MAN CH 12 13 & 14

Under the ____, the statute of limitations on pay discrimination claims begins running whenever a discriminatory pay decision is adopted, when an individual becomes subject to such a decision, and/or whenever the paycheck is issued.

Lilly Ledbetter Fair Pay Act

Averno Inc. wants to create a flexible base wage/salary structure. Which of the following will be true if the company decided to use the broadbanding approach?

Managers will have autonomy in setting pay rates.

Skill-based pay systems are also referred to as:

NOT: competency-based pay systems.

Which of the following acts places restrictions on the employment of individuals between ages 14 and 18?

The Fair Labor Standards Act

Ordinarily, the largest portion of an employee's total compensation consists of:

base wages or salaries.

One requirement of an incentive plan is that it be:

based on performance.

Rewards employees receive as a result of their employment and position with an organization are called:

benefits.

A reward offered on a one-time basis for high performance is referred to as a:

bonus.

The key to having a successful suggestion system, as a means to reward employee suggestions, is to:

clearly communicate how the system works.

The ____ rewards employees based on knowledge, skills, and behaviors that result in performance.

competency-based pay system

The Equal Pay Act:

eliminates pay differentials based on sex.

The Scanlon plan is designed to:

encourage employees to suggest changes that might increase productivity.

Market-based pay systems focus on:

external equity.

An organization's compensation system should produce a base wage/salary structure that is:

externally equitable.

Rewards that are controlled and distributed directly by an organization and are of a tangible nature are known as ____.

extrinsic rewards

A major disadvantage of commission plans as an incentive pay system is the:

impact of uncontrollable factors on sales.

The employees of Nazen Inc. are grouped into six to eight member project teams. In this organization, employee morale will be reinforced by all of the following factors concerning group goals EXCEPT:

intragroup conflicts related to the goals.

To employers, an advantage of incentive pay over salary increases is that it:

is not permanent and would need to be earned during each designated period.

A major disadvantage of the point method of job evaluation is that it:

is relatively time-consuming and costly to develop.

The primary method for determining the relative worth of jobs to an organization is termed:

job evaluation.

An employee's general attitude toward a job is termed:

job satisfaction.

A Scanlon plan is ordinarily a(n) ____ incentive.

organizationwide

Classes of jobs that for pay purposes are grouped on the basis of their worth to an organization are called:

pay grades.

Broadbanding:

reduces the number of pay grades in a salary system.

Under stock-for-stock swaps, an executive has the right to relinquish a stock option and receive from the company an amount equal to the appreciation in the stock price from the date the option was granted.

False

Wage garnishment is illegal in most states.

False

Which of the following is true about the job ranking method?

It produces an ordering of jobs.

In this method of job evaluation, certain classes of jobs are defined on the basis of differences in duties, responsibilities, skills, working conditions, and other job-related factors. Identify the method.

Job grading

Which of the following is an example of an intrinsic reward?

Job satisfaction

Which of the following is true of job satisfaction?

Job satisfaction can contribute to morale.

____ is related to what employees in other organizations are being paid for performing similar jobs.

External equity

In 1992, the National Labor Relations Board (NLRB) ruled that forbidding employees to discuss their pay constitutes a violation of Title VII of the Civil Rights Act.

False

Incentive plans usually function in place of the base wage/salary structure.

False

It is generally recognized that skill-based pay systems work well in unionized organizations.

False

Job evaluation is a systematic determination of the value of each job in relation to other jobs outside an organization.

False

Job satisfaction has been shown to always result in a high level of job performance.

False

Job satisfaction is synonymous with organizational morale.

False

Most organizational suggestion systems offer nonmonetary rewards such as vacations and cruises for cost savings ideas.

False

Research indicates that organizational suggestion systems are basically a waste of time and money for employers.

False

Revised data indicates that employee stock ownership plans (ESOPs) grew rather dramatically from the mid-1980s through the late 1990s.

False

The Equal Pay Act first went into effect in 1991.

False

When the point method of job evaluation is used, all jobs in an organization must be examined and evaluated.

False

Which of the following rewards is often provided but not related to performance?

Paid holiday

The ____, passed by Congress in 1936, requires that organizations manufacturing or furnishing materials, supplies, articles, or equipment in excess of $10,000 to the federal government pay at least the minimum wage for the industry as determined by the secretary of labor.

Walsh-Healey Public Contracts Act

Taurus Apparel Inc. uses a differential piece rate plan to reward good performance among its employees. In this incentive plan, the rate paid per unit produced is raised:

after a given number of pieces have been produced.

"Say-on-pay" proposals require an annual binding shareholder vote regarding executive compensation.

False

Compensation refers to all the intrinsic rewards employees receive in exchange for their work.

False

Formal rewards provided by organizations are almost always determined by performance.

False

In a recent survey on job incentives, money was ranked first.

False

The factor comparison method of job evaluation is similar to the point method with the exception that the factor comparison method eliminates the use of a monetary scale.

False

There is a universal set of compensable factors that can be used by all organizations when developing methods for determining the value of various jobs.

False

When a company establishes an employee stock ownership plan (ESOP), the shareholders risk losing voting control of the company.

False

____ is a feeling of being accepted by and belonging to a group of employees through adherence to common goals, confidence in the desirability of those goals, and the desire to progress toward the goals.

Morale

The Equal Pay Act was designed to eliminate pay discrimination based solely on sex.

True

The Fair Labor Standards Act regulates minimum wages and overtime pay.

True

The Scanlon plan technically is not a profit-sharing plan, but it is a plan that shares with employees measurable savings in labor and production costs.

True

When a job decreases in attractiveness, an employee is more likely to be tardy, quit, or become dissatisfied with the job itself.

True

Juana was recently promoted to the position of a team manager in her organization. Due to the promotion, she feels a sense of accomplishment. This exemplifies how:

extrinsic rewards can provide the recipient with intrinsic rewards.

Qualified stock options are known for their:

favorable tax treatment.

For premium-priced stock options, a stockholder realizes a gain only when the:

market value exceeds the exercise price.

Performance share plans involve performance units whose value is determined:

over a period of three to five years.

A good rule of thumb when doing a wage survey in conjunction with either the point or factor comparison method is that a minimum of ____ percent of the jobs in an organization should be surveyed to make a fair evaluation of the organization's pay system.

30

Most Scanlon plans pay ____ percent of the bonus fund to employees.

75

Conventional base pay systems compensate employees based on the work required to do a specific job as determined by job evaluations. Which of the following approaches was created to provide additional flexibility to conventional base pay systems?

Broadbanding

Passed by Congress in 1931, the ____ required that contractors and subcontractors on federal construction contracts in excess of $2,000 pay the prevailing wage rates for the locality of a project.

Davis-Bacon Act

Which of the following is the least effective practice when rewarding employees' good performance within an organization?

Rewarding employees through the base wage or salary structure

Noba Products Inc. has decided to take the total rewards approach to designing a base wage/salary structure. Which of the following will be true of Noba Products Inc?

The company will place more emphasis on lower-cost rewards rather than compensation and benefits.

NB Machines Inc. is a unionized organization. Which of the following statements will be true of NB Machines?

The wage structure will be largely determined through collective bargaining.

Which of the following is a potential use of job evaluations?

To reduce pay grievances by reducing their scope

An example of an intrinsic reward is job satisfaction.

True

Base wages and salaries are the hourly, weekly, or monthly pay that employees receive in exchange for their work.

True

Broadbanding provides less formal structure and allows organizations to react quicker to changes.

True

Comparable worth theory is about pay practices that would ostensibly address the practice of undervaluing work primarily performed by women.

True

In the context of pay equity, individual equity addresses the issue of rewarding individual contributions and is very closely related to the pay-for-performance issue.

True

If incentives are to be based on performance, all of the following are necessary concerning the affected employees EXCEPT that employees:

should approve all details of the incentive plan.

A pay plan in which an individual is paid for the typical time required to complete a job is a(n):

standard hour plan.

To keep its compensation system fair and competitive, GD Systems Inc. has developed a new base wage and salary system. The primary objective of this system should be to establish an equitable compensation for employees based on ____.

their jobs and levels of performance

The traditional view of managers toward employee rewards was that:

they were fully capable of deciding just what rewards the workers need and want.

In designing a reward system, an organization should:

understand what employees value.

Which of the following is true about self-directed work teams?

Most companies that use such teams usually incorporate some type of group incentive pay based on the performance of the respective work teams.

The management at Virtue Infra Inc. has decided to reward good performance within the organization through group incentives. Which of the following is a negative impact the firm will have to face as a result of using group incentives?

NOT: Groups can become considerably less competitive with one another, leading to the detriment of the entire organization.

Which of the following is a disadvantage of the job classification method of job evaluation?

NOT: It assumes equal intervals between the rankings, and this is usually not true.

What is the most reliable and most expensive method of surveying wage data?

Personal interviews

In the job ranking method of job evaluation, jobs are ranked from the simplest to the most difficult.

True

In the point method of job evaluation, after the point scale has been agreed on, point values are derived for key jobs by examining the job descriptions.

True

Incentive pay plans attempt to strengthen the performance-reward relationship and thus motivate the affected employees.

True

Most wage and salary systems establish pay ranges for jobs based on the relative worth of the job to an organization.

True

One advantage of individual incentive plans is the direct observable relation between rewards and individual performance.

True

Organizational pay equity addresses how profits are divided up within an organization.

True

Piece rate plans have been in effect for over 150 years.

True

Restricted stock plans normally require that an executive remain with a company for a number of years after the grant in order for him or her to cash them in.

True

Self-directed work teams are well established in Europe and especially in Scandinavia, but are relatively new in the United States.

True

The Davis-Bacon Act was passed in 1931.

True

Family Goods, a chain of departmental stores, provides an incentive pay plan along with its base wage/salary structure. All of the following are reasons for the firm to offer an incentive plans in addition to its base wage/salary structure EXCEPT that:

calculations are simpler when both systems are taken together.

The _____ holds that while the true value of jobs to an employer may be similar, some jobs (especially those held by women) are often paid at a lower rate than other jobs (often held by men).

comparable worth theory

Characteristics of jobs that an organization deems important to the extent that it is willing to pay for them are termed:

compensable factors.

The following guidelines should be followed when conducting wage and salary surveys EXCEPT:

disregard variations in job descriptions.

The ____ holds that employees have a strong need to maintain a balance between what they perceive as their inputs to their jobs and what they receive from their jobs in the form of rewards.

equity theory of motivation

Stock option plans are generally designed to give managers an option to buy company stock at the existing market price.

False

The most reliable and least expensive method of surveying wage data is the personal interview.

False

The responsibility for coordinating and administering an organization's reward system usually resides with the finance manager.

False

Top management executives constitute the vast majority of private-sector employees who hold stock options.

False

Under a typical skill-based pay system, companies hire employees at above-market rates.

False

In a market-based pay system, demonstrable characteristics of a person, including knowledge, skills, and behaviors, that enable performance are used as the base for deciding compensation.

False

Standard hour plans involve paying employees more if they work more hours, increasing their payment once they cross a certain number of hours.

False

Linda, a human resource executive, is trying to convince her colleagues that their organization should use an individual incentive plan as opposed to group incentive plans. Which of the following can Linda use as an argument to support her views on the individual incentive system?

Individual incentive plans help employees see the clear relationship between their actions and rewards.

Which of the following is a disadvantage of the factor comparison method of job evaluation?

It is not easily adapted to changes in the jobs being evaluated.

Neil has been recognized as a satisfied employee by his manager. Which of the following will be true of Neil?

It is not necessary that Neil will be a motivated or productive employee.

Managerial personnel generally receive incentives in the form of all of the following EXCEPT:

NOT: long-term performance planning.

Which of the following is NOT a benefit of a skill-based pay system?

NOT: Decreases labor costs

Paying for performance means:

NOT: compensating employees based of the performance of the entire industry.

____ concerns whether employees believe they are being fairly compensated in their jobs.

Pay equity

Which of the following is a major benefit of employee stock ownership plans to stockholders?

Provides ready market to sell stock

The intent of the total rewards approach to base wage/salary structure is to place more emphasis on lower-cost rewards and provide a flexible and broad array of rewards.

True

The most widely acknowledged shortcoming of wage and salary surveys is that it is difficult to find jobs that are directly comparable.

True

The role of the human resource manager in the overall organizational reward system is to assist in its design and to administer the system.

True

There is little doubt that organizations need to do a better job of explaining and communicating their compensation system to employees.

True

Wage and salary surveys are used to collect comparative information on the policies, practices, and methods of wage payment from selected organizations in a particular type of industry.

True

JF Software Inc. has decided to use the factor comparison technique for job evaluation. This method will require evaluators in the organization to conclude the evaluation by linking each compensable factor to a:

monetary scale.

A merit pay increase is:

perpetuated year after year.

In the ____ of job evaluation, job subfactors are used to describe compensable factors in detail.

point method

The ____ of determining job value is objective and quantitative.

point method

Performance-vesting options are also called:

price-vesting options.