Deck 11: Total Rewards and Compensation

Question 1

Productivity = _____.

A) total revenue divided by number of Full Time Equivalents
B) total revenue divided by total output produced
C) total output produced divided by number of Full Time Equivalents
D) total output produced divided by total revenue

Answer 1

A

Question 2

Which of the following is a tangible direct reward?

A) Base pay
B) Health care benefits
C) Paid time off
D) Challenging work

Answer 2

A

Question 3

_____ are payments calculated on the basis of the time worked.

A) Benefits
B) Commissions
C) Salaries
D) Wages

Answer 3

D

Question 4

Average comparative ratio = _____.

A) the average of the comparative ratio for each employee divided by the number of employees
B) the total of the comparative ratio of all employees divided by the number of employees
C) the number of employees divided by the average of the comparative ratio for each employee
D) the number of employees divided by the total of the comparative ratio for each employee

Question 5

Average annual salary increase = _____.

A) the average salary increase of all employees divided by the number of full-time equivalents
B) the number of full-time equivalents divided by the total salary increase of all employees
C) the total salary increase of all employees divided by the number of full-time equivalents
D) the number of full-time equivalents divided by the average salary increase of all employees

Question 6

Most federal and state entities rely on the criteria for independent contractor status identified by the _____.

A) National Labor Relations Board
B) Internal Revenue Service
C) Department of Labor
D) U.S. Treasury Department

Question 7

The _____ essentially treats each paycheck as a new act of discrimination.

A) Fair Pay Act
B) Employment Non-Discrimination Act
C) Civil Rights Act
D) Equal Pay Act

Question 8

Which of the following is an intangible reward?

A) Base pay
B) Health care benefits
C) Challenging work
D) Variable pay

Question 9

The _____ restricts the right of employers to terminate employees whose pay is subject to a single garnishment order.

A) Davis-Bacon Act
B) Walsh-Healy Public Contracts Act
C) McNamara-O'Hara Service Contract Act
D) Consumer Credit Protection Act

Question 10

Average hourly rate = _____.

A) total individual hourly rates of pay for all employees divided by the total output produced
B) total individual hourly rates of pay for all employees divided by the number of employees
C) total individual hourly rates of pay for all employees divided by the total number of hours worked
D) total individual hourly rates of pay for all employees divided by the total output produced in an hour

Question 11

Which of the following is typical of the performance philosophy of compensation?

A) Pay and raises based on length of service
B) No raises for poor-performing employees
C) Across-the-board raises
D) Pay scales increased annually

Question 12

If a state's minimum wage is higher than the federal minimum wage, _____.

A) employers must pay whichever wage is higher
B) employers must pay whichever wage is lower
C) employers are free to choose between either of the two
D) employers must pay the difference as employee benefits

Question 13

The _____ prohibits companies from using different wage scales for men and women performing substantially the same jobs.

A) Fair Employment Act
B) Employment Non-Discrimination Act
C) Civil Rights Act
D) Equal Pay Act

Question 14

Average tenure = _____.

A) average years of service for all employees divided by the number of full-time equivalents
B) number of full-time equivalents divided by the average years of service for all employees
C) number of full-time equivalents divided by the total years of service for all employees
D) total years of service for all employees divided by the number of Full Time Equivalents

Question 15

The FLSA established overtime pay requirements at _____ times the regular pay rate for all hours worked over 40 in a week.

A) two
B) two and one-half
C) one and one-half
D) three

Question 16

Which of the following is a tangible indirect reward?

A) Base pay
B) Health care benefits
C) Challenging work
D) Variable pay

Question 17

The child labor provisions of the FLSA set the minimum age for hazardous occupations at _____ years.

A) 14
B) 16
C) 18
D) 20

Question 18

Number of Full Time Equivalents = _____.

A) total annual hours paid for all employees divided by the total output of all full-time employees
B) total output of all full-time employees divided by the total annual hours paid for all employees
C) total annual hours paid for all employees divided by the number of hours a full-time employee is scheduled to work
D) number of hours a full-time employee is scheduled to work divided by the total annual hours paid for all employees

Question 19

_____ occurs when a creditor obtains a court order that directs an employer to set aside a portion of an employee's wages to pay a debt owed to the creditor.

A) Liquidation
B) Sequestration
C) Garnishment
D) Distraint

Question 20

Which of the following is typical of the entitlement philosophy of compensation?

A) Pay and raises based on length of service
B) No raises for poor-performing employees
C) Market-adjusted pay scales
D) Industry comparisons of total rewards

Question 21

Which of the following is typically the immediate next step after compensation philosophy in the compensation administration process?

A) Job analysis
B) Job evaluation
C) Internal focus
D) External focus

Question 22

Which of the following statements is true of the home-country-based approach?

A) Compensation is adjusted to maintain the expatriate's standard of living in the country where the expatriate is sent from the headquarters.
B) Compensation is adjusted to maintain the expatriate's standard of living in the country where the MNE is headquartered.
C) Compensation is adjusted to maintain the expatriate's standard of living in the country that has the lowest cost of living index.
D) Compensation is adjusted to maintain the expatriate's standard of living in the third country.

Question 23

Which of the following is classified as an outcome in the equity theory?

A) Loyalty
B) Time
C) Effort
D) Job security

Question 24

Which of the following is true of an employer who uses the second-quartile strategy of compensation?

A) The employer pays the employees above market levels.
B) The employers determine the pay independent of the market scenario.
C) The employer pays the employees below market levels.
D) The employer pays the employees on par with the market levels.

Question 25

Organizational policies that discourage employees from sharing pay information with each other may violate the _____.

A) Equal Pay Act
B) National Labor Relations Act
C) Fair Pay Act
D) Davis-Bacon Act

Question 26

The _____ uses external pay data to identify the relative value of jobs based on what other employers pay for similar jobs.

A) factor-comparison method
B) ranking method
C) point factor method
D) market pricing method

Question 27

Which of the following is true of an employer who uses the first-quartile strategy of compensation?

A) The employer pays the employees above market levels.
B) The employers determine the pay independent of the market scenario.
C) The employer pays the employees below market levels.
D) The employer pays the employees on par with the market levels.

Question 28

Which of the following is true of the classification method of job evaluation?

A) In this method, descriptions of each group of jobs are written and then each job is put into a grade according to the group it best matches.
B) It is a complex quantitative method that combines the ranking and point factor methods.
C) It looks at compensable factors in a group of similar jobs and assigns weights, or points, to them.
D) It is a simple system that places jobs in order, from highest to lowest, by their value to the organization.

Question 29

Which of the following is classified as an input in the equity theory?

A) Job security
B) Praise
C) Loyalty
D) Recognition

Question 30

Which of the following statements is true of the expectancy theory?

A) This theory emphasizes the importance of finding valued rewards for the employee.
B) This theory of motivation was first introduced by John Stacey Adams in 1963.
C) This theory states that individuals judge fairness in compensation by comparing their inputs and outcomes against the inputs and outcomes of referent others.
D) This theory is applicable only to flat organizations with little or no formal structure.

Question 31

Which of the following statements is true of the equity theory?

A) This theory of motivation was first introduced by Victor Vroom at Yale in 1964.
B) This theory of motivation was first introduced by John Stacey Adams in 1963.
C) This theory states that an employee's motivation is based on several linked concepts.
D) This theory emphasizes the importance of finding valued rewards for the employee.

Question 32

Which of the following is true of the ranking method of job evaluation?

A) In this method, descriptions of each class of jobs are written and then each job is put into a grade according to the class it best matches.
B) It is a complex quantitative method that combines the classification and point factor methods.
C) It looks at compensable factors in a group of similar jobs and assigns weights, or points, to them.
D) It is a simple system that places jobs in order, from highest to lowest, by their value to the organization.

Question 33

Which of the following is typically the immediate next step after job analysis in the compensation administration process?

A) Compensation philosophy
B) Job evaluation
C) Internal focus
D) External focus

Question 34

Which of the following is true of the point factor method of job evaluation?

A) In this method, descriptions of each class of jobs are written and then each job is put into a grade according to the class it best matches.
B) It is a complex quantitative method that combines the ranking and classification methods.
C) It looks at compensable factors in a group of similar jobs and assigns weights to them.
D) It is a simple system that places jobs in order, from highest to lowest, by their value to the organization.

Question 35

Which of the following is true an employer who uses the third-quartile strategy of compensation?

A) The employer pays the employees above market levels.
B) The employers determine the pay irrespective of the market scenario.
C) The employer pays the employees below market levels.
D) The employer pays the employees on par with the market levels.

Question 36

A _____ is a report based on research of compensation rates for workers performing similar jobs in other organizations.

A) pay survey
B) pay analysis
C) pay scale
D) pay grade

Question 37

Which of the following is an indicator of external inequity?

A) Difficulty hiring new employees
B) Lack of fairness in how rewards are distributed among employees
C) Lower attrition levels
D) Reward system based on favoritism

Question 38

Which of the following is typically the first step in the compensation administration process?

A) Job analysis
B) Job evaluation
C) Compensation philosophy
D) External focus

Question 39

Which of the following statements is true of the host-country-based approach?

A) Compensation is adjusted to maintain the expatriate's standard of living in the country where the expatriate is sent from the headquarters.
B) Compensation is adjusted to maintain the expatriate's standard of living in the country where the MNE is headquartered.
C) Compensation is adjusted to maintain the expatriate's standard of living in the country that has the lowest cost of living index.
D) Compensation is adjusted to maintain the expatriate's standard of living in the third country.

Question 40

Which of the following is true of the factor-comparison method of job evaluation?

A) In this method, descriptions of each group of jobs are written and then each job is put into a grade according to the group it best matches.
B) It is time-consuming and difficult to use, which accounts for its limited popularity in organizations.
C) It uses subjective judgments to develop the class descriptions and to place jobs accurately in them.
D) It is a qualitative method that combines the classification and ranking methods.

Question 41

Which of the following is true of red-circled employees?

A) They are paid above the range set for a job.
B) They are paid below the range set for a job.
C) They are paid on par with the range set for the job.
D) Their pay is not determined by the ranges set for a job.

Question 42

Across-the-board raises are most common in organizations that follow the pay-for-performance philosophy.

Question 43

Which of the following is true of pay compression?

A) It is the process by which all employees' pays decrease significantly in an economic downturn.
B) It occurs when the employer groups employees with different pay grades together.
C) It is frequently a result of labor market pay levels increasing faster than current employees' pay adjustments.
D) It occurs when pay differences among individuals with different levels of experience and performance become large.

Question 44

The total rewards package includes all forms of compensation, the monetary and nonmonetary rewards provided by a company to attract, motivate, and retain employees.

Question 45

Compa-ratio = _____.

A) total pay divided by the total number of employees
B) pay level divided by the midpoint of the pay range
C) total pay divided by the midpoint of the pay range
D) pay level divided by the total number of employees

Question 46

The Equal Pay Act of 1963 prohibits companies from using different wage scales for men and women performing substantially the same jobs.

Question 47

Benchmark jobs are _____.

A) all blue-collar jobs that require high skill and application
B) jobs that are found in many other organizations
C) all white-collar jobs that require high skill and application
D) jobs that are not commonly found in many other organizations

Question 48

A _____ shows the relationship between job value as determined by job evaluation points and job value as determined by pay survey rates.

A) market grade
B) market band
C) market line
D) market scale

Question 49

The entitlement philosophy assumes that compensation decisions reflect performance differences.

Question 50

Tangible rewards cannot be easily measured or quantified.

Question 51

Which of the following is true of green-circled employees?

A) They are paid above the range set for a job.
B) They are paid below the range set for a job.
C) They are paid on par with the range set for the job.
D) Their pay is not determined by the ranges set for a job.

Question 52

_____ groups jobs into pay grades based on similar market survey amounts.

A) Market scaling
B) Market pegging
C) Market lining
D) Market banding

Question 53

The two factors that the pay adjustment matrix considers are _____.

A) the employee's performance as rated in an appraisal and the employee's position in the pay range
B) the employee's total productivity and the employee's position in the pay range
C) the employee's performance as rated in an appraisal and the total number of hours spent at work
D) the employee's total productivity and the total number of hours spent at work

Question 54

Not having to pay social security, unemployment, or workers' compensation costs to independent contractors offers major advantages to the employer.

Question 55

_____ are used to group individual jobs having approximately the same job worth.

A) Pay scales
B) Pay grades
C) Pay compressions
D) Pay expansions

Question 56

The most common indirect compensation is employee benefits.

Question 57

Intangible rewards can be measured and it is possible to calculate the value of each reward.

Question 58

The child labor provisions of the FLSA set the minimum age for employment with unlimited hours at 19 years.

Question 59

Which of the following is true of a pay adjustment matrix?

A) It reflects an employee's horizontal movement in an organization.
B) It is used to determine the compensation benchmark for a particular industry.
C) It is used to determine the compensation benchmark for a particular organization.
D) It reflects an employee's vertical movement in an organization.

Question 60

Compliance with FLSA provisions on employee compensation is enforced by the National Labor Relations Board.

Question 61

Procedural justice is the perceived fairness in how rewards are distributed.

Question 62

An individual whose pay is above the range for a job is referred to as a green-circled employee.

Question 63

The compa-ratio is calculated by dividing the individual's pay rate by the lowest point in
the pay range.

Question 64

The practice of using fewer pay grades with much broader ranges than in traditional compensation systems is called broadbanding.

Question 65

The ranking method is a simple system of job evaluation that places jobs in order, from highest to lowest, by their value to the organization.

Question 66

The expectancy theory says that an employee's motivation is based on several linked concepts.

Question 67

Integrating performance appraisal ratings with pay changes can be done through the development of a merit-based performance matrix.

Question 68

An employer using the first-quartile strategy chooses to "lag the market."

Question 69

A pay survey is a report based on research of compensation rates for workers performing similar jobs in other organizations.

Question 70

In knowledge-based pay (KBP) or skill-based pay (SBP) systems, employees start at a base level of pay and receive increases as they learn to do other jobs or gain additional skills and knowledge and thus become more valuable to the employer.

Question 71

A red-circled employee is an employee who is paid above the range for the job.

Question 72

If an organization has implemented competitive pay practices and has a fair and reasonable pay structure, employee concerns about inequity can be reduced by sharing this information.

Question 73

Distributive justice is the perceived fairness of the process and procedures used to make decisions about employees, including their pay.

Question 74

A pay adjustment matrix considers two factors-the employee's level of performance as rated in an appraisal and the employee's position in the pay range, which is often related to experience and tenure.

Question 75

A major difficulty with the factor-comparison method is that subjective judgments are needed to develop the class descriptions and to place jobs accurately in them.

Question 76

Match-the-market strategy is also called third-quartile strategy.

Question 77

The equity theory states that individuals judge fairness in compensation by comparing their inputs and outcomes against the inputs and outcomes of referent others.

Question 78

The home-country-based approach compensates the expatriate at the same level as workers from the country where the expatriate has been sent from the headquarter.

Question 79

Market banding groups jobs into pay grades based on similar market survey amounts.

Question 80

The overall objective of the host-country-based approach is to maintain the expatriate's standard of living in the country where the company is headquartered.