Question 1

Employees covered by the overtime provisions of the Fair Labor Standards Act are labeled
A)protected workers.
B)nonexempt employees.
C)salaried workers.
D)exempt employees.

Accepted Answer

Nonexempt employees are those who are covered by the overtime provisions of the FLSA and are entitled to receive overtime pay for all hours worked over 40 in a workweek. Exempt employees, on the other hand, are not covered and are not entitled to receive overtime pay. Salaried workers may be either exempt or nonexempt depending on their job duties and salary level. Protected workers is not a commonly used term in relation to FLSA coverage.

Question 2

Clauses in labor agreements that provide for quarterly cost-of-living adjustments in wages, basing the adjustments on changes in the consumer price index are known as
A)maintenance clauses.
B)escalator clauses.
C)roll-up clauses.
D)guarantee clauses.

Accepted Answer

Escalator clauses provide for adjustments in wages based on changes in the consumer price index. Maintenance clauses generally refer to provisions for maintaining existing working conditions, while roll-up clauses relate to the calculation of overtime pay. Guarantee clauses typically refer to provisions for job security.

Question 3

Which of the following is an external factor that can influence the rates at which employees are paid?
A)The worth of the job
B)The employees' relative worth
C)The employer's ability to pay
D)Cost of living

Accepted Answer

Cost of living is an external factor that can influence the rates at which employees are paid. Cost of living refers to the average cost of basic necessities such as housing, food, healthcare, transport, and clothing, in a particular location or region. Employers may adjust employee compensation packages to reflect the cost of living in a particular area. This is because the cost of living can vary significantly from one location to another, which can impact the amount of money employees need to maintain a reasonable standard of living.

Question 4

Equity theory is also known as
A)procedural justice.
B)distributive fairness.
C)administrative justice.
D)moral justice.

Accepted Answer

Equity theory is also known as distributive fairness, as it focuses on the fairness of the distribution of resources among individuals. It suggests that people compare the input (such as effort or contribution) they put into a situation with the output (such as rewards or outcomes) they receive, and if this ratio is perceived as unfair, they feel demotivated and dissatisfied.

Question 5

The most common cost-of-living adjustments are __________ percent per hour for each .3-point or .4-point change in the consumer price index (CPI).
A)1
B)2
C)3
D)4

Accepted Answer

The most common cost-of-living adjustments are typically around 1 percent per hour for each .3-point or .4-point change in the consumer price index (CPI), reflecting a direct and moderate response to inflation as measured by the CPI.

Question 6

Employees whose compensation is calculated on the basis of weekly, biweekly, or monthly periods are classified as
A)salaried employees.
B)hourly employees.
C)management employees.
D)white-collar employees.

Accepted Answer

Salaried employees receive a fixed salary for a specific period, such as weekly, biweekly, or monthly, regardless of the number of hours worked. This distinguishes them from hourly employees who are paid based on the number of hours worked, management employees who have supervisory responsibilities, and white-collar employees who perform professional or administrative work.

Question 7

Which is the simplest and oldest method of job evaluation?
A)Job worth system
B)Job ranking system
C)Job grade system
D)Point system

Accepted Answer

The job ranking system is the simplest and oldest method of job evaluation. It involves simply ranking jobs in order of their importance or value to the organization, without assigning specific points or grades to them. This method is easy to understand and implement, but may be subjective and lacks the precision of other methods.

Question 8

Which of the following is an internal factor that can influence the rates at which employees are paid?
A)Labor market conditions
B)Collective bargaining
C)The employer's ability to pay
D)Cost of living

Accepted Answer

The employer's ability to pay is an internal factor that can affect the rates at which employees are paid as it is determined by the financial resources and profitability of the organization.

Question 9

Under the Fair Labor Standards Act, exempt employees
A)are required to be paid at the rate of one and a half times their regular pay rate for hours worked in excess of 40 hours in a week.
B)must be paid at the rate of one and a half times their regular hourly wage for time worked in excess of eight hours in a day.
C)are those employees not covered by the overtime provisions of the Act.
D)include most hourly personnel employed in interstate commerce.

Accepted Answer

Exempt employees are those who are not covered by the overtime provisions of the Fair Labor Standards Act. They are not entitled to receive overtime pay for working more than 40 hours per week. Examples of exempt employees include executive, administrative, and professional employees who meet certain criteria set forth by the Act.

Question 10

In __________, employees are paid according to the number of units they produce.
A)hourly work
B)piecework
C)commission
D)production work

Accepted Answer

Piecework involves paying employees based on the number of units they produce.

Question 11

Job evaluation helps to establish
A)job classifications.
B)the organization's ability to pay.
C)internal equity.
D)labor market conditions that affect pay.

Accepted Answer

Job evaluation is the process of comparing different jobs within an organization to determine their relative worth or value. This helps establish internal equity, ensuring that similar jobs are compensated in a similar manner. It is not directly related to job classifications, the organization's ability to pay, or labor market conditions, although these factors may be taken into account during the job evaluation process.

Question 12

Jenna and Blake are both line workers at LennoCorp. This week, they each worked 40 hours. Jenna produced 76 units this week, and Blake produced 69 units. They received identical wages. Jenna and Blake are compensated based on
A)hourly work.
B)piecework.
C)skilled labor.
D)competence.

Accepted Answer

Since Jenna and Blake worked the same number of hours and received identical wages despite producing different numbers of units, their compensation is based on the hours they worked, not the quantity of work done.

Question 13

Jenna and Blake are both line workers at LennoCorp. This week, they each worked 40 hours. Jenna produced 83 units this week, and Blake produced 71 units. Jenna received higher pay for the week than Blake did. Jenna and Blake are compensated based on
A)hourly work.
B)piecework.
C)skilled labor.
D)competence.

Accepted Answer

Jenna and Blake are compensated based on piecework, where they are paid a set amount for each unit they produce. Since Jenna produced more units than Blake, she earned more money for the week even though they worked the same number of hours.

Question 14

For real wages to increase, which of the following must be true?
A)An employee's wage increase must be greater than the increase in the consumer price index (CPI).
B)An employee must receive a lump-sum wage increase equal to the increase in the consumer price index (CPI).
C)An employee's wage must simply increase without the influence of consumer price index (CPI).
D)The consumer price index (CPI) must increase at least as much as the employee's wage.

Accepted Answer

Real wages refer to the purchasing power of an employee's income. For this to increase, their wage increase must be greater than the increase in the consumer price index (CPI), which measures the price changes of goods and services over time. If the wage increase is less than the increase in the CPI, the purchasing power of the employee's income decreases, resulting in a decrease in real wages. Therefore, option A is the correct choice.

Question 15

The exempt or nonexempt status of employees is determined by
A)the National Labor Relations Board.
B)the Secretary of Labor.
C)the Office of Programs and Budgets.
D)the U.S.Department of Labor.

Accepted Answer

The U.S. Department of Labor is responsible for determining the exempt or nonexempt status of employees under the Fair Labor Standards Act (FLSA). This determination is based on factors such as the employee's job duties, salary, and treatment in the workplace.

Question 16

One potential disadvantage to the cost of living increases often negotiated by unions is that
A)employees are not motivated to increase performance.
B)employees are more likely to seek jobs at unionized organizations.
C)employees are less likely to seek jobs at unionized organizations.
D)it makes it harder to recruit new employees in a tight labor market.

Accepted Answer

Cost of living increases, while ensuring that employees' salaries keep pace with inflation, may not directly incentivize individual performance improvements. This is because such increases are typically applied uniformly, not based on individual performance metrics.

Question 17

An employee's relative worth can be determined by
A)job analysis.
B)labor market conditions.
C)wage-rate surveys.
D)an effective performance appraisal system.

Accepted Answer

An effective performance appraisal system evaluates an employee's performance and contributions, determining their relative worth to the organization.

Question 18

The measure of the average change in prices over time in a fixed "market basket" of goods and services is known as
A)cost-of-living allowance.
B)cost-of-living adjustment.
C)the consumer price index.
D)the inflation index.

Accepted Answer

The measure of the average change in prices over time in a fixed "market basket" of goods and services is known as the consumer price index (CPI). Option A and B are related to adjustments or allowances given to employees in response to changes in cost of living or inflation, but they do not refer to the measure itself. Option D is a vague description and does not specify a particular measure.

Question 19

Which of the following is NOT a form of pay equity?
A)Internal equity
B)External equity
C)Collective equity
D)Individual equity

Accepted Answer

Internal equity refers to ensuring that employees with similar job responsibilities receive similar pay, while external equity ensures that the organization's pay rates are competitive with industry standards. Individual equity ensures that employees are paid based on their unique skills and contributions. Collective equity is not a recognized form of pay equity.

Question 20

Which system of job evaluation are raters using when they take cards that list the duties and responsibilities of the job and arrange them in order of the importance of the jobs?
A)Point method
B)Job ranking
C)Job grade system
D)Factor comparison method

Accepted Answer

The job ranking system involves raters taking cards with job duties and responsibilities listed and arranging them in order of importance. The other options mentioned — point method, job grade system, and factor comparison method — have different processes for evaluating jobs.

Quiz 9: Managing Compensation

Employees covered by the overtime provisions of the Fair Labor Standards Act are labeled

Clauses in labor agreements that provide for quarterly cost-of-living adjustments in wages, basing the adjustments on changes in the consumer price index are known as

Which of the following is an external factor that can influence the rates at which employees are paid?

Equity theory is also known as

The most common cost-of-living adjustments are __________ percent per hour for each .3-point or .4-point change in the consumer price index (CPI) .

Employees whose compensation is calculated on the basis of weekly, biweekly, or monthly periods are classified as

Which is the simplest and oldest method of job evaluation?

Which of the following is an internal factor that can influence the rates at which employees are paid?

Under the Fair Labor Standards Act, exempt employees

In __________, employees are paid according to the number of units they produce.

Job evaluation helps to establish

Jenna and Blake are both line workers at LennoCorp. This week, they each worked 40 hours. Jenna produced 76 units this week, and Blake produced 69 units. They received identical wages. Jenna and Blake are compensated based on

Jenna and Blake are both line workers at LennoCorp. This week, they each worked 40 hours. Jenna produced 83 units this week, and Blake produced 71 units. Jenna received higher pay for the week than Blake did. Jenna and Blake are compensated based on

For real wages to increase, which of the following must be true?

The exempt or nonexempt status of employees is determined by

One potential disadvantage to the cost of living increases often negotiated by unions is that

An employee's relative worth can be determined by

The measure of the average change in prices over time in a fixed "market basket" of goods and services is known as

Which of the following is NOT a form of pay equity?

Which system of job evaluation are raters using when they take cards that list the duties and responsibilities of the job and arrange them in order of the importance of the jobs?