Human Resource Management Part 2
The topic of CEO pay is often in the press. Considering an average CEO at the 300 largest US companies, what is the average percent of their total annual compensation received in salary? 14% 22% 36% 64%
14%
Benefits play a significant role in total compensation costs paid annually to employees. In the year 2015, average benefits costs were what percentage of total compensation? 68.7% 31.3% Under 30% There are no statistics on benefits because this figure is too hard to calculate.
31.3%
There are several common ways to provide cash bonuses for performance. Briefly define each of the following: performance bonus, sales commission, gainsharing, and profit sharing.
A performance bonus would be a cash bonus that is given to an employee on the terms that they have achieved and completed a particular goal. Sales commission is a cash bonus that is typically given as a percentage of a particular sale. If the sales employee is not making sales, they are not making additional bonus. Gainsharing is a shared form of bonus in which as the performance of the company improves the individual employees share in the gain. Profit Sharing is a bonus in the shared increase of profitability. It is not as performance based as gainsharing would be and is based on the overall profit.
Many employers implement a system of progressive discipline. What is the definition of this important process? A process in which the consequences become more serious if the employee repeats the offense Using social media to post employee disciplinary concerns The modern management practice of using mediation and arbitration to settle employee concerns A system designed to inform family members of insurance benefits after termination
A process in which the consequences become more serious if the employee repeats the offense
At the end of Chapter 12, we saw that average base pay for CEO's of the 300 largest US companies is only 14% of their compensation. The largest percent (64%) of their compensation comes from stock and stock options. Which of the following is a primary reason to grant company stock to executives? (see page 394) Stock options provide certain tax benefits to the company and to the executive Executives are able to exercise stock options even when the stock price falls below the grant price A stock ownership plan makes employees part owners of the organization Employee Stock Ownership Plans (ESOPs) can provide a way to transfer wealth to the executive's family members
A stock ownership plan makes employees part owners of the organization
What is the correct definition of an expatriate? An employee from one country assigned to work in another country A employee in the host country visiting for a short business trip An employee who works in the parent country headquarters Any employee working in the global marketplace
An employee from one country assigned to work in another country
What is the correct definition of a high-performance work system? An organization in which technology, organizational structure, people, and processes work seamlessly to give a competitive advantage An organization where technology receives priority investments to drive innovation, creativity, and high performance A work system that generates momentum from a balance of decision making processes and structures A work system based on the prioritized tenets of employee performance, leadership, ethics, and rewards structures
An organization in which technology, organizational structure, people, and processes work seamlessly to give a competitive advantage
As an employer, would you prefer to offer your employees a defined-benefit (DB) or a defined-contribution) DC retirement plan? Why?
As an employer it would be more beneficial for me to off a defined contribution plan such as a 401(k). This would be because of the long term effects of both plans. In a 401(k) I would match the payment of the plan currently vs having to guarantee a particular payment be paid monthly when the employee retires. This would help with the balance sheets and the cash flows. The 401(k) requires the employee to place their individual money into the account. Transfer of investment risk to employee
Discussing employee performance can be difficult. The 'HR How To' box on page 311 offers several steps of advice to make the feedback process constructive. Which of the following is not one of them? Use specific concrete examples - reference specific accomplishments and examples of behavior Listen as well as talk - use the opportunity to learn about the employees expectations and hopes for learning and advancement Be honest - but avoid discussing performance problems as this could cause undue stress and pressure on the employee Be positive - express yourself in a positive manner, make eye contact, take time to thank them
Be honest - but avoid discussing performance problems as this could cause undue stress and pressure on the employee
When an employee leaves a company due to a resignation or layoff, the company is required by federal law to allow the employee and/or dependents to stay on it's health insurance coverage for up to 36 months (usually 18 months). What is this law commonly called? COBRA (Consolidated Omnibus Budget Reconciliation Act) FMLA (Family and Medical Leave Act) ACA (Affordable Care Act) Medicare Part A
COBRA (Consolidated Omnibus Budget Reconciliation Act)
Organizations often use benchmarking to compare its pay practices against those of other companies. To avoid legal and anti-trust concerns about industry collusion, organizations purchase compensation survey data from 3rd party organizations. Which of the following is not an example of a 3rd party compensation data provider? Government sources - the Bureau of Labor Statistics (BLS) Competitors - industry meetings to discuss compensation levels HR organizations - WorldatWork and SHRM (Society for Human Resources Management) Consulting groups - Mercer, Towers Watson, Hewitt
Competitors - industry meetings to discuss compensation levels
Negotiation between union and management representatives is called collective bargaining. Which of the following is typically negotiated during the collective bargaining process? Conditions of employment, including pay, benefits, and work rules for the union members Who will represent the employees as union president and union steward The total amount of executive compensation, including stock granted The length of term served by members of the Board of Directors
Conditions of employment, including pay, benefits, and work rules for the union members
There are many ways to measure the performance of an employee. Several criteria determine the effectiveness of performance measures. Which of the following is not one of them? Fit with strategy - the system should aim at achieving behavior that supports the organization's strategy, goals, and culture Contamination validity - the system must not contaminate valid results from personality profiles Acceptability - the performance measure must be acceptable to the people who use it Specific feedback - the measure should tell employees what is expected of them and how to meet those expectations
Contamination validity - the system must not contaminate valid results from personality profiles
Organizations can promote job satisfaction and employee engagement in several ways. Which of the following is not one of them? Make jobs more interesting Set clear and challenging goals Provide valued rewards linked to performance Control employees through a tight line of command
Control employees through a tight line of command
There are several purposes for a performance management system. Which of the following is not one of them? Strategic purpose - to help the organization achieve its business objectives Administrative purpose - to provide information for day-to-day decisions about salary, benefits, and recognition Corporate purpose - to achieve budget guidelines for effective income statement results Developmental purpose - to serve as a basis for developing employees' knowledge and skills
Corporate purpose - to achieve budget guidelines for effective income statement results
Employers often provide a free and confidential 3rd party referral service to employees who need to seek professional treatment for emotional concerns or substance abuse. This service is called what? EAP - Employee Attitude Prevention EAP - Employee Assistance Program EAN - Employee Assistance Network EGCS - Employee Guidance & Counseling Service
EAP - Employee Assistance Program
Job evaluation systems attempt to measure the relative worth of an organization's jobs. They do this by identifying compensable factors and rating each job on these factors. Which of the following may be considered compensable factors? Select all that apply. Experience Size of office Education Working conditions Complexity Responsibility
Education Working conditions Complexity Responsibility Experience
There are several conditions that contribute to high performance. Which of the following is not one of them? Teams perform work Ongoing training is emphasized and rewarded Employee rewards and compensation relate to the company's social responsibility scores Work design allows employees to use a variety of skills
Employee rewards and compensation relate to the company's social responsibility scores
Decisions about pay are critical. An employer can have an unstructured approach, but this has many issues. Many organizations make pay decisions based on an internal pay structure. Which of the following is not usually an issue in developing a pay structure? Legal requirements Market forces Organizational goals Employee stock ownership
Employee stock ownership
Incentive Pay plans link rewards to individual, group, or organizational performance. There are several elements that make up an effective incentive plan. Which of the following is not one of them? Performance measures are linked to the organization's goals Employees value the rewards given and believe the system is fair The employees believe they can meet the performance standards Employees are encouraged to ignore goals that are not rewarded
Employees are encouraged to ignore goals that are not rewarded
Several forces have made benefits a significant part of a compensation package. Which of the following is not one of them? Laws require employers to provide certain benefits Tax laws can make benefits favorable to employees Some employers assemble creative benefits packages that set them apart in the competition for talent Employees can get a better deal on insurance rates on their own rather than from the open market
Employees can get a better deal on insurance rates on their own rather than from the open market
While we did not cover the Fair Labor Standards Act (FLSA) in Chapter 3, the FLSA is a key federal law. From this law, US employers have developed the terms 'exempt' employees (meaning a group exempted from certain provisions of the law) and 'nonexempt' employees (see page 359 for a definition of these important terms). Which of the following is established by the FLSA? Select all that apply. Federal minimum wage Minimum pay for CEOs and other named executive officers Overtime pay for hours worked beyond 40 per week Child labor restrictions
Federal minimum wage Overtime pay for hours worked beyond 40 per week Child labor restrictions
The 'HR How To' Box on page 265 describes several ways to link rewards to high performance. Which of the following is not one of them? Make rewards consistent with the company's culture Reward employees for specific achievements Express genuine appreciation Focus on individual accomplishments and bonuses
Focus on individual accomplishments and bonuses
If a company has a strategy to remain union free, which of the following can a manager or supervisor do to discourage unionization? Threaten employees with harsher terms if they engage in union activity Follow effective management practices such as: give recognition, show appreciation, solve employee problems, provide information, treat all employees with dignity and respect Interrogate employees about pro-union sentiment Spy on employees known to be engaged in pro-union activities
Follow effective management practices such as: give recognition, show appreciation, solve employee problems, provide information, treat all employees with dignity and respect
In the long-run, a high-performance organization meets high ethical standards. Ethical behavior is most likely to result from which of the following? From compensation systems focused on bottom line results From values held by the organization's leaders combined with systems that promote ethical behavior From low reliance on employee decision making and decentralization From systems that concentrate planning changes and employee selection processes in senior management positions
From values held by the organization's leaders combined with systems that promote ethical behavior
The most important influence on international human resources management is the culture of the country. Practices that are effective in the United States may fail or even backfire in a country with different beliefs and values. Which of the following is not one of the five dimensions of culture identified by Geert Hofstede? Individualism/Collectivism - the strength of relationships between an individual and others Gender bias - measures the effect of masculinity on the glass ceiling and disparate treatment Uncertainty avoidance - describes how cultures handle the unpredictable nature of the future Long-term/Short-term orientation - suggests whether the focus of cultural values are on the future or on the past and present
Gender bias - measures the effect of masculinity on the glass ceiling and disparate treatment
Merit pay is a system of linking pay or salary increases to ratings on performance appraisals. Experts advise several practices in conjunction with merit pay. Which of the following is not one of them? Make pay increases far greater for top performers than for average employees Give all employees an annual increase of at least 3% to make it meaningful Do not reward poor performers with a raise
Give all employees an annual increase of at least 3% to make it meaningful
Management by Objective (MBO) is a system in which people at each level of the organization set goals. These goals become the standards for evaluating performance. Components of MBO include the following. Select all that apply. Goals are specific, difficult, and objective. Managers develop objectives for their employees. Managers and their employees work together to set the goals. The manager gives objective feedback through the period to monitor progress toward the goals.
Goals are specific, difficult, and objective. Managers and their employees work together to set the goals. The manager gives objective feedback through the period to monitor progress toward the goals.
Understanding job satisfaction levels can be an important step in retaining key talent. What is a usual way to monitor current job satisfaction in an organization? Perform exit interviews with current employees Monitor computer use and access to non-work related job boards Have an ongoing program of employee surveys Have CEO meetings with all department managers annually
Have an ongoing program of employee surveys
The NLRA prohibits 'unfair labor practices'. According to the 'HR How To' section on page 457, which of the following would not be an example of an unfair labor practice? Threatening employees with loss of their jobs if they join a union Hiring independent contractors who are non-union Questioning employees about their union membership or activities in a way that coerces them Forbidding employees from wearing union logos on shirts
Hiring independent contractors who are non-union
Employees make judgments about fairness of their pay. What are key elements of how equity in pay may be viewed? How do I perceive that my inputs and outcomes compare to your inputs and outcomes? How do your medical benefits cover specific expenses after the annual deductibles are met? How does your organization measure performance for your annual bonus programs? How is the average employee determined in our company's CEO pay ratio?
How do I perceive that my inputs and outcomes compare to your inputs and outcomes?
Selection of employees for a foreign assignment can help ensure success. Which of the following is not associated with success in working overseas? Intolerance of immigration policies and poor government practices Flexibility, tolerance of ambiguity, and sensitivity to cultural differences Motivation to succeed and enjoyment of challenges Support from family members
Intolerance of immigration policies and poor government practices
There are several concerns or drawbacks about the merit pay process. Which of the following is not one of them? It provides a method for rewarding performance in only a few of the dimensions measured in the performance management system Most managers rate employees in the top categories, so pay costs can rise rapidly Assumptions can be misleading - performance ratings may depend on forces outside the employee's control, including managers' rating biases Merit pay can discourage teamwork
It provides a method for rewarding performance in only a few of the dimensions measured in the performance management system
There are many other polices and practices that can differ substantially and must be considered when operating across national boundaries. Which of the following should be included? Select all that apply. Market pay structures in terms of pay level and relative worth of jobs Employee benefits, from a legal perspective and considering employee expectations and values International labor relations and working with unions Principles of performance management, including legal requirements, local practices, and national culture
Market pay structures in terms of pay level and relative worth of jobs Employee benefits, from a legal perspective and considering employee expectations and values International labor relations and working with unions Principles of performance management, including legal requirements, local practices, and national culture
The National Labor Relations Act (NLRA) is a federal law passed in 1935 and includes the right to 'form, join, or assist labor organizations'. Which of the following activities is not protected by the NLRA? Union organizing Going out on strike to secure better working conditions Mass picketing in such numbers that nonstriking employees physically cannot enter the workplace Joining a union
Mass picketing in such numbers that nonstriking employees physically cannot enter the workplace
Chapter 10 describes several methods for measuring performance. Which of the following is not one of them? Making comparisons - a method that requires the rater to compare an individual's performance with that of others, like ranking or forced distribution systems Rating individuals - rating employee performance relative to a uniform set of standards, like attributes and behaviors Observation modification - describing the change in employees over time and based on the concerns of others, like personality analysis and assessments Measuring results - managing objectives and results of a job or work group, like MBO
Observation modification - describing the change in employees over time and based on the concerns of others, like personality analysis and assessments
Some employers have implemented systems for alternative dispute resolutions (ADR) to solve employee concerns. Which of the following in not an example of ADR? Peer review - a conflict is taken to a panel of peers within the company who tries to help the parties come to a settlement Arbitration - a professional arbitrator from outside the company hears the case and makes a decision Mediation - a neutral party from outside the company hears the case and tries to help the parties arrive at a settlement Open door policy - if someone has a concern, the front door is open at any time for them to resign and leave the company
Open door policy - if someone has a concern, the front door is open at any time for them to resign and leave the company
From the employer's point of view, pay is a powerful tool for many reasons. Which of the following is not one of them? Pay has a large impact on employee attitudes and behaviors Pay distinguishes which employers perform the best Pay influences which kinds of employees are attracted to the organization Pay can align employees' interests with the organization's goals
Pay distinguishes which employers perform the best
What is the correct definition of a 360-degree performance appraisal? Performance measurement that combines information from the employee's managers, peers, subordinates, self, and customers. Performance system that provides feedback throughout the year. Performance process that aligns all aspects of the job description with the behavioral ratings on the employee. Performance system that tests the employee in a variety of social settings to ascertain ability to handle stress and pressure.
Performance measurement that combines information from the employee's managers, peers, subordinates, self, and customers.
Which of the following benefits are required by law in the US? Select all that apply. Social Security Unemployment Insurance Disability Insurance Family and Medical Leave
Social Security Unemployment Insurance Family and Medical Leave
When an employee is selected for a foreign assignment, cross-cultural preparation for the employee and family members can help ensure a successful assignment. Which of the following is not one of the suggested phases of an international assignment? Preparation for departure - language instruction and orientation to culture The assignment itself - a combination of formal training and mentoring to provide further information The return home - providing home country information and helping the employee and family transition back to the home country, also known as repatriation Tax preparation assistance - giving the employee all the necessary tax forms to be able to file both country taxes on time
Tax preparation assistance - giving the employee all the necessary tax forms to be able to file both country taxes on time
US law gives employers wide latitude in hiring and firing. However, the employer must avoid wrongful discharge. Which of the following is an example of a wrongful discharge? Terminating someone who has excessive absences Terminating someone for refusing to do something unsafe Terminating someone for an ethics violation Terminating employees due to economic conditions
Terminating someone for refusing to do something unsafe
Of all the benefits offered by employers, health insurance is usually the most expensive. The second most expensive benefit involves company provided retirement plans. While there is no obligation to offer a retirement plan, it can be a competitive benefit to attract and retain employees. Which of the following is not true about retirement plans? A 'defined-benefit' (DB) plan provides a specific amount to be paid out after retirement, guaranteeing a specific level of retirement income. A 'defined-contribution' (DC) plan sets up an individual account and specifies the amount of investment into the account. An example is a Section 401(k) plan. The PBGC is the Pension Benefit Guarantee Corporation. They ensure that all state and federal employees receive at least $1,000 of monthly income in retirement. The Employee Retirement Income Security Act of 1974 (ERISA) has funding requirements that DB plans must meet and is designed to protect the rights of retirees.
The PBGC is the Pension Benefit Guarantee Corporation. They ensure that all state and federal employees receive at least $1,000 of monthly income in retirement.
When collective bargaining breaks down, union members may choose to stop working, or strike, until certain conditions are met. Which of the following is true about strikes? Calling a strike is an individual decision by each union member Company pay must be continued during the strike Picketing is not allowed near the worksite The company may hire replacement workers
The company may hire replacement workers
What is the correct definition of 'employee engagement'? The degree to which HR policies and programs support the organization's overall culture The degree to which employees are fully involved in their work The degree of alignment between employee efforts and rewards The degree to which employees are socially active in the organization
The degree to which employees are fully involved in their work
Why is incentive pay that is extremely rewarding a concern? The employees might move into a higher tax bracket The employees might focus only on the performance measures rewarded and ignore measures that are not rewarded Employees might become overwhelmed at the pressure and have higher rates of absence Managers might step in to do the employee's work and cause concerns about potential unionization
The employees might focus only on the performance measures rewarded and ignore measures that are not rewarded
While the media often refers to Obamacare, the health care reform law passed in 2010 is called the Patient Protection and Affordable Care Act (PPACA), often referred to in industry as the ACA. Which of the following does this law require? The law requires all companies to offer health insurance benefits The law requires medium-sized and large companies to choose between offering health insurance that meet certain standards or pay a penalty The law requires all employees to buy health insurance on the SHOP marketplace The law requires employers with 500 or more employees to provide medical insurance
The law requires medium-sized and large companies to choose between offering health insurance that meet certain standards or pay a penalty
Employee turnover, whether voluntary or involuntary, can be costly. Which of the following are possible costs of turnover? Select all that apply. Time and cost to recruit, select, and train replacements Lost productivity Loss of talent Lawsuits
Time and cost to recruit, select, and train replacements Lost productivity Loss of talent Lawsuits
Georgia is a 'right-to-work' state. What does this mean? All state employees who receive union benefits must pay union dues Employees are required to join the company union in order to have the right to work Employers may threaten employees with loss of job if they go out on strike Union Shops (see definition on page 455) are illegal because they restrict the employees' right to freedom of association
Union Shops (see definition on page 455) are illegal because they restrict the employees' right to freedom of association
