____ refers to the average of the array of rates paid by an employer.
a. cost of the company
d. pay level
Pay level decisions have a significant impact on expenses. Other things being equal, the higher the pay level, the higher the:
b. labor costs
c. return on investments
d. fixed cost
Which of the following is not a reason a company might pay base wages above market competitors?
a. employees are more productive
b. turnover will be lower
c. competitor production costs are lower
d. to attract more job applicants
competitor production costs are lower
IfCompany A and Company B pay the same total compensation for a job, which of thefollowing is most likely true?
a. base pay is the same
b. benefits costs are the same
c. the pay mix differs
d. the pay mix is the same
the pay mix differs
Which of the following is an example of a quoted-price?
a. a product on e-bay
b. a product on priceline
c. a used car
d. a product on amazon
a product on amazon
____ is an example of a bourse
a. the stated starting wage of a job in an ad
b. the total compensation for a top athlete
c. the price of a product on amazon
d. the price of a box of cereal at a grocery store
the total compensation for a top athlete
All of the following except the ___ shape external competitiveness
a. skill level of employees
b. nature of demand
c. industry strategy
d. level of production demand
skill level of employees
Which of the following is an example of the demand side of labor?
a. level of pay applicants will accept
b. qualification of applicants
c. pay level offered by an employer
d. locations of potential employees
pay level offered by an employer
The market pay rate is the:
a. min. wage rate set by the department of labor
b. pay rate at which applicants will accept a job
c. going rate
d. point which supply and demand lines cross
point at which supply and demand lines cross
Output associated with hiring an additional person, holding constant other production factors, is referred to as:
b. the marginal product of labor
c. incremental productivity
d. the marginal revenue product of labor
the marginal product of labor
Employers continue to hire until marginal revenue of the last hire equals their wage rate because as per the first labor market theory assumption:
a. markets are competitive
b. pay rates reflect all costs of employment
c. employers seek to maximize profits
d. workers are homogeneous and interchangeable
employers seek to maximize profits
In a hiring situation, considering that other potential costs will not change in the short run, the level of demand that max. profits is that level at which the ___ of the last hire is equal to the ___ for that hire
a/ demand factor; supply factor
b. marginal output; market price
c. incremental output; marginal output
d. marginal revenue; wage rate
marginal revenue; wage rate
Considering the third assumption of labor market theory, although some firms find lowering the job requirements and hiring less-skilled workers a better choice than raising wages, this choice incurs:
a. lower marginal productivity
b. increased training costs
c. decreased marginal output
d. higher recruitment costs
increased training costs
The assumption of the upward sloping supply curve may not hold when ____
a. wages are low
b. wages are high
c. unemployment is low
d. unemployment is high
unemployment is low
If company A raises its pay rate one dollar per hour to additional workers and competitors immediately match the increase, what is the most likely result?
a. higher labor costs for company A, but not more workers
b. company A will hire the needed workers at the higher wage rate
c. competitors will lose employees to company A
d. company A will hire quality workers
higher labor costs for company A, but not more workers
Which theory supports the idea that coal mining should be paid more than office clerical work?
b. marginal productivity
c. efficiency wage
d. compensating differentials
The theory that has the most implications for staffing is the ___ theory
a. compensating differentials
b. efficiency wage
d. marginal productivity
Research on efficiency wage theory shows that:
a. more unqualified workers apply
b. disciplinary layoffs are higher
c. more supervision is required
d. profits are not related
more unqualified workers apply
___ theory is typically associated with greater profits
b. compensating wage differentials
c. efficiency wage
d. human capital
Rent sharing is most commonly associated with the ____ theory
a. human capital
c. marginal productivity
d. efficiency wage
Implication of the ___ theory is that pay level affects an employer's ability to recruit
a. human capital
b. reservation wage
In ____ theory, pay is described as non-compensatory
a. efficiency wage
c. reservation wage
d. marginal productivity
The ____ theory is the most influential in explaining pay-level differences
a. human capital
b. marginal productivity
c. efficiency wage
___ sets a max. pay level an employer can pay
a. government legislation
b. the product market
c. the labor market
d. labor market competitors
the product market
Which of the following factors do not affect an employer's ability to pay high wages?
a. product demand
b. degree of competition
c. productivity of labor
d. supply of skilled employees
supply of skilled employees
The study referred to in the text on how managers make wage adjustment decisions found:
a. level of unemployment had a major effect
b. probability affected the overall pay budget
c. managers believed efficiency wage theory
d. managers believed higher pay makes supervision easier
profitability affected the overall pay budget
Segmented labor supply involves all of the following except:
a. hiring from different sources
b. paying workers differently who are performing the same work
c. hiring from different sources and differential pay and benefits for the same work
d. employing regulars, part-timers, and temps
hiring from different sources and differential pay and benefits for the same work
Wages tend to be low in which of the following industries:
a. education and health care
b. technology intensive industries
c. professional services
education and health care
Which of the following is not true of the relationship between employer size and its ability to pay?
a. talented individuals have a higher marginal value in a larger organization
b. talented people can influence more people and decisions
c. influence of talented people leads to more profits
d. talented people prefer to work in larger organizations
talented people prefer to work in larger organizations
Evidence shows that in manufacturing, ____ is positively correlated with hourly wage level
c. job satisfaction
d. total profit
All of the following are important factors in defining a market for compensation purposes except:
a. skill/knowledge required
b. product acceptance
c. ability to pay
d. product and/or labor market competitors
ability to pay
In which of the following would data from labor market competitors be given more weight than product market competitors data?
a. labor costs area a large share of total costs
b. employee skills are specific to the product market
c. product demand is responsive to price changes
d. the supply of labor is responsive to changes in pay
the supply of labor is responsive to changes in pay
The pay policy associated with increased productivity is the ____ policy
d. employer of choice
A pay policy most likely to reduce pay dissatisfaction is _____
b. employer of choice
The most common pay policy is _____
All of the following are advantages of a lead pay policy except ____
a. reduced training time
b. reduced turnover
c. reduced absenteeism
d. higher financial performance
reduced training time
Among pay-mix alternatives, base pay is largest in ____
a. work-life balance
b. security or commitment
c. performance driven
d. market match
security or commitment
The pay-mix component in which benefits is likely to be largest is _____
a. work-life balance
b. security or commitment
c. performance driven
d. market watch
Which of the following is not a consequence of level of competitiveness of total compensation?
a. increase probability of union-free status
b. increase organization profitability
c. reduce voluntary turnover
d. reduce pay-related work stoppages
increase organization profitability
In determining the compensation strategy, a major strategic decision is whether to mirror what competitors are paying. True or false?
Both pay level and pay mix decisions focus on two objectives: (1) control costs and increase revenues and (2) attract and retain employees. True or false?
External competitiveness is primarily determined by the impact of government regulations on the firm or industry. True or false?
There is no single "going rate" in the labor market for specific job. True or false?
Stores that label each item's price or ads that list a job opening's starting wage are examples of bourses. True or false?
An individual manager could be a factor affecting an employer's external competitiveness. True or false?
Graduating students usually find themselves in a quoted-labor market. True or false?
In a labor market, the demand side focuses on the actions of the employers. True or false?
The first assumption of labor market theories is that employers always seek to max. penetration. True or false?
In a labor market, the market rate is where the lines for labor demand and labor supply cross. True or false?
Marginal productivity theory argues that when factors of production are held constant, each additional worker is less productive than the last one hired. True or false?
Other things being constant, in a hiring scenario, the employer will continue to hire until the marginal revenue generated by the last hire is equal to the costs associated with employing that person. True or false?
Marginal revenues is measurable and used by managers to determine both pay levels and how many employees to hire. True or false?
In practice, organizations use skills and competencies to assess value of labor instead of marginal revenue product. True or false?
Compensation differentials theory says that paying above market wages will lead to workers with higher ability. True or false?
According to efficiency-wage theory, paying higher wages than competitors lowers labor costs due to more efficient workers. True or false?
Signaling theory argues that higher wages leads to greater efficiency. True or false?
An employer offering lower base pay with high bonuses is likely signaling they are seeking risk-taking employees. True or false?
Signaling theory applies to both the demand and supply side. True or false?
Job applicants who will not accept a job that pays below a certain level are acting according to signaling theory. True or false?
It is likely that workers act in accordance with reservation wage theory with respect to both wages and benefits. True or false?
The most influential theory explaining pay-level differences is marginal revenue productivity. True or false?
Human capital theory assumes that people are paid at the value of their marginal product. True or false?
The product market sets the floor on the min. wage required to attract sufficient numbers of employees. True or false?
Employers in highly competitive markets are less able to raise prices without loss of revenues. True or false?
Wages in labor-intensive industries are generally lower than in technology intensive industries. True or false?
Talented individuals have a higher marginal value in larger organizations. True or false?
The three factors usually used to determine the relevant labor markets are the occupation, geography, and competitors. True or false?
Combat pay premiums paid to military personnel offset some of the risk of being fired upon is an example of a lead pay-level policy. True or false?
A lead policy may force the employer to increase wages of current employees too, to avoid internal misalignment and murmuring. True or false?
The first step in setting competitive pay and designing a pay structure is _____
a. specify pay-level policy
b. conduct job evaluation
c. draw policy lines
d. specify relevant market
specify pay-level policy
The second major decision in pay-level determination is _____
a. specify relevant market
b. define purpose of survey
c. design and conduct survey
d. select product and labor market competitors
define purpose of survey
The final major decision in pay-level determination is _____
a. interpret and apply results of survey
b. obtain top-management acceptance of final decisions
c. design grades and ranges
d. draw policy lines
design grades and ranges
Which of the following is true regarding the Employment Cost Index (ECI)?
a. it is published by the department of commerce
b. it is an excellent source of competitor labor costs
c. it measures annual changes in employer compensation costs
d. it allows comparison of labor costs to all-industry averages
it allows comparison of labor costs to all-industry averages
A relevant labor market includes all employers who compete in one or more of the following areas except _____
a. employees in the same geographic area
b. the same occupations or skills
c. the same products and services
d. pay similar wages
pay similar wages
Which of the following types of labor would most likely be recruited only locally??
a. office and clerical workers
office and clerical workers
Which of the following jobs would most likely fall into a fuzzy market?
a. screen writer (MGM)
b. sound engineer (sony studios)
c. director of future vision services (west publishing)
d. vice-president of people (SW airlines)
director of future vision services (west publishing)
The primary responsibility for conducting a pay survey is ______
a. top management
b. the facility or plant manager
c. outside consultants
d. the compensation manager
the compensation manager
The answer to the question of how many firms to include in a pay survey is ____
a. there are no firm rules
b. include at least one hundred
c. focus primarily on labor-market competitors
d. the top 50 percentile of similar sized firms
there are no firm rules
The ____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data.
a. chamber of commerce
b. bureau of labor statistics
c. compensation association
d. department of economics
bureau of labor statistics
A company using a skill-based pay system prices the job of lead assembler at between $10 and $22 per hour. Survey data showed the job assembler averaged $10 per hour and the job assembly supervisor at $22 per hour. The company was using the ____ method of job matching
a. benchmark job
c. pay range
d. benchmark conversion
Applying the job evaluation process to pay survey jobs to assess the degree of match between survey jobs and benchmark jobs is called the _____ approach
b. benchmark job
c. benchmark conversion
d. point survey conversion
Financial data in pay surveys are used to __
a. group firms by size
b. analyze competitors' performance
c. compare competitors' labor costs
d. compare competitors' debt ratios
group firms by size
The purpose of collecting data on number of employees in a pay survey is to ___
a. indicate how the business is organized
b. estimate the ability to pay
c. estimate the organization's impact on the labor market
d. indicate staffing patterns
estimate the organization's impact on the labor market
___ shows how competitors value work in similar jobs
a. base wage
b. total cash
c. total compensation
d. base pay plus benefits
This measure of compensation may overstate competitors' pay
a. base pay plus benefits
b. total cash compensation
c. base pay
d. total compensation
total cash compensation
__ measures competitors' use of performance-based pay
a. base pay
b. short-term incentive pay
c. total cash
d. total compensation
The first step in interpreting survey data is ____
a. check for the accuracy of job matches
b. seek out non-responders
c. check for fraudulent data
d. remove the top and bottom paying companies
check for accuracy of job matches
Survey data from one or a few employers that are significantly out of line with other employers ___
a. are deviant data
b. are anomalies
c. reflect a diverse sample
d. are standard deviations
The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called ____
b. point factor adjustment
c. lead/lag policy adjustment
d. survey leveling
All of the following are examples of potential anomalies except ____
b. a large variation in base pay for a job at one company
c. one company dominates the results
d. a large variation in average base pay for a job across companies
a large variation in average base pay for a job across companies
The ___ minimizes distortion of the central tendency caused by outliers
a. weighted mean
Which of the following statistical measures shows how similar or dissimilar the market rates are from each other?
a. weighted mean
c. standard deviation
Because employers are raising employee pay at various times during the year, survey data must be updated using a process called __ or __
a. ageing, trending
b. ageing, smoothing
c. trending, leveling
d. gaining, smoothing
Asurvey conducted in January, 2007 found the median pay effective January 1,2007, for a clerk was $20,000 and the forecast rate of wage increases in themarket for 2007 was 5% and another 5% for 2008. An employer choosing to followa lead/lag policy for the 2008 plan year will need to _____.
a. add $2,000 to base pay
b. multiply the salary by 105%
c. multiply the salary by 105% and then by another 5%
d. multiply the salary by 110%
multiply the salary by 105% and then by another 5%
A market pay line __
a. reflects an organization's internal alignment policy
b. links a company's benchmark jobs with market rates paid by competitors
c. provides an accurate prediction of an organization's entry level pay rates
d. compares an organization's min. and max. pay rates for each skill level
links a company's benchmark jobs with market rates paid by competitors
Inthe regression equation, y = a + bx,job evaluation points are _____.
Anorganization that has a match (pay) policy will pay its employees:
a. the market rate each month for the duration
b. more than the market rate for some months and less than the market rate for the other months
c. at the 100th percentile of the market rate obtained through the wage/salary survey
d. at the 50th percentile of the market rate obtained through the wage/salary survey
more than the market rate for some months and less than the market rate for the other months
Aging market data to a point halfway through the plan year is called ___
a. are flexible enough to deal with differences in quality, but not with the productivity or value of these quality variations
b. usually lead to an increase in employee turnover
c. reflect the differences in performance or experience that an employer wishes to recognize with pay
d. cause employees to believe that their compensation can increase by only a limited amount
reflect the differences in performance or experience that an employer wishes to recognize with pay
Pay ranges for clerical and production jobs commonly range between __ and __
a. 5, 15
b. 15, 30
c. 30, 40
d. 40, 60
Size of pay differentials between grades should __
a. be based upon differentials in market surveys
b. be approximately 15 percent
c. support career movement through the pay structure
d. be between 10 and 25 percent
support career movement through the pay structure
Which of the following statements is true regarding broad bands?
a. they require a relatively stable organization design
b. they support recognition via titles or career progression
c. they foster cross-functional growth
d. they give managers "freedom with guidelines"
they foster cross-functional growth
Paying jobs of different functions different rates within a pay band is called ___
a. reference rates
b. broad banding
c. pay leveling
d. knowledge-based pay
Job structure is to ___ as pay structure is to pay-policy line
a. market line
b. pay surveys
c. job evaluations
d. reference rates
The __ pay strategy emphasizes external competitiveness and de-emphasizes internal alignment
a. job structure
b. broad banding
c. reference rate
d. market price
Which of the following statements is true about market pricers?
a. they align pay structures with the business strategy
b. their pay structures are unique and difficult to imitate
c. they assume that little value is added through internal alignment
d. they emphasize pay structures based on unique technology or the way work is organized
they assume that little value is added through internal alignment
The final step in determining externally competitive pay levels and structures is merging internal and external pressure. True or false?
Adjustments to form of pay occur more often than adjustments to overall pay level. True or false?
When there is an unusual level of turnover in a job, an employer is likely to conduct a market survey. True or false?
The relevant labor market for accounting, sales or clerical skills should be limited to each industry in which these types of work are found. True or false?
It is easier for employers to determine the worth of jobs that fall into fuzzy markets than traditional relevant markets. True or false?
Identifying pay survey participants by company name is considered price fixing under the Sherman Act. True or false?
Salary data available to employees via the internet are reliable and accurate as other more traditional surveys. True or false?
If the purpose of a survey is to price the entire structure, then benchmark jobs can be selected to include the entire job structure. True or false?
Pay surveys include information about both all forms of cash compensation and benefits. True or false?
In a survey, employees' views reveal what they think about their pay. True or false?
Setting your company's base pay to competitors' total compensation risks high fixed costs. True or false?
Total cash includes base pay plus stock options and benefits. True or false?
The process of multiplying survey data by a factor reflecting the difference between a survey and a company job is called survey leveling. True or false?
The most common measure of variation in pay surveys is the standard deviation. True or false?
A common practice is to use the 10th and 90 percentiles from pay survey data to set minimums and maximums of pay grades. True or false?
A frequency distribution must be constructed to calculate a median. True or false?
Market lines may be constructed by either freehand drawing or linear regression. True or false?
Regression smooths large amounts of data while minimizing variations. True or false?
Aging the market data to a point halfway through the plan year is called lead/lag. True or false?
A pay range exists when at least two employees in the same job are paid different rates. True or false?
Grades group job evaluation data on the horizontal axis. True or false?
Pay ranges for top-level management positions are commonly larger than those other professional and mid-level managerial positions. True or false?
Smaller pay ranges may reduce the opportunities for promotion. True or false?
When flat pay rates are used, they are typically the midpoint of a corresponding survey job. True or false
Ranges support flexibility within guidelines while bands support some flexibility within controls. True or false?
Career moves between bands are more common than within bands. True or false?
The pay structure is reflected in job evaluation or skill certification. True or false?
Market pricers match a small percentage of their jobs with market data. True or false?
A pure market pricing strategy tends to ignore internal alignment. True or false?
A key factor in increasing trust in top management is ___
a. an acceptable appraisal system
b. high base pay
c. stock options
d. a well-designed piece rate system
an acceptable appraisal system
The primary guiding force that determines needed employee behaviors is __
a. corporate goals
b. organization strategy
c. strategic business unit goals
d. department/team goals
The motivation triangle includes __
b. organization design
d. organization development
The ability triangle includes __
b. performance management
d. organization development
Compensation should reinforce all but which of the following behaviors?
a. attracting and hiring good employees
b. keeping turnover to nearly zero
c. encourage skill development
d. motivate high job performance
keeping turnover to nearly zero
Whenemployee performance is easily measured and the organization's performance isfairly stable over time, the most effective type of compensation is to offer_____.
a. large base and low-incentive pay
b. variety of rewards and base pay
c. a variety of rewards with significant incentive pay
d. monetary rewards with large incentives
monetary rewards with large incentives
Whenan organization's performance has regular and large swings and individualperformance is unclear and hard to measure, the most effective compensation mixis to offer _____. a. base pay with low incentives and a variety of rewards
b. monetary rewards with large incentives
c. large base and low-incentive pay
d. a wide range of rewards and significant incentives
a base pay with low incentives and a variety of rewards
Whichof the following best supports a culture of flexibility and innovation?
a. a flexible benefits package
b. a strong commitment to job security
c. high base wage
d. stock options
a strong commitment to job security
_____involves identifying what is important to a person and offering it to them inexchange for some desired behavior. a. conditioning
b. goal setting
Thekey ingredient in _____ is careful cost analysis to make sure the dollar costof the package an employee selects meets employer budgetary limits. a. gain-sharing plans
b. individual incentive plans
c. success-sharing plans
d. cafeteria-style compensation
Whendeveloping a flexible compensation system, which theory or theories would bemost useful?
a. expectancy theory
b. equity theory and agency theory
c. maslow's theory and herzberg's theory
d. goal setting
maslow's theory and herzberg's theory
In_____ theory, incentive pay is motivating if it helps an employee gain a senseof achievement, recognition or approval. a. herzberg's two-factor
Whichtheories would support a higher minimum wage? a. reinforcement and agency
b. goal setting and equity
c. maslow and herzberg's two-factor
d. expectancy and agency
maslow and herzberg's two-factor
_____theory contends that success-sharing plans will be motivating but at-risk planswill be de-motivating.
b. expectancy and agency
c. herzberg's two-factor
Accordingto expectancy theory, effort level depends on which of these factors? (1) expectancy (2) valence (3) instrumentality (4) reward (5) goals
a. expectancy, valence, instrumentality
b. valence, instrumentality, reward
c. expectancy, reward, goals
d. valence, goals, reward
expectancy, valence, instrumentality
_____is the belief that when a specified level of job performance is attained, theemployee will receive a specified reward. a. valence
Forwhich motivation theory is it important for organizations to pay attention tothe training and development needs of their employees?
c. goal setting
Lineof sight is an important pay implication for which theory or theories? a. agency
c. agency and reinforcement
d. expectancy and goal setting
expectancy and goal setting
_____theory argues that performance-based pay is best for complex jobs wheremonitoring employee performance is difficult.
b. goal setting
Asper the _____ theory, relative pay is important as employees evaluate theirpay-effort balance in comparison to other employees.
Theories dealing with exchange include ___
a. maslow and herzberg
b. equity and agency
c. expectancy and reinforcement
d. goal setting and equity
equity and agency
_____theory contends that we choose to do those things that we believe are mostlikely to lead to desired rewards.
Whichamong the following components of a reward system is a dimension ofempowerment?
a. work importance
A(n)____ requires annually "re-earning" the added pay.
a. success sharing plan
b. lump-sum bonus
c. profit-sharing plan
d. individual incentive plan
_____is an individual level form of performance pay.
a. risk sharing
b. gain sharing
c. lump-sum bonus
d. success sharing
Comparedto other incentive plans, line of sight is lowest in _____.
a. profit sharing
b. gain sharing
c. risk sharing
d. success sharing
Whichof the following is not true?
a. more companies are using pay based upon individual, group and organization performance
b. workers with high security needs may accept lower pay for pay security
c. workers may need higher pay to stay and perform in an at-risk pay company
d. companies are moving back to entitlement-oriented pay to reduce turnover
companies are moving back to entitlement-oriented pay to reduce turnover
Aperson with low self-esteem is likely to seek _____.
a. an organization with pay plans based upon individual not group performance
b. an organization with significant amount of pay based upon performance
c. a small organization with large benefits
d. a large, decentralized organization with little performance-based pay
a large, decentralized organization with little performance-based pay
Turnover tends to be highest among _____.
a. poor performers
b. good performers
c. single women with children
d. ethnic minorities
When moving from an individual to a group incentive plan, you would expect_____. a. high turnover among high performers
b. an increase in instrumentality
c. an increase in the output of high performers
d. an increase in perceived equity
high turnover among high performers
Growing evidence suggests that the major effect of skill-based pay is _____.
a. high productivity
b. reduced labor costs
c. high quality products
d. low training costs
high quality products
Available evidence indicates managers believe the most important factor for pay increasesis _____.
b. nature of the job
CompanyX pays for performance. Allan, an employee of the company, is not in favor ofthis reward system and, therefore, leaves Company X in search of anothercompany with different rules for getting rewards. This is an example ofthe:
a. design effect
b. compensation effect
c. sorting effect
d. incentive effect
Themost obvious sorting factor is _____.
d. educational qualification
Thereis evidence that every 10 percent increase in the bonus paid to employeesyields a _____ percent increase in ROA to the firm.
Thekey to designing a pay-for-performance system rests on standards. Specifically,managers need to be concerned about the:
a. objectives, structure, eligibility, and funding
b. strategy, measures, structure, and equity
c. structure, efficiency, equity, and funding
d. objectives, measures, eligibility, and funding
objectives, measures, eligibility, and funding
Researchsuggests that for employees to notice and work hard to perform behaviorsdesired by the organization, incentives need to be _____ percent.
Theamount of fairness given to employees refers to _____.
a. total justice
b. quantitative justice
c. procedural justice
d. distributive justice
Inthe formula (behavior = f (M, A, E)),M standards monetary incentives. True or false?
Thepoint of the behavior = f (M, A, E)model is that, though very important, compensation alone cannot change employeebehavior.. True or false?
When pay raises are based on events over which employees lack significant control,they are likely to regard the system as unfair. True or false?
Incentive pay systems are an effective way to motivate workers to perform a variety of tasks in changing situations. True or false?
Cafeteria-stylecompensation is based on the idea that the organization knows what package ofrewards would best suit individual employees' needs. True or false?
Maslow'stheory suggests that performance-based pay can be de-motivating. True or false?
Line of sight means that employees believe they can influence performance targets. True or false?
An important implication of reinforcement theory is that when employees receive pay is important. True or false?
Goalsetting theory argues that employees' performance in maximized when performancetargets are stated as "do your very best". True or false?
Agency theory argues that employees prefer risky pay since rewards can be greater than a salary. True or false?
According to agency theory, because employees prefer a salary, they demand higher total pay if performance-based pay is used. True or false?
Identifying desired behaviors is the emphasis of agency theory. True or false?
In today's organization, socialization, the culture and training rather than compensation packages are typically used to direct employees to desired behaviors. True or false?
Work load and work variety are both components of a total reward system. True or false?
Additional authority, control and autonomy are always positively motivating job factors for workers. True or false?
Security in terms of compensation refers to the predictability of one's paycheck from one time to another. True or false?
Many employees are not satisfied with compensation at risk plans because they do not understand the process used to determine their pay. True or false?
Lump-sum bonuses have less risk for workers than merit pay. True or false?
Line of sight is highest in individual incentive plans. True or false?
Gain sharing poses greater risk to individual employees than profit-sharing. True or false?
Risk-sharing plans include a provision for cuts in base pay that are only recaptured in years when the organization meets performance objectives. True or false?
Both pay level and pay system characteristics affect applicants decisions to accept a job. True or false?
An individual incentive pay system is associated with high turnover of high performers. True or false?
Evidence suggests that skill-based pay may not increase productivity. True or false?
Generally, team-based incentives are more attractive than individual incentives. True or false?
Blue-collar workers feel pay increases should be based upon performance. True or false?
Incentive effect means pay can motivate people to perform better. True or false?
A problem with incentive pay plans is workers focus exclusively on behaviors that are rewarded. True or false?
Eligibility refers to who in the organization may participate in an incentive pay program. True or false?
Managers have more control over distributive justice than procedural justice. True or false?
It is observed that _____ is/are commanding a larger share of the totalcompensation for all employee groups.
a. merit pay
b. health benefits
c. retirement benefits
d. variable pay
Which of the following is not true of lump-sum bonuses?
a. they help maintain competitive pay position relative to competitors
b. they are less expensive than merit pay
c. employees dislike them
d. they are a more visible reward than merit pay
they help maintain competitive pay position relative to competitors
Usually_____ are awarded for exceptional performance, often on special projects or forperformance that so exceeds expectations as to be deserving of an add-onbonus.
a. variable pay awards
b. individual spot awards
c. lump-sum bonuses
d. merit pay
individual spot awards
Which of the following is not true about individual spot awards?
a. smaller companies may be more casual about recognition
b. someone in the organization alerts top management to the exceptional performance
c. a majority of companies do not feel that these awards are effective
d. smaller companies are more subjective about deciding the size of the award
a majority of companies do not feel that these awards are effective
A penalty for poor performance rather than reward for good is an exampleof:
b. a re-engineering plan
c. a rowan plan
d. a reverse incentive plan
a reverse incentive plan
Which of the following does not use the time period per unit of production todetermine the rate?
a. gantt plan
b. rowan plan
c. halsey 50-50 method
d. merrick system
Paying a dime for every bottle collected and turned into a collection center is anexample of:
a. a commission based work
b. a standard hour based work
c. straight piecework
d. a rowan plan
a straight piecework
The most frequently used incentive system is the:
a. standard hour plan
b. straight piecework
c. halsey 50-50 plan
d. taylor differential piece-rate plan
In which of the following incentive pay plans does the wage rate not increase forproduction above the standard?
a. standard hour plan
b. rowan plan
c. taylor plan
d. merrick plan
standard hour plan
A_____ plan divides a task into simple actions and determines the time anaverage worker takes to complete each action.
a. standard hour
An incentive system with three piecework rates is the _____ plan. a. taylor
c. halsey 50-50
The incentive system with two rates, one for above production standard and one forbelow standard is the _____ plan.
Compensation security is highest for workers who fail to complete tasks within the standard time under the ____ plan?
a. halsey 50-50
Advantages of individual incentive plans include all of the following except:
a. lowered production costs
b. less direct supervision
c. greater trust between workers and management
d. higher productivity
greater trust between workers and management
The common feature to all types of incentive plan is:
a. a standard of performance to determine magnitude of incentive pay
b. a sharing formula between worker and employer
c. penalties for poor performance
d. limits on magnitude of incentive pay
a standard of performance to determine magnitude of incentive pay
Hoarding star performers, reluctance to accept new team members and resistance to transferring team members are examples of which team-related compensation problem?
b. large variety of teams
c. pay plan complexity
A team works on a project with specific performance level goals and time deadlines, but weather problems cause the team to miss the deadline. What is the key factor affecting how the team feels about their incentive?
a. the incentive was as promised
b. the incentive was less than promised
c. the team's perception of reward fairness
d. the timing of the incentive
the team's perception of reward fairness
The two most commonly used team incentive performance standards are:
a. productivity and quality
b. productivity and customer satisfaction
c. financial performance and quality
d. customer satisfaction and financial performance
productivity and quality
All of the following are HR capabilities performance indicators used for group incentive plans except:
a. turnover rates
b. total recruitment costs
c. promotability index
d. accuracy/error rates
Dissatisfaction with __ performance indicators for group incentives has led to greater use of ___
a. financial; the balanced scorecard
b. HR capabilities; financial measures
c. financial; customer-focused measures
d. the balanced scorecard; resource utilization measures
financial; the balanced scorecard
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