HRM test 2

Which of the following statements about employee turnover is true?

A wrongful discharge suit typically attempts to establish that the discharge either violated an implied contract or covenant or violated public policy. A wrongful discharge suit typically attempts to establish that the discharge either (1) violated an implied contract or covenant (that is, the employer acted unfairly) or (2) violated public policy (that is, the employee was terminated because he or she refused to do something illegal, unethical, or unsafe). Wrongful discharge suits can also be filed as a civil rights infringement if the person discharged is a member of a protected group.

_____ theory suggests that monitoring would be less costly and more effective if performed by employees.

Agency Agency theory suggests that monitoring would be less costly and more effective if performed by employees because they have knowledge about the workplace and behavior of fellow employees that managers do not have.

Which of the following is the last step in an alternative dispute resolution?

Arbitration Alternative dispute resolution (ADR) is a method of resolving disputes that does not rely on the legal system. Alternative dispute resolution (ADR) proceeds through the four stages of open door policy, peer review, mediation, and arbitration.

Which of the following plans combines the advantages of defined benefit plans and defined contribution plans?

Cash balance plans One way to combine the advantages of defined benefit plans and defined contribution plans is to use a cash balance plan. It is a retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee's salary; the account earns interest at a predefined rate.

Which of the following is the first step in an effective performance management process?

Define performance outcomes for company division and department The first step in the performance management process is to define performance outcomes for company division and department. It starts with understanding and identifying important performance outcomes or results. Typically, these outcomes or results benefit customers, the employees' peers or team, and the organization itself.

Which of the following purposes does the performance management system serve when it seeks to improve an employee's performance?

Developmental One of the purposes of performance management is to develop employees who are effective at their jobs. When employees are not performing as well as they should, performance management seeks to improve their performance. The feedback given during a performance evaluation process often pinpoints the employee's weaknesses.

Which of the following is an input factor to be considered while analyzing poor performance?

Does the employee recognize what he or she is supposed to do? Input factors to be considered while analyzing poor performance are—Does the employee recognize what he or she is supposed to do? Are the job flow and procedures logical? Do employees have the resources (tools, equipment, technology, time) needed for successful performance? Are other job demands interfering with good performance in this area?

_____ survey research allows the company to monitor trends over time and thus prevent problems in the area of voluntary turnover before they happen.

Employee Regardless of what measures are used or how many facets of satisfaction are assessed, a systematic, ongoing program of employee survey research should be a prominent part of any human resource strategy. It allows the company to monitor trends over time and thus prevent problems in the area of voluntary turnover before they happen.

Which of the following is an advantage of flexible benefit plans?

Employees gain a greater awareness and appreciation of what the employer provides. With flexible benefits plans, employees can gain a greater awareness and appreciation of what the employer provides them, particularly with plans that give employees a lump sum to allocate to benefits.

Which of the following is a determinant of procedural justice?

Ethicality The six determinants of procedural justice are consistency, bias suppression, information accuracy, correctability, representativeness, and ethicality.

Which of the following scenarios exemplifies eligibility for unemployment benefits?

Haseen was wrongfully discharged after two years of work. Unemployed workers are eligible for benefits if they (1) have a prior attachment to the workforce (often 52 weeks or four quarters of work at a minimum level of pay); (2) are available for work; (3) are actively seeking work (including registering at the local unemployment office); and (4) were not discharged for cause (such as willful misconduct), did not quit voluntarily, and are not out of work because of a labor dispute.

If an employee is not treated with empathy and consideration when bad news is conveyed to him or her, which of the following does he or she perceive to have not received from the organization?

Interactional justice Interactional justice refers to the interpersonal nature of how the outcomes were implemented. Explanation, social sensitivity, consideration, and empathy are the four determinants of interactional justice.

Which of the following is true of a cash balance plan?

It earns interest according to a predetermined rate. A cash balance requires contributions from the employer only and is most generous to young employees who have many years ahead in which to earn interest. If employees change jobs, they generally can roll over the balance into an individual retirement account.

Which of the following is true of organizations that have adopted a growth business strategy?

Long-term time orientation A long-term time orientation strategy fits with an organization's strategy of growth. A growth strategy's emphasis on innovation, risk taking, and new markets is linked to a pay strategy that shares risk with employees but also gives them the opportunity for high future earnings by having them share in whatever success the organization has.

_____ is the stage of alternative dispute resolution where two people in conflict attempt to arrive at a settlement together, without the involvement of other parties.

Open door policy Open-door policy is where the two people in conflict (e.g., supervisor and subordinate) attempt to arrive at a settlement together, without any involvement of third parties.

Which of the following is characteristic of profit-sharing programs?

Payments do not become part of base pay in such programs. Under profit sharing, payments are based on a measure of organization performance (profits), and the payments do not become part of the base salary. Thus, it encourages employees to think more like owners.

In an alternative dispute resolution program, at what stage does a panel composed of representatives from the organization that are at the same level of those people in the dispute hear the case and attempt to help the parties arrive at a settlement?

Peer review In peer review, a panel composed of representatives from the organization that are at the same level of those people in the dispute hear the case and attempt to help the parties arrive at a settlement.Alternative dispute resolution (ADR) is a method of resolving disputes that does not rely on the legal system. Alternative dispute resolution (ADR) proceeds through the four stages of open door policy, peer review, mediation, and arbitration.

Which of the following is true about mobility across employers?

Penalties for mobility may require modification when more mobility is necessary. If more mobility across employers becomes necessary or desirable, the current pension system's incentives against (or penalties for) mobility may require modification. Increased employee mobility will reinforce the continued trend toward defined contribution plans [like 401(k)s], which have greater portability (ease of transfer of funds) across employers.

_____ refers to the process of providing employees information regarding their performance effectiveness.

Performance feedback Performance feedback refers to the process of providing employees information regarding their performance effectiveness.

_____ is a compensation plan in which payments are based on a measure of organization performance and do not become part of the employees' base salary.

Profit sharing Under profit sharing, payments are based on a measure of organization performance (profits), and the payments do not become part of the base salary

Which of the following is a defined contribution pension plan?

Profit sharing plan Profit sharing plan is a defined contribution plan. Profit sharing plans and employee stock ownership plans permit contributions (cash and stock, respectively) to vary from year to year, thus allowing employers to avoid fixed obligations that may be burdensome in difficult financial times.

Jones is an employee with low ability and low motivation. As his boss, Rick tried to help Jones improve his skills through training and counselling. Despite this, Jones's performance continues to be low. Which of the following is an appropriate action that Rick should consider with respect to Jones?

Rick should withhold pay increases. Employees, such as Jones, who are low in ability and low in motivation, are considered as deadwood. Withholding pay increases, demotion, outplacement, firing, and providing specific as well as direct feedback are a few actions that can be used by Rick to manage the performance of Jones who is considered as deadwood.

Which of the following is a determinant of interactional justice?

Social sensitivity The four determinants of interactional justice are explanation, social sensitivity, consideration, and empathy.

_____ is the extent to which a performance measure tells employees what is expected of them and how they can meet these expectations.

Specificity Specificity is the extent to which a performance measure tells employees what is expected of them and how they can meet these expectations. Specificity is relevant to both the strategic and developmental purposes of performance management.

Which of the following rater errors occurs when a rater gives low ratings to all employees regardless of their performance?

Strictness Strictness is a rater error that occurs when a rater gives low ratings to all employees regardless of their performance.

Which of the following is an example of an upward feedback?

Subordinates evaluating their manager's behavior or skills Upward feedback refers to appraisals that involve collecting subordinates' evaluations of manager's behavior or skills.

Which of the following is one of the reasons for the growth of benefits as part of total compensation?

Tax treatment of benefits programs is favorable for employees. The tax treatment of benefits programs is often more favorable for employees than the tax treatment of wages and salaries, meaning that a dollar spent on benefits has the potential to generate more value for the employees than the same dollar spent on wages and salaries.

Which of the following stages in a typical progressive discipline program should be carried out prior to terminating an employee?

Temporary suspension Termination (with the right to go to arbitration) is the last step to take in progressive discipline. The step to take before that is temporary suspension and a last chance notification.

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), in which of the following cases is the employer exempted from extending health insurance coverage at group rates for up to 36 months?

Termination due to gross misconduct The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires employers to permit employees to extend their health insurance coverage at group rates for up to 36 months following a "qualifying event" such as termination (except for gross misconduct), a reduction in hours that leads to the loss of health insurance, death, and other events. The beneficiary (whether the employee, spouse, or dependent) must have access to the same services as employees who have not lost their health insurance.

Which of the following approaches to performance management usually has a low reliability outcome that can be improved by specific definitions of attributes?

The attribute approach An attribute approach usually has a low reliability outcome that can be improved by specific definitions of attributes.

Which of the following approaches to performance management has high specificity and high validity results, and minimizes contamination and deficiency?

The behavioral approach A behavioral approach has high specificity and high validity results, and minimizes contamination and deficiency.

Which of the following is a possible factor for the rise of agency costs?

The stockholders are unaware of the degree to which the agents are pursuing the principal's goals. Agency costs can arise from two factors. First, principals and agents may have different goals (goal incongruence). Second, principals may have less than perfect information on the degree to which the agent is pursuing and achieving the principal's goals (information asymmetry).

Which of the following is a major objective of the unemployment insurance program?

To help unemployed workers find new jobs Established by the 1935 Social Security Act, the unemployment insurance program has four major objectives: (1) to offset lost income during involuntary unemployment, (2) to help unemployed workers find new jobs, (3) to provide an incentive for employers to stabilize employment, and (4) to preserve investments in worker skills by providing income during short-term layoffs (which allows workers to return to their employer rather than start over with another employer).

_____ is the extent to which a performance measure assesses all the relevant aspects of performance.

Validity Validity is the extent to which a performance measure assesses all the relevant—and only the relevant—aspects of performance. This is often referred to as "content validity." For a performance measure to be valid, it must not be deficient or contaminated.

According to a merit increase grid, one of the factors that determines the size and frequency of pay increases is _____.

an individual's compa-ratio In merit pay programs, the size and frequency of pay increases are determined by two factors. The first factor is the individual's performance rating (because better performers should receive higher pay). The second factor is position in range (that is, an individual's compa-ratio).

Payout is done on a(n) _____ basis in merit pay programs.

annual Payout is done on an annual basis in merit pay programs. Payment is made as a change in the base pay.

Payments are made as _____ in gain sharing.

bonuses Payout is done on a monthly basis in gain sharing. Payments are in the form of bonuses

Organizations that represent large groups of employees:

can purchase insurance at a lower rate because of economies of scale. Organizations that represent large groups of employees can purchase insurance (or self-insure) at a lower rate because of economies of scale, which spread fixed costs over more employees to reduce the cost per person. Insurance risks can be more easily pooled in large groups, and large groups can also achieve greater bargaining power in dealing with insurance carriers or medical providers.

The _____ approach to performance management requires the rater to equate an individual's performance with that of others.

comparative The comparative approach to performance measurement requires the rater to compare an individual's performance with that of others. This approach usually uses some overall assessment of an individual's performance or worth and seeks to develop some ranking of the individuals within a work group.

In terms of sick leave, the replacement rate is the ratio of:

disability payments to normal salary. Employers may also attempt to communicate to their employees that accumulated sick leave is better saved to use as a bridge to long-term disability, because the replacement rate (the ratio of sick leave or disability payments to normal salary) for the former is typically higher.

Gainsharing plans lay strong emphasis on taking advantage of _____ to improve the production process.

employee know-how In gainsharing, there is often a strong emphasis on taking advantage of employee know-how to improve the production process through teams and suggestion systems.

In a Social Security retirement plan, the earnings test:

has a greater impact on the incentive to work part time. The earnings test increases a person's incentive to retire (otherwise full Social Security benefits are not received), and if she continues to work, the incentive to work part-time rather than full-time increases. A major change made in January 2000 is that there is no earnings test once full retirement age is reached.

Representativeness as a determinant of procedural justice ensures that the procedure is:

inclusive of the concerns of all stakeholders. As a determinant of procedural justice, in representativeness, the procedure is informed by the concerns of all groups or stakeholders (co-workers, customers, owners) affected by the decision, including the individual being dismissed.

According to agency theory, the goal of owners is to encourage the agents to act in the best interests of the owners. This means:

less emphasis on noncontingent pay. From an agency theory perspective, the goal of owners (shareholders) is to encourage the agents (managers and executives) to act in the best interests of the owners. This means less emphasis on noncontingent pay and more emphasis on outcome-oriented contracts that makes some portion of executive pay contingent on the organization's profitability or stock performance

When a frustrated employee engages in whistle-blowing, it typically involves:

making a grievance public by taking it to the government. Employees can initiate change through whistle-blowing (making grievances public by going to the media). Whistle-blowers are often dissatisfied individuals who cannot bring about internal change and, out of a sense of commitment or frustration, take their concerns to external constituencies.

Customer evaluations serve a strategic goal by integrating _____ strategies with human resource activities and policies.

marketing Customer evaluations are appropriate when the company is interested in gathering information to determine what products and services the customer wants. That is, customer evaluations serve a strategic goal by integrating marketing strategies with human resource activities and policies.

During the _____ stage, a neutral third party from outside the organization hears the case and, via a nonbinding process, tries to help the disputants arrive at a settlement.

mediation In mediation, a neutral third party from outside the organization hears the case and, via a nonbinding process, tries to help the disputants arrive at a settlement.

Relying exclusively on _____ may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

merit pay Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

An employee is perpetually dissatisfied despite organizational interventions. The reason for dissatisfaction is likely to be _____.

negative affectivity Negative affectivity is a term used to describe a dispositional dimension that reflects pervasive individual differences in satisfaction with any and all aspects of life. Individuals who are high in negative affectivity report higher levels of aversive mood states, including anger, contempt, disgust, guilt, fear, and nervousness across all contexts (work and nonwork).

Equity changes are the payment method most suitable for _____ programs.

ownership Equity changes are the payment method that is most suitable for ownership programs. Payment is made when stocks are sold.

Gainsharing involves the use of _____ performance measures.

plant-level Instead of using an organization-level performance measure (profits), gainsharing measures group or plant performance, which is likely to be seen as more controllable by employees.

One of the major objectives of the unemployment insurance program is to:

preserve investments in worker skills during short-term layoffs. Established by the 1935 Social Security Act, the unemployment insurance program has four major objectives: (1) to offset lost income during involuntary unemployment, (2) to help unemployed workers find new jobs, (3) to provide an incentive for employers to stabilize employment, and (4) to preserve investments in worker skills by providing income during short-term layoffs (which allows workers to return to their employer rather than start over with another employer).

Of the following pay programs, the weakest link between employees' performance and earnings is found in _____ plans.

profit-sharing Most employees are unlikely to see a strong connection between what they do and what they earn under profit sharing. This means that performance motivation is likely to change very little. Hence, profit sharing presents a weak link between employees' performance and their earnings.

Fundamental characteristics of the _____ approach to performance management include a customer orientation, a prevention approach to errors, and continuous improvement.

quality Fundamental characteristics of the quality approach include a customer orientation, a prevention approach to errors, and continuous improvement. Improving customer satisfaction is the primary goal of the quality approach.

A manager's role in an effective performance feedback process is to:

recognize effective employee performance and not only performance problems. Performance feedback sessions should not only focus on the employee's performance problems, but should recognize effective performance as well. Praising effective performance provides reinforcement for that behavior. It also adds credibility to the feedback by making it clear that the manager is not just identifying performance problems.

As part of the Employee Retirement Income Security Act (ERISA), a summary plan description (SPD) is a(n) _____.

reporting requirement A summary plan description (SPD) is a reporting requirement of the Employee Retirement Income Security Act (ERISA) that obligates employers to describe the plan's funding, eligibility requirements, risks, and so forth within 90 days after an employee has entered the plan.

Qualified plans must meet so-called nondiscrimination rules so that:

tax benefits of such plans should not disproportionately aid the wealthy. Qualified plans must meet so-called nondiscrimination rules. Basically, this means that a benefit cannot discriminate in favor of "highly compensated employees." One rationale behind such rules is that the tax benefits of qualified benefits plans (and the corresponding loss of tax revenues for the U.S. government) should not go disproportionately to the wealthy. Rather, the favorable tax treatment is designed to encourage employers to provide important benefits to a broad spectrum of employees.

Individual incentive plans are relatively rare because:

they are often inconsistent with the goals of proactive problem solving. Individual incentives are relatively rare for a variety of reasons. One of these is that they are often inconsistent with the goals of acquiring multiple skills and proactive problem solving.

When a wrongful discharge suit attempts to establish that an employer acted unfairly by terminating an employee, it is trying to establish that the termination is a(n) _____.

violation of an implied covenant A wrongful discharge suit typically attempts to establish that the discharge either (1) violated an implied contract or covenant (that is, the employer acted unfairly) or (2) violated public policy (that is, the employee was terminated because he or she refused to do something illegal, unethical, or unsafe). Wrongful discharge suits can also be filed as a civil rights infringement if the person discharged is a member of a protected group.

John is terminated from employment by Volin Inc. when he refuses to be a part of an unethical transaction. Consequently, John can charge Volin Inc. with a wrongful discharge lawsuit on the grounds of _____.

violation of public policy When an employee is terminated because he or she refused to do something illegal, unethical, or unsafe, the employer is said to have violated public policy. A wrongful discharge suit can be filed.