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250 Cards in this Set
- Front
- Back
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Matt, Juan, Linda, and Ming are working on a new product for their company that will be launched in the near future. Management wants to reinforce cohesiveness among the team. Which type of group incentive plan would be best suited for attaining the management objective?
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Equal incentive payments approach
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Which of the following best defines group incentives? |
A program that rewards employees for their collective performance |
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The disadvantage of profit-sharing plans for employees is that ________. |
employees find it difficult to predict their earnings from year to year |
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A key difference between merit pay and incentive pay is that supervisors generally ________. |
communicate in advance about the incentive pay amounts, but do not communicate in advance about the merit awards |
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Which statement about incentive pay is correct? |
Incentive pay is a one-time payment that augments an employee's base pay. |
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One of the advantages of introducing incentive pay instead of merit pay for cyclical industries such as retail sales is that ________. |
compensation expenses can be minimized with incentive pay |
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The Rucker plan and the Scanlon plan are similar gain-sharing plans. What is the key difference between the two plans? |
The Rucker plan uses the value-added formula, and the Scanlon plan uses the sales value of production formula. |
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When designing an incentive pay plan, the time horizon of the plan becomes a major issue. Of the following, which is true? |
Production workers' performance is sometimes judged on periods as short as one hour. |
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John has been employed for 15 years with a textile company that produces men's shirts. John has received incentive pay for most of the 15 years of his employment. What is the term an economist would use to classify this longevity of employment? |
Sorting effect. |
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The level of risk increases for employees as incentive pay becomes a greater proportion of total compensation. Generally this perceived level of risk ________. |
is higher for higher-ranked employees |
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Companies generally institute incentive pay programs to control payroll costs and motivate employee productivity. Of the following, which would be an example of an incentive pay program element that could help an organization meet those objectives? |
Profit-sharing program |
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Which of the following statements is true? |
Team-based pay plans should compensate employees for achieving group objectives as well as assuming their respective roles in a team. |
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Which of the following jobs would most likely use incentive pay as the base compensation plan? |
Automobile salespersons |
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Which type of incentive would be most applicable for a company that values employees with exemplary attendance records? |
Behavioral encouragement plan |
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Employees are rewarded in a company-wide incentive plan ________. |
when the company exceeds the minimum acceptable performance standard |
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Jill works at a factory where she is responsible for producing collector dolls. More than likely, Jill's employer uses ________. |
individual incentive plans |
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In traditional pay plans, employees are paid ________. |
a fixed hourly rate or annual salary |
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When designing incentive plans, it is important to keep time horizons in mind. Most HR professionals follow the general guideline that ________. |
short-term goals can be achieved in 5 years or less and long-term goals take longer than 5 years |
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Each of the following is true of a company-wide incentive plan EXCEPT ________. |
individual performance is measured in support of company goals |
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Java Jazz is a company known for superior pay and good benefits. Java Jazz is having a hard time finding qualified employees, and it is experiencing high growth. Which type of incentive is it most likely to offer? |
Referral plan
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A greater number of employees are becoming eligible for incentive pay. The key reason behind this phenomenon is that ________. |
companies want to control costs and motivate employees |
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Incentive plans that promote collaborative behavior are called ________. |
group incentive plans |
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Incentive or variable pay is defined as compensation, other than ________ that fluctuate(s) according to employees' attainment of some standard, such as a pre-established formula, individual or group goals, or company earnings. |
base wages or salaries |
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Which is true of profit-sharing plans? |
Profit-sharing plans pay a part of the company's profit to the employees. |
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What is the benefit of including an incentive component in the core compensation program offered to employees in an industry that experiences cyclical demand, such as retail sales? |
Lowering payroll costs during lean periods |
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Generally, supervisors give merit raises based on a subjective assessment of the employee's performance. It is therefore essential that ________. |
supervisors conduct accurate performance appraisals for merit pay to be effective |
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Before merit pay can be awarded, it is important that companies first ________. |
make permanent adjustments to base pay for inflation |
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Which of the following organizations will most likely utilize a longevity pay program 10 years from now? |
A public elementary school |
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Mary's employer rewards employees with periodic additions to base pay according to employees' length of service in performing their jobs. What type of pay system is the organization utilizing? |
Longevity pay |
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A manager uses the following form in evaluating her employees:#3 The incumbent is expected to complete the task in a timely fashion. 1 2 3 4 5Never Almost Never Sometimes Fairly Often Very OftenWhat type of performance appraisal method is the manager using? |
BARS |
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In order to establish an internally consistent compensation system, which of the following is absolutely necessary? |
Conducting job analyses |
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Which of the following is NOT a reason why seniority pay is expected to disappear in the future? |
Employee belief that workers become more valuable over time |
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The error that occurs when a rater generalizes an employee's good or bad behavior on one aspect of the job to all aspects of the job is known as ________. |
halo effect |
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The motivational benefit of merit pay can be perceived differently by employees and employers. Of the following factors of merit pay, which one is perceived differently by employers and employees? |
Amount of merit pay increase |
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Which would be an example of an employee receiving merit pay in an appropriate and typical manner? |
The employer adjusts the worker's base pay to account for inflation and then awards the worker an additional 2.5% increase based on a positive subjective evaluation. |
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In a merit pay program, there must be explicit ________ that specify the procedures or outcome against which employees' job performance can be clearly evaluated. |
performance standards |
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Performance targets establish effective appraisals, which strengthen the pay-for-performance link. What is the best way to establish performance targets? |
Refer to the performance standards listed within job descriptions. |
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Jane works for a private employer that does not follow the seniority pay system, but Alex, her friend, works for the federal government, which awards seniority pay. Alex has an advantage over Jane because ________. |
he knows that he will be treated fairly because seniority pay will be based on objective standards, rather than subjective standards |
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Harry has worked as a junior clerk for XYZ Company for three months, starting at $10 per hour. In the next five to seven years, if Harry continues to perform well and is willing and able, he can more than likely expect ________. |
an increase in seniority pay and a promotion |
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Which statement is correct? |
Accurate and effective performance appraisals are key for effective merit pay programs |
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Maria and Jill have been employed for three years at an accounting firm. In the last quarter, both received the same merit raise, although Maria has been a star performer and has not missed any deadlines, while Jill has missed deadlines on multiple occasions. On which aspect of the pay-for-performance link should the supervisor focus in this scenario so that this situation does not occur in the future? |
Differentiate among performers. |
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Empowering employees to conduct self-appraisals is a strategy to strengthen the pay-for-performance link. What is the key advantage of this strategy? |
It leads to self-corrective responses to supervisory feedback. |
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Dee Ann and her supervisor Andy both attend the same church and share similar points of view on many issues. It is possible for Andy to commit which type of error when judging Dee Ann's performance? |
Similar-to-me bias error |
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A software company is launching its new product line. The performance standards of the salespeople responsible for promoting the software should be judged based on ________. |
linking their performance to the company's business strategy or goals |
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When an employee receives a minimum pay increase that is perceived as significant, it is known as ________. |
just-meaningful |
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Marco likes to note several positive and negative behaviors and their outcomes when it comes to documenting performance appraisals of his employees. However, Matt never has enough time to record all the details. Marco is more than likely using________. |
the critical incident technique |
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John was disappointed when he saw a negligible increase in his paycheck after he was awarded merit pay. This problem can be attributed to which of the following problems with merit pay? |
Little motivational value of merit pay |
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Which type of performance appraisal method relies on many sources for information (employees, supervisors, coworkers, etc.)? |
360-degree |
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There are 15 classifications in the General Schedule for government employees. These classifications are based on ________. |
skill, education, and experience levels |
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What are the most common problems associated with merit pay programs? |
A supervisor's unwillingness to participate in a merit pay program |
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Person-focused pay programs are innovative because they ________ |
treat compensation as a reward rather than an entitlement |
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One of the key advantages of person-focused pay for employees is that it ________. |
provides job enrichment |
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One of the disadvantages of person-focused pay programs is that it is hard to assign a monetary value to skill and knowledge sets. This is because compensation surveys ________. |
report the value of entire jobs rather than of individual skill sets |
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Which statement about the skills and education of global workers is FALSE? |
The U.S. provides highly successful apprenticeship programs to both high school students and continuing education employees. |
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Marketing-for-All relies on its employees developing certain skills that address the key concerns of the company, like customer relations skills. The company rewards its employees by assigning points to skills such as customer relations, communication skills, and creativity. Which type of person-focused pay program is Marketing-for-All more than likely following? |
Job-point accrual model |
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Which statement about person-focused pay systems is FALSE? |
Person-focused pay systems create the need for more workers. |
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The key difference between the stair-step model and the skill blocks model is that ________. |
the skill blocks model addresses both horizontal and vertical skills, but the stair-step model addresses skill depth only |
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Seniority pay, merit pay, and incentive pay are forms of ________. |
job-based pay |
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Personal effectiveness and academic and workplace competencies can be grouped as ________. |
foundational competencies |
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Pay-for-knowledge, skill-based pay, and competency-based pay are forms of ________.
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person-focused pay |
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Of the following types of businesses, which one will benefit the most from the cross-departmental model of person-focused pay? |
Gift store selling holiday items |
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The ________ model is a person-focused pay plan that encourages employees to develop skills and learn to perform jobs from different job families. |
job-point accrual |
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A key difference between knowledge-based pay and merit pay is that ________. |
merit pay is for job performance, and knowledge-based pay is for potential future performance |
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Under which pay system do employers feel that hourly costs, training costs, and overhead costs can be high? |
Person-focused pay |
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When awarding person-focused pay to autonomous work teams, which types of skills are emphasized for team members? |
Vertical skills |
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What term refers to a job design approach that creates a more intrinsically motivating and interesting work environment? |
Job enrichment |
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Which of the following statements is true? |
Person-focused pay and incentive pay do not mesh well together. |
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Anna is a new graduate with a B.S. degree in Business Management and is entering the workforce. Which type of competencies will a future employer expect Anna to demonstrate? |
Foundational competencies |
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When an HR specialist continues to take courses and acquire additional experience in the benefits area, that specialist is ________. |
acquiring depth of skills |
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There is evidence that well-designed person-focused programs lead to greater employee commitment, motivation, and satisfaction. What is the main reason why employees feel the way they do in person-focused pay programs? |
Employees can attain more skills and autonomy in this system. |
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The focus of the ________ model is to promote staffing flexibility by training employees in one department with critical skills they would need to perform effectively in other departments. |
cross-departmental |
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What is the difference between person-focused pay and incentive pay? |
Person-focused pay is for skill development, but incentive pay is one-time pay for the attainment of goals communicated in advance. |
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Which statement about job-based pay and person-focused pay is true? |
In a person-focused pay system, employees tend to have more job variety and job enrichment than in a job-based system. |
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Which type of jobs would be best suited for person-focused pay programs? |
Jobs in manufacturing |
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________ is one of the key features of person-focused pay that makes it costly for employers. |
Higher training costs |
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Which is true of using alternative job-content evaluation approaches by compensation specialists? |
Ranking plans use neither job analyses nor job descriptions, which makes them harder to defend legally. |
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Martina is a sales manager in a major department store. Two independent job analysts have listed Martina's duties, which match the sales manager job description. This approach is known as the ________. |
reliable job analysis method |
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Dysfunctional turnover is best defined as the departure of ________. |
high-quality employees due to inadequate pay |
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When setting up an appeals process for employees to challenge the job evaluation process, it is best to have ________ be present. |
a group of compensation professionals, supervisors, and employees |
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The job-content evaluation technique that follows an order of all jobs from the lowest to the highest on a single criterion is known as ________. |
simple ranking plan |
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The social context within which waiters in a restaurant interact with guests, or tax accountants in a tax preparation office interact with clients, is known as the ________. |
working conditions |
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Mary has applied for an entry-level position in a marketing firm. She believes she meets the minimum qualifications for the job and that she has the knowledge, skills, and abilities to perform the job well. In other words, Mary believes she has the necessary________. |
worker requirements |
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Questionnaires, interviews, observations, and participation are methods for ________. |
collecting information for job analysis |
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What is the biggest drawback for a company that follows a tightly defined job description based on an internally consistent pay system? |
The company ends up being less flexible in responding to its competitor's pay practices. |
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What is the best approach to producing valid job descriptions? |
The results obtained from multiple data sources and multiple methods should converge. |
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Noor, an HR specialist, has expertise in labor laws due to his master's degree in HR and years of experience in the field. According to the EEOC, Noor's HR expertise is considered ________. |
knowledge |
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Which of the following best explains the concept of an internally consistent compensation system? |
The relative value and corresponding compensation associated with each job is determined by compensation professionals in an organization. |
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There is a basic principle that companies rely on for building an internally consistent compensation system. This principle states that ________. |
the greater the responsibilities and complexities of a job the greater the pay |
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The Standard Occupational Classification System, trade associations, professional societies, and trade unions are ________. |
external sources that job analysts can use to find pertinent job information to conduct job analysis |
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________ refers to the job duties and tasks as well as such pertinent factors as the skill and effort needed to perform a job adequately. |
Job content |
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What is the first step in the job evaluation process? |
Determining single versus multiple job evaluation techniques |
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Internally consistent compensation systems facilitate the use of lowest cost strategy for companies because ________. |
job duties and responsibilities are clearly defined with a focus on efficiency |
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The point method is a job-content valuation technique. What is the first step when using this technique? |
Selecting benchmark jobs |
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What is the sixth and final step in the job evaluation process? |
Setting up the appeals process |
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Which of the following would be the best source of information for providing information on the interrelationship among jobs when conducting a job analysis? |
Supervisors |
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What is the reason many companies use a market-based evaluation plan when conducting job evaluation? |
Market-based evaluation plans determine appropriate pay rates relative to the market. |
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Which of the following is a list of educational qualifications, KSAs, and other qualifications an individual must possess to perform a job adequately? |
Worker specifications |
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A job evaluation committee frequently uses the point method as a job valuation technique. When using the point method, an evaluation committee examines the importance of a factor to the overall value of the job, which means the committee is ________. |
determining the weight of each factor |
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What do compensation professionals use to establish pay differentials among employees within a company? |
Job evaluation |
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A problem associated with ________ is that they often lead to bureaucracy that can lead to higher fixed costs and a less competitive position. |
internally consistent compensation systems |
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Before investing time and money into compensation surveys, which question is most important for compensation professionals to consider? |
What does the company want to gain from the survey? |
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The index component of National Compensation Data, the Employer Cost Index (ECI), measures changes in ________. |
labor costs |
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When compensation analysts use regression analysis, they are trying to ________. |
predict the values of one variable from another |
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Compensation professionals must be aware of certain characteristics of compensation surveys. Which statement about compensation surveys is FALSE? |
Compensation surveys represent real-time data. |
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The data collected on compensation by professional and industry association members tends to be accurate because ________. |
members themselves stand to benefit from the data |
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________ is when companies make corrections for differences between their jobs and external benchmark jobs. |
Job leveling |
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Who is ultimately responsible for making compensation policy decisions? |
Top management |
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Custom compensation surveys designed by consulting firms for clients may be superior to existing surveys because they ________. |
include questions specifically designed to meet client needs, unlike existing surveys |
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The ________ survey is a monthly survey of the payroll records of businesses establishments that provides national estimates of average weekly hours and average hourly earnings for the private sector for all employees and for production and nonsupervisory employees. |
Current Employment Statistics |
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In order to remain competitive, how often should companies update their pay systems? |
Annually |
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What are the components of a pay mix? |
Core compensation and benefits |
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Who should be involved in job leveling in a company? |
Job incumbents and supervisors |
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What does the term market pay line imply when conducting a regression analysis? |
The typical market pay rates expressed as a mean or median |
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All of the following activities are part of designing a market-competitive pay system EXCEPT ________. |
matching job descriptions to pay levels |
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Compensation specialists hope to gain information regarding ________ from compensation surveys. |
competitors' base pay and mix of total monetary compensation |
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What is the balance that companies must strike when it comes to designing a differentiation pay strategy? |
Attracting and retaining qualified candidates with sufficient pay and giving them adequate resources with which to work |
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A relevant labor market can be defined on the basis of all of the following EXCEPT ________. |
customer type |
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Which term refers to the set of data that clusters around a typical numerical value? |
Central tendency |
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Which of the following measures the purchasing power of a dollar? |
Real compensation |
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Pay mix policy may be expressed in ________. |
currency or as a percentage of total dollars spent on compensation |
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Companies traditionally competed for qualified candidates on the basis of ________. |
base pay |
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Which statement about benchmark jobs is true? |
Benchmark jobs are common across many different employers. |
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Which of the following is true in regard to benefits? |
Benefits costs have increased, giving rise to greater variability in benefits among companies. |
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An appropriate pay mix should consider the relative worth of jobs within a structure. Keeping this in mind, most of the bonus compensation in a technology company like Intel would likely be given to which of the following groups? |
Engineers |
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A hospital that has been looking to fill the position for a neurosurgeon (a highly skilled and specialized job where demand is high and supply is low) would more than likely define its relevant labor market in terms of ________. |
geography |
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Pay rates that fall along the market pay line represent ________. |
competitive pay rates based on relevant labor market |
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When sales professionals are required to perform a significant amount of nonsales duties, they should be compensated primarily with ________. |
fixed pay |
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________ group jobs based on similar compensable factors for the purpose of pay policy application. |
Pay grades |
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Which term refers to an incentive compensation based on the percentage of the selling price of a product or service? |
Commission |
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Which of the following ensures that employees possess at least a minimally acceptable level of skill proficiency upon completion of a training unit? |
Certification |
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All of the following are effective goals and objectives for sales professionals EXCEPT ________. |
keeping current distribution channels |
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What is the primary limitation of a two-tiered pay structure? |
It limits the company's ability to recruit and retain qualified workers. |
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What is a draw? |
Money to cover basic living expenses |
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What is the requirement of the Davis-Bacon Act? |
It requires private contractors to provide wages that are equal to or above the prevailing wage rates in the area where work is being performed. |
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What type of a compensation plan is best suited for a salesperson who dislikes having to attain a specific volume of sales and who prefers concentrating on presale and post-sale activities? |
Salary-based sales plan |
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When determining pay structure based on geographical consideration, many employers consider the ________. |
cost-of-living adjustment for a certain area |
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Which of the following is NOT a step that compensation professionals use to begin plans for setting the merit pay grid? |
Ask managers for the names of employees receiving merit pay increases |
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Which term refers to a salesperson receiving a set salary plus a single payment for the achievement of specific, exceptional goals? |
Salary-plus-bonus plan |
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Which of the following best describes what a well-designed pay structure promotes? |
The retention of valued employees |
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In a ________, employees earn a higher rate of commission for all sales made in a given period if the sales level exceeds a predetermined level. |
multiple-tiered commission plan |
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Which is true of merit pay increases? |
Research shows that boosting merit pay will not necessarily increase productivity. |
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Generally, the greater the influence of the salesperson on the buying decision, the ________. |
more emphasis on incentive pay in the compensation mix |
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Jill and her colleagues have received an annual merit pay increase on June 15 for the last two years. What is the term used to define the date when Jill and her colleagues receive the annual merit increase? |
Common review date |
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Why are commission-only sales plans best suited for companies that are pursuing lowest-cost strategies? |
Companies using commission-only plans have compensation expenditures that vary with sales revenue. |
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What is one of the most difficult tasks managers face when they guide employees towards person-focused pay? |
Helping employees understand the basic performance appraisal system |
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Which statement about commissions is true? |
The intrinsic motivation of some sales professionals is undermined by commission-only plans. |
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Which of the following rewards newly hired employees less than established or tenured employees? |
Two-tiered pay structures |
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In which type of selling situation will salary represent a significant pay component? |
Pharmaceutical sales |
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Merit pay systems use ________ to determine employees' performance. |
performance appraisals |
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When the pay spread between newly hired or less qualified employees and more qualified job incumbents is small, it is known as ________. |
pay compression |
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Long-term disability plans usually state that _______. |
an employee has to wait three to six months before disability payments are made following an illness or injury |
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Employees must be allowed to participate in pension plans after they have reached ________ and have completed ________ of service. |
age 21; 1 year |
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Which act was established to protect employee benefits rights? |
The Employee Retirement Income Security Act of 1974 |
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Under noncontributory financing for benefits programs, ________. |
a firm assumes total costs for each discretionary benefit |
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The Pension Benefit Guaranty Corporation (PBGC) was created to _______. |
ensure retirement income for workers from those employers that offer defined benefit plans |
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Currently, most of the benefits plans offered by companies are ________. |
contributory |
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Which statement about flexible spending accounts (FSAs) is true? |
FSAs allow certain benefits (like child care) to be paid with pretax dollars. |
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What are the three key laws that have influenced discretionary benefits? |
Internal Revenue Code, ERISA, and Pension Protection Act of 2006 |
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Why do businesses use integrated paid time-off policies, which group together holidays, vacation, sick leave, and personal leave into a single paid time-off policy? |
To reduce the number of unscheduled employee absences |
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The first pension plan was established to specifically benefit ________. |
widows and children of Presbyterian ministers |
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What are the key aspects of vesting? |
Employees' contributions to pension plans are always vested and a company is required to give full vesting rights to employer contributions. |
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The three broad areas in which employers provide discretionary benefits are ________. |
protection programs, paid time-off, and services |
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Why would a company provide outplacement assistance to an employee? |
To promote a positive image of the company |
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Which of the following statements is true of core plus option plans? |
They extend a pre-established set of benefits, such as medical insurance, as a program core. |
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For many decades, discretionary benefits were ________. |
offered to a homogenous workforce consisting mostly of males |
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Which statement about designing and planning benefits programs is true? |
Companies and union representatives, when appropriate, should determine which benefits are most important for employees. |
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Employee assistance programs (EAPs) are established by companies to help employees ________. |
handle personal problems that affect job performance |
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One of the ways companies can use discretionary benefits is to _________. |
encourage certain worker behaviors that have strategic value to the firm |
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Under exclusion provisions for short-term disability plans, what kind of disability is almost always excluded? |
Injuries that are self-inflicted |
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How are welfare practices defined? |
Voluntary benefits paid by the employer that are for the intellectual or social development of the employees |
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Most short-term disability plans pay employees ________. |
60dash–70 percent of employees' pretax salary on a monthly or weekly basis |
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When determining who receives coverage, companies usually withhold discretionary benefits to probationary employees, which are typically employees working at a company for a period no longer than ________. |
6 months |
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What is one of the reasons that companies began offering discretionary benefits to employees even though they were not required to do so? |
To increase worker productivity and encourage good management |
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How has the government encouraged employers to provide retirement benefits to employees since as early as the 1900s? |
By giving employers a tax break on the amount paid out as employees' retirement payments |
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The largest percentage of total compensation costs incurred by companies currently is due to ________. |
rising health care costs and a lack of growth in the amount of funds available to support compensation programs |
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Up to what percentage can an employer charge COBRA beneficiaries a premium for continuation coverage? |
102 percent of the cost of the coverage of the plan |
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Coinsurance refers to ________. |
the percentage of the covered expense that the insured person will pay |
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The purpose of giving benefits to employees is to ________. |
provide subsistence income to all beneficiaries regardless of job performance |
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With regard to FUTA, the amount that an employer contributes is equal to ________ of the first ________ earned by each employee. |
6.2 percent; $7,000 |
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Individuals who meet the eligibility criteria for unemployment benefits receive ________ benefits. |
weekly |
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Why are several state legislatures considering integrating employer-sponsored medical insurance and workers' compensation programs? |
Escalating cost increases in workers' compensation |
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What is a key difference between a health reimbursement account (HRA) and a flexible spending account (FSA)? |
For HRAs, employers make the contributions, but in FSAs they do not. |
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How are HMOs and fee-for-service plans the same? |
They both have out-of-pocket maximum limits. |
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What was a common occurrence during the early twentieth century that led to workers' compensation insurance? |
Industrial accidents and occupational illnesses among workers |
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After states have paid into the central unemployment tax fund, what happens to the money? |
The federal government invests the money and disburses it back to the states as needed. |
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What is a notable drawback to flexible spending accounts (FSAs)? |
An employee must use the accumulated money in the account by a specific time or it will be lost. |
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hat is the main difference between insurance plans offered by insurance companies and self-funded insurance plans? |
The way each type of plan finances the benefits |
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Which of the following statements about coverage for disability benefits is FALSE? |
Younger workers need more quarters of coverage because of their young age and inexperience. |
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What is a key principle of workers' compensation? |
For injuries and accidents that occur on the job, employers must assume the costs. |
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Which of the following statements about the Social Security system is true? |
Retirement benefits of today's retirees are funded by the current workforce and their employers. |
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Who is exempt from COBRA? |
Companies with fewer than 20 employees, church plans, and plans maintained by the U.S. government |
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What can employers do to contain unemployment insurance costs? |
Monitor their reasons for terminating employees |
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What change occurred with the passing of the PPACA? |
Employers are no longer able to purchase insurance plans with lower maximum benefits at a lower cost. |
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If you are self-employed, what does the Self-Employment Contributions Act (SECA) require you to do? |
Contribute to Medicare and OASDI at a higher tax rate |
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COBRA was designed to ________. |
allow employees to continue with their medical coverage through their employer temporarily |
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If employees do not sign on to receive insurance from their employers, what are they required to do per the PPACA of 2010? |
Purchase their own insurance |
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Which of the following is a stipulation for fee-for-service plans? |
Fee-for-service plans have no pre-existing condition clauses. |
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What entities are typically exempt from FUTA? |
State and local governments and not-for-profit companies |
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What was the motivation behind the Social Security Act? |
Preventing families from becoming financially overwhelmed once unemployed |
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How did providing subsistence payments to those who were unemployed or injured help boost the U.S. economy, especially after the Great Depression? |
Subsistence payments gave unemployed individuals consumption ability to keep the economy afloat. |
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Which authority provides the criteria for defining an executive? |
Internal Revenue Code
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Stock compensation plans generally increase the ownership interest of an executive. What increases the value of a stock? |
The gain in company performance |
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What is the key difference between target plan bonus and predetermined allocation bonus? |
Predetermined allocation bonuses are fixed; target plan bonuses are not. |
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An employer-sponsored retirement plan is considered top-heavy when the accrued benefits of key employees exceed ________ percent of the accrued benefits of all employees. |
60 |
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Which of the following would contain detailed information on the compensation of a firm's CEO and Named Executive Officers? |
Definitive Proxy Statement |
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Based on the criteria for key employees, which of the following positions would be considered a key employee? |
CEO |
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How do companies create an ownership interest for an executive? |
Through granting stock and stock options |
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How do executives receive an income tax benefit by participating in incentive stock option plans? |
Executives do not pay any taxes until they sell their stock, and when they do sell, the tax rates are lower than their income tax. |
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When referring to executive compensation, what is mean by the term pay-for-failure? |
Executives receive pay for nonperformance and are given generous amounts to leave the company. |
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Which of the following describes the agency problem? |
Executives make decisions in their own self-interests. |
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When considering executive compensation, boards of directors are theoretically representing the interests of ________. |
shareholders |
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Which statement regarding executive compensation is true? |
Academic research is not decisive regarding a connection between executive compensation and company performance. |
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Miranda, the CEO of TVX Enterprises, has a compensation arrangement in which the TVX board of directors promises to pay her a bonus in the form of the equivalent of either the value of TVX shares or the increase in that value over a period of time. Which term refers to Miranda's compensation arrangement? |
A phantom stock plan |
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Compensation consultants determine executive pay based on a strategic analysis of internal and external factors of an organization. The most important internal factor in determining executive compensation is the ________. |
financial condition of the company |
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The idea behind deferred compensation for an executive is to ________. |
align the executive's and shareholders' interests in the long term |
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An officer in an organization is someone who _________. |
has the title and authority of an officer |
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The total bonus pool is considered when using the predetermined allocation bonus for an executive. What is the key factor that determines the size of the total bonus pool? |
A company's profits |
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All of the following are true of the ethical considerations regarding executive pay EXCEPT: |
Most CEOs who are hired from within make more money than those who are recruited from outside the company. |
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Which is true when comparing non-U.S. CEOs with U.S. CEOs? |
U.S. CEOs make 300 percent more than non-U.S. CEOs. |
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How do companies know when compensation expenditures become excessive? |
When compensation expenditure is greater than quantity and quality of labor output |
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Which statement about the annual base pay for an executive is true? |
For most executives, annual base pay represents a small part of their total compensation. |
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Executives must have ________ percent of ownership in a firm before they are classified as a highly compensated employee by the Internal Revenue Code (IRC). |
5 |
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The current executive core compensation consists of ________. |
annual base pay and bonuses |
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Due to a potential conflict of interest, what is the primary consideration for executive consulting firms when suggesting executive pay? |
The public image of the consulting firm |
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Executives are awarded short-term incentive compensation. What is the reason for giving short-term incentive compensation to executives? |
To recognize their pursuit of competitive strategy goals |
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Unions in the public sector feel that flex schedules ________. |
are acceptable, because they raise the productivity of employees, which makes the unions stronger |
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Leasing employees to a client company is common in which type of industry? |
Food |
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Which statement about temporary employment agencies is true? |
Temporary agency fees are based on a percentage of a placement's pay rate. |
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Which group of contingent workers chooses to work fewer than 35 hours per regularly scheduled workweek? |
Voluntary part-time employees |
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Flextime schedules allow workers to ________. |
modify their work schedules within the limits set by the employer |
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How do employers benefit from compressed workweeks? |
Greater workplace productivity |
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The dual employer doctrine law states that temporary workers have a right to _________ |
workers' compensation |
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Which is true of seasonal workers? |
The FLSA's minimum wage and overtime provisions do not apply to some seasonal workers. |
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What is the overall view of labor unions regarding companies' use of contingent workers and flex schedules? |
Unions generally do not support contingent work and flex work schedules. |
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Zachary has a full-time position with an accounting firm. Zachary works in the firm's office when he needs to attend meetings, but the majority of his work is accomplished in his home office. Which term best describes Zachary's work arrangement? |
Telecommuting |
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Which of the following statements is FALSE regarding flexible work schedules? |
Flexible work schedules can reduce productivity. |
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Which of the following is the most accurate description of why labor union opposition to contingent employees is unlikely to change in the near future? |
Labor unions see the practice of contingent employees as undermining their efforts to secure high wages and job security for their members. |
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Involuntary part-time employees work fewer than ________ hours per week. |
35 |
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Job sharing at work is an arrangement where ________ |
two or more part-time employees perform a single full-time job |
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Flex workweek schedules have the greatest impact on ________. |
paid time-off benefits |
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Sonia works 40 hours each week at a publishing company. She works Monday through Thursday from 8:00 a.m. until 6:00 p.m. Which term best describes Sonia's work arrangement? |
Compressed workweek schedule |
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What is the focus of the economic realities test for independent contractors? |
Whether the worker is financially dependent on an employer |
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Technically, when contingent workers are placed in an organization, they are ________. |
legally accountable to the temporary employment agency that hired them |
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Why are contingent workers perceived as a threat by most labor unions? |
Contingent workers tend to threaten members' job security. |
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Part-time employees are eligible for retirement benefits if they ________ and have________. |
are 21 years of age or older; 1,000 hours logged in a 12-month period |
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For employees who participate in job sharing, which of the following is a likely benefit? |
Ability to participate in an employee retirement program |
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Temporary workers are primarily hired by companies to ________. |
fill a need during peak times |
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One of the advantages of hiring contingent workers is that it prevents groupthink from occurring in the workplace. Which of the following best describes groupthink? |
When groups think alike and have mistaken solutions for existing problems |
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From an employer's perspective, job sharing is likely to result in ________. |
reducing employee training costs |
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Flex work schedules are best for companies that want to promote differentiation strategies. This is because flex schedules ________. |
help employees work without being distracted by personal matters |
