Verified Test Bank Ch.18 Management Making It Work Newman - Compensation 12e Complete Test Bank by Jerry Newman. DOCX document preview.
Chapter 18
Management: Making It Work
Multiple Choice Questions
1. | Which of the following is NOT a likely consequence of a highly decentralized pay system?
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2. | Total compensation in many organizations makes up at least _____ percent of operating expenses.
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3. | The average company match for 401(k) retirement plan is _____ cents on the dollar up to 6 percent of pay.
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4. | A major advantage of a _____ is that it reduces benefits costs, something that the other cost-cutting options ordinarily do not achieve.
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5. | All of the following are adverse effects of layoffs EXCEPT _____.
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6. | The _____ often comes into play if organizations target reductions among higher paid employees because higher paid employees also tend to be older employees.
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7. | Which of the following is NOT a potential problem with headcount reductions?
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8. | The percentage increase in average pay that is expected for an organizational unit or company is called _____.
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9. | _____ is the budgetary approach that begins with an estimate from the highest ranking executives of the pay increase budget for an entire organization.
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10. | If financially troubled employers have NOT been able to maintain competitive market positions, the conventional response has been to _____.
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11. | The denominator for calculating the current year's pay rise is _____.
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12. | The _____ recognizes the fact that when people leave an organization, they typically are replaced by employees who earn a lower wage.
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13. | HoldDesk Inc. has an annual labor cost of $3,000,000. It has a turnover rate of 10 percent and a planned average increase of 5 percent. The turnover effect is _____.
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14. | Changes in wages in labor markets are measured _____.
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15. | Which of the following is a measure of changes in prices of goods and services in the product and service markets over time?
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16. | If Philadelphia has a CPI of 165 and Houston has a CPI of 145, and if both cities started with bases of 100, it means that _____.
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17. | When employees are paid more than the maximum of their pay grade, these rates are called _____ rates.
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18. | The compa-ratio reflects the _____.
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19. | A compa-ratio less than 1 means that, on average, _____.
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20. | GronLan Inc., a company with a majority of workers with high seniority, decides to hire 1,000 college graduates to meet the sudden productivity requirements generated by a growth in the market. Which of the following statements is most likely to be happen in this situation?
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21. | MerTon Inc. decides to reduce labor costs by using exit incentives to encourage some of its senior, high-earning members to leave the organization. It replaces the employees who quit with new employees and pays them low wages. Which of the following statements is most likely true in this scenario?
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22. | According to one study, only _____ of organizations actually calculate the cost and value added by their pay programs.
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23. | Which of the following statements about anchoring/framing is true?
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24. | The Web page for the compensation society is _____.
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25. | _____, designed for employees or managers, explain compensation policies and practices, answer frequently asked questions, and explain how these systems affect their pay.
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26. | _____, a software package, allows workers to make health-care choices, allocate savings to 401(k)s or other savings vehicles, and access vacation schedules.
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27. | A management strategy of giving separate organization units the responsibility to design and administer their own compensation systems is _____.
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28. | Which of the following is the basic question to ask to improve quality and ensure that value is added by each technique and at each stage in the compensation system?
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29. | The major potential advantage of outsourcing is _____.
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30. | Replacing merit grids with _____ eliminates the link between the pay increase and the employees' salary position in the range and performance rating.
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True / False Questions
31. | In a totally decentralized pay system, employees are likely to be treated unequally and unfairly. |
32. | A major advantage of a reduction in force is that it reduces benefits costs. |
33. | Exit incentives is likely to result in the loss of high-performing employees. |
34. | Many employers achieve flexibility and control employment costs by utilizing contingent workers rather than expanding and contracting the core workforce. |
35. | Rather than define employment as hours of work, number of employees is often used. |
36. | In the past two decades, the average variable pay budget has increased. |
37. | The CPI accurately reflects an individual employee's cost of living. |
38. | Changes in the CPI indicate whether prices have increased more or less rapidly in an area since the base period. |
39. | An individual employee cannot earn more pay than the maximum of the pay grade of their current job. |
40. | If red circle rates become common throughout an organization, then the design of the ranges and the evaluation of the jobs should be reexamined. |
41. | Broad bands provide managers greater discretion in pay for their subordinates compared to a grade-range design. |
42. | A compa-ratio is the average actual pay divided by the midpoint of the pay grade. |
43. | A compa-ratio greater than 1 means that, on average, the rates exceed the intended policy. |
44. | Generally, organizations have increased their use of variable pay relative to traditional base pay increases. |
45. | Pay policies are more open in the public sector than in the private sector. |
46. | Less than 10 percent of compensation professionals strongly agree that employees know their own pay range and the one above them. |
47. | Over half of the employees in the private sector work in companies with open pay policies. |
48. | A key reason to communicate pay information is that the goodwill engendered by the act of being open about pay may affect perceptions of pay equity. |
49. | If a pay system is not based upon work-related or business-related logic, it is probably best to not conduct a formal compensation communication program. |
50. | The most important components of a pay communication program are the business-related and work-related rationales on which the pay systems are based. |
Short Answer Questions
51. | What are the potential problems associated with headcount reductions?
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52. | What is the top-down method of budgeting?
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53. | What is the turnover effect? Explain how it is calculated with an example.
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54. | What is the consumer price index (CPI)? Explain with an example.
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55. | Briefly summarize compa-ratios.
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