Question 1

Which of the following terms refers to a compensation plan that advances a firm's strategic goals?

Accepted Answer

Aligned reward strategy refers to a compensation plan that links to an organization's strategic objectives. It aims to reward employees based on their performance towards achieving these goals. The other options, such as portability rights, strategic management, performance pay plan, and workers' compensation package, are not directly related to a compensation plan that aligns with an organization's strategic objectives.

Question 2

Which of the following has historically been the primary issue in collective bargaining?

Accepted Answer

Wage rates have historically been the primary issue in collective bargaining, as workers seek to negotiate for higher pay and better benefits. However, other issues such as health care benefits, cost-of-living adjustments, income security, and safety have also been important topics in collective bargaining.

Question 3

Which of the following is the primary cause of salary compression?

Accepted Answer

Salary compression is primarily caused by inflation, which causes the cost of living to rise and ultimately reduces the purchasing power of the affected employees. As a result, newer employees may start at a higher pay scale than more experienced employees, causing compression in pay scales within the company. Taxes, interest rates, collective bargaining, and government regulations may also play a role in salary compression, but they are not the primary cause.

Question 4

Unions typically negotiate all of the following issues EXCEPT ________.

Accepted Answer

Unions typically negotiate for paid benefits and compensation-related issues, whereas unpaid medical leave is often governed by laws like the Family and Medical Leave Act (FMLA) rather than union negotiations.

Question 5

External equity refers to ________.

Accepted Answer

External equity refers to how a job's pay rate in one company compares to the job's pay rate in other companies. It is concerned with ensuring that an organization's pay rates for a particular job are comparable to the rates paid by other organizations for the same job. This helps the organization to attract and retain employees by offering competitive pay rates in the industry.

Question 6

According to the Family and Medical Leave Act,eligible employees can take up to ________ weeks of unpaid,job-protected leave for the birth of a child or for the care of a child,spouse,or parent.

Accepted Answer

The Family and Medical Leave Act (FMLA) allows eligible employees to take up to twelve weeks of unpaid, job-protected leave for the birth of a child or for the care of a child, spouse, or parent. This leave can be taken all at once or intermittently throughout the year. It is important to note that not all employees are eligible for FMLA leave and certain criteria must be met.

Question 7

Homelife,a national chain of high-end furniture stores,employs nearly 800 workers.In the past few years,the company's market share has dropped significantly,and employee turnover has increased.Upper management is considering the implementation of a new compensation policy in its efforts to turn the company around.Historically,the company has paid all employees similarly with some variation for seniority but no distinction between high and low performers. All of the following questions are relevant to Homelife's decision to develop an aligned reward strategy EXCEPT ________.

Accepted Answer

All of the other questions are relevant to understanding and developing a compensation strategy that aligns with Homelife's goals and objectives. However, the results of the employee salary surveys related to wage satisfaction may not be directly related to the development of an aligned reward strategy.

Question 8

Which form of equity refers to the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company,based on each individual's performance?

Accepted Answer

Individual equity refers to the fairness of an individual's pay compared to coworkers in similar roles, based on performance.

Question 9

Jason is an information systems technician in a town in North Carolina with a population of 100,000.He receives an annual salary of $35,000.He recently found out that a nearby town with a similar population pays people in the same position $40,000 annually.With which of the following is Jason most concerned?

Accepted Answer

Jason is most concerned with external equity, which refers to the perceived fairness of his salary in comparison to those in other organizations with similar job positions or in the same labor market. He found out that he could earn $40,000 in a nearby town, leading to his concern about his salary being below the standard pay for the same job position in other organizations in the same area.

Question 10

Which form of equity refers to the fairness of a job's pay rate in comparison to other jobs within the same company?

Accepted Answer

Internal equity refers to the fairness of a job's pay rate in comparison to other jobs within the same company. External equity refers to the fairness of a job's pay rate in comparison to similar jobs at other companies. Distributive equity refers to the fairness of the distribution of rewards among individuals or groups. Individual equity refers to the fairness of the reward system to individual employees. Procedural equity refers to the fairness of the procedures used to distribute rewards.

Question 11

Audrey is a lawyer in a mid-size firm in Chicago.She recently learned that another lawyer who joined the firm at the same time earns a lower salary than she does.Which form of equity is most relevant to Audrey's situation?

Accepted Answer

The answer of Audrey is a lawyer in a mid-size...

Question 12

Trevor,a sales manager at IBM,recently learned that an IBM human resources manager with comparable responsibilities and spans of control earns a higher salary than Trevor.Which form of equity is of most concern to Trevor?

Accepted Answer

Trevor's concern is related to his internal equity, which implies that he is concerned about how his salary compares to salaries of employees within IBM who have similar job responsibilities and work spans. External equity involves comparing an individual's salary to market-based salaries for similar jobs outside the organization. Distributive equity is concerned with the fairness of the allocation of rewards among employees. Individual equity is about how fairly an individual is rewarded in comparison to others with a similar performance level. Procedural equity is concerned with the fairness of the procedures that the organization uses to make decisions regarding employee rewards.

Question 13

Jennifer has worked at Bank of America for six years as a loan officer.Tina was recently hired by Bank of America as a loan officer,and Tina's salary is higher than Jennifer's salary.Which of the following terms best describes this situation?

Accepted Answer

Salary compression occurs when new hires are paid more than current employees who have been with the company for a longer period of time. This can happen when the market demand for a specific role has increased, or when the company has adjusted its compensation strategy to remain competitive.

Question 14

What theory of motivation states that people are strongly motivated to maintain a balance between what they perceive as their contributions and their rewards?

Accepted Answer

Equity theory states that people are motivated to maintain a balance or equilibrium between their inputs (contributions) and outputs (rewards) in comparison to others in similar positions. The theory emphasizes that people strive for fairness and justice in their relationships with others, and any perceived inequity can lead to tension and motivation to restore balance.

Question 15

All of the following laws influence compensation decisions EXCEPT the ________.

Accepted Answer

The Labor Management Relations Act, also known as the Taft-Hartley Act, primarily deals with the relationship between employers and labor unions and does not directly affect compensation decisions. The other options listed are laws that influence compensation decisions, either by prohibiting discrimination or regulating employee benefits and leave.

Question 16

Which of the following is NOT one of the forms of equity related to compensation issues?

Accepted Answer

The forms of equity related to compensation issues are internal equity, external equity, individual equity, and procedural equity. Group equity is not considered as one of them.

Question 17

Which form of equity refers to how a job's pay rate in one company compares to the job's pay rate in other companies?

Accepted Answer

External equity refers to how a job's pay rate in one company compares to the job's pay rate in other companies, whereas internal equity refers to how fairly an individual's pay rate compares to other jobs within the same company. Distributive equity refers to the fairness of how rewards are distributed among employees, individual equity refers to the fairness of how an individual's contributions are recognized and rewarded, and procedural equity refers to the fairness of the processes used to determine rewards and outcomes.

Question 18

All of the following are typical ways that employers address cost-of-living differentials EXCEPT ________.

Accepted Answer

The other options all involve some form of additional pay or compensation, while option E involves raising commission percentages which would be more closely tied to an employee's performance rather than a cost-of-living differential.

Question 19

The ________ gave employees the right to organize,bargain collectively,and engage in concerted activities for the purpose of collective bargaining.

Accepted Answer

The National Labor Relations Act, also known as the Wagner Act, enacted in 1935, guarantees the collective bargaining rights of employees in the private sector to organize and bargain collectively through their chosen representatives. It also prohibits employers from engaging in unfair labor practices that could interfere with employees' rights to organize and bargain collectively.

Question 20

Which form of equity refers to the perceived fairness of the processes used to make decisions regarding the allocation of pay?

Accepted Answer

Procedural equity refers to the perceived fairness of the processes used to make decisions regarding the allocation of pay. External equity refers to the fairness of an organization's pay relative to what other organizations are paying for similar work. Internal equity refers to the fairness of pay within the organization for similar work. Distributive equity refers to the perceived fairness of the outcomes of pay decisions, such as the actual amount of pay received. Individual equity refers to the fairness of pay in relation to an individual's contribution to the organization.

Quiz 11: Establishing Strategic Pay Plans