MGT 461 Exam 4 Ch. 13-17
_____ curve expresses the relationship between years since last degree, performance, and salary. The Phillips The marginal productivity A tenure A maturity
A maturity
T/F: The most recent trend in executive compensation is an increased use of stock options.
False
Which of the following is NOT a reason for the recent decline in the use of stock options in executive pay? There has been a growing pressure to expense stock options in annual reports. In a falling market, stock options are underwater—the market price is below the exercise price. Financial Accounting Standard Number 313 raises the cost of using stock options. Stock options do not pay for executive performance.
Financial Accounting Standard Number 313 raises the cost of using stock options.
Meltrop Corp. employs two store clerks, Sam and Stella. Stella sues Meltrop claiming unequal pay as she earns $500 a week less than Sam does despite doing the same work as Sam. Which of the following is most likely to be the result of the litigation? Meltrop will win the litigation as blue-collar workers are exempt from the Equal Pay Act. Meltrop will win the litigation if it can prove that Stella is Sam's senior. Meltrop will lose the litigation as it has committed access discrimination. Meltrop will lose the litigation as it has committed valuation discrimination.
Meltrop will lose the litigation as it has committed valuation discrimination.
T/F: In the Schultz v. Wheaton Glass case, the Supreme Court ruled that for jobs to receive equal pay, they do not have to be identical but substantially equal.
True
T/F: Understanding international compensation begins with recognizing differences and similarities and figuring out how to best manage them.
True
T/F: Vesting refers to the length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan.
True
The _____ theory argues that executive pay rises to maintain the same relative relationship with the salaries of lower-level employees. economic approach team production social comparison agency
social comparison
A deferred wage increase _____. specifies that wages will be renegotiated at a specified time specifies that such nonwage items as pension and benefits will be renegotiated under certain conditions is negotiated at the time of initial contract negotiations with the timing and amount specified in the contract involves periodic adjustments based typically on changes in the consumer price index
is negotiated at the time of initial contract negotiations with the timing and amount specified in the contract
Annual bonuses often play a major role in executive compensation and are primarily designed to _____. motivate better short-term performance reduce overtime pay decrease pay differentials between supervisors and subordinates increase employee turnover
motivate better short-term performance
A Japanese citizen working for Toyota in Georgetown, Kentucky, is a _____. host-country national third-country national parent-country national local country national
parent-country national
When taxes are deducted from employees' earnings up to the same amount of taxes they would pay had they remained in their home country, it is known as _____. expat tax tax equalization compensatory tax tax protection
tax equalization
With easily sold products: companies prefer a more aggressive sales force. the base compensation tends to be more important. the incentives provided in the form of commissions tend to be more important. companies tend to set lower sales targets.
the base compensation tends to be more important.
Individualism is _____. the degree to which people are supposed to look after themselves or remain integrated into groups, usually around the family the distribution of emotional roles between the genders the extent to which a culture programs individuals to accept delayed gratification of their emotional needs the extent to which a culture programs individuals to feel either uncomfortable or comfortable in unstructured situations
the degree to which people are supposed to look after themselves or remain integrated into groups, usually around the family
Uncertainty avoidance is _____. the distribution of emotional roles between the genders the extent to which a culture programs its members to accept delayed gratification of their material needs the extent to which the less powerful members of organizations accept and expect that power is distributed unequally the extent to which a culture programs its members to feel either uncomfortable or comfortable in unstructured situations
the extent to which a culture programs its members to feel either uncomfortable or comfortable in unstructured situations
The phenomenon where the nonunion management continues to enjoy the freedom from union "interference" in decision making, and the workers receive the rewards already obtained by their unionized counterparts is known as _____. automatic progression the spillover effect experience differential the equal mirror effect
the spillover effect
Executives, supervisors, and sales staff often receive special compensation treatment because _____. these jobs face conflicting demands these jobs are exempt under FLSA recruitment and retention are always difficult for these jobs these jobs are covered under the Sarbanes-Oxley Act
these jobs face conflicting demands
A Korean citizen working for Toshiba, a Japanese company, in Canada is a _____. host-country national third-country national parent-country national local country national
third-country national
Union employees in the public sector earn, on average, about _____ more than their nonunion counterparts. 40 percent 5 percent 14 percent 22 percent
22 percent
Research indicates that the presence of a union adds about _____ to employee benefits. 5 to 15 percent 20 to 25 percent 30 to 40 percent 50 percent
30 to 40 percent
Today, top executive pay is more than _____ times the pay of the average worker. 1,500 2,000 900 300
300
Which of the following is NOT true of expatriates? 68 percent of expatriates do not know what their jobs will be when they return home. Only five percent of expatriates believe their company values their overseas experience. 11 percent are promoted when they return. 49 percent of U.S. expatriates are women.
49 percent of U.S. expatriates are women.
The differential between supervisors' base pay and their highest paid subordinate is typically _____ percent. 0 to 5 5 to 30 30 to 50 50 to 90
5 to 30
Almost _____ percent of the companies offering child care assistance to employees also offer elder care assistance. 10 30 50 90
50
Today, _____ percent of the workers participate in the pension plan coverage provided by their employers. 98 12 28 53
53
Some level of dental coverage is provided by about _____ percent of all employers with above 500 employees. 30 60 11 85
60
_____ is movement through the wage ranges where seniority is specified as the basis of the movement. Length-of-stay progression Automatic progression Merit differential Performance differential
Automatic progression
Which of the following is NOT one of the clauses relating to the benefits employers can provide executives? Benefit plans must cover 80 percent of employees. Benefit plans must be determinable. Benefit plans must meet specific vesting requirements. Average value of benefits for low-paid employees must be at least 90 percent of that for highly paid employees.
Average value of benefits for low-paid employees must be at least 90 percent of that for highly paid employees.
Which of the following is NOT one of the steps in establishing a comparable-worth pay plan? Adopt a single gender neutral point job evaluation plan for all jobs within a unit. All jobs with equal job evaluation points should be paid the same. Identify the percentages of male and female employees in each job group. Base the wage-to-job evaluation point ratio on the wages paid for female-dominated jobs.
Base the wage-to-job evaluation point ratio on the wages paid for female-dominated jobs.
Which of the following is a factor determining base pay in the Japanese traditional national system? Job evaluation Career category Market pricing Specific job title
Career category
Which of the following groups can qualify for the exemptions under the Fair Labor Standards Act of 1938? Computer employees Police and other first responders Paramedics Fire fighters
Computer employees
In which of the following types of cases is the focus on the discriminatory consequences rather than the intent to discriminate? Disparate treatment Access discrimination Disparate impact Valuation discrimination
Disparate impact
Which of the following plans gives employees part ownership in the company? ESOPs Pay-for-knowledge plans Gain-sharing plans Profit-sharing plans
ESOPs
Which of the following is NOT a reason for companies to hire contingent workers? Contingent workers help save costs. Employees who accept the idea of bounded careers view contingent status as part of a fast-track developmental sequence. Such employment offers added flexibility to employers. Companies hire contingent workers as a way to insulate themselves in a volatile economy.
Employees who accept the idea of bounded careers view contingent status as part of a fast-track developmental sequence.
Which of the following is true of hiring LCNs? Companies incur relocation expenses and other substantial expenses associated with the use of LCNs. Companies have to be concerned about LCNs' adapting to the local culture. Only rarely do organizations decide that hiring LCNs is appropriate. Employment of LCNs satisfies nationalistic demands for hiring locals.
Employment of LCNs satisfies nationalistic demands for hiring locals.
T/F: Employees are the sole contributors to their cash balance plans.
False
T/F: In Malaysia and Mexico, egalitarian pay structures fit best with the culture.
False
T/F: In a two-tier wage system, employees hired after a specific date are placed in a higher wage scale than those hired prior to that date.
False
T/F: Independent contractors always earn less than their permanently employed counterparts.
False
T/F: It is easier and less complex to compare living costs across countries than total compensation.
False
T/F: Lump-sum awards are added to base wages.
False
Which of the following types of workers are generally NOT covered by workers' compensation? State government employees Private sector employees Railroad workers Farm workers
Farm Workers
Which of the following statements regarding wage differences in industries and firms is NOT true? Wages of men in large firms are 54 percent higher than wages of men in small firms. Hispanic men are concentrated in construction and service firms. Female employment is more heavily concentrated in large firms. The pay premium associated with changing jobs is enjoyed primarily by white males.
Female employment is more heavily concentrated in large firms.
_____ is designed to lessen an employer's ability to deny coverage to an employee for a preexisting condition. COBRA OSHA HIPPA FMLA
HIPPA
At the time it is granted, which of the following has no tax implications for an executive? Phantom stock plans Incentive stock options Stock appreciation rights Performance share/unit plans
Incentive stock options
Which of the following is a reason for unions favoring gain-sharing plans? Increased peer pressure to perform Increased involvement with job activities Increased flexibility in moving employees quickly into high-demand areas Increased clarity in bonus calculations
Increased involvement with job activities
Which of the following actions is most likely to be favored by unions? Increasing the pricing of products to cover for increases in wages Substituting wages with gain-sharing plans Making each individual worker more expendable to the firm Introducing lump-sum awards
Introducing lump-sum awards
Which of the following is the most likely reason for most unions to insist on group-based performance measures with equal payouts to members? It enables employees to learn new skills. It cuts down on strife and internal quarrels. It encourages individual differences. It causes a leniency effect.
It cuts down on strife and internal quarrels.
Which of the following is NOT a provision of the Fair Labor Standards Act of 1938? It requires that employers provide 15 weeks of medical leave to employees. It sets minimum wage standards. It prohibits child labor. It requires payment at one-and-a-half times the standard for working more than 40 hours per week.
It requires that employers provide 15 weeks of medical leave to employees.
Jacob, an 18-year-old, has been working at HoldVille Corp. for over a year. If HoldVille offers full vesting after one year, which of the following statements is true? Jacob is eligible for full pension as he has worked for over a year at HoldVille. Jacob is not eligible for pension as he is not over 21. Jacob is eligible for 20 percent of his pension if he has dependents. Jacob is not eligible for a pension if he quits of his own volition.
Jacob is not eligible for pension as he is not over 21.
Which of the following is a benefit under Social Security? Lump-sum death payments Job security Work/life balance Overtime pay
Lump-sum death payments
MNTX University requires that all its female professors score higher than the male professors in their appraisal rating to qualify for a pay bonus as there are more female professors than male professors in the university. Which of the following statements is true in this case? MNTX is liable for access discrimination against women. MNTX is liable for disparate treatment of women. MNTX's pay policy is legal as educational institutions are exempt under the Equal Pay Act. MNTX's pay policy is legal as its intention is to reduce the overall costs of the company and not to discriminate.
MNTX is liable for disparate treatment of women.
Which of the following is NOT true of the tariff agreements in Germany? Small organizations use them as guidelines. Managerial jobs are covered by the agreements. Job evaluation methods are part of the agreements. Tariff agreements are different for each industrial sector.
Managerial jobs are covered by the agreements.
Which of the following statements about evolution and change in the traditional German model is true? Nearly one in 10 German adults owns stock. High birth rates are pushing up the costs of the social support system. A relatively flexible labor market means that employers are finding it easier to move to other EU countries. Many of the changes in Germany are the result of global competitive pressures and technological changes.
Many of the changes in Germany are the result of global competitive pressures and technological changes.
Michael was laid off by his company owing to budget cuts. Before being laid off, he earned $1,000 per week. If he has been receiving unemployment insurance benefits for 26 weeks, which of the following statements is true in this scenario? Michael can continue to avail unemployment benefits for another 26 weeks. Michael is eligible for $1,000 per week if he can show that he has been earnestly searching for jobs. Michael is no longer eligible for unemployment benefits. Michael will now only be eligible for 20 percent of his previous income as unemployment benefits.
Michael is no longer eligible for unemployment benefits.
NaxWell Corp. sells a smart wristband that, apart from monitoring heart rate and blood pressure, also reminds users to stand and walk every half hour. As part of its promotional efforts, a celebrity starts wearing the wristband, thereby increasing its popularity and ease of sale. Which of the following is most likely to happen? NaxWell will set lower sales targets for its employees. NaxWell is likely to increase base salaries and decrease incentives. NaxWell is likely to lower its executive compensation in order to increase stock price. NaxWell will hire only contingent workers.
NaxWell is likely to increase base salaries and decrease incentives.
Which of the following is true regarding a gain-sharing plan? It prevents union members from sharing the wealth. It creates difficulty in maintaining employment levels in marginal organizations. It becomes ineffective when union members participate in plan development. Not all unions would be in favor of this type of plan.
Not all unions would be in favor of this type of plan.
The agency that conducts reviews and seeks remedies where insufficient compliance to Executive Order 11246 is found is the _____. OSHA EEOC OFCCP FCSS
OFCCP
The _____ specifies the number of breaks that must be provided in an eight-hour workday. Portal-to-Portal Act Occupational Safety and Health Administration legislation Walsh-Healey Public Contracts legislation Equal Pay Act
Occupational Safety and Health Administration legislation
Which of the following is NOT a benefit that is required by statutory law? Workers' compensation Social Security Pension and retirement benefits Unemployment compensation
Pension and Retirement Benefits
Which of the following is a reason for unions opposing gain-sharing plans? Reduced job security Decreased peer pressure to perform Decreased feeling of achievement or contributing to the organization Reduced need for jobs due to increased productivity
Reduced need for jobs due to increased productivity
_____ relieve an employer's liability when a pre-employment injury combines with a work-related injury to produce a disability greater than that caused by the latter alone. Collateral funds Second-injury funds Insolvency funds Pre-employment funds
Second-injury funds
Which of the following benefits is a federally administered program? Workers' compensation Social Security Job security Occupational Safety and Health Act
Social Security
Which of the following countries has the highest number of people in the workforce belonging to unions? Japan Sweden Italy South Korea
Sweden
Which of the following regarding child labor is NOT true? Persons under 18 cannot work in hazardous jobs such as logging and meat packing. Persons under 16 cannot be employed in jobs involving interstate commerce except for nonhazardous work for a parent or guardian. The ILO finds that child labor is increasing on a global basis. The highest rates of child labor are in sub-Saharan Africa.
The ILO finds that child labor is increasing on a global basis.
Susan works in a sterile laboratory that requires her to scrub and put on protective clothing. Which of the following acts determines whether she should be paid for this time? The Fair Labor Standards Act The Occupational Safety and Health Administration legislation The Portal-to-Portal Act The Health Care Workers Protection Act
The Portal-to-Portal Act
_____ is an example of a country with a highly decentralized approach to pay setting with higher wage flexibility. Sweden Germany Belgium The United States of America
The United States of America
_____ sets salaries according to the home-country system and simply offers employees lump sums of money to offset differences in standards of living. The modified balance sheet approach The localization approach The cafeteria approach The balance sheet approach
The cafeteria approach
T/F: 77 percent of expats have less disposable income when they return home from overseas assignments.
True
T/F: A GAO study found that 9 of 10 cases brought by GAO undercover agents posing as workers were mishandled by the Wage and Hour division of the Labor Department.
True
T/F: A McKinsey survey of CEOs found nearly 90 percent believe benefits are very important for attracting and retaining employees.
True
T/F: A deferred wage increase is negotiated at the time of initial contract negotiations.
True
T/F: A study of both U.S. and Slovenian MBAs found that risk taking was higher among Slovenians.
True
T/F: Prevailing wages protect foreign workers working as registered nurses.
True
T/F: Women's median annual earnings compared to men's has changed from about 60 percent to 78 percent from 1980 to 2013.
True
The _____ Act extends the prevailing-wage concept to manufacturers or suppliers of goods for government contracts. Sarbanes-Oxley Walsh-Healey Public Contracts Fair Labor Standards Davis-Bacon
Walsh-Healey Public Contracts
An early study of the effects of the living wage law in Los Angeles found all of the following EXCEPT that _____. 7,735 of the employees covered by the law received an average wage increase of 20 percent 1 percent of covered jobs were lost a higher proportion of new hires were female turnover and absenteeism declined
a higher proportion of new hires were female
The most common approach to motivating executives to make decisions that are in the best interests of stockholders is _____. high base salaries with few bonuses average base salaries with significant firm performance bonuses a long-term incentive plan using stock options average base salary with performance-based perks
a long-term incentive plan using stock options
A useful tool for determining the true worth of an entire executive compensation package is _____. the program evaluation and review technique (PERT) a tally sheet a Gantt chart the graphical evaluation and review technique (GERT)
a tally sheet
Denial of jobs, promotions, or training opportunities to qualified women or minorities are examples of _____. access discrimination valuation discrimination treatment discrimination hostile environment
access discrimination
Leah, the CEO of SteadyResults Corp., feels that she is underpaid, so she hires a compensation consultant to survey actual competitors of the company. According to agency theory, if SteadyResults performs poorly, her salary will most likely: remain the same as CEO salary is based only on performance. be withheld and paid at a later date as the company is doing poorly. be increased in order to retain her. remain the same as the company is doing poorly.
be increased in order to retain her.
Increased global competition has caused unions to: demand higher base wages than their international counterparts. become more receptive to alternate reward systems that link pay to performance. accept less variable pay in exchange for higher base pay. demand increases in product prices to cover for increased wage costs.
become more receptive to alternate reward systems that link pay to performance.
Regarding pay differences for different jobs, _____. courts continue to rely on the use of employer opinion surveys to justify differences the courts favor reliance on the use of statistical models court decisions have been inconclusive courts continue to uphold the use of market data to justify differences
courts continue to uphold the use of market data to justify differences
In a _____ plan, an employer agrees to provide a specific level of retirement pension, which is expressed as either a fixed dollar or a percentage-of-earnings amount that may vary (increase) with years of seniority in the company. defined benefit noncontributory benefit 401(k) shared benefit
defined benefit
With gain-sharing plans, the most common union strategy is to _____. delay taking a stand until real benefits are more apparent be very enthusiastic have direct opposition to the plans as soon as they are suggested by the management have no concern for the plans
delay taking a stand until real benefits are more apparent
Experts attribute the decline in dollar cost of workers' compensation after 2005 relates to: increased variable component of base wage. devaluation of the dollar. employer safety programs. relaxed federal regulations.
employer safety programs.
In the majority of the states, unemployment insurance is financed exclusively by: joint contributions by employee unions. the philanthropy of co-workers. federal, state, and employee contributions. employers that pay federal and state unemployment insurance.
employers that pay federal and state unemployment insurance.
The executive branch of the federal government _____. enforces laws through agencies and its other bodies passes new laws interprets laws and considers their constitutionality changes existing laws
enforces laws through agencies and its other bodies
A(n) _____ approach to compensation involves designing a total pay system at headquarters and applying it globally. delayered inpatriate localizer exporter
exporter
Contingent workers receive _____ benefits than regular workers; contingent workers' benefits cost _____ for employers than it does for regular workers. more; less fewer; more more; more fewer; less
fewer; less
Popular stereotypes of salespeople characterize them as being heavily motivated by _____. financial compensation personal growth and job security recognition and appreciation promotional opportunities
financial compensation
An employer experiencing high turnover and seeking to reduce pension cost is likely to prefer: full vesting after three years. full vesting after six years. full vesting after seven years. partial vesting after two years.
full vesting after three years.
An employee who changes jobs four or more times during his or her career will likely receive a pension approximately _____ as that of an employee whose working career is spent with one employer, assuming that both employees have the same starting salary and receive annual increases equal to inflation rate. twice as large the same size one-fourth the size half the size
half the size
According to Hofstede's cultural dimensions, in Malaysia and Mexico, where there is high power distance, _____ pay structures are appropriate. equitable hierarchical egalitarian parallel
hierarchical
Basically a phenomenon of the union sector, two-tier wage structures differentiate pay based upon the _____. type of work hiring date place of work length of contract, if applicable
hiring date
Hannah is the CEO of JF Corp., a steel manufacturing company. She finds that the market is exhibiting the signs of a maturing market. She wants to revise the compensation package for her sales employee to adapt to the changing market conditions. In this case, Hannah is most likely to: increase base pay. provide a commission-based incentive plan. provide incentives based on new customer generation. include a significant incentive component.
increase base pay.
Pay-for-knowledge plans do all of the following EXCEPT _____. make employees less expendable to their firms increase the probability of work being subcontracted out to nonunion organizations make each individual employee more valuable pay employees more for learning a variety of different jobs or skills
increase the probability of work being subcontracted out to nonunion organizations
The biggest trend in supervisory pay centers on _____. increased use of variable pay payment of wages that equal subordinate pay paying a wage that is above the highest paid superior payment of higher wages without benefits
increased use of variable pay
The rising costs of Social Security have been covered by: increases in the maximum earnings base and the rate at which that base is taxed. reduction in Social Security benefits by providing market-driven options. progressive reduction in the coverage. welfare grants and annual supplements from Congress.
increases in the maximum earnings base and the rate at which that base is taxed.
The base salary plus incentives for expatriates is usually determined by _____. job evaluation market pay competitors' pay level in the host country international pay schedules
job evaluation
The determination of pay discrimination on jobs of dissimilar content requires a standard that allows jobs of dissimilar content to be declared comparable and that allows pay differences for jobs that are not comparable. This standard is _____. job evaluation comparable worth analysis disparate impact analysis point factor market comparison
job evaluation
When compared to the impact of unions during periods of strong economies, the impact of unions during periods of higher unemployment is _____. unknown the same smaller larger
larger
Traditionally, Japan's employment relationships were supported by _____. lifetime security within the company performance-based pay systems alone centralized unions representing workers across several companies within an industry performance-based promotion systems alone
lifetime security within the company
The _____ component of executive compensation has grown the most since 2012. long-term incentives bonus short-term incentives base salary
long-term incentives
The degree of discretion managers have to make total compensation a strategic tool is referred to as _____. managerial accountability democratic accountability managerial autonomy managerial liability
managerial autonomy
For the past 10 years, a stable _____ of all major collective bargaining agreements in the private sector have contained a provision for lump-sum payouts. three-fourths one-half one-quarter one-third
one-third
If improved account retention became a major focus of attention, the performance measure stressed would be _____. gross margin on sales or price per unit percentage account erosion a volume measure a customer satisfaction index
percentage account erosion
A(n) _____ awards cash or stock if specific goals are achieved. nonqualified stock option incentive stock option restricted stock plan performance share plan
performance share plan
A(n) _____ awards cash or stock that is determined by an increase in stock price at a fixed future date. phantom stock plan incentive stock option restricted stock plan nonqualified stock option
phantom stock plan
In the comparison of the pay systems of two well-known Japanese companies Toyota and Toshiba, Toyota _____. places greater emphasis on external market rates places lesser emphasis on individual-based merit pay uses far more levels in its structure places lesser emphasis on individual-based performance pay
places greater emphasis on external market rates
A _____ plan is a hybrid health plan combining the benefits of HMO and _____. point-of-service; preferred provider organization POS; Blue Cross managed care; POS consolidated health; PPO
point-of-service; preferred provider organization
The Davis-Bacon Act _____. states that income from most stock plans need not be included in calculating overtime pay increases the burden of proof on employers to rebut some discrimination claims requires that mechanics and laborers on public construction projects be paid the prevailing wage in an area extends the prevailing-wage concept to manufacturers or suppliers of goods for government contracts
requires that mechanics and laborers on public construction projects be paid the prevailing wage in an area
The Worker Economic Opportunity Act _____. states that income from most stock plans need not be included in calculating overtime pay requires the value of all employee stock options to be expensed at estimates of fair value on financial statements gives SEC the authority to grant shareholders proxy access to nominate directors extends SEC pay disclosure requirements to highly paid executives
states that income from most stock plans need not be included in calculating overtime pay
The highest rates of child labor are in _____. China India Latin America sub-Saharan Africa
sub-Saharan Africa
Roughly _____ of all employees have access to paid life insurance. three-fourths half one-third a quarter
three-fourths
In a(n) _____ pay plan, a contract is negotiated which specifies that employees hired after a given target date will receive lower wages than their higher-seniority peers working on the same or similar jobs. skill-based efficiency-based one-tier two-tier
two-tier
A study of unions in 114 companies concluded that _____. the impact of unions on wages is lesser during recession the union-nonunion gap is the greatest during strong economies unions make a difference in wages across all studies and time periods unions are not responsible for any differences in wages
unions make a difference in wages across all studies and time periods
All of the following EXCEPT _____ would be considered a special compensation group. sales staff contingent workers unpaid interns professional employees
unpaid interns
The ADEA _____. prohibits discrimination on the basis of sex, race, or color was amended in 1990 to include the Older Workers Benefit Protection Act was amended in 2011 to ensure that workers get two months' notice before termination prohibits discrimination on the basis of national origin in any employment condition
was amended in 1990 to include the Older Workers Benefit Protection Act
In the negotiation stage of a multiyear wage contract, Mark, the manager of SifCo Corp., specifies that changes will be made to the wage based on the changes in the consumer price index and mentions the effective dates of adjustment. Which of the following types of clauses has Mark introduced in the contract? Halo clause Spillover clause Escalator clause Reopener clause
Escalator clause
Which of the following is the most popular executive perk offered by most companies? Executive physicals Payment of club dues Family spousal travel Corporate housing
Executive physicals
T/F: A 401(k) is an example of a defined benefit plan.
False
T/F: About 60 percent of all U.S. collective bargaining agreements permit some alternative reward system that links pay to performance.
False
T/F: All employees are covered by the Fair Labor Standards Act of 1938 and its amendments without exemptions.
False
T/F: All employers with less than 20 employees must comply with the Consolidated Omnibus Budget Reconciliation Act.
False
T/F: An eligible unemployed person may now collect unemployment insurance benefits for 36 weeks in most states.
False
T/F: Approximately 20 percent of expats leave their company within a year of their return to the U.S.
False
T/F: Companies in the United States, United Kingdom, and some central European countries are most likely to have centralized wage bargaining.
False
T/F: Japanese pay systems typically emphasize pay based upon competitors' market rates rather than internal alignment.
False
T/F: Medicare is not part of Social Security.
False
T/F: Members of boards of directors are not categorized as candidates for special compensation.
False
T/F: Moving employees through pay ranges using merit increases is more popular than automatic progression.
False
T/F: Since the Japanese system is so seniority-based, labor costs decrease as the average age of the workforce increases.
False
T/F: The best predictor of CEO pay is performance of the company.
False
T/F: The country with the highest unionization rate in Europe is France, where 90 percent of workers are union members.
False
T/F: The gender wage gap is moderate for recent college graduates and decreases as the cohort ages.
False
Who among the following has violated the Fair Labor Standards Act of 1938? Rachel, who pays all her workers a minimum wage of $13 Sally, who does not consider time her employees spend travelling to work as compensable time Jeremy, who employs his 16-year-old cousin in his meat-packing plant Randy, who employs his 17-year-old son in his stationery store as a cashier
Jeremy, who employs his 16-year-old cousin in his meat-packing plant
Under the _____, employers can be liable for current pay differences that are a result of discrimination that occurred many years earlier. Sarbanes-Oxley Act Lilly Ledbetter Fair Pay Act Equal Pay Act Fair Labor Standards Act
Lilly Ledbetter Fair Pay Act
_____ are one-time cash payments to employees that are not added to an employee's base wages. Relational returns Merit increases Lump-sum awards Cost-of-living increases
Lump-sum awards
Maxford Corp. offers full vesting after two years. However, it does not offer portability of pension to its employees. Which of the following statements is true in this scenario? Employees of Maxford will receive 20 percent of their pension if they quit after one year. Maxford does not have to provide vested benefits to employees who quit before six months. Employees of Maxford who quit can have their pension benefits transferred to the new employer. Maxford does not have to provide vested benefits if employees quit of their own volition after two years.
Maxford does not have to provide vested benefits to employees who quit before six months.
Which of the following statements about ownership and financial markets is true? In the United States, corporate ownership and access to capital is far more concentrated than in most other countries. Ninety percent of American households own stock in companies either directly or indirectly through mutual funds and pension funds. Recent tax law changes in many countries have made stock options more attractive, but limited ownership of many companies remains the rule. Large conglomerates in Germany link performance bonuses to increased shareholder value as it is the most effective pay system.
Recent tax law changes in many countries have made stock options more attractive, but limited ownership of many companies remains the rule.
Jennifer is hurt at work while driving a forklift. Her employer claims that she was injured as a result of her careless driving, and therefore she is not eligible for workers' compensation. What will be the outcome of the employer's challenge to her worker's compensation claim? She will likely receive workers' compensation benefits. She will get nothing. Jennifer and her employer will share the blame and split the costs. The employer has the final word in determining Jennifer's eligibility.
She will likely receive workers' compensation benefits.
Which of the following statements regarding unions is NOT true? Union membership has fallen from approximately 20 percent to 11 percent since 1983. Unions peaked in the 1950s and 1960s. Since 1997, there has been a consistent 2 percent annual decrease in certification elections decided in favor of unionization. Since 1997, the number of union certification elections for firms has declined.
Since 1997, there has been a consistent 2 percent annual decrease in certification elections decided in favor of unionization.
Which of the following includes a provision that requires public companies to set policies to allow executive compensation to be taken back if it was based on inaccurate financial statements that did not comply with accounting standards? The American Recovery and Reinvestment Act (ARRA) The Troubled Asset Relief Program (TARP) The Financial Accounting Standards Board Statement 123 R The Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act
T/F: A study shows that a 10 percent rise in import share has the effect of lowering the union wage differential by approximately 2 percent.
True
T/F: A trend in sales force compensation is linking sales force compensation to customer satisfaction measures.
True
T/F: According to the Japan Institute of Labour, for most employees bonuses are variable pay that help control the employer's cash flow and labor costs.
True
T/F: An alternative strategy for organizations hurt by intense competition is to control base wages in exchange for giving employees part ownership in the company.
True
T/F: An individual retirement account is a tax-favored retirement savings plan that individuals can establish themselves.
True
T/F: As the lowest rates paid in the software, chemical, oil, and pharmaceutical industries are already well above minimum, any legislation to increase minimum wage would have little direct impact on them.
True
T/F: Base pay for a Japanese employee is usually not based on job evaluation or market pricing.
True
T/F: Compensation committees of boards of directors typically set executive salaries.
True
T/F: Contingent workers are usually considered candidates for special compensation.
True
T/F: Introduction of a gain-sharing plan is particularly effective when union members participate in plan development.
True
T/F: Lower-tier employees in a two-tier pay plan, those hired after the contract is ratified, receive wages 50 to 80 percent lower than employees in the higher tier.
True
T/F: Unionization rates are higher in Europe than in Asia.
True
T/F: Under the Economic Growth and Tax Reconciliation Act of 2001, employers have three hundred vesting schedule options.
False
Data from WellPoint Inc shows that _____ percent of its 29 million customers account for over 60 percent of its medical costs. 7 17 27 37
7
Which of the following involves periodic adjustments based typically on changes in the consumer price index? A COLA clause A deferred wage increase A reopener clause An annual improvement adjustment
A COLA clause
T/F: Employees prefer defined contribution (DC) plans over defined benefit plans because DC plans tend to vest faster.
True
T/F: Employers who have frequent layoffs pay higher tax rates than those with few layoffs.
True
T/F: Evidence indicates that MNCs are influenced by both the institutional pressures in their home country and in the local context.
True
T/F: Few contracts specify special rates for part-time and temporary employees.
True
T/F: Generally, it is difficult to compare total compensation of a U.S. firm with a foreign competitor.
True
T/F: In China, while state-owned enterprises employ two-thirds of all workers, wholly privately owned enterprises, joint ventures with foreign companies, and WOFEs account for half of all profits.
True
T/F: In a recession environment, companies need to react to the decreasing level of sales by rewarding top-level performers that achieve high levels of sales despite the economic downturn.
True
T/F: In automatic progression, seniority is used as the basis for movement through the job classifications.
True
T/F: In maturing markets, companies focus both on performance-based pay tied to customer satisfaction and on greater.
True
T/F: In most cases, when a compensation consultant is called in to review the salary of a chief executive officer, regardless of how well the company is performing, the CEO's pay is raised.
True
T/F: Independent contractors generally are less expensive for employers as they receive no benefits.
True
T/F: Lump-sum awards are typically given because they are less costly to the employer than merit increases.
True
T/F: Many contracts specify a premium be paid above the worker's base wage for working nonstandard shifts.
True
T/F: Most employers prefer defined contribution pension plans to defined benefit plans.
True
T/F: Neither works councils nor co-determination are legally required in the United States and are quite rare.
True
T/F: Of the four affirmative defenses for unequal pay for equal work, "a factor other than sex" has prompted the most court cases.
True
T/F: One objective of the overtime provision of FLSA is to share available work by making the hiring of additional workers a less costly option than the scheduling of overtime for current employees.
True
T/F: Organizations rely very heavily on external market data in pricing scientists' and engineers' base pay.
True
T/F: Pay differences for equal work may be justified for demonstrably business-related reasons.
True
T/F: The 1993 Revenue Reconciliation Act limited employer deductions for executive compensation to $1 million and capped the amount of executive compensation used in computing contributions to and benefits from qualified retirement plans.
True
T/F: The Pension Benefit Guarantee Corporation guarantees payment of vested benefits to employees formerly covered by terminated pension plans.
True
T/F: The Social Security Act has been designed and amended to provide a foundation of basic financial security for American workers and their families.
True
T/F: The gender pay gap is common across countries and is smaller in some countries than the U.S.
True
T/F: The key to a comparable-worth system is a single job evaluation plan for jobs with dissimilar content.
True
T/F: The two types of discrimination recognized by law are valuation discrimination and access discrimination.
True
T/F: The vast majority of contracts specify that a job is to be compensated on an hourly basis.
True
T/F: There are numerous possible costs and benefits to union members for agreeing to a gain-sharing plan.
True
_____ prohibits discrimination on the basis of race, color, religion, sex, or national origin. Executive Order 11452 The FMLA Executive Order 11246 The Rehabilitation Act
Executive Order 11246
T/F: Unions respond relatively rapidly to wage increases during inflationary periods.
False
T/F: Unlike executives, scientists and engineers are less likely to receive lavish athletic facilities and large offices.
False
T/F: While government affects the supply of labor through legislation, it has no effect on the demand for labor.
False
T/F: Workers' compensation is covered by federal laws.
False
T/F: Compensation packages for salespeople must be competitive because salespeople tend to compare their pay with competitors.
True
KYZ Inc., a U.S. firm, sends its manager, Ryan, to London to manage its operations there. Ryan's salary is still based on the U.S pay system, however KYZ offers him a lump-sum payment to offset the additional standards-of-living expense in London. In this case, which of the following approaches to expatriate compensation is used by KYZ? The cafeteria approach The localization approach The local plus approach The balance sheet approach
The cafeteria approach
T/F: A government-defined prevailing wage is the minimum wage that must be paid for work done on covered government projects or purchases.
True
T/F: A major problem with Social Security is a rising number of retirees without a corresponding increase in the number of contributors.
True
T/F: A qualified deferred compensation plan offers tax advantages to employers.
True
T/F: A reopener clause specifies that wages will be renegotiated at a specified time or under certain conditions.
True
Company A and Company B are in the same industry, but Company A is unionized and Company B is not. Therefore, _____. it can be argued with assurance that any wage differences between the two firms are due to the presence of the union in Company A and the absence of the union in Company B it is difficult to argue with assurance that wage differences between the two firms are attributable to the presence of the union, although the possibility exists Company B has to form a union to compete with Company A any wage differences between the two firms can never be attributed to the presence of the union in Company A
it is difficult to argue with assurance that wage differences between the two firms are attributable to the presence of the union, although the possibility exists
When designing a sales compensation plan, it should be kept in mind that: salespeople rank recognition as their number-one motivator. salespeople under an incentive system will view customer service as an imposition. compensation systems are independent of the nature of a product or service. commissions for sales volume reduces the incentive to sell.
salespeople under an incentive system will view customer service as an imposition.
Prevailing-wage laws _____. set pay for work done to produce goods and services contracted by the state government specify that a government-defined prevailing wage is the maximum wage that must be paid for work done on covered government projects give contractors the right to drive down wages using their size were passed in response to conditions on projects such as the construction of the Hoover Dam during the Depression
were passed in response to conditions on projects such as the construction of the Hoover Dam during the Depression