MGMT 353
According to supporters of broad banding, the principal benefit of this technique is _____.
the cross-fertilization of ideas within an organization
Whole Foods Match the companies (in the left column) with the flexible benefits they offer their employees (in the right column).
Employees vote on the benefits of their choice.
What are the primary sources of the pay gaps among both black and Hispanic men and women? (Check all that apply.)
Level of schooling Work-related experience
How do some employers get around the overtime requirement?
They categorize employees as executives.
The majority (1.4 million) of those earning minimum wage or less are in service occupations, mostly food service, where tips supplement hourly wages for many workers.
True
To be most effective, an employee benefit manual should _____.
be followed by repetition of the message in multiple media such as newsletters and social media
The ... ... ... suggests that CEOs are irresolute about stock options, inclined to be risky and to accumulate future wealth but also inclined to be cautious about preserving current wealth.
behavioral agency theory
Across-the-board increase Match the components of compensation (in the left column) with their definitions (in the right column).
Permanent increase in salary given to all employees regardless of performance
Use value Match the terms (in the left column) with their meanings (in the right column).
Refers to the value of goods or services produced by an employee in a job
Which of the following are forbidden by equal employment legislation in the United States from serving as the criteria for setting pay differentials? (Check all that apply.)
Religion National origin Race Gender
Having a lag pay-level policy may impede an organization's ability to _____.
attract job applicants
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is designed to _____.
minimize an employer's ability to deny coverage for a preexisting condition
People who support the idea of adopting best practices in developing a pay strategy feel that this _____.
provides the employer with preferential access to superior employees
Benefits that are willingly provided by employers to an employee's unmarried partner are known as ... ... ...
domestic partners benefits
Match the members of an in-house sales team (in the left column) with their characteristics (in the right column). Inside reps Outside reps
Inside reps-They perform sales calls or sales support functions Outside reps-They usually travel and visit potential customers
Match the employee benefits (in the left column) with the type of government that mandated them (in the right column). Workers' compensation Unemployment insurance and social security
Workers' compensation-State Unemployment insurance and social security-Federal
A crucial challenge in the design of next-generation pay systems is _____.
how to better satisfy individual needs and preferences
Not all organizations that pay people have a compensation strategy.
False
In which of the following situations should an organization's internal structure be redesigned?
If it does not motivate employees to work toward achieving the organization's objectives
In order to discourage unions, many nonunionized companies tend to _____.
meet or lead competitors' wages
While the balance sheet approach links salary to the home country, the ... ... ... links salary to a region. Listen to the complete question
modified balance sheet
In the context of the implications of motivation theories for pay and pay for performance, Maslow's needs hierarchy suggests that _____.
base pay must be sufficient for individuals to meet their basic living needs
Why are market data weighed more heavily than internal job evaluation data when reconciling differences in pay structures?
Market data are usually perceived as more objective.
Any civil case in which parties indicated their intent to sue on behalf of themselves as well as others not specifically named in the suit at some point prior to the final resolution of the matter is called a(n) ___ _____ _____
class action lawsuit
_____ of the Civil Rights Act of 1964 bars discrimination on the basis of sex, race, color, religion, or national origin in any employment condition, including hiring, firing, promotion, transfer, compensation, and admission to training programs.
Title VII
Skill plans focusing on breadth Match the types of skill plans (in the left column) with the types of employees they focus on (in the right column).
Generalists who know about every phase of operation including marketing, manufacturing, finance, and human resources
An important provision of the Pension Protection Act of 2006 permits employees of a publicly held company to _____.
sell any employer stock purchased through deferrals or after-tax contributions
Which of the following is true according to tournament theory?
Greater differentials between employees' salary and the boss's salary motivate employees to work hard.
The best way to answer questions on anomalies while analyzing pay survey data is to _____.
do an analysis of them alone
If a pay survey's purpose is to price a company's entire pay structure, then _____ can be chosen to include the entire job structure, with all its important functions and all its levels.
benchmark jobs
A(n) ______ focuses on those compensation choices that help the organization gain and sustain competitive advantage.
strategic perspective
While verifying pay survey data, if a company job is found to be sufficiently similar to the survey job, particularly on the most fundamental aspects, an analyst can use _____ to multiply the survey data by a factor determined to be the difference between the two jobs.
benchmark conversion
A ...-... ... offers a solution for firms dealing with the salary plateau effect and attempts to accommodate the career intentions of senior scientists and engineers.
dual-career ladder
Adjustments made by employers to workers' pay levels on a regular basis can be based on the overall movement of wage rates caused by _____.
the competition for labor in the market
The job of a supervisor is categorized as ...
exempt
For determining the pay level of nonbenchmark jobs, _____ are useful.
market pay lines
Internal alignment is often known as _____ _____.
internal equity
The optimal overlap between the pay grades of employees and managers should be large enough to _____.
motivate employees to work toward promotion into a higher grade
Expatriates who are citizens of an employer's home country and residing and working in another nation are called _____.
parent-country nationals
Expectancy According to expectancy theory, match the perceptions that shape employees' motivation (in the left column) with their descriptions (in the right column).
Employees' evaluation of their ability to carry out required job tasks
Which of the following is currently believed to be responsible for too much risk-taking at Merrill Lynch and the eventual downfall of the company?
The aggressive pay-for-performance approach
Which of the following are true of the employees of companies that are engaged in virtuous circles? (Check all that apply.)
They receive large bonuses and stock awards. They share in the company's success.
The underlying assumption of efficiency-wage theory is that pay level determines _____.
effort
According to economic theory, a talented individual will have a higher marginal value when the individual is _____.
employed at a large organization
True or false: A pay-policy line always specifies a percent above the market line so that an organization can match its competitors.
false
A disadvantage of egalitarian pay structures is that they may result in a _____.
negative sorting effect
According to agency theory, what motivates and directs employee performance?
pay
Identify an accurate statement about the pay level in a company.
A company may have varying pay levels for different job families.
A lead policy Match the types of pay-level and pay-mix strategies (in the left column) with the types of jobs companies use them for (in the right column).
Companies use this policy for jobs requiring skills that are critical to their success.
What is the effect of the introduction of new technology within an industry that reduces the skills required of employees?
It causes the employees' average pay to decline.
True or false: The CEOs of companies that are performing well relative to competitors are more likely to have pay linked to annual performance.
false
Pay is inversely proportional to the value added by skills and experience.
False
Analyses for the purpose of designing pay grades and pay ranges are usually done with _____.
base pay data
Identify the various extremes of organizational pay-level and pay-mix strategies that exist on the continuum of possible organizational strategies. (Check all that apply.)
A low-wage, high-services strategy A low-wage, no-services strategy A high-wage, high-services strategy
Identify the most common basis for formulating a company's internal structure.
Work content and its value
According to the advocates of the strategic approach, what makes a pay strategy competitive?
How it is managed
What are the observable results of increased wages? (Check all that apply.)
Improved quality, effort, and performance Greater pay satisfaction Greater employee attraction and retention
Which of the following is a change introduced in the Japanese pay system?
Some companies have eliminated seniority-based pay.
Base pay Match the measures of compensation used in a pay survey (in the left column) with their descriptions (in the right column).
The amount of cash each job and incumbent is worth
Match the types of products (in the left column) with their meanings (in the right column). High barriers to entry Low barriers to entry
High barriers to entry-Considerable training is required for sales personnel to become effective in this field Low barriers to entry-The knowledge needed to make an effective sales presentation for these products is relatively easy to acquire
Which of the following makes a company's compensation strategy difficult to imitate?
Its alignment with the overall HR strategy
Match the different traditional pay systems (in the left column) with their features (in the right column). Pay systems in Japan Pay systems in Germany Pay systems in the United States
Pay systems in Japan-They are consistent with low turnover/high commitment and high security Pay systems in Germany-They tend to be more bureaucratic and rule-bound Pay systems in the United States-They are consistent with higher turnover and greater skepticism about change
In the given image, the point at which the labor demand line and the labor supply line cross is called the _____.
market rate
Which of the following unit rate sales compensation plans recognizes that a sales person works as part of a team?
Pooled commissions
total cash Match the measures of compensation used in a pay survey (in the left column) with their descriptions (in the right column).
The amount of cash each job and incumbent is worth plus bonus
Merrill Lynch Match the companies (in the left column) with their strategies for external competitiveness (in the right column).
They are market competitive in base, benefits, incentive/bonus, and stock.
True or false: A relatively inflexible labor market in Germany has made it harder for employers to expand to other EU countries.
false
According to the Department of Labor, the environmental surroundings and dangers of a job, including factors such as inside versus outside work, heat, cold, and poor ventilation are known as ___ ____
working conditions
How is external competitiveness expressed in practice? (Check all that apply.)
By setting the pay mix in relation to those of competitors By establishing a pay level that is greater than, less than, or equal to that of competitors
In the context of sales compensation plans, which of the following unit rate plans has one rate up to a target level and then a higher rate tied to more difficult "above-target" sales?
Ramped commissions
Identify the best solution to the differing pay structures for a job that arise out of differences between market structures and rates and job evaluation rankings.
Reanalyzing the job evaluation or market data for the job
Enforced by the Office of Federal Contracts Compliance Programs (OFCCP), Department of Labor, Executive Order 11246 (E.O.11246) bars _____ on the basis of race, color, religion, sex, or national origin.
discrimination
True or false: The different functions or groups within bands are usually priced the same due to external market differences.
false
Identify the essential features of Maslow's needs hierarchy. (Check all that apply.)
Higher-order needs become motivating after basic needs have been fulfilled. Needs are arranged from basic needs to higher-order needs.
The range midpoint of a pay range is $58,000, and its range minimum is $45,000. Calculate the range maximum of the pay range.
$71,000
A low-wage, no-services strategy Match the types of organizational pay-level and pay-mix strategies (in the left column) with their examples (in the right column).
A company that outsources in order to compete by producing its goods and services for the lowest compensation possible
Match the cost control strategies for health care (in the left column) with their meanings (in the right column). Coinsurance rates Coordination of benefits
Coinsurance rates-This refers to premium payments being shared by the company and employee Coordination of benefits-This ensures no double payment when coverage exists under the employee's plan and a spouse's plan
Using _____, employers choose specific health care providers who are willing to provide price discounts and follow stringent utilization controls.
Preferred Provider Organizations
____ ____ ____ determine pay for work done to produce goods and services contracted by the federal government.
Prevailing wage laws
Before 1930, who was responsible for health care coverage in the United States?
The family
Which of the following are used to describe pay structure? (Check all that apply.)
The number of levels The criteria used to determine the differences in pay between different levels The differentials in pay between different levels
Nucor Match the companies (in the left column) with their strategies for external competitiveness (in the right column).
They are market leaders for total cash compensation.
Identify the legal services provided by most legal insurance plans. (Check all that apply.)
Wills Divorce Real estate matters Traffic violations
Exchange value Match the terms (in the left column) with their meanings (in the right column).
Refers to the wage agreed upon by the employer and employee for a job
In order to translate an external competitive pay policy into practice, an employer needs _____.
information on the external market
What are the legally mandated benefits in Japan? (Check all that apply.)
Social security Workers' compensation Unemployment compensation
Match the most prevalent practices that employers follow to audit their benefit options for cost containment opportunities (in the left column) with their descriptions (in the right column). Probationary periods Benefit limitations Copay Administrative cost containment
Probationary periods-The practice of excluding new employees from employee benefit coverage until some term of employment is finished Benefit limitations-The practice of limiting disability income payments to some maximum percentage of income Copay-The practice of requiring employees to pay a fixed or percentage amount for employee benefit coverage Administrative cost containment-The practice of controlling costs using policies such as seeking competitive bids for program delivery
When are the data from product market competitors likely to be given greater weight than that of labor market competitors in defining a relevant market? (Check all that apply.)
When labor expenses form a large share of total expenses When labor supply is not responsive to pay changes When demand for a product is responsive to price changes When employee abilities are specific to the product market
lag In the context of how updating salary survey data reflects policy, match the terms used to describe the changes that an organization makes to its pay policy (in the left column) with their descriptions (in the right column).
The organization selects a "match" policy but then updates survey data to the start of the plan year/end of the current year and maintains this rate throughout the plan year.
Which of the following is the minimum wage for work done on covered government projects or purchases?
A government-defined prevailing wage
Which combination may boost employee commitment and encourage teamwork, which may in turn improve productivity?
A lag pay-level policy combined with the promise of increased future returns
Which of the following are the aspects of the pay model that influence the impact of any internal structure on organization performance? (Check all that apply.)
Management Competitiveness Employee performance
Which of the following are private sources of disability income? (Check all that apply.)
Long-term disability plans Salary continuation plans
What are the anomalies in pay survey data that an analyst should look for when verifying the survey data? (Check all that apply.)
Whether all employers show similar patterns Whether a single company dominates Whether there are any outliers
The distribution of rates around a measure of central tendency is called _____.
variation
The option of off-shoring to reduce labor expenses is also described as _____.
work flowing to the people
What are the salient features of a pay range?
A midpoint, a minimum, and a maximum
Distributive justice Match the sources of fairness of a pay structure (in the left column) with their meanings (in the right column).
A pay structure itself
Which of the following is a way to improve employer return on investment in employee benefits?
Allowing employees to choose the benefits they receive by introducing a flexible benefits package
Which of the following can be used as a tax-favored retirement savings plan?
An individual retirement account
How can a compensation manager ensure that compensation practices conform to judicial interpretation? (Check all that apply.)
By joining professional associations By constantly reviewing compensation practices and their results
How do employees judge the equity of their pay?
By making several comparisons
Which of the following are features of a flexible employee benefit plan? (Check all that apply.)
Employees are allowed to directly identify the benefits of greatest value to them. Benefit managers are capable of controlling benefit costs by constraining the dollars employees have to spend.
General Mills Match the companies (in the left column) with the flexible benefits they offer their employees (in the right column).
Employees are allowed to exchange several weeks' salary for stock awards.
"_____" refers to the image or brand a company projects as an employer.
Employer of choice
Identify a drawback of egalitarian pay structures.
High-performing and more skilled employees may feel underpaid.
Identify a true statement about employee benefit costs over a 20-year period between 1955 and 1975.
It increased at a rate almost four times larger than employee wages or the consumer price index.
Which of the following is a reason for differing pay rates in the labor market and is difficult to document due to the inability to accurately measure and control the factors that go into a net-advantage calculation?
Compensating differentials
Microsoft Match the companies (in the left column) with the pay brands reflected by their compensation strategy maps (in the right column).
Competitiveness, individual accomplishments, and performance-based returns are emphasized.
Which of the following methods of financing employee benefit plans is typically preferred by organizations?
Contributory
Match the components of the dual ladder (in the left column) with their features (in the right column). The managerial ladder The professional track
The managerial ladder-This offers promotions with more responsibility for managing people The professional track-This progresses with rising technical responsibility
Which of the following processes reflect the changes that are occurring in the design of organizations? (Check all that apply.)
Outsourcing Delayering
Which of the following is a feature of German pay systems?
Over 90 different laws apply to pay decisions.
Identify a true statement about the role of employee benefits in attraction, retention, and motivation.
Retention is increased by benefits.
Which of the following is a characteristic of external directors?
They are not obliged to the CEO who appoints them.
Which of the following is true of adjustments to a company's pay mix?
They occur less frequently than do adjustments to overall pay level.
Which of the following is true of corporate directors?
They play a crucial role in deciding executive compensation.
What is the first step in formulating a total compensation strategy?
Understanding business strategy and competitive dynamics
When is turnover much higher for poor performers in a company?
When pay is linked to individual performance
The 1993 Family and Medical Leave Act applies to _____.
all employers having 50 or more employees
Most North American, European, and Japanese global firms combine the elements of expatriate compensation in a ... ... ...
balance sheet approach
For workers to be covered by unemployment insurance, they must satisfy the state requirements for wages earned or time worked during a specific time period referred to as ... ...
base period
Since employees these days are easily able to compare their salaries to others' using data from the Bureau of Labor Statistics or Salary.com, managers must _____.
be able to defend the salaries they pay
Identify a difference between transactional work and tacit work.
Transactional work generates lower revenues than tacit work.
According to behavioral scientists, one explanation for executive compensation excesses involves ... ...
social comparisons
According to _______ ________, players will play better in a tournament where the prize differentials are large than in a tournament where the prize differentials are small.
tournament theory
A true statement about the cost effectiveness of employee benefits is that _____.
group-based employee benefits can be obtained at a lower rate than individual-based benefits
It is appropriate to use a compensation strategy that emphasizes base pay with a low-incentive component in organizations that _____.
have highly variable annual performance
An employer adopts new employee benefits offered by a competitor without careful consideration, just because the employer needs to avoid hard feelings. This is seen particularly among employers who _____.
have strong commitments to having a totally or partially nonunion work force
A characteristic of any pay structure is its _____.
hierarchical nature
Nations that have lower average labor costs display a tendency to have _____.
lower average productivity
An employer cannot alter most factors of production, such as technology, capital, or natural resources, in the short term. Thus, it can only alter its level of production if it alters the level of human resources. In these conditions, a single employer's labor demand coincides with the _____.
marginal product of labor
The _____ is the increase in output generated by the employment of one additional person, while keeping other production factors constant.
marginal product of labor
The Wage and Hour Division of the Department of Labor specifies stringent norms that must be satisfied in order for jobs to be ___ from minimum-wage and overtime provisions.
exempt
An employer will keep hiring until the marginal revenue generated by the last hire equals the _____.
expenses associated with employing that person
The extra amount of unemployment compensation paid by a company depends on its ... ...
experience rating
Employers in extremely competitive markets find it more difficult than other employers to _____.
increase prices without loss of revenues
The great majority of CEO pay is in the form of _____.
short-term and long-term incentives
...-... ... offers a proportion of one's salary (about 60% on average) for temporary disability due to sickness or injury.
short-term disability
The Department of Labor defines _____ as the experience, training, education, and ability that are determined by the performance requirements of a specific job.
skill
Which of the following is a difference between the layered and the delayered pay structure?
As opposed to the layered structure, employees are given more freedom and responsibility in the delayered structure.
Identify some of the forms of Social Security coverage in the United States. (Check all that apply.)
Survivors insurance Special Veterans Benefits Retirement insurance
_____ provides an opportunity for employers to allow employees to develop a reward package that is less expensive and more satisfying.
Flexible compensation
Which of the following cost control strategies for health care are considered to be less extreme? (Check all that apply.)
Health Maintenance Organizations Consumer-directed health care plans Preferred Provider Organizations Point-of-service plans
In the context of Consumer Driven Health Plans and High Deductible Plans, match the accounts set up by an employer (in the left column) with their features (in the right column). Instructions Health Savings Account Health Reimbursement Account
Health Savings Account-Funds in these accounts are contributed by employees with pre-tax dollars Health Reimbursement Account-Funds in these accounts are contributed by the employer up to some fixed dollar amount
Identify the strategic choices involved in tailoring a pay structure that is internally aligned. (Check all that apply.)
How specific the tailoring of the pay structure should be to the organization's design and work flow How pay should be distributed throughout the levels in the structure
According to the efficiency-wage theory, under which of the following conditions do high wages increase efficiency and reduce labor costs? (Check all that apply.)
If they boost worker effort and decrease shirking behavior If they lower the need to supervise employees If they decrease turnover If they lure higher-quality applicants
Which of the following is true of Nucor Steel's corporate mission?
It believes in achieving success by working together.
Which of the following statements is true of the Dodd-Frank Wall Street Reform and Consumer Protection Act?
It gives shareholders the power to vote for or against their organization's proposed compensation plan for its five highest-paid executives.
_____ influences a job applicant's decision to join a company because it is one of the more visible rewards during the process of recruitment.
Level of pay
Which of the following is an assumption of the demographic approach to determine employee preferences?
There are meaningful differences between groups in terms of benefit preferences.
People who disagree with the idea of strategic fit in terms of compensation believe that _____.
a set of best practices that have universal applicability exist
The Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted by Congress in 1985 so that current and former employees and their spouses and dependents can avail _____.
a temporary extension of group health insurance when coverage is lost due to qualifying events
Which theory of motivation states that employees are motivated when the ratio of their perceived inputs and outputs is equal to their perceived inputs and outputs of a comparison person?
equity theory
The standard of equal pay for work of comparable worth is also called ____
gender pay equity
Global Supply Chain Associates Corp., a multinational logistics company, uses ... ... ... ..., which essentially use pay for performance, worker engagement in decisions, use of teams, and ability/performance-based recruitment and growth.
high (H) performance (P) work (W) systems (S)
At Nucor Steel, the focus is on _____.
high productivity and quality
In the context of the impact of legislation on employee benefits, the tax reforms of 1982 and 1986 _____.
permitted individual retirement accounts (IRAs) for eligible employees and established 401(k) programs
Scientists and engineers are categorized as ...
professionals
A study on how economic factors translated into wage decisions for managers found that the profitability of a company was viewed by managers as a factor for higher management in determining _____.
the general pay budget
The Occupational Safety and Health Administration specifies _____.
the number of breaks that must be provided in an eight-hour workday
Identify a true statement about a flexible employee benefit plan.
It allots employees a fixed amount of money and allows them to spend that amount in the purchase of benefit options.
Identify a true statement about the "change-and-congeal" process of establishing pay structures.
It does not yet support the continuous changes occurring in the present economy.
A structure based on the value of work Match the types of internal structure (in the left column) with their features (in the right column).
It emphasizes the relative contribution of skills, tasks, and responsibilities to the organization's goals.
How does organization development help an organization with inefficient processes?
It frees up motivated employees to utilize their skills.
Match the alternatives to the balance sheet approach (in the left column) with their meanings (in the right column). Negotiation Localization
Negotiation-This means an employer and employee find a mutually agreeable package Localization-This associates salary to the host country's salary scales and provides some cost-of-living allowances for taxes, housing, and dependents
... is a return (profits) received from activities that are in excess of the minimum pay level needed to attract people to those activities.
Rent
Identify the economic pressures that influence the internal structure of an organization. (Check all that apply.)
Supply and demand for labor Supply and demand for products and services Differences in productivity
In the context of pay systems, which of the following is a feature of exporters?
They develop a total pay system at headquarters that is to be used at all global locations.
A study that used hockey teams to examine the influence of pay differences on performance found that _____.
larger differentials based on performance generated positive sorting effects
Greatly improved communication and software connectivity have accelerated _____.
the growth of offshoring
Identify the three most commonly used measures of compensation in a pay survey. (Check all that apply.)
Base pay Total compensation Total cash
SAS Match the companies (in the left column) with the pay brands reflected by their compensation strategy maps (in the right column).
Competitive market position, companywide success sharing, and egalitarianism are the distinctive features.
____ ____ legislation is meant to provide an income floor for workers in society's least productive jobs.
Minimum wage
Rank the jobs in an organization's hierarchy in decreasing order of the sizes of their pay ranges, beginning with the positions that have the largest percent above and below their range midpoint.
1. Top-level management positions 2. entry to midlevel professional and managerial positions 3. office and production work
According to the 1993 Family and Medical Leave Act, all eligible employees are entitled to _____ of unpaid leave for stated family or medical reasons.
12 weeks per year
How many quarters of coverage will insure any worker for life?
Forty quarters
_____ are citizens of a foreign nation where a parent employer operates.
Local country nationals
Employers pay insurance premiums to the _____ in order to protect employees from the potential risks of an organization going bankrupt or failing to meet its vested pension commitments.
Pension Benefit Guaranty Corporation
Identify the purposes of the Dodd-Frank Wall Street Reform and Consumer Protection Act. (Check all that apply.)
Protecting taxpayers by putting an end to bailouts Safeguarding customers from abusive financial services practices
The range midpoint of a pay range that has been set at 30 percent above and 30 percent below the midpoint is $20,000. Calculate the range maximum (Rmax) and range minimum (Rmin) of the pay range.
Rmax is $26,000, and Rmin is $14,000.
Who among the following covers the critical boundary between an organization and its consumers?
Sales staff
The goal of using a salary increase matrix is to keep adjusting employee pay so that it is _____.
appropriately positioned relative to the market
Agency theory claims that employees _____.
are risk-averse
The _____ sets wages according to the home-country system and provides employees large amounts of money to offset variations in standards of living.
cafeteria approach
A lag policy Match the types of pay-level and pay-mix strategies (in the left column) with the types of jobs companies use them for (in the right column).
companies use this policy for jobs that can be easily filled in the local labor market.
In most companies, the person responsible for managing a pay survey is the _____.
compensation manager
According to agency theory, companies must allot resources to systems that track employee output, which becomes more costly and difficult when _____.
cultural or geographic distance is great
It is important to note that for every dollar that an employee pays as his or her share of social security, there is a matching amount paid by the _____.
employer
In most states, unemployment insurance is financed by _____.
employers
The major challenge in compensating supervisors centers on _____.
fairness in pay
True or false: A common trend in supervisory compensation focuses on an increased use of fixed pay.
false
True or false: Each job in the labor market has a fixed "going rate."
false
While _____ put a floor on the pay level needed to attract sufficient employees, _____ put a lid on the highest pay level than an employer can set.
labor market conditions; product market conditions
One of the economic perspectives to understanding executive compensation focuses on _____.
labor markets
A company's pay structure should clarify the relationship between each job and the company's objectives. This is an example of _____.
line-of-sight
Wondrous Facts Inc. is a publisher of fact books that manages to exceed its sales targets every year. It rewards its employees' performance based on highly specific objective criteria, such as the quality of work and the number of units produced. These performance measures have remained the same for many years. There is little fluctuation in the nature of work and the employee performance expectations are consistent. In this scenario, the most appropriate compensation strategy for Wondrous Facts is rewarding its employees with _____.
monetary benefits that have a large-incentive portion
A benefit of a lead pay-level policy is that it _____.
offsets less appealing features of work
Life insurance coverage would typically be a group term insurance policy with a face value of _____.
one to two times an employee's annual salary
A good compensation manager should make decisions about outlays by considering that employee benefit costs are _____.
only one part of a total package of compensation costs
Different jobs in an organization that are considered substantially equal for pay purposes are grouped into a _____ to build flexibility into the organization's pay structure.
pay grade
Technology-intensive industries tend to _____ than labor-intensive industries.
pay higher
The lack of representation of women in executive and director level positions in organizations is sometimes referred to as _____.
the "Glass Ceiling" effect
The primary source of publicly available compensation data in the United States is _____.
the Bureau of Labor Statistics
In the context of controversial CEO pay practices, a "golden parachute" refers to _____.
the compensation given to a CEO when a merger or acquisition results in his or her termination
A contemporary U.S. example of legislation directed toward pay differentials is _____.
the living wage
Pay grades enhance an organization's ability to _____.
transfer people among jobs with no change in pay
The Pension Protection Act of 2006 was meant to safeguard the retirement income of employees and to _____.
transfer some responsibility for retirement savings from the employer to the employee
True or false: According to the cost-centered approach to employee benefit programs, if a benefit forecast implies future cost containment may be difficult, the benefit should be given to employees only on a cost-sharing basis.
true
Unlike Microsoft's compensation strategy, SAS Institute's approach to compensation emphasizes _____.
work/life programs
True or false: The federal government loosened wage and price controls during World War II and the Korean War.
False
Which of the following is a feature of an individual retirement account (IRA)?
It is used to store wealth accumulated in other retirement vehicles.
Identify the true statements about a company's strategic compensation map. (Check all that apply.)
It provides a visual reference of the company's compensation system. It can elucidate the message that the company is trying to deliver with its compensation system.
Organization factors Match the categories of factors that shape external competitiveness (in the left column) with their examples (in the right column).
Nature of the industry, company strategy and size, and characteristics of individual managers
An organization with low variability in performance across time and unstable and unclear performance measures. In the context of the relationship between performance measurement and compensation strategy, match the organizations (in the left column) with the most appropriate compensation strategies (in the right column).
Offering a wide array of rewards beyond just money and including a significant incentive component
Pay strategies need to take into account the nature of the union-management relationship.
Pay
____ ____ refers to the array of pay rates for different work or skills within a single organization.
Pay Structure
_____ _______ refers to the array of pay rates for different work or skills within a single organization.
Pay Structure
Which of the following is true of bonuses in a traditional German pay system?
Performance-based bonuses have not been part of a traditional German pay system for unionized workers.
Identify an accurate statement about the goal-setting theory's approach to performance-based pay.
Performance-based pay should be contingent upon the completion of major performance goals.
Which of the following labor supply theories explains pay-level differences on the premise that higher wages flow to people who invest in themselves to increase their potential productivity?
The theory of human capital
Which of the following summarizes the distribution of going rates paid by competitors in a labor market?
A market line
Match the type of countries (in the left column) with their features (in the right column). Countries with low employment regulation Countries with high employment regulation
Countries with low employment regulation-Employers in these countries have more flexibility in recruiting and expelling workers Countries with high employment regulation-Employers in these countries have less flexibility in recruiting and expelling workers
Identify an assumption of the demographic approach that is used to gauge employee preferences.
Demographic groups can be recognized for which benefit preferences are fairly consistent across members of the group.
What is the consequence of companies providing liability insurance to safeguard directors from potential stockholder lawsuits?
Director compensation is reduced
Colina Manufacturing Inc. Porfyra Manufacturing Inc. and Colina Manufacturing Inc. are two companies that manufacture laboratory equipment. The sales department of the former has six levels with large pay differentials between them, while the sales department of the latter has only three levels with small pay differentials between them. Match the companies (in the left column) with their internal structures (in the right column).
Egalitarian structure
Identify a statement that represents the evidence that employee benefits are cost-justified.
Employee benefits are known for helping in the retention of workers.
Instrumentality According to expectancy theory, match the perceptions that shape employees' motivation (in the left column) with their descriptions (in the right column).
Employees' beliefs that their organization will reward high job performance
Which of the following is a true statement about an employee benefit handbook that communicates employee benefits?
It consists of a description of all benefits, including coverage levels and eligibility requirements.
Identify the statistical measures of variation that are commonly found in pay surveys.
Quartiles and percentiles
Which of the following have brought changes to traditional German pay systems? (Check all that apply.)
Technological changes Global competitive pressures
Identify a true statement about the cost effectiveness of employee benefits.
The majority of employee benefits are not taxable.
Procedural justice Match the sources of fairness of a pay structure (in the left column) with their meanings (in the right column).
The methods used for determining a pay structure
How do market pricers approach nonbenchmark jobs?
They blend them into the pay structure created by external market rates.
When are survey participants declared guilty of price fixing? (Check all that apply.)
When they cause interference with competitive prices When they cause wages to be held down artificially
Unlike the job structure of a company, the pay structure _____.
is anchored by the company's external competitive position
A ...-...-... plan merges the benefits of Health Maintenance Organizations and Preferred Provider Organizations and allows individuals to select which plan to avail treatment from at the time that services are required.
point of service
The seniority-based pay systems in Japan have led to _____.
the rise in labor costs as the average age of the workforce increases
Merrill Lynch Match the companies (in the left column) with their management's stand on compensation (in the right column)
The management sends out an understandable and consistent message.
In the context of pay systems, which of the following is true of globalizers?
They pursue a system that can be used to support consistency across all global locations.
Which of the following are involved in the alignment of pay strategy? (Check all that apply.)
Alignment with the business strategy External alignment with the economic and socio-political conditions Internal alignment within the overall HR system
What are the only things that a manager using the marginal revenue product model must do? (Check all that apply.)
Calculate the marginal revenue generated by each new hire Calculate the pay level set by market forces
_____ _____ —the education, experience, knowledge, abilities, and skills required to perform the work—is a major influence on internal structures.
Human Capital
Different business units within the same company can have different compensation strategies.
True
Unions, stockholders, and even political groups are involved in the determination of internal pay structures.
True
A ... ... ... directs an employer to provide a particular amount of retirement pension, which is represented as either a fixed dollar or a percentage-of-earnings amount that increases with the seniority of the employee in the organization.
defined benefits plans
Faced with the pressures of controlling labor costs and/or increasing productivity, many Japanese companies are trying to maintain ...-... ... and are finding ways to reward less senior employees.
long-time employment
The _____ is the increase in returns generated by the employment of one additional person by a firm, while keeping other production factors constant.
marginal revenue of labor
In a pay survey, an analyst calculates the _____ by adding the base wages for all the employees in the survey and dividing that amount by the number of employees in the survey.
weighted mean
According to the agency theory, which of the following is true of CEOs?
CEOs make decisions that fail to represent the economic well-being of the organization and its stockholders.
Which test of compensation strategy is the most difficult?
Determining whether it adds value
What are the objectives of the compensation strategy followed at Google? (Check all that apply.)
Emphasis on innovation Commitment to cost containment Recognition of contributions
What do most organizations consider when evaluating the adequacy of employee benefits?
The financial liability of employees with and without a particular benefit
Compiling data on salaries as a function of years since a scientist/engineer last received a degree is meant to _____.
determine the half-life of technical obsolescence
In the context of salary grades, one of the advantages of broad banding is that it _____.
eases mergers and acquisitions
A(n) ... ... links a company's benchmark jobs on the horizontal axis with market rates paid by competitors on the vertical axis.
market line
In an attempt to understand the excesses in executive compensation, the ... ... integrates the political motivations that are an inevitable component of the corporate world.
agency theory
Which of the following are the determinants of base pay in German pay systems? (Check all that apply.)
Job evaluations Job descriptions Employee age
In 14th-century western Europe, the Christian church endorsed a(n) _____ ______ _______ that denied market forces such as skills shortages as appropriate determinants of pay structures.
Just Wage Doctrine
In managerial jobs, larger pay ranges reflect _____.
greater scope for performance variations and individual discretions
Over the last several decades, companies have been moving more toward _____.
greater use of variable pay programs
Broad banding leaves an organization vulnerable to charges of _____.
inconsistency and favoritism
In the context of pay systems, identify a feature of localizers.
They work independently of the company headquarters.
Unlike grades-and-ranges approaches to designing pay structures, broad-banding approaches have controls in the form of _____.
a total salary budget that limits managers
Companies with higher profits than competitors can share this success with employees by leading competitors' pay levels and/or through bonuses that are tied to profitability. Academics view this as _____.
rent sharing
According to the Department of Labor, _____ is the degree of accountability that is required to perform a job.
responsibility
What are the assumptions that theories of labor markets usually begin with? (Check all that apply.)
A single employer has no advantage to pays below or above the market rate. People are homogeneous and thus interchangeable. Employers always aim to maximize profit. All costs associated with employment are reflected in pay rates.
Which of the following is a feature of Japanese pay systems?
Emphasis on the person rather than the job
_______ states that people compare the ratio of their own outcomes (e.g., pay, status, enjoyment) to inputs (e.g., effort, ability, performance) with the outcome to input ratio of others (internal, external, or themselves in a past or future situation).
Equity Theory
The pay data for a salary survey are usually updated through a process called trending or aging to predict the _____.
competitive rates for the future date when the pay decisions will be implemented
A major work decision change is _______, in which entire levels of work are removed.
delayering
Diminishing marginal productivity for each new employee added to a firm arises from the fact that each new employee _____.
has access to a progressively smaller portion of other factors of production
A low-high approach to selecting jobs for inclusion in surveys is used to determine the pay level when an organization _____.
has skill-competency-based structures
According to recent research, job applicants seek organizations with reward systems that _____.
match their personalities
In German pay systems, various ... ... are worked out for all industrial sectors by employers and unions.
tariff agreements
Most employers pay income tax dues to the host country and/or the home country through ... ...
tax equalization
An organization with widely variable performance across time and unstable and unclear performance measures. In the context of the relationship between performance measurement and compensation strategy, match the organizations (in the left column) with the most appropriate compensation strategies (in the right column).
Offering a wide array of rewards beyond just money and emphasizing base pay with a low-incentive component
In the context of compensation, which of the following is a way to better satisfy employees' individual needs and preferences?
Offering more choice
Internal alignment perspective Match the perspectives (in the left column) with their views on pay ranges (in the right column).
Pay range reflects the variations in experience or performance that an organization wishes to acknowledge with pay.
Which of the following categories of benefits fall under Social Security? (Check all that apply.)
Benefits for surviving family members of a deceased worker Old age or disability benefits Benefits for dependents of retired or disabled workers Lump-sum death payments
Managerial and professional skills Match the types of the skills (in the left column) with the geographic limits within which they are usually competed for (in the right column).
Competition for these skills is usually national or international.
Match the type of countries (in the left column) with their features (in the right column). Countries with centralized pay-setting (e.g., Belgium, Germany, Sweden) Countries with decentralized pay-setting (e.g., the United Kingdom, Czech Republic, United States)
Countries with centralized pay-setting (e.g., Belgium, Germany, Sweden)-These countries have less wage flexibility Countries with decentralized pay-setting (e.g., the United Kingdom, Czech Republic, United States)-These countries have high wage flexibility
Which of the following institutional factors are specifically related to international compensation? (Check all that apply.)
Cultures Social contracts Employer federations Trade unions
What are the areas in which employers belonging to a labor market must compete? (Check all that apply.)
Employees situated in the same geographic area The same services and products The same skills or occupations
Identify a true statement about the choice available to employees in the plan coverage of a standard benefit package.
Employees typically are not offered a choice among employee benefits in a standard benefits package.
True or false: Historically, organizations have provided equal employee benefits for both part-time workers and full-time workers.
False
Porfyra Manufacturing Inc. Porfyra Manufacturing Inc. and Colina Manufacturing Inc. are two companies that manufacture laboratory equipment. The sales department of the former has six levels with large pay differentials between them, while the sales department of the latter has only three levels with small pay differentials between them. Match the companies (in the left column) with their internal structures (in the right column).
Hierarchical structure
Julia is a systems architect at a global information technology company. The company intends to relocate Julia from Palo Alto, California to one of its units in Manila. Before doing so, the company compares the living costs and standards between Palo Alto and Manila and appropriately decides on a compensation package. In this scenario, what is the intent of the company in comparing living costs and standards between the two cities?
It is meant to maintain the same level of purchasing power.
Identify a true statement about the cost-centered approach to employee benefit programs.
It requires benefit administrators to decide the cost commitments for an existing benefit package.
Identify the various compensation strategies used by companies with global operations. (Check all that apply.)
Localizer Exporter Globalizer
Which of the following are true of aligned pay structures? (Check all that app
They are fair to employees. They support the way work gets done.
When a company's job _____, a pay level can be selected that is a function of the pay of other companies as well as the role played by the job in executing the strategy of its own company.
matches a survey job well
In a pay survey, a _____ is calculated by summing up the base wages of all organizations in the survey and dividing by the number of organizations.
mean
Which of the following is a strategy meant to draw workers into supervisory roles?
Raising the base pay of supervisors to some amount that surpasses the base pay of the highest-paid subordinate in the team
_____ states that people compare the ratio of their own outcomes (e.g., pay, status, enjoyment) to inputs (e.g., effort, ability, performance) with the outcome to input ratio of others (internal, external, or themselves in a past or future situation).
Equity Theory
... is defined as shared mental programming which is rooted in the values, beliefs, and assumptions held in common by a group of people and which influences how information is processed.
culture
As part of a health promotion initiative, StatexPro, a business analytics company, provides a special annual travel allowance up to $500 to employees who cycle to work on a daily basis. StatexPro's initiative is an example of a cost control strategy for health care that _____.
links incentives to healthy behavior
Clerical and production skills Match the types of the skills (in the left column) with the geographic limits within which they are usually competed for (in the right column).
Competition for these skills is usually local or regional.
Rank the steps involved in filing affirmative action plans in the correct order.
GET BACKKKK TO....
Google Match the companies (in the left column) with their management's stand on compensation (in the right column)
The management wants the employees to know that it loves them.
lead In the context of how updating salary survey data reflects policy, match the terms used to describe the changes that an organization makes to its pay policy (in the left column) with their descriptions (in the right column).
The organization ages the market data to a point at the end of the plan year and pays at this rate for the entire plan year.
Identify the clauses under the Employee Retirement Income Security Act (ERISA) and the tax code that restrict an employer's ability to provide excessive benefits to executives. (Check all that apply.)
A benefit plan must provide determinable benefits. A benefit plan must satisfy certain vesting and nondiscrimination conditions. A benefit plan must cover a wide cross-section of employees.
Who among the following form a company's compensation committee?
A board of directors
Identify a statute that affects most employee benefits, pension administration, and various sections of the Internal Revenue Code.
Employee Retirement Income Security Act (ERISA)
Identify the factors that shape external competitiveness. (Check all that apply.)
Attributes unique to each company Competition in the labor market for applicants with various skills Competition in the product and service markets
Identify the fundamental components of most executive compensation packages. (Check all that apply.)
Base salary Perquisites Short-term bonuses Long-term incentives
Which of the following unit rate sales compensation plans offers one rate up to a target level and then lesser rates thereafter?
Declining commissions
Match the types of countries (in the left column) with their features (in the right column). Low-power-distance nations such as Australia and the Netherlands Individualistic national cultures such as the United States, United Kingdom, and Hong Kong High-power-distance nations, such as Malaysia and Mexico
Low-power-distance nations such as Australia and the Netherlands-An egalitarian approach to pay structures is appropriate for these countries Individualistic national cultures such as the United States, United Kingdom, and Hong Kong-A pay structure that features person-based pay and performance-based increases is appropriate for these countries High-power-distance nations, such as Malaysia and Mexico-Hierarchical pay structures are appropriate for these countries
Which of the following is true about executive benefits? (ERISA - the Employee Retirement Income Security Act)
Many executives receive additional benefits such as life insurance and exemptions from deductibles for health-related costs.
In the context of pay structures, a(n) _____-______ _______ focuses on the skills, knowledge, or competencies possessed by an employee, whether or not they are utilized in the employee's particular job.
Person-Based Structure
What are the factors that need to be included in the employee benefits planning process? (Check all that apply.)
Plans to ensure external competitiveness Integration of benefits with other compensation components Strategies for ensuring adequacy of benefits
DSTDB Corporation, a digital marketing agency, establishes a new system to calculate salaries based on skill and proficiency level, years of experience, market value, and merit. Based on this new system, the agency grants salary hikes to 45 female employees whose salaries were less than the amount computed by the new system. However, the agency refuses to grant salary hikes to 63 male employees whose salaries were also less than the amount computed by the new system. In this scenario, DSTDB Corporation is in violation of the Equal Pay Act. This violation is an example of _____.
Reverse discrimination
Which of the following options reduces labor expenses when people flow to the work?
Segmenting the source of labor
Which of the following theories claims to integrate motivation theories under a wide umbrella?
Self-determination theory
Identify the "three pillars" of Japan's employment relationships. (Check all that apply.)
Seniority-based pay and promotion systems Lifetime security within the company Enterprise unions
What are the steps involved in broad banding? (Check all that apply.)
Set the number of bands Price the bands with reference to market rates
Which of the following bars wage discrimination on the basis of gender if workers perform equal work in the same firm?
The Equal Pay Act of 1963
Identify the law that covers all employees of companies involved in interstate commerce or in the production of goods for interstate commerce.
The Fair Labor Standards Act of 1938
Which of the following states that time spent on activities before beginning the "principal activity" is usually not compensable?
The Portal-to-Portal Act
Valence According to expectancy theory, match the perceptions that shape employees' motivation (in the left column) with their descriptions (in the right column).
The significance employees attribute to the organization rewards received for job performance
Content Match the terms (in the left column) with their meanings (in the right column).
The work performed in a job
How do Consumer Driven Health Plans and High Deductible Plans help cut health care costs?
They shift much of the burden of purchasing health care over to employees.
In the context of the elements in the pay model, _____ is the measure of the significance of total compensation in the overall HR strategy.
prominence
... ... begins with the traditional alternatives of lead, meet, or lag; it then adds a second part, which is to offer employees choices within limits in the pay mix.
shared choice
According to the agency theory, executive compensation should be devised to ensure that executives keep in mind the interests of _____ when making decisions.
shareholders
Performance-based pay is most effective when _____.
there is success to share
Employee benefits slowly became a costly entitlement of the American workforce because _____.
they were taken on faith without hard data about payoffs
Expatriates who are citizens of neither an employer's parent country nor the foreign nation where they are residing and working are called _____.
third-country nationals
True or false: The use of alternative work arrangements offers a way to meet rapidly changing economic conditions.
true
True or false: There is no research to show how much of a pay-grade differential is required to induce employees to seek promotion into a higher grade.
true
True or false: Workers in Japanese pay systems receive annual wage increments irrespective of the degree of their performance until age 50.
true
A lead pay-level policy is capable of masking negative job traits that lead to higher _____ later on.
turnover
What are common across various employers, have stable job content, and have sizable numbers of employees?
Benchmark jobs
Which of the following approaches determines pay structures almost entirely on external market rates?
Market pricing
During World War II and the Korean War, the climate fostered by wage and price controls provided a perfect opportunity for unions to flex the muscles they had gained under the _____.
Wagner Act of 1935
After the results of a pay survey have been interpreted and a market line constructed, two components of the total pay structure of an organization merge. These components are _____.
internal alignment and external competitiveness
A group of positions with similar duties and responsibilities that require similar qualifications, are filled by similar recruiting procedures, and are paid under the same pay schedule is known as a ___ ___
job group
The length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan is referred to as ...
vesting
Match the methods of financing employee benefit plants (in the left column) with their descriptions (in the right column). Noncontributory Contributory Employee financed
Noncontributory-Total costs are paid by employers Contributory-Employers and employees share the total costs Employee financed-Employees pay total costs for some benefits
The Department of Labor recognizes _____, mental or physical, as the degree of exertion actually expended in the performance of a job.
effort
Research has proven that in manufacturing, productivity has a positive correlation with _____.
hourly wage level
Health care delivery through _____ enable employees to choose any health care provider.
indemnity plans
To comprehend international compensation, organizations must first ascertain _____.
the degree to which certain contextual factors constrain their compensation decisions and practices
The business units at United Technologies follow different compensation strategies because _____.
they face varied competitive conditions
True or false: The marginal product and the marginal revenue of a new hire are not directly measurable quantities.
true
The base salary and incentives for expatriate jobs is usually ascertained through _____ or some system of "job leveling."
job evaluation
What are the consequences of an internally aligned structure? (Check all that apply.)
Increased experience Reduced pay-related grievances Reduced pay-related work stoppages
The results from using a compensation system need to be assessed against the objectives the company is trying to achieve.
True
In the context of salary grades, identify the advantages of broad banding. (Check all that apply.)
It allows job responsibilities to be defined more broadly and flexibly than when using ranges. It fosters cross-functional growth and development in downsized or boundary-less organizations. It supports organizations that have eliminated levels of managerial positions
Regular adjustments made by organizations to employees' pay levels may be based on _____.
performance, ability to pay, or terms specified in a contract
In the context of motivation theories, agency theory maintains that _____.
performance-based pay helps motivate and direct employee performance
True or false: To discourage turnover, most companies make life insurance forfeitable when employees depart from the company.
true
Value Match the terms (in the left column) with their meanings (in the right column).
The relative contribution of a job to the organization aims
What is the biggest concern for individuals who receive health insurance under the Consolidated Omnibus Budget Reconciliation Act (COBRA)?
The relatively brief qualifying period
Matching the market wage and offering no performance-based pay. Match the sorting and signaling strategies (in the left column) with their descriptions (in the right column).
This strategy is most likely to appeal to people who just want to show up and are risk-averse.
Which technique can be used by an analyst in a pay survey to generate a straight market line that best fits the survey data by minimizing the variance around the line?
Regression analysis
Skill plans focusing on depth Match the types of skill plans (in the left column) with the types of employees they focus on (in the right column).
Specialists in corporate law, finance, or welding and hydraulic maintenance
External Factors Match the factors that influence a company's internal structure (in the left column) with their examples (in the right column).
Stakeholders and cultures and customs
What are the advantages of hiring local country nationals? (Check all that apply.)
They are familiar with local conditions and have associations with local customers, suppliers, and government regulators. They help the company save on relocation expenses and other major expenses associated with the hiring of expatriates.
The first step in a cost-centered approach to employee benefits requires _____.
policy decisions on the level of benefit expenditures acceptable both in the short and the long runs
______ _______ refers to the pay relationships among different jobs or skills or competencies within a single organization.
Internal Alignment
Arrange the wage components in the increasing order of their riskiness. (Place the least risky component at the top.)
1. Base Pay, 2. Across-the-board increase, 3. Cost-of-living increase, 4. Merit Pay, 5. Merit Bonus, 6. Individual incentive
In jobs that are characterized by high fluctuation in the nature of tasks employees are expected to perform, how can companies best motivate employees to be flexible, adjust, and display commitment?
By offering a broad array of rewards
____ ____ ______ refer to the rules and procedures that determine the pay for the different jobs within a single organization and allocate employees among those different jobs.
Internal Labor Markets
In the context of the employment relationship, which of the following is true of the social contract in the United States?
It is characterized by the expansion of the role of government in the automobile and financial services industries.
Product market factors Match the categories of factors that shape external competitiveness (in the left column) with their examples (in the right column).
Level of competition and degree of product demand
What did Matt Bloom discover about the effect of pay differences on performance based on eight years of data on major league baseball?
Teams with small differences in member salaries did better than those with large differentials.
How do managers choose their relevant labor markets? (Check all that apply.)
They look at the skills and knowledge required for a job. They consider the products, size, and location of their competitors. They evaluate the importance of a job to their organization's success.
Equal pay for equal work Match the standards with their definitions of pay discrimination.
This definition affirms that it is discriminatory to pay women less than men when they are performing equal work.
Bind Communications Corp., a major telecommunications equipment manufacturer, restructures its business by relocating its hardware and equipment manufacturing division to a low-wage country. In this scenario, which of the following is true of the company's strategy?
This strategy is likely to help the company reduce labor costs.
Living wage laws have narrower coverage than minimum wage laws.
True Reason: Living wage laws have narrower coverage than minimum wage laws, as they cover only city (or state) employees and/or employers that do business with the city (i.e., contractors and subcontractors). Sometimes they cover only base wages, but more frequently they require health insurance, vacations, sick pay, job security, and provide incentives to unionize.
In which of the following situations can performance-based pay be a "worst practice"? (Check all that apply.)
When it prompts government investigation When it alienates employees
Flexible employee benefit plans are also known as _____.
cafeteria-style benefit plans
Defined benefit plans that resemble defined contribution plans are called ... ... ...
cash balance plans
How does a good compensation manager consider employee benefit costs?
As part of a total package of compensation costs
What significance does pay level have in the application of Herzberg's two-factor theory to designing compensation to motivate employees?
It must satisfy an employee's hygiene needs before the employee can be motivated.
What are the objectives of the balance sheet approach? (Check all that apply.)
To ensure mobility of people to global assignments To ensure that expatriates neither gain nor lose financially
When an employee asserts that a specific event, such as disability, hospitalization, unemployment, has occurred and demands that the employer fulfill a promise of payment, ... ... arises.
claims processing
True or false: One way for companies to deal with equity problems that form a major compensation challenge for contingent workers is to promote the idea of boundaryless careers for them.
true
According to the Worker Economic Opportunity Act, which of the following are exempted from inclusion in overtime calculations? (Check all that apply.)
Bonuses Stock options
Which of the following is true of employee benefits and allowances in Japanese pay systems?
Company housing usually takes the form of dormitories for single employees.
total compensation Match the measures of compensation used in a pay survey (in the left column) with their descriptions (in the right column).
The amount of cash each job and incumbent is worth plus bonus, stock options, and benefits
Who pays for the majority of legal insurance premiums?
The employee
Which of the following are true of aligned pay structures? (Check all that apply.)
They support the way work gets done. They are fair to employees.
Changes to the federal minimum wage can result in indirect, spillover effects because as legislation forces pay rates at the lowest end of the scale to move up, pay rates above the minimum often _____ in order to maintain differentials.
increase
When economists describe pay as "noncompensatory," they mean to say that job seekers have a(n) _____ below which they will not take up a job, regardless of the attractiveness of other job attributes.
reservation wage level
... ... is based on the idea that only the individual employee knows what package of rewards would best suit personal needs; it allows tradeoffs between pay and benefits.
flexible compensation
In the short term, a company's factors of production are _____, which causes each new hire to have lower marginal productivity than the previous hire.
inalterable
True or false: Analyses for designing pay grades and pay ranges focus on the basic value of the work in consideration rather than the performance levels of employees.
true
According to the Fair Labor Standards Act of 1938, overtime provision requires payment at one-and-a-half times the standard for working more than _____.
40 hours per week
A high-wage, high-services strategy Match the types of organizational pay-level and pay-mix strategies (in the left column) with their examples (in the right column).
A company that ensures that its highly-paid employees maintain a balance between their work and their personal lives
Identify the true statements about organizations' business and pay strategies. (Check all that apply.)
A company's pay systems should align with its business strategy. Pay systems should change according to changes in business strategies.
Success-sharing plans Match the components of compensation (in the left column) with their definitions (in the right column).
A generic category of variable pay that is linked to some measure of group performance
Identify the pay-level and pay-mix strategy with the least risk.
A match policy
Which of the following factors have reduced the break-even point at which it pays employers to schedule longer hours and pay the overtime premium, rather than hire, train, and pay benefits for more employees? (Check all that apply.)
A workforce with improved skills and increased training costs per employee Increased benefits costs
According to Boxall and Purcell, the _____ ________ is an increasingly common "very basic theory of performance" that bases performance on ability, motivation, and opportunity.
AMO theory
Identify the characteristics of jobs that are thought to make them more susceptible to offshoring. (Check all that apply.)
Easy to routinize Easy to transmit inputs/outputs electronically Little need for worker interaction Little need for local insight on unique social and cultural factors
_____ supply the information needed to translate an external competitive pay policy into pay mix, pay levels, and pay structures.
Surveys
In the context of the Equal Pay Act of 1963, which of the following criteria are affirmative defenses? (Check all that apply.)
Quality or quantity of production Some factor other than sex Seniority Merit or quality of performance
What are the pay objectives followed at Merrill Lynch?
To hire, motivate, and retain the best talent
Why are outside consulting firms often used in designing a survey?
To protect a company from price-fixing lawsuits
What are the goals of the Employee Retirement Income Security Act (ERISA)? (Check all that apply.)
To protect the interest of approximately 100 million active participants To stimulate the growth of pension systems in which employers are not required to offer a pension plan
Many of the employee benefits that exist today were provided at employer initiative. Why did employers implement savings and profit-sharing plans? (Check all that apply.)
To provide greater security for worker retirement years To improve job performance
Identify the true statements about Whole Foods's business objectives. (Check all that apply.)
To take extraordinary measures to satisfy and delight customers To hire and try to retain employees who are going to help the company make money
Microsoft Match the companies (in the left column) with the main message being communicated by their compensation strategy maps (in the right column).
Total compensation is given prominence.
A company's pay structure should support its work flow.
True
An organization has an employee with performance ratings that are consistently high. According to the salary increase matrix of the organization, the pay of the employee should be _____.
above the pay range midpoint
Pay discrimination involving the denial of certain jobs, promotions, or training opportunities to qualified women or minorities is called ___ _____
access discrimination
Companies examine their own practices and costs in the area of compensation against their competitors in order to _____.
better comprehend how their competitors achieve their market share
When collecting organizational data for a salary survey, financial data are typically used to _____.
categorize firms by size, expressed in terms of revenues or sales
An analyst of a pay survey should avoid using the Consumer Price Index (CPI) for updating salary survey data because the CPI does not measure _____.
changes in wages in the labor markets
In the context of the balance sheet approach to determine expatriate compensation, norms are meant to reflect _____ in the home country for an individual at a particular salary level with a particular family pattern.
consumption patterns
One of the common cuts companies make in times of high unemployment is decreasing _____.
contributions to 401k retirement plans
In the image of an example depicting how choices for updating survey data reflect pay policy, match the letters in the image (in the left column) with the choices that they represent. A B C
A-Lag B-Lead/Lag C-Lead
Match the letters in the image of a grid with a pay range on the vertical axis (in the left column) with the salient features of the pay range they represent (in the right column). A B C
A-Range maximum B-Range midpoint C-Range minimum
Identify the similarities between Google, Nucor, and Merrill Lynch in terms of compensation strategies. (Check all that apply.)
All three formulate their pay strategy in a way that supports their business strategy. All three give importance to outstanding employee performance and commitment.
Which of the following are cost control strategies for health care that involve changes in the design or the administration of health insurance policies? (Check all that apply.)
Deductibles Using intranet technology to allow employees access to online benefit information Auditing of hospital charges for accuracy Defining maximum payout schedules
External factors Match the factors that shape the internal structure of an organization (in the left column) with their examples (in the right column).
Economic pressures and government policies, laws, and regulations
What are the two factors that merit increase grids use to guide pay increases in an organization?
Employee performance rating and position in the pay range
Identify an advantage of a skill-based pay structure.
Employees can be deployed in a way that better aligns with the flow of work.
Netflix Match the companies (in the left column) with the flexible benefits they offer their employees (in the right column).
Employees can select the mix of stock options and salary.
Identify the concerns associated with using stock options as incentives. (Check all that apply.)
Stock options as incentives have the ability to manipulate the system. Stock options sometimes do not relate as closely as desired to executive performance.
____ refers to the fundamental directions that an organization chooses.
Strategy
Identify the union preferences that influence compensation strategies. (Check all that apply.)
The worry about job security The desire for different forms of pay
How do companies use defined benefit plans to cut cost?
They purchase annuities with insurance companies.
In the context of the compensation of different groups in companies, which of the following is true of special groups in companies?
They tend to be strategically critical to the company.
Equal pay for work of comparable worth Match the standards with their definitions of pay discrimination.
This definition examines the illegality of paying workers in one job group less than workers in another if the two job groups include work that is not identical in content or results.
Individual incentive Match the components of compensation (in the left column) with their definitions (in the right column).
Variable pay linked directly to an objective measure of each employee's performance
If the content of a company's jobs fails to sufficiently match that of jobs in a salary survey, an attempt can be made to quantify the dissimilarity through _____.
benchmark conversion
... ... is a technique that collapses salary grades into only a few broad bands, each with a sizable range.
broad binding
Unlike job evaluations, market surveys lack _____.
high standards of reliability and validity
While verifying pay survey data, in most cases, the match between the survey job and an organization's job is _____.
imperfect
Internal factors Match the types of factors that affect the pay for jobs (in the left column) with the types of jobs they influence (in the right column).
nonentry jobs
Evidence has consistently proven that large organizations tend to _____ than do small organizations.
pay higher wages
The range maximum of a pay range is $81,000, and its range midpoint is $56,000. Calculate the range minimum of the pay range.
$31,000
The Pension Protection Act of 2006 defines pension plans less than _____ as 'at risk' plans.
70% funded
Which of the following is a savings plan that allows employees to defer pretax income?
A 401(k) plan
Which of the following health care delivery systems pools together a group of health care providers who agree to provide services at a set rate in exchange for employers directing their employees only to these health care providers?
A Health Maintenance Organization
A low-wage, high-services strategy Match the types of organizational pay-level and pay-mix strategies (in the left column) with their examples (in the right column).
A company that offers many services for the improvement of its low-wage employees
Which of the following affirmative defenses for unequal pay for equal work has brought about the greatest number of court cases?
A factor other than sex
_____ is used to estimate the relative value of job evaluation points for survey jobs and internal jobs in order to provide guidance for adjusting market data.
Benchmark conversion
How do most organizations motivate employees to apply for higher-level positions?
By associating promotions with money
Identify the ways in which employers can reduce the costs associated with unemployment insurance. (Check all that apply.)
By auditing compliance of terminated employees with unemployment insurance (UI) requirements By auditing pre-layoff behavior of employees By having a well-designed human resource planning system
Identify the ways in which employers can increase the effectiveness of employee benefits. (Check all that apply.)
By planning, designing, and administrating benefits in a better way By educating and creating awareness among employees about benefits
Which of the following is true of any change to the federal minimum wage?
Changes to the federal minimum wage have little direct impact on the software, chemical, oil, and pharmaceutical industries.
Identify an important point that compensation experts often miss.
Compensation is not the only reward that influences employee performance.
Identify a true statement about flexibility in cafeteria-style employee benefit plans.
Employees have great flexibility in choosing the benefit options of greatest value to them.
Which of the following requirements should be met by an organization's pay structure? (Check all that apply.)
Employees should be able to view the way in which their work is linked to the work of others and the organization's objectives. It should be fair to employees.
... are workers temporarily working and residing in a foreign nation.
Expats
The development of a total compensation strategy should not involve trial and error.
False
True or false: Workers are covered by unemployment insurance regardless of whether they are unemployed through faults of their own.
False
While referring to pay, the terms equity and equal can be used interchangeably.
False
The regulatory environment does not constrain the decisions of a compensation manager.
False Reason: Compliance with laws and regulations can be a constraint and/or an opportunity for a compensation manager. The regulatory environment certainly constrains the decisions that can be made. Once laws are passed and regulations published, employers must comply.
Which of the following is true of an organization that has many levels?
It can offer more promotions than an organization with fewer levels.
Which of the following statements is true of workers' compensation?
It covers injuries and diseases that arise out of, and while in the course of, employment.
Which of the following is true of the Employee Retirement Income Security Act (ERISA)?
It does not require that employers offer a pension plan.
Identify a true statement about workers' compensation.
It is a form of no-fault insurance.
Identify the disadvantages of offering employees unlimited choice in terms of compensation. (Check all that apply.
It may confuse employees. It would be difficult to design and manage. It would not be approved by the U.S. Internal Revenue Service.
Google Match the companies (in the left column) with their strategies for internal alignment (in the right column).
It minimizes hierarchy and stresses collaboration.
Identify a true statement about the compensation strategy at Google.
It offers its employees significant stock programs.
Nucor Match the companies (in the left column) with their strategies for internal alignment (in the right column).
It provides several opportunities but no defined career paths.
Merrill Lynch Match the companies (in the left column) with their strategies for internal alignment (in the right column).
It sizes jobs based on knowledge/skill, complexity, business impact, and strategic value.
Due to restrictions placed by the product market on an employer's pay level, what strategies must an employer use to compensate for paying above the maximum? (Check all that apply.)
Passing the higher pay level on to consumers by increasing prices Allocating a large share of total revenues to cover labor expenses
Match the different traditional pay systems (in the left column) with their pay objectives (in the right column). Pay systems in Japan Pay systems in Germany Pay systems in the United States
Pay systems in Japan-Pay objectives focus on the long term (age and security) and support high commitment (seniority-based/ability-based) Pay systems in Germany-Pay objectives include mutual long-term commitment, security, egalitarian pay structures, and cost control through tariff agreements Pay systems in the United States-Pay objectives focus on the shorter term (less job security), are market-sensitive, and emphasize cost control (variable pay based on performance)
_____ provided by an employer are considered integral to every citizen's economic security and are regulated in most countries.
Pensions and health care
What does reinforcement theory recommend for reinforcing performance?
Performance must be directly followed by performance-based payments.
Merit pay Match the components of compensation (in the left column) with their definitions (in the right column).
Permanent increase in salary given to an employee as a function of some evaluation of employee performance
What are the effects of offering high wages in a lead pay-level policy? (Check all that apply.)
Reduced vacancy rates and training time Reduced turnover and absenteeism
What are the controversial executive compensation practices identified by Institutional Shareholder Services (ISS)? (Check all that apply.)
Repricing of underwater stock options without the prior approval of shareholders Providing extraordinary perks or tax gross-ups
Which of the following statements highlights the influence of cultures and customs on internal pay structures?
Shared mind-sets may judge what size pay differential is fair.
Which of the following do most unions demand as a way to promote solidarity among members? (Check all that apply.)
Small pay differences among jobs Seniority-based promotions
Organization factors Match the factors that shape the internal structure of an organization (in the left column) with their examples (in the right column).
Strategy, technology, and human capital
Which of the following can be attributed to the relatively modest increase in dental care costs? (Check all that apply.)
Stringent cost control strategies An excess supply of dentists
In the context of unequal pay for equal work, which of the following are included in factors other than sex? (Check all that apply.)
Temporary assignments Shift differentials Bona fide training programs Other reasons of "business necessity" Differences based on ability, training, or experience
Identify the law that bars discrimination on the basis of age and the law that bars discrimination on the basis of disability. (Check all that apply.)
The 1990 Americans with Disabilities Act The 1967 Age Discrimination in Employment Act
Why are some people against the idea of viewing pay as an investment with measurable returns?
They feel that this view reduces the importance of treating employees equitably.
Mires Global Bank Corp. (MGBC) is an international financial institution. Investment bankers work for different branches of the bank across the world, including, Beijing, New Delhi, Berlin, and Chicago. Identify a true statement about the jobs of MGBC investment bankers in these four cities.
They have different exchange values.
Which of the following is an advantage of flexible employee benefit plans?
They help firms meet the changing needs of a changing workforce.
Which of the following is true of the stock options offered to executives?
They provide executives with an inherent incentive to aim for long-term achievements.
Paying below the market for base pay yet offering generous bonuses. Match the sorting and signaling strategies (in the left column) with their descriptions (in the right column).
This strategy is most likely to appeal to risk-takers who seek flexible schedules, more interesting projects, or more opportunities for promotion.
What are the types of pay discrimination recognized by the law? (Check all that apply.)
Valuation discrimination Access discrimination
What are the differences among organizations that pay grades and pay ranges offer flexibility to deal with? (Check all that apply.)
Variations in the mix of pay forms competitors use Variations in quality among job applicants Variations in the value of quality differences
Which of the following statements is true of countries with decentralized pay-setting?
Wage bargaining occurs with little government participation
According to the AMO theory, when will HR systems be most effective? (Check all that apply.)
When employee ability is enhanced through selective hiring and training and development When the compensation system encourages employees to act on their abilities and utilize the opportunity to make a difference When roles are designed to allow employees to participate in decision-making and have an opportunity to make an impact
Which of the following represent government interests in compensation decisions? (Check all that apply.)
Whether systems for determining pay are fair Safety nets for employees who are unable to work and for those who are unemployed Protection of workers
The process by which goods and services are delivered to the customer is referred to as _____ ____
Work Flow
A lead pay-level policy maximizes the ability of an organization to _____.
attract and keep skilled employees
An employer adopts new employee benefits offered by a competitor without careful consideration, just because the employer needs to avoid hard feelings. This is termed a _____.
bandwagon effect
The views of a compensation committee play an important role in determining executive ... ...
base "salary" or "pay"
In the context of the impact of legislation on employee benefits, discrimination legislation states that _____.
benefits must be administered in a manner that avoids differentiating against protected groups
The dashboard form of reporting the mix of pay forms of a company focuses on _____.
comparing each pay form to the market
The higher wages that employees offer to make up for the negative characteristics of a job are known as _____.
compensating differentials
According to social scientists, executive pay has a consistent corresponding relationship to _____.
compensation of lower-level employees
Survey data are used by employers to gather ... ... in order to better understand how competitors achieve their market share and price their products and services.
competitive intelligence
In an organization that uses a pure market pricing strategy, the pay structure is completely determined by _____.
competitors' pay decisions
The money to pay for Social Security benefits comes from _____.
contributions made by employees
The ___ business strategy places emphasis on pleasing customers and bases employee pay on how well they do this.
customer focused
Heather, a law school graduate, applies for job at one of the leading corporate law firms in her hometown. In the interview, she is asked whether she has any intentions of getting married and having children in the near future. Male candidates applying for the same position are not asked these questions. In the context of discrimination under Title VII of the Civil Rights Act of 1964, this scenario illustrates the concept of ___ _____
disparate treatment
Lorenzo and Sophia, an unmarried couple, have been living together for over four years. Lorenzo's employer, a major investment bank, has been providing certain benefits to Sophia. In this scenario, the benefits received by Sophia are called _____.
domestic partner benefits
... ... are that part of the total compensation package, other than pay for time worked, provided to employees in whole or in part by employer payments.
employee benefits
A(n) ... ... ... (ESOP) plan is a defined contribution plan in which a company makes a tax-deductible contribution of stock shares or cash to a trust.
employee stock ownership
Differentials are used to _____.
encourage people to work for promotion to a higher-paying level
External factors Match the types of factors that affect the pay for jobs (in the left column) with the types of jobs they influence (in the right column).
entry jobs
In the context of company-owned housing, ... ... are built in sections of major cities where various international corporations group their expatriates.
expatriate colonies
Which component of a total pay structure includes the salaries paid by relevant competitors for the benchmark jobs measured by a pay survey?
external competitive data
True or false: Some reservation-wage theorists say that job seekers accept the first job offer they receive where the pay is below their reservation wage.
false
True or false: The variations in wage flexibility across countries are not related to regulatory restrictions.
false
The unemployment benefits of an unemployed worker are paid for by the _____.
firm or firms most recently employing that currently unemployed worker
According to Herzberg's two-factor theory, _____ are factors related to basic living needs that prevent behaviors in their absence, whereas _____ are factors that motivate performance.
hygiene factors; satisfiers
A pure market pricing strategy carried to the extreme ignores _____ entirely.
internal alignment
One of the drawbacks of the salary data available on the Web is that much of the data _____.
is of uncertain quality
The term "reverse discrimination" is disliked by many people because they believe that _____.
it is still discrimination even if the group penalized is white males
In the context of pay structures, a _____ focuses on the work content—tasks, behaviors, responsibilities.
job-based structure
Changes to the pay mix of an organization occur less frequently than changes to the pay level probably because of the _____.
lack of attention given to pay mix decisions
One of the negative effects of a _____ is that it forces an employer to raise the wages of current workers in order to avoid internal misalignment and murmuring.
lead pay-level policy
Since governments are major stakeholders in determining compensation, _____ can be included in a compensation strategy.
lobbying to influence laws and regulations
According to the theory of human capital, improving productive skills by making investments in training will raise one's _____.
marginal product
According to the theory of human capital, the wages of new hires match the value of their _____.
marginal product
Fill in the blanks to complete the sentence. The association between scientist/engineer compensation and years of experience in the labor market is determined by ... ...
maturity curves
The level of demand that _____ is that level at which the marginal revenue of the last hire in the company equals the pay for that employee.
maximizes profits for a company
An issue encountered while adjusting an organization's pay structure is that the job structure that emerges from internal job evaluation _____.
may not match the pay structures of competitors
A 1999 advisory from the Wage and Hour Division specified that bonus, gain-sharing, and stock option payments must be included when determining overtime pay. The burden from extra bookkeeping and calculations forced employers to not provide such forms of pay to ___ employees.
nonexempt
In the process of auditing employee benefits for cost containment opportunities, employers _____.
outsource benefits and administration
In the context of the elements in the pay model, _____ refers to the role played by non-HR managers in making compensation decisions.
ownership
A pay-with-competition policy attempts to ensure than an organization's labor costs are approximately the same as those of its _____ and that its ability to attract potential employees is approximately the same as its _____.
product market competitors; labor market competitors
Companies adjust the pay of employees who transfer among different countries in order to maintain the same level of ... ...
purchasing power
A band in broad banding encompasses many positions of varying values, so a _____ is usually not used.
range midpoint
Unlike broad-banding approaches to designing pay structures, grades-and-ranges approaches have guidelines and controls in the form of _____.
range minimums, range maximums, and range midpoints
The approach to motivation that believes that employees have the highest quality motivation when both extrinsic and intrinsic motivators are used is _____.
self-determination theory
Pay structures undergo changes due to external factors such as _____.
skill shortages
Fill in the blanks to complete the sentence. The dental equivalent of Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) is the ... ... ...
standard delivery system
The most common statistical measure of variation is probably _____, which is rarely used in pay surveys.
standard deviation
A(n) ... is the systematic process of collecting and making judgments about the compensation paid by other employers.
survey
The reassessment step in formulating a total compensation strategy recognizes that _____.
the compensation strategy must undergo modifications in response to changing conditions
To deal effectively with turbulent competitive dynamics, an organization should first focus on _____.
the factors that are of importance to the business environment in the present and in the future
The hierarchy of a pay structure refers to _____.
the number of levels and reporting relationships
True or false: Nationalistic demands of hiring locals can be satisfied by providing employment to local country nationals.
true
It is evident from practice that different pay surveys imply _____.
varying levels of pay
According to reinforcement theory, an organization should discourage an employee's undesirable behavior by _____.
withholding the employee's payouts
Why do scientists and engineers experience lower salary increments in comparison to employees in other occupations after ten years in their career?
A slow obsolescence of their knowledge
Identify an accurate statement about a reservation wage.
A reservation wage may be more than or less than the market wage.
Which of the following are steps involved in establishing a comparable-worth plan? (Check all that apply.)
A single "gender neutral" point job evaluation plan for all jobs within a unit should be adopted. Percentages of male and female employees in each job group should be identified.
Identify a similarity in the compensation strategies adopted by Google and Microsoft.
A strong emphasis on stock-related compensation
What are the conditions for qualifying for the benefits of Social Security? (Check all that apply.)
A worker must work in covered employment. A worker must earn a specified amount of money for each quarter-year of coverage.
Refer to the given image and match the letters of the alphabet (in the left column) with the corresponding factors that influence employee behavior (in the right column). A B C
A-Ability to perform, B-Motivation to perform, C-Opportunity to perform
Match the letters in the image (in the left column) with the stages in the cascading link between organization strategy and employee behavior they represent (in the right column). A B C D E
A-Corporate Goals, B-SBU Goals, C-Department/Team Goals, D-Employee Team Results, E-Choice, Individual Goals
In the formula Behavior = f (A, M, O), if Behavior represents employee behavior, what do A, M, and O represent?
Ability, motivation, and opportunity
Which of the following are included in the employment relationship as part pf the social contract? (Check all that apply.)
All employees The government All enterprise owners
Which of the following are true of alternative work arrangements? (Check all that apply.)
Alternative work arrangements allow employers to easily expand and contract the labor force in response to fluctuation in sales. Alternative work arrangements reduce direct labor costs.
In the context of employee benefits, which of the following is a true statement about a Consumer-driven or High Deductible health care plan?
An employee pays all health care costs up to a pre-determined amount.
Which of the following companies is most likely to reduce its labor costs?
Anertia Inc., an American laptop manufacturer that has decided to outsource the assembly of its products to China
Which of the following is an important facet of executive compensation that is primarily meant to drive better short-term performance?
Annual bonuses
In the context of benefit administration issues, what are the major questions that arise in setting up an employee benefit package? (Check all that apply.)
Are the selected benefits legally defensible? How much choice should employees have from a range of benefits? Who should be benefited or protected? How should benefits be financed?
In the context of surveys for determining pay levels, why do surveys of upper-level and executive positions in an organization include reporting relationships and financial data?
Because the organization's financial performance is directly related to compensation for these positions
Which of the following is a way in which employers can control spiraling employee benefit costs?
By adopting a broad, cost-centered approach to benefits
A match policy Match the types of pay-level and pay-mix strategies (in the left column) with the types of jobs companies use them for (in the right column).
Companies use this policy for jobs that require skills that are not very critical to their success.
Identify the principal decisions for an organization in determining externally competitive pay and creating corresponding pay structures. (Check all that apply.)
Create a pay policy line that reflects external pay policy Choose relevant market competitors Balance competitiveness with internal alignment
Identify the factors in the social and political context that influence compensation strategies. (Check all that apply.)
Demographical changes in the workforce Legal requirements
An organization with widely variable performance across time and stable and clear performance measures. In the context of the relationship between performance measurement and compensation strategy, match the organizations (in the left column) with the most appropriate compensation strategies (in the right column).
Emphasizing monetary rewards and emphasizing base pay with a low-incentive component
An organization with low variability in performance across time and stable and clear performance measures. In the context of the relationship between performance measurement and compensation strategy, match the organizations (in the left column) with the most appropriate compensation strategies (in the right column).
Emphasizing monetary rewards and including a significant incentive component
Alignment is probably the most difficult test that a pay strategy has to pass.
False
In the real workplace, pay structures follow either a job-based structure or a person-based structure.
False
In the context of sales compensation plans, which of the following unit rate plans has the same rate for each unit sold?
Flat commissions
In the context of vesting, which of the following conditions are included in the Economic Growth and Tax Relief Reconciliation Act of 2001? (Check all that apply.)
Full vesting after three years 20 percent vesting after two years and 20 percent each year thereafter
Which of the following is true of the role of government in employment relationships?
General economic growth/demand and business activity can be influenced through government monetary policy.
Which of the following limit managerial autonomy? (Check all that apply.)
Governments Trade unions Corporate policies
What do unusual shapes of frequency distributions in a pay survey reflect? (Check all that apply.)
Greatly dispersed pay rates Issues with job matches Companies with very different pay policies
Organization Factors Match the factors that influence a company's internal structure (in the left column) with their examples (in the right column).
HR policy, employee acceptance, and cost implications
Identify a difference between hierarchical and egalitarian pay structures.
Hierarchical pay structures have larger differentials between adjacent levels than do egalitarian pay structures.
Match the types of products (in the left column) with the appropriate methods of compensation for selling these products (in the right column). High barriers to entry Low barriers to entry
High barriers to entry-Compensation for selling these products includes a large base-pay component Low barriers to entry-Compensation for selling these products includes a large incentive component
Identify the true statements about the impact of internal pay structures. (Check all that apply.)
High-performing employees resign less under more hierarchical systems when their pay is based on performance rather than seniority. High-performing employees resign less under hierarchical systems when they have knowledge of the pay structure.
According to research, under which of the following conditions are pay procedures more likely to be viewed as fair? (Check all that apply.)
If accurate data are used If employees were involved in the process If appeals procedures are included If they are applied to all employees in a consistent manner
Which theory sees organizations as responding or conforming to normative pressures in their environments in order to gain legitimacy and to minimize risk?
Institutional theory
What are the principal decisions involved in an organization determining externally competitive pay and forming corresponding pay structures through a survey? (Check all that apply.)
Interpreting survey results and construct the market line Defining the purpose of the survey Designing the survey
What is the purpose of the Pension Benefit Guaranty Corporation (PBGC)?
It guarantees payment of vested benefits to employees formerly covered by terminated pension plans.
Identify the examples of employee benefits. (Check all that apply.)
Life insurance Workers' compensation
How does Whole Foods make its compensation strategies competitive in the external market?
It provides health insurance for all full-time employees.
A structure based on work content Match the types of internal structure (in the left column) with their features (in the right column).
It usually ranks jobs based on the skills required, the complexity of tasks, problem solving, and/or responsibility.
Identify the disadvantages of offering employees unlimited choice in terms of compensation. (Check all that apply.)
It would be difficult to design and manage. It would not be approved by the U.S. Internal Revenue Service. It may confuse employees.
Identify a drawback of using the Bureau of Labor Statistics as a source in a pay survey.
Its data are usually not specific enough to be used alone.
How did the study on managers' approaches to pay decisions in light of varying unemployment, profitability, and labor market conditions directly contradict the efficiency-wage theory?
Managers believed that difficulties with attracting and retaining people were the result of poor management and not inadequate compensation.
The ______ theory was put forth in the last half of the 19th century and countered the views of Karl Marx by stating that employers pay use value.
Marginal Productivity
What are the benefits that are given to employees under workers' compensation? (Check all that apply.)
Medical care required to treat job-related injuries or illnesses Survivor death benefits
Match the national health insurance plans (in the left column) with their descriptions (in the right column). Medicare Medicaid Affordable Care Act
Medicare-This insurance plan covers the elderly Medicaid-This insurance plan covers the poor Affordable Care Act-This insurance plan targets the uninsured
What are the major provisions of the Fair Labor Standards Act of 1938 (FLSA)? (Check all that apply.)
Minimum wage Hours of work Child labor
_____ involves offering what's important to a person in exchange for some desired behavior.
Motivaion
Labor market factors Match the categories of factors that shape external competitiveness (in the left column) with their examples (in the right column).
Nature of demand for employees and nature of supply of employees
External competitiveness perspective Match the perspectives (in the left column) with their views on pay ranges (in the right column).
Pay range is a control device because a range maximum is the highest an organization is willing to pay for the work and the range minimum is the lowest.
Which of the following relieves an employer's liability in the event that a wound caused before employment combines with a wound caused during work to result in a disability greater than that caused by the latter alone?
Second-injury funds
According to goal-setting theory, which type of goals generate the most employee effort?
Specific and challenging performance goals
Match the legislations (in the left column) with their effects on employee benefits (in the right column). The Fair Labor Standards Act of 1938 The Employee Retirement Income Security Act of 1974 The Maintenance Act of 1973
The Fair Labor Standards Act of 1938-Introduced time-and-a-half overtime pay The Employee Retirement Income Security Act of 1974-Set up the Pension Benefit Guaranty Corporation The Maintenance Act of 1973-Mandated employers to provide alternative health coverage options to employees
Which of the following firms is using a cost control strategy to reduce health care costs by linking incentives to healthy behaviors?
The Fitness Quo, a fitness center that charges employees $500 more in health premiums if they fail to attend their biannual health checkups
Match the statutes (in the left column) with their effects on employee benefits (in the right column). The Patient Protection and Affordable Care Act of 2010 The Consolidated Omnibus Budget Employees Reconciliation Act (COBRA) of 1984 The Family Medical Leave Act of 1993
The Patient Protection and Affordable Care Act of 2010-Requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship The Consolidated Omnibus Budget Employees Reconciliation Act (COBRA) of 1984-Makes employees who resign or are laid off through no fault of their own eligible to continue receiving health coverage under the employer's plan at a cost borne by the employees The Family Medical Leave Act of 1993-Mandates 12 weeks of time off for all workers at companies that employ 50 or more people
Identify the way of reporting an organization's mix of pay forms that is depicted in the image.
The dashboard
Identify recent examples of "benchmarking" behavior by organizations. (Check all that apply.)
The emphasis on teams The rush to outsource jobs
According to the equity theory of motivation, what is an employee most likely to do if he or she perceives that other employees are getting paid more for the same effort?
The employee will put in less effort than he or she previously did.
What are the terms associated with the various service allowances and premiums that an expatriate receives? (Check all that apply.)
The expatriate must work with less direct supervision than a domestic counterpart. The expatriate must often work and dwell in strange and sometimes uncongenial locations. The expatriate must represent the employer in the host country.
Which of the following can be considered an indicator of employment regulation?
The flexibility that employers have to hire and fire workers
Identify a difference between the layered and the delayered pay structure.
The layered structure is more hierarchical than the delayered structure
Nucor Match the companies (in the left column) with their management's stand on compensation (in the right column)
The management follows a no-layoff practice, but the income varies.
lead/lag In the context of how updating salary survey data reflects policy, match the terms used to describe the changes that an organization makes to its pay policy (in the left column) with their descriptions (in the right column).
The organization ages the market data to a point in the middle of the plan year and updates the original survey rates to the end of the current year plus half the predicted amount for the plan year.
Which of the following guidelines helps ensure the success of an organization's attempt to change its employees' behavior? (Check all that apply.)
The organization should select the right people. The organization should design its work and culture to provide the opportunity to leverage employees' motivation and ability. The organization should provide necessary training to people whose behavior needs to be changed.
Identify the reasons for the current trend of companies hiring contingent workers. (Check all that apply.)
The productivity of contingent workers is often higher than that of full-time workers. The wages and benefits for contingent workers are lower than those for full-time workers. Companies desire to protect themselves in a volatile economy.
In the context of the implications of motivation theories for pay and pay for performance, which of the following can be inferred from expectancy theory? (Check all that apply.)
There must be a clear and perceivably strong link between pay and performance. Employees' responsibilities and job tasks should be clearly defined.
How do frequency distributions aid an analyst during the statistical analysis of a pay survey?
They aid in visualizing information.
Which of the following is true of bonuses in Japanese pay systems?
They are a form of supplementary pay equivalent to 1 to 5 months of annual salary.
Which of the following is true of norms in the balance sheet approach to determine expatriate compensation?
They are based on surveys conducted by consulting firms.
Google Match the companies (in the left column) with their strategies for external competitiveness (in the right column).
They are market leaders in pay and benefits and provide unique benefits.
What are the disadvantages of flexible employee benefit plans? (Check all that apply.)
They are subject to the nondiscrimination requirements in Section 125 of the Internal Revenue Code. They increase administrative burdens and expenses.
Why are directors well-compensated?
They assume the risks associated with lawsuits.
What do managers use pay ranges for? (Check all that apply.)
To encourage employees to stay with the company To meet employees' expectations that their salary will rise over time To acknowledge individual performance differences with pay
SAS Match the companies (in the left column) with the main message being communicated by their compensation strategy maps (in the right column).
Total compensation supports work/life balance.
An organization's internal pay structure must comply with the laws and regulations of the country in which the organization operates.
True
True or false: A potential reason why companies are paying less bonuses to executives is that they want executives to shift their focus from short-term consequences to long-term consequences.
True
Class action lawsuits associated with equal employment opportunity/discrimination can be very costly to employers.
True Reason: Employment-related class action lawsuits such as those that pertain to equal employment opportunity/discrimination can be very costly to employers because they can include large numbers of potential plaintiffs (employees, former employees, potential employees).
Which of the following statements is true of countries with centralized pay-setting?
Wage bargaining occurs primarily at the industry level
When will an employer face no increase in labor supply even after raising its pay level?
When competitors quickly meet the employer's higher offer
Compensation strategy, HR strategy, and business strategy ultimately seek to _____, relative to competitors.
decrease costs or increase revenues
The pay differences among levels are referred to as ____
differentials
___ ____ applies different standards to different employees.
disparate/unequal treatment
Goodspro Inc., a global manufacturing firm, uses management practices that involve hiring and promoting employees based on ability and performance, paying employees based on their performance, and including employees in decision-making processes. In this scenario, Goodspro Inc. most likely uses a(n) _____.
high-performance work system
If an organization fails to _____, it becomes difficult to implement revised training programs or create compensation packages to reward new skills immediately.
identify changing skill requirements
In general, employers desire for employees to perform in ways that result in _____.
improved organizational performance
_____ _____ provides a minimum wage tailored to living costs in an area.
living wage
The extent of discretion managers possess to make total compensation a strategic tool is referred to as ... ...
managerial autonomy
Instead of reconciling an internal and external pay structure, some employers directly use _____ to determine their internal pay structures and mimic competitors' structures.
market surveys
The most common competitive pay-level policy involves _____.
matching competitors' wage rates
In a study conducted to determine the effects of sorting and signaling strategies, it was determined that pay level held more significance for _____.
materialists than for the risk-averse
Unlike the pay structure of an organization, the job structure _____.
orders the organization's jobs according to internal factors
There is evidence that organizations that widely use high-performance work practices and computer-based technology and employ higher-skilled employees _____.
pay higher wages
An employee pays all health care costs up to some pre-determined rate in a Consumer-driven or High Deductible health care plan. After that amount, the employee _____.
pays a rate of 10-35 percent of any additional medical services
Johanna, an accountant at an auditing firm, consults a doctor about a preexisting inflammatory condition of the skin. After the consultation, the doctor prescribes medication and instructs Johanna to follow the treatment regimen. The doctor also makes Johanna sign a HIPAA (Health Insurance Portability and Accountability Act) document. The HIPAA document is most likely to benefit Johanna by _____.
prohibiting discrimination against Johanna on the basis of her health-related status
In geographical areas with high concentrations of managers, scientists, and engineers, the primary market comparison is usually _____.
regional
Employers in markets with no competition have the ability to _____.
set whatever price they desire
One of the methods used to translate pay policy determined through a pay survey into practice is to _____.
specify a percent below or above the market line that an organization intends to match
One of the ways in which employers make pay cuts in times of high unemployment is by requiring employees to _____.
take furloughs without pay
In the context of the compensation of different groups in a company, an important characteristic of special groups is that _____.
the positions of the members of special groups are characterized by inherent conflicts
The easiest way to convert market data to fit a skill or competency structure is to use _____ as anchors for the competency-based structures.
the wages for the lowest- and highest-paid benchmark jobs for the relevant skills in the market
True or false: One of the best methods an organization can adopt to successfully change employees' behavior is to develop a compensation system that rewards desired behavior.
true
True or false: The assumption that pay systems must be established to accommodate various national cultures is predicated on the belief that most of a country's residents share a national character.
true
The concept of upward sloping supply in theories of labor markets assumes that as wage rates increase, more people are willing to take a job. However, offers of increased pay may not boost labor supply when _____.
unemployment rates are low
