Final Exam Flashcards
1
Q
Announcements of layoffs and plant closings never have favourable effects on stock prices as investors anticipate poor cash flow and increased costs.
A
False
2
Q
Using contingent employees makes it more difficult to control labour costs.
A
False
3
Q
A planned level rise is the percentage increase in average pay that is planned for a budget period.
A
True
4
Q
A consumer price Index (CPI) of 120 in Ontario and 160 in Toronto means that it costs more to live in Toronto.
A
False
5
Q
Changes in the CPI only indicate whether prices have increased more or less rapidly in an area since the base period.
A
True
6
Q
Compensation objectives provide standards for evaluating the effectiveness of the pay system.
A
True
7
Q
External competitiveness refers to pay comparisons between different skill levels in an organization.
A
False
8
Q
Pay relationships within the organization affect employee decisions to stay with the organization.
A
True
9
Q
While external competitiveness directly affects efficiency, it doesn’t affect fairness.
A
False
10
Q
Applied to internal structures, procedural justice addresses whether the actual pay differences among employees are acceptable.
A
False
11
Q
A hierarchical pay structure applies a belief that all employees should be treated equally.
A
False
12
Q
A hierarchical pay structure seeks to encourage teamwork by minimising pay differentials among employees.
A
False
13
Q
Equal treatment of employees can result in more knowledgeable employees with more responsible jobs going unrecognised and unrewarded.
A
True
14
Q
Employees judge the fairness or equity of their pay by comparing it to that of other jobs at their own employer but not to that of other jobs with other employers.
A
False
15
Q
The equity theory could support either egalitarian or hierarchical structures.
A
True
16
Q
According to tournament theory, the greater the pay differential between an employee’s present salary and his/her boss’s salary, the harder the employee will work.
A
True
17
Q
Research on tournament theory shows that pay differentials do not determine employees’ performance.
A
False
18
Q
Institutional theory predicts that very few firms are “first movers”, instead they copy innovative practices after innovators have learned how to make the practices work.
A
True
19
Q
Egalitarian structures are related to greater performance when the work flow depends more on individual contributions.
A
False
20
Q
Whether through conventional analysis or a quantitative approach, completing a questionnaire requires considerable involvement on the part of both employees and supervisors.
A
True
21
Q
The number of incumbents per job from which to collect data remains the same irrespective of the jobs stability.
A
False
22
Q
A job specification is a short paragraph that provides an overview of the nature of the job.
A
False
23
Q
The final step in the job analysis process is to consolidate job information of the resulting job descriptions.
A
False
24
Q
Quantitative job analysis is a systematic process that focuses exclusively on collecting information about an individual’s mathematical skills.
A
False
25
Reliability is a measure of the rightness of a job analysis.
False
26
Validity examines conversions of results among different sources of data and methods.
True
27
Information collected through one-on-one interviews is free of subjectivity.
False
28
Employees like the potential of higher pay that comes with learning.
True
29
One of the advantages of skill based pay is continuous learning.
True
30
Skill based plans are generally not well accepted by employees because it is difficult to see the connection between the plan, the work and the size of the paycheque.
False
31
Competency indicators translate the core competencies into specific actions.
False
32
Advocates of competencies say they can empower employees to take charge of their own development.
True
33
Visionary characteristics are the lowest level competencies that can be used to collect information about competencies.
False
34
The heart of the person-based plan is that employees get paid for the specific skills they use in their jobs, not for the relevant skills or competencies they possess.
False
35
Employee acceptance is crucial for person-based plans because it is the key to employees’ perceptions of fairness regarding the pay structure.
True
36
Using evaluators who are familiar with the jobs they are evaluating enhances reliability of the evaluation.
True
37
Reliability refers to the degree to which the evaluation achieves the desired results.
False
38
The limitation of a competency-based structure is that it requires cost controls.
True
39
Operationally, the key to designing a pay-for-performance plan rests in setting performance standards.
True
40
Distributive justice refers to perceived fairness of pay or other work outcomes received.
True
41
Seniority increases relate pay increases to a preset progression pattern based on seniority.
True
42
Which of the following factors helps in the reduction of labour costs?
- increasing the number of employees
- Making early retirement less attractive
- Expanding the core workforce
- Paying more benefits and less cash
- Paying the same wages to fewer employees
Paying the same wages to fewer employees
43
The most common approach to managing labour costs during a recession involves:
- reducing employees variable pay
- using competitive market costs
- reducing the workforce
- using a top-down budgeting
- hiring only core employees
reducing the workforce
44
A group of employees with whom a strong and long-term relationship is desired is:
- Part-time employees
- Temporary employees
- Contingent Workers
- Core employees
- contract employees
Core employees
45
Which of the following is true about core employees?
- They are employees whose employment agreements cover only short, specific time periods
- They help achieve flexibility and control labour costs
- They have many varied compensation packages
- They bring about an increase in the fixed portion of labour costs
- They can be contracted and expanded more easily than the contingent workers
They bring about an increase in the fixed portion of labour costs
46
Employers achieve flexibility and control labour costs by:
- expanding the permanent workforce
- hiring only full-time employees
- basing employee payment decisions on manager preferences
- forming strong and long-term relationships with all employees
- expanding or contracting the contingent workforce
expanding or contracting the contingent workforce
47
Which of the following factors influences decisions made using the top-down approach?
- analyzing the impact of the cost of living increases on wages
- providing consultation to managers
- analyzing forecasts
- monitoring budget versus actual increases
- reviewing and revising forecasts and budgets with management
analyzing the impact of the cost of living increases on wages
48
The index that measures changes in prices over time is known as the:
- consumer price index
- producer price index
- cost of living index
- manufacturer index
- cost price index
consumer price index
49
The budgeting approach that requires senior management of each unit to estimate the pay increase for the entire organization unit is known as the:
- top-down budgeting approach
- decentralized budgeting approach
- bottom-up budgeting approach
- employee- participation budgeting approach
- peer budgeting approach
Top-down budgeting approach
50
To help ensure that different managers grant consistent increases to employees with similar performance ratings and in the same position in their ranges one should utilize:
- outsourcing techniques
- merit grids
- job security measures
- management by objectives
- ad hoc reshuffling
Merit grids
51
Which of the following is a step in the bottom-up approach to controlling salary level?
- examining the current years rise in average wages
- managers to forecast pay increase recommendations
- determining the company’s ability to pay
- analyzing the impact of cost-of-living increases on wages
- instructing managers in compensation policies and techniques
instructing managers in compensation policies and techniques
52
Which of the following is the final step in the development of the total compensation strategy?
- mapping a total compensation strategy
- implementing cultural and regulatory changes
- assessing total compensation implications
- reassessing the fit
- implementing strategy
Reassessing the fit
53
Periodic reassessment of a compensation strategy’s fit to changing conditions is needed to:
- set objectives on alignment, competitiveness, contributions and management
- design work so that employees have opportunities work independently without collaboration with others
- continuously learn, adapt and improve
- specify the four policies on alignment, competitiveness, contributions and management
- defer taxes by putting money into retirement funds
Continuously learn, adapt and improve
54
Managing links between the compensation strategy and the pay system as well as people’s perceptions and behaviours is vital to implementing a(n):
- organizational hierarchy
- strategic alliance
- planned perception
- association perspective
- pay strategy
Pay strategy
55
A pay strategy is a source of competitive advantage:
- if it offers stock options
- if it rarely aligns
- if it differentiates
- if it seldom provides value
- if it defers taxes
if it differentiates
56
Internal alignment suggests that:
- both smaller and larger pay differences among jobs inside an organization can affect results
- paying higher than the average wage offered by competitors can affect results
- performance-based pay can affect results
- embedding compensation strategy within the broader HR strategy affects results
- rather than focusing only on one dimension of the pay strategy, such as pay for performance or internal pay differences, all dimensions need to be considered together
both smaller and larger pay differences among jobs inside an organization can affect results
57
Which of the following organizational practices assumes that paying higher than the average paid by competitors can affect results?
- internal alignment
- external competitiveness
- employee contributions
- managing compensation
- compensation strategy
External competitiveness
58
Which of the following organizational practices assumes that rather than focusing on only one dimension of the pay strategy, such as pay for performance or internal pay differences, all dimensions need to be considered together?
- Internal alignment
- external competitiveness
- employee contributions
- managing compensation
- compensation strategy
Managing compensation
59
Which of the following is true about job evaluation?
- Typically, an employer evaluated all jobs in the organization at the same time
- It is used to establish an internally aligned pay structure
- Employers design a single evaluation plan for all types of work
- it isolates each jobs pay from its relative contribution to the organization
-it is seldom developed using benchmark jobs
It is used to establish an internally aligned pay structure
60
Which of the following is a characteristic of a benchmark job?
- its contents are little known
- its contents fluctuate frequently
- it is unique to a particular employer
- it employs a reasonable proportion of the workforce
- it is the highest paid job in the industry
it employs a reasonable proportion of the workforce
61
Which of the following is a disadvantage of point method of job evaluation?
- Compensable factors do not communicate what is valued
- Basis for comparisons is not called out
- it can become bureaucratic and rule-bound
- it cannot be applied to non-benchmark jobs
- it compensable factors are not aligned with the organizations strategy
it can become bureaucratic and rule-bound
62
Which of the following is an advantage of the ranking method of evaluation?
- it is fast, simple and easy to explain
- it is best suited for a rapidly growing organization
- it makes the criteria for evaluating jobs explicit
- it frees the process of evaluation from subjectivity
it does not require the evaluator to know about all jobs under study
it is fast, simple and easy to explain
63
Which of the following methods of job evaluation is the fastest, simplest, and easiest to explain to employees?
- classification
- ranking
- point method
- benchmarking
- absolution
Ranking
64
___ grades the highest- and lowest- valued jobs first, then the next highest- and lowest- valued jobs, repeating the process until all jobs have been graded.
- paired comparison method
- classification method
- point method
- simple ranking method
- alternation ranking method
alternation ranking method
65
The ___ lists all jobs across columns and down rows of a matrix, analyzing the two jobs in each cell and indicating which is of greater value, then ranking jobs based on the total number of times each is ranked as being of greater value
- point method
- classification method
- paired comparison method
- repeat point method
- alternation ranking method
paired comparison method
66
Which of the following job evaluation methods is based on job class descriptions into which jobs are categorized?
- point method
- simple ranking method
- paired comparison method
- classification method
- alternation ranking method
classification method
67
___ are characteristics of a particular work that an organization values, that help it pursue its strategy, and that achieve its objectives
- factor weights
- factor degrees
- compensable factors
- job benchmarks
- pursuable features
compensable factors
68
Which of the following is the first step in the design of a point plan for job evaluation?
- determine compensable factors
- determine factor weights
- prepare a communication manual
- conduct job analysis
- establish plan for non-benchmark jobs
conduct job analysis
69
Compensating differentials theory states that:
- job seekers have a reservation wage level below which they will not accept a job offer
- pay level and pay mix are designed to signal desired employee behaviours
- high wages will increase efficiency and lower labour costs if they lower turnover
- higher wages must be offered to employees when chances of success are high
- higher wages must be offered to employees to compensate any negative features of jobs
higher wages must be offered to employees to compensate any negative features of jobs
70
Efficiency wage theory says that sometimes high wages may:
- increase efficiency if they increase turnover
- increase efficiency if they reduce worker effort
- increase efficiency if they reduce “shirking”
- lower labour costs if they increases the need to supervise employees
- lower labour costs if they attract low-quality applicants
increase efficiency if they reduce “shirking”
71
Pay policies indicate that kinds of behaviour an employer seeks. This is a prediction of ___ labour demand theory
- compensating differentials
- efficiency wage
- human capital
- signalling
- reservation wage
Signalling
72
Which labour demand theory says that pay levels and pay mix are designed to indicate desired employee behaviours?
- efficiency wage theory
- compensating differentials
- reservation wage theory
- human capital theory
- signalling theory
Signalling theory
73
The wage level below which an employee declines a job offer is known as a:
- prevailing wage level
- reservation wage level
- living wage level
- market wage level
- competitive wage level
Reservation wage level
74
Which of the following is an employee benefit required by law?
- Employment insurance
- employee assistance plan
-payments for vacation
- employee stock ownership
- severance pay plan
Employment Insurance
75
Disability benefits are payable to contributors who sustain a severe, prolonged mental and physical disability and are payable until age __ when the retirement pension begins
- 50
- 55
-60
-65
65
76
Which of the following is true of workers compensation?
- Employees are not eligible for cover of their actions caused the injury
- They cover injuries and diseases that are not work related
- they provide benefits for loss of earnings due to permanent disability; not temporary
- the contributions make to the plan are subject to tax
- The complete cost of administering and paying out for the plan is borne by the employer
The complete cost of administering and paying out for the plan is borne by the employer
77
Which of the following is true of Employment Assistance programs?
- It provides temporary income to employees during adoption leave period
- it is payable even if an employee quits without good reason
- it applies to workers who are self employed
- it is funded entirely by contributions from the employer
- it is not included in taxable income
It provides temporary income to employees during adoption leave period
78
Which of the following provides temporary income replacement for employer Canadians who face employment interruptions due to shortage of work or sickness?
- Old age security program
- Workers’ compensation
- supplementary unemployment benefit plans
- quebec pension plan
- employment insurance
Employment Insurance
79
___ are an arrangement by which employees work a reduced workweek and receive Employment Insurance benefits for the remainder of the week
- Supplementary unemployment benefit plans
- Employee assistance programs
- Workers’ compensation plans
- Vesting programs
- Work-sharing programs
Work-sharing programs
80
Which of the following plans is funded by the employer alone?
- Quebec pension plan
- defined contribution pension plans
- defined benefit pension plans
- Employment insurance
- coinsurance
defined benefit pension plans
81
___ is an employer- sponsored pension plan where employee benefits are calculated based on a formula using factors such as salary history and employment duration
- defined benefit pension plan
- Quebec pension plan
- Employment insurance plan
- defined contribution pension plan
- employment assistance plan
defined benefit pension plan
82
Which of the following is true of defined contribution plans?
- it is more favourable to long- service employees
- it does not require managing of surplus or deficit in pension fund
- it makes the employer accountable for the risks associated with changes in inflation and interest rates
- it provides an explicit benefit which is easily communicated
- it does not make employer costs known
it does not require managing of surplus or deficit in pension fund
83
Which of the following is true of defined benefit plans?
- it is more favourable to short-term employees
- it does not require managing of surplus or deficit in pension fund
- it makes the employer accountable for the risks associated with changes in inflation and interest rates
- it provides an explicit benefit which is easily communicated
- it does not make employer costs known upfront
it provides an explicit benefit which is easily communicated
84
Which of the following statements about the role of the government in compensation is true?
- legislation says that overtime is pain on time compensated, not on time worked
- legislation aims at protecting specific groups and also trends to expand that groups participation in the labour market
- lowering interest rates by the government generally lowers manufacturing and this decreased business activity translates into decreased demand for labour
- legislation excludes administrative rules regarding record keeping and statement of wages
- legislation ensures that the employees are protected from exploitation and given a fair pay
legislation ensures that the employees are protected from exploitation and given a fair pay
85
The laws that are intended to provide an income floor for workers in society’s least productive jobs are known as:
- overtime wage laws
- disability laws
- minimum wage laws
- human rights laws
- standard hours of work laws
Minimum wage laws
86
Which of the following is an employer required to provide under the Canadian employment standards acts?
- pricing controls
- market policy
- maximum wage of employment
- paid vacation
- voting rights
Paid vacation
87
Which of the following statements about overtime pay legislation is true?
- it forces pat rates at the lowest end of the scale to move up
- it limits the number of hours per week for certain age
- it specifies the wages paid for time worked in excess of the standard hours
- it limits the size of wage increases
- it specifies the number of mandatory paid holidays
it specifies the wages paid for time worked in excess of the standard hours
88
Which laws are being violated when employment applications and interviews ask for any information regarding the applicant’s colour or religion?
- Employment standards acts
- human rights laws
- minimum wage laws
- overtime legislation
- labour union laws
Human rights laws
89
The amount by which the average pay for female workers is less than the average pay for male workers is known as the:
- relational return
- benchmark wage
- sex ratio
- gender wage gap
- gender pay
Gender wage gap
90
Which of the following has been found to be the best predictor of wages across North America, Europe and Australia?
- Experience
- Gender
- Education
- Unionization
- Religion
Gender
