Deck 7: Compensation Issues

Question 1

The annual cost of a proposed 5% across the board wage increase would be:

A) $87,400.00.
B) $96,549.68.
C) $100,510.00.
D) $103,787.50.

Answer 1

C

Question 2

Which of the following would normally be included in a roll-up calculation?

A) COLA maximums.
B) Inflation index.
C) Social Security contribution.
D) Change in base pay.

Answer 2

C

Question 3

Which of the following provides for time and one-half pay for any time worked over 40 hours in a week for most workers?

A) Wagner Act
B) Fair Labor Standards Act
C) Davis-Bacon
D) Walsh-Healy Act

Answer 3

B

Question 4

Which of the following would benefit the most from the classification method of job evaluation?

A) C & V Hardware Store
B) Fuller's New York Inn
C) Jimmy's Peanut Processing Plant
D) J.C. Penney

Question 5

Unions have generally made significant wage gains when:

A) They practice decentralized bargaining.
B) Employers' ability to pay is high due to their discretionary pricing power.
C) Unions are generally fragmented.
D) Industries are decentralized.

Question 6

The process of determining the financial impact of a contract provision change is referred to as:

A) Counter.
B) Provision.
C) Surveying.
D) Costing.

Question 7

A wage survey primarily achieves the compensation objective of:

A) External pay equity.
B) Retaining good employees.
C) Motivating employees.
D) Internal pay equity.

Question 8

Which of the following is used as a means of wage determination, as well as a motivational technique?

A) Job security provision
B) Pension charges
C) Benefit package
D) Piecework

Question 9

Union and management negotiations agree that one problem with COLAs is:

A) They are difficult contract clauses to write.
B) They are not needed.
C) Employees take for granted past COLA increases.
D) They are difficult to "explain to employees."

Question 10

The average cents-per-hour increase of a 5% across-the-board increase would be:

A) 44¢.
B) 46¢.
C) 48¢.
D) 53¢.

Question 11

Which of the following is/are COLA provisions?

A) Pension charges
B) Inflation index
C) Benefit package
D) Piecework

Question 12

Which of the following is true of the "ability to pay" negotiation theory:

A) Is commonly expressed during wage negotiations.
B) Management will argue that capital investment should receive a share of higher profits.
C) Union negotiations will expect to maintain pay levels not decrease them, when profits are down.
D) Past profit levels may not be maintained in the future-to pay higher negotiated wages.

Question 13

Union leaders favor a standard rate of pay for each job versus a pay range) because:

A) They distrust management merit/performance appraisal systems.
B) A standard pay rate pays senior employees more.
C) A pay range does not allow for merit increase.
D) Supervisors have input in determining individual pay levels.

Question 14

COLA increases in labor agreements are usually tied to increases in the:

A) GNP.
B) CPI.
C) Unemployment rate.
D) Labor force participation rate.

Question 15

The __________ is computed by dividing the cost of the directly increased benefit by the cost of the wage rate increase.

A) Actuarial wage
B) GNP forecast
C) Roll-up percentage
D) Linear programming formula

Question 16

Productivity theory states that the organization's production is a combination of factors that includes which of the following?

A) Labor
B) Management
C) Unions
D) Profit levels

Question 17

When a national union chooses one employer to "target" and first negotiates a new agreement with them, and then demands the same economic gains of others in the industry, it is known as:

A) Industrial consistency.
B) Stress negotiating.
C) Pattern bargaining.
D) Factor comparison.

Question 18

The general purpose for negotiating COLA increases during a multiyear contract is to:

A) Reward merit.
B) Increase wages as profit levels increase.
C) Increase wages as productivity levels increase.
D) Maintain the purchasing power of negotiated wage rates.

Question 19

Management is primarily concerned with the effect a negotiated wage increase will have on:

A) Board members.
B) Competitive industry position.
C) Stockholders.
D) Supervisors.

Question 20

Which of the following is not true of the piece-rate system?

A) Rewards employee based on # hrs worked.
B) Rewards based on productivity.
C) Reduces labor costs per unit.
D) Helps attract and retain employees.

Question 21

A wage system in which employees receive a standard rate of pay per unit regarding output) is a piece-rate system.

Question 22

Under the FLSA, employers must pay an employee at least a ____________ per hour:

A) Deferred wage rate.
B) Minimum wage
C) Piece-rate.
D) Lump-sum payment.

Question 23

Which method of deferred income has most increased in use in recent years?

A) Deferred wage rate increases
B) COLAs
C) Lump-sum payments
D) Two-tier pay plans

Question 24

The following is an example of which type of pay plan?
a. Standard piece-rate
b. Falling piece-rate
c. Rising piece-rate
d. Standard hour

Question 25

Potential morale problems caused by a "two-tier" wage system might be minimized by:

A) Assigning new workers to locations with few or no high-tier employees.
B) Hiring high-tier employees for part-time work.
C) Providing no merges of the two tiers.
D) Allowing higher-tiered employers the first right of refusal.

Question 26

Management usually is willing to pay wage rates that reflect the "cost-of-living" by labor if it is kept in proportion with the cost of capital and equipment.

Question 27

Employees earning over ______________ per year do not receive overtime if their duties are executive, administrative, or professional.

A) $175,000
B) $95,000
C) $150,000
D) $100,000

Question 28

Generally, as annual earnings increase, the cost of insurance automatically decreases.

Question 29

If employees perceive that they are unfairly treated by an organization, it is highly likely that the employees will leave.

Question 30

Why do fewer union contracts in recent years contain COLAs?

A) Labor is more interested in COLAs due to lower inflation rates.
B) Management continues to like COLAs.
C) Foreign and nonunion competition have forced lower negotiated wage increases.
D) Labor is not concerned with job security.

Question 31

The productivity theory states:

A) Employees should share in increased profits caused by greater productivity.
B) Leagues produce more than other entities.
C) Team owners should share income with fans of the players.
D) All income should remain with the earner.

Question 32

Increased foreign and domestic nonunion competition have forced unions to accept which of the following new wage adjustment techniques?

A) COLA
B) Equal year deferred wage increase
C) Front-end loaded deferred wage increase
D) Back-end loaded deferred wage increase

Question 33

Under Title VII, the federal statute governing employee rights, the right to bargain collectively is limited to issues concerning conditions of employment and excludes wage and fringe benefits.

Question 34

The percentage of contract wage re-openers has decreased by ________ between 1995 and 2004.

A) 30%
B) 1%
C) 7%
D) 75%

Question 35

The pyramiding of overtime refers to:

A) The same hours are eligible for more than one type of premium pay.
B) Working weekends and receiving overtime premium pay.
C) Double-time pay rates.
D) Working more than seven days in a row.

Question 36

Union negotiators are more likely to demand a COLA provision in a contract if:

A) A strike is imminent.
B) Unemployment is high.
C) Negotiations follow a period of high inflation.
D) They are losing union membership.

Question 37

In 2003, the Communication Workers of America CWA) walked off the job over forced overtime. This strike was against _______________.

A) AT&T
B) Vonage
C) Verizon
D) Sprint

Question 38

A pay incentive system in which employees receive a share of the employer's profits in addition to their regular wages is called _____.

A) Benchmark
B) Seniority rights
C) Union security
D) Profit sharing

Question 39

Which of the following is not a reason management would prefer a profit-sharing plan to a COLA?

A) They are always less expensive.
B) They are not tied to the Consumer Price Index.
C) Workers' pay is linked to their productivity.
D) Workers feel more involved with the success of the company.

Question 40

Union negotiators have generally agreed to "two-tier" wage systems:

A) Because they are more valuable than COLAs.
B) Because all future union members are better off than under a deferred wage increase.
C) To avoid layoffs or wage cuts.
D) In exchange for grievance arbitration.

Question 41

The primary problem with productivity theory is that there is no commonly accepted method of determining labor's share of increases in productivity.

Question 42

Management prefers a system of pay ranges versus a standard rate for each job.

Question 43

Compensation systems whereby management agrees to make two small payments to employees in addition to their regular wages are termed profit sharing or bonus sharing.

Question 44

A back-loaded contract provides a lower wage adjustment in the first year with higher increases in later years of a multiyear contract.

Question 45

Job evaluation is an attempt to review the employees within a position.

Question 46

A roll-up is one that exists in all departments within an organization.

Question 47

Labor negotiators conclude that if a company is experiencing high profits, it can better pay its employees who have contributed to the good financial conditions. This is called "ability to pay."

Question 48

A falling piece rate involves a standard time and rate of production. If the employee produces less than the standard, the gain is shared between the employer and the employee.

Question 49

About 55% of the civilian U.S. labor force is covered by a COLA provision.

Question 50

The productivity theory states that employees should share in increased profits caused by greater productivity.

Question 51

A back-loaded contract provides a lower wage adjustment in the first year with higher increases in the later years of a multiyear contract.

Question 52

In existing labor proposals, an employee's "base" refers to COLA.

Question 53

Front-end loading refers to a deferred wage increase with a larger proportion of the total percentage increase in the second year of the agreement.

Question 54

Wages and benefits are the "meat and potatoes" of collective bargaining.

Question 55

High inflation refers to the cost of employee benefits that increase directly as base wages increase.

Question 56

COLA changes normally are made weekly as prices increase.

Question 57

The process of determining the financial impact of a contract provision is referred to as "costing."

Question 58

In 2004, the U.S. Department of Labor issued new regulations to determine if an employee is classified as exempt.

Question 59

A rising piece rate involves a standard time and rate of production. The worker who increases output by 50% has a greater than proportional increase in hourly earnings.

Question 60

The minimum that can occur in the COLA during an agreement is referred to as a "cap."

Question 61

The classification method of job evaluation is primarily designed for large organizations with one location.

Question 62

Unions are entitled to company financial information.

Question 63

In 2005, members of the International Association of Machinists and Aerospace Workers Union went on strike against Boeing.

Question 64

Within a Scalon plan, departmental committees of union and management representatives meet together at least monthly to consider any cost-saving suggestions.

Question 65

Most labor contracts specify that the pyramiding of overtime pay is allowed if earned.