chapter 12 - comp

Which of the following is a federal law that establishes a minimum wage and requirements for overtime pay and child labor? A. Fair Labor Standards Act B. Americans with Disabilities Act C. Family and Medical Leave Act D. Employee Retirement Income Security Act E. Equal Pay Act

A. Fair Labor Standards Act

According to _____, people measure outcomes such as pay in terms of their inputs. A. expectancy theory B. equity theory C. retributive justice theory D. progressive justice theory E. economic theory

B. equity theory

_____ means that an employee is paid a given amount regardless of the number of hours worked or quality of the work. A. Pay level B. Nonexemption C. Pay policy line D. Piecework rate E. Salary basis

E. Salary basis

Caroline, a researcher, believes that an organization needs to plan what they will pay employees in each job. Mark, her colleague, argues that an employee's pay should be independently negotiated. Which of the following statements will weaken Mark's argument? A. An unplanned approach will likely result in unfairness and dissatisfaction among the employees. B. Most of the employees prefer planned pay because negotiation with the management takes time. C. Independently negotiated pay will increase the workload and rivalry among the employees. D. When the pay is planned by the organization, it creates more employment opportunities. E. The pay structure is the same for both an entry-level and a manager-level employee if it has been independently negotiated.

A. An unplanned approach will likely result in unfairness and dissatisfaction among the employees

Pay ranges are most common for _____. A. white-collar jobs B. piece-rate jobs C. jobs that are covered by union contracts D. automotive workers E. construction workers

A. white-collar jobs

Cindy and Alex execute the same roles and responsibilities at their organization. However, Alex earns more than Cindy. Under the laws governing equal employment opportunity, which of the following statements will justify the organization's decision to pay Alex more than Cindy? A. Alex is white, and Cindy is black. B. Alex has more experience than Cindy. C. Cindy has a hearing impairment. D. Men have more stamina, so they can work longer hours. E. Cindy is an immigrant.

B. Alex has more experience than Cindy.

Triano Brothers, an insurance firm, follows an administrative procedure for measuring the relative worth of its jobs. The organization does this by assembling and training a committee consisting of people familiar with the jobs. The committee includes a human resource specialist and, if the budget permits, an outside consultant is hired. Which of the following is exemplified in this scenario? A. job rotation B. job evaluation C. merit pay system D. job enrichment E. work structure

B. job evaluation

An organization's choices about _____ are limited by its response to the economic forces of product markets and labor markets. A. pay rates B. pay structure C. pay differentials D. pay grades E. pay ranges

B. pay structure

David earns a base rate of $12 an hour and receives a weekly attendance award of $20. He works 40 hours this week. What would be his total compensation for the week? A. $480 B. $600 C. $500 D. $520 E. $250

C. $500

Blyrie Pharma is a pharmaceutical company based in Alabama. Blyrie Pharma expects its employees to work long hours and achieve increased production rates. Employees earn one and a half times the usual hourly rate for working more than 40 hours in one week. Which of the following laws is Blyrie Pharma abiding by in this scenario? A. laws governing equal employment opportunity B. Fair Labor Standards Act (FLSA) of minimum wage C. Fair Labor Standards Act (FLSA) of overtime D. laws governing prevailing wages E. product market laws

C. Fair Labor Standards Act (FLSA) of overtime

According to equity theory, employees evaluate job outcomes such as compensation in terms of outputs.

f

Cliff Stiff Inc., a cement company, receives more than $2,000 in federal money. The company hires employees belonging to the age group of 25 to 40. Soon after, the Cliff Stiff is charged for violation of law under the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936. Which of the following would most likely explain the reason for the company being sued? A. The employees of the company are not being paid at rates at least equal to the prevailing wages in the area. B. Cement industry employees are being paid only 15% above the minimum wage. C. The company hired employees belonging to the age group of 25 to 30, and they are being employed in hazardous environments. D. Individuals eligible for overtime are being paid at one and a half times the employee's regular pay rate. E. Employees below the age of 25 are not being hired by the company.

. The employees of the company are not being paid at rates at least equal to the prevailing wages in the area.

Kazuri Inc., a manufacturing company, bases employees' pay entirely on market forces. In this case, which of the following is a practical drawback faced by the company? A. Employees might conclude that the pay rates are unfair. B. Supervisors of the company will expect to receive lower pay because of less responsibility. C. The highly paid employees will likely be dissatisfied because of more work. D. The managers will participate in rotation of responsibilities because they receive lower pay. E. All employees will be categorized as exempt employees.

A. Employees might conclude that the pay rates are unfair.

Which of the following best defines an organization's job structure? A. It consists of the relative pay for different jobs within the organization. B. It is the average amount an organization pays for a particular job. C. It comprises the characteristics of jobs that the organization values and chooses to pay. D. It comprises regular pay, overtime pay, and bonuses. E. It refers to the standard amount that employers must pay under federal and state law.

A. It consists of the relative pay for different jobs within the organization

John and Lisa hold the same position at Flyberry Electronics. However, John earns more than Lisa. In the context of pay structure, which of the following justifies the organization's decision to pay John more than Lisa? A. John works the night shift, and night hours are less desirable for most workers. B. John is a U.S. citizen; therefore his pay should be higher than that of non-Americans. C. Lisa is pregnant; therefore her productivity is assumed to be lower. D. John is physically disabled; therefore he should be paid more than Lisa. E. Lisa lives in a location where living expenses are higher.

A. John works the night shift, and night hours are less desirable for most workers.

Mark and Chloe hold the same position at Rue & West Bros. However, Mark earns more than Chloe. Which of the following will justify the organization's decision to pay Mark more than Chloe? A. Mark meets higher productivity targets than Chloe. B. Mark comes from an economically weaker background. C. Mark is male. D. Chloe is younger than Mark. E. Chloe is not a U.S. citizen.

A. Mark meets higher productivity targets than Chloe.

Sapheda Inc., a heavy machinery company, has employees belonging to the age group of 17 to 30. Noah, a 17-year-old, is prohibited from working with heavy machinery tools. Instead, he works in the mail room. Under the laws governing Fair Labor Standards Act (FLSA), which of the following will justify the organization's decision to forbid Noah from doing heavy machinery work? A. Noah cannot be employed in hazardous occupations because he is 17 years old. B. Noah is expected to work in a safe environment because he is male. C. Noah is not a U.S. citizen, therefore he is prohibited from working in a hazardous environment. D. Noah has not yet completed college, therefore he should only be given administrative duties. E. Noah comes from an economically weaker background, therefore he is expected to perform clerical duties.

A. Noah cannot be employed in hazardous occupations because he is 17 years old.

Some employees at Los Amigos Inc., a clothing manufacturer, investigate pay rates on Salary.com and learn that Los Amigos has been paying them significantly more than the national average for their jobs. In this case, which of the following is the most likely reaction of the employees at Los Amigo? A. The employees will conclude that there must be regional differences in pay. B. The employees will be motivated to work much harder. C. The employees will find their jobs less challenging. D. The employees will find a way to increase their outcomes by stealing. E. The employees' attitudes and behaviors will continue unchanged.

A. The employees will conclude that there must be regional differences in pay.

Teno Industries Inc. is a manufacturing company based in Texas. In the year after Teno Industries implemented a comparable-worth policy, its expenses increased, and as a result, profits declined. What difficulty of comparable-worth policies does this example illustrate? A. The employer is at an economic disadvantage because of increased pay for some jobs. B. The policy overlooks the undervalued work performed by women. C. The policy uses job enrichment to establish a pay structure based on market rates. D. The employer ignores the evaluation points for each job. E. Employees in lower-paid jobs are encouraged to meet the goal of comparable worth.

A. The employer is at an economic disadvantage because of increased pay for some jobs.

Thomas and Alex are welders working for two different divisions of the same company. Both have the same level of experience. However, Thomas earns more than Alex. Under the Fair Labor Standards Act (FLSA), which of the following will justify the organization's decision to pay Thomas more than Alex? A. Thomas lives in a location where living expenses are higher B. Alex is younger than Thomas C. Thomas is a U.S. citizen D. Alex is physically disabled E. Alex works the night shift

A. Thomas lives in a location where living expenses are higher

Ramon Inc., a software company, uses job evaluations to establish the value of its jobs in terms of criteria such as their difficulty and their importance to the organization. The company then compares the evaluation points awarded to each job with the pay for each job. If jobs have the same number of evaluation points, but are not paid equally, the pay of the lower-paid job is raised. Based on the scenario, identify the policy adopted by the company. A. comparable-worth policy B. minimum wage policy C. average pay policy D. merit pay policy E. piecework rate policy

A. comparable-worth policy

Which of the following will most likely be a result of using an unplanned approach, in which each employee's pay is independently negotiated? A. dissatisfied employees B. equal pay distribution C. rates that are stable D. easy employment E. cost control

A. dissatisfied employees

Under the FLSA, exempt status of employees depends on their A. job responsibilities and salary. B. organizational commitment. C. job title. D. work experience. E. job qualifications.

A. job responsibilities and salary.

Employees' conclusions about equity depend on A. what they choose as a standard of comparison. B. how much money they think the company CEO makes. C. what level of income they believe they should be at by this point in their lives. D. what benefits they receive. E. if they think they can bargain for a higher rate of pay.

A. what they choose as a standard of comparison.

Scorla Automobiles is a manufacturing company based in Nevada. The employees of Scorla are paid the lowest amount under federal or state law, which is stated as an amount of pay per hour. Which of the following laws is the organization abiding by in this scenario? A. laws governing equal employment opportunity B. Fair Labor Standards Act (FLSA) of minimum wage C. Fair Labor Standards Act (FLSA) of overtime D. laws governing prevailing wages E. product market laws

B. Fair Labor Standards Act (FLSA) of minimum wage

Pentrall, a healthcare company, provides a lower training rate to its employees belonging to the age group of 18 to 19 years. The rate is applicable for a period of 90 days. In this case, which of the following laws will justify the organization's decision to pay the lower pay? A. laws governing equal employment opportunity B. Fair Labor Standards Act (FLSA) provisions for minimum wage C. Fair Labor Standards Act (FLSA) provisions for overtime D. laws governing prevailing wages E. Fair Labor Standards Act (FLSA) provisions for child labor

B. Fair Labor Standards Act (FLSA) provisions for minimum wage

Which of the following statements is true according to the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936? A. Under these laws, individuals aged 18 and 19 may not be employed in hazardous occupations defined by the Department of Labor. B. Federal contractors must pay their employees at rates at least equal to the prevailing wages in the area. C. The overtime rate applies to the hours worked beyond 45 in one week. D. Employers must pay a training wage to workers under the age of 15 for a period of up to 60 days. E. Organizations can defend themselves against claims of discrimination by showing that they pay the going market rate.

B. Federal contractors must pay their employees at rates at least equal to the prevailing wages in the area.

Which of the following statements is true about the Consumer Price Index (CPI)? A. The CPI helps organizations in the product markets decide an upper limit on the pay they will offer. B. Following and studying changes in the CPI helps employers prepare for changes in the demands of the labor market. C. The CPI helps organizations lure top-quality employees. D. The CPI helps control labor markets' demand for pay increases. E. The CPI helps organizations to compete with companies in other industries that hire similar employees.

B. Following and studying changes in the CPI helps employers prepare for changes in the demands of the labor market.

Which of the following statements is true of equal employment opportunity laws? A. These laws guarantee equal pay for whites and minorities. B. The goal of these laws is for employers to provide equal pay for equal work. C. Job descriptions and job structures cannot help organizations demonstrate that they are upholding these laws. D. These laws guarantee equal pay for men and women. E. Under these laws, employers cannot tie differences in pay to business-related considerations.

B. The goal of these laws is for employers to provide equal pay for equal work.

Which of the following statements is true of compensable factors? A. They are generally statistically derived. B. They are the characteristics of a job that a firm values and chooses to pay for. C. They refer to the factors that are important for setting the two-tier wage system. D. They describe all aspects of the jobs being evaluated. E. They are used to ensure equity among employees.

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

Which of the following statements is true of compensable factors? A. They are generally statistically derived. B. They are the characteristics of a job that a firm values and chooses to pay for. C. They refer to the factors that are important for setting the two-tier wage system. D. They describe all aspects of the jobs being evaluated. E. They are used to ensure equity among employees.

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

Hamish Life, an insurance company, defines the difference in pay between an entry-level recruiter and an entry-level assembler, as well as the difference between an entry-level recruiter, an HR manager, and the vice president of the human resource department. Which of the following is being exemplified in this scenario? A. straight piecework plan B. job structure C. merit pay system D. pay differential E. balanced scorecard

B. job structure

Research on the effects of two-tier wage plans found that A. lower-paid employees were less satisfied on average than higher-paid employees. B. lower-paid employees were more satisfied on average than higher-paid employees because they made comparisons with lower-paying alternatives for themselves. C. lower-paid employees expected to be promoted into the second tier in a short time span. D. equity theory did not come into play for either group and neither group experienced more or less job satisfaction than the other. E. both existing employees and new employees have a similar pay rate.

B. lower-paid employees were more satisfied on average than higher-paid employees because they made comparisons with lower-paying alternatives for

Which of the following provisions is included in the Fair Labor Standards Act (FLSA)? A. personal finance B. minimum wage C. wage discrimination D. environmental hazards E. retirement plans

B. minimum wage

Which of the following is an adjustment to a pay rate to reflect differences in working conditions or labor markets? A. bonus B. pay differential C. green-circle rate D. rank-and-file adjustment E. red-circle rate

B. pay differential

Which of the following is a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job? A. pay grade B. pay range C. pay differential D. compa-ratio E. compensation differential

B. pay range

Overlapping _____ give the organization more flexibility in transferring employees among jobs, because transfers need not always involve a change in pay. A. pay rates B. pay ranges C. pay policies D. pay differentials E. pay ranks

B. pay ranges

Which of the following is an advantage of a two-tier wage system? A. It helps move jobs out of the country. B. It helps eliminate jobs without any legal hassles. C. It helps reduce labor costs without cutting employees' existing salaries. D. It helps provide more pay to new employees. E. It provides better standards for benchmarking.

C. It helps reduce labor costs without cutting employees' existing salaries.

Which of the following statements is true of the FLSA requirements for overtime pay? A. The overtime rate is one and a half times the employee's hourly rate, excluding any bonuses or piece-rate payments. B. Time worked includes hours spent on production or sales, but not on activities such as attending required classes, cleaning up the work site, and so on. C. Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours. D. Everyone is eligible for overtime pay. E. Most workers paid on an hourly basis are exempt and therefore not subject to the laws governing overtime pay.

C. Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours.

Under the FLSA, which of the following statements is true of child labor? A. Children aged 18 and 19 may not be employed in hazardous occupations defined by the Department of Labor. B. Children aged 14 and 15 may not be employed in any work associated with interstate commerce. C. The FLSA's restrictions on the use of child labor apply to children younger than 18. D. Children aged 18 and 19 may work only outside school hours, in jobs defined as nonhazardous, and for limited time periods. E. All the states have laws requiring working papers or work permits for minors.

C. The FLSA's restrictions on the use of child labor apply to children younger than 18.

According to the FLSA, which of the following individuals is most likely a nonexempt employee? A. the CEO B. a senior administrative employee C. an hourly paid employee D. an HR manager E. the director of marketing

C. an hourly paid employee

Organizations under pressure to cut labor costs may respond by A. retaining staff levels. B. providing pay increases to prevent employee turnover. C. postponing hiring decisions. D. requiring employees to bear less of the cost of benefits such as insurance premiums. E. avoiding automation of routine tasks.

C. postponing hiring decisions.

Which of the following sentences best describes a situation that comparable-worth policies were designed to address? A. In a manufacturing company, there are no female managers. B. A consumer products company has been sued for racial discrimination. C. An agency works with a supermarket's HR department to design a job that could be held by people with mental disabilities. D. In a city government, positions mostly held by women pay less than positions mostly held by men. E. At a utility company, jobs that involve physical strain and danger pay more than office jobs.

D. In a city government, positions mostly held by women pay less than positions mostly held by men.

John is the head of the insurance claims department. John works for longer hours than his subordinates, however, he is not paid overtime for working more than 40 hours per week. Under the FLSA, which of the following will justify the organization's decision not to give John overtime pay? A. John is not a U.S. citizen. B. John comes from an economically strong background. C. John is unmarried. D. John is considered as an exempt employee. E. John has lower educational qualifications than his subordinates.

D. John is considered as an exempt employee

Which of the following statements is true about the Fair Labor Standards Act (FLSA)? A. The overtime rate under the FLSA is two and a half times the employee's hourly rate. B. The FLSA permits federal contractors to pay less than the prevailing wage rate. C. The FLSA permits a subminimum training wage equal to 95% of the minimum wage. D. Nonexempt employees are covered by FLSA and include most hourly workers. E. Under the FLSA, executive, professional, and administrative employees are considered nonexempt employees.

D. Nonexempt employees are covered by FLSA and include most hourly workers.

Assuming an organization wants to motivate employees through promotions, and assuming enough opportunities for promotions are available, the organization would want to A. increase the overlap from one level to the next. B. reduce its compa-ratio to less than 1. C. implement a broadband pay structure. D. limit the overlap from one pay range to the next. E. use a fixed interval promotion policy.

D. limit the overlap from one pay range to the next.

SalientVision Inc., a construction company, receives more than $2,000 in federal money. The company pays its employees at rates at least equal to the prevailing wages in the area. The calculation of prevailing rates by the company is based on 30% of the local labor force. In this case, which of the following laws does the company comply with? A. the Lloyd-La Follette Act of 1912 B. the Smith-Connally Act of 1943 C. the Julie Jargon Act of 1940 and the Eric Morath Act of 1945 D. the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936 E. the Humphrey-Hawkins Full Employment Act

D. the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936

Which of the following statements is true about key jobs? A. Organizations usually have no survey data available for key jobs. B. Key jobs are jobs that have highly unstable content. C. Key jobs are jobs that are unique among organizations and are rare to obtain. D. Organizations make the process of creating a pay structure more impractical by defining key jobs. E. A job with a higher evaluation score than a particular key job would receive higher pay than that key job.

E. A job with a higher evaluation score than a particular key job would receive higher pay than that key job.

Which of the following is a drawback of a minimum wage in terms of social policy? A. It assumes people will take differences in pay into account when they choose a career. B. It is one and a half times the employee's usual hourly rate. C. It applies only to the hours worked beyond 40 in one week. D. It places the employer at an economic disadvantage relative to employers that pay the living wage. E. It tends to be lower than the earnings required for a full-time worker to rise above the poverty level.

E. It tends to be lower than the earnings required for a full-time worker to rise above the poverty level.

Which of the following is a drawback of a comparable-worth policy? A. A free-market economy assumes people will not take differences in pay into account when they choose a career. B. Employees may conclude that pay rates are unfair. C. The courts prohibit organizations from defending themselves against claims of discrimination by showing that they pay the going market rate. D. Grouping jobs will result in rates of pay for individual jobs that do not precisely match the levels specified by the market and the organization's job structure. E. Raising pay for some jobs places the employer at a disadvantage relative to employers that pay the market rate.

E. Raising pay for some jobs places the employer at a disadvantage relative to employers that pay the market rate.

Spark Inc., a manufacturing company, hires employees ranging in age from 14 to 25. Which of the following practices by Spark would ensure that it complies with child labor laws? A. The employees are all paid the same amount. B. The teenage employees earn a training wage for the first year. C. Only the workers over 20 earn overtime pay. D. All the employees have part-time schedules. E. The employees aged 14 and 15 work only in office jobs and for limited time periods.

E. The employees aged 14 and 15 work only in office jobs and for limited time periods

The Walsh-Healy Public Contracts Act of 1936 A. requires that a lower "training wage" be paid to workers under the age of 20 for a period of up to 90 days. B. mandates that employers pay higher wages for overtime, defined as hours worked beyond 40 hours per week. C. covers construction contractors that receive more than $2,000 in federal money. D. requires general contractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the prevailing local wage rates. E. covers all government contractors receiving $10,000 or more in federal funds.

E. covers all government contractors receiving $10,000 or more in federal funds.

The Davis-Bacon Act of 1931 A. requires that a lower "training wage" be paid to workers under the age of 20 for a period of up to 90 days. B. mandates that employers pay higher wages for overtime, defined as hours worked beyond 40 hours per week. C. requires general contractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates found prevailing in the locality. D. covers all government contractors receiving $10,000 or more in federal funds. E. covers construction contractors that receive more than $2,000 in federal money.

E. covers construction contractors that receive more than $2,000 in federal money.

Which of the following elements establish an organization's pay structure? A. pay ranges and pay differentials B. cost control and equity C. legal requirements and job descriptions D. individual salaries of its employees E. job structure and pay level

E. job structure and pay level

If the average pay is below the midpoint of an organization, the compa-ratio is 1

F

In a two-tier wage system, employees doing the same job are paid two different rates, depending on their technical background and training

F

Key jobs are uncommon and have unstable content, making them very difficult to evaluate using pay surveys.

F

Pay grades allow precise matching of pay for individual jobs to market rates and an organization's job structure.

F

The laws governing Equal Employment Opportunity guarantee equal pay for all employees of an organization.

F

Under the FLSA, children aged 14 and 15 may not be employed outside school hours.

F

A pay structure helps an organization achieve goals related to cost control.

T

If state laws specify minimum wages, in addition to the federal level, employees are entitled to receive whichever rate is higher.

T

Issues affecting an organization's pay structure do not affect its reputation in general.

f

Research suggests that employees in the lower tier of the pay structure in a two-tier wage system are less satisfied than the top-tier employees

f

Themost common approach to pay differentials is to move an employee lower in the pay structure to compensate for higher living costs

f

Under the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, employees of federal contractors must receive rates less than the prevailing wages in the area.

f

When job structure conflicts with market data, organizations should base their pay only on market forces because this approach does not have any practical drawbacks.

f

Paying a salary does not necessarily mean that a job is exempt from overtime pay

t

The job characteristics that an organization deems valuable and decides to pay for are called compensable factors.

t