Compensation Administration - Chapter 9

According to ________ theory, relative pay is important as employees evaluate the adequacy of their pay via comparisons with other employees. A) equity B) expectancy C) agency D) reinforcement

A) equity

When a company moves from an individual incentive plan to a group incentive plan, the company is most likely to experience A) higher turnover among high performers. B) an increase in instrumentality. C) higher turnover among poor performers. D) an increase in perceived equity.

A) higher turnover among high performers.

When pay is based on individual performance, turnover tends to be highest among A) poor performers. B) good performers. C) single women with children. D) ethnic minorities

A) poor performers.

The ability triangle includes A) selection. B) performance management. C) compensation. D) organization development

A) selection.

Which of the following theories states that people choose the behavior that leads to the most satisfactory exchange? A) Maslow's need hierarchy B) Expectancy theory C) Herzberg's two-factor theory D) Goal-setting theory

B) Expectancy theory

Droppiece, Inc. is a company that provides more performance-based pay and less base pay than its competitors. Who among the following is most likely to join Droppiece? A) George, a recently married man who wants a stable income B) Stella, a recent college graduate who loves to take on a challenge C) Mark, a musician who wants to supplement his income D) Sara, a senior citizen who wants a job only to keep herself busy

B) Stella, a recent college graduate who loves to take on a challenge

The most obvious sorting factor is A) seniority. B) ability. C) experience. D) educational qualification

B) ability.

Most experts agree that employees do not begin to consider changing their behavior unless payouts are at least ________ percent higher. A) 5 B) 8 C) 20 D) 10

C) 20

The motivation triangle includes A) selection. B) organization design. C) culture. D) organization development.

C) culture.

A person with low self-esteem is likely to seek A) a small, hierarchical organization with pay plans based upon individual performance. B) a flat organization with a significant amount of pay based upon performance. C) a small organization with large benefits based on group performance. D) a large, decentralized organization with little pay for performance

D) a large, decentralized organization with little pay for performance

Which of the following is an example of the sorting effect in action? A) An employee leaving a high-paying job for one that provides more work/life balance B) The provision of across-the-board pay increases by a company C) The provision of cost-of-living increases by a company D) An employee choosing fewer incentives in his flexible compensation plan

A) An employee leaving a high-paying job for one that provides more work/life balance

When an organization's performance has regular and large swings and individual performance is unclear and hard to measure, the most effective compensation mix is to offer A) a base pay with low incentives and a wide array of awards. B) monetary rewards with large incentives. C) a large base pay and low incentive pay. D) a wide range of rewards and significant incentives

A) a base pay with low incentives and a wide array of awards.

When an organization's performance has frequent highs and lows, but individual performance is fairly stable and performance measures are clear, the most effective compensation mix is to offer A) a base pay with low incentives and a variety of rewards. B) monetary rewards with large incentives. C) a large base pay and low incentive pay. D) a wide range of rewards and significant incentives.

B) monetary rewards with large incentives.

________ is employees' beliefs that higher job performance will be rewarded by the organization. A) Valence B) Expectancy C) Instrumentality D) Utility

C) Instrumentality

________ is the value employees attach to the organization rewards received for job performance A) Equity B) Instrumentality C) Valence D) Reinforcement

C) Valence

When employee performance measures are ambiguous and vary from time to time, but the organization's performance is fairly stable over time, the most effective type of compensation is to offer A) a large base pay and low incentive pay. B) an increase in base pay. C) a variety of rewards with significant incentive pay. D) monetary rewards with no benefits

C) a variety of rewards with significant incentive pay.

Company X pays for performance. Allan, an employee of the company, is not in favor of this reward system and, therefore, leaves Company X in search of another company with different rules for getting rewards. This is an example of the: A) design effect. B) compensation effect. C) sorting effect. D) incentive effect.

C) sorting effect.

The corporate performance of Yellow Corp. is fairly stable. However, it is difficult to measure individual performance. In this case, the most effective compensation mix is to offer A) a high base pay with high incentives. B) monetary rewards alone. C) a large base pay and low incentive pay. D) a wide range of awards beyond just money

D) a wide range of awards beyond just money

The amount of fairness given to employees refers to A) total justice. B) quantitative justice. C) procedural justice. D) distributive justice.

D) distributive justice.

When employee performance is easily measured and the organization's performance is fairly stable over time, the most effective type of compensation is to offer A) a large base pay and low incentive pay. B) a variety of rewards in addition to base pay. C) a variety of rewards with significant incentive pay. D) monetary rewards with large incentives.

D) monetary rewards with large incentives.

Available evidence indicates that managers believe the most important factor for pay increases is A) experience. B) nature of the job. C) seniority. D) performance

D) performance