Exam Review Questions - CMS 2

Question 1

employee stock ownership plans:

1. Have an impact on short-term employee behavior
2. Are similar to Rucker plans
3. Are more attractive when stock prices are going up
4. Require simple performance measures
5. Discourage employee participation because of the legal requirements

Answer 1

C

Question 2

Which of the following approaches depicts organizations as simply following patterns exhibited by other organizations?

1. Internal labor markets
2. Just-wage doctrine
3. Institutional theory
4. Tradition
5. Legal requirements

Answer 2

C

Question 3

pay for executives is supposed to be tied to the:

1. External pay equity theory
2. Company performance measures
3. Cost-of-living index
4. Industrywide norm
5. Piece-rate production plan

Answer 3

B

Question 4

which of the following statements is (are) supported by compensation research evidence?

• larger internal pay differences constitute a “best” practice while smaller pay differences are detrimental.
• performance-based pay can affect results.
• Compensation strategy generally operates independently of the overall human resource (hr) strategy.

1. I only
2. II only
3. I and II only
4. II and III only
5. I, II and III

Answer 4

B

Question 5

All the following factors are likely to increase perceptions of fairness in pay structures eXCept:

1. They are consistently applied to all employees.
2. Management develops and administers the plan.
3. An appeals procedure is in place.
4. The data used are based in fact.
5. Employee input was solicited.

Answer 5

B

Question 6

Which of the following statements concerning job analysis is (are) correct?

• traditional job analysis that makes ne distinctions among levels of jobs has been accused of reinforcing rigidity in the organization.
• Conventional methods of job analysis rely heavily on the analyst’s interpretations.
• the most common way to collect job information is to ask the people who are doing a job to complete a questionnaire.

1. I only
2. II only
3. III only
4. I and II only
5. I, II and III

Answer 6

E

Question 7

Which of the following has (have) been identi ed as a potential problem(s) linked to skill-based approaches to internal pay systems?

• employees may be dif cult to train.
• over time, the majority of employees may qualify for the top pay rate.
• employees may not understand the criteria for advancement.

1. None
2. I only
3. II only
4. I and II only
5. II and III only

Answer 7

C

Question 8

Which statements about compensable factors is (are) correct?

• Compensable factors should re ect what the organization values in the work.
• Compensable factors are related to job content.
• Compensable factors are a central part of the point method.

1. I only
2. II only
3. I and II only
4. II and III only
5. I, II and III

Answer 8

E

Question 9

A compa-ratio greater than 1.00 typically means that:

1. Employees are overpaid.
2. The pay policy is vague.
3. A majority of workers are being paid above intended policy.
4. Most employees are new entrants.
5. Turnover is high.

Answer 9

C is the correct answer. A compa-ratio greater than 1.00 means that on average pay is higher than the intended policy, perhaps due to high seniority or performance. A compa-ratio less than 1.00 means that employees in the range are paid on average below the midpoint or that pay is less than intended policy. Thus, options A, B, D and E are incorrect.

Question 10

to conduct a bottom-up salary budgeting, employers must do which of the following?

• instruct managers in compensation policies and techniques.
• Check increases with pay increase guidelines.
• monitor budgeted versus actual increases.

1. I only
2. II only
3. III only
4. I and II only
5. I, II and III

Answer 10

E is the correct answer. To conduct a bottom-up salary budgeting, employers must perform all three of the actions described in Statements I, II and III.

Question 11

All the following are forms of pay eXCept:

1. Base wage
2. Incentive pay
3. Merit pay
4. Recognition
5. Bene ts

Answer 11

D

Question 12

evidence of the usefulness of a job evaluation method can be measured by all of the following eXCePt:

1. The degree to which the method achieves organizational objectives
2. The extent to which desired employee behaviors are motivated
3. Reduction in pay dissatisfaction
4. Employee acceptance of the process and its results
5. The number of jobs evaluated per work unit

Answer 12

E

Question 13

the theory that states people behave as if they cognitively evaluate what behaviors are possible in relation to the value of rewards offered in an exchange is the:

1. Expectancy theory of motivation
2. Equity theory of motivation
3. Negative reinforcement
4. Two-factor theory of motivation
5. Positive reinforcement

Answer 13

A

Question 14

Unequal pay for equal work may be justi ed through af rmative defenses which include all the following eXCept:

1. Seniority
2. Merit
3. Performance-based incentive system
4. Wage discrimination
5. A factor other than sex

Answer 14

D is the correct answer. Unequal pay for equal work may be justified through the af rmative defenses of seniority, merit, performance-based incentive systems and a factor other than gender. Unequal pay for equal work may not be justi ed by wage discrimination. See pages 610-611.

Question 15

companies report they generally are not satis ed with the way their team compensation systems work with failures being attributed to all the following eXcePt:

1. With a wide variety of team types, one consistent type of compensation does not exist.
2. Different problems arise when team size varies.
3. Some team compensation plans are too complex.
4. Many team compensation plans make too many allowances for uncontrollable elements.
5. Team-based pay plans are not well communicated.

Answer 15

D

Question 16

which of the following employee bene ts is (are) mandated by either a state government or the federal government?

• workers’ compensation
• unemployment insurance
• socialsecurity

1. I only
2. II only
3. III only
4. I and II only
5. I, II and III

Answer 16

E

Question 17

obtaining consistent results regardless of the job analysis method used is a measure of:

A. Validity
B. Currency
C. Reliability
D. Acceptability E. Administration

Answer 17

C

Question 18

which of the following is (are) an important factor when setting up a gain-sharing plan?

• Productivity standards
• How gains are shared between management and workers
• the incentive pay level relative to base pay

1. I only
2. II only
3. III only
4. I and II only
5. I, II and III

Answer 18

E

Question 19

All the following are purposes of a pay survey excePt:

1. Adjust pay level
2. Determine if pay structure needs to be changed
3. Estimate the labor cost of competitors
4. Keep labor costs as low as possible within a given industry
5. May give information on speci c related pay problems

Answer 19

D

Question 20

measures of central tendency in salary surveys include which of the following?

• minimums, maximums and midpoints
• Percentiles and quartiles
• means and medians

1. I only
2. II only
3. III only
4. II and III only
5. I, II and III only

Answer 20

C

Question 21

the observable behaviors that indicate the level of competency within each set are called:

1. Comparable factors
2. Critical incidence
3. Factor comparisons
4. Competency indicators
5. Behavioral anchors

Answer 21

D

Question 22

All the following are general procedures for conducting a conventional job analysis eXCept:

1. Determine what the job should be called
2. Develop preliminary job information
3. Conduct initial tour of worksite
4. Conduct interviews
5. Verify job description drawn up

Answer 22

A

Question 23

All of the following statements concerning life insurance as an employee bene t are correct eXCept:

1. Life insurance is seldom offered by organizations as an employee bene t.
2. Most employee bene t life insurance premiums are paid completely by the employer.
3. Typical employee bene t life insurance coverage would be a group term insurance policy with a face value of one to two times the employee’s annual salary.
4. Some companies provide retiree life insurance coverage.
5. Most companies make employee bene t life insurance forfeitable when the employee ends employment with the company.

Answer 23

A

Question 24

An employer’s pay level:

1. Should be set prior to job evaluation
2. De nes the going market rate
3. Can affect the size of the applicant pool
4. Ignores employers’ pro ts
5. Is determined by the market analyst

Answer 24

C

Question 25

which of the following statements regarding the compensation system in germany is (are) correct?

• the german system encourages the use of pay as a strategic tool.
• Job evaluation methods vary dramatically between competitors in the same industry.
• german companies compete with each other using varied base pay and bonuses to attract and retain workers.

1. None
2. II only
3. I and III only
4. II and III only
5. I, II and III

Answer 25

A

Question 26

All the following are the basis for evaluating jobs, exCept:

1. The nature of the skills required
2. Individual performance on the job
3. Market pricing of the job
4. Job content
5. Strategy and cultural values of the organization

Answer 26

B

Question 27

An egyptian citizen working in the United states for a Japanese-owned firm would be a:

1. U.S. expatriate
2. Local country national
3. Third-country national
4. Third-country expatriate
5. Local country expatriate

Answer 27

C

Question 28

generally the employee retirement income security Act (erisA) requires that eligibility for participation in a pension plan not be delayed beyond age:

• A. 16
• B. 18
• C. 19
• D. 20
• E. 21

Answer 28

E

Question 29

1. A systematic procedure designed to aid in establishing pay differential among jobs within a single employer is:
2. Apportioning method
3. Job evaluation
4. Market pricing
5. Path data
6. Broad banding

Answer 29

B

Question 30

Which of the following is (are) correct statements about labor demand-and-supply theories and their implications?

• signaling theory assumes that in the absence of complete information about a job, applicants make inferences about nonmonetary job attributes based on information about the pay system.
• ef ciency wage theory says that employers may deliberately design lower pay policies as part of a strategy to inform prospective and current employees of what kinds of behavior are sought.
• Work with negative characteristics requires higher pay to attract workers.

1. I only
2. II only
3. III only
4. I and III only
5. I, II and III

Answer 30

D

Question 31

in addition to wages, commissions and bonuses, an organization’s total rewards system includes which of the following?

• the importance of the work done
• the ability to in uence others
• social interaction

1. I only
2. II only
3. III only
4. I and III only
5. I, II and III

Answer 31

E

Question 32

All the following are alternatives to the “balance sheet” approach commonly used in setting expatriate compensation eXcept:

1. Negotiation which means the employer and employee nd a mutually agreeable package
2. Localization which ties salary to the host country salary scales and provides some cost-of- living allowances for taxes, housing and dependents
3. The modi ed “balance sheet”approach ties salary to a region of the world.
4. Increasing allowances over time for the seniority of expatriates in their host country
5. The lump-sum cafeteria approach offers expatriates more choices.

Answer 32

D

is the correct answer. The other options are correct, but increasing allowances as a result of seniority is an illogical approach. See pages

Question 33

Which of the following statements is (are) correct regarding the egalitarian structure of an organization?

• An egalitarian form of organization has many different levels.
• An egalitarian form of structure has large differentials.
• its work organization is composed of individual performers.

1. None
2. I only
3. II only
4. II and III only
5. I, II and III

Answer 33

A

Question 34

maslow’s needs Hierarchy theory includes all of the following elements eXcePt:

1. People are motivated by inner needs.
2. Needs are never fully met.
3. Higher-order needs become motivating after lower-order needs have been met.
4. When needs are not met, they become frustrating.
5. The absence of hygiene, or maintenance, factors prevent behaviors, but their presence cannot motivate performance.

Answer 34

E

Question 35

All the following statements regarding competitive pay policy alternatives are correct eXcept:

1. A match policy places employers on an equal footing in their ability to attract and maintain a quali ed workforce.
2. A match policy may offer no competitive advantage in the marketplace.
3. A lag policy, or offering rates lower than competitors, is primarily relevant to employers that want to attract and retain older employees.
4. A lead policy maximizes the ability to attract and retain quality employees
5. A lead policy may, in the short run, mask managerial problems.

Answer 35

C

Question 36

market pricing as a pay strategy refers to which of the following?

1. Annually adjusting base pay using the Consumer Price Index
2. Relying on external market rates to set the internal pay structure
3. The point where supply and demand labor curves cross
4. Combining jobs into a broader market band
5. Paying rates that re ect product market conditions

Answer 36

B