Compensation Management Chapter 7

Which theory supports the idea that coal mining should be paid more than office clerical work?

Compensating differentials

All of the following are important factors in defining a market for compensation purposes except

ability to pay.

Rent sharing is most commonly associated with the _____ theory.

efficiency wage

Employers continue to hire until marginal revenue of the last hire equals their wage rate because as per the first labor market theory assumption:

employers seek to maximize profits.

The _____ theory is the most influential in explaining pay-level differences.

human capital

Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the:

labor costs.

A pay policy most likely to reduce pay dissatisfaction is _____.

lead

All of the following except the _____ shape external competitiveness.

skill level of employees

Output associated with hiring an additional person, holding constant other production factors, is referred to as:

the marginal product of labor.

The assumption of the upward sloping supply curve may not hold when _____.

unemployment is low

The pay-mix component in which benefits is likely to be largest is _____.

work-life balance

The theory that has the most implications for staffing is the _____ theory.

efficiency wage

Segmented labor supply involves all of the following except:

hiring from different sources and differential pay and benefits for the same work

The pay policy associated with increased productivity is the _____ policy

hybrid

Considering the third assumption of labor market theory, although some firms find lowering the job requirements and hiring less-skilled workers a better choice than raising wages, this choice incurs:

increased training costs.

In a hiring situation, considering that other potential costs will not change in the short run, the level of demand that maximizes profits is that level at which the _____ of the last hire is equal to the _____ for that hire.

marginal revenue; wage rate

Implication of the _____ theory is that pay level affects an employer's ability to recruit.

reservation wage

Which of the following is an example of a quoted-price?

A product on Amazon

Among pay-mix alternatives, base pay is largest in _____.

security or commitment

Wages tend to be low in which of the following industries?

Education and health care

_____ theory is typically associated with greater profits.

Efficiency wage

If Company A raises its pay rate one dollar per hour to hire additional workers and competitors immediately match the increase, what is the most likely result?

Higher labor costs for Company A, but not more workers

Which of the following is not a consequence of level of competitiveness of total compensation?

Increase organization profitability

_____ refers to the average of the array of rates paid by an employer

Pay level

Which of following is an example of the demand side of labor?

Pay level offered by an employer

Which of the following factors do not affect an employer's ability to pay high wages?

Supply of skilled employees

If Company A and Company B pay the same total compensation for a job, which of the following is most likely true?

The pay mix differs

_____ sets a maximum pay level an employer can pay.

The product market

In which of the following would data from labor market competitors be given more weight than product market competitors data?

The supply of labor is responsive to changes in pay

_____ is an example of a bourse

The total compensation for a top athlete

The most common pay policy is

match

Research on efficiency wage theory shows that:

more unqualified workers apply

The market pay rate is the

point at which supply and demand lines cross.

Evidence shows that in manufacturing, _____ is positively correlated with hourly wage level.

productivity

The study referred to in the text on how managers make wage adjustment decisions found:

profitability affected the overall pay budget

All of the following are advantages of a lead pay policy except

reduced training time

In _____ theory, pay is described as noncompensatory.

reservation wage

Which of the following is not a reason a company might pay base wages above market competitors?

Competitor production costs are lower

A small lawn care company has two mowers and four employees. If it hires another employee, how productive will productivity of the fifth employee compare to the current two employees?

Less productive

Which of the following is not true of the relationship between employer size and its ability to pay?

Talented people prefer to work in larger organizations.