likely to be largest is ____________________.
work-life balance