CHAPTER 1 Strategic Compensation: A Component of Human Resource Systems

Transcription

1 CHAPTER 1 Strategic Compensation: A Component of Human Resource Systems Multiple Choice Questions 1. Which type of compensation program is based, in part, on the human capital theory? a) merit pay b) seniority pay c) incentive pay d) skill-based pay Answer: b (H, pg. 6) 2. Passage of this Act requires compensation professionals to demonstrate that alleged discriminatory pay practices are a business necessity. a) Civil Rights Act of 1991 b) Equal Pay Act of 1938 c) Fair Labor Standards Act of 1938 d) Davis-Bacon Act of 1931 Answer: a (H, pg. 23) 3. What represents employees critical psychological states that result from performing their job? a) fringe compensation b) core compensation c) intrinsic compensation d) extrinsic compensation Answer: c (M, pg. 3) 4. Which theory states that employees knowledge and skills generate productive capital? a) job characteristics theory b) expectancy theory c) equity theory d) human capital theory Answer: d (H, pg. 6) 5. What is a cooperative effort between employees and their employers to promote rewarding work experiences throughout employees work lives called? a) employment termination b) career development c) labor-management relations d) training Answer: b (M, pg. 18) 1

2 6. Tuition reimbursement is considered which of the following? a) a legally-required benefit b) a protection program c) a discretionary benefit d) pay for time-not-worked Answer: c (E, pg. 11) 7. Which of the following does NOT lead to experienced meaningfulness of work? a) skill variety b) task significance c) differentiation d) task identity Answer: c (H, pg. 4) 8. Which constituency group turns to compensation professionals for advice about setting appropriate pay rates for jobs? a) employees b) line managers c) unions d) executives Answer: b (M, pg. 22) 9. What is a systematic process for gathering, documenting, and analyzing information in order to describe jobs? a) job evaluation b) internal consistency c) job analysis d) strategic analysis Answer: c (H, pg 21) 10. Which of the following are the three broad categories of discretionary benefits? a) welfare practices, services, paid time-off b) protection programs, paid time-off, services c) paid time-off, welfare practices, protection programs d) services, protection programs, welfare practices Answer: b (E, pg. 7) 11. What is a planned effort to facilitate employees learning of job-related knowledge, skills, or behaviors? a) training b) labor-management relations c) career development d) performance appraisal Answer: a (E, pg. 18) 2

3 12. These practices were designed to control labor costs and gave rise to individual incentive pay systems. a) time and motion studies b) welfare c) scientific management d) job analysis Answer: c (H, pg. 9) 13. This term refers to the degree to which the job enables a person to complete an entire job from start to finish. a). skill variety b) feedback c) task identity d) task significance Answer: c (H, pg. 4) 14. Which of the following include any of a variety of programs that provide pay for time-notworked, employee services, and protection programs? a) core compensation b) intrinsic compensation c) employee benefits d) B & C Answer: c (E, pg. 7) 15. What pay structures represent companies compensation policies that fit with their business objectives? a) market-competitive b) internally consistent c) equitable d) analytical Answer: a (H, pg. 21) 16. Which of the following refers to cash payment to an employee for doing her job or for acquiring job-relevant knowledge or skills? a) core compensation b) fringe compensation c) workers compensation d) employee benefits Answer: a (E, pg. 5) 3

4 17. Which of the following is a goal of a compensation department? a) internal consistency b) market competitiveness c) to recognize individual contributions d) all of the above Answer: d (M, pg ) 18. Which of the following refers to the amount of freedom or independence the employee has in determining how to do the job? a) autonomy b) task significance c) task identity d) feedback Answer: a (H, pg. 4) 19. Which type of compensation fluctuates according to employees' attainment of some standard based on a pre-established formula, individual or group goals, or company earnings? a) merit pay b) incentive pay c) skill-based pay d) hourly pay Answer: b (M, pg. 6) 20. Which of the following laws set prevailing wage rates for companies that provide services to the U.S. Government? a) Civil Rights Act of 1991 b) Equal Pay Act of 1938 c) Fair Labor Standards Act of 1938 d) Davis-Bacon Act of 1931 Answer: d (H, pg. 20) 21. What are an employee s skills, effort, responsibility, and the working conditions of a job site labeled? a) compensational factors b) competency factors c) commendable factors d). compensable factors Answer: d (H, pg. 6) 4

5 22. What type of pay should be determined over time, by differences in job performance? a) seniority pay b) merit pay c) skill-based pay d) knowledge-based pay Answer: b (M, pg. 6) 23. Who relies on compensation professionals expertise to design pay and benefits systems that will attract and retain the best qualified employees? a) the U.S. government b) line managers c) executives d) unions Answer: c (M, pg ) 24. Which type of compensation fluctuates according to employees' attainment of a predetermined work objective? a) merit pay b) incentive pay c) base pay d) knowledge-based pay Answer: b (H, pg. 6) 25. Which type of pay plan rewards employees for the range, depth, and types of abilities they are capable of applying productively to their job? a) knowledge-based pay b) skill-based pay c) merit pay d) hourly pay Answer: b (M, pg. 7) 26. Which of the following is NOT a part of core compensation? a) discretionary benefits b) incentive pay c) skill-based pay d) cost-of-living adjustments Answer: a (H, pg. 5/Table 1-1) 5

6 27. This strategy helps companies develop products or services that are unique from those of its competitors and generally requires employees that exhibit highly creative behaviors, a relatively long-term focus, cooperative and interdependent behavior, and a greater degree of risk-taking. a) tactical strategy b) cost leadership strategy c) low-cost strategy d) differentiation strategy Answer: d (H, pg ) 28. Compensation professionals use compensable factors to determine whether jobs are the same, in order to comply with which federal legislation? a) Davis Bacon Act of 1931 b) Fair Labor Standards Act of 1938 c) Equal Pay Act of 1963 d) Civil Rights Act of 1964 Answer: c (M, pg. 6) 29. These group jobs for pay policy application. a) pay grades b) pay ranges c) pay scales d) pay structures Answer: a (M, pg. 21) 30. Cost-of-living-adjustments are generally based on changes that are indexed in what kind of report? a) compensation levels index b) compensable factors index c) consumer price index d) compensable price index Answer: c (H, pg. 6) 31. Services, paid time-off, and protection programs are what type of compensation benefits? a) external b) non-monetary c) internal d) monetary Answer: b (M, pg. 5) 6

7 32. Which of the following refers to the cash an employee receives from an employer for performing the job she was hired to do? a) merit pay b) hourly pay c) base pay d) knowledge-based pay Answer: c (M, pg. 5) 33. The use of one-time signing bonuses to entice high quality applicants best exemplifies the use of compensation and what HR function? a) performance appraisal b) recruitment c) training d) employment termination Answer: b (M, pg. 17) 34. Base pay, protection programs, paid time-off programs, and work-related bonuses are all part of which type of compensation program? a) intrinsic b) core c) extrinsic d) fringe Answer: c (M, pg. 5) 7

8 Essay Questions 35. Explain the job characteristics theory. How does it tie in with intrinsic compensation? According to the job characteristics theory, employees experience enhanced psychological states when their jobs rate high on five core job dimensions. First, skill variety refers to the degree to which the job requires an employee to perform different tasks that involve the use of a number of different skills, abilities, and talents. Second, task identity refers to the degree to which the job requires completion of a whole and identifiable piece of work. Third, task significance refers to the degree to which the job has a substantial impact on the lives or work of other people. Fourth, autonomy refers to the amount of freedom, independence, and discretion the employee enjoys in determining how to do the job. Finally, feedback gives the employee clear information about how he or she is performing on the job. Because intrinsic compensation reflects an employee s psychological mind-set that results from performing his or her job, a job that rates on many of these dimensions will mean that an employee is experiencing high intrinsic compensation. 36. Explain the link between compensation and recruitment and selection. As with other HR functions, compensation can be used to advance other aspects of an organization. In order to attract top-notch applicants to an organization, a lucrative compensation package can serve as a good marketing tool. Communicating the positive aspects of core and fringe compensation programs can spark a job candidate s interest. Further, companies may offer such inducements as a one-time signing bonus to entice a quality applicant. 37. What is a constituency? How does it affect the HR department? The HR department does not exist in isolation. Rather, it must respond to a variety of parties, each with their own interests. In fact, the success of an HR department may depend on how well it serves various constituencies. Constituencies can include employees, line managers, executives, unions, the U.S. government, and customers. Each of these groups expects certain actions by the HR department, rates these actions according to their own standards, and tries to set up goals or present constraints within their realm of understanding. As a result, the HR department plays the role of a juggler trying to meet often-competing goals presented by multiple constituencies. 8