31. In terms of procedural justice, the process of determining base pay, allocating pay increases, and measuring performance all must be seen by employees as
32. Amanda is upset because she makes the same amount of money Carl does, although Amanda has 18 clients and Carl has only 11 clients. Amanda is making a judgment about
a. extrinsic justice.
b. intrinsic justice.
c. internal equity.
d. external equity.
33. Typical compensation appeals procedures require the employee to discuss the problem first with a. the organizational ombuds.
b. the EEOC.
c. the HR department.
d. his/her supervisor.
34. What is a likely outcome when an organization's compensation is viewed by employees and outsiders as lacking external equity?
a. lower than average turnover
b. employees discussing their pay with other employees
c. little effect on employee morale, because internal equity is most important to employees
d. difficulty recruiting qualified and high-demand employees
35. Organizations that have specific policies about where they wish to position themselves in the labor market use a/an ____ strategy.
d. labor market
36. Abundance Nurseries needs large numbers of unskilled employees every spring and summer to plant, maintain, and harvest the flower fields. Abundance is located in an area where there is a large supply of unskilled workers, and it has few problems recruiting workers as needed. It would be reasonable for Abundance Nurseries to position its pay for these workers in the ____ -quartile of the labor market.
37. A third-quartile approach is a compensation strategy
a. in which the company pays higher wages than its competitors do.
b. to pay below the average in the labor market.
c. where one-third of the competitors in the labor market pay higher wages than what the company does.
d. in which the company pays the median of what its competitors pay.
38. A company that structures its compensation system so that half of its competitors pay their employees more than it does and half of its competitors pay less than it does is using a ____ the market strategy.
39. Larry has decided to go back to his hometown of Mellonburg and set up an architectural design business. Mellonburg is a depressed farming community of 351 residents. It is 20 miles from the nearest restaurant, 70 miles from the nearest Starbucks coffee shop, and the local schools are the worst in the state. The winters are severe, the summers are oppressive. Few single people live there, and the social and cultural life is negligible. In order to attract good quality architects, Larry will probably
a. need to ignore the market compensation for architects and pay employees on an entitlement basis.
b. be able to lag the market significantly in pay because of the low cost of living.
c. have pay somewhat more than the market because of the unappealing location.
d. have to pay as much as if he were hiring top quality architects in the most expensive cost-of-living area, such as New York City.
40. Paul is a single-parent. He received consistently high performance appraisals from his employer, until the company was wiped out by Hurricane Katrina. Now, Paul is looking for a new job away from the Gulf Coast. As the recruiter at MilqueMaid Chocolate, you are very interested in Paul. But, your firm has a lag-the-market compensation strategy. You know that Paul has had an offer from a firm that has a meet-the-market strategy. Your best way to lure Paul to MilqueMaid is to
a. point out MilqueMaid’s broad-based performance incentive programs.
b. emphasize MilqueMaid’s entitlement compensation philosophy.
c. discuss the method that MilqueMaid used to determine its quartile strategy.
d. discuss MilqueMaid’s broadband pay structure.
41. An organization can benefit from a properly designed and implemented competency-based pay system through
a. lower overall labor costs.
b. reduction of overtime costs by the move to an all-salaried workforce.
c. greater workforce skills and knowledge.
d. improved participative decision making.
42. In a competency-based pay system employees are paid
a. on the skills and knowledge they have, whether they use these or not.
b. according to their job performance, measured either by quality or quantity.
c. on the basis of their scores on annual competency tests.
d. on whether they have added value to the organization in the last year.
43. Which of the following is the typical structure of team-based compensation?
a. individual pay-for-performance based on team member input
b. skill-based pay plus a percentage of base pay
c. equal pay for each team member based on team performance
d. team-based variable pay on top of individual base pay
44. As HR director, you are discussing the implementation of a competency-based compensation system with the company’s CEO. You point out that in order for the competency system to be effective
a. the company must place its base pay in the third quartile.
b. the company’s pay structure must be broad-banded.
c. the company must invest heavily in employee training programs.
d. the company must employ a pay-for-performance system.
45. As director of HR for a medium-sized firm, you are implementing your company’s first overseas location. You will be transferring ten current employees to the company’s foreign location for assignments lasting up to three years. You are considering all of the following factors in these employees’ future compensation EXCEPT
a. travel allowances.
b. tax equalization.
c. cost-of-living adjustments.
d. assignment abandonment penalties.
46. Steven, the vice president of manufacturing for a U.S. textile firm that is opening up a plant in India, must decide how to pay the hourly workers in the Indian plant. After much consultation with his peers at other companies he decides to follow the common practice of
a. paying wages negotiated with the local community leaders in India.
b. paying local Indian wages.
c. paying the U.S. wage in Indian rupees.
d. paying higher than the local Indian wages, but lower than the equivalent U.S. wage.
47. Compensation plans for internationally-assigned employees that attempt to be comprehensive in providing base pay, incentives, benefits and relocation expenses regardless of the country to which the employee is assigned are called ____ compensation plans.
b. global market
c. tax equalization
d. supply and demand
48. If the Wage and Hour Division of the U.S. Labor Department investigates an employer’s files looking for violations of the FLSA, it will focus on
a. time records.
b. pay levels for all protected classes
c. tax withholding records.
d. calculation of compra-ratios.
49. A compensation plan for expatriates that equalizes the cost differences between the international assignment and the same assignment in the home country of the individual or the corporation is the
a. global market
b. cost equalization
c. total rewards
d. balance sheet
50. The aggregate employer costs for the typical expatriate employee, including all allowances, is about
____ the expatriate’s salary.
a. 10% of
d. three or four times
51. The major federal law that regulates compensation in the U.S. is the
a. Fair Labor Standards Act
b. Workers’ Compensation Act
c. National Labor Relations Act
d. Pay Equity Act
52. Which of the following is a NOT major objective of the Fair Labor Standards Act?
a. to give labor unions the right to organize
b. to limit the number of hours employees work each week
c. to establish a minimum wage
d. to outlaw all child labor
53. Marcia is very upset. She applied for a waitstaff position at a local restaurant and she was told her base wage would be $4 an hour. Marcia knows this is much lower than minimum wage.
a. Marcia should report the restaurant to the U.S. Department of Labor for violating the FLSA.
b. The wage offered is consistent with the FLSA because Marcia would be in a “tipped” position.
c. The wage offered is consistent with the FLSA because Marcia is only 16, and youths can be paid a special “learners” wage.
d. Marcia should report the restaurant to the U.S. Department of Labor because this is not a living wage.
54. ____ is the amount needed for a family of four to be supported by one worker so that family income is above the officially-identified poverty level.
a. An honest wage
b. A fair wage
c. The minimum wage
d. The living wage
55. Chuck has applied to a residential roofing firm for a job as a roofer during school vacation because the pay is very good. Roofing is considered hazardous work. Under the FLSA Chuck cannot be hired unless he is at least ____ years old.
56. Which of the following are NOT paid overtime under the Fair Labor Standards Act?
a. salaried employees
c. exempt employees
d. public sector employees
57. Which of the following is a TRUE statement about the overtime provisions for non-exempt employees of the Fair Labor Standards Act?
a. A manufacturing firm with a 4-day/10-hour schedule must pay overtime for the two hours above 8 each day.
b. Overtime pay is set at one and one-half times the regular pay rate for all hours in excess of 40 per week.
c. Compensatory time off must be paid at straight time for all hours over 40 in a week or 8 in a day.
d. The work week is defined as beginning at 12:01 a.m. Monday and running until midnight Sunday.
58. Under the FLSA, which of the following would be classified as a non-exempt employee?
a. an artist creating murals for a prestigious restaurant
b. a sales representative who travels 3 days a week
c. the lead engineer on a construction project
d. an electrician on staff at a casino
59. Terri is a salaried line worker at Chicken Delight Poultry Processors. Terri joking refers to herself as a “chicken dis-assembler.” She often works more than 40 hours a week, and is not paid overtime.
a. Terri’s pay is consistent with the FLSA because she is a salaried worker.
b. Terri should be paid overtime according to the FLSA because she is an exempt employee.
c. Terri’s pay is not consistent with the FLSA because she is a non-exempt employee.
d. Terri should be given compensatory time off but not overtime because she is a salaried worker.
60. Marie has been offered work as an employee trainer for AgriEnterprise. In this job, Marie will use the employer’s training materials, and she will train employees at AgriEnterprise’s three locations at the times that the company determines. Marie has been promised that the company will continue to use her services as long as her performance is satisfactory. Marie has agreed not to work as a trainer for any other company while she is working for AgriEnterprise. The company is paying Marie as an independent contractor. Which of the following statements is correct?
a. Marie is a contractor.
b. Marie is an employee.
c. Marie is an independent contractor with only one client.
d. Marie would properly be classified as a creative professional employee.