Deck 1: The Pay Model

Question 1

include psychological aspects of work such as recognition and status, challenging work, and learning opportunities.

A)Compensational returns
B)Relational returns
C)Subjective returns
D)Cognitive returns
E)Qualitative returns

Answer 1

B

Question 2

Which of the following is a form of relational return?

A)allowances
B)life Insurance
C)recognition and status
D)benefits
E)monitory incentives

Answer 2

C

Question 3

Which of the following refers to pay calculated at an hourly rate?

A)total reward
B)compensation
C)wage
D)salary
E)merit increase

Answer 3

C

Question 4

Which of the following is true of the present value perspective?

A)It establishes a limit on the amount spent on benefits.
B)It considers future bonuses, merit increases, and promotions.
C)It creates an external competitiveness through future promises.
D)It considers today's initial offers to employees.
E)It assesses the present value of a company to offer stock options to employees.

Question 5

Internal alignment may be achieved by:

A)comparing pay between jobs or skill levels inside a single organization
B)paying below-market base wages but offering training and rapid promotion
C)matching competitors' wage rates
D)compensating employees at above-market rates
E)creation of cross-functional departments

Question 6

Which of the following pay policies lays emphasis on performance?

A)External competitiveness
B)Management
C)Employee contributions
D)Internal alignment
E)Administration of the pay system

Question 7

A merit increase is best described as:

A)percentage increment to base pay provided to all employees regardless of performance.
B)a one-time reward for past performance that does not increase base pay.
C)an increment to base pay that recognizes past work behaviour.
D)psychological returns employees believe they receive in the workplace.
E)compensation given to provide for items that are in short supply.

Question 8

Which of the following best describes relational returns?

A)programs that help employees better integrate their work and life responsibilities
B)one-time payments for meeting previously established performance objectives
C)the psychological returns people believe they receive in the workplace
D)all forms of financial returns and tangible services that employees receive as part of an employment
E)all rewards received by employees, including cash compensation, benefits, and psychological returns

Question 9

External competitiveness refers to:

A)comparison of product prices with that of competitors
B)comparison of compensation with that of competitors
C)competitiveness between different departments in a company
D)inflationary pressure caused by external market factors
E)the relative importance of jobs within a company

Question 10

refer to one-time payments for meeting previously established performance objectives.

A)Relational returns
B)Cost-of-living adjustments
C)Incentives
D)Allowances
E)Merit increments

Question 11

Total compensation does NOT include:

A)insurance benefits
B)base pay
C)relational returns
D)incentives
E)allowances

Question 12

refers to the compensation given to purchase items that are in short supply.

A)Wage
B)Cost-of-living adjustment
C)Allowance
D)Variable pay
E)Incentive

Question 13

Pay for executives should supposedly to be tied to:

A)the cost of living index
B)the financial needs of the employee
C)the company's financial performance
D)the company's reputation
E)the company's growth potential

Question 14

All forms of financial returns and tangible services and benefits that employees receive as part of an employment relationship are known as _.

A)relational returns
B)compensation
C)total rewards
D)merit pay
E)base pay

Question 15

An incentive payment:

A)is part of an employee's base wage.
B)ties pay increases directly to an employee's performance.
C)is made to provide for items that are in short supply.
D)refers to psychological returns employees believe they receive in the workplace.
E)is non-taxable and therefore highly preferred by employees.

Question 16

Which of the following best describes allowances?

A)programs that help employees better integrate their work and life responsibilities
B)percentage increment to base pay provided to all employees regardless of performance
C)pay calculated at an annual or monthly rate
D)one-time payments for meeting previously established performance objectives
E)compensation to provide for items that are in short supply

Question 17

Which of the following statements is true about the forms of pay?

A)Relational returns are more transactional than total compensation.
B)Base pay tends to reflect the value of the work or skills and generally ignores differences attributable to individual employees.
C)Merit increases refer to the same percentage increase that everyone receives regardless of performance in order to maintain pay levels relative to increases in the cost of living.
D)Unlike relational returns, total compensation typically refers to the psychological returns people believe they receive in the workplace.
E)Base pay, incentives, and cost-of-living adjustments are the typical relational returns.

Question 18

Which of the following is NOT a benefit component of total compensation?

A)allowances
B)merit increase
C)relational returns
D)incentives
E)cost-of-living adjustment

Question 19

as a pay objective involves abiding by various federal, provincial, and territorial compensation laws and regulations.

A)Fairness
B)Competitiveness
C)Alignment
D)Compliance
E)Efficiency

Question 20

Which of the following is a work/life program?

A)telecommuting
B)stock options
C)health insurance
D)cost-of-living adjustment
E)employment Insurance

Question 21

Incentives may be long-term or short-term.

Question 22

When executive pay is excessive relative to company performance, profits are diverted away from stockholders to the executives.

Question 23

Which of the following is NOT a form of cash compensation?

A)pensions
B)insurance
C)stock options
D)allowances
E)financial planning

Question 24

Merit pay is a one-time payment for meeting previously established performance objectives.

Question 25

Which of the following is true of internal alignment?

A)It places greater emphasis on performance than the other policies.
B)It compares pay between jobs inside a single organization.
C)It uses incentive programs as a technique to implement the policy.
D)It relates to comparison of compensation with that of competitors.
E)It does not influence the company's compensation objectives.

Question 26

External competitiveness refers to pay comparisons between different skill levels in an organization.

Question 27

Allowances are rewards given to employees based on their performance.

Question 28

Total compensation only includes salary and incentives; not benefits.

Question 29

Procedural fairness is the fairness of the process used to make a decision about pay.

Question 30

Making contributions to Workers' Compensation is at discretion of the employer.

Question 31

Compensation objectives provide standards for evaluating the effectiveness of the pay system.

Question 32

Total compensation includes psychological aspects of work such as recognition and status, challenging work, and learning opportunities.

Question 33

What is procedural fairness?

Question 34

Base pay is the cash compensation an employer pays for the work performed.

Question 35

Pay relationships within the organization affect employee decisions to stay with the organization.

Question 36

While external competitiveness directly affects efficiency, it does not affect fairness.

Question 37

Which of the following best describes cost-of-living adjustment?

A)one-time payments for meeting previously established performance objectives
B)consolidated pay which is not subject to any change regardless of the cost-of-living
C)percentage increment to base pay provided to all employees regardless of performance
D)compensation to provide for items that are in short supply
E)increment to base pay in recognition of past work behaviour

Question 38

includes cash compensation, benefits, and relational returns.

A)Total incentive
B)Total cash benefit
C)Total base pay
D)Total compensation
E)Total reward

Question 39

Cost-of-living adjustment refers to percentage increment to base pay provided to employees based on their performance.

Question 40

Which of the following is NOT part of an employee's total compensation?

A)cost-of-living adjustments
B)relational returns
C)pay
D)paid vacation
E)health insurance

Question 41

What is base pay? Distinguish between a wage and a salary.

Question 42

Explain the two major categories of total rewards.

Question 43

List the three basic objectives of a compensation system.

Question 44

What are the basic building blocks of a pay model?

Question 45

What are the two major categories of total rewards?

Question 46

What are long-term incentives?

Question 47

Why is compensation important to managers?

Question 48

Why is executive pay in Canada of special interest to stockholders?

Question 49

What does base pay reflect?