Ch 11 Sample Questions (MC)

41. (p. 506) What type of business is most likely to have a high revenue-to-labor-cost ratio? A. A capital-intensive business B. A newly formed business C. A labor-intensive business D. A diversified business

A. A capital-intensive business

50. (p. 509) Which pay-setting approach places the highest relative emphasis on external comparisons? A. Basing pay on market surveys that cover as many key jobs as possible. B. Deriving pay rates for all jobs based on the number of job evaluation points. C. Grouping jobs into a smaller number of pay grades. D. Basing pay on skills employees have acquired.

A. Basing pay on market surveys that cover as many key jobs as possible.

42. (p. 506) _____ comparisons may be more important when attracting and retaining qualified employees is difficult, and when the costs of recruiting replacements is high. A. Labor market B. International C. Product market D. Commodity market

A. Labor market

63. (p. 517) _____ play the most crucial communication role because of their day-to-day interactions with employees. A. Managers B. Owners C. Subordinates D. Competitors

A. Managers

28. (p. 501) Consider the same two jobs in two different organizations. In Organization 1, jobs A and B are paid an annual average compensation of $30,000 and $50,000, respectively. In Organization 2, the pay rates are $25,000 and $55,000, respectively. Which of the following is true? A. Organizations 1 and 2 have the same pay level B. Organizations 1 and 2 have the same job structures C. Organizations 1 and 2 have the same individual pay rates D. Organizations 1 and 2 use incentive pay systems

A. Organizations 1 and 2 have the same pay level

55. (p. 511) Pay rate range spreads: A. are usually larger at higher grade levels. B. represent the distance between the midpoint and the maximum pay rates in each grade. C. represent a measure of the range of pay rates paid across an entire organization. D. are usually largest for blue-collar jobs in unionized settings.

A. are usually larger at higher grade levels.

31. (p. 502) All of the following are counterproductive ways of restoring equity except: A. decreasing one's outcomes. B. reducing one's own inputs. C. leaving the situation that generates perceived inequity. D. refusing to cooperate with employees who are perceived as overrewarded.

A. decreasing one's outcomes.

39. (p. 505-506) When using pay surveys to establish pay levels, all of the following are important activities except: A. include all jobs in an organization in the survey. B. include both labor market and product market competitors. C. decide if multiple surveys will be used. D. decide how to weigh and combine pay data.

A. include all jobs in an organization in the survey.

66. (p. 519-520) A broad band: A. is a combination of pay grades that reduces the number of levels in a pay structure. B. refers to the distance between the minimum and maximum pay rate in a pay grade. C. is the salary range attached to white-collar jobs. D. reduces flexibility in assigning merit increases.

A. is a combination of pay grades that reduces the number of levels in a pay structure.

56. (p. 513) The compa-ratio: A. measures the degree to which actual pay is consistent with pay policy. B. is defined as actual average pay for the grade divided by the minimum pay for the grade. C. can range from 0 to 100 percent. D. uses data from market pay surveys.

A. measures the degree to which actual pay is consistent with pay policy.

36. (p. 504) All of the following are ways of enhancing the organization's competitive position in the product market except: A. staff expansion. B. wage and salary freezes. C. hiring freezes. D. sharing benefits costs with employees.

A. staff expansion.

30. (p. 502) Implications of the equity theory for managing employee compensation include all but one of the following. Name the exception. A. Employees evaluate their pay by comparing it with what others get paid. B. Employees look at the intrinsic aspect of their work when making pay evaluations. C. Employees work attitudes and behaviors are influenced by their pay comparisons. D. Employee perceptions are what determine their pay evaluations.

B. Employees look at the intrinsic aspect of their work when making pay evaluations.

35. (p. 504) Which of the following is an example of an indirect payment? A. Wages B. Health insurance C. Bonuses D. Salaries

B. Health insurance

47. (p. 507) Which of the following HR activities provides basic descriptive information on job attributes and the job itself? A. Market survey B. Job analysis C. Recruitment D. Strategic planning

B. Job analysis

52. (p. 509-510) Which of the following is not a pay-setting approach to developing pay structure? A. Market survey data B. Pay remuneration C. Pay policy line D. Pay grades

B. Pay remuneration

26. _____ refers to the relative pay of different jobs and how much they are paid. A. Equity structure B. Pay structure C. Task structure D. Job structure

B. Pay structure

67. (p. 520) Which of the following is a possible disadvantage of delayering and banding? A. They do not work for a small sample of jobs. B. There is a reduced opportunity for promotion. C. They do not permit the organization to reward employees for learning. D. The lesser spread does not allow managers to recognize high performers.

B. There is a reduced opportunity for promotion.

72. (p. 526) During the recent financial crisis, the U.S. government, as part of the _____, decided it was appropriate to further regulate executive pay in firms receiving government "bail out" money. A. NCUA Corporate Stabilization Program B. Troubled Asset Relief Program C. Equal Pay Act D. Civil Rights Act

B. Troubled Asset Relief Program

45. (p. 507) In developing a job evaluation system, compensable factors: A. are generally statistically derived. B. are the characteristics of jobs that a firm values and chooses to pay for. C. usually vary significantly across job-evaluation systems. D. describe all aspects of the jobs being evaluated.

B. are the characteristics of jobs that a firm values and chooses to pay for.

51. (p. 509) A market pay policy line: A. is developed using nonkey jobs. B. can be generated using a statistical procedure called regression analysis. C. requires market pay rate data on all jobs in the organization. D. is always expressed as a linear relationship between job evaluation points and pay rates.

B. can be generated using a statistical procedure called regression analysis.

70. (p. 522) Skill-based pay systems generally are not appropriate for organizations that: A. desire worker flexibility. B. rely on market-based rates. C. emphasize decentralization of decision making. D. desire a climate of learning.

B. rely on market-based rates.

62. (p. 517) Research on the effects of two-tier wage plans has found that: A. lower-paid employees were less satisfied on average than higher-paid employees. B. those in the lower tier used lower comparison standards than those in the higher tier. C. lower-paid employees compared their pay to those in the higher tier. D. lower-paid employees expected over time to be promoted into the second tier.

B. those in the lower tier used lower comparison standards than those in the higher tier.

46. (p. 507) An example of a typical compensable factor is: A. social status. B. working conditions. C. longevity. D. gender.

B. working conditions.

69. (p. 522) Skill-based and competency-based approaches have all but one of the following potential disadvantages. Name the exception. A. Increased bureaucracy B. The challenge an organization faces in terms of using new skills effectively C. Decreased worker flexibility D. Employees "topping out"

C. Decreased worker flexibility

33. (p. 503) _____ pay comparisons focus on what employees within the same organization, but in different jobs, are paid. A. External equity B. Interior incentive C. Internal equity D. Exterior incentive

C. Internal equity

34. (p. 503-504) Which of the following is not a true statement concerning product market competition? A. In the absence of clear evidence of on productivity differences, costs need to be closely monitored. B. Organizations compete on multiple dimensions (e.g., quality, service, and price). C. It is the degree to which an organization must pay to compete against other companies that hire similar employees. D. It places an upper bound on labor costs and compensation.

C. It is the degree to which an organization must pay to compete against other companies that hire similar employees.

27. (p. 501) _____ refers to the relative pay of jobs in an organization. A. Pay structure B. Equity structure C. Job structure D. Task structure

C. Job structure

40. (p. 506) Which of the following comparisons is not important when deciding how to combine and weigh pay survey data from product market competitors? A. The ratio of labor costs to total costs B. The elasticity of product demand C. The costs of recruiting replacements D. The elasticity of the supply of labor

C. The costs of recruiting replacements

61. (p. 516-517) In a recent research study, more effective communication of the reasons for an organization's pay-cuts had: A. little effect on employees' attitudes and behaviors. B. a negative effect on employee retention rates. C. a large effect on reducing employee theft rates. D. no effect on employees' perceived equity of pay.

C. a large effect on reducing employee theft rates.

49. (p. 507) Weighting factors based on expert judgment refers to: A. pay policy weights. B. empirical weights. C. a priori weights. D. ex post weights.

C. a priori weights.

8. (p. 520) Competency-based pay is generally directed toward: A. nonexempt employees. B. international employees. C. exempt employees. D. unionized employees.

C. exempt employees.

59. (p. 516) Compensation management could be improved in most organizations by: A. improving the technical merit of compensation decisions. B. developing better theoretical bases for pay decisions. C. increasing employee participation in compensation decision making. D. offering better justification for the selection of compensation programs.

C. increasing employee participation in compensation decision making.

73. (p. 526) Top executive pay in the United States: A. is not questioned by American citizens. B. is justified because of the high pay of many athletes/entertainers. C. is the highest in the world. D. is lesser when compared to other more developed countries.

C. is the highest in the world.

54. (p. 511) A disadvantage of using the pay-setting approach that groups jobs into a smaller number of pay grades is that: A. it increases administrative burden. B. it permits less flexibility in moving employees from job to job. C. it results in some jobs being underpaid and others overpaid. D. it increases costs of surveying the market.

C. it results in some jobs being underpaid and others overpaid.

48. (p. 507) The job evaluation process includes all of the following except: A. compensable factors. B. a weighting scheme. C. pay ranges. D. scores (ratings).

C. pay ranges.

38. (p. 505) According to the efficiency wage theory, being a higher-pay employer is more beneficial when organizations: A. can easily monitor employee performance. B. are centralized. C. require highly skilled employees. D. have specialized work structures.

C. require highly skilled employees.

32. (p. 503) Which of the following is a consequence of external equity perceptions in making pay level decisions? A. Transfer B. Promotion C. Cooperation among employees D. Attraction and retention of quality employees

D. Attraction and retention of quality employees

65. (p. 519) _____ is reducing the number of job levels to achieve more flexibility in job assignments and in assigning merit increases. A. Remunerating B. Reorganization C. Downsizing D. Delayering

D. Delayering

37. (p. 505) Which of the following theories describes the conditions under which the benefits of higher pay outweigh the higher costs? A. Equity theory B. Expectancy theory C. Agency theory D. Efficiency wage theory

D. Efficiency wage theory

64. (p. 517-519) Which of the following is not a recognized limitation of a job-based pay structure? A. It encourages a bureaucratic orientation due to its reliance on inflexible job descriptions. B. It reinforces top-down decision making and information flow. C. It may not reward desired behaviors, particularly in a rapidly changing environment. D. It is difficult to explain to employees.

D. It is difficult to explain to employees.

44. (p. 506) _____ are the different pay rates various employees may get for the same job. A. Wage differentials B. Key proximities C. Compensable factors D. Rate ranges

D. Rate ranges

1. (p. 523) Which of the following is a factor to consider in keeping many types of production in one's own country which has high labor costs rather than shifting to low labor cost countries? A. Relative labor costs are stable over time. B. The quality and productivity of national labor forces generally do not vary. C. Any consideration of where to locate production can be based on labor considerations alone. D. The combination of lower labor costs and higher productivity translates into lower unit labor costs.

D. The combination of lower labor costs and higher productivity translates into lower unit labor costs.

53. (p. 510) Pay grades are desirable pay structures when: A. there are only a few jobs in the organization. B. there are broad distinctions between jobs within a pay grade. C. there is concern about overpaying some jobs. D. an organization desires greater flexibility in moving employees.

D. an organization desires greater flexibility in moving employees.

43. (p. 506) Key, or benchmark, jobs have all of the following characteristics except: A. relatively stable content. B. are common to many organizations. C. are jobs on which it is possible to obtain market pay survey data. D. have many incumbents within the organization.

D. have many incumbents within the organization.

29. (p. 501) Both pay level and job structure are characteristics of organizations and reflect decisions about: A. human resource development. B. individual employees. C. organizational goals. D. jobs.

D. jobs.

60. (p. 516) As in other areas of human resource management, _____ are typically responsible for making policies work. A. top management teams B. team leaders C. consultants D. line managers

D. line managers