Deck 10: Establishing Rewards and Pay Plans

Question 1

It is well known that executives in the public sector are paid more than those in the private sector.

Answer 1

False

Question 2

The Federal minimum wage is $7.25 per hour.

Answer 2

False

Question 3

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Rewards one gets from the employer, usually money, a promotion, or benefits.

Answer 3

b

Question 4

A commission is considered a performance-based reward.

Question 5

Probably one of the most complex functions of international human resource management is the design and implementation of an equitable compensation program.

Question 6

In the U.S., the threshold poverty level for an individual is $19,570 per year.

Question 7

Federal legislation sets minimum wages but states may set their own which are higher that the federal minimum.

Question 8

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Used to gather factual data on pay practices among firms and companies within specific communities.

Question 9

The FLSA identifies two primary categories of employees: full-time and part-time.

Question 10

Employers must offer higher wages when unemployment rates are high to attract qualified workers.

Question 11

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
The process of managing a company's compensation program.

Question 12

Organization-wide incentives aim to direct the efforts of all employees toward achieving overall organizational effectiveness.

Question 13

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
A financial protection plan for executives in case they are severed from the organization.

Question 14

An example of an extrinsic reward is health insurance.

Question 15

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Rewards exemplified by the use of commissions, piecework pay plans, incentive systems, group bonuses, or other forms of merit pay.

Question 16

Intrinsic rewards include money, promotions, and benefits.

Question 17

Three basic methods of job evaluation are currently in use: ordering, classification, and point methods.

Question 18

Job evaluation is the process whereby an organization systematically establishes its compensation program.

Question 19

A downside to merit pay is that employees expect pay increases regardless of how well the company performs.

Question 20

Research finds that employees only value financial types of rewards, such as pay, which are designed to assist in maintaining employee commitment.

Question 21

Pride in one's work and a sense of accomplishment are examples of ________ rewards.

Question 22

__________ would likely include employees in professional and managerial jobs.

Question 23

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Ranking job worth from highest to lowest.

Question 24

The three basic methods of job evaluation currently in use are order, classification, and _________ methods.

Question 25

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
An increase in one's pay, based on performance, that is usually given on an annual basis

Question 26

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Pay based on how well the team performed.

Question 27

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
A pay scale showing ranges of pay within each grade.

Question 28

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
A professional employee whose job category is not required to meet FLSA standards, especially in the area of overtime pay.

Question 29

The __________ consists of breaking down jobs based on identifiable criteria and the degree to which these criteria exist on the job.

Question 30

_________ are used to gather factual data on pay practices among firms within specific communities.

Question 31

________ are motivation systems based on individual work performance.

Question 32

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Wage adjustment linked to cost of living to maintain standards of living for an expatriate employee.

Question 33

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Evaluating jobs based on pre-determined job grades.

Question 34

_________ for expatriates may include shipping household goods, legal clearance and shipment for pets, education allowances for children, and bodyguards.

Question 35

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
A motivation system that rewards all facility members based on how well the entire group performed.

Question 36

In the United States, the threshold _________ for a family of two is approximately $16,240 per year.

Question 37

________ receive(s)certain protections under the FLSA.

Question 38

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Passed in 1938, this act established laws outlining minimum wage, overtime pay, and maximum hour requirement for most U.S.workers.

Question 39

_________ consists of enhancing jobs by giving employees more opportunity to plan and control their work.

Question 40

MATCHING KEY TERMS AND DEFINITIONS
a)Team-based compensation
b)Extrinsic rewards
c)Compensation administration
d)Ordering method
e)Fair Labor Standards Act
f)Performance-based rewards
g)Wage structure
h)Differential
i)Organization-wide incentive
j)Classification method
k)Equal Pay Act
l)Merit pay
m)Golden parachute
n)Compensation surveys
o)Exempt
Passed in 1963, this act mandates that organizations compensate men and women doing the same job in the organization with the same rate of pay.

Question 41

Which of the following is an extrinsic source of employee motivation?

A)Increased responsibility
B)Impressive job title
C)Participation in decision-making
D)Opportunities for job growth
E)More interesting work

Question 42

Which of the following is NOT covered by the provisions of the FLSA?

A)Minimum wage
B)Overtime pay
C)Child labor
D)Retirement plans
E)Record keeping

Question 43

Which of the following is NOT an intrinsic source of employee motivation?

A)Increased responsibility
B)Pay raise
C)Increased employee autonomy
D)Tasks organized to allow individuals to complete activities
E)Performance feedback

Question 44

Which method evaluates jobs based on predetermined job grades?

A)Ordering method
B)Broad-banding method
C)Classification method
D)Point method
E)Group incentive method

Question 45

Heather is the human resources administrator for a small electronics firm that currently has 27 employees.Until now, workers were paid whatever the CEO felt they were worth.Heather wants to start a job evaluation process.She wants to use the point method for all of these reasons except

A)It offers the greatest stability over time.
B)It can effectively address the comparable worth issue.
C)The methodology contributes to a minimum of rating error.
D)It is quick and inexpensive to develop.
E)It is the most widely used method.

Question 46

Which of the following is an explicit membership-based financial reward?

A)Commission
B)Performance bonuses
C)Incentive plans
D)Pay for time not worked
E)Profit sharing

Question 47

Which of the following is NOT an implied membership-based financial reward?

A)Cost-of-living increases
B)Labor market adjustment
C)Time-in-rank increases
D)Business cards
E)Profit sharing

Question 48

Which of the following is NOT a performance-based financial reward?

A)Piecework
B)Labor market adjustment
C)Commission
D)Performance bonuses
E)Merit pay plans

Question 49

Which act was passed in 1938 to establish laws outlining wage, overtime pay, and maximum hour requirement for most U.S.workers?

A)Equal Pay Act
B)Fair Labor Standards Act
C)Walsh-Healy Act
D)Civil Rights Act
E)Living Wage Act

Question 50

Membership-based rewards include all of the following EXCEPT

A)cost-of-living increases.
B)pay for time not worked.
C)seniority benefits.
D)labor market adjustments.
E)piecework.

Question 51

Which of these is NOT an external factor affecting compensation?

A)Geographic differences in locations.
B)Supply of workers in the local area.
C)Wages paid by others seeking workers.
D)Job evaluation in compensation.
E)Union employers in the area.

Question 52

What is the federal minimum wage under the Fair Labor Standard Act that began in July 2009?

A)$5.85
B)$6.55
C)$7.25
D)$8.15
E)$9.10

Question 53

Proponents of an increase in minimum wage argue all of the following EXCEPT:

A)Wages lag behind the cost of living.
B)Young people and women are the most affected by low wages.
C)75% of those earning minimum wage are in the service industry.
D)Education is a strong indicator of income.
E)The annual income of a single parent earning minimum wage is below the poverty level.

Question 54

Lisa, a compensation analyst for a large government agency, is completing a job evaluation for her organization.She is reviewing the grades that have been established by skills, knowledge and abilities because several managers have complained that the jobs no longer "fit" into the defined grades.What job evaluation method is Lisa using?

A)Ordering
B)Classification
C)Basic factors
D)Point method
E)Prioritization

Question 55

Keon, vice-president of human resources for a large manufacturing firm, wants to keep the reward system membership-based instead of moving to performance-based pay.Traditionally, most increases have been based on seniority.Why does he want to keep the membership-based system?

A)Membership-based pay increases commitment and loyalty.
B)All pay increases are membership-based due to work process reengineering.
C)The criteria area easier to measure with the membership-based system.
D)Performance based pay does not increase status awareness.
E)Under the ADA, all seniority raises are membership-based.

Question 56

Organizational reward systems are typically categorized as

A)financial versus extrinsic.
B)performance-driven versus performance-based.
C)hourly versus salaried.
D)intrinsic versus extrinsic.
E)membership-based versus extrinsic.

Question 57

Which of the following is NOT true of child labor under the FLSA?

A)Employers may pay full-time students less than minimum wage.
B)Children 17 and under are prohibited from driving motor vehicles at work.
C)Children 17 and under are not allowed to use most cutting and power equipment at work.
D)Children 14 and 15 years old may work up to 3 hours a day on school days.
E)Children 14 and under are not allowed to work for pay under any circumstances.

Question 58

Which is NOT true of employees who earn tips?

A)Federal law allows their direct wage to fall significantly below minimum wage.
B)Employers may claim tip credit to make up for the difference between direct wage and minimum wage.
C)Employers are not required to pay the difference between tips received and minimum wage.
D)States may required direct wage above the federal minimum.
E)Supervisors are not allowed to participate in tip pools.

Question 59

Opponents of an increase in minimum wage use all of these arguments EXCEPT:

A)Increased wage costs to employers make it difficult to compete globally.
B)Increased wage costs to employers reduce profitability and may reduce competition.
C)Increased wage costs to employers would reduce the number of employees hired.
D)Increased federal minimum wage isn't necessary because many states already have higher minimum wage laws.
E)The U.S.already has the highest minimum wage among industrialized nations.

Question 60

Which is NOT true of internships?

A)The FLSA doesn't specifically recognize internships.
B)Internships may be unpaid if the employer doesn't directly benefit from the work of the intern.
C)Unpaid internships are allowed if the intern is entitled to a job at the end of the internship.
D)Employers get away with FLSA violations because interns rarely complain about abuses.
E)Minimum wage laws apply to internships with few exceptions.

Question 61

Which of the following is NOT a factor that is taken into account in the balance sheet approach to international compensation?

A)Base pay
B)Differentials
C)Golden parachute
D)Incentives
E)Assistance programs

Question 62

Which type of long-term incentive makes up the largest portion of an executive's pay?

A)Base salary
B)Stock options
C)Bonuses based on sales
D)Benefits
E)Golden parachutes

Question 63

All of these are characteristics of piecework pay plans EXCEPT

A)It is commonly used in manufacturing.
B)It typically does not include any hourly rate.
C)Workers earn specific rate for each unit produced up to a specified standard.
D)Incentives may be based on time saved as well as units produced.
E)Higher rates may be paid for units produced over the specified standard.

Question 64

Team-based compensation plans are effective in all of these situations EXCEPT

A)Teams share a clear purpose and goals.
B)Team members communicate effectively with each other.
C)Team members compete with each other.
D)Resources are plentiful.
E)Rewards must be significant and worthwhile.

Question 65

Criteria used in creating job evaluation plans include all of these EXCEPT:

A)Responsibility of the position.
B)Skill required by the position.
C)Physical demands of the position.
D)Intrinsic rewards provided by the position.
E)Complexity of the position.

Question 66

Cesar, a satellite architect, accepted an overseas assignment for his company when the company agreed to provide a car and chauffeur, a beach villa, a sailboat, and a lump sum payment of $600,000.What kind of pay factor was used?

A)Base pay
B)Differentials
C)Bonuses
D)Incentives
E)Assistance programs

Question 67

Which of the following types of variable pay is most commonly used for sales workers?

A)Commissions
B)Bonuses
C)Merit pay
D)Competency-based pay
E)Premium pay

Question 68

Edrian works for a bank that recently acquired his consulting shop.He has a "green-circled" job for the wage curve.His manager is likely to tell him:

A)you won't get a raise until you get a promotion.
B)you won't get a promotion for at least 3 years.
C)you will get a salary adjustment increase in your next paycheck.
D)you need to assess your skills and interests and find another job.
E)you are targeted for a 10% pay decrease.

Question 69

What type of compensation plan would be appropriate for employees who have tasks that are interdependent and require cooperation by all team members?

A)Merit pay
B)Bonuses
C)Competency-based plans
D)Organization-wide incentives
E)Group incentive plans

Question 70

Rayshard works for an automobile salvage firm.Last year he started going to monthly meetings with managers and coworkers to evaluate labor-saving ideas.One idea, raising the crane level by 8 feet to clear the building, saved them $2 million.Each of the employees received a $200 bonus for the implementation of that idea.What kind of compensation system is used?

A)Piecework
B)Time-saving bonus
C)Merit pay
D)Scanlon Plan
E)Group incentive

Question 71

Dana, a compensation specialist for a large hospital in Phoenix is reviewing pay rates for nurses and nursing technicians in other health care organizations in the Phoenix area.She is also making sure her organization is giving as much vacation and shift differentials as her competition.What is she studying?

A)Wage structure
B)Compensation survey
C)Overtime pay review
D)Wage and hour law
E)Classification

Question 72

International compensation packages typically include four factors, base bay, differentials, incentives and assistance programs.This approach is referred to as

A)broadband.
B)golden parachute.
C)balance sheet.
D)expatriate.
E)classification.

Question 73

Jean, a geologic specialist, agreed to accept an overseas assignment for her company after the company agreed to store her yacht, provide security service 24/7, and arrange for Mimi, her cat, to go with her.What kind of pay factor was used?

A)Base pay
B)Differentials
C)Bonuses
D)Incentives
E)Assistance programs

Question 74

Al's company just instituted a new compensation program for managers.Pay is based on competencies such as leadership, problem solving and strategic planning.Pay levels are preset and reflect the degree of competency.What kind of compensation system was used?

A)Broad-banding
B)Scanlon Plan
C)Piece rate
D)Ordering
E)IMPROSHARE

Question 75

Shameka is the new compensation manager of a large manufacturing company.She is currently redesigning the pay structure.She wants to be able to break down jobs based on identifiable factors and the degree to which these criteria exist on the different jobs in her company.What job evaluation method should Shameka use?

A)Classification method
B)Point method
C)Ordering method
D)Ranking method
E)Broad-banding method

Question 76

As the HR manager of Company XYZ., Victoria is currently working on the reward system.She wants to be able to pay and reward employees based on their skills, knowledge, and behaviors.What pay system should Victoria use?

A)Scanlon plan
B)IMPROSHARE
C)Profit sharing
D)Competency-based plan
E)Point method

Question 77

Which method breaks down jobs based on identifiable criteria and the degree to which these criteria exist on the job?

A)Ordering method
B)Broad-banding method
C)Classification method
D)Point method
E)Group incentive method

Question 78

Jon, a U.S.petroleum engineer, moved his family to Saudi Arabia for a two-year assignment.The company provided him a travel allotment, a food allowance of $1000 a month, and $2000 a month for housing to maintain his standard of living.What kind of pay factor was used?

A)Base pay
B)Differentials
C)Bonuses
D)Incentives
E)Assistance programs

Question 79

Andres is the general manager of a plant that manufactures tires.He wants to introduce a plant-wide incentive program focusing on cooperation between management and employees through sharing problems, goals, and ideas.What incentive system should Andres use?

A)Scanlon plan
B)Competency-based plan
C)Merit pay
D)Stock options
E)Piecework plan

Question 80

What is the incentive plan that uses a mathematical formula to determine employee bonuses?

A)IMPROSHARE
B)Scanlon Plan
C)Broad-banding
D)FLSA
E)Ordering