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Q:
(p. 344) An employee who earns a base rate of $10 an hour and receives a weekly attendance award of $20 works 50 hours this week (Overtime pay is required, whether or not the employer specifically asked or expected the employee to work more than 40 hours). His/her total compensation for the week will be:
A. $550.00.
B. $557.50.
C. $570.00.
D. $577.50.
E. $505.00.
Q:
(p. 344) Which of the following is a drawback of a minimum wage in terms of social policy?
A. It assumes people will take differences in pay into account when they choose a career.
B. It is only one and a half times the employees usual hourly rate.
C. It applies only to the hours worked beyond 40 in one week.
D. It places the employer at an economic disadvantage relative to employers that pay the living wage.
E. It tends to be lower than the earnings required for a full time worker to rise above the poverty level.
Q:
Which of the following is associated with Taylors differential rates?
A) There are two outcomes related to pay: one for performing below standard and the other for meeting or exceeding the standard.
B) They are used to pay a higher ranked worker more than one who is lower ranked.
C) The rate is based on a productivity index called labor contribution to value added.
D) They involve higher levels of employee involvement.
E) They are generally tied to company profits.
Q:
(p. 344) The Fair Labor Standards Act (FLSA) includes provisions for:
A. personal finance.
B. minimum wage.
C. wage discrimination.
D. environmental hazards.
E. retirement plans.
Q:
Why do Deming and other quality experts think PFP is a bad idea?
A) Performance appraisal diverts attention away from the systems related to the quality of the product or service.
B) PFP places too much emphasis on getting employees to do their jobs right the first time.
C) PFP links rewards valued by the employee to organizational outcomes valued by the employer.
D) Performance appraisal decreases the intensity of competition among individual workers.
E) PFP only enhances organizational performance.
Q:
(p. 344) Which of the following permits a lower training wage, which employers may pay to workers under the age of 20 for a period of up to 90 days?
A. FLSA
B. ADA
C. FMLA
D. ERISA
E. ADEA
Q:
The individual incentive plan in which the worker is paid solely per unit of production is known as __________.
A) differential rate plan
B) straight piecework plan
C) standard hourly rate plan
D) Halsey plan
E) Rucker plan
Q:
(p. 343) From an economic standpoint, identify the drawback of a comparable-worth policy.
A. A free-market economy assumes people will not take differences in pay into account when they choose a career.
B. Employees may conclude that pay rates are unfair.
C. The pay policy line reflects the pay structure in the market, which does not always match rates in the organization.
D. Grouping jobs will result in rates of pay for individual jobs that do not precisely match the levels specified by the market and the organization's job structure.
E. Raising pay for some jobs places the employer at a disadvantage relative to employers that pay the market rate.
Q:
When forced distribution is used to reduce leniency bias, this can cause __________ if a PFP system is in place.
A) increased trust in the organization
B) increased trust between employees
C) increased theft in the organization
D) decreased trust between employees
E) decreased trust in the organization
Q:
(p. 343) The comparable-worth policy:
A. advocates remedies for any undervaluation of jobs based on market-pay data.
B. is designed to reduce the wage gap between women and minority groups.
C. has been consistently upheld in court rulings.
D. uses job evaluation of an organizations jobs in terms of such criteria as their difficulty.
E. is the only non-controversial pay policy.
Q:
Each of the following is true regarding individual PFP plans EXCEPT:
A) Individual PFP plans can be divided into merit pay systems and incentive systems tied to production rates.
B) For a merit pay plan, performance is generally measured through performance appraisal.
C) Incentive plans rely on some countable result as a basis for setting the PFP rate.
D) The greatest strength of the merit pay plan is its ability to create a clear linkage between employee performance and pay.
E) Incentive pay is based on units produced and provides the closest connection between performance and pay.
Q:
(p. 342-343) Which of the following statements is true of Equal Employment Opportunity laws?
A. These laws guarantee equal pay for whites and minorities.
B. The goal of these laws is for employers to provide equal pay for equal work.
C. Job descriptions and job structures cannot help organizations demonstrate that they are upholding these laws.
D. These laws guarantee equal pay for men and women.
E. Under these laws, employers cannot tie differences in pay to business-related considerations.
Q:
In which of the following ways do incentive plans differ from merit pay plans?
A) They rely on countable results as basis for setting PFP rate.
B) They use performance appraisal data as the basis for the increase.
C) They use standard hours rather than labor costs to determine incentive pay.
D) They have less union support.
E) Are illegal under the Fair Labor Standards Act.
Q:
(p. 342-343) Identify the legal requirement(s) for developing a pay structure.
A. Product markets
B. High-quality workforce
C. Equity and fairness
D. Overtime pay
E. Pay differentials
Q:
When is a group pay for performance plan more effective than an individual plan?
A) When tasks are independent
B) When cooperation and teamwork are essential
C) When it is difficult to measure an employees specific contributions
D) Both A and B
E) Both B and C
Q:
(p. 342-343) Which of the following would act as a market force during the development of a pay structure?
A. Restrictions on child labor
B. Meeting principles of fairness
C. Providing equal pay for equal work
D. Paying atleast the minimum wage established by law
E. Obtaining human resources in labor markets
Q:
Which of the following plans calls for a distribution of pay based on an appraisal of a workers performance?
A) Merit pay plan
B) Incentive plan
C) Halsey plan
D) Commission plan
E) Profit sharing plan
Q:
(p. 341) An organization's job structure and pay levels:
A. reflect the organization's knowledge about inflationary pressures.
B. reflect the decisions about how much to pay each employee.
C. provide the total amount an organization pays for a particular job.
D. are annual earnings of key employees in the organization.
E. are policies of the organization.
Q:
When there is relatively little differential pay associated with using merit pay systems, one of the major problems that arise is:
A) company has a problem tracking payroll costs.
B) best performers perceive it as inequitable.
C) middle performers complain.
D) poor performers become worse.
E) top management takes the opportunity to give itself raises.
Q:
(p. 341) An organization's job structure consists of:
A. the relative pay for different jobs within the organization.
B. the average amount an organization pays for a particular job.
C. the characteristics of jobs that the organization values and chooses to pay for.
D. regular pay, overtime pay, and bonuses.
E. the standard amount that employers must pay under federal and state law.
Q:
Each of the following is a reason for the failure of PFP systems EXCEPT:
A) poor conceived connection between performance and pay.
B) the level of performance-based pay is too low relative to base pay.
C) lack of objective, countable results for most jobs, requiring the use of performance ratings.
D) faulty performance appraisal systems.
E) union support for PFP systems.
Q:
(p. 362) The equity of executive pay does not affect other employees.
Q:
Your company has jobs that are highly interrelated and strategic in focus. You want to provide a pay for performance incentive with relatively long measures of performance. The best option would be to design a:
A) Merit pay plan
B) Commission pay plan
C) Profit Sharing plan
D) Piece rate plan
E) Behavioral modification plan
Q:
(p. 356) Military pay often exceeds what service members would earn in their civilian jobs.
Q:
PFP is a High Performance Work Characteristic and is linked to a firms performance particularly when the:
A) CEO pay is a lower base pay with the majority of compensation coming from incentive plans.
B) PFP system is closely aligned with the companys strategic objectives.
C) company has both profit sharing and employee stock option plans established.
D) performance is measurable.
E) size of the award is sufficient to stimulate increased effort.
Q:
(p. 356) Issues affecting an organization's pay structure do not affect its general reputation.
Q:
When formulating a pay for performance system it is important to strike a balance between individual, team and business based incentives.
Q:
(p. 356) A compa-ratio of 1 suggests that actual pay is not consistent with the pay policy.
Q:
(p. 356) Skill-based pay systems support efforts to empower employees and enrich jobs.
Q:
Clawback provisions allow a company to grant an executive stock and then increase their stock gains by manipulating the price of the stock through corporate buy back programs.
Q:
(p. 356) Broad bands increase the opportunities for promoting employees.
Q:
Pay for performance plans are most effective when managers set the goals and have control over the pace of work.
Q:
(p. 356) The most common approach to pay differentials is to move an employee lower in the pay structure to compensate for increasing costs.
Q:
In general, pay for performance systems are more effective when specific worker contributions can be clearly measured.
Q:
(p. 356) Pay grades allow rates of pay for individual jobs to be more precisely matched to market rates and the organization's job structure.
Q:
A pay for performance plan negates the need to manage an employees performance. The manager need only focus on the distribution of rewards in order to generate appropriate employee behaviors.
Q:
(p. 356) When job structure and market data conflict, organizations should base their pay only on market forces because this is the only approach that does not have any practical drawbacks.
Q:
Workforce interdependence is one of the factors to be considered in designing a gain sharing program.
Q:
(p. 341) Key jobs have relatively unstable content and are uncommon to many organizations.
Q:
IMPROSHARE is similar to Scanlon except that the IMPROSHARE ratio uses labor costs rather than standard hours.
Q:
(p. 353) Compensable factors are job characteristics that an organization values and chooses to pay for.
Q:
Profit sharing is a group incentive system that gives participating employees an incentive allocation based on improvements in quality measurements.
Q:
(p. 351) Research suggests that employees in the lower tier of the pay structure are less satisfied than the top-tier employees.
Q:
The flaw with a bonus incentive system is that due to the repetition of payments, it can be difficult to manage from a budgetary perspective.
Q:
(p. 351) In a two-tier wage system, employees doing the same job are paid two different rates, depending on their technical background and training.
Q:
The three major types of group-based incentive plans, profit sharing, gain sharing, and employee stock option plans, are all designed to establish a link between pay and performance.
Q:
(p. 349) According to equity theory, people measure outcomes such as pay in terms of their outputs.
Q:
A draw, in a sales incentive plan, is essentially an interest-free loan to the salesperson, repayable when commissions are below the draw limit.
Q:
(p. 349) In terms of compensation, benchmarking involves the use of pay surveys.
Q:
Winsharing combines gain sharing with profit sharing.
Q:
(p. 346) When labor costs are a large part of an organization's total costs, the organization responds by increasing pay levels.
Q:
Considering the procedure to calculate the standard rate, if the standard time for a task is two hours and the fair hourly wage is $10, the standard rate is $20.
Q:
(p. 346) Product markets do not place any limit on the pay an organization will offer.
Q:
The piece-rate approach is recommended if individual performance can be accurately measured and teamwork or worker collaboration is not important for the desired performance outcomes.
Q:
(p. 346) Organizations in a product market compete to serve different customers.
Q:
The standard hourly rate is calculated by dividing the base wage by the standard.
Q:
(p. 346) The 1938 FLSA requires federal contractors to pay local or area prevailing wage rates.
Q:
The piece-rate system and the standard hourly rate, as the two types of individual incentive systems, are based on rated output.
Q:
(p. 345) Under the FLSA, children aged 14 and 15 may not be employed in any work associated with interstate commerce.
Q:
Merit pay plans are also known as piece-rate systems.
Q:
(p. 345) Paying a salary does not necessarily mean a job is exempt.
Q:
Team-based PFP is a better approach when it is part of a comprehensive team-based model of HRM and compensation.
Q:
Incentives that are not permanently tied to an individuals base pay are easier to manage in terms of budgets when performance declines.
Q:
(p. 344) In states that have laws specifying minimum wages, employers must pay whichever rate is higherthe federal or state.
Q:
The incentive stock option that gives an executive the right to purchase stock is priced higher than the market price.
Q:
(p. 343) The laws governing Equal Employment Opportunity guarantee equal pay for men and women, whites and minorities, and other groups within the United States.
Q:
Stock awards and stock options, identified as a means for rewarding performance, are well suited for meeting short-run objectives.
Q:
(p. 341) An organization's job structure and pay levels are policies of the organization, rather than the amount a particular employee earns.
Q:
Reliability is defined as the extent to which the measure used to define performance is correlated with some criterion of organizational performance.
Q:
(p. 341) Pay level is the average amount (including wages, salaries, and bonuses) the organization pays for a particular job.
Q:
The lowest level recommended for a PFP system is four percent of the base salary in order for the money to be considered significant and for the PFP system to be effective.
Q:
One reason for the failure of PFP systems is that employees do not understand the connection between their performance and changes in pay.
Q:
An important determinant of effective PFP is the incentive being valued relative to other rewards.
Q:
Explain the demerits of the traditional approach to pay.
Q:
What are the different ways in which an organization structures its base salary program?
Q:
Discuss the principles of justice that are to be followed in a system of disciplining or terminating employees.
Q:
List a few criteria's that will help an organization choose the type and the depth of the compensation analysis.
Q:
(p. 293) Distinguish between involuntary and voluntary turnover, and give examples of each.
Q:
What are the objectives of an effective compensation system?
Q:
_____ can uncover reasons why employees leave and perhaps set the stage for some of them to return.
A. Mock interviews
B. Job Descriptive Indices
C. Pay Satisfaction Questionnaires
D. Exit interviews
E. Summary dismissals