Q&A Hero

Q: Incentive plans can create an organizational environment of shared commitment since individuals contribute to organizational success. a. True b. False

Q: The performance threshold in incentive plans is the name given to the amount awarded to an employer. a. True b. False

Q: Historically, incentive plans have not been a major element of strategic compensation management. a. True b. False

Q: Briefly discuss the legal requirements of the Fair Labor Standards Act used to regulate employee compensation.

Q: Explain competence-based pay including its advantages and disadvantages. Include in your discussion the practice of broadbanding.

Q: Rewarding an employee's past performance is not a goal of a strategic compensation policy. a. True b. False

Q: A Bloomberg National Poll showed thatmost Americans believe that large bonuses for Wall Street companies that took taxpayer bailoutsshould be prohibited. a. True b. False

Q: Raising selection standards and hiring better-qualified employees can reduce training costs. a. True b. False

Q: If rates of pay are high, which creates a large applicant pool, then organizations may choose to raise their selection standards. a. True b. False

Q: Strategic compensation is the term used for all the processes used to determine the market rates to pay employees. a. True b. False

Q: Expectancy theory predicts that people expect to be paid as much or more than individuals in a similar job class. a. True b. False

Q: Pay equity is achieved when employees' compensation is equal to the value of the work they perform. a. True b. False

Q: While most managers agree that pay should be linked to performance, employees do not. a. True b. False

Q: Pay-for-performance programs have little, if any, effect on employee productivity. a. True b. False

Q: A formal statement of compensation policy would typically include the rate of pay within the organization and whether it is to be above, below, or at the prevailing market rate. a. True b. False

Q: Among the goals of a strategic compensation policy are rewarding past performance, attracting new employees, and reducing turnover. a. True b. False

Q: The compensation scorecard creates a comparative tool within the organization that can reinforce desired outcomes that are unique to the company's strategy. a. True b. False

Q: The expectancy theory of motivation predicts that one's level of motivation depends on the attractiveness of the rewards sought by employees and the probability of obtaining those rewards. a. True b. False

Q: Pay secrecy is still prevalent in organizations despite its negative effect on motivation and employee trust. a. True b. False

Q: Managers in companies with compensation scorecards often struggle to know if the promotions, raises, bonuses, and pay adjustments they make are in line with the rest of the organization and its strategy. a. True b. False

Q: Nonexempt employees are covered by the Fair Labor Standards Act and must be paid at the rate of a rate of one and a halftimes their regular pay rate for time worked in excess of forty hours in their workweek. a. True b. False

Q: Nonexempt employees are not covered by overtime requirements under the Fair Labor Standards Act. a. True b. False

Q: Employees who are compensated on an hourly basis are referred to as salary earners. a. True b. False

Q: The worth of a job is determined formally through the wage and salary survey. a. True b. False

Q: Internal factors that influence wage rates include the worth of a job and the employer's ability to pay. a. True b. False

Q: Under the Fair Labor Standards Act, most of hourly workers involved in interstate commerce are considered nonexempt. a. True b. False

Q: Exempt employees are not covered by the overtime provisions under the Fair Labor Standards Act. a. True b. False

Q: The worth of a job, as it is determined by its comparative worth with jobs in other firms, is an external factor in the wage mix. a. True b. False

Q: American President Obama enacted a five-year freeze on federal salaries to help the government achieve its objectives of reducing the deficit. a. True b. False

Q: A critical concern for a successful pay-for-performance system is the perceived fairnessof the pay decision. a. True b. False

Q: Pay levels are limited in part by profitability of the firm and productivity of employees. a. True b. False

Q: The consumer price index tracks the change in price over time of a "market basket" of goods and services. a. True b. False

Q: Real wages represent the difference between wage increases and cost-of-living increases. a. True b. False

Q: The consumer price index is available in separate indexes by size of city and region of the country. a. True b. False

Q: Wages of unionized employees are generally higher than those of nonunion employees. a. True b. False

Q: Job evaluation is a non-systematic, qualitative process of determining the relative worth of jobs in order to establish a comparison with the prevailing market and regional value of a job within a job family. a. True b. False

Q: The job ranking system ranks jobs on the basis of relative worth and can be done by a single person familiar with all jobs. a. True b. False

Q: Job ranking is a simple method that provides a precise measure of each job's worth. a. True b. False

Q: The job classification system is a quantitative job evaluation procedure that determines a job's relative value by calculating the total points assigned to it. a. True b. False

Q: The point system of job evaluation permits jobs to be evaluated quantitatively based on compensable factors. a. True b. False

Q: The job classification system is used commonly by smaller employers. a. True b. False

Q: Compensable factors include skills, efforts, responsibilities, and working conditions. a. True b. False

Q: Point manuals contain job descriptions and the number of points assigned to each job type. a. True b. False

Q: A point manual can be used to determine the external equity of a job. a. True b. False

Q: The three factors that constitute the evaluation in the Hay profile method are knowledge, mental activity, and accountability. a. True b. False

Q: The Hay profile method is useful for evaluating jobs of all types and levels. a. True b. False

Q: Employers refer to the area from which they obtain certain types of workers as the labor market. a. True b. False

Q: Equity theory is also referred to as distributive fairness. a. True b. False

Q: The National Compensation Survey published by the Bureau of Labor Statistics can provide local, regional, and national compensations statistics. a. True b. False

Q: An advantage of published wage surveys is compatibility with the organization's jobs. a. True b. False

Q: For employees, pay equity is achieved when the compensation received is equal tothe value of the work performed. a. True b. False

Q: Managers group similar jobs into a pay grade in order to help with the setting of wages for all jobs. a. True b. False

Q: The wage curve represents the wages paid to jobs after adjustment for cost-of-living. a. True b. False

Q: Employees are likely to accept a promotion if succeeding rate ranges are larger in size. a. True b. False

Q: Steps within a rate range allow pay increases based on merit or seniority. a. True b. False

Q: Red circle rates are above the maximum for the pay range and are often frozen until the range shifts upward through market wage adjustments. a. True b. False

Q: When employees are paid according to the skills and knowledge they have rather than the specific jobs they perform, they are paid according to competence-based compensation. a. True b. False

Q: A major benefit of job-based compensation systems is that they encourage employees to learn new skills and capabilities. a. True b. False

Q: One of the major criticisms of job-based compensation systems is that they often fail to reward employees for their skills or the knowledge they possess. a. True b. False

Q: An advantage of competence-based pay from the employee's perspective is that there is no limit to what they can earn by learning new skills. a. True b. False

Q: A major criticism of competence-based pay systems is that after achieving the top wage, employees may be reluctant to continue their educational training. a. True b. False

Q: Pay secrecy seems to be an accepted practice in many organizations. a. True b. False

Q: Broadbanding refers to collapsing of many traditional salary grades into a few wide salary bands. a. True b. False

Q: Companies are more heavily scrutinized than they have been historically by shareholders, government, and the public for how much they pay their people. a. True b. False

Q: Strategic compensation is the compensation of employees in ways that enhance motivation and growth while concurrently aligning their efforts with the goals of the organization. a. True b. False

Q: Because management positions are more difficult to evaluate and involve certain demandsnot found in jobs at the lower levels, some organizations do not attempt to include them in their job evaluation programs for hourly employees. a. True b. False

Q: Under the Fair Labor Standards Act (FLSA), an employer must pay an employee for whatever work the employer "suffers or permits" the employee to €perform, even if the work is done away from the workplace and even if it is not specifically expected or requested. a. True b. False

Q: Seniority, merit, and individual incentive plans are factors affected under the Equal Pay Act. a. True b. False

Q: Indirect compensation includes healthcare benefits and commissions.€ a. True b. False

Q: Wages paid above the range maximum are called blue square rates. a. True b. False

Q: Competence-based pay systems represent a fundamental change in the attitude ofmanagement regarding how work should be organized and how employees should bepaid for their work efforts. a. True b. False

Q: Which of the following is an example of a nonfinancial compensation? a. Bonuses b. Commissions c. Health insurance d. Employee recognition programs

Q: A compensation scorecard can cloud the transparency of how people are rewarded and makes managers responsible for how they spend company money. a. True b. False

Q: _____ encompasses employee wages and salaries, incentives, bonuses, and commissions. a. Nonfinancial compensation b. Indirect compensation c. Direct compensation d. Component compensation

Q: _____ includes employee recognition programs, rewarding jobs, organizational support,work environment, and flexible work hours to accommodate personal needs. a. Financial compensation b. Nonfinancial compensation c. Direct compensation d. Indirect compensation

Q: A Bloomberg National Poll showed that more than _____ ofAmericans thought big bonuses should be banned for Wall Street companies thattook taxpayer bailouts. a. 90 percent b. 80 percent c. 85 percent d. 70 percent

Q: Pay-for-performance programs: a. tie rewards to firm profitability. b. are easy to implement and measure. c. tie rewards to employee effort. d. result in negligible increases in output.

Q: The term pay-for-performance can encompass all of the following EXCEPT: a. merit pay. b. base salary. c. cash bonuses. d. gainsharing plans.

Q: Which of the following compensation options would not qualify under the term pay-for-performance? a. Seniority-based pay b. Group incentive c. Pay banding d. Gainsharing plans

Q: Which of the following is NOT a common goal of a strategic compensation policy? a. To reward employees' past performance b. To mesh employees' past performance with organizational goals c. To remain competitive in the labor market d. To attract new employees