Compensation Administration - Chapter 15 Questions

________ is movement through the wage ranges where seniority is specified as the basis of the movement. A) Length-of-stay progression B) Automatic progression C) A merit differential D) A performance differential

B) Automatic progression

The CEO of BoardCom, Inc., James, negotiates a new union contract with the union leader. If James wants to reduce expenses and keep the union happy, which of the following suggestions is most likely to be helpful? A) Introduce merit increases based on individual-based performance. B) Provide lump-sum awards in exchange for merit pay increases. C) Introduce a gain-sharing plan that substitutes wages. D) Provide a 20 percent increase to base wages.

B) Provide lump-sum awards in exchange for merit pay increases.

Basically a phenomenon of the union sector, two-tier wage structures differentiate pay based upon the A) type of work. B) hiring date. C) place of work. D) length of contract, if applicable

B) hiring date.

A study of unions in 114 companies concluded that A) the impact of unions on wages is less during recession. B) the union-nonunion gap is the greatest during strong economies. C) unions make a difference in wages across all studies and time periods. D) unions are not responsible for any differences in wages.

C) unions make a difference in wages across all studies and time periods.

Which of the following involves periodic adjustments based typically on changes in the consumer price index? A) A COLA clause B) A deferred wage increase C) A reopener clause D) An annual improvement adjustment

A) A COLA clause

With gain-sharing plans, the most common union strategy is to A) delay taking a stand until real benefits are more apparent. B) be very enthusiastic. C) have direct opposition to the plans as soon as they are suggested by the management. D) have no concern for the plans.

A) delay taking a stand until real benefits are more apparent.

In the negotiation stage of a multiyear wage contract, Mark, the manager of SifCo Corp., specifies that changes will be made to the wage based on the changes in the consumer price index and mentions the effective dates of adjustment. Which of the following types of clauses has Mark introduced in the contract? A) A halo clause B) A spillover clause C) An escalator clause D) A reopener clause

C) An escalator clause

Union employees in the public sector earn, on average, about ________ more than their nonunion counterparts. A) 40 percent B) 5 percent C) 14 percent D) 22 percent

D) 22 percent

When compared to the impact of unions during strong economies, the impact of unions during periods of higher unemployment is A) unknown. B) the same. C) smaller. D) larger

D) larger

In a(n) ________ pay plan, a contract is negotiated that specifies that employees hired after a given target date will receive lower wages than their higher-seniority peers working on the same or similar jobs. A) skill-based B) efficiency-based C) one-tier D) two-tier

D) two-tier

Which of the following is a reason for unions favoring gain-sharing plans? A) Increased peer pressure to perform B) Increased involvement with job activities C) Increased flexibility in moving employees quickly into high-demand areas D) Increased clarity in bonus calculations

B) Increased involvement with job activities

Which of the following is the most likely reason for most unions to insist on group-based performance measures with equal payouts to members? A) It enables employees to learn new skills. B) It cuts down on strife and internal quarrels. C) It encourages individual differences. D) It causes a leniency effect

B) It cuts down on strife and internal quarrels.

Increased global competition has caused unions to: A) demand higher base wages than their international counterparts. B) become more receptive to alternate reward systems that link pay to performance. C) accept less variable pay in exchange for higher base pay. D) demand increases in product prices to cover for increased wage costs.

B) become more receptive to alternate reward systems that link pay to performance.

Which of the following actions is most likely to be favored by unions? A) Increasing the pricing of products to cover for increases in wages B) Substituting wages with gain-sharing plans C) Making each individual worker more expendable to the firm D) Introducing lump-sum awards

D) Introducing lump-sum awards

Which of the following plans give employees part ownership in a company? A) Employee stock ownership plans B) Pay-for-knowledge plans C) Gain-sharing plans D) Profit-sharing plans

A) Employee stock ownership plans

Which of the following statements about single rates is true? A) Single rates are usually specified for workers within a particular job classification. B) Single-rate agreements differentiate wages on the basis of seniority. C) Single rates are only specified for workers employed by a firm in different geographic areas. D) Single-rate agreements differentiate wages on the basis of merit.

A) Single rates are usually specified for workers within a particular job classification.

Company A and Company B are in the same industry, but Company A is unionized and Company B is not. Therefore, A) it can be argued with assurance that any wage differences between the two firms are due to the presence of a union in Company A and the absence of a union in Company B. B) it is difficult to argue with assurance that wage differences between the two firms are attributable to the presence of a union, although the possibility exists. C) Company B has to form a union to compete with Company A. D) any wage differences between the two firms can never be attributed to the presence of a union in Company A.

B) it is difficult to argue with assurance that wage differences between the two firms are attributable to the presence of a union, although the possibility exists.

A deferred wage increase A) specifies that wages will be renegotiated at a specified time. B) specifies that such nonwage items as pension and benefits will be renegotiated under certain conditions. C) is negotiated at the time of initial contract negotiations with the timing and amount specified in the contract. D) involves periodic adjustments based typically on changes in the consumer price index.

C) is negotiated at the time of initial contract negotiations with the timing and amount specified in the contract.

Which of the following is a reason for unions opposing gain-sharing plans? A) Reduced job security B) Decreased peer pressure to perform C) Decreased feeling of achievement or contributing to the organization D) Reduced need for jobs due to increased productivity

D) Reduced need for jobs due to increased productivity

MaxTrain Corp. recognizes that its competitor GlasWell Corp., which is unionized, offers higher wages and benefits. To avoid unionization demands from its workers, MaxTrain decides to offer the same wages and benefits to its employees as GlasWell. Which of the following phenomena is exemplified in this case? A) The sorting effect B) The halo effect C) The leniency effect D) The spillover effect

D) The spillover effect