The Pay Model Chapter 1 12e Test Questions & Answers

1.

Which of the following programs introduced by Congress includes restrictions on executive pay that are designed to discourage executives from taking "unnecessary and excessive risks"? 
 

2.

Hourly compensation costs for production workers in manufacturing are higher in _____ than in the United States. 
 

3.

One of the reasons why 8 in 10 of the uninsured in the United States are from working families is that _____. 
 

4.

The degree to which pay influences individual and aggregate motivation among employees at any point in time is referred to as a(n): 
 

5.

Which of the following is an example of a relational return? 
 

6.

Which of the following is given as an increment to the base pay in recognition of past work behavior? 
 

7.

GreenRain Corp. faces an increase in employee turnover rate. The CEO calls for a board meeting with the senior executives to discuss the issue. Who among the following suggests increasing the relational returns that employees receive to reduce the turnover rate at GreenRain? 
 

8.

Which form of pay does not permanently increase labor costs? 
 

9.

Recent surveys show that, on average, an outstanding performer receives a _____ merit increase, an average performer a _____ merit increase, and a poor performer a 0.4% merit increase. 
 

10.

Which of the following companies is taking efforts to improve the work/life balance of its employees? 
 

11.

Variable pay may also be called _____. 
 

12.

Which of the following is often the largest component in an executive pay package? 
 

13.

Among employers that provide health insurance, the cost to provide family coverage per year per employee is approximately _____. 
 

14.

Robert, the CEO of GameTrack Corp., wants to restructure the pay plan without increasing the labor costs in the long run. He is most likely to achieve this, while retaining his top employees, by: 
 

15.

Incentives do not permanently increase labor costs because: 
 

16.

A difference between incentives and merit increases is that incentives: 
 

17.

Which of the following is a fundamental objective, and NOT a policy, in the pay model? 
 

18.

Which of the following is a policy, and NOT an objective, in the pay model? 
 

19.

Incentives and merit guidelines are techniques of the _____ policy of the pay model. 
 

20.

_____ refers to comparisons among jobs or skills inside a single organization. 
 

21.

In the context of pay relationships, which of the following is illegal in the United States? 
 

22.

Managers seek internal alignment within their organization by: 
 

23.

Compensation policy choices that affect the pay level relative to other companies are most closely associated with the _____ aspect of the pay model. 
 

24.

The decisions to implement pay for performance, flat rate pay, and profit sharing are examples of _____ policy decisions. 
 

25.

According to the text, which of the following decisions should be made jointly? 
 

26.

Which of the following policy decisions directly affects employees' attitudes and work behaviors? 
 

27.

You are an HR manager, and your boss has told you to find the best way to raise job performance. After some research, you find that _____ have the greatest instrumental value. 
 

28.

Which of the following is NOT a question to ask for determining if research has value? 
 

29.

A measure of how changes in one variable are related to changes in another variable is the: 
 

30.

The best way to establish _____ is to account for competing explanations, either statistically or through control groups. 
 

31.

When unemployment increases, the proportion of the population covered by health insurance decreases. 
 
True    False

32.

The degree to which pay influences individual and aggregate motivation among employees is called the sorting effect. 
 
True    False

33.

Base wage is the overtime pay given to employees who are exempt from regulations of the Fair Labor Standards Act. 
 
True    False

34.

Commissions are an example of incentives. 
 
True    False

35.

Most U.S. firms use merit pay increases. 
 
True    False

36.

Base wage reflects both the value of the work and individual employee skills and experience. 
 
True    False

37.

Pension and health benefits are a very large component of total compensation for many large companies such as American Airlines and GM. 
 
True    False

38.

A major challenge facing most employers is the rising cost of health care benefits. 
 
True    False

39.

Procedural fairness suggests that the way a pay decision is made is of less importance to employees than the results of the decision. 
 
True    False

40.

If the objective is to increase customer satisfaction, then incentive programs and merit pay might be used to pay for performance. 
 
True    False

41.

Objectives guide the design of pay systems and provide the standards for evaluating their effectiveness. 
 
True    False

42.

Even if the federal compensation laws change, it is unnecessary to change pay systems to ensure continued compliance. 
 
True    False

43.

Internal alignment refers to comparisons among jobs or skill levels inside a single organization. 
 
True    False

44.

Since HR research contains information useful to managers, most managers read research in HR management, and compensation journals. 
 
True    False

45.

Management and HR research has conclusively shown that goal setting and job enrichment produce the largest and most reliable increases in job performance. 
 
True    False

46.

Monetary incentives produce the biggest increases in job performance. 
 
True    False

47.

A study found that only a very small amount of change in CEO pay is related to changes in company performance. 
 
True    False

48.

A study of IBM showed that its long-standing policy of no layoffs was the major cause of its strong profits. 
 
True    False

49.

Causality is one of the most difficult questions to answer and continues to be an important and sometimes perplexing problem for researchers. 
 
True    False

50.

The R², which is an output from a regression analysis, is different from correlation in that it tells us what percentage of the variation is accounted for by the variables we are using to predict or explain. 
 
True    False

51.

Describe the perspective of stockholders on compensation. 
 

52.

What are the different ways in which pay can influence employee motivation and behavior? 
 

53.

Describe the various returns received from work. 
 

54.

List the basic elements of the pay model. 
 

55.

Explain the basic compensation objectives of pay systems.