MGT 3070 Final (Ch. 12- 15)

________ occurs when a date or price in a stock option agreement is changed so that the option holder can buy shares at a bargain price. A. "Backdating" B. "Option revising" C. "Retro-vising" D. "Adjusting" E. "Rechecking"

A. "Backdating" "Backdating" stock options refers to when companies changed the date or price in the option agreement so that the option holder could buy shares at a bargain price (this practice may be illegal if done secretly).

What is the minimum percent of employees in a bargaining unit who must sign authorization cards for the National Labor Relations Board to hold a union representation election? A. 30 percent B. 51 percent C. 20 percent D. 10 percent E. 55 percent

A. 30 percent At the start of an organizing process, union representatives make contact with employees, present their message about the union, and invite them to sign an authorization card. For the organization process to continue, at least 30 percent of the employees must sign an authorization card.

Helen is a marketing manager at a local equipment manufacturer. She and her husband know that saving for college for their 4-year-old twin boys is a challenge. Her employer recently implemented a college tuition plan that lets parents and other family members defer taxes on their contributions to the plan. What is the type of plan recently implemented? A. 529 savings plan B. 401k savings plan C. 207 college tuition plan D. U.S. saving bonds plan E. TD Ameritrade college tuition plan

A. 529 savings plan As workers' children grow up, their needs shift from maternity leave and child care to college tuition. Some organizations have supported this concern by sponsoring tax-favored 529 savings plans. These plans, named after the section of the Internal Revenue Code that regulates them, lets parents and other family members defer taxes on the earnings of their deposits into the 529 account.

Guangli is a human resource specialist at Quasio Inc., a business consulting company. To support human resource planning, Guangli monitors trends in the Consumer Price Index. In recent months, the CPI has been rising at an increasing rate. What can Guangli predict based on this information? A. A rising cost of living will lead workers in the labor market to seek higher pay. B. A falling cost of living will cause workers to leave the labor market. C. A rise in employment costs will lead companies to demand more labor. D. Competitors in Quasio's product markets will hold wages steady. E. Uncertainty about prices will cause workers to accept lower-paying jobs.

A. A rising cost of living will lead workers in the labor market to seek higher pay. When the cost of living is rising rapidly, labor markets demand pay increases. The federal government tracks trends in the nation's cost of living with a measure called the Consumer Price Index (CPI). Following and studying changes in the CPI can help employers prepare for changes in the demands of the labor market.

Caroline, a researcher, believes that an organization needs to plan what they will pay employees in each job. Mark, her colleague, argues that an employee's pay should be independently negotiated. Which of the following statements will weaken Mark's argument? A. An unplanned approach will likely result in unfairness and dissatisfaction among the employees. B. Most of the employees prefer planned pay because negotiation with the management takes time. C. Independently negotiated pay will increase the workload and rivalry among the employees. D. When the pay is planned by the organization, it creates more employment opportunities. E. The pay structure is the same for both an entry-level and a manager-level employee if it has been independently negotiated.

A. An unplanned approach will likely result in unfairness and dissatisfaction among the employees. Because pay is important both in its effect on employees and on account of its cost, organizations need to plan what they will pay employees in each job. An unplanned approach in which each employee's pay is independently negotiated will likely result in unfairness, dissatisfaction, and rates that are either overly expensive or so low that positions are hard to fill.

Which of the following U.S. organizations conducts an ongoing National Compensation Survey measuring wages, salaries, and benefits paid to the nation's employees? A. Bureau of Labor Statistics B. Society for Human Resource Management C. American Management Association D. AFL-CIO E. Bureau of Economic Analysis

A. Bureau of Labor Statistics Pay surveys are available for many kinds of industries and jobs. The primary collector of this kind of data in the United States is the Bureau of Labor Statistics, which conducts an ongoing National Compensation Survey measuring wages, salaries, and benefits paid to the nation's employees.

Which of the following is a reason for the popularity of employee stock ownership plans (ESOPs)? A. ESOPs provide tax advantages to employers. B. ESOPs provide very high risk-free retirement income. C. Employees can use ESOPs to buy their company during financial crises. D. ESOPs must invest at least 51 percent of their assets in the company's own stocks. E. The employees are provided with many more shares of stock than they actually own.

A. ESOPs provide tax advantages to employers. ESOPs can be attractive to employers. Along with tax and financing advantages, ESOPs give employers a way to build pride in and commitment to the organization.

As Ray Inc., a shoe manufacturer, grows more profitable, it wants to become more competitive as an employer in the labor market. Tanya, the human resource manager, urges the company to develop a more attractive package of benefits, rather than simply raising salaries. Which of the following statements best supports Tanya's argument? A. Employees do not pay income taxes on most benefits they receive. B. Benefits are harder for employees to understand than pay structures. C. Employees could get a better deal if they bought their own insurance policies. D. Higher cash compensation gives employees more purchasing power. E. Different employees look for different types of benefits.

A. Employees do not pay income taxes on most benefits they receive. Tax laws can make benefits more favorable to employees than cash compensation. For example, employees do not pay income taxes on most benefits they receive, but they pay income taxes on cash compensation.

Kazuri Inc., a manufacturing company, bases employees' pay entirely on market forces. In this case, which of the following is a practical drawback faced by the company? A. Employees might conclude that the pay rates are unfair. B. Supervisors of the company will expect to receive lower pay because of less responsibility. C. The highly paid employees will likely be dissatisfied because of more work. D. The managers will participate in rotation of responsibilities because they receive lower pay. E. All employees will be categorized as exempt employees.

A. Employees might conclude that the pay rates are unfair. An organization could base pay entirely on market forces. However, this approach also has some practical drawbacks. One is that employees may conclude that pay rates are unfair.

Keytechi and Sons, a marketing company, has implemented a few incentive plans to motivate its employees. The organization encourages employees to learn new skills and cooperate with others. Which of the following will contribute to employees' feeling that the organization's incentive pay plans are fair and something to pursue? A. Employees must be able to understand the requirements of the incentive pay plan. B. Equal incentives should be offered to all the employees of the organization. C. Employees must be the key decision makers when creating incentive pay plans. D. The company should not inform the employees about incentive plan changes. E. Employees should make decisions that are only in favor of their interests.

A. Employees must be able to understand the requirements of the incentive pay plan. Along with empowerment, communicating with employees is important. It demonstrates to employees that the pay plan is fair. Also, when employees understand the requirements of the incentive pay plan, the plan is more likely to influence their behavior as desired.

Employees should participate in pay-related decisions. This will most likely help in the success of incentive plans, and the plans are more likely to influence employee behavior as desired. Which of the following statements weakens this argument? A. Employees will make decisions that are in their best interests at the expense of the organization's interests. B. It is difficult to monitor an employee's work output when decisions are made by the employee. C. When employees become more involved in pay decisions, they neglect the work assigned to them. D. Employees should be a part of the human resource department to be involved in pay-related decisions. E. It will have a negative impact on the top-level management of the company.

A. Employees will make decisions that are in their best interests at the expense of the organization's interests. If employees are involved in decisions about incentive pay plans and employees' eligibility for incentives, the process of creating and administering these plans can be more complex. There is also a risk that employees will make decisions that are in their interests at the expense of the organization's interests.

How does linking executive pay to stock performance make unethical behavior tempting? A. Executives can use the advantage of knowing the company's inside information to buy or sell stock and create huge personal gains. B. Executives can roll in the stock price into their base pay to avoid paying a huge tax. C. Executives will lower the stock prices in order to enjoy bonuses. D. Executives can use the employee stock ownership plan to buy their company if it is experiencing financial problems. E. The executives can obtain as many shares as they need at a price that is much lower than the market rate.

A. Executives can use the advantage of knowing the company's inside information to buy or sell stock and create huge personal gains. When executives are stockholders, they have a dual role as owners and managers. This places them at an advantage over others who want to invest in the company. An individual, a pension fund, or other investors have less information about the company than its managers do. An executive who knows about these activities could therefore reap a windfall in the stock market by buying or selling stock based on knowledge about the company's future.

What is the drawback of stock ownership as a form of incentive pay? A. Financial benefits mostly come when the employee leaves the organization. B. Employees have the right to participate in votes by shareholders, hence reducing the negotiating power of the employer. C. It causes the employers to lose control over their employees. D. The employees will not benefit even if the organization is performing well. E. Stock options do not provide any ownership to employees, instead offering an equivalent sum.

A. Financial benefits mostly come when the employee leaves the organization. Employees may not see a strong link between their actions and the company's stock price, especially in larger organizations. The link between pay and performance is even harder to appreciate because the financial benefits mostly come when the stock is sold—typically when the employee leaves the organization.

Identify the correct statement about the trends in international union membership. A. In Western Europe, it is common to have union coverage rates of 80 to 90 percent. B. Coverage rates within the United States are much higher than in most other countries. C. U.S. employees tend to have a larger, more formal role in organizational decision making than in Western European countries. D. Worker representatives on boards of directors are much more common in the United States than in Western European countries. E. The union membership rate in the U.S. is second only to that of Denmark.

A. In Western Europe, it is common to have union coverage rates of 80 to 90 percent. The percentage of U.S. workers who belong to unions is lower than in many other countries. More dramatic is the difference in coverage—the percentage of employees whose terms and conditions of employment are governed by a union contract, whether or not the employees are technically union members. In Western Europe, it is common to have coverage rates of 80 to 90 percent, so the influence of labor unions far outstrips what membership levels would imply.

Under the Older Workers Benefit Protection Act of 1990, which of the following guidelines must employers follow when asking employees to sign early-retirement waivers? A. Inform employees that they may consult with a lawyer before signing. B. Allow employees no more than 48 hours before signing the retirement agreement. C. Make Age Discrimination in Employment Act (ADEA) waivers compulsory. D. Provide lesser benefits than would otherwise be available upon retirement. E. Provide employees with an annual bonus and health insurance after the retirement.

A. Inform employees that they may consult with a lawyer before signing. When employers offer early retirement, they often ask employees to sign waivers saying they will not pursue claims under the Age Discrimination in Employment Act (ADEA). The Older Workers Benefit Protection Act of 1990 set guidelines for using these waivers. The employer must inform employees that they may consult a lawyer before signing.

Inverness Inc., a manufacturing company, believes that pay is an investment that can generate returns in attracting, retaining, and motivating a high-quality workforce. In this case, which of the following statements is true about Inverness? A. It considers its employees as resources. B. It gives the least importance to profits. C. It is a customer-friendly firm. D. It tries to keep its labor costs minimal. E. It helps employees find higher-paying jobs.

A. It considers its employees as resources. Higher pay may be an investment in superior human resources. Having higher labor costs than your competitors is not necessarily bad if you also have the best and most effective workforce, which produces more products of better quality. Pay policies are one of the most important human resource tools for encouraging desired employee behaviors and discouraging undesired behaviors. Therefore, organizations must evaluate pay as more than a cost—it is an investment that can generate returns in attracting, retaining, and motivating a high-quality workforce.

Which of the following best defines an organization's job structure? A. It consists of the relative pay for different jobs within the organization. B. It is the average amount an organization pays for a particular job. C. It comprises the characteristics of jobs that the organization values and chooses to pay. D. It comprises regular pay, overtime pay, and bonuses. E. It refers to the standard amount that employers must pay under federal and state law.

A. It consists of the relative pay for different jobs within the organization. Job structure consists of the relative pay for different jobs within the organization. It establishes relative pay among different functions and different levels of responsibility.

Which of the following is a drawback of a standard hour plan? A. It does not focus on quality or customer service. B. It escalates costs for an employer in the long term. C. It is applicable only in team-based work environments. D. It helps employees work at a comfortable pace. E. It does not pay workers extra for work done in less than the standard time.

A. It does not focus on quality or customer service. Standard hour plans encourage employees to work as fast as they can, but not necessarily to care about quality or customer service. Also, they only succeed if employees want the extra money more than they want to work at a pace that feels comfortable.

Which of the following is most likely a consequence of paying most or all of a salesperson's compensation in the form of commissions? A. It encourages the salesperson to focus on closing the sale. B. It frees the salesperson to focus on developing customer goodwill. C. It encourages teamwork over individual performance. D. It makes the employee appreciate the reward as the reward relates to economic conditions. E. It will quickly become expensive for the employer.

A. It encourages the salesperson to focus on closing the sale. Paying most or all of a salesperson's compensation in the form of commissions encourages the salesperson to focus on closing sales.

Which of the following is a characteristic of delayering? A. It increases an organization's flexibility. B. It increases the opportunities for promoting employees. C. It sets pay according to the employees' level of knowledge. D. It encourages a climate of learning. E. It decreases the flexibility of managers in making assignments.

A. It increases an organization's flexibility. Some organizations have found greater flexibility through delayering, or reducing the number of levels in the organization's job structure. By combining more assignments into a single layer, organizations give managers more flexibility in making assignments and awarding pay increases.

Which of the following is an advantage of the merit pay incentive system? A. It makes the reward more valuable by relating it to economic conditions. B. It promotes group performance instead of promoting individual behavior. C. It provides merit increases to employees solely on the basis of performance. D. It is the most economical incentive system for the employers. E. It provides a direct link between the work done by the employee and the amount earned.

A. It makes the reward more valuable by relating it to economic conditions. An advantage of merit pay is that it makes the reward more valuable by relating it to economic conditions.

Which of the following must be true for a pension plan to be deemed as a qualified plan? A. It must not discriminate in favor of an organization's highly compensated employees. B. It must not be a cafeteria-style plan. C. It should include elder care and child care. D. It has to be a defined-contribution plan. E. It has to be a defined-benefit plan that requires most of the funding to come from the employer.

A. It must not discriminate in favor of an organization's highly compensated employees. To obtain status as a qualified plan, a benefit plan must meet certain requirements. In the case of pensions, these involve vesting and nondiscrimination rules. The nondiscrimination rules provide tax benefits to plans that do not discriminate in favor of the organization's highly compensated employees.

Das Work and Edge Tech are electronics manufacturing companies competing to serve the same customers. The labor-related expense per product for Das Work is $30 higher than that for Edge Tech. However, Das Work makes more profits than Edge Tech. In this case, which of the following actions has contributed to the profits made by Das Work? A. It produces high quality goods and charges more for these products than competitors. B. It does not provide overtime pay to employees who work more than 40 hours in one week. C. It has recently introduced the comparable-worth policy for employees. D. It provides free home delivery of purchased goods. E. It has a company website where customers can purchase goods online.

A. It produces high quality goods and charges more for these products than competitors. If an organization's labor costs are higher than those of its competitors, it will be under pressure to charge more than competitors charge for similar products. The company with higher labor costs will be more profitable if it can justify its higher price to customers.

John and Lisa hold the same position at Flyberry Electronics. However, John earns more than Lisa. In the context of pay structure, which of the following justifies the organization's decision to pay John more than Lisa? A. John works the night shift, and night hours are less desirable for most workers. B. John is a U.S. citizen; therefore his pay should be higher than that of non-Americans. C. Lisa is pregnant; therefore her productivity is assumed to be lower. D. John is physically disabled; therefore he should be paid more than Lisa. E. Lisa lives in a location where living expenses are higher.

A. John works the night shift, and night hours are less desirable for most workers. In some situations organizations adjust pay to reflect differences in working conditions or labor markets. For example, an organization may pay extra to employees who work the night shift because night hours are less desirable for most workers. Similarly, organizations may pay extra to employees in locations where living expenses are higher.

Which of the following is a federal law that establishes a minimum wage and requirements for overtime pay and child labor? A. Fair Labor Standards Act B. Americans with Disabilities Act C. Family and Medical Leave Act D. Employee Retirement Income Security Act E. Equal Pay Act

A. Labor Standards Act The Fair Labor Standards Act is a federal law that establishes a minimum wage and requirements for overtime pay and child labor.

Mark and Chloe hold the same position at Rue & West Bros. However, Mark earns more than Chloe. Which of the following will justify the organization's decision to pay Mark more than Chloe? A. Mark meets higher productivity targets than Chloe. B. Mark comes from an economically weaker background. C. Mark is male. D. Chloe is younger than Mark. E. Chloe is not a U.S. citizen.

A. Mark meets higher productivity targets than Chloe. Since Mark meets higher productivity targets than Chloe, the organization's decision to pay him more than Chloe is justified. The laws governing equal employment opportunity do not guarantee equal pay for men and women, whites and minorities, or any other groups, because so many legitimate factors, from education to choice of occupation, affect a person's earnings. Any differences in pay must instead be tied to such business-related considerations as job responsibilities or performance.

Sapheda Inc., a heavy machinery company, has employees belonging to the age group of 17 to 30. Noah, a 17-year-old, is prohibited from working with heavy machinery tools. Instead, he works in the mail room. Under the laws governing Fair Labor Standards Act (FLSA), which of the following will justify the organization's decision to forbid Noah from doing heavy machinery work? A. Noah cannot be employed in hazardous occupations because he is 17 years old. B. Noah is expected to work in a safe environment because he is male. C. Noah is not a U.S. citizen, therefore he is prohibited from working in a hazardous environment. D. Noah has not yet completed college, therefore he should only be given administrative duties. E. Noah comes from an economically weaker background, therefore he is expected to perform clerical duties.

A. Noah cannot be employed in hazardous occupations because he is 17 years old. Under the FLSA, children aged 16 and 17 may not be employed in hazardous occupations defined by the Department of Labor, such as mining, meatpacking, and certain kinds of manufacturing using heavy machinery.

In a meeting to discuss pension plans, management decides to offer retirement plans exclusively to the organization's owners and top managers. Steven, one of the top managers, disagrees with this decision because he believes the company can benefit more by providing pensions to a broad range of employees. Which of the following strengthens Steven's belief? A. Nondiscrimination rules provide tax benefits to plans that do not favor the organization's highly compensated employees. B. The ADEA provides more favorable tax treatment of benefits when they are offered to a broad range of employees. C. A top-heavy plan requires faster vesting for non-key employees. D. Extending pension plans to employees at all levels will triple the costs. E. Pension plans are determined exclusively by state and federal laws.

A. Nondiscrimination rules provide tax benefits to plans that do not favor the organization's highly compensated employees. Nondiscrimination rules provide tax benefits to plans that do not discriminate in favor of the organization's highly compensated employees.

Steve, the vice president of Ocher Inc., plans to introduce a retirement plan for all employees. George, the operations director, disagrees because the proposed plan would increase the company's costs. Which of the following, if true, strengthens Steve's argument? A. Some benefits have become so common that today's employees expect them. B. Benefit packages are more complex than pay structures. C. The employees at Ocher are young adults who prefer cash compensation to benefits. D. Benefit packages do not affect the competitive nature of the labor market. E. The federal government does not have mandatory requirements for specific retirement plans.

A. Some benefits have become so common that today's employees expect them. Even though many kinds of benefits are not required by law, they have become so common that today's employees expect them. Hence, Steve needs to let George know that their company will lose its competitive edge if it does not provide retirement plans to all its employees.

strictly limits the definition of "independent contractors," so that employers cannot avoid legal obligations by classifying workers as self-employed when the organization receives the benefits of a permanent employee. A. The Internal Revenue Service B. The Consolidated Omnibus Budget Reconciliation Act (COBRA) C. The Employee Retirement Income Security Act (ERISA) D. Employee Benefit Research Institute E. The Bureau of Labor Statistics

A. The Internal Revenue Service The Internal Revenue Service strictly limits the definition of "independent contractors," so that employers cannot avoid legal obligations by classifying workers as self-employed when the organization receives the benefits of a permanent employee.

Jacob is a new father. His company helps Jacob by collecting information about the cost and quality of available child care. Which of the following is true of the child care provided by Jacob's company? A. The child care provided by the company is at the lowest level of involvement. B. The child care provided by the company is at the highest level of involvement. C. According to the Family and Medical Leave Act, the company has not provided Jacob with adequate child care. D. According to the Patient Protection and Affordable Care Act, the company has exceeded the level of involvement that is permissible. E. The child care provided by the company is a form of a dependent care assistance plan.

A. The child care provided by the company is at the lowest level of involvement. The lowest level of involvement is for the organization to supply and help employees collect information about the cost and quality of available child care.

At Carbon Fine Inc., a maker of premium art pencils, the human resource department is evaluating its pay structure. A compensation specialist computes the compa-ratio of the designers and determines that it is 1.9. What problem is most likely to result from a compa-ratio of this size? A. The company may have difficulty keeping costs under control. B. The company may have difficulty attracting and keeping qualified employees. C. The company may be in violation of the Fair Labor Standards Act. D. The company may have misclassified these employees as exempt when they are nonexempt. E. The company may not have met minimum-wage requirements.

A. The company may have difficulty keeping costs under control. Assuming that an organization's pay structure is well planned to support its goals, the compa- ratios should be close to 1. A compa-ratio greater than 1 suggests that the organization is paying more than planned for human resources and may have difficulty keeping costs under control.

Cliff Stiff Inc., a cement company, receives more than $2,000 in federal money. The company hires employees belonging to the age group of 25 to 40. Soon after, the Cliff Stiff is charged for violation of law under the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936. Which of the following would most likely explain the reason for the company being sued? A. The employees of the company are not being paid at rates at least equal to the prevailing wages in the area. B. Cement industry employees are being paid only 15% above the minimum wage. C. The company hired employees belonging to the age group of 25 to 30, and they are being employed in hazardous environments. D. Individuals eligible for overtime are being paid at one and a half times the employee's regular pay rate. E. Employees below the age of 25 are not being hired by the company.

A. The employees of the company are not being paid at rates at least equal to the prevailing wages in the area. Two federal laws, the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, govern pay policies of federal contractors. Under these laws, federal contractors must pay their employees at rates at least equal to the prevailing wages in the area.

Some employees at Los Amigos Inc., a clothing manufacturer, investigate pay rates on Salary.com and learn that Los Amigos has been paying them significantly more than the national average for their jobs. In this case, which of the following is the most likely reaction of the employees at Los Amigo? A. The employees will conclude that there must be regional differences in pay. B. The employees will be motivated to work much harder. C. The employees will find their jobs less challenging. D. The employees will find a way to increase their outcomes by stealing. E. The employees' attitudes and behaviors will continue unchanged.

A. The employees will conclude that there must be regional differences in pay. Typically, if employees see their pay as equitable, their attitudes and behavior continue unchanged. If employees see themselves as receiving an advantage, they usually rethink the situation to see it as merely equitable.

Teno Industries Inc. is a manufacturing company based in Texas. In the year after Teno Industries implemented a comparable-worth policy, its expenses increased, and as a result, profits declined. What difficulty of comparable-worth policies does this example illustrate? A. The employer is at an economic disadvantage because of increased pay for some jobs. B. The policy overlooks the undervalued work performed by women. C. The policy uses job enrichment to establish a pay structure based on market rates. D. The employer ignores the evaluation points for each job. E. Employees in lower-paid jobs are encouraged to meet the goal of comparable worth.

A. The employer is at an economic disadvantage because of increased pay for some jobs. There are several instances where employers have undervalued work performed by women. Some policy makers have proposed a remedy for this called equal pay for comparable worth. Comparable-worth policies are controversial. From an economic standpoint, the obvious drawback of such a policy is that raising pay for some jobs places the employer at an economic disadvantage relative to employers that pay the market rate.

Which of the following is a disadvantage of using incentive plans? A. The goals of an incentive plan may interfere with other management goals. B. The goals of incentive plans can seldom be linked to particular outcomes or behaviors. C. Incentive plans cannot be used to promote group and organizational performance. D. Incentive plans cause dissatisfaction among the non-performing employees in the organization. E. Incentive plans are not very effective for jobs other than sales and service.

A. The goals of an incentive plan may interfere with other management goals. An incentive pay designed to support a management goal may interfere with other management goals. If incentive pay is extremely rewarding, employees may focus on only the performance measures rewarded under the plan and ignore measures that are not rewarded.

Under the Family and Medical Leave Act, which of the following criteria makes employees eligible to take unpaid family leave? A. They should be working for an organization with 50 or more employees within a 75-mile radius. B. They should have worked at least 15 hours per week. C. They should have worked for the employer for more than 5 years. D. They should belong to the top 10 percent of highest paid executives. E. They should be working for an organization with at least 100 employees.

A. They should be working for an organization with 50 or more employees within a 75-mile radius. The Family and Medical Leave Act (FMLA) of 1993 requires organizations with 50 or more employees within a 75-mile radius to provide as much as 12 weeks of unpaid leave after childbirth or adoption, to care for a seriously ill child, spouse, or parent, for an employee's own serious illness, or to take care of urgent needs that arise when a spouse, child, or parent in the National Guard or Reserve is called to active duty.

Thomas and Alex are welders working for two different divisions of the same company. Both have the same level of experience. However, Thomas earns more than Alex. Under the Fair Labor Standards Act (FLSA), which of the following will justify the organization's decision to pay Thomas more than Alex? A. Thomas lives in a location where living expenses are higher B. Alex is younger than Thomas C. Thomas is a U.S. citizen D. Alex is physically disabled E. Alex works the night shift

A. Thomas lives in a location where living expenses are higher In some situations organizations adjust pay to reflect differences in working conditions or labor markets. For example, an organization may pay extra to employees who work the night shift because night hours are less desirable for most workers. Organizations may pay extra to employees in locations where living expenses are higher. These adjustments are called pay differentials.

Executive pay has drawn public scrutiny in recent years. Which of the following statements best explains the reason? A. Top executives' pay is much higher than average workers' pay. B. Most of the top executives' pay is in the form of a salary. C. Top executives come under the category of exempt employees. D. Top executives are paid in the form of commissions. E. Executives are denied short-term or long-term incentives with their pay.

A. Top executives' pay is much higher than average workers' pay. The media have drawn public attention to the issue of executive pay. The issue attracts notice because of the very high pay that the top executives of major U.S. companies have received in recent years.

The __________ requires employers to make jobs available to their workers when they return after fulfilling military duties for up to five years. A. Uniformed Services Employment and Reemployment Rights Act B. Fair Labor Standards Act C. Equal Employment Opportunity Act D. National Labor Relations Board E. Family and Medical Leave Act

A. Uniformed Services Employment and Reemployment Rights Act The Uniformed Services Employment and Reemployment Rights Act (USERRA) requires employers to make jobs available to their workers when they return after fulfilling military duties for up to five years.

Employees of Neronsen Inc. have been working to organize a union. The company's managers wish to maintain nonunion operations, because they believe the union's demands for more generous employee benefits would hurt profits. What evidence could the employees point to in support of the idea that unions are good for business? A. Unions can reduce turnover by giving employees a way to resolve problems. B. Whether unions make employees more productive remains open to question. C. Unions raise wage and benefits costs. D. Evidence has found an association between union coverage and lower profits. E. Unions decrease productivity because of the work rules they insist on.

A. Unions can reduce turnover by giving employees a way to resolve problems. Unions can have positive effects on productivity. They can reduce turnover by giving employees a route for resolving problems.

East Bay Hospital was concerned about rising costs for patients who have surgery for joint replacement. It tried rewarding staff in any quarter they met targets for lower use of supplies, but costs continued to rise. An investigation showed that one source of costs was the readmission of patients who experienced infections after surgery. The human resource department proposed setting up a gainsharing program with an effectiveness measure related to reducing infections. Which statement about gainsharing best supports this recommendation? A. With gainsharing, employees are freed to collaborate on how to improve performance. B. Gainsharing creates a competitive environment, so employees will try to outdo one another. C. Gainsharing is appropriate because the jobs in this case are simple, and so are the performance standards. D. Gainsharing will narrow employees' focus to the key aspects of their individual jobs and rewards. E. The success of gainsharing requires management acceptance of employee input.

A. With gainsharing, employees are freed to collaborate on how to improve performance. Gainsharing addresses the challenge of identifying appropriate performance measures for complex jobs. Gainsharing frees employees to determine how to improve their own and their group's performance. It also broadens employees' focus beyond their individual interests.

Trevor, the human resource manager at XTech, is advising the company's business executives that paying more for labor than competitors can support the company's strategy. Under what conditions might Trevor's idea be most valid? A. XTech pays more to attract top talent, applying employees' knowledge to be more innovative than competitors. B. XTech intends to charge more for than competitors for the same kinds of products. C. XTech hopes other companies will eventually match XTech's pay scale. D. Labor costs are a large part of XTech's total costs. E. XTech is developing a low-price strategy that will generate more sales.

A. XTech pays more to attract top talent, applying employees' knowledge to be more innovative than competitors. An organization may gain an advantage by paying above the market rate if it uses the higher pay as one means to attract top talent and then uses these employees' knowledge to be more innovative, produce higher quality, or work more efficiently.

Which of the following best describes a balanced scorecard? A. a combination of performance measures directed toward the company's long and short-term goals and used as the basis for awarding incentive pay B. a performance review process where the organization collects feedback from customers, managers, and subordinates, assigns ratings, and lists them on the company's performance card C. an arrangement in which the organization distributes shares of stock to all its employees by placing the stock into a trust D. a type of incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary E. a system designed to measure the performance of HR personnel based on the quality of recruitment

A. a combination of performance measures directed toward the company's long and short- term goals and used as the basis for awarding incentive pay A balanced scorecard refers to a combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay.

Which of the following is a union security arrangement that requires a person to pay union dues, but is not required to join the union? A. agency shop B. union shop C. closed shop D. maintenance of membership E. checkoff provision

A. agency shop The agency shop is a union security arrangement that requires the payment of union dues but not union membership.

David is a non-union employee at Orion Inc. Although he does not intend to join the union at the company, he is still required to pay union dues as part of a union contract with the company. Which of the following does this scenario best exemplify? A. an agency shop agreement B. a checkoff provision C. a union shop agreement D. a trade-off provision E. a closed shop agreement

A. an agency shop agreement An agency shop is a union security arrangement that requires the payment of union dues but not union membership.

Under the Americans with Disabilities Act, which of the following employers is most likely to face legal challenges? A. an employer who switches to a risk-based policy after hiring a disabled employee B. an employer who sets guidelines for using waivers C. an employer who discriminates against workers over age 40 in providing pay or benefits D. an employer who has risk-based insurance and then hires an employee with a disability E. an employer who does not have risk-based insurance

A. an employer who switches to a risk-based policy after hiring a disabled employee From the standpoint of avoiding legal challenges, an employer who has risk-based insurance and then hires an employee with a disability is in a stronger position than an employer who switches to a risk-based policy after hiring a disabled employee.

Who among the following is NOT covered by the National Labor Relations Act (NLRA)? A. an individual employed as a supervisor B. an individual employed in the service sector C. an individual employed by a private-sector firm with less than 15 full-time employees D. an individual joining a union that is not recognized by his or her employer E. an individual refraining from activity on behalf of the union

A. an individual employed as a supervisor Most employees in the private sector are covered by the NLRA. However, workers employed as supervisors are among the types of employees not covered under the act.

The Public Transport Union and the Chicago Transit Authority are in conflict with each other. When the conflict escalates, the Chicago City Council decides to intervene and settle the dispute. The Council, after listening to offers from both sides, puts forth a binding settlement, which both parties must accept. In the context of the alternatives to work stoppages, this is an example of ____________. A. arbitration B. fact finder negotiation C. mediation D. checkoff bargain E. grievance leverage

A. arbitration Arbitration is the most formal type of outside intervention to resolve a conflict between management and union. An arbitrator (the Chicago City Council in this scenario) or arbitration board determines a settlement that is binding, meaning the parties have to accept it. Arbitration in the writing of contracts or setting of contract terms has traditionally been reserved for special circumstances such as negotiations between unions and government agencies, where strikes may be illegal or especially costly.

Capnos Inc., an insurance company, incurred losses of about $100 million. To analyze its losses and to overcome them, the company began comparing its own practices against those of its successful competitors. In this scenario, which of the following procedures is adopted by Capnos? A. benchmarking B. job evaluation C. regression analysis D. delayering E. pay structuring

A. benchmarking To compete for talent, organizations use benchmarking, a procedure in which an organization compares its own practices against those of successful competitors.

Global Solutions Corp. pays its executives short-term incentives for meeting financial targets. Which of the following could be included in this incentive pay? A. bonus for meeting the return on investment goal for last year B. bonus for meeting a target for greater customer satisfaction C. stock options D. stock purchase plans E. merit pay

A. bonus for meeting the return on investment goal for last year Short-term incentives include bonuses based on the year's profits, return on investment, or other measures related to the organization's goals. In this example, customer satisfaction scores are not a financial target, but a return on investment is.

When an employee's pay is calculated as a percentage of sales, it is referred to as A. commissions. B. gainsharing. C. a merit plan. D. a variable wage plan. E. profit sharing.

A. commissions. A variation on piece rates and bonuses is the payment of commissions, or pay calculated as a percentage of sales.

Merit pay system decisions are based on two factors: an individual's performance rating and their A. compa-ratio. B. seniority. C. pay grade. D. educational qualifications. E. experience.

A. compa-ratio. The decisions about merit pay are based on two factors: the individual's performance rating and the individual's compa-ratio.

Ramon Inc., a software company, uses job evaluations to establish the value of its jobs in terms of criteria such as their difficulty and their importance to the organization. The company then compares the evaluation points awarded to each job with the pay for each job. If jobs have the same number of evaluation points, but are not paid equally, the pay of the lower-paid job is raised. Based on the scenario, identify the policy adopted by the company. A. comparable-worth policy B. minimum wage policy C. average pay policy D. merit pay policy E. piecework rate policy

A. comparable-worth policy There are several instances where employers have undervalued work performed by women. Some policy makers have proposed a remedy for this called equal pay for comparable worth. This policy uses job evaluation to establish the worth of an organization's jobs in terms of such criteria as their difficulty and their importance to the organization. The employer then compares the evaluation points awarded to each job with the pay for each job. If jobs have the same number of evaluation points, they should be paid equally. If they are not, pay of the lower-paid job is raised to meet the goal of comparable worth.

With reference to the impact of unions on company performance, it can be said that companies wishing to become more competitive must A. continually monitor their labor relations strategy. B. prohibit unions. C. actively encourage unions. D. deny collective bargaining rights to their employees. E. pay workers well above market rates.

A. continually monitor their labor relations strategy. Even if unions do raise productivity, a company's profits and stock performance may still suffer if unions raise wage and benefits costs by more than the productivity gain. In summary, companies wishing to become more competitive must continually monitor their labor relations strategy.

The United Association of Plumbers and Pipefitters is a labor union that seeks to unite plumbers and pipefitters from around the country. The members of this union exhibit the same set of skills and are proficient in relatively similar tasks. Such an association is most likely an example of a(n) _________. A. craft union B. industrial union C. local union D. business union E. vertical union

A. craft union A craft union is a labor union whose members all have a particular skill or occupation. Examples include the United Association of Plumbers and Pipefitters, the International Brotherhood of Electrical Workers, and the National Education Association for teachers.

Token Inc. is an envelope manufacturer based in Dallas. The employees of the organization receive pay based on the amount of work produced. If the output of an employee is more than the average production volume, then the organization pays more for the work performed. In this case, which of the following incentives is offered by Token Inc.? A. differential piecework rate B. minimum wage C. merit pay D. retention bonus E. group bonus

A. differential piecework rate Piecework rate is the wage based on the amount of work produced. Differential piece rates (also called rising and falling differentials) occurs when the piece rate depends on the amount produced. If the worker produces more than the standard output, the piece rate is higher.

Which of the following will most likely be a result of using an unplanned approach, in which each employee's pay is independently negotiated?A. dissatisfied employees B. equal pay C. distribution rates that are stable D. easy employment E. cost control

A. dissatisfied employees An unplanned approach, in which each employee's pay is independently negotiated, will likely result in unfairness, dissatisfaction, and rates that are either overly expensive or so low that positions are hard to fill.

Under a 401(k) plan, the _________ is responsible for choosing specific investments. A. employee B. PGBC C. ERISA fiduciary advisor D. financial institution handling the account E. employer

A. employee The defined-contribution plans, including the 401(k) plan, free employers from the risks that investments will not perform as well as expected. They put the responsibility for wise investing squarely on the shoulders of each employee.

Employee participation in pay-related decisions can be part of a general move toward A. employee empowerment. B. centralized decision making. C. self ownership. D. high power distance. E. federalism.

A. employee empowerment. Employee participation in pay-related decisions can be part of a general move toward employee empowerment.

Ron, the manager of a shipping company, introduces a set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks and subsequent medical costs. The program aims at specific health risks, such as high blood pressure, high cholesterol levels, smoking, and obesity. Based on these offerings, Ron has introduced a(n) _________. A. employee wellness program B. health maintenance organization plan C. preferred provider program D. managed care program E. consumer-driven health program

A. employee wellness program An employee wellness program (EWP) is a set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks. Typically an EWP aims at specific health risks, such as high blood pressure, high cholesterol levels, smoking, and obesity, by encouraging preventive measures such as exercise and good nutrition.

Which of the following is a common condition for gainsharing to be a success in an organization? A. employees who value working in groups B. employers who do not set short-term goals for employees C. work environment with minimum management commitment D. employees who prefer minimum interaction and cooperation E. low levels of cooperation and interaction

A. employees who value working in groups Gainsharing is most likely to succeed when organizations provide the right conditions. One of the common conditions is the presence of employees who value working in groups.

The Transport Union in Atlanta, Georgia, enters into a contract with the Metropolitan Transportation Authority. The contract requires the government agency to pay a yearly bonus to union members. A year after signing the contract, the Metropolitan Transportation Authority refuses to pay the annual bonus, which triggers a conflict between the union and the agency. A third party intervenes to resolve the conflict between the two parties. The third party evaluates the arguments of both sides and proposes a solution. Both parties have the right to decline the proposal, but they decide to accept it. In the context of the alternatives to work stoppage, the third party in this scenario is an example of a(n) . A. fact finder B. arbitrator C. stakeholder D. moderator E. rights enforcer

A. fact finder A fact finder is a third party to collective bargaining who reports the reasons for a dispute, the views and arguments of both sides, and possibly a recommended settlement, which the parties may decline.

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a ________ program. A. gainsharing B. standard hour C. bonus D. commission E. piece rate pay

A. gainsharing Organizations that want employees to focus on efficiency and on group incentives may adopt a gainsharing program, which measures increases in productivity and effectiveness and distributes a portion of each gain to employees.

Which of the following is a factor that has been associated with the decline in union membership? A. high regulation in such areas as workplace safety and equal employment opportunity B. low competition between companies for scarce human resources C. high job growth in the manufacturing sector of the economy D. low costs of unionized labor E. low prospects for growth in the service industry

A. high regulation in such areas as workplace safety and equal employment opportunity Stricter government regulations in areas like workplace safety and equal employment opportunity leaves fewer areas in which unions can show an advantage over what employers must already offer. This is one of the reasons for the decline of union membership in the U.S.

Which of the following is an advantage of a qualified plan in retirement benefits? A. immediate tax deductions for the funds employees contribute to the plan B. taxable earnings on the money in the retirement fund C. tax-free withdrawals for highly compensated employees D. exemption of contribution from employees E. a retirement plan that provides benefits exclusively to its owners and top managers

A. immediate tax deductions for the funds employees contribute to the plan In the case of retirement plans, the advantages include the ability for employees to immediately take a tax deduction for the funds they contribute to the plans, no immediate tax on employees for the amount the employer contributes, and tax-free earnings on the money in the retirement fund.

The many kinds of incentive pay fall into three broad categories: A. incentives linked to individual, group, or organizational performance B. incentives linked to output, productivity, or quality of a product C. pay linked to goals, focus, or achievements of an organization D. pay related to base salary, bonus, and travel allowance E. incentives obtained in the form of company shares, gift coupons, and trial products

A. incentives linked to individual, group, or organizational performance The many kinds of incentive pay fall into three broad categories: incentives linked to individual, group, or organizational performance. Choices from these categories should consider not only their strengths and weaknesses, but also their fit with the organization's goals.

Which of the following is an unfair labor practice by unions under the Taft-Hartley Act? A. insisting on provisions that the employer may hire only workers who are union members B. nominating candidates to union office and conducting secret-ballot elections C. going out on strike to secure better working conditions D. refraining from activity on behalf of the union E. joining a union not recognized by the employer

A. insisting on provisions that the employer may hire only workers who are union members Under the Taft-Hartley Act, unions may not restrain employers through certain actions. This covers contract negotiations and includes actions such as insisting on illegal provisions, provisions that the employer may hire only workers who are union members or "satisfactory" to the union, or working conditions to be determined by a group to which the employer does not belong.

Under the FLSA, exempt status of employees depends on their A. job responsibilities and salary. B. organizational commitment. C. job title. D. work experience. E. job qualifications.

A. job responsibilities and salary. Exempt status depends on the employee's job responsibilities, salary level, and "salary basis."

In the U.S., the amount of sick leave given to employees is often based on . A. length of service B. position within the company C. age D. educational background E. prior job experience

A. length of service Sick leave programs pay employees for days not worked because of illness. The amount of sick leave is often based on length of service, so that it accumulates over time—for example, one day added to sick leave for each month of service.

The primary function of a merit increase grid is to A. make pay increases consistent. B. further increase the pay of those whose pay is relatively higher for their job. C. increase the employees' compa-ratios. D. stabilize economic conditions. E. increase incentives on a year-by-year basis.

A. make pay increases consistent. To make the merit increases consistent, so they will be seen as fair, many merit pay programs use a merit increase grid.

Sarah's employer provides her with an insurance plan that requires her to obtain approval before being admitted to the hospital for surgical procedures. Which variation of health coverage does this illustrate? A. managed care B. health maintenance organization C. employee wellness D. flexible spending account E. consumer-driven health plan

A. managed care With managed care, patients may be required to obtain approval before hospital admissions, and the insurer may require alternatives to hospital stays—for example, outpatient surgery or home health care.

Lola, a neutral third party, tries to resolve a conflict initiated by a manager and union representative at Thornton Inc. She does so by listening to what both parties have to say about the issue and facilitating the negotiations. In this scenario, Lola is exercising which of the following types of alternatives to work stoppages? A. mediation B. final-offer arbitration C. fact-finder technique D. conventional arbitration E. rights arbitration

A. mediation Mediation is the least formal and most widely used of these procedures. A mediator hears the views of both sides and facilitates the negotiation process.

Julianna, the HR manager at Hudson Corp., wants to ensure that incentive pay rewards the individuals who contribute the most to the organization and whose contributions have grown since their pay rates were originally set. She determines that she can best accomplish these goals by paying an incentive amount based on individuals' performance ratings and compa-ratios. In this scenario, Julianna would be applying the system of A. merit pay. B. piecework pay. C. standard hour pay. D. commissions. E. attendance bonus.

A. merit pay. Merit pay is a system of linking pay increases to ratings on performance appraisals. The decisions about merit pay are based on two factors: the individual's performance rating and the individual's compa-ratio.

Bargaining over a new union contract typically occurs A. only about every three years. B. year after year. C. only on the anniversary of the union's establishment. D. when the union wants more power over an organization. E. when a company feels a union is overstepping its boundaries.

A. only about every three years. Bargaining over a new contract typically occurs only about every three years.

Which of the following organizations benefits when switching from a defined-benefit plan to cash balance plans? A. organizations with many experienced employees B. organizations with a few skilled employees C. organizations with many young employees D. organizations with many retired employees E. organizations with highly skilled, young employees

A. organizations with many experienced employees For an organization with many experienced employees, switching from a defined-benefit plan can produce great savings in pension benefits.

Contrary to Western European countries, the United States has no legal requirements regarding employee . A. paid vacation time B. Social Security benefits C. unemployment insurance D. pension plans E. 401k contributions

A. paid vacation time The United States, in contrast to Western European countries, has no legal requirement regarding employees' paid vacation time.

Jules & Co., a smartphone manufacturing company, provides wages to its employees based on the number of smartphones the workers assemble. The more the employees assemble, the more they earn. This type of plan is called a A. piecework rate plan. B. merit pay plan. C. Scanlon plan. D. profit-sharing plan. E. rapid hour plan.

A. piecework rate plan. As an incentive to work efficiently, some organizations pay production workers a piecework rate, a wage based on the amount they produce.

Which of the following is an organization-level incentive plan that is intended to motivate employees to align their activities with the organization's goals? A. profit sharing B. gainsharing C. merit pay D. group bonus E. Scanlon plan

A. profit sharing Organizations offer incentive pay tied to organizational performance measures. These organization-level incentives can motivate employees to align their activities with the organization's goals. Profit sharing is an example of organizational incentives.

If a company distributes stock to employees by granting stock options, employees exercise the option when they A. purchase the stock. B. sell the stock. C. retain the stock. D. distribute the stock. E. liquidate the stock.

A. purchase the stock. Employers grant stock options with the right to buy a certain number of shares of stock at a specified price. Purchasing the stock is called exercising the option.

Jeff owns and manages a small electronics repair store. He determines the time required by his employees to complete each task assigned by him. When employees complete the repairs in less time, they receive an amount of pay equal to that time determined by him. In this scenario, Jeff is using a A. standard hour plan. B. differential piecework plan. C. merit pay plan. D. straight piecework plan. E. Scanlon plan.

A. standard hour plan. An incentive plan that pays workers extra for work done in less than a preset "standard time" is referred to as a standard hour plan.

Wayan Inc., a health insurance company, pays clerks an incentive based on the average amount of work completed per hour. Wayan pays $10 for processing 20 invoices per hour. An employee who processes 30 invoices would earn $15 per hour. Hence, Wayan pays the same rate per invoice no matter how many invoices an employee processes per hour. Which type of incentive pay does this scenario illustrate? A. straight piecework plan B. falling differential C. rising differential D. standard hour plan E. straight commission plan

A. straight piecework plan A straight piecework plan is incentive pay in which an employer pays the same rate per piece, no matter how much a worker produces.

Which of the following actions related to benefits can best give employers an advantage in the labor market? A. teaching employees about the value of their benefits B. limiting benefits to a few simple options C. explaining complex benefits with sophisticated language D. keeping messages about benefits basic and uncreative E. simplifying messages about benefits by delivering them through one medium

A. teaching employees about the value of their benefits In practice, it is difficult for employees and job applicants to understand the value of their benefits, especially the complexities of health insurance and the nuances of getting the most out of retirement benefits. The edge in the labor market goes to employers that help them understand. To increase the likelihood that employees will receive and understand the messages, employers can spread messages through multiple channels, online and offline.

Which of the following laws permits states to pass right-to-work laws? A. the Taft-Hartley Act B. the Sarbanes-Oxley Act C. the Landrum-Griffin D. the Hatch Act E. the Maguire Act

A. the Taft-Hartley Act The Taft-Hartley Act allows the states to pass so-called right-to-work laws, which make union shops, maintenance of membership, and agency shops illegal. The idea behind such laws is that requiring union membership or the payment of union dues restricts the employees' right to freedom of association.

A major problem with ESOPs is that A. they carry a significant risk for employees. B. employees are not allowed to participate in votes by shareholders. C. the stocks within the trust are too widely diversified to earn high returns. D. any earnings from the trust holdings are taxed at an extremely high rate. E. they result in reduced profitability for the employees.

A. they carry a significant risk for employees. A disadvantage of ESOPs is that they carry a significant risk for employees. By law, an ESOP must invest at least 51 percent of its assets in the company's own stock in contrast to other kinds of stock funds that hold a wide diversity of companies. Problems with the company's performance therefore can take away significant value from the ESOP. Many companies set up ESOPs to hold retirement funds, so these risks directly affect employees' retirement income.

A _________ pension plan allows pension benefits for key employees, such as highly paid managers, to exceed a government-specified share of total pension benefits. A. top-heavy B. multiemployer C. special draw rights D. deferred E. defined-contribution

A. top-heavy Employers may vest employees more quickly if they wish. Two less-common situations have different vesting requirements. One is a "top-heavy" pension plan, meaning pension benefits for key employees (such as highly paid top managers) exceed a government-specified share of total pension benefits.

James is the founder of a new start-up company. He hires mostly young employees who are fresh out of college. He finds that most of his employees are willing to develop their knowledge and skills and would like to take courses to improve themselves. This additional knowledge would benefit James' company, so he decides to encourage this behavior. Which of the following programs is James most likely to use in order to do so? A. tuition reimbursement program B. employee wellness program C. worker's compensation program D. short-term vesting program E. mature education program

A. tuition reimbursement program To encourage learning and attract the kinds of employees who wish to develop their knowledge and skills, many organizations offer tuition reimbursement programs. A typical program covers tuition and related expenses for courses that are relevant to the employee's current job or future career at the organization.

Most organizations offer _________ to encourage learning and attract the kinds of employees who wish to develop their knowledge and skills. A. tuition reimbursement programs B. paid vacations C. pension plans D. quarterly promotions E. medical insurance plans

A. tuition reimbursement programs To encourage learning and attract the kinds of employees who wish to develop their knowledge and skills, many organizations offer tuition reimbursement programs.

Which of the following strategies can be legally adopted by organizations looking to restructure the workforce to minimize the expense of benefits? A. using more independent contractors rather than hiring additional employees B. limiting the coverage on life insurance based upon an employee's age C. using more full-time rather than part-time employees D. recruiting new employees instead of demanding overtime from existing employees E. substituting HMO and PPO plans with traditional health insurance plans

A. using more independent contractors rather than hiring additional employees Organizations looking for ways to control staffing costs may look for ways to structure the workforce so as to minimize the expense of benefits. They may require overtime rather than adding new employees, hire part-time rather than full-time workers, and use independent contractors rather than hire employees.

Employees' conclusions about equity depend on A. what they choose as a standard of comparison. B. how much money they think the company CEO makes. C. what level of income they believe they should be at by this point in their lives. D. what benefits they receive. E. if they think they can bargain for a higher rate of pay.

A. what they choose as a standard of comparison. Employees' conclusions about equity depend on what they choose as a standard of comparison. In general, employees compare their pay and contributions against several yardsticks: What they think employees in other organizations earn for doing the same job. What they think other employees holding different jobs within the organization earn for doing work at the same or different levels. What they think other employees in the organization earn for doing the same job as theirs.

Pay ranges are most common for _________. A. white-collar jobs B. piece-rate jobs C. jobs that are covered by union contracts D. automotive workers E. construction workers

A. white-collar jobs Pay ranges are most common for white-collar jobs and for jobs that are not covered by union contracts.

Compa-ratio A. is defined as the ratio of average pay to the midpoint of the pay range. B. is defined as the ratio of the average pay for the grade divided by the minimum pay for the grade. C. can range from 0 to 100 percent. D. uses data from market-pay surveys. E. measures the degree to which new skills learnt are consistent with the increases in pay.

A.is defined as the ratio of average pay to the midpoint of the pay range. As part of its management responsibility, the HR department should compare actual pay to the pay structure, making sure that policies and practices match. A common way to do this is to measure a compa-ratio, the ratio of average pay to the midpoint of the pay range.

On average, out of every dollar spent by a company on employee compensation, more than cents goes to employee benefits. A. 75 B. 30 C. 50 D. 15 E. 20

B. 30 Like other forms of compensation, benefits impose significant costs. On average, out of every dollar spent on compensation, more than 30 cents goes to benefits.

Jane and Martha work at Anden Inc. Jane claims that forming a union can help enhance workers' bargaining power with management. Martha, however, argues that it is quite challenging to form a union. Which of the following statements strengthens Martha's argument? A. Unionized employees have low negotiating power with the management. B. A union needs to convince a majority of workers to have a common goal. C. Union workers generally have lower productivity than nonunion workers. D. A union's goals must always contradict the employer's goals. E. A union must only include members with highly conceptual skills who can easily deal with conflict resolution.

B. A union needs to convince a majority of workers to have a common goal. To meet its objectives, a union needs to convince a majority of workers that they should receive better pay or other employment conditions. For a union organizing process to work, at least 30% of an organization's employees must sign an authorization card.

Cindy and Alex execute the same roles and responsibilities at their organization. However, Alex earns more than Cindy. Under the laws governing equal employment opportunity, which of the following statements will justify the organization's decision to pay Alex more than Cindy? A. Alex is white, and Cindy is black. B. Alex has more experience than Cindy. C. Cindy has a hearing impairment. D. Men have more stamina, so they can work longer hours. E. Cindy is an immigrant.

B. Alex has more experience than Cindy. The goal of equal employment opportunity laws is for employers to provide equal pay for equal work. Job descriptions, job structures, and pay structures can help organizations demonstrate that they are upholding these laws. These laws do not guarantee equal pay for men and women, whites and minorities, or any other groups, because so many legitimate factors, from education to choice of occupation, affect a person's earnings.

Which of the following is a similarity between unemployment insurance benefits and workers' compensation benefits? A. Both of the programs are funded by the federal taxes on employees. B. Both of the programs' costs depend on the organization's experience ratings. C. Both of the programs have the same funding costs across the states. D. Both of the programs replace the same percentage of an individual's previous earnings. E. Both of the programs provide the same amount of compensation to the employees.

B. Both of the programs' costs depend on the organization's experience ratings. The size of the unemployment insurance tax imposed on each employer depends on the employer's experience rating. As with unemployment insurance, unfavorable experience ratings lead to higher premiums for workers' compensation.

Which of the following is true of child care? A. At the highest level of involvement, organizations provide vouchers or discounts for employees to use at existing child care facilities. B. Companies that provide child care facilities face liability concerns. C. Provision of child care is mandatory under the Family and Medical Leave Act. D. Child care should be limited to provision of leaves to employees. E. Child care must include death benefits for it to be considered as a qualified plan.

B. Companies that provide child care facilities face liability concerns. Child care benefits may take several forms, requiring different levels of organizational involvement. At the highest level of involvement, the employer provides child care at or near the work site. Staffing a child care facility is costly and involves important liability concerns.

Which of the following statements is true about labor markets? A. Organizations compete to sell labor in the labor market. B. Competition for labor establishes the minimum an organization must pay to hire an employee for a particular job. C. Changes in the CPI do not affect the labor market. D. Cost-of-living considerations have little impact on labor-market rates. E. An organization's competitors in labor markets only include companies with different products.

B. Competition for labor establishes the minimum an organization must pay to hire an employee for a particular job. Competition for labor establishes the minimum an organization must pay to hire an employee for a particular job. If an organization pays less than the minimum, employees will look for jobs with other organizations.

refers to incentive pay in which the wage paid is higher when a greater amount is produced. A. Profit sharing B. Differential piece rate C. Gainsharing D. Scanlon pay E. Merit pay

B. Differential piece rate Differential piece rate refers to an incentive pay in which the piece rate is higher when a greater amount is produced.

Which of the following is an advantage of cafeteria-style plans? A. Employees do not have to select their individual plans. B. Employees can get a better understanding of the value of benefits provided. C. These types of plans have lower administrative costs. D. Since employees will select the benefits that they need the most, it reduces the overall costs. E. When companies provide cafeteria-style plans, they do not have to pay unemployment insurance tax.

B. Employees can get a better understanding of the value of benefits provided. Cafeteria-style plans have a number of advantages. The selection process can make employees more aware of the value of the benefits, particularly when the plan assigns each employee a sum of money to allocate to benefits. Also, the individual choice in a cafeteria plan enables each employee to match his or her needs to the company's benefits, increasing the plan's actual value to the employee.

Which of the following is true of employee benefits? A. Employees have a thorough understanding of what benefits they have and what the market value of these benefits is. B. Employees have a hard time understanding the cost and value of their benefits. C. It is up to employees to determine the cost and value of their benefits. D. Employees, for the most part, are just not interested in their benefits. E. Employers have very limited options for communicating information about benefits.

B. Employees have a hard time understanding the cost and value of their benefits. In practice, it is difficult for employees and job applicants to understand the value of their benefits, especially the complexities of health insurance and the nuances of getting the most out of retirement benefits.

Janet, a sales manager at Drexler Inc., claims that labor and management are rivals for most organizations. Carmella, the HR manager, says she is aware of exceptions. Which statement best supports Carmella's perspective? A. After the 1980s, most unions and organizations have acted more like adversaries. B. Examples of cooperation between labor and management include employee involvement in decision making and self-managing teams. C. Finding win-win solutions is almost impossible because unions and management have conflicting goals. D. Organizations often define jobs narrowly, which is a sign of cooperation. E. Creating a union necessarily forces employers to pay more wages, which results in loss of profits.

B. Examples of cooperation between labor and management include employee involvement in decision making and self-managing teams. Since the 1980s, there has been greater acceptance of the view that greater cooperation between labor and management can increase commitment and motivation while making the workplace more flexible. Cooperation between labor and management may feature employee involvement in decision making, self-managing employee teams, labor-management problem- solving teams, broadly defined jobs, and sharing of financial gains and business information with employees.

Scorla Automobiles is a manufacturing company based in Nevada. The employees of Scorla are paid the lowest amount under federal or state law, which is stated as an amount of pay per hour. Which of the following laws is the organization abiding by in this scenario? A. laws governing equal employment opportunity B. Fair Labor Standards Act (FLSA) of minimum wage C. Fair Labor Standards Act (FLSA) of overtime D. laws governing prevailing wages E. product market laws

B. Fair Labor Standards Act (FLSA) of minimum wage In the United States, employers must pay at least the minimum wage established by law. At the federal level, the 1938 Fair Labor Standards Act (FLSA) establishes a minimum wage that is now $7.25 per hour

Pentrall, a healthcare company, provides a lower training rate to its employees belonging to the age group of 18 to 19 years. The rate is applicable for a period of 90 days. In this case, which of the following laws will justify the organization's decision to pay the lower pay? A. laws governing equal employment opportunity B. Fair Labor Standards Act (FLSA) provisions for minimum wage C. Fair Labor Standards Act (FLSA) provisions for overtime D. laws governing prevailing wages E. Fair Labor Standards Act (FLSA) provisions for child labor

B. Fair Labor Standards Act (FLSA) provisions for minimum wage At the federal level, the 1938 Fair Labor Standards Act (FLSA) establishes a minimum wage that is now $7.25 per hour. The FLSA also permits a lower "training wage," which employers may pay to workers under the age of 20 for a period of up to 90 days.

The __________ usually provides the neutral third party who is used for the common alternatives to strikes. A. National Labor Relations Board B. Federal Mediation and Conciliation Service C. Federal Labor Relations Board D. Federal Arbitration and Consulting Service E. National Mediation and Arbitration Commission

B. Federal Mediation and Conciliation Service Because strikes are so costly and risky, unions and employers generally prefer other methods for resolving conflicts. Three common alternatives—mediation, use of a fact-finder, and arbitration—rely on a neutral third party, usually provided by the Federal Mediation and Conciliation Service (FMCS).

Which of the following statements is true according to the Davis-Bacon Act of 1931 and the Walsh- Healy Public Contracts Act of 1936? A. Under these laws, individuals aged 18 and 19 may not be employed in hazardous occupations defined by the Department of Labor. B. Federal contractors must pay their employees at rates at least equal to the prevailing wages in the area. C. The overtime rate applies to the hours worked beyond 45 in one week. D. Employers must pay a training wage to workers under the age of 15 for a period of up to 60 days. E. Organizations can defend themselves against claims of discrimination by showing that they pay the going market rate.

B. Federal contractors must pay their employees at rates at least equal to the prevailing wages in the area. Two federal laws, the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, govern pay policies of federal contractors. Under these laws, federal contractors must pay their employees at rates at least equal to the prevailing wages in the area.

Which of the following statements is true about the Consumer Price Index (CPI)? A. The CPI helps organizations in the product markets decide an upper limit on the pay they will offer. B. Following and studying changes in the CPI helps employers prepare for changes in the demands of the labor market. C. The CPI helps organizations lure top-quality employees. D. The CPI helps control labor markets' demand for pay increases. E. The CPI helps organizations to compete with companies in other industries that hire similar employees.

B. Following and studying changes in the CPI helps employers prepare for changes in the demands of the labor market. The federal government tracks trends in the nation's cost of living with a measure called the Consumer Price Index (CPI). Following and studying changes in the CPI can help employers prepare for changes in the demands of the labor market.

is a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees. A. Profit rate B. Gainsharing C. Commission sharing D. Merit rate E. Group bonus

B. Gainsharing Gainsharing is a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees.

Ravi is the CEO of a magazine publishing company. He wants to provide benefits for his employees, but would still like to control his company's costs. Jess, the head of the HR department, suggests implementing a cafeteria-style plan. What would be the most likely benefit of Ravi doing so? A. He will save time by using software packages to offer benefits packages. B. He will avoid the cost of providing employees with benefits they don't value. C. Having a non-standardized plan will make Ravi's company seem cutting-edge. D. Employees of the company, including Ravi, will be given more vacation days. E. Costs will be easy to estimate since all benefits options will be taken into consideration.

B. He will avoid the cost of providing employees with benefits they don't value. In a cafeteria-style plan, employees would not select benefits they don't want, leading to the company avoiding the cost of providing employees with benefits they don't value.

How does the balanced scorecard help organizations deal with unethical behaviors of executives? A. It allows companies to deduct executive pay that exceeds $1 million. B. It ensures that by rewarding the achievement of a variety of goals, temptation on the executive's part to gain bonuses by manipulating data are reduced. C. It encourages executives to hold on to their stock options when the company is undergoing financial problems. D. It forces executives to focus on the company's long-term success because ESOP funds are guaranteed by the Pension Benefit Guarantee Corporation. E. It mandates that an ESOP invest at least 51% of its assets in the company's own stock.

B. It ensures that by rewarding the achievement of a variety of goals, temptation on the executive's part to gain bonuses by manipulating data are reduced. Rewarding achievement of a variety of goals in a balanced scorecard reduces the temptation to win bonuses by manipulating financial data.

Which of the following best describes a card-check provision? A. It is an arrangement that allows the employer, on behalf of the union, to automatically deduct union dues from the employees' paychecks. B. It is an agreement that if a certain percentage of employees sign an authorization card, the employer will recognize their union representation. C. It is an alternative form of union membership in which members receive discounts on insurance and credit cards rather than representation in collective bargaining. D. It is a formal and binding pledge by the employer not to oppose organizing efforts elsewhere in the company. E. It is a formal and binding pledge by at least 51 percent of employees to not unionize.

B. It is an agreement that if a certain percentage of employees sign an authorization card, the employer will recognize their union representation. A card-check provision is an agreement that if a certain percentage—by law, at least a majority—of employees sign an authorization card, the employer will recognize their union representation. An impartial outside agency, such as the American Arbitration Association, counts the cards.

Which of the following statements is true of a performance bonus? A. It is designed to reward group performance. B. It should be re-earned by employees during each performance period. C. It is rolled into base pay and provided yearly or monthly. D. It lacks flexibility and hence it is less popular. E. It is exclusively linked to subjective ratings, rather than objective performance measures.

B. It should be re-earned by employees during each performance period. Like merit pay, performance bonuses reward individual performance, but bonuses are not rolled into base pay. The employee must re-earn them during each performance period.

Jack has to decide between two jobs that provide equal pay. He decides to compare the health care benefits provided by both jobs to arrive at a decision. He wants to choose the job that offers him a flexible spending account over the job that offers him managed care. Which of the following statements best supports Jack's preference? A. With managed care, the insurer makes decisions about health care, which helps avoid unnecessary procedures. B. Money in flexible spending accounts is not taxed, so employees get more take-home pay. C. The money in the flexible spending accounts must meet IRS requirements. D. At the end of each year, money remaining in a flexible spending account reverts to the employer. E. Contributions to a flexible spending account may not exceed $5,000 per year.

B. Money in flexible spending accounts is not taxed, so employees get more take-home pay. The major advantage of flexible spending accounts is that the money in the account is not taxed, so employees will have more take-home pay.

Mike, the CEO of an automobile company, believes that profit sharing has increased the productivity of his organization. He feels that an incentive plan motivates employees to be more productive. Which of the following statements strengthens Mike's argument? A. In a profit-sharing plan, employees are the owners of the organization. B. Profit sharing helps employees to cooperate and to focus on organizational interests. C. Profit sharing makes employees workaholics. D. In profit sharing, employees contribute their base salary for the development of the organization. E. Profit sharing benefits employees even if the organization makes less profit or no profit.

B. Profit sharing helps employees to cooperate and to focus on organizational interests. Organizations use profit sharing for a number of reasons. It may encourage employees to think more like owners, taking a broad view of what they need to do in order to make the organization more effective. They are more likely to cooperate and less likely to focus on narrow self-interests.

Kelly, a new employee, learns her company provides a group insurance plan that she can enroll in. Her friend, Michael, suggests that Kelly would be able to save money if she chooses to purchase an individual insurance plan over the company's group insurance plan. Which of the following weakens Michael's argument? A. Individual plans are typically offered only to senior executives. B. Rates for group insurance are typically lower than those of individual policies. C. Kelly will not be eligible for other benefits if she does not enroll in a group insurance plan. D. Employees get more for their money when they receive insurance as a group benefit. E. Kelly will get more take-home pay if she opts for a group insurance plan.

B. Rates for group insurance are typically lower than those of individual policies. Rates for group insurance are typically lower than for individual policies. As a result, Kelly would save money by choosing a group insurance policy over an individual insurance policy.

What is the difference between stock options and an employee stock ownership plan (ESOP)? A. Stock options carry significant risk, whereas ESOPs are risk-free. B. Stock options are usually granted to company executives, whereas ESOPs are provided to all employees. C. In stock options, stocks are placed into a trust, whereas ESOPs give employees the right to buy a certain number of shares of stock. D. Under stock options, employees can sell their stocks, whereas ESOPs do not allow employees to sell their stocks. E. Earnings from stock options are exempt from income taxes, whereas earnings from ESOPs are taxable.

B. Stock options are usually granted to company executives, whereas ESOPs are provided to all employees. While stock options are most often used with top management, a broader arrangement is the employee stock ownership plan (ESOP). In an ESOP, the organization distributes shares of stock to its employees by placing the stock into a trust managed on the employees' behalf.

Which of the following statements is true of equal employment opportunity laws? A. These laws guarantee equal pay for whites and minorities. B. The goal of these laws is for employers to provide equal pay for equal work. C. Job descriptions and job structures cannot help organizations demonstrate that they are upholding these laws. D. These laws guarantee equal pay for men and women. E. Under these laws, employers cannot tie differences in pay to business-related considerations.

B. The goal of these laws is for employers to provide equal pay for equal work. Under the laws governing equal employment opportunity, employers may not base differences in pay on an employee's age, sex, race, or other protected status. Any differences in pay must instead be tied to such business-related considerations as job responsibilities or performance. The goal is for employers to provide equal pay for equal work.

Which of the following is true of a cash balance plan? A. All contributions to the plan come from the employee. B. The money earns interest at a predetermined rate, such as the rate paid on U.S. Treasury bills. C. Older employees with many years of service benefit to a greater degree than do younger workers just starting their careers. D. It penalizes employees for changing jobs. E. Employees cannot predict retirement benefits under cash balance plans.

B. The money earns interest at a predetermined rate, such as the rate paid on U.S. Treasury bills. The money in a cash balance plan earns interest according to a predetermined rate, such as the rate paid on U.S. Treasury bills.

Which of the following statements is true of right-to-work laws? A. They are federal laws that protect employees' right to lifetime employment. B. They are state laws that make union shops, maintenance of membership, and agency shops illegal. C. They are laws that protect the right of unions to insist that the employer hire only union members. D. They are laws that allow terminating an existing contract and striking for a new one without notifying the employer. E. They are federal laws that ensure that all union members get pension benefits.

B. They are state laws that make union shops, maintenance of membership, and agency shops illegal. The Taft-Hartley Act allows the states to pass so-called right-to-work laws, which make union shops, maintenance of membership, and agency shops illegal. The idea behind such laws is that requiring union membership or the payment of union dues restricts the employees' right to freedom of association.

Which of the following statements is true of compensable factors? A. They are generally statistically derived. B. They are the characteristics of a job that a firm values and chooses to pay for. C. They refer to the factors that are important for setting the two-tier wage system. D. They describe all aspects of the jobs being evaluated. E. They are used to ensure equity among employees.

B. They are the characteristics of a job that a firm values and chooses to pay for. To conduct a job evaluation, the job evaluation committee identifies each job's compensable factors, meaning the characteristics of a job that the organization values and chooses to pay for.

Kristen, a production manager at KartWheel Designs Inc., believes that the formation of labor unions may have a negative impact on the performance of a company's stock. Which of the following statements is likely to strengthen Kristen's belief? A. Workers in unionized organizations tend to exhibit lower levels of productivity than workers in nonunion organizations. B. Unionized organizations are often required to pay their workers higher wages and offer them more generous benefits. C. Studies reveal that unions do not have any positive effects on performance measures, such as productivity, profits, and stock performance. D. Unions tend to have a positive impact on the self-esteem of their members. E. The formation of labor unions is likely to lead to conflicts between social and labor union goals.

B. Unionized organizations are often required to pay their workers higher wages and offer them more generous benefits. On average, union members receive higher wages and more generous benefits than nonunion workers, and evidence shows that unions have a large negative effect on profits.

The National Labor Relations Act is also known as the ________. A. Taft-Hartley Act B. Wagner Act C. Landrum-Griffin Act D. Sarbanes-Oxley Act E. Hatch Act

B. Wagner Act Perhaps the most dramatic example of labor laws' influence is the 1935 passage of the Wagner Act (also known as the National Labor Relations Act, or NLRA), which actively supported collective bargaining.

Timothy, a manager at Zillful Company, is concerned because negotiations with the union are breaking down, and the union is discussing a strike. What would be the major harm from management's perspective? A. The company would have to hire replacement workers, and they might be more productive. B. When the company does not have enough workers, production output will fall. C. Employees will call off the strike if they do not receive pay from their employer. D. Employees are rarely serious when they threaten to go on strike. E. Employees will decide they are better off without union representation.

B. When the company does not have enough workers, production output will fall. During a strike, the employer loses production unless it can hire replacement workers, and even then, productivity may be reduced.

Which of the following is characteristic of benefits required by the Social Security Act? A. Workers receive no benefits until they reach the full retirement age. B. Workers are compensated according to their past earnings and retirement age. C. Workers receive increased benefits when they earn more than the exempt amount. D. The cost of the program is borne entirely by the employers, who pay a payroll tax. E. The program benefits persons who are financially dependent on current workers.

B. Workers are compensated according to their past earnings and retirement age. Under the Social Security program, workers who meet eligibility requirements receive the retirement benefits according to their age and earnings history. If they elect to begin receiving benefits at full retirement age, they can receive full benefits, or if they elect to begin receiving benefits at age 62, they receive benefits at a permanently reduced level.

Kelltech Inc. is a sales and marketing company based in Baltimore. It wants to combine the advantages of different incentive-pay plans and help employees understand the organization's goals. Which of the following will help the company accomplish this goal? A. the Scanlon plan B. a balanced scorecard C. a dashboard D. an employee stock ownership plan E. a differential piece rate system

B. a balanced scorecard A combination of performance measures directed toward a company's long- and short-term goals and used as the basis for awarding incentive pay is called a balanced scorecard.

When Greater Aircraft acquired Middling Aircraft, the executives of the two companies identified key employees they needed for the combined companies' success. One of them was Michael, the vice president of engineering. The executives offered Michael a one-time bonus of $25,000 if he stayed with Greater Middling for 12 months following the acquisition. In this scenario, Michael's $25,000 represents A. a commission B. a retention bonus C. stock options D. merit pay E. a differential piece rate

B. a retention bonus Retention bonuses are one-time incentives paid in exchange for remaining with the company.

Collective bargaining differs from one situation to another in terms of . A. bargaining provisions B. bargaining structure C. bargaining campaigns D. bargaining strategies E. bargaining techniques

B. bargaining structure Collective bargaining differs from one situation to another in terms of bargaining structure— that is, the range of employees and employers covered by the contract.

In collective bargaining, the term ________ refers to the range of employees and employers covered by the contract. A. arbitrated team B. bargaining structure C. union leverage D. differentiated group E. associate mediation

B. bargaining structure In collective bargaining, the term bargaining structure refers to the range of employees and employers covered by the contract.

Which of the following is the result of combining more assignments into a single layer, thus giving managers more flexibility in making assignments and awarding pay increases? A. outsourcing B. broad bands C. rightsizing D. benchmarks E. downsizing

B. broad bands By combining more assignments into a single layer, organizations give managers more flexibility in making assignments and awarding pay increases. These broader groupings often are called broad bands.

Benefit plans that permit employees to choose the types and amounts of benefits they want from a set of alternatives are called A. preferred provider plans. B. cafeteria-style plans. C. defined-benefit plans. D. flexible spending accounts. E. cash balance plans.

B. cafeteria-style plans. Cafeteria-style plans offer employees a set of alternatives from which they can choose the types and amounts of benefits they want.

A pay policy line A. shows the mathematical relationship between the minimum pay and the maximum pay in an organization. B. can be generated using a statistical method called regression analysis. C. requires market-pay-rate data on all jobs in the organization. D. can seldom provide information on the market pay level for a given job evaluation. E. reflects the pay structure in the market, which always matches rates in the organization.

B. can be generated using a statistical method called regression analysis. A pay policy line is a graphed line showing the mathematical relationship between job evaluation points and pay rate. This can be done statistically on a computer, using a procedure called regression analysis.

Joe and his colleagues are members of the union at Pinnacle Inc. While negotiating the terms of the labor contract, they request their employer to deduct union dues from their paychecks. This type of contractual arrangement between the two parties is known as a(n) . A. agency shop B. checkoff provision C. maintenance provision D. trade-off provision E. union shop

B. checkoff provision Under a checkoff provision, the employer, on behalf of the union, automatically deducts union dues from employees' paychecks.

Barbara, a job applicant at Solace Corp., finds that the job she is applying for requires her to be a union member before being hired. She also learns that this arrangement is illegal under the National Labor Relations Act. In the context of the security provisions related to union membership, this Solace Corp. has a(n) arrangement. A. open shop B. closed shop C. checkoff provision D. union shop E. agency shop

B. closed shop The strongest union security arrangement is a closed shop, under which a person must be a union member before being hired. Under the National Labor Relations Act, closed shops are illegal.

The National Labor Relations Board has two major functions: one is to prevent unfair labor practices, and the other one is to A. conduct periodic onsite inspections of union and company financial records. B. conduct and certify representation elections. C. make rules and regulations for union-management relations. D. levy punitive charges on violators. E. monitor and regulate labor relations in small, local businesses.

B. conduct and certify representation elections. The National Labor Relations Board has two major functions: to conduct and certify representation elections and to prevent unfair labor practices. It does not initiate either of these actions but responds to requests for action.

One of the substitutes for traditional organizing is to conduct , which bring financial, political, or public pressure on employers during union organization and contract negotiation. A. collective coercion B. corporate campaigns C. indirect provisions D. associate campaigns E. social campaigns

B. corporate campaigns One of the alternatives to traditional organizing is to conduct corporate campaigns—bringing public, financial, or political pressure on employers during union organization and contract negotiation.

Which of the following is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust? A. stock options B. employee stock ownership plan C. Scanlon plan D. collective stock options E. profit-sharing plan

B. employee stock ownership plan Employee stock ownership plan refers to an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust.

According to _________, people measure outcomes such as pay in terms of their inputs. A. expectancy theory B. equity theory C. retributive justice theory D. progressive justice theory E. economic theory

B. equity theory According to equity theory, people measure outcomes such as pay in terms of their inputs.

Brendan, the HR manager at Baretta & Co., is trying to implement an effective group incentive plan which measures increases in productivity and effectiveness and distributes a portion of its earnings to all employees. In this case, Brendan should apply the incentive scheme of . A. piecework rate B. gainsharing C. sales commission D. merit pay E. ESOPs

B. gainsharing A gainsharing program measures increases in productivity and effectiveness and distributes a portion of each gain to employees.

QVO Financial, an auditing firm, distributes a portion of the profits resulting from improvements in productivity and efficiency among its employees. If the company enjoys an improvement of $45,000, 60% of the improvement is the company's share. The other 40% is distributed among the employees in the company. Which of the following is being exemplified in this scenario? A. profit rate B. gainsharing C. commission sharing D. merit gain E. group bonus

B. gainsharing Organizations that want employees to focus on efficiency may adopt a gainsharing program, which measures increases in productivity and effectiveness and distributes a portion of each gain to employees. This scenario exemplifies gainsharing.

Which of the following incentive plans are specifically designed to promote group performance? A. performance bonuses B. gainsharing C. standard hour plans D. merit pay E. commissions

B. gainsharing To win group incentives, employees must cooperate and share knowledge so that the entire group can meet its performance targets. Common group incentives include gainsharing, bonuses, and team awards.

Developed in the 1930s, the Scanlon plan is a variation of a(n) A. profit-sharing plan. B. gainsharing plan. C. merit pay plan. D. individual bonus. E. commission plan.

B. gainsharing plan. The Scanlon plan is a gainsharing program where employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.

Which of the following best describes profit sharing? A. a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard B. incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary C. a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees D. a combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay E. an incentive plan where a percentage of the previous year's profits is provided to the employees as a part of their salary

B. incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary Incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary is termed profit sharing.

To make merit increases consistent, administrators of merit pay programs must closely monitor the compa-ratio and the A. number of grades in the pay structure. B. individual's performance ratings. C. number of new hires in the company. D. company's stock price in the current financial year. E. average pay of the area where the organization is based.

B. individual's performance ratings. The decisions about merit pay are based on two factors: the individual's performance rating and the individual's compa-ratio.

Britt, a heavy equipment operator, Sara, an operating engineer, and Nick, a construction mechanic, hail from different parts of the United States. Though they have different occupations, they are all members of the same union. In the context of types of union, Britt, Sara, and Nick most likely belong to a(n) ________ union. A. international B. industrial C. stewards D. checkoff E. craft

B. industrial Industrial unions consist of members who are linked by their work in a particular industry. Typically, an industrial union represents many different occupations.

Perlis Inc. is a whole-foods distributor. Its human resource department gathers the following data for computing compa-ratios of some positions. Based on the data, for which position is Perlis most likely underpaying for human resources? A. shipping clerks: average salary of $22,000, range midpoint of $24,000 B. inventory clerks: average salary of $20,000, range midpoint of $30,000 C. order packers: average salary of $24,000, range midpoint of $22,000 D. purchasing agents: average salary of $30,000, range midpoint of $20,000 E. warehouse workers: average salary of $20,000, range midpoint of $20,000

B. inventory clerks: average salary of $20,000, range midpoint of $30,000 A compa-ratio is the ratio of average pay to the midpoint of the pay range. Assuming that the pay structure is well planned to support the organization's goals, the compa-ratios should be close to 1. A compa-ratio less than 1 suggests that the organization is underpaying for human resources relative to its target and may have difficulty attracting and keeping qualified employees. In this scenario, the compa-ratio is below 1 for the shipping clerks (0.92) and the inventory clerks (0.67).

78.Triano Brothers, an insurance firm, follows an administrative procedure for measuring the relative worth of its jobs. The organization does this by assembling and training a committee consisting of people familiar with the jobs. The committee includes a human resource specialist and, if the budget permits, an outside consultant is hired. Which of the following is exemplified in this scenario? A. job rotation B. job evaluation C. merit pay system D. job enrichment E. work structure

B. job evaluation Job evaluation is an administrative procedure for measuring the relative worth of the organization's jobs. Usually, the organization does this by assembling and training a job evaluation committee, consisting of people familiar with the jobs to be evaluated. The committee often includes a human resource specialist and, if its budget permits, may hire an outside consultant.

Hamish Life, an insurance company, defines the difference in pay between an entry-level recruiter and an entry-level assembler, as well as the difference between an entry-level recruiter, an HR manager, and the vice president of the human resource department. Which of the following is being exemplified in this scenario? A.straight piecework plan B. job structure C. merit pay system D. pay differential E. balanced scorecard

B. job structure Job structure consists of the relative pay for different jobs within the organization. It establishes relative pay among different functions and different levels of responsibility. For example, job structure defines the difference in pay between an entry-level accountant and an entry-level assembler, as well as the difference between an entry-level accountant, the accounting department manager, and the organization's comptroller.

An employer's exclusion of workers from a workplace until they meet certain conditions is known as a ________. A. strike B. lockout C. mediation D. picket line E. sabbatical

B. lockout In a lockout, the employer excludes workers from the workplace until they meet certain conditions.

Research on the effects of two-tier wage plans found that A. lower-paid employees were less satisfied on average than higher-paid employees. B. lower-paid employees were more satisfied on average than higher-paid employees because they made comparisons with lower-paying alternatives for themselves. C. lower-paid employees expected to be promoted into the second tier in a short time span. D. equity theory did not come into play for either group and neither group experienced more or less job satisfaction than the other. E. both existing employees and new employees have a similar pay rate.

B. lower-paid employees were more satisfied on average than higher-paid employees because they made comparisons with lower-paying alternatives for themselves. In a two-tier wage system, existing employees continue at their current (upper-tier) pay rate while new employees sign on for less pay (the lower tier). One might expect reaction among employees in the lower tier that the pay structure is unfair. But a study found that these employees were more satisfied than the top-tier employees. They were not comparing their pay with that of the upper-tier employees but with the other alternatives they saw for themselves: lower-paying jobs or unemployment.

Economic theory holds that the most profitable pay level, all things being equal, would be at the A. lowest possible level B. market rate C. highest possible level D. mid-range level E. CPI rate

B. market rate Economic theory holds that the most profitable level, all things being equal, would be at the market rate.

Which of the following types of incentive plans are used to reward individual performance? A. gainsharing B. merit pay C. Scanlon plan D. profit sharing E. stock ownership

B. merit pay Organizations may reward individual performance with a variety of incentives such as merit pay, piecework rates, sales commission, and so on.

Songreen Inc., a firm that manufactures ready-to-eat soups, offers incentives based on an employee's performance rating and the employee's compa-ratio. Which of the following payment plans is exemplified in this scenario? A. piecework plan B. merit pay C. standard hour plan D. differential plan E. skill-based plan

B. merit pay This scenario exemplifies a merit pay program. To make merit increases consistent, so they will be seen as fair, many merit pay programs use a merit increase grid. The decisions about merit pay are based on two factors: an individual's performance rating and the individual's compa- ratio. This system gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

A _______ gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job. A. piecework pay system B. merit pay system C. standard hour plan D. differential plan E. skill-based plan

B. merit pay system A merit pay system gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

Which of the following provisions is included in the Fair Labor Standards Act (FLSA)? A. personal finance B. minimum wage C. wage discrimination D. environmental hazards E. retirement plans

B. minimum wage The Fair Labor Standards Act (FLSA) includes provisions for minimum wage, overtime pay, and child labor.

Which of the following is an example of a defined-contribution pension plan? A. consumer-driven pension plan B. money purchase plan C. cost-sharing plan D. flexible spending account plan E. unfunded PBGC plan

B. money purchase plan Many kinds of defined-contribution plans are available, including money purchase plan; profit- sharing and employee stock ownership plans; and section 401(k) plans. In a money purchase plan, the employer specifies a level of annual contribution (for example, 10% of salary). The contributions are invested, and when the employee retires, he or she is entitled to receive the amount of the contributions plus the investment earnings.

Which of the following is an adjustment to a pay rate to reflect differences in working conditions or labor markets? A. bonus B. pay differential C. green-circle rate D. rank-and-file adjustment E. red-circle rate

B. pay differential Pay differential is an adjustment to a pay rate to reflect differences in working conditions or labor markets.

Which of the following is a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job? A. pay grade B. pay range C. pay differential D. compa-ratio E. compensation differential

B. pay range Pay range is a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade.

Overlapping ___________ give the organization more flexibility in transferring employees among jobs, because transfers need not always involve a change in pay. A. pay rates B. pay ranges C. pay policies D. pay differentials E. pay ranks

B. pay ranges Overlapping pay ranges gives the organization more flexibility in transferring employees among jobs, because transfers need not always involve a change in pay.

An organization's choices about ________ are limited by its response to the economic forces of product markets and labor markets. A. pay rates B. pay structure C. pay differentials D. pay grades E. pay ranges

B. pay structure Decisions about how to respond to the economic forces of product markets and labor markets limit an organization's choices about pay structure.

Nina works at Gia Inc., which provides her with a health care plan that contracts with health care professionals to provide services at a reduced fee. Which type of health care plan is Gia providing to its employees? A. flexible spending account B. preferred provider organization C. health maintenance organization D. consumer-driven health plan E. managed care plan

B. preferred provider organization A preferred provider organization (PPO) is a health care plan that contracts with health care professionals to provide services at a reduced fee.

The CEO of Logiworks asked the human resource manager, April, to propose an approach to incentive pay. April proposes that the company create a gainsharing plan. What action(s) by the company will best increase the likelihood that gainsharing will succeed? A. hiring employees who prefer to work alone and equipping them with cost data B. sharing data about costs and setting up time for employees to interact C. indicating that failure to achieve goals will lead to job cuts D. using incentive pay as a substitute for goal setting and performance standards E. promoting continuous improvement and limiting time spent on personal interactions

B. sharing data about costs and setting up time for employees to interact Gainsharing is most likely to succeed when organizations provide the right conditions. Among the conditions identified the most common include management commitment; need for change or strong commitment to continuous improvement; management acceptance and encouragement of employee input; high levels of cooperation and interaction; employment security; information sharing on productivity and costs; goal setting; commitment of all involved parties to the process of change and improvement; performance standard and calculation that employees understand and consider fair and that is closely related to managerial objectives; and employees who value working in groups.

Instruck Inc. is a real estate firm based in Colorado. The company ensures that employees' pay is dependent on what they are capable of doing. The company also supports efforts to empower its employees by encouraging them to be independent and to make decisions in various areas. This, in turn, ensures job enrichment. Based on this information, identify the pay structure being utilized by Instruck. A. straight piecework plan B. skill-based pay systems C. merit pay system D. differential piece rates E. standard hour plan

B. skill-based pay systems Skill-based pay systems are pay structures that set pay according to the employees' level of skill or knowledge and what they are capable of doing. Paying for skills makes sense at organizations where changing technology requires employees to continually widen and deepen their knowledge. Skill-based pay also supports efforts to empower employees and enrich jobs because it encourages employees to add to their knowledge so they can make decisions in many areas.

In a company's merit pay program, an individual's compa-ratio represents A. the individual's pay relative to the individual's performance rating. B. the individual's pay relative to company's average pay for that position. C. the individual's worth versus that of others in the organization. D. the ratio of the individual's pay to benefits. E. the average worth of the skills possessed by the individual.

B. the individual's pay relative to company's average pay for that position. Compa-ratio refers to the individual's pay relative to average pay for the position.

In which of the following conditions is an advantage when group incentives encourage competition between groups of employees? A. when concern for costs obscures customer service B. when groups try to outdo one another in satisfying customers C. when competition replaces cooperation to meet company goals D. when competition for sales obscures the importance of ethical behavior E. when performance goals consider only one objective, such as sales growth

B. when groups try to outdo one another in satisfying customer In group bonuses, depending on the reward system, competition among individuals may be replaced by competition among groups. Competition may be healthy in some situations, as when groups try to outdo one another in satisfying customers.

The Rudd-Mitchell organization uses the Scanlon plan to provide incentives to its employees. The workers produce electrical components worth $5 million. The target ratio set by the organization is 30%. The employees will be given a bonus if the actual labor costs are less than A. $0.5 million. B. $1 million. C. $1.5 million. D. $2 million. E. $2.5 million.

C. $1.5 million. The target ratio refers to the ratio of labor costs and sales value of production. In this example, the standard is a ratio of 30/100, or 30 percent, and the workers produced parts worth $5 million. To meet the standard, the labor costs should be less than 30 percent of $5 million, or $1.5 million.

David earns a base rate of $12 an hour and receives a weekly attendance award of $20. He works 40 hours this week. What would be his total compensation for the week? A. $480 B. $600 C. $500 D. $520 E. $250

C. $500 Since David earns a base rate of $12 an hour for 40 hours, he earns $480. He also receives a weekly award of $20. This increases his compensation to $500 for this week.

Linda, who is pregnant, works for an organization with more than 100 employees. She lives 20 miles away from work. By federal law, she is entitled to of unpaid leave after her child is born. A. 12 days B. 56 days C. 12 weeks D. 30 weeks E. 11 months

C. 12 weeks In the United States, unpaid leave is required by law for certain family needs. Specifically, the Family and Medical Leave Act (FMLA) of 1993 requires organizations with 50 or more employees within a 75-mile radius to provide as much as 12 weeks of unpaid leave after childbirth or adoption.

By law, what is the minimum percentage of assets that an ESOP must invest in its company's stock? A. 10 B. 26 C. 51 D. 60 E. 76

C. 51 By law, an ESOP must invest at least 51 percent of its assets in the company's own stock.

Employees at Harlan Industries have formed a union and are negotiating a union security arrangement. Which option would be most favorable to the union and also legal? A. A closed shop, because any employee hired must be a union member B. An agency shop, because it requires employees to join the union for the length of the contract C. A union shop, because it requires all employees to join the union within 30 days of their start date with the company D. Maintenance of membership rules, because they require that union members remain at the company E. Free riders, because these let employees benefit from union activities without joining the union

C. A union shop, because it requires all employees to join the union within 30 days of their start date with the company A legal membership arrangement that supports the goals of labor unions is a union shop, an arrangement that requires an employee to join the union with a certain time (30 days) after beginning employment.

Most national unions in the United States are linked with the ________, an association that pursues to improve the shared interests of its member unions at the national level. A. National Labor Relations Act (NLRA) B. Society of Modern Trade Workers and the Trade Federation of the States (SMTW-TFS) C. American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) D. Chamber of Commerce (CoC) E. National Association of Manufacturers (NAM)

C. American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Most national unions in the United States are affiliated with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). The AFL-CIO is not a labor union but an association that seeks to advance the shared interests of its member unions at the national level.

John is the owner of the restaurant, The Round. He decides to increase employee motivation by introducing benefit packages. However, Nina, the manager, suggests that employees will be more motivated if John increases their actual wages. Which of the following statements, if true, strengthens Nina's argument? A. John's competitor, Mark, gives many benefits to his employees. B. The state has introduced mandatory requirements for employee benefits. C. Benefit packages are more difficult to understand by employees than pay structures. D. Most of the employees at The Round belong to the age group that looks forward to pensions. E. Employees do not prefer cash compensation due to higher tax rates in the state.

C. Benefit packages are more difficult to understand by employees than pay structures. Benefits packages are more complex than pay structures, so benefits are harder for employees to understand and appreciate. Even if employers spend large sums on benefits, if employees do not understand how to use them or why they are valuable, the cost of the benefits will be largely wasted.

For incentive pay to motivate employees to contribute to the organization's success, the pay plans must be well designed. Which of the following statements describes a characteristic of a well- designed plan? A. Performance measures are to be linked to the individual's goals. B. Employees are given unattainable performance standards. C. Employees value the rewards or incentives that are being offered. D. Employees are given limited resources to meet their goals.

C. Employees value the rewards or incentives that are being offered. For incentive pay to motivate employees to contribute to the organization's success, employees should value the rewards or incentives that are being offered.

Blyrie Pharma is a pharmaceutical company based in Alabama. Blyrie Pharma expects its employees to work long hours and achieve increased production rates. Employees earn one and a half times the usual hourly rate for working more than 40 hours in one week. Which of the following laws is Blyrie Pharma abiding by in this scenario? A. laws governing equal employment opportunity B. Fair Labor Standards Act (FLSA) of minimum wage C. Fair Labor Standards Act (FLSA) of overtime D. laws governing prevailing wages E. product market laws

C. Fair Labor Standards Act (FLSA) of overtime The overtime rate under the FLSA is one and a half times the employee's usual hourly rate, including any bonuses and piece-rate payments (amounts paid per item produced). The overtime rate applies to the hours worked beyond 40 in one week.

Two management students, Frank and Neil, discuss the pros and cons of employee benefits. Frank states that unemployment insurance is more advantageous to employees than it is to employers, while Neil argues that employers receive more rewards from it. Which of the following weakens Neil's argument? A. Unemployment insurance provides employers a competitive advantage in the talent market. B. The amount of an employer's unemployment insurance tax depends on the number of employees. C. Federal and state taxes paid by employers fund most of unemployment insurance. D. Unemployment insurance does not provide assistance to unemployed workers looking for new jobs. E. Unemployment insurance does not include payment to offset lost income during voluntary unemployment.

C. Federal and state taxes paid by employers fund most of unemployment insurance. Most of the funding for unemployment insurance comes from federal and state taxes on employers. Employers who pay their state taxes currently pay a federal tax that after tax credits generally equals 0.6% of the first $7,000 of each employee's wages. The state tax rate varies from less than 1% to more than 18%, and the taxable wage base ranges from $7,000 to $44,000, so the amount paid depends a great deal on where the company is located. Also, some states charge new employers whatever rate is the average for their industry, so the amount of tax paid in those states also depends on the type of business.

Which of the following statements is true about a balanced scorecard? A. It encourages employees to compete at the expense of cooperating to achieve organizational goals. B. It allows employees to buy their company when it is experiencing financial problems. C. It combines the advantages of different incentive pay plans and helps employees understand the organization's goals. D. It increases cooperation, but does little to motivate day-to-day effort or to attract and retain top individual performers. E. It is the only measure used by top management to measure the performance of HR professionals and managers.

C. It combines the advantages of different incentive pay plans and helps employees understand the organization's goals. The balanced scorecard combines the advantages of different incentive-pay plans and it helps employees understand the organization's goals.

Which of the following is a disadvantage of a pay structure that rewards employees for winning promotions? A. It does not focus on setting pay for groups of jobs. B. It does not make adjustments to a pay rate to reflect differences in labor markets. C. It discourages employees from gaining valuable experience through lateral career moves. D. It rewards employees for acquiring skills but does not provide a way to ensure that employees can use their new skills. E. It places the employer at an economic disadvantage relative to other employers that pay the market rate by raising the pay for some jobs.

C. It discourages employees from gaining valuable experience through lateral career moves. A pay structure that rewards employees for winning promotions may discourage them from gaining valuable experience through lateral career moves.

Which of the following is an advantage of a two-tier wage system? A. It helps move jobs out of the country. B. It helps eliminate jobs without any legal hassles. C. It helps reduce labor costs without cutting employees' existing salaries. D. It helps provide more pay to new employees. E. It provides better standards for benchmarking.

C. It helps reduce labor costs without cutting employees' existing salaries. Some organizations have set up two-tier wage systems as a way to cut labor costs without cutting employees' existing salaries.

Which of the following is a disadvantage of skill-based pay systems? A. It makes organizations inflexible. B. It reduces employee empowerment. C. It may result in paying employees for skills they don't use. D. It reduces opportunities for promoting employees. E. It limits the number of pay levels by delayering.

C. It may result in paying employees for skills they don't use. Skill-based pay has its own disadvantages. It rewards employees for acquiring skills but does not provide a way to ensure that employees can use their new skills. The result may be that the organization is paying employees more for learning skills that the employer is not benefiting from.

Which of the following is true about disability insurance? A. It benefits the disabled employee only for the first year of disability. B. Payments under short-term plans are less than that of long-term plans. C. It pays about 50% to 70% of the employee's salary in case of disability. D. Most employers offer long-term disability plans. E. It offers coverage when the employee's dependent is disabled.

C. It pays about 50% to 70% of the employee's salary in case of disability. Disability payments are a percentage of the employee's salary—typically 50% to 70%.

Identify the statement that characterizes an industrial union. A. All the members are in the same occupation. B. Union leaders try to limit the number of members in order to maintain high wages. C. Members are linked by their work in a particular industry. D. Members change employers more frequently than in other types of unions. E. It is often responsible for training its members through apprenticeships.

C. Members are linked by their work in a particular industry. Industrial unions consist of members who are linked by their work in a particular industry. Typically, an industrial union represents many different occupations.

provides a method for rewarding performance in all of the dimensions measured in the organization's performance management system. A. Differential piece rate B. Standard hour plan C. Merit pay D. Piece rate E. Commission

C. Merit pay An advantage of merit pay is that it provides a method for rewarding performance in all of the dimensions measured in the organization's performance management system. If that system is appropriately designed to measure all the important job behaviors, then the merit pay is linked to the behaviors the organization desires.

The _________ has the authority for certifying or decertifying a union through an election. A. American Federation of Labor and Congress of Industrial Organization (AFL-CIO) B. Small Business Association (SBA) C. National Labor Relations Board (NLRB) D. Federal Trade Commission (FTC) E. Selective Service System (SSS)

C. National Labor Relations Board (NLRB) The National Labor Relations Board has the authority for certifying or decertifying a union through an election

Identify the right statement regarding the effects of unions on company performance. A. As a result of the type of pay system favored by unions, employees are more inclined to compete than cooperate. B. Most studies show that union workers are less productive than nonunion workers. C. On average, union members receive higher wages and more generous benefits than nonunion workers. D. The introduction of a union invariably results in the employer paying lesser attention to employee ideas. E. Evidence shows that unions have a large positive effect on profits.

C. On average, union members receive higher wages and more generous benefits than nonunion workers. On average, union members receive higher wages and more generous benefits than nonunion workers, and evidence shows that unions have a large negative effect on profits.

Which of the following statements is true about a product market? A. The cost of labor does not affect the product market because it is an insignificant part of an organization's costs. B. Product-market considerations are of particular concern to a company when its customers place greater importance on product rather than price. C. Organizations in a product market are competing to serve the same customers. D. Product markets typically place a lower limit on the pay an organization will offer its employees. E. Organizations in a product market must increase the cost of labor every quarter.

C. Organizations in a product market are competing to serve the same customers. The organization's product market includes organizations that offer competing goods and services. In other words, the organizations in a product market are competing to serve the same customers.

Which of the following statements is true of the FLSA requirements for overtime pay? A. The overtime rate is one and a half times the employee's hourly rate, excluding any bonuses or piece-rate payments. B. Time worked includes hours spent on production or sales, but not on activities such as attending required classes, cleaning up the work site, and so on. C. Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours. D. Everyone is eligible for overtime pay. E. Most workers paid on an hourly basis are exempt and therefore not subject to the laws governing overtime pay.

C. Overtime must be paid whether or not the employer specifically asked or expected the employee to work the extra hours. The FLSA requires that employers pay higher wages for overtime, defined as hours worked beyond 40 hours per week. Overtime pay is required, whether or not the employer specifically asked or expected the employee to work more than 40 hours.

During a meeting to discuss ways to cut costs on benefit packages, the vice president of the company, Harold, suggests getting long-term disability insurance for all employees. Alexis, HR manager, disagrees with him stating that short-term disability coverage is more advantageous for the company. Which of the following supports Alexis' statement? A. Short-term disability coverage is offered by few employers, which leads to a competitive advantage. B. Long-term disability coverage does not have any limits on the amount to be paid each month to employees. C. Short-term disability plans limit maximum coverage in a month, which makes them more affordable for the company. D. The nature of work is such that the level of risk involved is high and injuries could be permanent. E. The majority of the workforce is middle-aged and prefers long-term coverage.

C. Short-term disability plans limit maximum coverage in a month, which makes them more affordable for the company. Payments under short-term disability plans may be higher, but the policy sets a maximum amount that may be paid each month. Because its limits make it more affordable, short-term disability coverage is offered by more employers.

Ryan was working as an engineer at a paint manufacturing company. A chemical spill at the factory caused an accident that left him permanently disabled. Which of the following programs is specifically designed to help employees like Ryan? A. unqualified retirement plan B. vested-benefit plan C. Social Security D. defined-benefit plan E. work-sharing plan

C. Social Security Ryan can get assistance from Social Security. Social Security, formally known as Old Age, Survivors, Disability, and Health Insurance (OASDHI), provides health insurance for disabled persons.

Which of the following statements is true of using stock options as incentive pay? A. The use of stock options ensures that managers add value in terms of efficiency and customer satisfaction. B. Stock options require an option holder to purchase the organization's stocks at its present market rate. C. Stock options are rewarding for employees who exercise their option when the company's stock value has risen. D. Low-level employees with stock options are more likely to think like owners than executives who have stock options. E. A company's performance in the stock market tends to be significantly better if its low-level employees are provided stock options.

C. Stock options are rewarding for employees who exercise their option when the company's stock value has risen. Suppose that in 2018 a company's employees received options to purchase the company's stock at $10 per share. If in 2021 the stock is worth $30, they can exercise their options and buy stock for $10 a share.

Under the FLSA, which of the following statements is true of child labor? A. Children aged 18 and 19 may not be employed in hazardous occupations defined by the Department of Labor. B. Children aged 14 and 15 may not be employed in any work associated with interstate commerce. C. The FLSA's restrictions on the use of child labor apply to children younger than 18. D. Children aged 18 and 19 may work only outside school hours, in jobs defined as nonhazardous, and for limited time periods. E. All the states have laws requiring working papers or work permits for minors.

C. The FLSA's restrictions on the use of child labor apply to children younger than 18. The FLSA's restrictions on the use of child labor apply to children younger than 18. Under the FLSA, children aged 16 and 17 may not be employed in hazardous occupations defined by the Department of Labor. Children aged 14 and 15 may work only outside school hours in jobs defined as nonhazardous and for limited time periods. A child under age 14 may not be employed in any work associated with interstate commerce, except work performed in a nonhazardous job for a business entirely owned by the child's parent or guardian.

During an organizing campaign, which of the following occurs when union representatives make contact with employees, present their message about the union, and invite them to sign an authorization card? A. The unions determine who is eligible to vote. B. The union is automatically recognized if at least 30 percent of employees agree. C. The National Labor Relations Board (NLRB) conducts a secret-ballot election if only 30 to 50 percent of employees signed cards. D. The National Labor Relations Board (NLRB) certifies the union as the exclusive representative of employees if the employer refuses to sign the card. E. The employees cannot participate in any of the proceedings.

C. The National Labor Relations Board (NLRB) conducts a secret-ballot election if only 30 to 50 percent of employees signed cards. For the organization process to continue, at least 30 percent of the employees must sign an authorization card. If over half the employees sign an authorization card, the union may request that the employer voluntarily recognize the union. If the employer agrees, the NLRB certifies the union as the exclusive representative of employees. If the employer refuses, or if only 30 to 50 percent of employees signed cards, the NLRB conducts a secret-ballot election.

Which of the following is a federal law passed in 1935 that supports collective bargaining and sets out the rights of employees to form unions? A. The Landrum-Griffin Act B. The Civil Rights Act C. The Wagner Act D. The Taft-Hartley Act E. The Sarbanes-Oxley Act

C. The Wagner Act Perhaps the most dramatic example of labor laws' influence is the 1935 passage of the Wagner Act (also known as the National Labor Relations Act, or NLRA), which actively supported collective bargaining.

Which of the following is a drawback of setting pay rates based strictly on a pay policy line? A. It increases the administrative burden of managing the compensation system. B. Employees have difficulty interpreting regression analysis. C. The estimated pay for a job may not reflect conditions in the labor market. D. It increases the costs of surveying the market. E. It groups jobs, which will result in rates of pay for individual jobs that precisely match the levels specified by the market.

C. The estimated pay for a job may not reflect conditions in the labor market. The pay policy line reflects the pay structure in the market, which does not always match rates in the organization. Survey data may show that people in certain jobs are actually earning significantly more or less than the amount shown on the pay policy line. Some kinds of expertise are in short supply, and in other cases, conditions may create a surplus of labor needed for certain jobs.

An organization employs Rick, a bilateral amputee, to work as a research analyst. When Sarah, the organization's chief advisor, becomes aware of this, she argues that the organization is going to experience legal challenges. According to the Americans with Disabilities Act, which of the following will strengthen Sarah's argument? A. The organization has a risk-based insurance in place before recruiting Rick. B. The organization plans to stop Rick's benefits when he reaches the age of 50. C. The organization switched to a risk-based policy after hiring Rick. D. The organization gave Rick access to the same health insurance that is provided to the other employees. E. The organization does not have a risk-based insurance.

C. The organization switched to a risk-based policy after hiring Rick. From the standpoint of avoiding legal challenges, an employer who has risk-based insurance and then hires an employee with a disability is in a stronger position than an employer who switches to a risk-based policy after hiring a disabled employee.

Which of the following is a true of unemployment insurance? A. It provides payments to offset lost income during voluntary unemployment. B. Most funding for unemployment insurance is provided by employees. C. Unfavorable experience ratings of employers lead to higher premiums. D. Costs for unemployment insurance are standard across the country. E. It is a voluntary program based on number of employers in a specific state.

C. Unfavorable experience ratings of employers lead to higher premiums. No state imposes the same unemployment insurance tax rate on every employer in the state. The size of the unemployment insurance tax imposed on each employer depends on the employer's experience rating; unfavorable experience ratings lead to higher premiums.

Rita, who recently moved to a new city, evaluates several insurance options from her new employer. Owing to her recent medical issues, she wants to choose her health care providers, even if seeing them costs more than seeing the providers in a specific insurance network. Which of the following health care plans is Rita most likely to find suitable for her needs? A. a managed care plan B. a health maintenance organization C. a preferred provider organization D. an employee wellness program E. a flexible spending account

C. a preferred provider organization A preferred provider organization (PPO) is a health care plan that contracts with health care professionals to provide services at a reduced fee. Unlike a health maintenance organization (HMO), which requires patients to receive their medical care from the HMO's health care professionals, the PPO often does not require employees to use providers in the network. The PPO will also pay a larger share of the cost of services from PPO providers. If Rita chooses a PPO, she will be able to choose the health care provider of her choice, even if it may cost her more money to do so.

Miranda is an employee covered by a union security arrangement that does not mandate she become a union member but requires that she pays union dues. In this scenario, which type of union security arrangement is described? A. maintenance shop B. union shop C. agency shop D. closed shop E. provision shop

C. agency shop The agency shop requires the payment of union dues but not union membership.

According to the FLSA, which of the following individuals is most likely a nonexempt employee? A. the CEO B. a senior administrative employee C. an hourly paid employee D. an HR manager E. the director of marketing

C. an hourly paid employee Under the FLSA, executive, professional, administrative, and highly compensated white-collar employees are considered exempt employees. Any employee who is not in one of the exempt categories is called a nonexempt employee. Most workers paid on an hourly basis are nonexempt and therefore subject to the laws governing overtime pay.

The differential piece rate system refers to A. an incentive pay plan in which the employer pays the rate per piece based on the difference in performance of employees. B. a system that gives employees a bonus if the ratio of labor costs to the sales value of production is below a set standard. C. an incentive pay in which the piece rate is higher when a greater amount is produced. D. a system of linking pay increases to ratings on performance appraisals. E. an incentive pay plan where employees are paid different wages based on the skills they possess.

C. an incentive pay in which the piece rate is higher when a greater amount is produced. Differential piece rates refers to an incentive pay in which the piece rate is higher when a greater amount is produced.

Team awards differ from group bonuses in that they A. are typically plant-wide group incentive programs. B. make payments in company stock rather than in cash. C. are more likely to use a broad range of performance measures. D. encourage competition among individual employees to achieve higher bonuses. E. give more importance to organizational performance than small groups' performances.

C. are more likely to use a broad range of performance measures. Team awards are similar to group bonuses, but they are more likely to use a broad range of performance measures, such as cost savings, successful completion of a project, or even meeting deadlines.

Deep Space Aeronautics is developing a profit-sharing plan. Randy, the human resource manager, assumes the employees are excited to participate in this start-up company's success. However, a supervisor tells Randy about anxiety surrounding a rumor that employees will lose money if the company has a bad year. How should Randy address this problem with employee morale? A. by recalling that employees are also motivated by factors other than pay B. by removing non-management employees from the team designing the incentive plan C. by conducting meetings to teach about profit sharing and how employees will benefit D. by reminding employees that rumors are against company policy E. by shutting down the company's intranet to prevent further spreading of rumors

C. by conducting meetings to teach about profit sharing and how employees will benefit Communicating with employees is important. It demonstrates to employees that the pay plan is fair. It is particularly important to communicate with employees when changing the plan. Employees tend to feel concerned about changes. Pay is a frequent topic of rumors and assumptions based on incomplete information, partly because of pay's importance to employees. When making any changes, the human resource department should determine the best ways to communicate the reasons for the change.

Name the type of union security arrangement that is illegal under the provisions of the National Labor Relations Act. A. union shop B. agency shop C. closed shop D. open shop E. checkoff provision

C. closed shop The strongest union security arrangement is a closed shop, under which a person must be a union member before being hired. Under the National Labor Relations Act, closed shops are illegal.

A labor union in which all of the members have a particular skill or occupation is known as a(n) _______ union. A. common B. industrial C. craft D. regional E. employer's

C. craft Labor unions may be either craft or industrial unions. The members of a craft union all have a particular skill or occupation. Examples include the International Brotherhood of Electrical Workers for electricians and the National Education Association for teachers.

Joy Limon, a manufacturing company, has a pay structure based on job descriptions. As the company moves toward customizing production to meet customers' specific needs, it finds that managers are lacking flexibility in both job assignments as well as awarding pay increases to their employees. In this case, which of the following alternatives to job-based pay structures would best help the organization to respond to this problem? A. straight piecework plan B. skill-based pay system C. delayering D. quality-based pay system E. benchmarking

C. delayering Some organizations have found greater flexibility through delayering, or reducing the number of levels in the organization's job structure. By combining more assignments into a single layer, organizations give managers more flexibility in making assignments and awarding pay increases.

Identify the category of employees excluded by the National Labor Relations Board (NLRB) from participating in organizing activities. A. employees in multiple facilities within a single employer B. employees covered by multiple employers C. employees with managerial duties D. employees who have been on strike for economic reasons for less than one year and who have been replaced by other employees E. employees who have a community of interest in their wages, hours, and working conditions

C. employees with managerial duties Bargaining units may not include certain types of employees, such as agricultural laborers, independent contractors, supervisors, and managers. Beyond this, the NLRB attempts to group together employees who have a community of interest in their wages, hours, and working conditions.

Which of the following factors is considered while calculating the retirement benefit levels under a defined benefit retirement plan? A. the state where the person was employed during the retirement year B. number of dependents C. employees' years of service, age, and earnings level D. average earning during the last 20 years of employment E. number of unused leaves at the end of the retirement year

C. employees' years of service, age, and earnings level Usually the amount of defined benefit is calculated for each employee based on the employee's years of service, age, and earnings level.

Which of the following is legally required by an organization while offering early-retirement incentives? A. setting an age at which retirement benefits stop growing B. asking female employees to pay more to defined-benefit plans C. ensuring there is no coercion used to force employees to retire D. asking employees to sign compulsory waiver under ERISA E. providing employees no more than 48 hours to make an early retirement decision

C. ensuring there is no coercion used to force employees to retire Early-retirement incentive programs need to meet certain standards. The programs may not coerce employees to retire, they must provide accurate information about the options available, and they must give employees enough time to make a decision.

The method for providing solutions to union-management conflicts over interpretation or violation of a collective bargaining agreement is known as a . A. complaint protocol B. chain of command C. grievance procedure D. protest procedure E. corporate campaign

C. grievance procedure A grievance procedure is a process for resolving union-management conflicts over interpretation or violation of a collective bargaining agreement.

A pay structure specifically designed to energize, direct, or control employees' behavior is known as A. monthly salary. B. wage. C. incentive pay. D. annual salary. E. fixed pay.

C. incentive pay Along with wages and salaries, many organizations offer incentive pay—that is, pay specifically designed to energize, direct, or control employees' behavior.

Vactin Motors, an automobile company, ties individual performance, profits, and other measures of employees' success to a particular form of pay. This form of pay is influential because the amount paid is linked to certain predefined behaviors or outcomes. Which of the following is exemplified in this scenario? A. minimum wage B. overtime pay C. incentive pay D. piecework rates E. salary

C. incentive pay Incentive pay is the pay specifically designed to energize, direct, or control employees' behavior. Incentive pay is influential because the amount paid is linked to certain predefined behaviors or outcomes. Incentive pay is exemplified in this scenario.

Leroy joins the human resource department at ZenFuels Inc., where the production workers are represented by a union. Which of the following goals would Leroy most likely be expected to work toward in supporting any negotiations with the union? A. discouraging employees from forming a union B. making managers and workers into adversaries C. keeping operations flexible and retaining some control over schedules D. raising the value of workers' compensation package E. ensuring a regular flow of new members into the union

C. keeping operations flexible and retaining some control over schedules When an employer has recognized a union, management's goals continue to emphasize restraining costs and improving output. Managers continue to prefer to keep the organization's operations flexible, so they can adjust activities to meet competitive challenges and customer demands. Therefore, in their labor relations managers prefer to limit increases in wages and benefits and to retain as much control as they can over work rules and schedules.

Kolese Inc., a manufacturing company, includes stock options and stock purchase plans in executive pay. Executives at the company will want to do what is best for Kolese because that will cause the value of the stock to grow. Which of the following is being exemplified in this scenario? A. Scanlon plan B. balanced scorecard C. long-term incentive D. merit plan E. short-term incentive

C. long-term incentive Long-term incentives include stock options and stock purchase plans. The rationale for these long-term incentives is that executives will want to do what is best for an organization because that will cause the value of their stock to grow.

Organizations customize their balanced scorecards according to their A. earnings. B. profits, benefits, and incentives. C. markets, products, and objectives. D. objectives as set by the organization's CEO and board of directors. E. research on what drives employee motivation.

C. markets, products, and objectives. Organizations customize their balanced scorecards according to their markets, products, and objectives.

According to the provisions outlined in the contract between Kranfer Inc. and its labor union, Kranfer must pay its employees double for working overtime. However, due to financial constraints, the company is unable to meet these demands. The company and the union decide to negotiate the terms of the contract in a relatively informal manner. A non-authoritative third party is invited to listen to the views of both sides and to help resolve the conflict. In the context of the alternatives to work stoppages, the third party in this scenario is an example of a(n) ___________. A. arbitrator B. fact finder C. mediator D. rights enforcer E. stakeholder

C. mediator Mediation is the least formal and most widely used of these procedures. A mediator hears the views of both sides and facilitates the negotiation process. The mediator has no formal authority to dictate a resolution, so a strike remains a possibility.

An incentive system in which an organization links pay increases to ratings on performance appraisals is referred to as . A. commissions B. the Scanlon plan C. merit pay D. gainsharing E. profit sharing

C. merit pay Merit pay is a system of linking pay increases to ratings on performance appraisals.

Alonso, the union steward at Selzar Inc., is attempting to persuade members of management to make certain revisions to the company's policies on job security and work rules on behalf of the union. The union believes that company management has neglected these aspects of the company's administration system for too long. Which of the following levels of decisions is Alonso most likely concerned with in this scenario? A. forming labor relations strategies B. administering agreements C. negotiating contracts D. terminating contracts E. forming dissociation strategies

C. negotiating contracts Contract negotiations in a union setting involve decisions about pay structure, job security, work rules, workplace safety, and many other issues. These decisions affect workers' and the employer's situation for the term of the contract.

In 2017, a company employee received an option to purchase the company's stock at $45 per share. If the stock is trading at $40 a share in 2019, the employee will most likely A. exercise the option, receiving a gain of $5. B. exercise the option, receiving a gain of $40. C. not bother to exercise the options. D. buy the stock at $45 per share. E. sell the shares to a third party slightly above the market price.

C. not bother to exercise the options. If the stock price falls below the options level, employees are not likely to exercise the options.

Grey Inc. is a start-up located in Orlando. It offers highly beneficial pension plans to its employees. Which of the following categories of employees is the company most likely to attract through its pension benefits? A. women of childbearing age B. disabled workers C. older people D. young people E. unmarried people

C. older people Basic demographic factors such as age and sex can influence the kinds of benefits employees want. An older workforce is more likely to be concerned about (and use) medical coverage, life insurance, and pensions.

Although labor and product markets limit organizations' choices about pay levels, there is a range within which organizations can make decisions. The size of this range depends on the A. minimum and maximum wages fixed by the government. B. pay of federal contractors. C. organization's competitive environment. D. quality of employees. E. organization's global reputation.

C. organization's competitive environment. Although labor and product markets limit organizations' choices about pay levels, there is a range within which organizations can make decisions. The size of this range depends on the details of the organization's competitive environment.

A difference between an industrial union and a craft union is that only an industrial union A. contains members who have a particular skill or occupation. B. is often responsible for training its members through apprenticeships. C. organizes as many employees in as wide a range of skills as possible. D. represents a particular occupation. E. comprises members who change employers more often.

C. organizes as many employees in as wide a range of skills as possible. A difference between craft union and industrial union is that whereas a craft union may restrict the number of skilled craftsmen—say, carpenters—to maintain higher wages, industrial unions try to organize as many employees in as wide a range of skills as possible.

Sick leave programs A. must be provided by all employers according to the law. B. are based solely on the age of employees. C. pay employees for days not worked due to illness. D. are mandatory forms of unpaid leave. E. are forms of floating holidays.

C. pay employees for days not worked due to illness. Sick leave programs pay employees for days not worked due to illness. Sick leaves are optional benefits provided by employers.

Organizations under pressure to cut labor costs may respond by A. retaining staff levels. B. providing pay increases to prevent employee turnover. C. postponing hiring decisions. D. requiring employees to bear less of the cost of benefits such as insurance premiums. E. avoiding automation of routine tasks.

C. postponing hiring decisions. Organizations under pressure to cut labor costs may respond by reducing staff levels, freezing pay levels, postponing hiring decisions, or requiring employees to bear more of the cost of benefits such as insurance premiums.

A piecework rate plan is best suited for A. HR professionals. B. executives. C. production workers. D. managers. E. knowledge workers.

C. production workers. The piecework rate plan is most suited for very routine, standardized jobs with output that is easy to measure. For complex jobs or jobs with hard-to-measure outputs, piecework plans do not apply very well.

Jupiter Systems, an information technology company, determines that most problems handled by employees at its help desk can be resolved within 20 minutes. The company sets 20 minutes as the standard time for resolving a customer problem. If an employee solves a customer's problem in less than 20 minutes, the employee still earns 20 minutes' worth of wages. Which of the following payment methods does this scenario illustrate? A. piecework plan B. differential plan C. standard hour plan D. merit pay E. performance bonus

C. standard hour plan In a standard hour plan, an organization determines a standard time to complete a task. If the employee completes the work in less than the standard time, the employee receives an amount of pay equal to the wage for the full standard time.

Identify the law that regulates unions' actions with reference to their members, including financial disclosure and the conduct of elections. A. the Hatch Act B. the Taft-Hartley Act C. the Landrum-Griffin Act D. the Civil Service Reform Act E. the Maguire Act

C. the Landrum-Griffin Act The Landrum-Griffin Act regulates unions' actions with regard to their members, including financial disclosure and the conduct of elections. This law establishes and protects rights of union members. These include the right to nominate candidates for union office, participate in union meetings and secret-ballot elections, and examine unions' financial records.

Which of the following includes the right not nominate candidates for union office? A. the Roosevelt Act B. the California 1975 Labor Relations Act C. the Landrum-Griffin Act D. the Taft-Hartley Act E. the Wagner Act

C. the Landrum-Griffin Act The Landrum-Griffin Act regulates unions' actions with regard to their members, including financial disclosure and the conduct of elections. This law establishes and protects rights of union members. These include the right to nominate candidates for union office, participate in union meetings and secret-ballot elections, and examine unions' financial records.

A multinational organization uses a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard. This incentive plan is referred to as A. a group bonus. B. merit pay. C. the Scanlon plan. D. a piecework rate. E. a team award.

C. the Scanlon plan. The Scanlon plan is a gainsharing program where employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.

Steve is a human resource manager at an advertising firm. Steve proposes that the company adopt defined-benefit plans to attract and retain its employees. In which situation will this benefit be most valuable to the firm's employees? A. all the employees are under the age of 30 B. the nature of work demands college graduates C. the firm employs experienced, older people D. the firm employs young and creative minds E. the firm mainly employs freelancers

C. the firm employs experienced, older people A defined-benefit plan guarantees a specified level of retirement income, and is thus most generous to older employees with many years of service. In contrast cash balance plans are most generous to young employees who will have many years ahead in which to earn interest.

Identify the right of employees that is covered under the Taft-Hartley Act. A. the right to nominate candidates for union office B. the right to participate in union meetings and secret-ballot elections C. the right to choose whether they join a union or other group D. the right to examine unions' financial records E. the right to physically block nonstriking employees from entering the workplace

C. the right to choose whether they join a union or other group The Taft-Hartley Act allows the states to pass so-called right-to-work laws, which make union shops, maintenance of membership, and agency shops illegal. The idea behind such laws is that requiring union membership or the payment of union dues restricts the employees' right to freedom of association. In other words, employees should be free to choose whether they join a union or other group.

Jim is the CEO of a company that is expanding overseas. He considers introducing a cafeteria-style benefits plan to cater to the company's diverse workforce. However, the HR team brings up the concern of higher expenses involved in this type of benefits. Which of the following is Jim likely to do to lower costs at the initial stage? A. opt for communication methods that do not stress the value of each benefit B. avoid standardized plans available for employers opting for cafeteria-style benefits C. use software packages to design the plan D. discourage employees from choosing lower-cost options E. encourage employees to choose benefits they need the most

C. use software packages to design the plan A drawback of cafeteria-style plans is that they have a higher administrative cost, especially in the design and start-up stages. Jim's company can avoid some of the higher cost by using software packages and standardized plans that have been developed for employers wishing to offer cafeteria-style benefits.

Brandon is a new employee at Relagen Inc. He wants to work for the company, but he has no desire to join the union or even consider the possibility of becoming a member in the future. Which of the following security provisions of union membership is most suitable for Brandon? A. A closed shop provision because it gives an employee the right to participate in decision making without becoming a member B. A maintenance of membership provision because it allows employees to join the union as passive members C. A union shop provision because it helps an employee use indirect influence to affect management-union contracts D. An agency shop provision because it requires employees to pay union dues but does not force them to become members E. A checkoff provision because it requires all the employees of an organization to join the union, regardless of their preferences

D. An agency shop provision because it requires employees to pay union dues but does not force them to become members In this scenario, the agency shop provision works best for Brandon because it requires payment of union dues, but not union membership.

A nursing assistant in a nursing home filed a grievance that he was unfairly passed over for a promotion. Discussions and appeals did not satisfy the employee, so the issue went to arbitration. The arbitrator decided that the nursing home must promote the employee, based on the terms of its contract, in spite of management's protests that the employee was too unreliable to handle the greater responsibility. The employee's supervisor urges Scott, the director of human resources, to file an appeal in the state courts. Scott says doing so would be a wasted expense. Which of the following statements best supports Scott's conclusion? A. The company should have considered whether the grievance procedure is fair. B. The majority of grievances are settled during the early stages of the process. C. Courts generally do not have the authority to rule on employment matters. D. Courts generally avoid reviewing arbitrators' decisions in these matters. E. Courts generally rule against businesses in employment matters.

D. Courts generally avoid reviewing arbitrators' decisions in these matters. If a grievance reaches arbitration, the arbitrator makes the final ruling in the matter. Based on a series of Supreme Court decisions, courts generally avoid reviewing arbitrators' decision and focus only on whether the grievance involved an issue that is subject to arbitration under the contract.

How do cafeteria-style plans increase costs for employers? A. Employers pay much higher premiums for an HMO than a preferred health care plan. B. Employers are required to pay higher insurance premiums for laid-off workers. C. Contributions to PGBC to fund the retirement plan increases under this plan. D. Employees select the kind of benefits they expect to need the most. E. Employers bear the cost of providing employees with benefits they do not value.

D. Employees select the kind of benefits they expect to need the most. A drawback of cafeteria-style plans is that they have a higher administrative cost, especially in the design and start-up stages. Another possible drawback is that employee selection of benefits will increase rather than decrease costs because employees will select the kinds of benefits they expect to need the most.

Nick, the HR manager at a start-up company, helped the founder plan a benefits package that includes paid vacations, holidays, and sick leave. Now an employee approaches Nick to say she has been called up for jury duty and needs to be away next week. What should Nick do? A. He should direct the employee to use the Family and Medical Leave Act. B. He should forbid the employee from taking time off for jury duty. C. He should ask the employee to use her sick leave for jury duty. D. He should ask the employee to use her vacation time for jury duty. E. He should establish, and then apply, policies for other situations requiring time off.

D. He should ask the employee to use her vacation time for jury duty. The major categories of paid leave are vacations, holidays, and sick leave. Employers also should establish policies for other situations that may require time off. Many organizations provide paid leave for jury duty, funerals of family members, and military duty.

Which of the following sentences best describes a situation that comparable-worth policies were designed to address? A. In a manufacturing company, there are no female managers. B. A consumer products company has been sued for racial discrimination. C. An agency works with a supermarket's HR department to design a job that could be held by people with mental disabilities. D. In a city government, positions mostly held by women pay less than positions mostly held by men. E. At a utility company, jobs that involve physical strain and danger pay more than office jobs.

D. In a city government, positions mostly held by women pay less than positions mostly held by men. One explanation for historically lower pay for women has been that employers have undervalued work performed by women—in particular, placing a lower value on occupations traditionally dominated by women. Some policy makers have proposed a remedy for this called equal pay for comparable worth. This policy uses job evaluation to establish the worth of an organization's jobs in terms of such criteria as their difficulty and their importance to the organization. If jobs have the same number of evaluation points, they should be paid equally.

Veronica, a vice president of human resources at an auto company, wants to develop its programs for employee empowerment. However, she is concerned because unions are heavily involved in representing auto workers and might object to empowerment programs. Which of the following statements about the National Labor Relations Board would best address Veronica's concern? A. The NLRB has issued statements indicating that it will not tolerate employee empowerment. B. In its rulings, the NLRB has allowed employee empowerment in certain very limited situations. C. The NLRB has issued rulings that say employee empowerment is allowed only in a nonunion environment. D. In its rulings, the NLRB has shown clear support for employee involvement in decision making. E. The NLRB makes it an unfair labor practice to form employee participation committees to make decisions.

D. In its rulings, the NLRB has shown clear support for employee involvement in decision making. Although employers must be careful to meet legal requirements, the NLRB has clearly supported employee involvement in work teams and decision making.

Which of the following is a disadvantage of using group bonuses? A. Physical outputs are not rewarded. B. It reduces the level of cooperation between the members of the group. C. The performance measures used are narrow. D. It could result in competition among groups. E. It cannot be used to promote specific goals.

D. It could result in competition among groups. When using group bonuses, depending on the reward system, competition among individuals may be replaced by competition among groups.

Which of the following statements is true about a piecework rate plan? A. It can be used for all types of jobs and in all types of industries. B. It is best suited for complex jobs and tasks. C. It can be used to encourage teamwork and collaboration. D. It has a direct link between the work done by the employee and the amount earned. E. It encourages the employee's peers to perform and reduces conflicts.

D. It has a direct link between the work done by the employee and the amount earned. An obvious advantage of piece rates is the direct link between how much work the employee does and the amount the employee earns.

Which of the following is true of a craft union? A. It represents many different occupations. B. Membership in the union is the result of working for a particular employer in the industry. C. Changing employers is not very common. D. It is often responsible for training members through apprenticeships. E. It consists of members who are linked by their work in a particular industry.

D. It is often responsible for training members through apprenticeships. The members of a craft union all have a particular skill or occupation. Craft unions are often responsible for training their members through apprenticeships and for supplying craft workers to employers.

The executives of BeeGood Honey are proud of the company's management practices, which they believe ensure fair treatment of employees better than union representation does. However, some complaints about working conditions have shown up in the suggestion box. The executives asked the HR manager, Leslie, to plan a system of employee-manager meetings to address issues such as these. As Leslie considers this request, what potential problem should she keep in mind? A. Legal guidelines covering an employer-established system of representation are lengthy and precise. B. Workers tend to think representatives in an employer-established system cannot be counted on to stand up for them. C. It is statistically likely that most BeeGood workers are already represented by unions. D. It is possible that a management-established system of employee representation may violate the NLRA. E. Unions have never tried to organize BeeGood's workers, so they can easily make a case that the company organized workers illegally.

D. It is possible that a management-established system of employee representation may violate the NLRA. Employees want some form of representation, which often involves "substitutes" for unions. A recent survey of hundreds of U.S. workers found that 17% were covered by a collective bargaining agreement, and another 28% said they had some form of management-established system to represent them. Both groups of workers were equally likely to say the employee representatives could be "counted on to stand up for workers." It is important to note that these "substitutes" may violate the NLRA. However, they exist because the legal guidelines covering these systems are ambiguous.

An electric utility operates in a state with right-to-work laws. About three-quarters of its line workers have elected to join the union that represents them. Joel, one of the line workers, believes that his supervisor is unfairly passing him over when selecting employees to earn extra pay by working overtime. Joel wants to file a grievance according to the process in the labor agreement, but he is not a member of the union. What must the union do in this situation? A. It must let Joel join the union so he can have representation in the process. B. It must allow Joel to use the process it negotiated, but it need not send representatives. C. It has no obligations in this process, because Joel chose not to be represented. D. It must give Joel representation equal to what a union member would receive. E. It must give Joel a copy of the labor agreement, but it need not be involved in the process.

D. It must give Joel representation equal to what a union member would receive. Under the National Labor Relations Act, the union has a duty of fair representation, which means the union must give equal representation to all members of the bargaining unit, whether or not they actually belong to the union.

Which of the following is true of short-term disability insurance? A. It pays the full amount of a disabled employee's salary for a minimum period of one year. B. It pays the double the full salary of a disabled employee for a period of two months. C. Only employees who have been with an organization for less than two years are eligible for short-term disability insurance. D. It pays a portion of a disabled employee's salary as benefits for up to six months. E. It is only provided to those individuals who work part time.

D. It pays a portion of a disabled employee's salary as benefits for up to six months. Short-term disability insurance pays a portion of a disabled employee's salary as benefits to the employee for six months or less.

John is the head of the insurance claims department. John works for longer hours than his subordinates, however, he is not paid overtime for working more than 40 hours per week. Under the FLSA, which of the following will justify the organization's decision not to give John overtime pay? A. John is not a U.S. citizen. B. John comes from an economically strong background. C. John is unmarried. D. John is considered as an exempt employee. E. John has lower educational qualifications than his subordinates.

D. John is considered as an exempt employee. Under the FLSA, executive, professional, administrative, and highly compensated white-collar employees are considered exempt employees, meaning employers need not pay them one and a half times their regular pay for working more than 40 hours per week.

________ rules require that employees who join the union remain members for a certain period of time but do not require a union membership. A. Agency shop B. Union shop C. Closed shop D. Maintenance of membership E. Checkoff provision

D. Maintenance of membership Maintenance of membership rules do not require union membership but do require that employees who join the union remain members for a certain period of time, such as the length of the contract.

A production worker believes that her supervisor is intentionally assigning her to work on machinery for which she does not have the proper training. She is worried about her safety and wonders if the supervisor is intentionally harassing her. The worker is represented by a union, so she starts the grievance process specified in the labor agreement. Assuming this is a typical grievance procedure, in which step, if any, will the employee likely act alone? A. The final step; the employee and the supervisor would meet together with the union-appointed arbitrator. B. The first step; the employee can speak with her supervisor on her own before involving the union. C. The step in which a written grievance is submitted; this must be written and delivered by the employee only. D. None; the union handles all steps of the grievance procedure without involving the employee. E. The step of deciding to appeal an unresolved grievance; it is up to the employee to choose arbitration or no appeal.

D. None; the union handles all steps of the grievance procedure without involving the employee. For grievances launched by an employee, a typical grievance procedure follows four steps. In the first step, the employee talks to his or her supervisor about the problem. If this conversation is unsatisfactory, the employee may involve the union steward in further discussion. If the problem was not resolved and does seem to be a contract violation, the union moves to step 2. Steps 2 through 4 are carried out by management and representatives of the union.

Which of the following statements is true about the Fair Labor Standards Act (FLSA)? A. The overtime rate under the FLSA is two and a half times the employee's hourly rate. B. The FLSA permits federal contractors to pay less than the prevailing wage rate. C. The FLSA permits a subminimum training wage equal to 95% of the minimum wage. D. Nonexempt employees are covered by FLSA and include most hourly workers. E. Under the FLSA, executive, professional, and administrative employees are considered nonexempt employees.

D. Nonexempt employees are covered by FLSA and include most hourly workers. Most workers paid on an hourly basis are nonexempt and therefore subject to the laws governing overtime pay. Under the FLSA, executive, professional, administrative, and highly compensated white-collar employees are considered exempt employees.

Which of the following statements is true about job-based pay structures? A. A pay structure that rewards employees for winning promotions will encourage them to gain valuable experience through lateral career moves. B. Their focus on higher pay for higher status can work in favor of efforts for empowerment. C. They typically reward desired behaviors, particularly in a rapidly changing environment. D. Organizations may avoid change because it requires repeating the time-consuming process of creating job descriptions and related paperwork. E. They always encourage flexibility, innovation, quality, and customer service.

D. Organizations may avoid change because it requires repeating the time-consuming process of creating job descriptions and related paperwork. Organizations may avoid change because it requires repeating the time-consuming process of creating job descriptions and related paperwork.

The human resource, accounting, and legal departments of GloryB Software, a company with locations in seven states plus Australia, are working together on developing a profit-sharing plan. Of the following options for communicating with employees about the plan, which would be the most practical and effective? A. Call a meeting of all the employees to discuss the plan face-to-face. B. Set up a balanced scorecard to measure opinions about the plan. C. Ask employees not to engage in rumors. D. Post descriptions and videos on the company's intranet. E. Hold off on any communications until all employees can be brought together.

D. Post descriptions and videos on the company's intranet. It is particularly important to communicate with employees when changing an incentive plan. Employees tend to feel concerned about changes. Pay is a frequent topic of rumors and assumptions based on incomplete information, partly because of pay's importance to employees. When making the changes, the human resource department should determine the best ways to communicate the reasons for the change. Options include videos, descriptions, and scenarios in brochures, or online, as well as face-to-face discussions. In this example, online distribution (the intranet) is most practical, because the employees are geographically spread out.

is a type of incentive pay in which payments are a percentage of an organization's profits and do not become part of its employees' base salary. A. Merit pay B. Gainsharing C. Group bonus D. Profit sharing E. Commission

D. Profit sharing Profit sharing is incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.

The _______ has required companies to more clearly report executive compensation levels and the company's performance relative to that of competitors. A. National Credit Union Administration B. Financial Industry Regulatory Authority C. Commodity Futures Trading Commission D. Securities and Exchange Commission E. Omnibus Budget Reconciliation Act

D. Securities and Exchange Commission The Securities and Exchange Commission (SEC) has required companies to more clearly report executive compensation levels and the company's performance relative to that of competitors.

Which of the following statements is true about skill-based pay? A. Skill-based pay provides a way to ensure that employees can use their new skills. B. Gathering market data about skill-based pay is easy. C. Skill-based pay ensures that the employer pays the employee for learning skills that benefit the employer. D. Skill-based pay does not necessarily provide an alternative to the bureaucracy and paperwork of traditional pay structures. E. Skill-based pay does not require records related to skills, training, and knowledge acquired.

D. Skill-based pay does not necessarily provide an alternative to the bureaucracy and paperwork of traditional pay structures. Skill-based pay does not necessarily provide an alternative to the bureaucracy and paperwork of traditional pay structures, because it requires records related to skills, training, and knowledge acquired. Gathering market data about skill-based pay is difficult because most wage and salary surveys are job-based.

Which of the following benefits provided by employer is required by law in the United States? A. paid vacation B. personal leave C. flextime D. Social Security contributions E. retirement savings plan

D. Social Security contributions Social Security contributions, pensions, and retirement savings plans help employees prepare for their retirement, and insurance plans help to protect employees from unexpected costs such as hospital bills. This important role of benefits is one reason that benefits are subject to government regulation. Some benefits, such as Social Security contributions, are required by law.

During the grievance process, the union appeals a grievance to top line management and senior industrial relations staff. What step comes next? A. The union steward and employee decide whether the contract was violated. B. The union decides whether to appeal the unresolved grievance to arbitration. C. The written grievance is submitted to the production superintendent, another line manager, or industrial relations representative. D. The decision resulting from the appeal is put into writing. E. The employee (and the union steward) discuss the problem with a supervisor.

D. The decision resulting from the appeal is put into writing. In step 3 of the grievance procedure, the union appeals the grievance to top line management and senior industrial relations staff. Additional local or international union officers may be involved at this point. The decision resulting from this appeal is then put into writing.

During contract negotiations, the union representing the teachers in District 46 is calling for a strike if the union's demands aren't met by the end of the week. A new school board member is worried about school shutting down and suggests directing the negotiators to accept the union's demands. A more experienced board member says the teachers also have reasons for not wanting to strike. Which of the following would be one of the most likely reasons for teachers not wanting to strike? A. The school board member will picket the schools during the strike. B. The union will likely be able to make up for some pay during the strike. C. The janitors' union will refuse to cross the teachers' picket lines. D. The district will not pay the teachers while they are on strike. E. During a strike, the employer excludes workers from the workplace.

D. The district will not pay the teachers while they are on strike. A primary reason strikes are rare is that a strike is seldom in the best interests of either party. Not only do workers lose wages and employers lose production, but the negative experience of a strike can make future interactions more difficult.

Which of the following statements is true about pay ranges? A. Pay ranges are most common for blue-collar jobs and those covered by union contracts. B. Pay ranges are widest for employees who are at lower levels in terms of their job evaluation points. C. Pay ranges generally are designed so that they do not overlap. D. The market rate or the pay policy line generally serves as the midpoint of a range for the job. E. The less overlap, the more flexibility in transferring employees among jobs.

D. The market rate or the pay policy line generally serves as the midpoint of a range for the job. Pay ranges are most common for white-collar jobs and for jobs that are not covered by union contracts. The range is widest for employees who are at higher levels in terms of their job evaluation points. That is because the performance of these higher-level employees will likely have more effect on the organization's performance, so the organization needs more latitude to reward them. A typical approach is to use the market rate or the pay policy line as the midpoint of a range for the job or pay grade.

The hourly employees at BigHeart Health System have become dissatisfied with their union. They find that management communicates more openly and treats them with respect in resolving problems, so they don't see much value in paying dues to a union. What option do the employees have in this situation? A. They may negotiate for a neutrality provision to neutralize the union's authority. B. They must accept the union, because they voted for representation in a lawful manner. C. They can request an immediate decertification election. D. They can call for a decertification election to take place when their contract term ends. E. They can request that their union representative terminate the union contract.

D. They can call for a decertification election to take place when their contract term ends. The Taft-Hartley Act expanded union members' right to be represented by leaders of their own choosing to include the right to vote out an existing union. This action is called decertifying the union. An election to decertify a union may not take place when a contract is in effect.

Which of the following is a disadvantage of broad bands? A. They reduce managers' flexibility in making assignments. B. They always result in pay decreases. C. They increase the number of levels in the organization's job structure. D. They reduce the opportunities for promoting employees. E. They discourage employees from gaining valuable experience through lateral career moves.

D. They reduce the opportunities for promoting employees. They discourage employees from gaining valuable experience through lateral career moves. Broad bands reduce the opportunities for promoting employees, so organizations that eliminate layers in their job descriptions must find other ways to reward employees.

What should employees typically do to earn bonuses under the Scanlon plan? A. They should produce products at a rate that is much higher than the standard production time. B. They should create goodwill with customers and close as many sales as possible. C. They should follow a defined set of quality standard to produce the desired outcome. D. They should keep labor costs to a minimum and produce as much as possible with that amount of labor. E. They should improve their performance year after year so that they re-earn the bonus during each performance period.

D. They should keep labor costs to a minimum and produce as much as possible with that amount of labor. The Scanlon plan gives employees a bonus if the ratio of labor costs to the sales value of production is below a set standard. To keep this ratio low enough to earn the bonus, workers have to keep labor costs to a minimum and produce as much as possible with that amount of labor.

Connor, an HR manager, heard from other managers that there was talk of a union organizing effort at his company. Connor saw no signs of a union at work, so he downplayed the rumors. Therefore, he was caught by surprise when the union presented authorization cards and a request for a representation election. Which statement best explains the flaw in Connor's reasoning about the organizing effort? A. For the organizing process to continue, at least 30% of the employees must sign an authorization card. B. In an election, workers may have a choice from among more than one union. C. In most organizing efforts, there is a hotly contested election campaign. D. Unions usually launch an organizing campaign by discussing issues with employees at home. E. Regulations forbid unions from using online databases to identify issues of interest to particular workers.

D. Unions usually launch an organizing campaign by discussing issues with employees at home. The traditional union organizing strategy has been for organizers to call or visit employees at home, when possible, to talk about issues like pay and job security. A recent loosening of regulations allows unions to move organizing efforts online—for example, to access database information about union members, nonmember employees, and issues of interest facing particular groups of workers. In this situation, Connor did not see union activity at work, because the contacts were being made away from the workplace.

The National Labor Relations Board certifies a union as the exclusive representative of a group of employees when A. the management of an organization approves of a union. B. a union pays its dues to the board. C. at least 51% of the employees join the union within a certain time (30 days) after beginning employment. D. a majority of workers vote in favor of a union. E. the American Federation of Labor and Congress of Industrial Organizations votes in favor of a union.

D. a majority of workers vote in favor of a union. When a majority of workers vote in favor of a union, the National Labor Relations Board certifies it as the exclusive representative of a group of employees.

As an incentive to work efficiently, some organizations pay production workers , a wage based on the amount they produce. A. merit pay B. a sales commission C. standard hour pay D. a piecework rate E. a special bonus

D. a piecework rate As an incentive to work efficiently, some organizations pay production workers a piecework rate, a wage based on the amount they produce.

Which of the following depicts the most complex bargaining structure in collective bargaining? A. a craft union representing one facility B. a teachers' union representing a large city's school district C. a craft union representing employees in two facilities of one company D. an industrial union representing all hourly employees of several companies E. a carpenters' union representing the employees of one construction firm

D. an industrial union representing all hourly employees of several companies Collective bargaining differs from one situation to another in terms of bargaining structure— that is, the range of employees and employers covered by the contract. As opposed to a craft union in a single facility, many more interests must be considered in collective bargaining for an industrial union with a bargaining structure that includes several employers.

Straight commission plans are plans which A. provide a straight salary to employees. B. are useful when the organization wants salespeople to concentrate on listening to customers. C. help to attract risk-averse employees. D. are common among insurance and real estate agents. E. are uncommon among car salespeople.

D. are common among insurance and real estate agents. Some salespeople earn a commission in addition to a base salary; others earn only commissions—a pay arrangement called a straight commission plan. Straight commissions are common among insurance and real estate agents and car salespeople.

Which of the following terms refers to a substitute arrangement of union membership in which members receive discounts on insurance and credit cards rather than representation in collective bargaining? A. card-check provision B. corporate union membership C. indirect union provision D. associate union membership E. relational union membership

D. associate union membership Organizers sometimes offer workers associate union membership, which is not linked to an employee's workplace and does not provide representation in collective bargaining. Rather, an associate member receives other services, such as discounts on health and life insurance or credit cards.

Which of the following is a method where a combination of performance measures directed toward the company's long- and short-term goals are used as the basis for awarding incentive pay? A. merit pay B. profit sharing C. gainsharing D. balanced scorecard E. Scanlon plan

D. balanced scorecard A balanced scorecard refers to a combination of performance measures directed toward the company's long and short-term goals and used as the basis for awarding incentive pay.

In the context of stock ownership, what is meant by "backdating" a stock option? A. reaping windfall in the stock market by selling stock based on company's nonpublic information B. falsifying numbers in the company's annual report to hide losses and inflate the stock prices C. buying a company's stock just before the date of key product launch D. changing the date or price in an option agreement so that the option holder can buy stock at a bargain price E. hiding losses and inflating the recorded value of revenues to boost the price of the company's stock

D. changing the date or price in an option agreement so that the option holder can buy stock at a bargain price "Backdating" involves changing the date and/or price in the original option agreement so that the option holder can buy stock at a bargain price—making the backdated option profitable or more profitable.

Electrix Inc. is an electrical appliances manufacturing company. It distributes shares of stock to its employees by placing the stock in a trust managed on the employees' behalf. Which of the following has been implemented by Electrix in this scenario? A. Scanlon plan B. balanced scorecard C. piecework stock plan D. employee stock ownership plan E. differential piece stock plan

D. employee stock ownership plan Employee stock ownership plan is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust.

In the process of designing incentives, managers should make sure that A. all the employees are paid the same amount. B. even the lowest performing employees are rewarded. C. employees focus only on completing the task quickly. D. employees believe that the pay plan is fair. E. they hire employees who consider earning money as the sole reason to perform well.

D. employees believe that the pay plan is fair. Attitudes that influence the success of incentive pay include whether employees value the rewards and think the pay plan is fair.

A standard hour incentive plan is likely to be successful if A. most or all of a salesperson's compensation is in the form of commissions. B. employers keep labor costs to a minimum. C. the pay increase is linked to ratings on performance appraisals. D. employees want the extra money more than they want to work at a pace that feels comfortable. E. the organization values employee satisfaction, product quality, and customer service more than profits.

D. employees want the extra money more than they want to work at a pace that feels comfortable. A standard hour plan is an incentive plan that pays workers extra for work done in less than a preset "standard time." This plan can only succeed if employees want the extra money more than they want to work at a pace that feels comfortable.

Marshall finds that he meets the eligibility requirements for Social Security. He elects to receive retirement benefits at 62. In this case, which of the following is true? A. he will receive full retirement benefits B. he will receive retirement benefits only according to his earnings history C. he will not be eligible for worker's compensation D. he will receive benefits at a permanently reduced level E. his exempt amount limits will be lifted

D. he will receive benefits at a permanently reduced level Workers who meet eligibility requirements receive the retirement benefits according to their age and earnings history. If they elect to begin receiving benefits at full retirement age, they can receive full benefits, or if they elect to begin receiving benefits at age 62, they receive benefits at a permanently reduced level.

Sheldon, the manager of a manufacturing firm, wants the organization to perform better. He expects his employees to think more like owners, taking a broad view of what they need to do in order to make the organization more effective. In this case, Sheldon should A. pay his employees per piece that is manufactured. B. create a balanced scorecard. C. reorganize the departments in the organization. D. implement a profit-sharing incentive plan. E. hire new employees and pay them above the market rate.

D. implement a profit-sharing incentive plan. Organizations use profit sharing for a number of reasons. It may encourage employees to think more like owners, taking a broad view of what they need to do in order to make the organization more effective.

Which of the following is a function of elder care benefits offered by organizations? A. direct financial assistance B. tax exemptions on medical bills of the dependent elders C. setting up elderly care facilities close to the workplace D. information, referrals, and support E. providing vouchers and discounts to help employees access the existing elderly care facilities

D. information, referrals, and support Elder care benefit benefits typically emphasize information, referrals, and support, rather than direct financial assistance.

Max, a new supervisor at Freson Inc., is being trained on skills that managers and union leaders require to encourage employee-management cooperation. He is learning the different ways of dealing with employee-management conflicts and how to resolve situations in ways that benefit both parties. In the context of labor management, Max is receiving training on . A. checkoff provisions B. right-to-work laws C. maintenance of membership D. labor relations E. corporate campaigns

D. labor relations Labor relations emphasizes skills that managers and union leaders can use to foster effective labor-management cooperation, minimize costly forms of conflict, and seek win-win solutions to disagreements

When employees in an organization have reason to believe that the management is overlooking their needs and interests, they are likely to respond by collectively forming . A. partnerships B. bureaus C. trade associations D. labor unions E. Interest groups

D. labor unions When employees in an organization have reason to believe that the management is overlooking their needs and interests, they are likely to respond by collectively forming labor unions.

Assuming an organization wants to motivate employees through promotions, and assuming enough opportunities for promotions are available, the organization would want to A. increase the overlap from one level to the next. B. reduce its compa-ratio to less than 1. C. implement a broadband pay structure. D. limit the overlap from one pay range to the next. E. use a fixed interval promotion policy.

D. limit the overlap from one pay range to the next. Assuming the organization wants to motivate employees through promotions (and assuming enough opportunities for promotions are available), the organization will want to limit the overlap from one level to the next.

The idea that unions benefit people in communities by holding employers accountable for the way they treat workers is an example of a(n) ________ goal. A. management B. union C. industrial D. societal E. economical

D. societal According to Senator Orrin Hatch, society's goal for unions is to ensure that workers have a voice in how they are treated by their employers.

Which of the following is a long-term incentive? A. sales commission B. group bonus C. merit pay D. stock option E. piece rate

D. stock option Long-term incentives include stock options and stock purchase plans.

The link between employees' performance and pay is hardest to establish in A. piece rate plans. B. merit pay plans. C. standard hour plans. D. stock ownership plans. E. Scanlon plans.

D. stock ownership plans. In stock ownership plans, employees may not see a strong link between their actions and the company's stock price, especially in larger organizations. The link between pay and performance is even harder to appreciate because the financial benefits mostly come when the stock is sold—typically when the employee leaves the organization.

SalientVision Inc., a construction company, receives more than $2,000 in federal money. The company pays its employees at rates at least equal to the prevailing wages in the area. The calculation of prevailing rates by the company is based on 30% of the local labor force. In this case, which of the following laws does the company comply with? A. the Lloyd-La Follette Act of 1912 B. the Smith-Connally Act of 1943 C. the Julie Jargon Act of 1940 and the Eric Morath Act of 1945 D. the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936 E. the Humphrey-Hawkins Full Employment Act

D. the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936 Two federal laws, the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, govern pay policies of federal contractors. Under these laws, federal contractors must pay their employees at rates at least equal to the prevailing wages in the area.

The employees' union and the management at Rexen Inc. enter into a contract, which requires Rexen to improve its facilities and to ensure the safety of its employees. However, a few months later, the employees observe that the conditions have remained the same and that management has not taken any steps to revamp its systems. As a result, the union files a case against Rexen for violating the terms of their contract. In order to resolve this issue, the union and Rexen will both have to participate in a process for resolving conflicts, known as . A. lockout protocols B. right-to-work laws C. the unionship arrangement D. the grievance procedure E. the chain of command

D. the grievance procedure Contract administration includes carrying out the terms of the agreement and resolving conflicts over interpretation or violation of agreement. Under a labor contract, the process for resolving these conflicts is called a grievance procedure.

What are vesting rights? A. the ability of retired employees to retain their seniority if they return to work at their former employer B. government commitment to provide retirement benefits to all U.S. workers C. the designation that retired workers will receive cost-of-living increases as part of their monthly pension checks D. the guarantee that employees in a pension plan will receive a pension at retirement age, regardless of whether they stay with the employer E. the ability of younger workers to move their retirement savings to another account after leaving a specific employer

D. the guarantee that employees in a pension plan will receive a pension at retirement age, regardless of whether they stay with the employer ERISA guarantees employees that when they become participants in a pension plan and work a specified number of years they earn a right to a pension upon retirement. These rights are called vesting rights. Employees whose contributions are vested have met the requirements (enrolling and length of service) to receive a pension at retirement age, regardless of whether they remained with the employer until that time.

Representatives of management at Eternal Steel and of the union representing its workers are preparing to negotiate contract provisions related to job security. Which of the following topics are most likely to be included in this round of contract negotiations? A. work rules, rest periods, and hours of work B. health insurance, pension plans, and bonuses C. application of rules to apprentices and employees who are veterans D. training programs, transfer arrangements, and relocation allowances E. grievance procedures, job classifications, and production standards

D. training programs, transfer arrangements, and relocation allowances Typical provisions negotiated for job or income security include hiring and transfer arrangements; employment and income guarantees; supplemental unemployment benefit plans; regulation of overtime, shift work, etc.; reduction of hours to forestall layoffs; layoff procedures; seniority; recall; promotion practices; training and retraining, relocation allowances; and severance pay and layoff benefit plans.

In which of the following situations will workers become eligible for unemployment benefits? A. when they have worked only for a few days B. when they are out of work because they are sick C. when they are discharged because of willful misconduct D. when they are actively seeking work E. when they are out of work because of a labor dispute

D. when they are actively seeking work To receive benefits, workers must meet four conditions: They must meet requirements demonstrating they had been employed; they are available for work; they are actively seeking work; and they were not discharged for cause, did not quit voluntarily, and are not out of work because of a labor dispute.

A chain of fried-fish restaurants hires part-time workers and pays minimum wage. Turnover is very high. Given that most employees do not stay at a restaurant long or work there full-time, organizing campaigns are very difficult. With these facts in mind, Gloria, the chain's vice president of human resources, believes unions will not have an impact on the company. What possible force in labor markets is Gloria overlooking? A. self-managing employee teams, which could conduct an union organizing campaign B. management-established representation systems, which are endorsed by the NLRB C. the National Labor Relations Board, which could require the company to form a union D. worker centers, which could influence attitudes through publicity and community support E. arbitration panels, which could rule that fair labor conditions require a union

D. worker centers, which could influence attitudes through publicity and community support Worker centers are nonprofit organizations offering their members services such as training, legal advice, lobbying, and worker advocacy. A few worker centers are affiliated with unions; most are not, so they are not constrained by some of the requirements on unions. Instead of negotiating contracts with management, worker centers pressure employers through publicity campaigns, and they lobby legislators to pass laws favorable to their members. They may lack the financial resources of a major union, but they can be a powerful force when they rally community support.

Which of the following statements is true about key jobs? A. Organizations usually have no survey data available for key jobs. B. Key jobs are jobs that have highly unstable content. C. Key jobs are jobs that are unique among organizations and are rare to obtain. D. Organizations make the process of creating a pay structure more impractical by defining key jobs. E. A job with a higher evaluation score than a particular key job would receive higher pay than that key job.

E. A job with a higher evaluation score than a particular key job would receive higher pay than that key job. Pay for the key jobs can be based on survey data, and pay for the organization's other jobs can be based on the organization's job structure. A job with a higher evaluation score than a particular key job would receive higher pay than that key job.

What is the difference between bonuses and team awards? A. Bonuses are for bigger work groups, whereas team awards are for small teams. B. Unlike bonuses, team awards encourage cooperation. C. Bonuses are usually given to employees who meet deadlines, whereas team awards are given only when the team as a whole meets the targets. D. Unlike team awards, bonuses encourage competition among individuals. E. Bonuses reward attainment of a specific goal, whereas team awards reward performance measured more broadly.

E. Bonuses reward attainment of a specific goal, whereas team awards reward performance measured more broadly. Bonuses reward the members of a group for attaining a specific goal, usually measured in terms of physical output. Team awards are similar to group bonuses, but they are more likely to use a broad range of performance measures, such as cost savings, successful completion of a project, or even meeting deadlines.

Ian is the human resource manager of a one-year-old technology company. The founder wants him to set up a retirement plan. Ian thinks the best approach during the company's early years would be a defined-contribution plan funded with profit-sharing dollars. Which statement best supports Ian's idea? A. The plan makes employees part-owners of the company. B. The Pension Benefit Guarantee Corporation will guarantee a basic benefit. C. Employees can buy an annuity with the contributions when they retire. D. The amount employees contribute is not taxed when they contribute it. E. Contributing a share of profits gives the company more flexibility as it establishes itself.

E. Contributing a share of profits gives the company more flexibility as it establishes itself. Incentive pay may take the form of profit sharing and employee stock ownership plans. These payments may be set up so that the money goes into retirement plans. By defining its contributions in terms of stock or a share of profits, the organization has more flexibility to contribute less dollar value in lean years and more in good years.

Isaiah, an HR manager, conducted a survey to learn which benefits employees value the most. He discovers that the survey results will be difficult to apply. What is the most likely reason? A. Employees expect to receive benefits that are legally required and widely available. B. Software is the only method employees will accept to help them choose their benefits. C. The costs of turnover at Isaiah's company are high. D. The employees only value medical insurance. E. Employees have very different opinions about what they value.

E. Employees have very different opinions about what they value. Employers should consider that the value employees place on various benefits is likely to differ from one employee to another. At a broad level, basic demographic factors such as age and sex can influence the kinds of benefits employees want.

Stan, the CEO of a company, considers dropping medical insurance from the list of benefits provided to employees. Alisha, the operations director, disagrees with Stan by stating that medical insurance is a high-value benefit. Which of the following supports Alisha's statement? A. Companies that do not provide medical insurance cannot have their retirement plans considered as qualified plans. B. Most employees do not appreciate what health insurance costs the employer. C. Medical insurance plans do not cover mental illness. D. A health insurance rate is higher than a general insurance rate. E. Employees usually realize that surgery or a major illness can be financially devastating.

E. Employees usually realize that surgery or a major illness can be financially devastating. With regard to value, medical insurance is a high-value benefit because employees usually realize that surgery or a major illness can be financially devastating.

Which of the following is an advantage of providing benefits instead of cash compensation? A. It is simpler to pay compensation in benefits than in cash. B. Benefits give greater control to employees over cash compensation. C. All companies that provide benefits become eligible for tax breaks by state and federal agencies. D. Younger employees place more importance on benefits than cash compensation. E. Employers can assemble creative benefits packages that give them a competitive advantage.

E. Employers can assemble creative benefits packages that give them a competitive advantage. One advantage of providing benefits instead of cash compensation is that providing benefits allows employers to creatively assemble benefit packages to set them apart in the competition for talent. Also, laws require employers to provide certain benefits, such as contributions to Social Security and unemployment insurance.

Which of the following is a requirement set for employers under the Financial Accounting Standards Board standards? A. Employers must fund benefits on a pay-as-you-go basis. B. Benefits must not appear as future cost obligations. C. Employers should encourage employees to participate in management functions. D. Financial statements should be made in such a way that outsiders cannot understand them. E. Employers must set aside the funds they expect to need for benefits to be paid after retirement.

E. Employers must set aside the funds they expect to need for benefits to be paid after retirement. Under Financial Accounting Standards Board standards, employers must set aside the funds they expect to need for benefits to be paid after retirement, rather than funding those benefits on a pay-as-you-go basis.

Mario, a production worker, complains to a human resource professional at his company that when he asked his supervisor for a week off to care for his son after surgery, the supervisor replied, "Can't your wife do that instead?" Which of the following statements best summarizes what the HR professional should explain to the supervisor? A. Benefits apply whether a spouse is of the same or the opposite sex. B. Females may not be required to contribute more than men to defined-benefit plans. C. Fatherhood is a protected category in the antidiscrimination laws. D. Mario has not yet used all of his sick leave. E. Equal employment opportunity requires that access to benefits not be limited by sex.

E. Equal employment opportunity requires that access to benefits not be limited by sex. Legal treatment of men and women includes equal access to benefits, so the organization may not use the employee's gender as the basis for providing more limited benefits. Family and medical leave, one of the benefits required by law, permits up to 12 weeks of unpaid leave for childbirth, adoption, or serious illness.

For five years, Speed-All Production Systems offered $500 bonuses to individuals who identified ways to reduce costs by at least $1,000 per year. In the first year of that incentive program, 23 employees earned the bonus, but last year, only 7 submitted ideas, and only two of the ideas would actually save more than a few dollars. The company's HR director suggests that the company is likely to see more improvement if it replaces individual incentives with a gainsharing plan. Which of the following statements best supports this argument? A. Gainsharing succeeds regardless of whether employees understand how performance is measured. B. Gainsharing is likely to succeed under almost any organizational conditions. C. Gainsharing broadens employees' horizons beyond the range of activities they can influence. D. Gainsharing measures oversimplify the complex responsibilities of production work. E. Gainsharing expands employees' thinking beyond their individual interests.

E. Gainsharing expands employees' thinking beyond their individual interests. Employers may address the drawbacks of individual incentives by including group incentives in the organization's compensation plan. Gainsharing, one type of group incentives, frees employees to determine how to improve their own and their group's performance. It broadens employees' focus beyond their individual interests. It keeps the performance measures within a range of activity that most employees believe they can influence.

Which of the following is true of how the National Labor Relations Board (NLRB) carries out the function of preventing unfair labor practices? A. The deadline for filing a charge is twelve months after the alleged unfair practice. B. The NLRB has no authority to issue cease-and-desist orders to halt unfair labor. C. The board can order the employer to reinstate workers but cannot order them to pay back pay. D. The NLRB is not authorized to set aside the results of an election and must approach the courts for this purpose. E. If an employer or union refuses to comply with an NLRB order, the board has the authority to petition the U.S. Court of Appeals.

E. If an employer or union refuses to comply with an NLRB order, the board has the authority to petition the U.S. Court of Appeals. If an employer or union refuses to comply with an NLRB order, the board has the authority to petition the U.S. Court of Appeals. The court may enforce the order, recommend it to the NLRB for modification, change the order itself, or set it aside altogether. The deadline for filing a charge is six months after the alleged unfair practice.

Which of the following is a disadvantage of a merit pay system? A. It does not relate the rewards to economic conditions. B. It cannot be used effectively with performance appraisals. C. Comparative pay is not considered in its evaluation. D. It does not provide rewards for performance in all the dimensions measured in the organization's performance management system. E. It can quickly become expensive for the company.

E. It can quickly become expensive for the company. A drawback of merit pay, from the employer's standpoint, is that it can quickly become expensive. Managers at a majority of organizations rate most employees' performance in the top two categories (out of four or five). Therefore, the majority of employees are eligible for the biggest merit increases, and their pay rises rapidly.

Which of the following is an advantage of using balanced scorecard? A. It eliminates the need to communicate the details of an incentive plan to the employees. B. It eliminates managerial effort when providing incentives to employees. C. It increases the pay for all employees in the organization regardless of their performances. D. It reduces employee stress because it does not focus on financial targets. E. It helps employees understand the organization's goals.

E. It helps employees understand the organization's goals. The balanced scorecard combines the advantages of different incentive-pay plans and it helps employees understand the organization's goals.

Gabriela, an HR manager, and her staff devote long hours to planning and running a "benefits fair," where employees can view displays and ask questions about the various parts of the company's benefits package. The following week, the marketing manager asks if the effort was worthwhile. Gabriela says it was. What is the most likely reason for Gabriela's opinion? A. It lowered the cost of communicating with employees, because now the company doesn't need to use printed media. B. It lowered the cost of providing benefits, because employees know what to sign up for. C. It increased employees' commitment to saving for retirement, so they won't need Social Security. D. It increased employees' happiness and job commitment, so they are more fun to be around. E. It increased employees' commitment and satisfaction, so they contribute more to the company.

E. It increased employees' commitment and satisfaction, so they contribute more to the company. Employers have many options for communicating information about benefits. To increase the likelihood that employees will receive and understand the messages, employers can combine several media. An investment of creativity in communications to employees can reap great results in the form of committed, satisfied employees.

FastForward Technology depends heavily on a workforce of software engineers, systems analysts, and coders. Which statement best explains why FastForward would offer its employees paid maternity and paternity leave? A. Only 13% of workers currently have paid family leave. B. Most industrialized nations provide this type of employee benefit. C. Management doesn't want exhausted workers in the office. D. These benefits are required by the Family and Medical Leave Act. E. It makes the company more attractive to workers who are in high demand.

E. It makes the company more attractive to workers who are in high demand. Federal law requires 12 weeks of unpaid leave. Companies may choose to offer more generous leave policies, and four states have requirements for paid family leave. Tech companies, which compete in a tight labor market, are among the leaders in offering paid maternity and paternity leave.

Which of the following is a drawback of a minimum wage in terms of social policy? A. It assumes people will take differences in pay into account when they choose a career. B. It is one and a half times the employee's usual hourly rate. C. It applies only to the hours worked beyond 40 in one week. D. It places the employer at an economic disadvantage relative to employers that pay the living wage. E. It tends to be lower than the earnings required for a full-time worker to rise above the poverty level.

E. It tends to be lower than the earnings required for a full-time worker to rise above the poverty level. From the standpoint of social policy, an issue related to the minimum wage is that it tends to be lower than the earnings required for a full-time worker to rise above the poverty level.

Identify the disadvantage of using profit-sharing plans. A. They cannot be used to improve the organization's performance as a whole. B. The employees may develop a narrow view of their roles in the organization. C. They cost more when the organization experiences financial difficulties. D. Sharing profit with the employees ultimately reduces the organization's profitability. E. Profit sharing is not directly linked to individual behavior.

E. Profit sharing is not directly linked to individual behavior. Profit-sharing plans are not directly linked to individual behavior, as they are designed to promote organizational goals. Employees also may feel that small profit-sharing checks are unfair because they have little control over profits. If profit sharing is offered to all employees but most employees think only management decisions about products, price, and marketing have much impact on profits, they will conclude that there is little connection between their actions and their rewards.

Which of the following is a drawback of a comparable-worth policy? A. A free-market economy assumes people will not take differences in pay into account when they choose a career. B. Employees may conclude that pay rates are unfair. C. The courts prohibit organizations from defending themselves against claims of discrimination by showing that they pay the going market rate. D. Grouping jobs will result in rates of pay for individual jobs that do not precisely match the levels specified by the market and the organization's job structure. E. Raising pay for some jobs places the employer at a disadvantage relative to employers that pay the market rate.

E. Raising pay for some jobs places the employer at a disadvantage relative to employers that pay the market rate. Comparable-worth policies are controversial. From an economic standpoint, the obvious drawback of such a policy is that raising pay for some jobs places the employer at an economic disadvantage relative to employers that pay the market rate. A free-market economy assumes people will take differences in pay into account when they choose a career.

Employee stock ownership plans (ESOPs) are attractive to employers. Along with tax and financing advantages, ESOPs give employers a way to build pride in and commitment to the organization. Which of the following statements weakens this argument? A. Employees are not allowed to participate in general body meetings as shareholders. B. The stocks within the trust are too widely diversified to earn high returns. C. The stock earnings are taxed at high rates. D. Employees are forced to return the stock profits to the organization. E. Risks involved will directly affect employees' retirement income.

E. Risks involved will directly affect employees' retirement income. A disadvantage of ESOPs is that they carry a significant risk for employees. By law, an ESOP must invest at least 51 percent of its assets in the company's own stock in contrast to other kinds of stock funds that hold a wide diversity of companies. Problems with the company's performance therefore can take away significant value from the ESOP. Many companies set up ESOPs to hold retirement funds, so these risks directly affect employees' retirement income.

________ means that an employee is paid a given amount regardless of the number of hours worked or quality of the work. A. Pay level B. Nonexemption C. Pay policy line D. Piecework rate E. Salary basis

E. Salary basis Salary basis means that an employee is paid a given amount regardless of the number of hours worked or quality of work. Paying an employee on a salary basis means the organization expects that this person can manage his or her own time to get the work done, so the employer may deduct from the employee's pay only in certain limited circumstances, such as disciplinary action or for unpaid leave for personal reasons.

Maria, the financial officer at Boone & Borowitz, encourages the human resource manager to consider using stock options as incentive pay for all employees. The human resource manager cautions that employees could become upset if the options don't turn out to be as valuable as cash. Which of the following statements supports this concern? A. Stock options are not profitable to employees. B. Option owners must exercise the options, no matter what the market price. C. Employees may not purchase their employer's stock. D. Offering stock options discourages employees from thinking like owners. E. Stock prices in the market may fall below the exercise price of the options.

E. Stock prices in the market may fall below the exercise price of the options. Stock prices can soar very high very fast, but they can also fall. This can result in a great deal of uncertainty about the amount of incentive pay each employee will receive in each period. When stock prices fall below a stock option's specified price, employees may not bother to exercise their options, leading to small or nonexistent employee incentives.

Old Thyme Manufacturing offered employees a defined-benefit retirement plan, in which retirees received benefits calculated on the basis of their age, earnings, and years of service. But the company didn't keep up with technology, and its earnings fell. When the stock market dipped, the company found that it couldn't afford to keep up with paying for its retirement benefits. What protection will the retirees have in this situation? A. Old Thyme must give the employees the option to sell their stock in the company. B. The employees will receive payouts from their 401(k) plans. C. The employees will receive a share of profits as part of the company's ESOP. D. Because the plan was underfunded, the retirees will no longer receive benefits. E. The Pension Benefit Guarantee Corporation will provide them with a basic benefit.

E. The Pension Benefit Guarantee Corporation will provide them with a basic benefit. The Pension Benefit Guarantee Corporation is the federal agency that insures retirement benefits and guarantees retirees a basic benefit if the employer experiences financial difficulties. To fund the PBGC, employers must make annual contributions at a flat rate per participant in a defined-benefit plan.

Spark Inc., a manufacturing company, hires employees ranging in age from 14 to 25. Which of the following practices by Spark would ensure that it complies with child labor laws? A. The employees are all paid the same amount. B. The teenage employees earn a training wage for the first year. C. Only the workers over 20 earn overtime pay. D. All the employees have part-time schedules. E. The employees aged 14 and 15 work only in office jobs and for limited time periods.

E. The employees aged 14 and 15 work only in office jobs and for limited time periods. Under the FLSA, children aged 14 and 15 may work only outside school hours in jobs defined as nonhazardous and for limited time periods.

Which of the following statements is true about standard hour plans? A. They encourage employees to focus exclusively on customer service. B. They succeed only for employees who are not motivated by money. C. They encourage employees to focus mainly on quality. D. In terms of their pros and cons, they are very different from piecework plans. E. They encourage employees to work as fast as they can.

E. They encourage employees to work as fast as they can. Standard hour plans encourage employees to work as fast as they can, but not necessarily to care about quality or customer service.

In the United States, what is the legal requirement for giving employees paid vacation? A. Paid vacation in the United States must take place on specified days in addition to holidays. B. In the United States, employers must give the amount of paid vacation that makes economic sense. C. In the United States, employers must give employees 10 paid vacation days each year. D. U.S. law requires that new employees receive 25 or 30 days off. E. U.S. law lets employers decide on paid time off; there is no minimum.

E. U.S. law lets employers decide on paid time off; there is no minimum. At first blush, paid vacation, holidays, sick leave, and other paid leave may not seem to make economic sense. This may be the reason Western European countries require a minimum number of paid vacation days, with new employees receiving 25 or 30 days off in many countries. The United States, in contrast, has no such legal requirement. It is up to U.S. employers to decide whether paid leave has a payoff in recruiting and retaining employees.

Broxton, a production manager at Silkenz Inc., is against the idea of forming a union. He believes that unionization may negatively affect the company's profit margins. Which statement best supports Broxton's viewpoint? A. Union workers tend to exhibit lower levels of productivity than nonunion workers. B. Unions are designed to cater to the interests of management rather than to those of employees. C. Unionization tends to reduce the overall costs of labor and operations. D. Forming an employee union will reduce the risk of work stoppages. E. Unionization is associated with higher costs in wages and benefits.

E. Unionization is associated with higher costs in wages and benefits. Management goals are to increase the organization's profits. Managers tend to prefer options that lower costs and raise output. When deciding whether to discourage employees from forming a union, a concern is that a union will create higher costs in wages and benefits, as well as raise the risk of work stoppages.

An organization wants to provide its employees information about what its goals are and what it expects employees to accomplish. It is planning to implement an incentive plan that helps employees understand the organization's goals. Which of the following should be used by this organization? A. a retention bonus B. a piecework rate system C. a merit pay system D. the Scanlon plan E. a balanced scorecard

E. a balanced scorecard Not only does the balanced scorecard combine the advantages of different incentive-pay plans, it helps employees understand the organization's goals. By communicating the balanced scorecard to employees, the organization shows employees information about what its goals are and what it expects employees to accomplish.

Which of the following is covered by the National Labor Relations Act (NLRA)? A. a worker employed as a supervisor B. a person working for a parent C. an independent contractor D. a worker employed by an employer subject to the Railway Labor Act E. a worker going out on strike to secure better working conditions

E. a worker going out on strike to secure better working conditions The following activities are among those protected under the NLRA: union organizing; joining a union, whether recognized by the employer or not; going out on strike to secure better working conditions; and refraining from activity on behalf of the union.

Organizations must communicate benefits information to employees so that they will A. be motivated to work harder. B. choose the least-expensive benefits package. C. be legally liable in an employee lawsuit. D. be informed of future career opportunities within the organization. E. appreciate the value of their benefits.

E. appreciate the value of their benefits. Organizations must communicate benefits information to employees so that they will appreciate the value of their benefits. This is essential so that benefits can achieve their objective of attracting, motivating, and retaining employees.

Employee benefits at Great Nile, an online retailer, include a basketball team, a gym, and an on- site massage therapist. In what way are these benefits most likely to support the company's business goals? A. by meeting the standards of most U.S. businesses B. by making the workplace more family-friendly C. by protecting the company against charges of employment discrimination D. by complying with legal requirements for benefits E. by helping employees cope with demanding, high-stress jobs

E. by helping employees cope with demanding, high-stress jobs Especially for demanding, high-stress jobs, organizations may look for benefits that help employees put in the necessary long hours and alleviate stress. Recreational activities provide for social interaction as well as physical activity.

House Factory Inc. and a union conducting an organizing campaign agree on the time and place of an election and a way to determine who can vote. Which type of election does this scenario best describe? A. stipulation election B. decertification election C. union election D. agreement election E. consent election

E. consent election For a consent election, the employer and the union seeking representation arrive at an agreement stating the time and place of the election, the choices included on the ballot, and a way to determine who is eligible to vote.

Matt has a health care plan that provides him coverage in such a way that allows him to be involved in making decisions to help lower costs. This plan typically includes insurance with a high deductible, a medical savings account, and ongoing health education. Which type of health care plan is Matt using? A. managed care B. health maintenance organization C. preferred provider organization D. flexible health plan E. consumer-driven health plan

E. consumer-driven health plan Consumer-driven health plans (CDHPs) are intended to provide health coverage in a way that gets employees involved as consumers making decisions to lower costs. CDHP typically brings together three elements: insurance with a high deductible, a medical savings account in which the employer contributes to employee-controlled accounts for paying expenses below the deductible, and health education aimed at helping employees improve their health and thus lower their need for health care.

The Walsh-Healy Public Contracts Act of 1936 A. requires that a lower "training wage" be paid to workers under the age of 20 for a period of up to 90 days. B. mandates that employers pay higher wages for overtime, defined as hours worked beyond 40 hours per week. C. covers construction contractors that receive more than $2,000 in federal money. D. requires general contractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the prevailing local wage rates. E. covers all government contractors receiving $10,000 or more in federal funds.

E. covers all government contractors receiving $10,000 or more in federal funds. Walsh-Healy covers all government contractors receiving $10,000 or more in federal funds. Davis-Bacon covers construction contractors that receive more than $2,000 in federal money.

The Davis-Bacon Act of 1931 A. requires that a lower "training wage" be paid to workers under the age of 20 for a period of up to 90 days. B. mandates that employers pay higher wages for overtime, defined as hours worked beyond 40 hours per week. C. requires general contractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates found prevailing in the locality. D. covers all government contractors receiving $10,000 or more in federal funds. E. covers construction contractors that receive more than $2,000 in federal money.

E. covers construction contractors that receive more than $2,000 in federal money. Davis-Bacon covers construction contractors that receive more than $2,000 in federal money. Walsh-Healy covers all government contractors receiving $10,000 or more in federal funds.

Beckwith Corporation has a benefits package that includes paid vacations and sick leave. The human resource manager proposes shifting this time into a bank of paid time off. What would be an advantage of this change? A. vacation and sick leave do not make economic sense B. most companies offer this arrangement C. the company won't have to set a schedule for holidays D. the company won't have to pay for the time the employees take off E. employees have more flexibility and privacy for their personal matters

E. employees have more flexibility and privacy for their personal matters The most flexible approach to time off is to grant each employee a bank of paid time off, in which the employer pools personal days, sick days, and vacation days for employees to use as they choose. Paid time off avoids awkwardness for employees who don't feel well or have urgent personal matters but have used up their time off for such needs. With these advantages in mind, one-quarter to one-half of employers have reported offering PTO benefits.

Pay policies are one of the most important human resource tools for A. reducing competition in the product market. B. automating routine activities. C. persuading customers that high quality is worth a premium price. D. making decisions about product pricing. E. encouraging desired employee behaviors.

E. encouraging desired employee behaviors. Pay policies are one of the most important human resource tools for encouraging desired employee behaviors and discouraging undesired behaviors.

Noah, a human resource manager, learns from employee surveys and conversations that many employees are struggling with the needs of aging parents. He decides to investigate offering elder care benefits. What could these benefits include? A. a 529 savings plan to save money for long-term care facilities B. providing professional caregivers and nursing care C. vacation days and sick leave D. paid time off and part-time jobs for the parents E. flexible hours and decision support from experts in geriatric care

E. flexible hours and decision support from experts in geriatric care Responsibilities such as providing assistance to elderly relatives, paying for professional caregivers, and locating services can be expensive, time consuming, and exhausting, often distracting employees from their work roles. In response, many employers have added elder care benefits. These programs often started by offering employees information and referrals. More recent enhancements of elder care benefits include referrals to decision support from experts in geriatric care, insurance, and the law, as well as flexible hours and paid time off.

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of the earnings to all employees? A. merit pay B. team award C. commission D. standard hour plans E. gainsharing

E. gainsharing Gainsharing refers to a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees.

A feature of an effective incentive pay plan is that it should A. have performance measures based on employees' requirements. B. not be provided as a direct percentage of employees' performance. C. encourage group performance and sideline individual achievements. D. be the same for all employees in the organization. E. have performance measures linked to the organization's goals.

E. have performance measures linked to the organization's goals. An effective incentive pay plan should have performance measures that are linked to the organization's goals.

Bilge Makers Unlimited has a goal to lower the cost of employee benefits. Its human resource department compares the costs of its benefits with averages published by the Bureau of Labor Statistics, the U.S. Chamber of Commerce, and other sources. The investigation shows that its cost for workers' compensation insurance is high relative to other companies. Which of the following actions could best help Bilge Makers accomplish its goal? A. accept the high cost and look for other areas in which to reduce spending B. replace the workers' compensation insurance with disability insurance C. shop for a better deal on workers' compensation insurance D. cancel the workers' compensation insurance E. improve safety to lower the company's experience rating

E. improve safety to lower the company's experience rating Organizations can control certain costs, such as workers' compensation, by improving their experience ratings.

Most pay-related communications come through A. the company newsletter. B. one designated company speaker. C. rumors between employees from various departments. D. an employee's annual review. E. individual discussions between employees and their supervisor.

E. individual discussions between employees and their supervisor. Most pay-related communications come through individual discussions between employees and their supervisor.

Martin, the HR vice president at Ace Trucking, evaluates responses from an employee survey and questions at the company's annual benefits presentation. He concludes that many employees are confused about their options for health insurance and often unhappy with the policy they choose. What should Martin do about this situation? A. accept that it is difficult for employees to understand the value of insurance B. save money by reducing printed messages about health insurance C. downplay the role of health insurance in the benefits package, relative to other benefits D. discontinue health insurance, since it is a source of dissatisfaction E. introduce software that will guide employees to the insurance option for their needs

E. introduce software that will guide employees to the insurance option for their needs It is difficult for employees and job applicants to understand the value of their benefits, especially the complexities of health insurance and the nuances of getting the most out of retirement benefits. The edge in the labor market goes to employers that help them understand. Besides simply delivering information about benefits' value, some companies also offer tools that help employees select and use benefits. An example is software that uses data about an employee's demographics and health status to recommend the health insurance option that best fits the employee's needs.

Which of the following elements establish an organization's pay structure?A. pay ranges and pay differentials B. cost control and equity C. legal requirements and job descriptions D. individual salaries of its employees E. job structure and pay level

E. job structure and pay level Together, job structure and pay levels establish a pay structure that helps the organization achieve goals related to employee motivation, cost control, and the ability to attract and retain talented human resources.

Organizations that are formed in order to represent their members' interests while dealing with employers are known as A. employee guilds. B. sororities. C. lobbies. D. member clubs. E. labor unions.

E. labor unions. Labor unions are organizations formed for the purpose of representing their members' interests and resolving conflicts with employers.

According to your text, a logical place to begin selecting employee benefits is to establish _________ for the benefits package. A. a basic hierarchy B. limits C. costs D. goals E. objectives

E. objectives A logical place to begin selecting employee benefits is to establish objectives for the benefits package. This helps an organization select the most effective benefits and monitor whether the benefits are doing what they should.

Retention bonuses refer to A. the special reward programs used to satisfy the lower and middle-level managers. B. the bonuses provided to union members to withhold a strike. C. the bonuses provided to employees who take long leaves without pay. D. annual incentives paid to daily wage workers to remain in the organization. E. one-time incentives paid in exchange for remaining with the company.

E. one-time incentives paid in exchange for remaining with the company. Retention bonuses refer to one-time incentives paid in exchange for remaining with the company—to top managers, engineers, top-performing salespeople, and information technology specialists.

Which of the following incentive plans would enable its employees to think like owners, taking a broad view of what they need to do in order to make the organization more effective? A. merit pay B. gainsharing C. the Scanlon plan D. performance bonuses E. profit sharing

E. profit sharing Profit sharing is an incentive-pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary. Organizations use profit sharing may encourage employees to think more like owners, taking a broad view of what they need to do in order to make the organization more effective.

Identify the guideline that should be followed by a supervisor to discourage unions. A. promise employees that they will receive favorable terms or conditions of employment if they forgo union activity B. threaten employees with harsher terms and conditions of employment or employment loss if they engage in union activity C. limit direct contact with employees D. interrogate employees about pro-union or anti-union sentiments that they or others may have E. report any direct or indirect signs of union activity to a core management group

E. report any direct or indirect signs of union activity to a core management group In order to discourage unions, supervisors should report any direct or indirect signs of union activity to a core management group.

Identify the unfair labor practice under Section 8(a) of the National Labor Relations Act (NLRA). A. engaging in collective bargaining with a labor organization B. asking to meet with employees' representatives because the employees are on strike C. failing to pay unionized employees higher wages than nonunionized employees D. complementing performance-based pay plans in the company E. restraining employees in exercising their rights to join or assist a labor organization

E. restraining employees in exercising their rights to join or assist a labor organization In Section 8(a), the National Labor Relations Act (NLRA) prohibits certain activities by employers as unfair labor practices. In general, employers may not interfere with, restrain, or coerce employees in exercising their rights to join or assist a labor organization or to refrain from such activities.

Piecework rate plans are most suited for . A. innovative tasks B. non-standard jobs C. managerial jobs D. jobs with difficult-to-measure output E. routine jobs

E. routine jobs Most jobs, including those of managers, have no physical output, so it is hard to develop an appropriate performance measure. So piecework rates are most suited for very routine, standardized jobs with output that is easy to measure.

Laura, HR manager at a tech company, is responsible for administering the company benefits program. The employee benefits package will undergo several significant changes at the start of the new year. Which of the following would be an effective strategy to share the changes with employees? A. issue a revised employee handbook to new employees B. mention the changes to a few employees and hope they spread the word C. say little about the changes D. ask the CEO to say a few words about the changes at the company holiday party E. set up Q&A sessions with each department to discuss the changes

E. set up Q&A sessions with each department to discuss the changes Employers have many options for communication information about benefits. To increase the likelihood that employees will receive and understand the messages, employers can combine several media, such as brochures, question-and-answer meetings, intranet pages, memos, and e-mail.

Kelsey, the engineering manager at Tek Solutions, takes an eight-week unpaid leave to go on a tour to promote a book she wrote. She does so in accordance with Tek Solutions' policy for leaves without pay. In what sense could this unpaid leave be an employee benefit for Kelsey? A. her leave is based on length of service, so it accumulates over time B. her time off is an example of personal days C. the Family and Medical Leave Act requires the employer to grant unpaid time off D. she uses her paid time off for the leave E. she retains her seniority and benefits during the leave

E. she retains her seniority and benefits during the leave Employers should establish policies for leaves without pay—for example, leaves of absence to pursue nonwork goals or to meet family needs. Unpaid leave is an employee benefit because the employee usually retains seniority and benefits during the leave.

Which of the following actions help organizations reduce the cost of health care benefits offered to employees? A. increasing the amount employers pay for deductibles and coinsurance B. selecting traditional health insurance over HMOs and PPOs as a preferred option C. expanding the coverage for different types of claims D. paying some or all of the difference in cost between an HMO or PPO plan E. shifting from traditional health insurance plans to PPOs and CDHPs

E. shifting from traditional health insurance plans to PPOs and CDHPs Concern over health care costs has prompted many employers to shift from traditional health insurance to PPOs and CDHPs.

Executive pay at Ashance Inc., a manufacturing company, includes bonuses based on the year's profits or other measures related to the organization's goals. Sometimes, to gain tax advantages, the bonus is made part of executives' retirement plans. Which of the following is being exemplified in this scenario? A. long-term incentives B. balanced scorecards C. piecework plans D. employee stock ownership plans E. short-term incentives

E. short-term incentives Short-term incentives include bonuses based on the year's profits, return on investment, or other measures related to an organization's goals. Sometimes, to gain tax advantages, the actual payment of the bonus is deferred (for example, by making it part of a retirement plan).

An employee at CellWorks who produces 10 components in an hour earns $9 ($.90 × 10) per hour, while another employee who produces 15 components earns $13.50 ($.90 × 15). This is an example of a A. commission plan. B. differential piece rate plan. C. direct commission plan. D. profit-sharing plan. E. straight piecework plan.

E. straight piecework plan. Incentive pay in which the employer pays the same rate per piece, no matter how much the worker produces is referred to as straight piecework plan.

Which of the following federal laws increased the responsibility of pension plan trustees to protect retirees? A. the Consolidated Omnibus Budget Reconciliation Act (COBRA) B. the Age Discrimination in Employment Act (ADEA) C. the American Disabilities Act (ADA) D. the Fair Labor Standards Act (FLSA) E. the Employee Retirement Income Security Act (ERISA)

E. the Employee Retirement Income Security Act (ERISA) The Employee Retirement Income Security Act (ERISA) is a federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the Pension Benefit Guarantee Corporation.

If employee participation in making pay-related decisions is encouraged in an organization, then A. administering the plans become simple. B. the organization's interests can be best protected. C. the cost borne by the organization decreases. D. monitoring performance becomes difficult. E. the incentive plan has more chances of being successful.

E. the incentive plan has more chances of being successful. Employee participation can contribute to the success of an incentive plan.

Neal joins Filestene Inc. as an executive designer. The HR manager informs him that he will have to join the labor union within a period of 30 days from his start date. In the context of the security provisions related to union membership, Neal's HR manager is referring to a(n) arrangement. A. closed shop B. maintenance of membership provision C. agency shop D. checkoff provision E. union shop

E. union shop Union shop arrangement supports the goals of labor union. It is an arrangement that requires an employee to join the union within a certain time (30 days) after beginning employment.

The employees of Fanzi Textiles Inc. are concerned about company management overlooking their interests. They decide to form a union to voice their concerns and speak up for their rights. They elect Ronny to represent them during negotiations. Ronny's new role requires him to ensure that the terms of the labor contract are enforced and that the interests of the union are met. In this context, Ronny most likely holds the position of _________. A. business representative B. chief executive officer C. stakeholder D. union trustee E. union steward

E. union steward A union steward is an employee elected by union members to represent them in ensuring that the terms of the contract are enforced. The union steward helps investigate complaints and represents employees to supervisors and other managers when employees file grievances alleging contract violations.

From employers' perspective, an advantage of merit pay is that it is cheap

FALSE A drawback of merit pay, from the employer's standpoint, is that it can quickly become expensive.

Health maintenance organizations charge patients half the fee for each visit and service.

FALSE A health maintenance organization (HMO) is a health care plan that requires patients to receive their medical care from the HMO's health care professionals, who are often paid a flat salary, and provides all services on a prepaid basis.

A union steward is a person hired by an organization's management to monitor union activity and report violations, if any.

FALSE A union steward is an employee elected by union members to represent them in ensuring that the terms of the labor contract are enforced.

According to the Financial Accounting Standards Board, employers fund retirement benefits on a pay-as-you-go basis.

FALSE According to the Financial Accounting Standards Board, employers must set aside the funds they expect to need for benefits to be paid after retirement, rather than funding those benefits on a pay-as-you-go basis.

An organization should keep information, such as changes made to its incentive plan, confidential from its employees.

FALSE Along with empowerment, communicating with employees is important. It demonstrates to employees that the pay plan is fair. It is particularly important to communicate with employees when changing the plan. Employees tend to feel concerned about changes.

Successful gainsharing plans include employee stock ownership plans.

FALSE An employee stock ownership plan (ESOP) is an example of an organizational performance incentive plan. A gainsharing plan is an example of pay for group performance.

Employees who are parents always need child care and family leave.

FALSE As workers' children grow up, their needs shift from maternity leave and child care to college tuition.

Associate union membership is linked to an employee's workplace.

FALSE Associate union membership is not linked to an employee's workplace and does not provide representation in collective bargaining. Rather, an associate member receives other services, such as discounts on health and life insurance or credit cards.

If at least 30 percent of an organization's employees sign an authorization card, the union may request that the employer voluntarily recognize the union.

FALSE At the start of the organization process, union representatives make contact with employees, present their message about the union, and invite them to sign an authorization card. For the organization process to continue, at least 30 percent of the employees must sign an authorization card. If over half the employees sign an authorization card, the union may request that the employer voluntarily recognize the union.

Benefits provided to domestic partners of employees have the same tax advantages as benefits provided to their spouses.

FALSE Benefits provided to domestic partners do not have the same tax advantages as benefits provided to spouses. The partner's benefits are taxed as wages of the employee receiving the benefits.

Group bonuses typically reward the performance of all employees in an organization.

FALSE Bonuses for group performance tend to be for smaller work groups. These bonuses reward the members of a group for attaining a specific goal, usually measured in terms of physical output.

A defined contribution plan guarantees a specified or fixed level of retirement income.

FALSE Defined contribution plans set up an individual account for each employee and specify the size of the investment into that account, rather than the amount to be paid out upon retirement. The amount the retiree receives will depend on the account's performance.

Disability insurance payments are usually less than 25 percent of the employee's salary.

FALSE Disability payments are a percentage of the employee's salary—typically 50 to 70 percent.

An ESOP denies employees the right to participate in votes by shareholders even if the stock is registered on a national exchange.

FALSE Employees have a right to participate in votes by shareholders if the stock is registered on a national exchange, such as the New York Stock Exchange.

To increase the likelihood of employees understanding messages about benefits, employers must limit communications.

FALSE Employers have many options for communicating information about benefits. To increase the likelihood that employees will receive and understand the messages, employers can combine several media, such as brochures, question-and-answer meetings, intranet pages, memos, and e-mail.

Enforcement of the National Labor Relations Act rests with the Federal Mediation and Conciliation Service.

FALSE Enforcement of the National Labor Relations Act (NLRA) rests with the National Labor Relations Board (NLRB). It is a federal government agency that enforces the NLRA by conducting and certifying representation elections and investigating unfair labor practices.

Floating holidays are standardized on an annual basis in the United States.

FALSE Floating holidays are paid holidays that vary from year to year. The organization may schedule floating holidays so that they extend a Tuesday or Thursday holiday into a long weekend. Organizations may also give employees discretion over the scheduling of floating holidays.

Employees who receive stock options as incentive pay must exercise the stock options even if the stock price decreases.

FALSE If the stock price falls, employees do not need to exercise the options.

In a company that wants to prevent a union from organizing its workers, the human resource department should encourage supervisors to promise employees that they will receive an extra day off if they don't support the unionization effort.

FALSE It is critical that supervisors establish good relationships with employees even before there is any attempt at union organizing. Supervisors also must know what not to do if a union drive takes place. Promising employees favorable terms or conditions if they forgo union activity is among the actions to avoid.

As in the case of merit pay, performance bonuses for rewarding individual performance are rolled into an employee's base pay.

FALSE Like merit pay, performance bonuses reward individual performance, but bonuses are not rolled into base pay. The employee must re-earn them during each performance period.

In their labor relations, managers prefer to increase wages and benefits and to give maximum control to workers over work rules and schedules.

FALSE Managers continue to prefer to keep the organization's operations flexible, so they can adjust activities to meet competitive challenges and customer demands. Therefore, in their labor relations, managers prefer to limit increases in wages and benefits and to retain as much control as they can over work rules and schedules.

Mediation is the most formal and least used method of conflict resolution.

FALSE Mediation is a conflict resolution procedure in which a mediator hears the views of both sides and facilitates the negotiation process but has no formal authority to dictate a resolution. It is the least formal and most widely used of these procedures.

The funding for unemployment insurance comes from federal and state taxes on employees.

FALSE Most of the funding for unemployment insurance comes from federal and state taxes on employers.

The costs associated with profit sharing increase substantially when the organization experiences financial difficulties.

FALSE Profit sharing has the practical advantage of costing less when the organization is experiencing financial difficulties.

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

FALSE Relying heavily on profit sharing or stock ownership may increase cooperation but do little to motivate day-to-day effort or to attract and retain top individual performers.

Right-to-work laws grant both the employee and employer the right to terminate the employment relationship at any time with or without cause or notice.

FALSE Right-to-work laws are state laws that make union shops, maintenance of membership, and agency shops illegal. The idea behind such laws is that requiring union membership or the payment of union dues restricts the employees' right to freedom of association.

Social security benefits increase if a worker earns wages above the exempt amount.

FALSE Social security benefits may be reduced if the worker is still earning wages above a maximum, called the exempt amount.

Standard hour plans are quality-oriented incentives for professional employees.

FALSE Standard hour plans are quantity-oriented incentives for production workers. They are an incentive plan that pays workers extra for work done in less than a preset "standard time." Standard hour plans are much like piecework plans: they encourage employees to work as fast as they can, but not necessarily to care about quality or customer service.

Tax laws generally make benefits unfavorable to employees.

FALSE Tax laws can make benefits favorable to employees.

Under the team awards type of group incentive, cost savings is excluded as a performance measure.

FALSE Team awards are similar to group bonuses, but they are more likely to use a broad range of performance measures, such as cost savings, successful completion of a project, or even meeting deadlines.

According to the Americans with Disabilities Act (ADA), employers are required to take care not to discriminate against workers over age 40 in providing pay or benefits.

FALSE The Age Discrimination in Employment Act (ADEA) requires employers to take care not to discriminate against workers over age 40 in providing pay or benefits. Under the Americans with Disabilities Act (ADA), employees with disabilities must have "equal access to whatever health insurance coverage the employer provides other employees."

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is by far the largest labor union in the U.S.

FALSE The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is not a labor union but an association that seeks to advance the shared interests of its member unions at the national level.

All U.S. employees, including federal, state, and local government employees, are covered under the Old Age, Survivors, Disability, and Health Insurance program.

FALSE The Old Age, Survivors, Disability, and Health Insurance (OASDHI) program covers over 90 percent of U.S. employees. The main exceptions are railroad and federal, state, and local government employees, who often have their own plans.

Under the workers' compensation laws, employees are eligible to receive their regular paycheck in the event of a disability.

FALSE The amount of income varies from state to state but is typically two-thirds of the worker's earnings before the disability.

The balanced-scorecard approach should be avoided while designing executive pay.

FALSE The balanced-scorecard approach is useful in designing executive pay.

A merit pay incentive system is used to attract employees who are more team-oriented.

FALSE The decisions about merit pay are based on two factors: the individual's performance rating and the individual's compa-ratio (pay relative to average pay).

For an average employee, the most common type of insurance offered as benefits is the pension program.

FALSE The most common types of insurance offered as employee benefits are medical, life, and disability insurance.

Tuition reimbursement programs offered by certain organizations cover the tuition and other education related expenses of their workers' children.

FALSE To encourage learning and attract the kinds of employees who wish to develop their knowledge and skills, many organizations offer tuition reimbursement programs, which cover tuition and related expenses for courses that are relevant to the employee's current job or future career at the organization.

Under a checkoff provision, a person must be a union member before being hired.

FALSE Under a checkoff provision, an employer, on behalf of the union, automatically deducts union dues from employees' paychecks.

Under profit sharing, payments are a percentage of the organization's profits and become part of the employees' base salary.

FALSE Under profit sharing, payments are a percentage of the organization's profits and do not become part of the employees' base salary.

Employers in the United States are legally required to provide 30 days of paid vacation to both new and existing employees every year.

FALSE Western European countries require a minimum number of paid vacation days, with new employees receiving 25 or 30 days off in many countries. The United States, in contrast, has no such legal requirement.

Pay grades allow precise matching of pay for individual jobs to market rates and an organization's job structure.

False A drawback of pay grades is that grouping jobs will result in rates of pay for individual jobs that do not precisely match the levels specified by the market and the organization's job structure.

According to equity theory, employees evaluate job outcomes such as compensation in terms of outputs.

False According to equity theory, people measure outcomes such as pay in terms of their inputs.

Issues affecting an organization's pay structure do not affect its reputation in general.

False An organization's policies regarding pay structure greatly influence employees' and even the general public's opinions about the organization. Issues affecting pay structure therefore can hurt or help the organization's reputation and ability to recruit, motivate, and keep employees.

If the average pay is below the midpoint of an organization, the compa-ratio is 1.

False Assuming that an organization has pay grades, the organization would find a compa-ratio for each pay grade. If the average equals the midpoint, the compa-ratio is 1. Below 1 means the average pay is below the midpoint.

Implementing broad bands increases the opportunities for promoting employees.

False Broad bands reduce the opportunities for promoting employees, so organizations that eliminate layers in their job descriptions must find other ways to reward employees.

In a two-tier wage system, employees doing the same job are paid two different rates, depending on their technical background and training.

False In a two-tier wage system, existing employees continue on at their current (upper-tier) pay rate while new employees sign on for less pay (the lower tier).

Key jobs are uncommon and have unstable content, making them very difficult to evaluate using pay surveys.

False Key jobs are jobs that have relatively stable content and are common among many organizations, so it is possible to obtain survey data about what people earn in these jobs.

Research suggests that employees in the lower tier of the pay structure in a two-tier wage system are less satisfied than the top-tier employees.

False One might expect reaction among employees in the lower tier that the pay structure is unfair. But a study of these employees found that they were more satisfied than the top-tier employees.

Pay level is the total amount an employee pays to the organization.

False Pay level is the average amount (including wages, salaries, and bonuses) the organization pays for a particular job.

The pay offered by an organization is not limited by its presence in a product market.

False Product markets place an upper limit on the pay an organization will offer.

Skill-based pay systems do not support empowerment of employees.

False Skill-based pay supports efforts to empower employees and enrich jobs because it encourages employees to add to their knowledge so they can make decisions in many areas.

Military pay often exceeds what service members would earn in their civilian jobs.

False The armed services pay service members during their time of duty, but military pay often falls short of what they would earn in their civilian jobs.

The laws governing Equal Employment Opportunity guarantee equal pay for all employees of an organization.

False The laws governing equal employment opportunity do not guarantee equal pay for men and women, whites and minorities, or any other groups, because so many legitimate factors, from education to choice of occupation, affect a person's earnings.

The most common approach to pay differentials is to move an employee lower in the pay structure to compensate for higher living costs.

False The most common approach to pay differentials is to move an employee higher in the pay structure to compensate for higher living costs.

In a product market, different organizations have exclusive customer bases.

False The organizations in a product market are competing to serve the same customers.

The equity of executive pay affects a select few of an organization's employees.

False Top executives help to set the tone or culture of the organization, and employees at all levels are affected by behavior at the top. As a result, the equity of executive pay can affect more employees than, say, equity among warehouse workers or salesclerks.

Under the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, employees of federal contractors must receive rates less than the prevailing wages in the area.

False Two additional federal laws, the Davis-Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, govern pay policies of federal contractors. Under these laws, federal contractors must pay their employees at rates at least equal to the prevailing wages in the area.

Under the FLSA, children aged 14 and 15 may not be employed outside school hour

False Under the FLSA, children aged 14 and 15 may work only outside school hours in jobs defined as nonhazardous and for limited time periods. A child under age 14 may not be employed in any work associated with interstate commerce, except work performed in a nonhazardous job for a business entirely owned by the child's parent or guardian. A few additional exemptions from this ban include acting, babysitting, and delivering newspapers to consumers.

When job structure conflicts with market data, organizations should base their pay only on market forces because this approach does not have any practical drawbacks.

False When job structure and market data conflict, organizations have to decide on a way to resolve the two. One approach is to stick to the job evaluations and pay according to the employees' worth to the organization. A way to moderate this approach is to consider the importance of each position to the organization's goals. At the other extreme, the organization could base pay entirely on market forces. However, this approach also has some practical drawbacks.

A balanced scorecard is a combination of performance measures directed toward the company's long- and short-term goals.

TRUE A balanced scorecard is a combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay.

A craft union's bargaining power depends greatly on the control it can exercise over the supply of its workers.

TRUE A labor union whose members all have a particular skill or occupation are known as craft unions. Craft unions are often responsible for training their members through apprenticeships and for supplying craft workers to employers. A craft union's bargaining power depends greatly on its control over the supply of its workers.

When a union and employer negotiate a contract, they cannot bar outside parties from holding an election for more than three years.

TRUE After the union and employer have finished negotiating a contract, an election cannot be held for the time of the contract period or for three years, whichever comes first. The parties to the contract may agree not to hold an election for longer than three years, but an outside party (another union) cannot be barred for more than three years.

Merit pay is a system of linking pay increases to ratings on performance appraisals.

TRUE Almost all organizations have established a program of merit pay, which links pay increases to ratings on performance appraisals. To make the merit increases consistent, so they will be seen as fair, many merit pay programs use a merit increase grid.

Incentive pay is specifically designed to energize, direct, or control employees' behavior and is influential because the amount paid is linked to certain predefined behaviors or outcomes.

TRUE Along with wages and salaries, many organizations offer incentive pay—that is, pay specifically designed to energize, direct, or control employees' behavior. Incentive pay is influential because the amount paid is linked to certain predefined behaviors or outcomes.

The frequency for bargaining over a new contract is only about every three years.

TRUE Although the process of negotiating a labor agreement receives the most publicity, other union-management activities occur far more often. Bargaining over a new contract typically occurs only about every three years, but administering labor contracts goes on day after day, year after year.

Most studies have found that union workers are more productive than nonunion workers.

TRUE Although there is evidence that unions have both positive and negative effects on productivity, most studies have found that union workers are more productive than nonunion workers.

The use of wellness programs and consumer-directed health plans in an organization reflect its objective of controlling the cost of health care benefits.

TRUE Among companies that do set goals, the most common objectives include controlling the cost of health care benefits and retaining employees. The first goal explains the growing use of wellness programs and consumer-directed health plans.

Because benefits packages are more complex than pay structures, they are harder for employees to understand and appreciate.

TRUE Benefits packages are more complex than pay structures, so benefits are harder for employees to understand and appreciate.

Competition for scarce human resources can lead employers to offer much of what employees traditionally sought through union membership.

TRUE Competition for scarce human resources can lead employers to offer much of what employees traditionally sought through union membership.

Contract administration includes carrying out the terms of the agreement and resolving conflicts over interpretation or violation of the agreement.

TRUE Contract administration includes carrying out the terms of the agreement and resolving conflicts over interpretation or violation of the agreement. Under a labor contract, the process for resolving these conflicts is called a grievance procedure. This procedure has a key influence on success in contract administration.

Cooperation between labor and management may feature employee involvement in decision making and self-managing employer teams.

TRUE Cooperation between labor and management may feature employee involvement in decision making, self-managing employee teams, labor-management problem-solving teams, broadly defined jobs, and sharing of financial gains and business information with employees. The search for a win-win solution requires that unions and their members understand the limits on what an employer can afford in a competitive marketplace.

During a strike, the employer loses production unless it can hire replacement workers, and even then, productivity may be reduced.

TRUE During a strike, the employer loses production unless it can hire replacement workers, and even then, productivity may be reduced.

Cafeteria-style plans increase benefits costs for employers.

TRUE Employee selection of benefits, in cafeteria-selection plans, will increase rather than decrease costs because employees will select the kinds of benefits they expect to need the most.

An employee stock ownership plan is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust.

TRUE Employee stock ownership plan refers to an arrangement in which the organization distributes shares of stock to all its employees by placing the stock into a trust managed on the employees' behalf.

Employees are most likely to benefit from a flexible spending account if they have predictable health care expenses, such as insurance premiums.

TRUE Employees are most likely to benefit from a flexible spending account if they have predictable health care expenses, such as insurance premiums.

According to Employee Retirement Income Security Act (ERISA), employees whose contributions are vested meet the requirements to receive a pension at retirement age.

TRUE Employees whose contributions are vested have met the requirements (enrolling and length of service) to receive a pension at retirement age, regardless of whether they remained with the employer until that time.

Courts generally avoid reviewing arbitrators' decisions and focus only on whether the grievance involved an issue that is subject to arbitration under the contract.

TRUE If a grievance reaches arbitration, the arbitrator makes the final ruling in the matter. Based on a series of Supreme Court decisions, courts generally avoid reviewing arbitrators' decisions and focus only on whether the grievance involved an issue that is subject to arbitration under the contract.

Employees and job applicants often have a poor idea of what benefits they have and what the market value of their benefits is.

TRUE In practice, it is difficult for employees and job applicants to understand the value of their benefits, especially the complexities of health insurance and the nuances of getting the most out of retirement benefits.

Incentive pay for executives lays the groundwork for significant ethical issues.

TRUE Incentive pay for executives lays the groundwork for significant ethical issues. When an organization links pay to its stock performance, executives need the ethical backbone to be honest about their company's performance even when dishonesty or clever shading of the truth offers the tempting potential for large earnings.

Joining a union, whether recognized by the employer or not, is an activity protected under the National Labor Relations Act (NLRA).

TRUE Joining a union, whether recognized by the employer or not, is an activity protected under the National Labor Relations Act (NLRA).

Linking incentives to the organization's profits or stock price exposes employees to a high degree of risk.

TRUE Linking incentives to the organization's profits or stock price exposes employees to a high degree of risk. Profits and stock price can soar very high very fast, but they can also fall. The result is a great deal of uncertainty about the amount of incentive pay each employee will receive in each period.

Under incentive pay, piecework rates are most suited for routine, standardized jobs with output that is easy to measure.

TRUE Most jobs, including those of managers, have no physical output, so it is hard to develop an appropriate performance measure. So piecework rates are most suited for very routine, standardized jobs with output that is easy to measure.

The balanced scorecard helps employees understand the organization's goals and how they can contribute to these goals.

TRUE Not only does the balanced scorecard combine the advantages of different incentive-pay plans, it helps employees understand the organization's goals. By communicating the balanced scorecard to employees, the organization shows employees information about what its goals are and what it expects employees to accomplish.

On average, unionized workers receive higher pay than their nonunionized counterparts.

TRUE On average, unionized workers receive higher pay than their nonunionized counterparts.

Originally, the National Labor Relations Act (NLRA) did not contain a list of any unfair labor practices by unions.

TRUE Originally, the NLRA did not list any unfair labor practices by unions. In later amendments to the NLRA—the Taft-Hartley Act of 1947 and the Landrum-Griffin Act of 1959—Congress established some restrictions on union practices deemed unfair to employers and union members.

Retention bonuses are one-time incentives paid to top managers, engineers, top-performing salespeople, and information technology specialists in exchange for remaining with the company.

TRUE Retention bonuses are one-time incentives paid in exchange for remaining with the company to top managers, engineers, top-performing salespeople, and information technology specialists.

The addition of creative benefits packages for employees provides employers a competitive edge in acquiring and retaining talented employees in their organization.

TRUE Some employers assemble creative benefits packages that set them apart in the competition for talent.

The Family and Medical Leave Act of 1993 requires organizations with 50 or more employees within a 75-mile radius to provide as much as 12 weeks of unpaid leave to qualifying employees.

TRUE The Family and Medical Leave Act (FMLA) of 1993 requires organizations with 50 or more employees within a 75-mile radius to provide as much as 12 weeks of unpaid leave after childbirth or adoption; to care for a seriously ill child, spouse, or parent; for an employee's own serious illness; or to take care of urgent needs that arise when a spouse, child, or parent in the National Guard or Reserve is called to active duty.

The Scanlon plan of gainsharing gives employees a bonus if the ratio of labor costs to the sales value of production is below a set standard.

TRUE The Scanlon plan of gainsharing gives employees a bonus if the ratio of labor costs to the sales value of production is below a set standard. To keep this ratio low enough to earn the bonus, workers have to keep labor costs to a minimum and produce as much as possible with that amount of labor.

In larger organizations that have stock ownership plans, the employees may not see a strong link between their actions and the company's stock price.

TRUE The drawback of stock ownership as a form of incentive pay is that employees may not see a strong link between their actions and the company's stock price, especially in larger organizations.

Preparation, in collective bargaining, includes establishing objectives for the contract, reviewing the old contract, and gathering data.

TRUE The outcome of contract negotiations can have important consequences for labor costs, productivity, and the organization's ability to compete. Therefore, unions and management need to prepare carefully for collective bargaining. Preparation includes establishing objectives for the contract, reviewing the old contract, and gathering data.

Under the National Labor Relations Act, the union has a duty of fair representation, meaning that the union must provide equal representation to all members of the bargaining unit, whether or not they actually belong to the union.

TRUE Under the National Labor Relations Act, the union has a duty of fair representation, which means the union must give equal representation to all members of the bargaining unit, whether or not they actually belong to the union.

Unlike union membership for workers in businesses, union membership among government workers has remained strong.

TRUE Unlike union membership for workers in businesses, union membership among government workers has remained strong. Union membership in the public sector grew during the 1960s and 1970s and has remained steady ever since.

Organizations use pay surveys to benchmark compensation.

True In terms of compensation, benchmarking involves the use of pay surveys. These provide information about the going rates of pay at competitors in the organization's product and labor markets.

Paying a salary does not necessarily mean that a job is exempt from overtime pay.

True Most workers paid on an hourly basis are nonexempt and therefore subject to the laws governing overtime pay. However, paying a salary does not necessarily mean a job is exempt.

Product markets place an upper limit on the pay an organization will offer. This upper limit is significant when the organization's total costs are mainly comprised of labor costs, and when price is a significant factor for the organization's consumers.

True Product markets place an upper limit on the pay an organization will offer. This upper limit is most important when labor costs are a large part of an organization's total costs and when the organization's customers place great importance on price.

If state laws specify minimum wages, in addition to the federal level, employees are entitled to receive whichever rate is higher.

True Some states have laws specifying minimum wages; in these states, employers must pay whichever rate is higher.

The job characteristics that an organization deems valuable and decides to pay for are called compensable factors.

True To conduct a job evaluation, a job evaluation committee identifies each job's compensable factors, meaning the characteristics of a job that the organization values and chooses to pay for.

A pay structure helps an organization achieve goals related to cost control.

True Together, job structure and pay levels establish a pay structure that helps the organization achieve goals related to employee motivation, cost control, and the ability to attract and retain talented human resources.