HRM 6632 - question bank for mid-term
Which of the following refers to knowing that one's work matters in the lives of others?
A. Intrinsic compensation
Which term refers to money received by employees on a recurring basis for performing their jobs? A. Performance pay B. Base pay C. Minimum pay D. Employee benefits E. Subsistence pay
B. Base pay
A manager uses the following form in evaluating her employees: 1-5 to judge how task efficient a employee is. What type of performance appraisal method is the manager using? Trait system Paired comparisons BOS MBO BARS
BARS
Which type of incentive would be most applicable for a company that values employees with exemplary attendance records? Management incentive plan Piecework plan Spot bonuses Referral plan Behavioral encouragement plan
Behavioral encouragement plan
A greater number of employees are becoming eligible for incentive pay. The key reason behind this phenomenon is that _______. Companies award incentive pay instead of cost-of-living adjustments More workers demand incentive pay Companies want to control costs and motivate employees More companies want to share their profits with employees Incentive pay is replacing merit pay
Companies want to control costs and motivate employees
One of the advantages of introducing incentive pay instead of merit pay for cyclical industries such as retail sales is that ________. Incentive pay is much easier to achieve for all types of performers Incentive pay is perceived as more valuable by employees than merit pay Supervisors can choose not to award incentive pay Compensation expenses can be minimized with incentive pay Incentive pay is always less than merit pay
Compensation expenses can be minimized with incentive pay
The ________ survey is a monthly survey of the payroll records of businesses establishments that provides national estimates of average weekly hours and average hourly earnings for the private sector for all employees and for production and nonsupervisory employees. Bureau of Labor Statistics Consumer Price Index Current Employment Statistics National Estimates National Compensation
Current Employment Statistics
Workers earning less than $23,600 a year are guaranteed overtime protection under what guidelines?
Fair Pay Rules
Which is the most common area of negotiation between management and union workers?
Pay raises and benefits
Which of the following measures the purchasing power of a dollar? Nominal compensation Real compensation Market pay line Standard deviation Central tendency
Real compensation
Which is true when comparing pay rate differentials and relative rate differentials?
Relative pay differentials measure the control for the influence of various variables, but pay rate differentials do not.
Which term refers to a salesperson receiving a set salary plus a single payment for the achievement of specific, exceptional goals? Salary-only-plan Salary-plus-bonus plan Salary-plus-commission Commission-only plan Salary-plus-draw plan
Salary-plus-bonus plan
A problem associated with ________ is that they often lead to bureaucracy that can lead to higher fixed costs and a less competitive position. internally inconsistent compensation systems flexible pay systems salary-based pay systems hourly-wage-based pay systems internally consistent compensation systems
internally consistent compensation systems
Capital intensity is best defined as the extent to which a company's operations depend on ________.
large-scale equipment
Interindustry wage differential can best be defined as ________.
pay and benefits associated with characteristics of industries
The social context within which waiters in a restaurant interact with guests, or tax accountants in a tax preparation office interact with clients, is known as the ________. job content KSAs job description working conditions worker requirements
working conditions
Which of the following is NOT a step that compensation professionals use to begin plans for setting the merit pay grid? Calculate the expected number of employees who will fall into each cell Ask managers for the names of employees receiving merit pay increases Determine if the projected merit increase totals are within the budgeted amount Ask managers for the performance distribution of their employees Gather data on employee positions in the pay range
Ask managers for the names of employees receiving merit pay increases
What is the balance that companies must strike when it comes to designing a differentiation pay strategy? Trying to match their overhead costs to their competitors while keeping up with productivity levels Paying employees competitively while pursuing a lowest-cost strategy Paying employees lower pay than competitors and keeping employees from joining unions Attracting and retaining qualified candidates with sufficient pay and giving them adequate resources with which to work Providing employees generous benefits while keeping compensation costs to a minimum
Attracting and retaining qualified candidates with sufficient pay and giving them adequate resources with which to work
Which of the following jobs would most likely use incentive pay as the base compensation plan? Customer service representatives Factory workers Automobile salespersons Wait staff teachers
Automobile salespersons
How do compensation professionals serve executives in a company? A. By helping executives achieve low production costs B. By designing sound compensation systems C. By helping executives comply with labor legislation, but not with regard to pay and benefits D. By striving to change labor legislation E. By attracting employees for short-term employment
B. By designing sound compensation systems
Which law established criteria for determining whether employees should be paid hourly or by salary? A. Davis-Bacon Act of 1931 B. Fair Labor Standards Act C. National Labor Standards Act D. Social Security Act E. Equal Pay Act of 1963
B. Fair Labor Standards Act
What is the primary method used by companies to purchase the use of human capital? A. Hiring the best recruiters B. Paying wages and benefits C. Offering health benefits D. Providing pension programs E. Providing discretionary benefits
B. Paying wages and benefits
Why has HR traditionally been viewed as an administrative or support function?
B. The financial or marketing value of HR was not as apparent.
Income, higher company stock prices, economic value, strong positive brand identity, and reputation can all be generated by acquiring ________.
B. capital
All of the following are examples of differentiation strategies EXCEPT ________.
B. producing low-cost, standardized goods
Companies traditionally competed for qualified candidates on the basis of ________. sign-up bonuses benefits quality pension plans generous relocation allowances base pay
Base pay
Incentive or variable pay is defined as compensation, other than ________ that fluctuate(s) according to employees' attainment of some standard, such as a pre-established formula, individual or group goals, or company earnings. Bonus pay Group-based pay Merit pay Base wages or salaries performance-based pay
Base wages or salaries
Which statement about benchmark jobs is true? Benchmark jobs increase the time required to determine pay levels. Benchmark jobs are common across many different employers. Benchmark jobs are used for determining appropriate employee benefits. Benchmark jobs are typically unstable over time in most industries. Benchmark jobs represent a limited number of jobs within a company.
Benchmark jobs are common across many different employers.
Which of the following is true in regard to benefits? Benefits are currently far less important to employees than base pay. Benefits are becoming a smaller component of total compensation packages. Benefits costs have been falling for most companies. Benefits costs have increased, giving rise to greater variability in benefits among companies. Compensation surveys do not take into account benefits; they concentrate on base pay.
Benefits costs have increased, giving rise to greater variability in benefits among companies.
Which of the following is LEAST likely to explain why employees of Boeing, an aircraft manufacturer, receive higher wages than Walmart employees?
Boeing operates in a non-capital-intensive industry.
When companies strive to achieve the lowest cost of production or product differentiation, they are mainly trying to ________.
C. achieve competitive advantage
Which term refers to the set of data that clusters around a typical numerical value?Regression analysis Standard deviation Central tendency Quartile Variation
Central tendency
Which of the following ensures that employees possess at least a minimally acceptable level of skill proficiency upon completion of a training unit? Certification Recertification Skill blocks Pay ranges Pay structure
Certification
Which term refers to an incentive compensation based on the percentage of the selling price of a product or service? Recoverable draw Salary Nonrecoverable draw Draw Commission
Commission
Jill and her colleagues have received an annual merit pay increase on June 15 for the last two years. What is the term used to define the date when Jill and her colleagues receive the annual merit increase? Merit pay raise date Compensation budget date Employee anniversary date Common review date Performance review date
Common review date
A key difference between merit pay and incentive pay is that supervisors generally ________. Offer greater merit pay than incentive pay Communicate in advance about the incentive pay amounts, but do not communicate in advance about the merit awards Communicate in advance about merit pay, but do not communicate in advance about incentive pay Offer greater incentive pay than merit pay Base incentive pay on subjective assessment and merit pay on objective assessment of the employees
Communicate in advance about the incentive pay amounts, but do not communicate in advance about the merit awards
Typically, companies in profitable industries pay higher compensation than companies in less profitable industries. What is the main reasoning behind this phenomenon?
Companies in profitable industries typically have productive employees with skills and abilities that contribute to company success.
Why are commission-only sales plans best suited for companies that are pursuing lowest-cost strategies? Companies using commission-only plans have compensation expenditures that vary with sales revenue. Generally, in commission-only plans, companies pay draws to salespeople but do not provide any incentive pay. Companies using commission-only plans are not required to give pay raises to employees on a regular basis Companies using commission-only plans can pay smaller and smaller commissions on incremental sales. Companies using commission-only plans can avoid paying commission to salespeople if they do not meet their required quota of sales.
Companies using commission-only plans have compensation expenditures that vary with sales revenue.
Compensation professionals must be aware of certain characteristics of compensation surveys. Which statement about compensation surveys is FALSE? Compensation survey data requires statistical analysis. Compensation surveys become outdated quickly. Compensation surveys are loaded with information. Compensation surveys contain a wide range of pay rates across companies. Compensation surveys represent real-time data.
Compensation surveys represent real-time data.
In a pay-effort bargain, the basis for employee compensation is ________.
D. an employer's perception of what a job is worth
Matt, Juan, Linda, and Ming are working on a new product for their company that will be launched in the near future. Management wants to reinforce cohesiveness among the team. Which type of group incentive plan would be best suited for attaining the management objective? Equal incentive payments approach Differential incentive payments Gain-sharing plans Referral plans Differential payments based on ratio of base pay
Equal incentive payments approach
The Standard Occupational Classification System, trade associations, professional societies, and trade unions are ________. internal sources from which pertinent information on labor laws can be determined external sources from which pertinent information on pay raises can be determined external sources that job analysts can use to find pertinent job information to conduct job analysis excellent sources that companies can use when developing training programs for employees external sources that HR professionals can use to develop performance appraisals
External sources that job analysts can use to find pertinent job information to conduct job analysis
Anna is a new graduate with a B.S. degree in Business Management and is entering the workforce. Which type of competencies will a future employer expect Anna to demonstrate?Industry-sector technical competenciesIndustry-related competencies Foundational competencies Occupation -related competencies Workplace competencies
Foundational competencies
Personal effectiveness and academic and workplace competencies can be grouped as ________. Industry-wide technical competencies Industry-sector technical competenciesOccupation-specific competencies Foundational competencies Management competencies
Foundational competencies
If the following types of businesses, which one will benefit the most from the cross-departmental model of person-focused pay? Hair salon Dentist office Auto body shop Pharmacy Gift store selling holiday items
Gift store selling holiday items
What is one of the most difficult tasks managers face when they guide employees towards person-focused pay? Trying to help employees understand the connection between seniority and person-focused pay systems Helping employees understand the basic performance appraisal system Aligning employee pay with the knowledge structure Making employees understand the incentive pay structure Making employees understand the base pay structure
Helping employees understand the basic performance appraisal system
Dysfunctional turnover is best defined as the departure of ________. high-quality employees due to inadequate pay high-quality employees due to bad supervisory behavior supervisors due to low-quality employees being hired part-time employees from the organization due to bad performance reviews employees due to the lack of adequate job benefits
High-quality employees due to inadequate pay
_______ is one of the key features of person-focused pay that makes it costly for employers. Generous allowances for time off Higher training costs Larger pay raises Reduced work hours Greater need for staffing
Higher training costs
Which statement about job-based pay and person-focused pay is true? Job-based pay considers key skills, but person-focused pay considers the market value of the job itself In a job-based pay system, an employee's pay is determined by the market value of their skills A person-focused pay system is easier to administer than a job-based pay system Job-based pay promotes workers based on their past proficiency, but person-focused pay promotes based on seniority In a person-focused pay system, employees tend to have more job variety and job enrichment than in a job-based system.
In a person-focused pay system, employees tend to have more job variety and job enrichment than in a job-based system
What do compensation professionals use to establish pay differentials among employees within a company? Seniority in the company Job descriptions Skills and qualifications Academic background Job evaluation
Job Evaluation
Companies generally institute incentive pay programs to control payroll costs and motivate employee productivity. Of the following, which would be an example of an incentive pay program element that could help an organization meet those objectives? increasing sales commissions from 20% of sales to 25% of sales Profit-sharing program 10% base pay increase for all employees Holiday bonus program Overtime pay program
Profit-sharing program
One of the key advantages of person-focused pay for employees is that it ________. Provides job enrichment Makes promotions easier to attain Provides greater pay raises than any other system Helps them to strengthen relationships with supervisors Helps them earn bonuses
Provides job enrichment
Which is true of merit pay increases? Merit pay can be administered regardless of the level of funding for merit pay Merit pay should be awarded equally across the board for it to be meaningful. Merit pay is not viewed by employees as having any relationship to cost-of-living adjustments Merit pay should be substantive in the absolute sense, not a relative sense, for the employee. Research shows that boosting merit pay will not necessarily increase productivity.
Research shows that boosting merit pay will not necessarily increase productivity.
John has been employed for 15 years with a textile company that produces men's shirts. John has received incentive pay for most of the 15 years of his employment. What is the term an economist would use to classify this longevity of employment? Incentive effect Longevity effect Seniority effect Sorting effect Base pay effect
Sorting effect
Which of the following would be the best source of information for providing information on the interrelationship among jobs when conducting a job analysis?Supervisors Compensation specialists Job incumbents New hires Ex-employees
Supervisors
Generally, supervisors give merit raises based on subjective assessment of the employee's performance. It is therefore essential that _______. Employees not put much effort into obtaining merit pay Employees get a commitment from the supervisor before extending any effort for merit pay Supervisors conduct accurate performance appraisals for merit pay to be effective Supervisors do not give a high level of merit pay Supervisors become friendly with their employees
Supervisors conduct accurate performance appraisals for merit pay to be effective
Which of the following statements is true? Individualistic compensation practices encourage group behavior Team-based pay plans should compensate employees for achieving group objectives as well as assuming their respective roles in a team. Companies that rely on groups should offer more individualistic incentives.Your answer is not correct Traditional pay programs are beneficial for work teams Merit and seniority pay are compatible with team-based work.
Team-based pay plans should compensate employees for achieving group objectives as well as assuming their respective roles in a team.
Marco likes to note several positive and negative behaviors and their outcomes when it comes to documenting performance appraisals of his employees. However, Matt never has enough time to record all the details. Macro is more than likely using _______. A trait system A forced distribution appraisal BARS The critical incident technique A comparison system
The critical incident technique
Which statement about commissions is true?Commissions interfere with the cost-cutting measures of most organizations The intrinsic motivation of some sales professionals is undermined by commission-only plans As incentives, commissions are considered the best tactic for compensating sales professionals. Younger sales professionals typically prefer commission-only plans much more than older sales professionals Commission plans generate cohesiveness among most sales professionals.
The intrinsic motivation of some sales professionals is undermined by commission-only plans
Which of the following best explains the concept of an internally consistent compensation system? Every employee within an organization should be paid equally, regardless of duties and responsibilities The relative value and corresponding compensation associated with each job is determined by compensation professionals in an organization. The value of each job is determined by a cross-functional team, which then assigns compensation based on a formula incorporating both longevity and employee skill sets necessary to complete tasks. Compensation systems do not change over time. When an employee is hired by an organization, the employee is guaranteed that the compensation system in place upon hiring will remain in place until separation. The compensation system for internal full-time employees remains consistent over time, whereas the compensation paid to contractors and outside agents is subject to change depending on market fluctuations.
The relative value and corresponding compensation associated with each job is determined by compensation professionals in an organization.
What is the best approach to producing valid job descriptions? Supervisors should study jobs for a minimum of six months, and conduct extensive job interviews with employees. The results obtained from multiple data sources and multiple methods should converge. External HR consulting companies should communicate with supervisors and employees for one month. Data from government websites and employee questionnaires should be gathered by job analysts. Employees should provide detailed information, as well as document their daily tasks and activities for one year.
The results obtained from multiple data sources and multiple methods should converge.
Which of the following best describes what a well-designed pay structure promotes? A reduction in payroll costs The retention of valued employees Identification of which pay system is the best to use A company-wide balanced budget Limiting the number of excess employees
The retention of valued employees
Person-focused pay programs are innovative because they ________. Reward employees very well for lack of absenteeism Reward employees for taking high levels of risk on the job Treat compensation as a reward rather than an entitlement Reward employees on the basis of loyalty Make supervisors more accountable on the job
Treat compensation as a reward rather than an entitlement
Which of the following rewards newly hired employees less than established or tenured employees? Broadbanding Salary-only plans Two-tiered pay structures Commission-only plans Pay compression
Two-tiered pay structures
When awarding person-focused pay to autonomous work teams, which types of skills are emphasized for team members? Vertical skills Horizontal skills Leadership skills Numerical skills Interpersonal skills
Vertical skills
Before investing time and money into compensation surveys, which question is most important for compensation professionals to consider? How should we design the survey? How long will the survey be valid? Should company employees be involved in constructing the survey? How long will it take to conduct the survey?What does the company want to gain from the survey?
What does the company want to gain from the survey?
Employees are rewarded in a company-wide incentive plan ________. To promote healthy individual competition among workers When the company exceeds the minimum acceptable performance standard When the company perceives loyalty on the part of the employees When an individual worker exceeds the performance standard Regardless of the prevailing profit levels and stock price of the company
When the company exceeds the minimum acceptable performance standard
Which is NOT a true statement regarding wage levels and supply and demand for labor?
When the supply of qualified labor is greater than the demand for labor, there is an upward pressure on wages.
Which of the following is a list of educational qualifications, KSAs, and other qualifications an individual must possess to perform a job adequately?Job duties Worker specifications Job analysis Job summary Job content
a group of compensation professionals, supervisors, and employees
Harry has worked as a junior clerk for XYZ Company for three months, starting at $10 per hour. In the next five to seven years, if Harry continues to perform well and is willing and able, he can more than likely expect_____ an increase in longevity pay but not seniority pay an increase in longevity and seniority pay simultaneously, but not a promotion an increase in seniority pay and a promotion a cost-of-living increase with no increase in seniority pay an increase in seniority pay but not longevity pay
an increase in seniority pay and a promotion
Pay rates that fall along the market pay line represent ________. bonus pay awarded to workers on a random basis labor uniondash-determined pay rates negotiated and agreed upon by the company minimum wage rates as determined by the government competitive pay rates based on relevant labor market incentive pay historically paid by the company
competitive pay rates based on relevant labor market
Compensation specialists hope to gain information regarding ________ from compensation surveys. competitors' hiring practices competitors' benefits packages competitors' base pay and mix of total monetary compensation employee preferences regarding pay labor unions' preferences regarding pay
competitors' base pay and mix of total monetary compensation
The focus of the ________ model is to promote staffing flexibility by training employees in one department with critical skills they would need to perform effectively in other departmentscross-departmental Team skills Skill blocks Stair-step Job-point accrual
cross-departmental
Pay mix policy may be expressed in ________. fractions and ratios hours spent on the job dollars expressing total payroll taxes paid in a given year dollars expressing the total savings in compensation currency or as a percentage of total dollars spent on compensation
currency or as a percentage of total dollars spent on compensation
A relevant labor market can be defined on the basis of all of the following EXCEPT ________. geography product market competitors service market competitors customer type occupational classification
customer type
Collective bargaining ________.
describes the terms of employment
A job evaluation committee frequently uses the point method as a job valuation technique. When using the point method, an evaluation committee examines the importance of a factor to the overall value of the job, which means the committee is ________. determining the point value of each compensable factor selecting benchmark jobs defining factor degrees determining the weight of each factor verifying factor degrees and point values
determining the weight of each factor
Jane works for a private employer that does not follow the seniority pay system, but Alex, her friend, works for the federal government, which awards seniority pay. Alex has an advantage over Jane because _______ he expects much larger pay raises he knows that he will be treated fairly bc seniority pay will be based on objective standards, rather than subjective standards the federal government is known for taking care of its employees He is male and will always receive better raises than Jane He knows that he will get seniority pay as well as a COL adjustment
he knows that he will be treated fairly bc seniority pay will be based on objective standards, rather than subjective standards
Utility companies overall in 2007 paid their employees more than did companies in the leisure and hospitality industry. This phenomenon can be attributed to a(n) ________.
inter-industry wage differential
Internally consistent compensation systems facilitate the use of lowest cost strategy for companies because ________. jobs are placed on a hierarchy, with most jobs placed on the lower-paid levels job descriptions are broadly defined and focus on quality jobs are valued numerically, with most jobs being assigned lower points job duties and responsibilities are clearly defined with a focus on efficiency merit pay is not part of the compensation
job duties and responsibilities are clearly defined with a focus on efficiency
When an employee receives a minimum pay increase that is perceived as significant, it is known as ______. regressive just-meaningful most-available least-acceptable progressive
just-meaningful
All of the following are effective goals and objectives for sales professionals EXCEPT ________. improving sales productivity achieving customer objectives acquiring new direct customers keeping current distribution channels expanding overall sales
keeping current distribution channels
Pay rate differentials are ________.
statistics based on particular geographic regions and the United States
Utility companies generally pay higher wages than companies in other industries because ________.
utility companies have high barriers to entry, no foreign competition, and high profits
Mary has applied for an entry-level position in a marketing firm. She believes she meets the minimum qualifications for the job and that she has the knowledge, skills, and abilities to perform the job well. In other words, Mary believes she has the necessary ________. job content background check worker certification work ethic worker requirements
worker requirements
In a ________, employees earn a higher rate of commission for all sales made in a given period if the sales level exceeds a predetermined level. salary-only plan graduated commission plan commission-only plan multiple-tiered commission plan draw-only plan
multiple-tiered commission plan
John was disappointed when he saw a negligible increase in his paycheck after he was awarded merit pay. This problem can be attributed to which of the following problems with merit pay? Supervisor's biased rating of employee's job performance Lack of open communications between management and employees Counting costs associated with merit pay Little motivation value of merit pay Undesirable competition among workers
Little motivational value of merit pay
Mary's employer rewards employees with periodic additions to base pay according to employee's length of service in performing their jobs. What type of pay system is the organization utilizing? Comparison pay Longevity pay Pay-for-performance Merit pay Just-meaningful pay
Longevity pay
What is the benefit of including an incentive component in the core compensation program offered to employees in an industry that experiences cyclical demand, such as retail sales? Reducing turnover Lowering payroll costs during lean periods Reducing absenteeism Having tax advantages associated with the strategy Attracting better educated applicants
Lowering payroll costs during learn periods
Before merit pay can be awarded, it is important that companies first ________. Consider whether the person was employed in a for-profit or not-for-profit company in the past Consider the amount of times spent on the job by an employee Make permanent adjustments to base pay for inflation Make the employee realize that any pay increase is temporary Ignore the amount of available funds for merit pay
Make permanent adjustments to base pay for inflation
What type of a compensation plan is best suited for a salesperson who dislikes having to attain a specific volume of sales and who prefers concentrating on presale and post-sale activities? Salary-based sales plan Commission-plus-draw plan Commission-only plan Salary-plus-commission plan Salary-plus-bonus plan
Salary-based sales plan
The point method is a job-content valuation technique. What is the first step when using this technique? Defining factor degrees Determining the weight of each factor Determining point values for each factor Selecting benchmark jobs Choosing compensable factors based on a benchmark
Selecting benchmark jobs
What is the sixth and final step in the job evaluation process? Setting up the appeals process Choosing the job evaluation committee Documenting the job evaluation plan Training employees to conduct job evaluations Communicating with employees
Setting up the appeals process
Which of the following is a true statement about compensation? A. Compensation offers both intrinsic and extrinsic rewards. B. Compensation offers only subjective rewards. C. Compensation offers only monetary rewards. D. Compensation offers only extrinsic rewards. E. Compensation offers only intrinsic rewards.
A. Compensation offers both intrinsic and extrinsic rewards.
Which of the following are responsible for proving that alleged discriminatory pay practices are not discriminatory? A. Compensation professionals B. Labor courts C. Labor unions D. Company executives E. Employees
A. Compensation professionals
Which statement about extrinsic compensation is true? A. Extrinsic compensation includes both monetary and nonmonetary rewards. B. Extrinsic compensation includes any reward that makes employees feel better about themselves. C. Extrinsic compensation includes any reward that may be internal to the individual but external to the organization. D. Extrinsic compensation includes only monetary rewards. E. Extrinsic compensation includes only nonmonetary rewards.
A. Extrinsic compensation includes both monetary and nonmonetary rewards.
Which of the following is important for successful pay-for-knowledge programs?
A. Providing knowledge-development programs
Which two forces have contributed to a strategic approach towards HR?
A. Technological advances and global competition
The chief reason that human resource and compensation professionals in today's work environment need to think like CEOs is to ________.
A. accomplish strategic organizational goals
During collective bargaining, compensation professionals ensure that ________. A. employees receive cost-of-living adjustments and seniority pay increases B. union workers are treated fairly C. labor legislation is not violated D. pay is equitable across all ranks E. collective bargaining terms are part of the labor contract
A. employees receive cost-of-living adjustments and seniority pay increases
Marco is employed as a production worker at TVX Industries. Marco is best described as a ________. A. line employee B. specialist C. generalist D. staff employee E. contingent worker
A. line employee
An appropriate pay mix should consider the relative worth of jobs within a structure. Keeping this in mind, most of the bonus compensation in a technology company like Intel would likely be given to which of the following groups? Administrative staff Engineers Custodial staff Sales and marketing staff Blue collar workers
Engineers
When determining pay structure based on geographical consideration, many employers consider the ________. insurance costs in a given area minimum wage in a given area cost-of-living adjustment for a certain area sales taxes in a given area payroll taxes in a given area
cost-of-living adjustment for a certain area
Economists call the sets of collective skills, knowledge, and abilities of employees ________. A. human capital B. financial capital C. pay structures D. employee benefits E. pure capital
human capital
All of the following activities are part of designing a market-competitive pay system EXCEPT ________. matching job descriptions to pay levels conducting strategic analyses assessing competitors' pay practices with surveys integrating internal job structures with external market pay rates determining compensation policies
matching job descriptions to pay levels
The data collected on compensation by professional and industry association members tends to be accurate because ________. it is valuable information, and therefore goes through several cycles of accuracy checks it is extremely expensive to purchase the data members themselves stand to benefit from the data members are proficient in statistical techniques it takes a very long time to compile the data
members themselves stand to benefit from the data
Generally, the greater the influence of the salesperson on the buying decision, the ________. less likely that the salesperson will serve as a consultant to the buyer greater the likelihood of receiving a straight salary-only plan less effort will be exerted by the salesperson less emphasis on incentive pay in the compensation mix more emphasis on incentive pay in the compensation mix
more emphasis on incentive pay in the compensation mix
When the pay spread between newly hired or less qualified employees and more qualified job incumbents is small, it is known as ________. pay compression a pay grade a green circle rate a red circle rate broadbanding
pay compression
Merit pay systems use ________ to determine employees' performance. the employee's job title the labor union's input customer feedback seniority performance appraisals
performance appraisals
In a merit pay program, there must be explicit _______ that specify the procedures or outcomes against which employees' job performance can be clearly evaluated. outcome assessments specifications job qualifications performance standards job descriptions
performance standards
Which of the following statements is true?Merit pay and person-focused pay mesh together very well Incentive pay and merit pay combine together well Incentive pay and person-focused pay combine together very well Job-based pay and person-focused pay combine well together Person-focused pay and incentive pay do not mesh well together.
person-focused pay and incentive pay do not mesh well together
When compensation analysts use regression analysis, they are trying to ________. come up with an average of the salaries on a survey establish the highest and lowest salary levels on the survey study the amount of deviation in salaries predict the values of one variable from another predict salary increases in the future
predict the values of one variable from another
The National Labor Relations Act of 1935 requires ________.
private-sector employers to enter into good-faith negotiations with employees over employment terms
When workers in Los Angeles, California, make 20% more than workers nationwide, this is an example of ________.
relative pay differential
The difference between relative pay differential and pay rate differential is that ________.
relative pay is based on the comparison of a geographic region to the United States, and pay rate is based on the occupation in a geographic region
Martina is a sales manager in a major department store. Two independent job analysts have listed Martina's duties, which match the sales manager job description. This approach is known as the ________. reliable job analysis method observation method data collection method interview method valid job analysis method
reliable job analysis method
The job-content evaluation technique that follows an order of all jobs from the lowest to the highest on a single criterion is known as ________. simple ranking plan paired comparison alternation ranking job-content plan classification plan
simple ranking plan
There is a basic principle that companies rely on for building an internally consistent compensation system. This principle states that ________. the relative value of each job should be based on the academic qualifications required to perform the job there is very little difference in job characteristics between jobs that fall within a job family all employees should be paid equally the greater the responsibilities and complexities of a job the greater the pay jobs should be ranked on the basis of seniority
the greater the responsibilities and complexities of a job the greater the pay
What type of performance appraisal method relies on many sources for information (employees, supervisors, coworkers, etc)? Forced distribution 360-degree Comparison BARS Trait
360-degree
In traditional pay plans, employees are paid ________. For length of service to the company A fixed hourly rate or annual salary Every two weeks In advance of work performed Based on performance
A fixed hourly rate or annual salary
Which of the following best defines group incentives? A program that rewards employees for their collective performance An incentive fund that can be distributed to individual team members based on supervisor appraisals Incentives paid to group members based on individual performance Incentive pay based on individual group members' contribution A program that rewards groups on company-wide objective
A program that rewards employees for their collective performance
Which of the following organizations will most likely utilize a longevity pay program 10 years from now? A yo-yo manufacturer A public elementary school A small, locally owned coffee shop A privately owned flower shop A mechanical engineering organization
A public elementary school
What are the most common problems associated with merit pay programs? A poor personal relationship between a supervisor and an employee A supervisor's improper choice of performance standards A supervisor's unwillingness to participate in merit pay program The failure of a supervisor to properly differentiate performers An employee not feeling that the merit pay is significant enough
A supervisor's unwillingness to participate in a merit pay program
Which statement is correct? Administrators of merit pay programs depends solely on the skills of the supervisor, not necessarily on the design and implementation of merit pay programs Supervisors are generally very objective when awarding merit pay When employees get continual and ongoing feedback, they learn to dread performance appraisals The frequency with which employees are provided feedback on their performance is not very critical Accurate and effective performance appraisals are key for effective merit pay programs
Accurate and effective performance appraisals are key for effective merit pay programs
When an HR specialist continues to take courses and acquire additional experience in the benefits area, that specialist is ________. Acquiring depth of skills Acquiring vertical skills Restricting the specialist's career progression Acquiring horizontal skills Acquiring fewer competencies in the HR area
Acquiring depth of skills
The motivational benefit of merit pay can be perceived differently by employees and employers. Of the following factors of merit pay, which one is perceived differently by employers and employees? Value of other employees Amount of merit pay increase Need for merit pay Job description Value of competition
Amount of merit pay increase
Which of the following statements is true of an occupation?
An occupation is a group of jobs found at more than one company.
In order to remain competitive, how often should companies update their pay systems?Every two years Annually Quarterly Every five years Every six months
Annually
Which of the following factors is the biggest threat to McDonald's success?
E. Changing consumer preferences
Seniority pay is based on ________. A. the perception of compensation professionals B. your age and service to the organization C. length of service D. the time you have been associated with a certain department E. your position in the company
C. length of service
In order to establish an internally consistent compensation system, which of the following is absolutely necessary? Establishing subjective performance measures Establishing effective appraisals Linking performance appraisals to business goals Conducting job analyses Communicating about merit pay
Conducting job analyses
What are the components of a pay mix? Core compensation and incentive pay Core compensation and benefits Total benefits and bonuses Total pay and merit pay Total benefits and incentives
Core compensation and benefits
One of the threats unions face is offshoring, which is part of the globalization phenomenon. Offshoring refers to the migration of all or a significant part of the development, maintenance, and delivery of services to a company in another ________.
Country
Within the HR profession, a(n) ________ is a top-level manager who reports directly to the corporation's CEO or to the head of a major division. A. specialist B. generalist C. vice president D. executive E. HR specialist
D. executive
Cost-of-living adjustments represent ________. A. increases based on geographical location B. changes in retirement benefits C. pay increases based on industry D. periodic base pay increases E. changes in health care benefits
D. periodic base pay increases
What is the first step in the job evaluation process? Training employees to conduct job evaluations Documenting the job evaluation plan Setting up the appeals process Choosing the job evaluation committee Determining single versus multiple job evaluation techniques
Determining single versus multiple job evaluation techniques
Maria and Jill have been employed for three years at an accounting firm. In the last quarter, both received the same merit raise, although Maria has been a star performer and has not missed any deadlines, while Jill has missed deadlines on multiple occasions. On which aspect of the pay-for-performance link should the supervisor focus in this scenario so that this situation does not occur in the future? Establish effective appraisal Communicate the way the merit pay was determined Empower both Mary and Jill Conduct a job analysis Differentiate among performers
Differentiate among performers
Monetary compensation is best described as ________. A. a cost-of-living adjustment B. a type of intrinsic reward C. a small portion of a total compensation package D. the experiential part of an employee's total compensation E. an employee's core compensation
E. an employee's core compensation
Corporate strategy formulation is typically based on ________, which help determine threats and opportunities.
E. environmental scanning activities
Which of the following is NOT a reason why seniority pay is expected to disappear in the future? Employee belief that workers become more valuable over time Skill deficits of new employees Rapid technological advancements Skill deficits of current workers Increased global competition
Employee belief that workers become more valuable over time
There is evidence that well-designed person-focused programs lead to greater employee commitment, motivation, and satisfaction. What is the main reason why employees feel the way they do in person-focused pay programs? Employees can attain more skills and autonomy in this system This is the correct answer Employees feel supervisors communicate better in this system Employees feel less pressure to develop themselves in this system Employees can take more personal time off in this system Employees feel less threatened in this system.
Employees can attain more skills and autonomy in this system
The disadvantage of profit-sharing plans for employees is that ________. Employees find it difficult to predict their earnings from year to year Management makes it harder to achieve the performance standards Profit-sharing plans generally replace cost-of-living increases Profit-sharing plans create unnecessary competition among workers Employees do not see a significant increase in base pay
Employees find it difficult to predict their earnings from year to year
Which stipulation is NOT part of the National Labor Relations Act of 1935?
Employer-appointed representative for workers
Which statement about incentive pay is correct? Incentive pay is more costly for firms than seniority and merit pay Incentive pay replaces an employee's traditional pay at most firms Incentive pay is a one-time payment that augments an employee's base pay. Incentive pay is used to reward individual employees but not groups Incentive pay is limited to production and nonsupervisory employees.
Incentive pay is a one-time payment that augments an employee's base pay.
Jill works at a factory where she is responsible for producing collector dolls. More than likely, Jill's employer uses ________. merit plans group incentive plans individual incentive plans bonus plans company-wide incentive plans
Individual incentive plans
Each of the following is true of a company-wide incentive plan EXCEPT ________. Company-wide incentive plans are used to motivate employees to work toward increased profits Employees are rewarded based on company profits Employees are rewarded based on stock values for publicly traded companies Company-wide incentive plans make employees' goals more compatible with corporate goals Individual performance is measured in support of company goals
Individual performance is measured in support of company goals
Which is true of the minimum wage? A. Federal minimum wage is always greater than state minimum wage. B. In general, federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage. C. Employers do not need a consent from the Department of Labor in order to pay a trainee less than minimum wage. D. State minimum wage is always greater than federal minimum wage. E. In general, state law regarding minimum wage supersedes federal law when the state minimum wage is less than the federal minimum wage.
In general, federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage.
The level of risk increases for employees as incentive pay becomes a greater proportion of total compensation. Generally this perceived level of risk ________. Is higher for higher-ranked employees Can be controlled by supervisors Is lower for higher-rank employees Increases for all employees regardless of their rank Is subjective for most employees
Is higher for higher-ranked employees
The error that occurs when a rater generalizes an employee's good or bad behavior on one aspect of the job to all aspects of the job is known as ________. similar-to-me effect error of central tendency contrast error first impression effect halo effect
It leads to self-corrective responses to supervisory feedback
What is the primary limitation of a two-tiered pay structure? It increases the total compensation costs for the company. It limits a company's ability to retain senior, experienced workers. It restricts the company's ability to award merit pay. It leads to discord between workers inside and outside the company. It limits the company's ability to recruit and retain qualified workers.
It limits the company's ability to recruit and retain qualified workers.
What is the requirement of the Davis-Bacon Act? It requires government agencies to match the wage rates to prevailing wages paid by private contractors It requires private contractors who employ more than 15 workers to pay $10 above the minimum wage rate. It requires private contractors to give the minimum wage as set by the state. It requires private contractors to provide wages that are equal to or above the prevailing wage rates in the area where work is being performed. It requires private companies to match wages paid by government agencies.
It requires private contractors to provide wages that are equal to or above the prevailing wage rates in the area where work is being performed.
________ refers to the job duties and tasks as well as such pertinent factors as the skill and effort needed to perform a job adequately Job motivation Job content Job analysis A job requirement A job specification
Job content
What term refers to a job design approach that creates a more intrinsically motivating and interesting work environment?Empowerment Job security Job enrichment Job analysis Skill variety
Job enrichment
Who should be involved in job leveling in a company? Employees and union leaders Compensation professionals and HR specialists Job incumbents and supervisors Compensation professionals Employees and HR professionals
Job incumbents and supervisors
________ is when companies make corrections for differences between their jobs and external benchmark jobs. Job leveling Point factor leveling Objective correction Occupational classification Subjective correction
Job leveling
Seniority pay, merit pay, and incentive pay are forms of ________. Job-based pay Training costs Person-focused pay Skill-based pay Pay-for-knowledge
Job-based pay
The ________ model is a person-focused pay plan that encourages employees to develop skills and learn to perform jobs from different job families. Stair-step Skill blocks Incentive-pay Job-point accrual Cross-departmental
Job-point accrual
Marketing-for-All relies on its employees developing certain skills that address the key concerns of the company, like customer relations skills. The company rewards its employees by assigning points to skills such as customer relations, communication skills, and creativity. Which type of person-focused pay program is Marketing-for-All more than likely following? Cross-departmental model Job-point accrual model Stair-step model Horizontal skill model Skill-block model
Job-point accrual model
Which type of jobs would be best suited for person-focused pay programs? Jobs in the finance industry Jobs in the fast food industry Jobs in telemarketing Jobs in manufacturing Jobs in the retail industry
Jobs in manufacturing
Joanna believes her employer is discriminating against her by paying her a lower salary than a male co-worker. Which legislation states that Joanna must file a pay discrimination charge within 180 days of receiving a discriminatory paycheck?
Lilly Ledbetter Fair Pay Act
What is the reason many companies use a market-based evaluation plan when conducting job evaluation? Market-based evaluation plans use companies' internal value system in establishing job worth. Market-based evaluations plans are more accurate than job-content evaluations. Market-based evaluation plans do not rely on any questionnaires or surveys and therefore are easier to conduct. Market-based evaluation plans are preferred by compensation specialists. Market-based evaluation plans determine appropriate pay rates relative to the market.
Market-based evaluation plans determine appropriate pay rates relative to the market
A key difference between knowledge-based pay and merit pay is that ________. Merit pay takes into account the number of years of service, but knowledge-based pay does not Merit pay is for job performance, and knowledge-based pay is for potential future performance Merit pay is for the commitment to future job performance, but knowledge-based pay is not Knowledge-based pay is smaller than merit pay Knowledge-based pay is awarded to employees who achieve high scores on training, but merit pay is not
Merit pay is for job performance, and knowledge-based pay is for potential future performance
What is a draw? A bonus payment An employee incentive An increase in base pay Money to cover basic living expenses A type of merit pay
Money to cover basic living expenses
Which statement is true of pay differences between occupations?
Pay differences between occupations depend on knowledge, skills, and abilities that define jobs.
________ group jobs based on similar compensable factors for the purpose of pay policy application. Pay compressions Green circle rates Red circle rates Compa-ratios Pay grades
Pay grades
Pay-for-knowledge, skill-based pay, and competency-based pay are forms of ________. Incentive pay Job-based pay Person-focused pay Merit pay Ccost-of-living adjustments
Person-focused pay
Under which pay system do employers feel that hourly costs, training costs, and overhead costs can be high? Job-based pay Merit pay Incentive pay Person-focused pay Seniority pay
Person-focused pay
What is the difference between person-focused pay and incentive pay? Person-focused pay is paid one time, but incentive pay is ongoing Person-focused pay is agreed upon in advance, but incentive pay is not Person-focused pay is for skill development, but incentive pay is one-time pay for the attainment of goals communicated in advance Person-focused pay is a much larger amount than incentive pay Person-focused pay focuses on past performance, whereas incentive pay focuses on future performance.
Person-focused pay is for skill development, but incentive pay is one-time pay for the attainment of goals communicated in advance
Which statement about person-focused pay systems is FALSE? Person-focused pay systems offer job enrichment Person-focused systems create staffing flexibility Person-focused systems often lead to enhanced job motivation. Person-focused pay systems create the need for more workers. Person-focused systems lead to higher job commitment from employees.
Person-focused pay systems create the need for more workers
In which type of selling situation will salary represent a significant pay component? Furniture store Cosmetic sales Pharmaceutical sales Auto sales Home electronics sales
Pharmaceutical sales
When designing an incentive pay plan, the time horizon of the plan becomes a major issue. Of the following, which is true? Production workers' performance is sometimes judged on periods as short as one hour Incentive programs for professionals and executives should have a short-term orientation In general, incentives for lower-level employees should be based on long-term goals.Your answer is not correct Production workers' performance should be based on longer periods of time in order to accurately assess skills As a general rule of thumb, short-term goals can be achieved in two years or less.
Production workers' performance is sometimes judged on periods as short as one hour
Which is true of profit-sharing plans? Profit-sharing plans are short-term in natureProfit-sharing plans include merit pay Profit-sharing plans do not pay cash awards. There is only type of profit-sharing plan in use today long dash—the deferred profit-sharing plan Profit-sharing plans pay a part of the company's profit to the employees.
Profit-sharing plans pay a part of the company's profit to the employees.
Which is true of using alternative job-content evaluation approaches by compensation specialists? Simple ranking plans use different criteria to rank jobs Qualitative methods used to study job content assign numerical values to rank jobs. Ranking plans use objective data. Ranking plans use neither job analyses nor job descriptions, which makes them harder to defend legally Private-sector organizations use classification plans extensively.
Ranking plans use neither job analyses nor job descriptions, which makes them harder to defend legally
Performance targets establish effective appraisals, which strengthen the pay-for-performance link. What is the best way to establish performance targets? Ask the employees to set targets for themselves Set performance targets based on prior performance appraisal Find out how other companies set performance targets Refer to the performance standards listed within job descriptions The supervisor should set the standard as the supervisor sees fit
Refer to the performance standards listed within job descriptions
Java Jazz is a company known for superior pay and good benefits. Java Jazz is having a hard time finding qualified employees, and it is experiencing high growth. Which type of incentive is it most likely to offer? Individual incentive plans Management incentive plan Group incentive plan Spot bonuses Referral plan
Referral plan
One of the disadvantages of person-focused pay programs is that it is hard to assign a monetary value to skill and knowledge sets. This is because compensation surveys ________. Compensation surveys become outdated very quickly Report the value of entire jobs rather than of individual skill sets Are biased in reporting the monetary value of skill and knowledge sets Usually are taken from a small number of companies and are therefore limited in nature Are not always accurate when reporting the monetary value of skill and knowledge sets
Report the value of entire jobs rather than of individual skill sets
When designing incentive plans, it is important to keep time horizons in mind. Most HR professionals follow the general guideline that ________. Short-term goals can be achieved in 5 years or less and long-term goals take longer than 5 years Long term goals can be achieved in less than 3 years Short-term and long-term goals can be divided arbitrarily by a supervisor Short-term goals take less than a year and long-term goals take longer than a year to be achieved Short-term goals can be achieved in 8 years or less and long-term goals take longer than 8 years
Short-term goals can be achieved in 5 years or less and long-term goals take longer than 5 years
Dee Ann and her supervisor Andy both attend the same church and share similar points of view on many issues. It is possible for Andy to commit which type of error when judging Dee Ann's performance? Contrast error Similar-to-me bias error Error of central tendency Positive or negative halo effect bias error First-impression effect bias error
Similar-to-me bias error
There are 15 classifications in the General Schedule for government employees. These classifications are based on _____. Supervisory experience and length of service Knowledge and expertise Age, seniority, and merit Skill, education, and experience levels Education and technical skills
Skill, education, and experience levels
Minimum wage, overtime pay, and child labor provisions are covered by which federal law?
The Fair Labor Standards Act of 1938
Which of the following is a true statement regarding the National Labor Relations Board (NLRB) and its enforcement of the National Labor Relations Act (NLRA)? A. The president of the United States appoints members of the NLRB for 10-year terms. B. The NLRB does not enforce the National Labor Relations Act. C. Employees of rail and air carriers get special coverage by the NLRA. D. The NLRA covers agricultural workers and independent contractors. E. The NLRA covers most private-sector employees.
The NLRA covers most private-sector employees.
The Rucker plan and the Scanlon plan are similar gain-sharing plans. What is the key difference between the two plans? The Rucker plan uses the value-added formula, and the Scanlon plan uses the sales value of production formula. The Scanlon plan provides no input from management, but the Rucker plan does The Scanlon plan does not emphasize monetary rewards as much as the Rucker plan does The Rucker plan emphasizes the suggestion system within the company, but the Scanlon plan does not The Scanlon plan does not recommend employee involvement, but the Rucker plan does
The Rucker plan uses the value-added formula, and the Scanlon plan uses the sales value of production formula.
Which statement about the skills and education of global workers is FALSE? Some private sector firms in Ireland offer employees training in technology, science, and marketing The U.S. provides highly successful apprenticeship programs to both high school students and continuing education employees In the EU, academic institutions and employers often collaborate to educate workers. Learning is emphasized by many employers in both the EU and some Pacific Rim economies Western European economies provide vocational instruction for the non-college-bound members of their workforces.
The U.S. provides highly successful apprenticeship programs to both high school students and continuing education employees
What is the biggest drawback for a company that follows a tightly defined job description based on an internally consistent pay system?The company ends up giving employees greater bargaining power in an internally consistent pay system. The company ends up with fewer jobs than it normally would. It becomes difficult for supervisors to assess employees on narrowly defined job descriptions.Y The company usually ends up paying more to its employees than its competitors do. The company ends up being less flexible in responding to its competitor's pay practices.
The company ends up being less flexible in responding to its competitor's pay practices.
What does the term market pay line imply when conducting a regression analysis? The deviation in pay rates The lowest wages paid in the market The typical market pay rates expressed as a mean or median The highest wages paid in the market Insignificant pay rate increases in the market
The typical market pay rates expressed as a mean or median
Who is ultimately responsible for making compensation policy decisions? HR specialists Labor unions Top management Employees Supervisors
Top management
According to the Americans with Disabilities Act, employees ________.
are protected from discrimination based on a disability, if they are qualified, with the employer providing reasonable accommodation
Questionnaires, interviews, observations, and participation are methods for ________. conducting job evaluation collecting information for job analysis determining pay raises conducting job orientation training job analysts
collecting information for job analysis
When sales professionals are required to perform a significant amount of nonsales duties, they should be compensated primarily with ________. draws bonus pay incentive pay frequent promotions fixed pay
fixed pay
A hospital that has been looking to fill the position for a neurosurgeon (a highly skilled and specialized job where demand is high and supply is low) would more than likely define its relevant labor market in terms of ________. the local area where the hospital is located product market competitors service market competitors geography occupational classification
geography
Incentive plans that promote collaborative behavior are called ________. cooperation incentives team-based incentive plans group incentive plans behavioral rewards team-building incentives
group incentive plans
Custom compensation surveys designed by consulting firms for clients may be superior to existing surveys because they ________. cost much less than existing surveys include questions specifically designed to meet client needs, unlike existing surveys use multiple sources to collect data, unlike existing surveys, which use one source are not as out of date as existing surveys consider the total compensation package of the client, unlike existing surveys
include questions specifically designed to meet client needs, unlike existing surveys
Which statement is true regarding the knowledge, skills, and abilities (KSAs) required to perform a job?
jobs that are based on KSAs that require higher education typically pay more.
Noor, an HR specialist, has expertise in labor laws due to his master's degree in HR and years of experience in the field. According to the EEOC, Noor's HR expertise is considered ________. knowledge a skill an ability a benefit
knowledge
The index component of National Compensation Data, the Employer Cost Index (ECI), measures changes in ________. pay raises benefits pay relative to inflation labor costs hourly versus salaried wages
labor costs
A software company is launching its new product line. The performance standards of the salespeople responsible for promoting the software should be judged based on ________. Their job descriptions Linking their performance to the company's business strategy or goals Communicating clearly to them about merit increases how they self-appraise themselves making sure that effective appraisals are in place
linking their performance to the company's business strategy or goals
