BUSN 222 - Test 1

T/F: a manager can use one of four proven pay techniques that tie basic policies to the pay objectives

False

T/F: commissions are examples of incentives

True

Which of the following is an example of a quoted-price?

a product on Amazon

In a study, causation can be best established by:

analyzing the scope of the study

T/F: base wage reflects both the value of the work and individual employee skills and experience

False

T/F: even if federal compensation laws change, it is necessary to change pay systems to ensure continued compliance

False

T/F: in Japan, the traditional characters for the word "compensation" are based on the symbols for logs and water, suggesting that compensation provides the necessities in life

False

T/F: the R^2, which is an output from a regression analysis, is difference from correlation in that it tells us what percentage of the variation is accounted for by the variables we are using to predict or explain

False

T/F: when looking at the total CEO compensation of U.S. public companies, salary was the largest, most significant compensation component

False

Which of the following companies is taking efforts to improve the work/life balance of its employees?

MH Corp., which increases the number of paid holidays given to its senior employees

The "say on pay" and claw back provisions are included in which of the following federal laws?

The Dodd-Frank Wall Street Reform and Consumer Protection Act

GreenRain Corp. faces an increase in its employee turnover rate. The CEO calls for a board meeting with the senior executives to discuss the issue. Who among the following suggests increasing the relational returns that employers receive to reduce the turnover rate at GreenRain?

Tom, who suggests increasing the decision-making authorities given to the employees to make work more challenging

T/F: consultant surveys are often presented as studies that reveal cause and effect

True

T/F: fairness is affected through employees' comparisons of their pay to the pay of others in the organization

True

T/F: if the objective is to increase customer satisfaction, then incentive programs and merit pay might be used to pay for performance

True

T/F: internal alignment pertains to the pay rates both for employees doing equal work and for those doing dissimilar work

True

T/F: merit bonuses are paid in a lump sum and do not become a permanent part of base salary

True

T/F: most U.S. firms use merit pay increases

True

T/F: objectives guide the design of pay systems and provide standards for evaluating their effectiveness

True

T/F: the relationship between variables is most often addressed through the use of statistical analysis

True

Which of the following is a policy, and NOT an objective, of the pay model?

competitiveness

A measure of how changes in one variable are related to changes in another variable is that:

correlation coefficient

A compensation system that focuses on competitors' labor costs is most closely associated with a ____________________ strategy

cost-cutter

Mich Inc, a hardware store, has a rating system in place that rates employees on their friendliness, usefulness, and product knowledge. Based on the ratings an employee receives, he or she gets an incentive. The compensation strategy followed by Mich is most closely described as a ______________

customer-focused strategy

The problem that is most likely to be faced by organizations using an egalitarian pay structure is:

difficulty in external recruitment

A difference between incentives and merit increases is that incentives:

do not increase the base wage, whereas merit increases increase the base wage

The theory that has the most implications on staffing is that _____________ theory

efficiency wage

When cooperating is important for successful organization performance, which of the following pay structures in more suitable?

egalitarian pay structure

The decisions to implement pay for performance, flat rate pay, and profit sharing are examples of _______________ policy decisions

employee contribution

Which of the following policy decisions directly affects employees' attitudes and work behaviors?

employee contributions

Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that:

employers seek to maximize profits

Which of the following is an example of a relational return?

employment security

Which of the following is not a factor in defining equal work according to the Equal Pay Act?

equal experience

Comparisons based on the forms for compensation used by other companies are part of ____________________

external competitiveness

Compensation policy choices that affect the pay level relative to other companies are most closely associated with the ____________ aspect of the pay model

external competitiveness

Decisions regarding what forms of compensation should be part of ___________________

external competitiveness

Work/life balance is most closely associated with the _____________ aspect of mapping a total compensation strategy

external competitiveness

_______________ focuses attention on the competitive positions reflected in the pay relationships among organizations

external competitiveness

The alignment test:

helps ensure passing the differentiation test

_________________ refers to the education, experience, knowledge, abilities, and skills required to perform work

human capital

The pay policy associated with increased productivity is the ___________ policy

hybrid

"Choosing techniques to fit strategy" is part of which step in developing a total compensation system?

implement strategy

Research investigating high-performance workplaces found that performance-based pay _______________ when combined with other high performance practices

improves attitudes and behaviors

The degree to which pay influences individual and aggregate motivation among employees at any point in time is referred to as an ____________________

incentive effect

Variable pay may also be called ______________

incentives

Robert, the CEO of the Game Track Corp., wants to restructure its pay plan without increasing labor costs in the long run. He is most likely to achieve this, while retaining his top employees by:

increasing base pay and decreasing variable pay

A compensation system using market-based pay is most like to be part of a ______________ strategy

innovator

_____________ refers to comparisons among jobs or skill levels inside a single organization

internal alignment

Which of the following is true of internal alignment?

it addresses pay relationships inside an organization

Which of the following is true of the marginal revenue product model?

it oversimplifies business conditions in the real world

Which of the following is an assumption held by the labor supply model about the behavior of potential employees?

job seekers do not face barriers to mobility

Marie hired on with a tech company offering the usual benefits but paying below-market rates. She took the job because the company was promising generous stock options and hefty yearly bonuses if goals are met. Plus, they are paying her to relocate to Hawaii. Marie's new employer is using a _________________.

lag-pay-level policy

The pay-level policy that is most likely to reduce pay dissatisfaction is a:

lead policy

A small lawn care company has two mowers and four employees. If it hires another employee, how productive will productivity for the fifth employee compare to the current two mowers?

less productive

Issues of transparency, technology, and choice are most closely associated with the _____________ aspect of mapping a total compensation strategy

management

One of the reasons why the great majority of the uninsured in the U.S. are from working families is that:

many small employers are much less likely than larger employers to offer health insurance to their employees

The most common pay policy is ________________

match

Which of the following is given as an increment to base pay in recognition of past work behavior?

merit increases

According to the Hudson Survey, _________________ is the single thing that would make employees happier

more money

Which of the following statements concerning cash compensation and the Fair Labor Standards Act is true?

nonexempt employees have their pay calculated at an hourly wage

Whole Foods' decision to seek and engage employees who are going to help the company make money is an example of which strategic pay decision?

objectives

Unlike merit increases, merit bonuses are:

paid in the form of a lump sum

Which of the following statements is true of pay level?

pay level is directly proportional to labor costs

In the context of pay relationships, which of the following is illegal in the U.S.?

paying on the basis of one's age

Trying to measure ROI for any compensation strategy implies that:

people are "human capital," similar to other factors of production

__________ refers to the process used to make pay decisions

procedural fairness

Evidence shows that in manufacturing, _________________ is positively correlated with hourly wage level

productivity

Which of the following is linked to high pay levels?

reduced vacancy rates

In _________________ theory, pay is described as noncompensatory

reservation wage

___________ theory is the basis for sorting effect pay strategy has on the composition of the workforce

signaling

Total CEO annual compensation at S & P 500 companies is roughly $12.3 million. At just over half that total ($6.5 million), which compensation component comprises the majority of that total compensation amount?

stock grants

Which of the following is often the largest component in an executive pay package?

stock options

Which of the following is not true of the relationship between employee size and its ability to pay?

talented people prefer to work in larger organizations

_______________ is an example of a bourse

the total compensation for a top athlete

Incentives do not permanently increase labor costs because:

they are one-time payments

Which of the following is true of incentives?

they are re-earned each pay period

Which of the following theories predicts that individual performance will be maximized when the pay differentials between job levels are large?

tournament theory

the most common basis for determining internal structures are:

work content and its value

The pay-mix component in which benefits are likely to be largest is ____________________.

work-life balance