Test Bank Ch.15 Union Role In Wage And Salary Administration

Chapter 15

Union Role in Wage and Salary Administration

Multiple Choice Questions

Which of the following statements regarding unions is NOT true?

A.	Union membership has fallen from approximately 20 percent to 11 percent since 1983.

B.	Unions peaked in the 1950s and 1960s.

C.	Since 1997, there has been a consistent 2 percent annual decrease in certification elections decided in favor of unionization.

D.	Since 1997, the number of union certification elections for firms has declined.

Which of the following is NOT one of the popular explanations for the decline of union memberships?

A.	Workers do not view unions as a solution to their problems.

B.	Management resistance to unions has increased.

C.	The intensity of union organizing efforts has become less.

D.	Growing industries are most heavily unionized, while declining industries are less so.

Company A and Company B are in the same industry, but Company A is unionized and Company B is not. Therefore, _____.

A.	it can be argued with assurance that any wage differences between the two firms are due to the presence of the union in Company A and the absence of the union in Company B

B.	it is difficult to argue with assurance that wage differences between the two firms are attributable to the presence of the union, although the possibility exists

C.	Company B has to form a union to compete with Company A

D.	any wage differences between the two firms can never be attributed to the presence of the union in Company A

A study of unions in 114 companies concluded that _____.

A.	the impact of unions on wages is lesser during recession

B.	the union-nonunion gap is the greatest during strong economies

C.	unions make a difference in wages across all studies and time periods

D.	unions are not responsible for any differences in wages

When compared to the impact of unions during periods of strong economies, the impact of unions during periods of higher unemployment is _____.

unknown

the same

smaller

larger

The largest gains in wages for public sector employees are reported for _____.

A.	teachers' unions

B.	firefighters

C.	telecommunication unions

D.	postal services

Union employees in the public sector earn, on average, about _____ more than their nonunion counterparts.

A.	40 percent

5 percent

C.	14 percent

D.	22 percent

Research indicates that the presence of a union adds about _____ to employee benefits.

A.	5 to 15 percent

B.	20 to 25 percent

C.	30 to 40 percent

D.	50 percent

In a(n) _____ pay plan, a contract is negotiated which specifies that employees hired after a given target date will receive lower wages than their higher-seniority peers working on the same or similar jobs.

A.	skill-based

B.	efficiency-based

one-tier

two-tier

10.

Basically a phenomenon of the union sector, two-tier wage structures differentiate pay based upon the _____.

A.	type of work

B.	hiring date

C.	place of work

D.	length of contract, if applicable

11.

The phenomenon where the nonunion management continues to enjoy the freedom from union "interference" in decision making, and the workers receive the rewards already obtained by their unionized counterparts is known as _____.

A.	automatic progression

B.	the spillover effect

C.	experience differential

D.	the equal mirror effect

12.

MaxTrain Corp. recognizes that its competitor GlasWell Corp., which is unionized, offers higher wages and benefits. To avoid unionization demands from its workers, MaxTrain decides to offer the same wages and benefits to its employees as GlasWell. Which of the following phenomena is exemplified in this case?

A.	The sorting effect

B.	The halo effect

C.	The leniency effect

D.	The spillover effect

13.

Which of the following statements about single rates is true?

A.	Single rates are usually specified for workers within a particular job classification.

B.	Single-rate agreements differentiate wages on the basis of seniority.

C.	Single rates are only specified for workers employed by a firm in different geographic areas.

D.	Single-rate agreements differentiate wages on the basis of merit.

14.

_____ is movement through the wage ranges where seniority is specified as the basis of the movement.

A.	Length-of-stay progression

B.	Automatic progression

C.	Merit differential

D.	Performance differential

15.

Wage adjustments in multiyear contracts may be specified through all of the following ways EXCEPT _____.

A.	cost-of-living adjustments

B.	deferred wage increases

C.	reopener clauses

D.	turnover clauses

16.

A deferred wage increase _____.

A.	specifies that wages will be renegotiated at a specified time

B.	specifies that such nonwage items as pension and benefits will be renegotiated under certain conditions

C.	is negotiated at the time of initial contract negotiations with the timing and amount specified in the contract

D.	involves periodic adjustments based typically on changes in the consumer price index

17.

Which of the following involves periodic adjustments based typically on changes in the consumer price index?

A.	A COLA clause

B.	A deferred wage increase

C.	A reopener clause

D.	An annual improvement adjustment

18.

In the negotiation stage of a multiyear wage contract, Mark, the manager of SifCo Corp., specifies that changes will be made to the wage based on the changes in the consumer price index and mentions the effective dates of adjustment. Which of the following types of clauses has Mark introduced in the contract?

A.	Halo clause

B.	Spillover clause

C.	Escalator clause

D.	Reopener clause

19.

Which of the following is the most likely reason for most unions to insist on group-based performance measures with equal payouts to members?

A.	It enables employees to learn new skills.

B.	It cuts down on strife and internal quarrels.

C.	It encourages individual differences.

D.	It causes a leniency effect.

20.

The CEO of BoardCom Inc., James, negotiates a new union contract with the union leader. If James wants to reduce expenses and keep the union happy, which of the following suggestions is most likely to be helpful?

A.	Introduce merit increases based on individual-based performance.

B.	Provide lump-sum awards in exchange for merit pay increases.

C.	Introduce a gain-sharing plan that substitutes wages.

D.	Provide a 20 percent increase to base wages.

21.

Increased global competition has caused unions to:

A.	demand higher base wages than their international counterparts.

B.	become more receptive to alternate reward systems that link pay to performance.

C.	accept less variable pay in exchange for higher base pay.

D.	demand increases in product prices to cover for increased wage costs.

22.

_____ are one-time cash payments to employees that are not added to an employee's base wages.

A.	Relational returns

B.	Merit increases

C.	Lump-sum awards

D.	Cost-of-living increases

23.

For the past 10 years, a stable _____ of all major collective bargaining agreements in the private sector have contained a provision for lump-sum payouts.

A.	three-fourths

one-half

C.	one-quarter

one-third

24.

Which of the following plans gives employees part ownership in the company?

ESOPs

B.	Pay-for-knowledge plans

C.	Gain-sharing plans

D.	Profit-sharing plans

25.

Which of the following actions is most likely to be favored by unions?

A.	Increasing the pricing of products to cover for increases in wages

B.	Substituting wages with gain-sharing plans

C.	Making each individual worker more expendable to the firm

D.	Introducing lump-sum awards

26.

Pay-for-knowledge plans do all of the following EXCEPT _____.

A.	make employees less expendable to their firms

B.	increase the probability of work being subcontracted out to nonunion organizations

C.	make each individual employee more valuable

D.	pay employees more for learning a variety of different jobs or skills

27.

Which of the following is a reason for unions favoring gain-sharing plans?

A.	Increased peer pressure to perform

B.	Increased involvement with job activities

C.	Increased flexibility in moving employees quickly into high-demand areas

D.	Increased clarity in bonus calculations

28.

Which of the following is a reason for unions opposing gain-sharing plans?

A.	Reduced job security

B.	Decreased peer pressure to perform

C.	Decreased feeling of achievement or contributing to the organization

D.	Reduced need for jobs due to increased productivity

29.

Which of the following is true regarding a gain-sharing plan?

A.	It prevents union members from sharing the wealth.

B.	It creates difficulty in maintaining employment levels in marginal organizations.

C.	It becomes ineffective when union members participate in plan development.

D.	Not all unions would be in favor of this type of plan.

30.

With gain-sharing plans, the most common union strategy is to _____.

A.	delay taking a stand until real benefits are more apparent

B.	be very enthusiastic

C.	have direct opposition to the plans as soon as they are suggested by the management

D.	have no concern for the plans

True / False Questions

31.	A study shows that a 10 percent rise in import share has the effect of lowering the union wage differential by approximately 2 percent. True False

32.	Unions respond relatively rapidly to wage increases during inflationary periods. True False

33.	Voluntary benefits account for nearly 37 percent of the total compensation package for unionized workers. True False

34.	In a two-tier wage system, employees hired after a specific date are placed in a higher wage scale than those hired prior to that date. True False

35.	Lower-tier employees in a two-tier pay plan, those hired after the contract is ratified, receive wages 50 to 80 percent lower than employees in the higher tier. True False

36.	The vast majority of contracts specify that a job is to be compensated on an hourly basis. True False

37.	Many contracts specify a premium be paid above the worker's base wage for working nonstandard shifts. True False

38.	Most contracts recognize that jobs in the same occupations should receive different wage rates. True False

39.	Single rates are not usually specified for workers within a particular job classification. True False

40.	Moving employees through pay ranges using merit increases is more popular than automatic progression. True False

41.	In automatic progression, seniority is used as the basis for movement through the job classifications. True False

42.	Few contracts specify special rates for part-time and temporary employees. True False

43.	A deferred wage increase is negotiated at the time of initial contract negotiations. True False

44.	A reopener clause specifies that wages will be renegotiated at a specified time or under certain conditions. True False

45.	About 60 percent of all U.S. collective bargaining agreements permit some alternative reward system that links pay to performance. True False

46.	Lump-sum awards are added to base wages. True False

47.	Lump-sum awards are typically given because they are less costly to the employer than merit increases. True False

48.	An alternative strategy for organizations hurt by intense competition is to control base wages in exchange for giving employees part ownership in the company. True False

49.	There are numerous possible costs and benefits to union members for agreeing to a gain-sharing plan. True False

50.	Introduction of a gain-sharing plan is particularly effective when union members participate in plan development. True False

Short Answer Questions

51.	What are the reasons for the decline in unionization?

52.	What is the spillover effect?

53.	What is meant by automatic progression?

54.	Briefly summarize lump-sum awards and ESOPs.

55.	Briefly describe gain-sharing plans.

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Chapter Number:

Created Date:

Aug 21, 2025

Chapter Name:

Chapter 15 Union Role In Wage And Salary Administration

Author:

Jerry Newman

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