Chapter 9 Compensation

1. When the objectives of compensation conflict with each other, HR professionals must consider: a) Reinforcing pay policies b) Making tradeoffs c) Being creative d) Rewriting pay guidelines e) Ignoring pay rules altogether 2) An example of a conflict between compensation objectives is: a) To reward the desired behaviour of controlling costs b) To reward desired behavior and to award merit raises c) To reward desired behaviour and to control costs. d) To reward behavior and to implement performance appraisals e) To control costs and to create annual compensation budgets 3) The one compensation objective which overrides all other compensation objectives is: a) To further operational efficiency b) To maintain legal compliance c) To retain present employees d) To reward desired behavior e) To further administrative and operational efficiency. 4) Compensation objectives are not __________, they are _______________. a) rules; guidelines b) guidelines; rules c) suggestions; rules d) guidelines; Canadian law e) policy; rules 5) Employee physiological and security needs are primarily met through ______ pay, whereas _______ pay is related to social and esteem needs. a) primary; secondary b) relative; absolute c) low; high d) effective; desired e) absolute; relative 6) Which of the following choices best describes the results that can be achieved when the HR department develops, implements, and administers a compensation systems which ties rewards to the achievement of company objectives, a) Improved employee performance and happier supervisors.

b) Improved employee satisfaction and cost control c) Improved employee motivation and cost control. d) Control of costs e) Improved employee performance, motivation and satisfaction. 7) Compensation programs help to maintain an organizations ___________. a) Corporate mission b) human resources c) operations personnel d) corporate objectives e) corporate vision 8) Systematic procedures to determine the relative worth or value of jobs is: a) job evaluation b) a wage and salary survey. c) pricing jobs. d) job analysis. e) Job relativity 9) The simplest, though not necessarily best, approach to job evaluation is: a) factor compensation. b) job grading. c) job ranking. d) point system e) job classification. 10) Compensable factors are part of which of the following job evaluation techniques? a) Grade comparison method b) Job grading c) Job ranking d) Point system e) Key job approach. 11) The use of wage and salary surveys helps organizations provide for: a) internal equity b) absolute equity c) external equity d) pricing equity e) Internal evaluation 12) The most commonly used, and probably most accurate, system of job evaluation is: a) factor compensation b) job grading. c) job ranking d) a point system. e) job classification 13) Internal equity is determined through: a) human rights commission. b) balancing market forces. c) employment equity act. d) job evaluation. e) wage surveys

14) Wage and salary surveys determine: a) how much each employee in the company is making. b) point values for jobs. c) wages in relevant labour markets. d) national averages for wages. e) total labour costs for the company 15) To develop a wage-trend line, a scattergram is constructed showing the relationship between: a) current pay levels and market wages. b) points and factor comparisons. c) current pay levels and rate ranges. d) market wages and employer wages. e) points and wage levels of key jobs 16) When building a compensation system based on points, the first step that must be taken is: a) determine compensable factors. b) determine degrees of factors c) allocate points d) develop a point manual e) perform a wage survey 17) When a job is paid more than its relative worth, this is referred to as a: a) green-circled rate b) merit raise c) Red-circled rate d) Rate range e) Point allocation 18) Components of a total reward system include all of the following, EXCEPT: a) wages b) benefits c) development opportunities. d) recognition. e) Compa-ratio 19) A _________ is an indicator of how the salary of an employee relates to the midpoint of the relevant pay grade. a) compensation index b) compa-ratio c) compensation matrix d) compa-matrix e) Matrix indicator 20) Without ___________, a company cannot attract the ____________ necessary to remain competitive. a) People; investors b) People; job applicants c) Profits; investors d) Profits; employees e) Employees; investors 21) A job is gender-dominated if, depending on jurisdiction, _______________of the job occupants are from one sex. a) 20 to 30 percent b) Less than 50 percent

c) 60 to 70 percent d) 30 to 40 percent e) 50 to 60 percent 22) To a large degree, womens job choices in our culture have been determined by: a) Male dominance in our culture b) Gender dominance in our culture c) Societys expectations about the role of women in our culture d) Mens expectations about the role of women in our culture e) Womens expectations about the role of women in our culture 23) What makes the issue of equal pay for work of equal value very tricky is: a) the lack of any generally acceptable definition of equality and how it can be measured. b) the lack of any generally acceptable definition of equal value and how it can be measured. c) the lack of any generally acceptable definition of male dominance and how it can be measured. d) the lack of any generally acceptable definition of equal value e) the lack of any generally acceptable definition of gender wage gap and how it can be measured. 24) __________is the principle that means pay must be equal for jobs with comparable content. a) Equal pay for equal work b) Equal pay for work of equal value c) Equal pay d) Equal pay structures e) Gender pay 25) Individual incentive plans include all of the following, EXCEPT: a) production bonuses b) piecework. c) commissions d) profit-sharing. e) executive incentives 26) ________________is the accomplishment of assigned tasks; ___________ is the measure of output. a) Performance; productivity b) Productivity; commission c) Work; compensation d) Productivity; performance e) Incentive; productivity 27) One of the most significant benefits of financial incentives is that: a) employees see a direct line of sight.

b) better performance is reinforced on a regular basis c) employees can see something tangible d) employees feel truly rewarded e) managers have control over costs 28) An example of piecework as an incentive system is: a) in agricultural labour, workers are often paid a specific amount per bushel of produce picked. b) in agricultural labour, workers are often paid a specific amount per hour. c) in agricultural labour, workers are often paid a specific amount per bushel of produce sold d) in agricultural labour, workers are often paid a specific hourly rate for picking produce. e) in agricultural labour, workers are often paid a specific amount per week. 29) Executives are sometimes granted _____________, that is, the right to purchase the companys stock at a predetermined price. a) Excessive perquisites b) Large bonuses c) stock options d) Grant options e) Stock privileges 30) The common element in most executive incentive plans is: a) their relation to the performance of the organization b) their relation to the performance of their subordinates c) their relation to the performance of the stock market. d) their relation to the performance of other executives e) their relation to the pay of other executives 31) The team concept seems to work best in ___________ companies. a) Manufacturing b) exporting c) High tech d) Consumer products e) Pharmaceutical 32) A team approach tends to foster: a) group cohesion and organizational commitment. b) Group cohesion and higher productivity c) Higher productivity and increased profit. d) group cohesion and employee appreciation. e) Group cohesion and larger profits

33) One disadvantage of a team-based pay systems, if team cohesiveness is not strong, can be that: a) A help yourself attitude may take place. b) A freeloader effect may take place. c) An every man for himself effect may set in d) A red circle effect may set in. e) A silver circle effect may set in. 34) Plans that allow groups of workers to receive bonuses for exceeding predetermined levels of output are called: a) Exceeding output plans b) Bonus output plans c) Production incentive plans d) Worker group incentives e) Commission plans 35) Profit-sharing plans can have a dramatic impact on organizations because they can: a) create a sense of comaraderie among workers and management. b) create a feeling of success among workers and management. c) create a sense of democracy between workers and management. d) create a sense of trust and a feeling of common fate among workers and management. e) Create a sense of justice among workers 36) The advantages of pay secrecy include all of the following except: a) Most employees prefer to have their pay kept secret b) Gives managers greater freedom c) May generate a distrust in the pay system d) Many employers dont like to publish salary levels. e) Covers inequities in the internal pay structure 37) The first thing to be done to create a skill- or knowledge-based pay system is: a) skills have to be priced so that pay rates can be determined. b) The skills required have to be certified. c) The tasks identified have to be certified. d) the skills required to complete the tasks have to be identified. e) tasks that have to be performed in the organization must be identified.

38) The second step in establishing a skill or knowledge based pay system is: a) skills have to be priced so that pay rates can be determined. b) the skills required have to be certified. c) the tasks identified have to be certified. d) the skills required to complete the tasks have to be identified. e) tasks that have to be performed in the organization must be identified. 39) A powerful way to motivate employees in the development of autonomous work groups (also known as leaderless work groups) is to: a) Give every member of management an increase. b) Give every member of the work group a promotion. c) Give every member of the work group an increase d) Offer one of the members of the work group the position of team leader e) Give every member of a work group a unique tshirt. 40) The greatest advantage of skill-based pay is: a) the flexibility of the workforce. b) Increased job satisfaction among management group c) Increased productivity of both management and the workforce. d) Increased job satisfaction of the workforce. e) Increased compensation of the workforce. 41) A survey by Hewitt Associates, a Human Resource Consulting firm, found that of 420 large Canadian companies surveyed in 2008, _____________ use variable pay as part of their compensation system. a) 39 percent b) Fewer than 10 percent c) Greater than 30 percent d) 86 percent e) Less than 20 percent 42) Which of the following is not an advantage of broadbanding? a) allows for a more flexible workforce and organization b) deemphasizes promotion c) Demphasizes cost controls d) assists in flattening large, hierarchical organizations e) encourages employees to broaden their skills and abilities

43) Lawler suggests concentrating on motivating performance because: a) Money motivates when the company is doing well. b) Money is easy to administer. c) Money talks. d) Money is still a strong motivator e) Money is an important manipulator 44) Simply stated, companies that offer the most valued rewards tend to have the best: a) attraction and retention rates b) Credit rating c) Corporate brand d) Consumer and employee brand e) Branding opportunities 45) The compensation principles originate from two sources: the overall strategy of the organization and its corporate values. a) the overall strategy of the compensation committee and the companys profitability. b) The philosophy of the original founder and the effectiveness of the compensation committee. c) The overall strategy of the organization and its corporate values. d) The general sustainability of the organization and its corporate values. e) The overall strategy of the organization and sustainability in dynamic markets.