Question # 00005107 Posted By: smartwriter Updated on: 12/10/2013 02:30 PM Due on: 12/31/2013
Subject Business Topic General Business Tutorials:
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1. McDonald’s global rewards program has resulted in lower managerial and employee turnover. In this type of total rewards system why would turnover decline?

a. All employees benefit from higher pay, and are less likely to quit.

b. Employees receive equal bonuses based on growth in McDonald’s profits, and this fair treatment makes employees less likely to quit.

c. The increased in employee competition from varying reward levels based on performance encourages high performers to stay.

d. Higher performers receive higher incentives than lower performers, so high performers would be less likely to quit.

2. Compensation is one of the organization’s largest expenditures. Compensation philosophies and systems vary from one organization to the next. Why is that?

a. There is no “one right way” to compensate employees. Many systems will work equally well in any organization.

b. Different organizations have different organizational objectives and strategies.

c. Legal requirements mandate different types of compensation systems depending on the organization’s industry.

d. Organizations depend heavily on consultants to design their compensation systems, and each consulting firm has its own system.

3. All of the following are compensation objectives of the organization EXCEPT

a. legal compliance with relevant laws and regulations.

b. internal, external and individual equity for employees.

c. the lowest total cost of compensation in the industry.

d. performance enhancement for the organization.

4. The total rewards compensation approach has three main components. Which of the following is NOT one of these components?

a. compensation

b. benefits

c. performance and talent management

d. individual, team and organizational-level incentives

5. In a total rewards compensation approach, it is critical to balance

a. the need for the employer to generate profits with the needs of the employees to receive equitable pay.

b. the ability of the employer to pay with the needs of the employees for tangible and intangible rewards.

c. the strategic goals of the employer with the personal needs and goals of the employees.

d. balance the interests and costs of employers with the needs and expectations of employees.

6. Which of the following would be an example of an intrinsic reward?

a. a grant of stock options

b. additional medical insurance coverage

c. a membership in a country club

d. verbal praise for a job well done

7. Medical insurance, paid by the employer, is classified as ____ compensation.

a. indirect

b. direct

c. intangible

d. intrinsic

8. Tom has just taken his first full time job with a salary of $38,000. He knows that he should plan his personal recurring expenses, such as rent and car payments, around this amount because it is his

a. total compensation.

b. total reward package.

c. base pay.

d. living wage.

9. A compensation philosophy in which each employee who has gained another year of seniority should have an increase in pay is called the ____ philosophy.

a. entitlement

b. commitment

c. paternalistic

d. the equity-based

10. ____ are payments directly calculated on the amount of time worked.

a. Salaries

b. Wages

c. Incentives

d. Bonuses

11. At Artistic Floral Creations, the non-managerial employees all receive the same pay increase every year. Usually this increase is about 5%, but some years it has been as high as 10% depending on changes in the cost-of-living. Artistic Floral Creations has a/an ____ philosophy of compensation.

a. performance

b. entitlement

c. quartile-based

d. total rewards

12. The two basic compensation philosophies, which should be seen as opposite ends of a continuum, are the ____ and the ____ orientations.

a. competency, productivity

b. exempt; non-exempt

c. entitlement; performance

d. equity, equality

1. Amber is the manager of a popular clothing store. She regularly works over 40 hour a week. But when new styles are coming in requiring new displays, she may put in as many as 60 hours a week. Amber’s paycheck is the same regardless of the number of hours she has worked. Amber is paid on a/an

total compensation arrangement.

incentive compensation program.

wage system.

salary basis.

14. Which type of compensation is linked directly to individual, team, or organizational performance?

a. variable pay

b. direct pay

c. wages

d. salary

15. A/an ____ is an indirect reward given to an employee or group of employees for organizational membership.

a. incentive

b. bonus

c. benefit

d. motivator

16. In an organization with a performance-oriented philosophy,

a. seniority plays little role in whether an employee receives a raise.

b. all employees can at least count on an annual cost-of-living adjustment to their salaries.

c. bonuses are based on what other companies in the industries are paying.

d. marginal performers tend to be satisfied with their compensation.

17. Justin is an hourly employee of Furnace Brick, a company that manufactures a special high-heat-resistant brick for industrial kilns. Justin is unhappy with the new compensation system introduced by the company’s new plant manager and HR director. This system has eliminated the practice of annual raises, the Christmas bonus, and raises based on seniority for a new system that ties every employee’s raise to how well Furnace Brick is performing in the market. Moreover, the plant manager has announced that twenty percent of the employees in the plant will receive no raise at all this year, regardless of the company’s performance. Furnace Brick has moved from a/an ____ compensation philosophy, to a/an____ compensation philosophy.

a. budget-based, pay-as-you-go

b. paternalistic, competitive

c. entitlement, performance

d. meet-the-market, lag-the-market

18. Jack and Jerry are twins. Both started working at competing firms in the same industry. Jack and Jerry were given exactly the same starting salary. They have been with their companies for ten years, and both have identical positions and identical performance ratings. Both Jack and Jerry are consistently average performers. Jack works at a company with an entitlement compensation philosophy. Jerry works at a company with a pay-for-performance compensation philosophy. The two companies are identical in revenue and profitability. They allocate the same budget amount for employee raises each year. All other factors remaining equal, which of the following statements is most likely to be true?

a. Jerry will have a higher salary than Jack.

b. Jack will have a higher salary than Jerry.

c. Jerry and Jack will have identical salaries.

d. Jerry and Jack will have identical levels of pay satisfaction.

19. Gigantic Motor Vehicles, which manufactures the Behemoth, the main competitor to the Hummer, has experienced huge losses for the last three years due to collapsing sales of their gas-guzzling vehicles. GMV’s stock has plummeted on Wall Street because it has not met projected profits for the 24th straight quarter. GMV has moved to a pure pay-for-performance system that is tied to achievement of organizational profit goals. Which of the statements below are most likely to be true?

a. Only high performers at GMV can be certain that they will receive a pay increase.

b. No GMV employee can expect he/she will receive a pay increase, regardless of his/her performance.

c. All employees except those who are the worst performers can expect that they will receive a pay increase.

d. GMV will be able to attract high performing employees from its competitors.

20. The CEO of BizMark Equipment wants to know what return the firm is getting on the money it is spending on its employees. As the director of HR, you know this is considered return on human capital. You will calculate this as

a. Total Compensation and Benefits / FTEs

b. Revenue - Operating Expense -Pay and Benefits = Adjusted Profit / Pay and Benefits

c. Revenue - Operating Expense - Pay and Benefits + Adjusted Profit / FTEs

d. Total Pay and Benefits Expenditures / Operating Expense

21. Brian, the director of compensation, has been asked by the board of directors to present the “employee cost factor” at the next board meeting. Brian needs to do the following calculation:

a. total compensation and benefits divided by FTEs

b. total pay and benefits expenditures

c. revenue minus operating expense minus pay and benefits equal adjusted profits divided by FTEs

d. revenue minus operating expense minus pay and benefits equal adjusted profit divided by pay and benefits

22. In order to show how the rate of compensation changes compares with the rate of changes in the organization’s revenues overall

a. compensation metrics should be calculated each year and compared with previous years’ metrics.

b. compensation metrics should be calculated for regular employees (excluding compensation for part time employees) and compared with previous years’ metrics.

c. the board of directors should have compensation metrics calculated on a rotating basis: Human value added one year, return on human capital invested the next year, and so forth. This provides the “big picture” strategically.

d. total compensation is charted against total revenues, and any upward change in total compensation is analyzed.

23. If employees are dissatisfied with their pay, they are likely to do or feel all the following EXCEPT

a. quit.

b. be dissatisfied with their jobs.

c. lose self-esteem.

d. change their job performance.

24. The HR unit is typically responsible for

a. recommending pay rates and pay increases for employees.

b. monitoring attendance and productivity for compensation purposes.

c. attempting to match employee performance with rewards.

d. administering the compensation system.

25. Operating managers typically

a. evaluate employee performance for compensation purposes.

b. develop and administer the compensation system.

c. conduct wage surveys.

d. develop wage and salary structures and policies.



26. As director of HR for Megatherium Products, you are looking for ways to make the compensation function more efficient. You are considering outsourcing some of the compensation functions to an outside vendor. The function you are most likely to outsource will be

a. employee performance appraisal.

b. development of wage and salary structures.

c. payroll processing.

d. job evaluation.

27. In a division of compensation responsibilities, ____ typically ensure job evaluations and wage surveys are done.

a. operating managers

b. HR specialists

c. Department of Labor analysts

d. outside consultants

28. In an equity calculation, an employee’s base pay, variable pay, and benefits are the ____ he/she receives from a job.

a. outcomes

b. outputs

c. inputs

d. motivators

29. The director of HR at Megatherium Industries knows that there are serious flaws in the company’s compensation system. If employees freely discuss their salary levels, raises and bonuses, the director is concerned that there will be widespread dissatisfaction and employee questions that will place the HR department and top management in a bad light. Consequently, Megatherium has a strict pay secrecy policy, and employees who discuss their pay are disciplined. Which of the following statements is TRUE?

a. Pay secrecy policies are very rare in the U.S.

b. If Megatherium opens its pay policies, employee retention will improve.

c. Closed pay systems, such as Megatherium’s, are illegal unless they meet certain IRS requirements.

d. It is possible that Megatherium’s policy violates the National Labor Relations Act.

30. Simon is outraged that Missy was given a raise because she is related to the chairman of the board. Simon’s sense of ____ has been violated.

a. compensatory equity

b. distributive justice

c. external equity

d. procedural justice

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  1. Tutorial # 00004901 Posted By: smartwriter Posted on: 12/10/2013 02:32 PM
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