MGT 319 Final
Total compensation in many organizations makes up at least _____ of operating expenses.
50%
Menthorp, Incorporated wants to design a variable pay plan that fosters teamwork and increases the 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?
A gain-sharing plan
The _________ often comes into play if organization target reductions among higher paid employees because higher paid employees also tend to be older employees.
Age Discrimination in Employment Act (ADEA)
In the context of performance appraisals, which of the following statements is true?
All other things being equal, males are rated higher than females.
This type of defined contribution plan involves a company making a tax-deductible contribution of stock shares to cash to a trust which then allocates payments to employees based on earnings.
An ESOP
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
A _____ requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action.
Bedeaux plan
In a(n) _______, employees have a hypothetical account into which is deposited what is typically a percentage of annual compensation.
Cash balance plan
The ____ was enacted by the Congress to provide current and former employees and their spouses and dependents with a temporary extension of group health insurance.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Which of the following is a measure of changes in prices of goods and services in the product and service markets over time?
Consumer price index
Which of the following is a factor to control in order to manage labor costs in a simple labor cost model?
Employment
For any task completed in standard time or less, earnings are pegged at 120 percent of the time saved under the ___
Gantt plan.
In the context of the performance evaluation process, which of the following ensures that raters are motivated to rate accurately?
Making sure that managers are graded on how well they utilize and develop human resources.
Which of the following types of rankings would be least preferred by managers of more than 10-15 employees?
Paired comparison ranking
Which of the following is a disadvantage of team incentives?
They are administratively complex to implement.
A compa-ratio of less than 1 means that, on average, _____.
employees in a range are paid below the midpoint.
In the majority of the states, unemployment insurance is financed exclusively by:
employers that pay federal and state unemployment insurance
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.
Paying a dime for every bottle collected and turned into a collection center is an example of a:
straight piecework system.
HoldDesk Inc. has an annual labor cost of $3,000,000. It has a turnover rate of 10 percent and a planned average increase of 5 percent. The turnover effect is ______.
$15,000
Steve has a small company with 12 employees. One of his employees, Larry, has been laid off because his work has been outsourced. Larry had health coverage through Steve's company and wants to continue that coverage. According to COBRA, how long can Larry continue his coverage through Steve's company after being laid off?
0 months
The average company match for 401(k) retirement plan is ______ on the dollar up to 6 percent of pay.
50 cents
Approximately ___ percent of private sector employees have access to paid life insurance.
56
Which of the following is an individual incentive plan?
A straight piecework system
_____ are defined benefit plans that look like a defined contribution plan.
Cash balance plans
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
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
Which of the following is the basic question to ask to improve quality and ensure that value is added by each technique and at each stage in the compensation system.
Does each specific activity directly contribute to our objectives?
The _______ is designed to lessen an employer's ability to deny coverage to an employee for a preexisting condition.
Health Insurance Portability and Accountability Act (HIPAA)
Which of the following is an advantage of providing stock ownership as variable pay to employees?
It defers a portion of taxes to employees.
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%.
Which of the following rating formats has the lowest rating errors?
Management by Objectives (MBO)
The most common form of outcomes-based appraisal is:
Management by Objectives (MBO).
A key provision of the ____ allows employees in publicly traded companies the freedom to sell off any employer stock purchased through deferrals or after-tax contributions.
Pension Protection Act
Which of the following are an example of a long-term incentive plan?
Performance plans
Which of the following statements is true of workers' compensation benefits?
States vary in the size of the payout for claims.
_______ have indirect pay-performance links and require employees to put up money to exercise grants.
Stock options plans
GronLan Inc., a company with a majority of workers with high seniority, decides to hire 1,000 college graduates to meet the sudden productivity requirements generated by a growth in the market. Which of the following statements is most likely to be happen in this situation?
The average pay actually paid by the company will fall below its range midpoint.
Which of the following is a feature of defined contribution plans?
They are faster to vest than defined benefit plans
Which of the following statements is true of individual spot awards?
They are given to employees for exceptional performance as an add-on bonus
Which of the following statements is true regarding rater training?
Training to reduce halo errors and improve accuracy has been most successful.
In the context of subordinates as raters, which of the following statements is true?
Upward feedback has been historically viewed as countercultural.
Which of the following statements concerning contingent workers, alternative work arrangements, and/or gig workers is not true?
Use of such workers represents less that 5% of all workers.
What is the first question that should be asked when determining the amount of retirement income an employer should provide?
What level of retirement compensation would the employer like to set as a target, expressed in relation to pre-retirement earnings?
If you had repair work done on your car, the shop most likely used ________ to pay the mechanic.
a standard hour plan
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.
All of the following are categories of rater training EXCEPT _____
behavior modeling training.
Replacing merit grids with _______ eliminates the link between the pay increase and the employees' salary position in the range and performance rating.
bonuses
Financially healthy employers may wish to maintain their competitive positions in the labor market or share financial success.
bonuses and profit sharing.
Three major problems with team compensation involve the three Cs, which are:
complexity, control, and communications.
Allowing non-performance factors to affect performance scores as part of performance appraisals is referred to as ______.
criterion contamination
A management strategy of giving separate business units the responsibility of designing and administering their own systems known as a _______
decentralized strategy.
If red circle rates become common throughout an organization, then the _____.
design of the ranges and the evaluation of the jobs should be reexamined.
Childcare may be considered a legitimate expense offered in a _____ funded with pretax dollars provided by the employee, the employer, or both.
flexible spending account
An employer experiencing high turnover and seeking to reduce pension cost is likely to prefer ____
full vesting after three years.
The trend in recent variable-pay design is to combine the best of ____.
gain-sharing and profit-sharing plans.
When contemplating compensation communications, remember that _______ occurs when a company follows trends in programs and techniques, and the company needs to benchmark selectively.
herding
The rising costs of Social Security have been covered by _____.
increases in the maximum earnings base and the rate at which that base is taxed.
Tying budgets or payments to the CPI is called ____
indexing.
In gain-sharing plan formulas, _____.
labor inputs are in the numerator and productivity outcomes are in the denominator.
Telling raters that sometimes the work environment and system affect job performance more than the individual employee's behavior:
leads to higher ratings
A health maintenance organization (HMO) pulls together a group of providers willing to provide services at an agreed-upon rate in exchange for employers ____
limiting employees to these providers for health services.
When implementing a gain-sharing plan, employee and union participation may lead to success due to the resulting _____.
perceived fairness of the formula
Teaching raters what constitutes good, average, and bad performance is _____ training.
performance-standard
The percentage increase in average pay that is expected for an organizational unit or company is called a _____.
planned pay-level rise.
A ____ plan is a hybrid health plan combining the benefits of HMO and preferred provider organization.
point-of-service
A major criticism of standard rating scales is that:
raters have different definitions of scale levels.
The term "pension plan" most often refers to ___
defined benefit plan.
The majority of defined benefit plans calculate average earnings over the last ______ years of service for a prospective retiree.
3 to 5
Components identified as vital to the success of both Scanlon and Rucker plans are:
a productivity norm and effective worker committees.
Changes in wages in labor markets are measured _____
through pay surveys.
Which of the following statements is true of the Halsey 50-50 method?
It derives its name from the shared split between worker and employer of any savings in direct cost.
Bottom-up budgeting includes the process of distributing forecasting instructions and worksheets where:
firms furnish managers with the forms and instructions necessary to preplan increases.
An employee who changes jobs four or more times during his or her career will likely receive a pension approximately _____ as that of an employee whose working career is spent with one employer, assuming that both employees have the same starting salary and receive annual increases equal to the inflation rate.
half the size
If Philadelphia has a CPI of 165 and Houston has a CPI of 145 and if both cities started with bases of 100, it means that ______.
prices have risen faster in Philadelphia since the base year than in Houston.
Of the following large group incentive plans, which type of plan uses financial measures to gauge performance, as opposed to operating measures to gauge performance?
profit-sharing plans
Which of the following is an objective of the unemployment insurance program?
provide an incentive for employers to stabilize employment.
A major advantage of a ________ is that it reduces benefits costs, something that the other cost-cutting options ordinarily do not achieve.
reduction in force (RIF)
The compa-ratio reflects the ___.
relationship of the average actual salary in each range to the midpoint of the range.
Controls on managers' pay decisions come from two different aspects of the compensation process: (1) controls that are inherent in the design of the techniques and (2) _____
the formal budgeting process.
The _______ recognizes the fact that when people leave an organization, they typically are replaced by employees who earn a lower wage.
turnover effect (aka: churn/slippage)
In the context of the Consolidated Omnibus Budget Reconciliation Act (COBRA), which of the following statements is true?
The biggest concern for individuals getting health insurance under COBRA is the relatively brief qualifying period, only 18 months.
Which of the following statements is NOT true?
Workers whose performance is consistently average are rated higher than those who perform better at the end of a rating cycle.
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.
Among peer raters, the most objective evaluations are given by:
high-performing workers.
When employees are paid more than the maximum of their pay grade, these rates are called ______
red circle rates
In 1940, the ratio of social security covered workers (those paying into the fund) to beneficiaries was 159.4 to 1, and now it is under ____
3.0 to 1
Jacob, an 18-year-old, has been working at HoldVille Corp. for over a year. If HoldVille offers full vesting after one year, which of the following statements is true?
Jacob is not eligible for pension as he is not over 21.
Which of the following is a benefit under Social Security?
Lump-sum death payments
Which of the following statements is true of merit pay?
Merit programs are commonly designed to pay different amounts depending on the level of performance.
An incentive system with three piecework rates is the ___
Merrick plan.
Michael was laid off by his company owing to budget cuts. Before being laid off, he earned $1,000 per week. If he has been receiving unemployment insurance benefits for 26 weeks, which of the following statements is true in this scenario?
Michael is no longer eligible for unemployment benefits.
Which of the following statements is true of a pay-for-performance (PFP) plan?
Of the pay components, only base pay and across-the-board increase do not fit the PFP category.
Which of the following is a disadvantage of gain-sharing plans?
Payouts can occur even if a company's financial performance is poor.
______ relieve an employer's liability when a pre-employment injury combines with a work-related injury to produce a disability greater than that caused by the latter alone.
Second-injury funds
Jennifer is hurt at work while driving a forklift. Her employer claims that she was injured as a result of her careless driving and is therefore not eligible for workers' compensation. What will be the outcome of the employer's challenge to her worker's compensation claim?
She will likely receive workers' compensation benefits.
MerTon Inc. decides to reduce labor costs by using exit incentives to encourage some of its senior, high-earning members to leave the organization. It replaces the employees who quit with new employees and pays them low wages. Which of the following statements is most likely true in this scenario?
The salary range midpoint of the company is higher than the actual salary paid.
The denominator for calculating the current year's pay rise is ___
average pay at the beginning of the year.
The most frequently implemented incentive system is:
a straight piecework system.
In the context of performance appraisal formats, which of the following criteria is concerned with whether the evaluation form initially requires a long time to be developed?
Cost criterion
In the context of evaluation formats, which of the following is true of the alternation ranking method?
It recognizes that raters are better at ranking people at extreme ends of a distribution
The European Union has issued the _______, which is significantly stronger than U.S. regulations.
Data Privacy Directive
Which of the following is true of the Affordable Care Act?
It is aimed at expanding health care coverage through an individual mandate to purchase health insurance and an employer mandate to provide qualifying health insurance coverage
Which of the following statements is true of the Rowan plan?
It is an individual incentive plan that provides for variable incentives as a function of a standard expressed as time period per unit of production.
Which of the following is statements is true of leniency errors?
It is the error of consistently rating someone higher than is deserved.
In _______, 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 ranking
As a strategy for measuring job performance, a(n) ______ acknowledges that success does not just happen and this approach looks at all aspects of the job performance that contribute value in an organization.
balanced scorecard approach
When a job involves very routine, mechanistic tasks, the most appropriate appraisal format is:
Behaviorally Anchored Rating Scales (BARS)
Which of the following is the best appraisal format in terms of legal defensibility?
Behaviorally Anchored Rating Scales (BARS)
TreeDen Corp. experiences an increase in its employee turnover rate. Upon investigation, 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.