Test Bank For Human Resource Management 1st Edition by Phillips

Test Bank for Human Resource Management 1st
Edition by Phillips
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Test Bank for Human Resource Management 1st Edition by Phillips
Chapter 9: Base Compensation
TRUE/FALSE
1. How organizations choose to compensate employees can make those organizations more or
less attractive as employers, motivate different employee behaviors, and affect financial
outcomes.
ANS: T PTS: 1 DIF: Difficulty: Easy

REF: p. 290 OBJ: LO: 9-1 NAT: BUSPROG: Analytic
TOP: What Is Compensation? KEY: Bloom's: Knowledge
2. Employees exchange their labor for both financial and nonfinancial rewards.

3. Employees and their employers have an exchange relationship in which employees apply their
time and talents to create value for the organization in exchange for tangible and intangible
rewards that employees value.

4. There is one main type of compensation.
ANS: F PTS: 1 DIF: Difficulty: Easy

5. Incentive pay is a popular form of indirect compensation.

6. Base pay reflects the size and scope of an employee’s responsibilities.

7. In large companies, severance pay is given to all employees upon termination of their
employment.
ANS: F PTS: 1 DIF: Difficulty: Moderate

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1
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8. Total rewards include everything an employee perceives to be of value that results from the
employment relationship but excludes the physical work environment, organizational culture,
professional development, recognition, and work/life balance.

9. There are numerous laws requiring severance pay.
ANS: F PTS: 1 DIF: Difficulty: Challenging

TOP: What Is Compensation? KEY: Bloom's: Comprehension
10. One goal of a strategic compensation system is to attract and retain qualified employees.

TOP: Strategic Compensation KEY: Bloom's: Knowledge
11. Compensation is not considered a strategic tool.
ANS: F PTS: 1 DIF: Difficulty: Moderate

12. A strategic perspective on compensation focuses on tailoring a firm’s compensation system to

reinforce the firm’s business strategy.
ANS: T PTS: 1 DIF: Difficulty: Moderate

13. Diversified firms are more likely to link employee pay with business unit performance,
whereas less diversified firms are more likely to link employee pay with corporate
performance.
ANS: T PTS: 1 DIF: Difficulty: Moderate

14. Direct financial compensation is influenced by the organization, the job, the specific
employee, and external factors.

TOP: What Influences Direct Financial Compensation? KEY: Bloom's: Knowledge
2
15. To maximize your own compensation, carefully choose your industry as well as your career.

16. Pay followers pay their frontline employees as high a wage as possible.

17. The resource dependence theory proposes that organizational decisions are influenced by both
internal and external agents who control critical resources.

18. Seniority and merit are two of the largest influences on wage differentials among people
holding the same job in an organization.

19. The labor market is all of the potential employees located within a geographic area from
which the organization might be able to hire.

20. A cost-of-living allowance is a clause in union contracts that allows the company to argue
against an increase in wages.

21. Market pricing identifies the economic worth of a job on the open labor market based on what
is needed to attract and retain qualified individuals.

TOP: Evaluating the Worth of a Job KEY: Bloom's: Knowledge
3
22. Any characteristic used to provide a basis for judging a job’s value is called a compensation
factor.

23. In applying the point factor method, benchmark jobs are selected based on their having
equitable pay and representing a wide range of the compensable factors.

24. The Hay Group Guide Chart-Profile Method is a point-factor system used to produce both a
profile and a point score for each position.

25. The Position Analysis Questionnaire is a structured job evaluation questionnaire that is
statistically analyzed to calculate pay rates based on how the labor market is valuing worker
characteristics.

MULTIPLE CHOICE
1. __________ is compensation received in the form of salary, wages, commissions, stock

options, or bonuses.
a. Direct financial compensation c. Incentive pay
b. Benefits d. Indirect financial compensation
ANS: A PTS: 1 DIF: Difficulty: Easy
2. __________ is/are the largest element of base compensation.

4
3. __________ include(s) all the tangible and financially valued rewards that are not included in
direct compensation, including free meals, vacation time, and health insurance.
ANS: D PTS: 1 DIF: Difficulty: Easy
4. Indirect financial compensation is also referred to as __________.

a. direct financial compensation c. incentive pay
b. benefits d. indirect financial compensation
ANS: B PTS: 1 DIF: Difficulty: Easy
5. __________ is a popular form of indirect compensation.

ANS: C PTS: 1 DIF: Difficulty: Easy
6. __________ includes casual dress codes and flexible work hours.

b. Nonfinancial compensation d. Indirect financial compensation
7. Development opportunities can be considered a type of __________.

a. direct financial compensation c. incentive pay
b. nonfinancial compensation d. indirect financial compensation
TOP: What Is Compensation KEY: Bloom's: Knowledge
8. __________ typically reflects the size and scope of an employee’s responsibilities.

a. Incentive pay c. Severance pay
b. Base pay d. Benefits
5
9. __________ is typically reviewed annually in light of an individual’s performance and
experience, competitive trends, and the geographic location of the job.
b. Base pay d. Total rewards
10. Julie has just been laid off from her job, and her company has agreed to pay her $15,000 for
each year she was with the company. This is an example of __________.
a. incentive pay c. severance pay
b. base pay d. total rewards
11. The amount of __________ a departing employee receives is typically based on their length
of eligible employment with the company.
a. incentive pay c. severance pay
12. There is no legal requirement to provide __________.

a. financial compensation c. severance pay
13. __________ refers to everything an employee perceives to be of value that results from the
employment relationship.
b. Base pay d. Total rewards
14. __________ pays employees a set amount regardless of performance.

a. Variable pay c. A pay mix
b. Fixed pay d. A pay structure
6
15. _________ bases some or all of an employee’s compensation on employee, team, or
organizational performance.
16. __________ reinforces the competitive advantage of cost efficiency because the pay system
helps to control labor costs.
17. To maximize motivation, __________ is usually based on performance over which the
employee has some degree of control.
a. variable pay c. a pay mix
b. fixed pay d. a pay structure
18. __________ is the array of pay rates for different work or skills within a single organization
a. Variable pay c. Pay mix
b. Fixed pay d. Pay structure
19. __________can be designed to price jobs at the prevailing market rate or to preserve internal
pay equity by compensating each job consistently with the positions above and below it in the
company hierarchy.
a. Variable pay c. The pay mix
b. Fixed pay d. The pay structure
20. __________ is the relative emphasis given to different compensation components.

a. Variable pay c. Pay mix
b. Fixed pay d. Pay structure
7
21. __________ financial compensation is influenced by the organization, the job, the specific
employee, and external factors.
a. Variable c. Direct
b. Indirect d. Fixed
22. Different industries and different organizations within an industry are able to pay differently
based on their __________ and resources.
a. competition c. position
b. profitability d. compensation
23. A pay __________ is an organization with a compensation policy of giving employees greater
rewards than their competitors do.
a. leader c. follower
b. challenger d. structure
24. A pay __________ pays their frontline employees as little as possible.

25. __________ often pay below the market average wage rate due to an inability to pay more or
a belief that their employees are easily replaceable.
a. Pay leaders c. Pay followers
b. Pay challengers d. Pay structures
26. __________ often experience high turnover and lower employee performance.
a. Pay leaders c. Pay followers
b. Pay challengers d. Pay structures
8
27. Companies with an innovation or customer service strategy use the pay __________ strategy
to attract and retain higher quality employees who are critical to their success.
28. The __________ theory proposes that organizational decisions are influenced by both internal
and external agents who control critical resources.
a. resource dependence c. critical resource
b. resource independence d. critical dependence
29. According to the __________ theory, an organization must acquire resources to survive, and it
interacts with other actors who control such resources.
a. resource dependence c. critical resource
b. resource independence d. critical dependency
30. __________ differentials are differences in pay between various workers, groups of workers,
or workers within a career field.
a. Wage c. Market
b. Labor d. Legal
31. Seniority and merit are two of the largest influences on __________ among people holding
the same job in an organization.
a. wage differentials c. labor unions
b. labor markets d. labor laws
32. A __________ consists all of the potential employees located within a geographic area from
which the organization might be able to hire.
a. wage differential c. labor union
b. labor market d. labor laws
9
33. __________ expand as positions are located higher in the organization.
a. Wage differentials c. Labor union effects
b. Labor markets d. Labor laws
34. The __________ during the time of an employee’s hire can result in differing pay for
employees in the same job.
a. wage differential c. labor union effect
b. labor market d. labor laws
35. __________ influence compensation through the process of collective bargaining.

a. Wage differentials c. Labor unions
b. Labor markets d. Labor laws
36. If a nonunionized company wants to be competitive in the __________, it often must at least
match the terms of the local union contract.
a. wage differential criteria c. labor union category
b. labor market d. labor environment
37. __________ pricing uses external sources of information about how others are compensating
certain positions to assign value to similar jobs.
a. Arcade c. Market
b. Compensation d. Organizational
38. __________ pricing is particularly important when an organization believes that it must pay
competitively in the open market to attract sufficient numbers of appropriately qualified
talent.
a. Arcade c. Market
b. Compensation d. Organizational
10
39. __________ are jobs that tend to exist across departments and across diverse organizations,
allowing them to be used as a basis for compensation comparisons.
a. Benchmark jobs c. Evaluations jobs
b. Job evaluations services d. Compensation jobs
40. A __________ may have slightly different job titles across organizations but has enough
consistency that it can be used as a basis for comparison.
a. benchmark job c. benchmark evaluation
b. job evaluation tier d. compensation evaluation
41. A __________ is a systematic process that uses expert judgment to assess differences in value
between jobs.
a. benchmark job tier c. benchmark evaluation
b. job evaluation d. compensation evaluation
42. A __________does not address employees, their performance, or their pay—only the relative
size and value of a job compared to other jobs in the organization.
a. benchmark job c. benchmark evaluation
b. job evaluation d. compensation evaluation
43. The __________ of job evaluation subjectively compares jobs to each other based on their
overall worth to the organization.
a. ranking method c. point factor method
b. job classification d. compensable factor
44. __________ of job evaluation subjectively classifies jobs into an existing hierarchy of grades
or categories.
a. The ranking method c. The point factor method
b. Job classification d. The compensable factor
11
45. The __________ of job evaluation uses a set of compensable factors to determine the value of
each job.
b. job classification criteria d. compensable factor
46. A __________ is any characteristic used to provide a basis for judging a job’s value.
a. ranking c. point factor
47. A __________ must be clearly and carefully established, and the levels of each factor must
mean the same to all pay rates
48. __________ is the generation of salary structures and pay levels for each job based on the job
evaluation data
a. Job pricing c. Pay grade reckoning
b. Single pay rate status d. Broadbanding
TOP: Job Pricing KEY: Bloom's: Comprehension
49. Under a __________ system a single market-determined rate is paid for the job.
a. job pricing c. pay grade
b. single pay rate d. broadbanding
50. __________ systems are appropriate when the job doesn’t allow for a significant performance
difference across employees, and when the employee is paid for time on the job or for simply
completing the job as directed.
a. Job pricing c. Pay grade
b. Single pay rate d. Broadbanding
ANS: B PTS: 1 DIF: Difficulty: Moderate
12
51. Many organizations, including the military, base their compensation plans on ________.
a. job pricing c. pay grades
b. single pay rate d. broadbanding
ANS: C PTS: 1 DIF: Difficulty: Moderate
52. A __________ is the range of possible pay for a group of jobs.

a. job price c. pay grade
b. single pay rate d. broadband
TOP: Job Pricing KEY: Bloom's: Knowledge
53. A _________ is derived from factors including education, tasks performed, and required skills
and abilities.
54. A __________ clarifies compensation by communicating what an employee’s base

compensation will be based on, and how long they hold the job.
55. __________ is the use of very wide pay grades to increase pay flexibility.
a. Job pricing c. Pay grade reckoning
b. Single pay rate tiers d. Broadbanding
ANS: D PTS: 1 DIF: Difficulty: Moderate
56. __________ was popularized in the 1990s to support flatter, faster, de-bureaucratized
organizational cultures and to empower managers to make compensation decisions.
a. Job pricing c. Pay grading
b. Single pay rating d. Broadbanding
13
57. The successful adoption of __________ requires managers to be trained in the approach as
this method puts them in charge of the majority of pay decisions
a. job pricing c. pay grading
b. single pay rating d. broadbanding
58. __________ equity is evaluated both internally and externally.

a. Compensation c. Employee
b. Internal d. External
ANS: A PTS: 1 DIF: Difficulty: Moderate
TOP: Compensation Issues KEY: Bloom's: Comprehension
59. __________ equity exists when employees perceive their pay to be fair relative to the pay of
other jobs in the organization.
60. __________ equity refers to the perceived fairness of the relative pay between employees
performing similar jobs in the same organization.
61. __________ equity exists when an organization’s employees believe that their pay is fair
when compared to what other employers pay their employees who perform similar jobs.
62. The idea of __________ is that if two jobs have equal difficulty requirements, the pay should
be the same, regardless of who fills them.
a. comparable worth c. compensation equity
b. wage rate compression d. pricing equity
ANS: A PTS: 1 DIF: Difficulty: Moderate
14
63. __________happens when starting salaries for new hires exceed the salaries paid to
experienced employees.
a. Comparable worth c. Compensation equity
b. Wage rate compression d. Pricing equity
64. __________ is an internal equity issue that can create morale problems and increase turnover
of highly skilled and experienced employees as they seek higher salaries elsewhere.
65. The primary cause of __________ is increasing market rates for skills that are in short supply.
66. A __________ refers to lucrative benefits including bonuses and stock options given to
executives in the event a company is taken over.
a. golden balloon c. parachute payment
b. golden parachute d. balloon payment
67. __________ are pay increases to account for a higher cost of living in one country versus
another.
a. Cost-of-living adjustments c. Hardship premiums
b. Housing allowances d. Tax equalization payments
68. __________ are payments to subsidize or cover housing and other related costs in high-cost
areas.
15
69. __________ increase salary for living in an area with a lower quality of life or less safety.
70. __________ increase salary to make up for higher taxes that reduce take-home pay and
decrease employees’ purchasing power.
71. __________ are larger and/or more frequent raises to maintain employees’ purchasing power
in the face of inflation.
b. Inflation adjustments d. Tax equalization payments
72. The __________ is a federal law that sets standards for minimum wages, overtime pay, and
equal pay for men and women performing the same job.
a. Fair Labor Standards Act
b. Equal Pay Act
c. Equal Employment Opportunity Commission
d. Workers’ Compensation Act
TOP: Compensation Laws and Regulations KEY: Bloom's: Comprehension
73. The __________ was passed in 1938 to stimulate economic recovery from the Great
Depression and sets standards for minimum wages and equal pay for men and women
performing the same jobs.
a. Fair Labor Standards Act
b. Equal Pay Act
16
74. The Equal Employment Opportunity Commission administers and enforces the _________,
which prohibits gender-based wage discrimination.
a. Fair Labor Standard
b. Equal Pay Act
75. The __________ is a type of insurance that replaces wages and medical benefits for
employees injured on the job in exchange for relinquishing the employee’s right to sue the
employer for negligence.
a. No legal recourse insurance c. Medical benefits
b. No fault d. Workers’ compensation
ESSAY
1. What is the difference between financial and nonfinancial compensation? Be sure to include
direct financial compensation and in-direct financial compensation.
ANS:
Employees exchange their labor for both financial and nonfinancial rewards. Financial
compensation is both direct and indirect. Direct financial compensation consists of the pay an
employee receives in the form of wages, salary, bonuses, and commissions. Direct financial
compensation is the largest element of base compensation. Indirect financial compensation
consists of all the tangible and financially valued rewards that are not included in direct
compensation, including free meals, vacation time, and health insurance. Incentive pay is a
popular form of indirect compensation. Nonfinancial compensation includes employee
rewards and incentives that are not financial in nature. Flexible work schedules that give
employees an alternative to an 8-to-5 work schedule, development opportunities, casual dress
codes, and helping employees balance work with the other demands in their life are all
valuable to employees and can be considered a type of compensation.
PTS: 1 DIF: Difficulty: Moderate REF: p. 290

OBJ: LO: 9-1 NAT: BUSPROG: Analytic TOP: What Is Compensation?
KEY: Bloom's: Comprehension
2. What are the goals of a strategic compensation system?
ANS:
The goals of a strategic compensation system are to:
• Attract and retain qualified employees
• Reflect the relative value of each job
• Be externally competitive and internally consistent and fair
17
• Motivate individual performance and employees’ contribution to
organizational goal achievement
• Foster employee engagement and productive work relationships
• Comply with all state and federal laws and regulations.
A strategic perspective on compensation focuses on tailoring a firm’s compensation system to

reinforce the firm’s business strategy. Because a good fit, or alignment, between a firm’s
business strategy and its human resource management system leads to better firm
performance, a company’s business strategy should be a key determinant of its compensation
system.
PTS: 1 DIF: Difficulty: Moderate REF: p. 292

OBJ: LO: 9-1 NAT: BUSPROG: Analytic TOP: Strategic Compensation
KEY: Bloom's: Comprehension
3. Define the labor market, and explain how it can affect compensation.
ANS:
The labor market for a position consists of all of the potential employees located within a
geographic area from which the organization might be able to hire. Many organizations try to
set compensation at a level consistent with the prevailing rate in the relevant labor market.
The labor market differs for different positions. The labor market expands as positions are
located higher in the organization. Different geographic labor markets often have different
compensation levels. The labor market during the time of an employee’s hire can result in
differing pay for employees in the same job.
(Explanations will vary.)
PTS: 1 DIF: Difficulty: Challenging REF: p. 295

OBJ: LO: 9-2 NAT: BUSPROG: Analytic
TOP: What Influences Direct Financial Compensation? KEY: Bloom's: Application
4. What are some global issues surrounding compensation?
ANS:
Setting compensation rates in local markets around the world can create wide variability in
pay. For example, market pay for an engineer in the U.S. might be $75,000 but in India the
same position might warrant only the equivalent of $12,000. Decisions must be made
regarding how to balance compensation in the local currency and market with the company’s
average pay for that position. Employees in different countries also differently value various
types of compensation. Although the U.S. tends to emphasize bonuses and incentives, areas
including Asia put more weight on salary than bonuses.

OBJ: LO: 9-2 NAT: BUSPROG: Analytic
TOP: What Influences Direct Financial Compensation? KEY: Bloom's: Application
18
5. What is market pricing? Explain the factors that determine the usefulness of market pricing.
ANS:
Market pricing uses external sources of information about how others are compensating a
certain position to assign value to a company’s similar job. Market pricing identifies the
economic worth of a job on the open labor market based on what is needed to attract and
retain qualified individuals. Market pricing is particularly important when an organization
believes that it must pay competitively in the open market to attract sufficient numbers of
appropriately qualified talent.
The usefulness of the market pricing method depends on the accuracy of the job
analysis used to define the job, the ability to find similar jobs in the labor market, and the
quality and comprehensiveness of the market pricing data available for those jobs. Because it
can be difficult to identify comparable jobs and obtain accurate market rate information,
particularly for specialized jobs in which companies tend to develop their own talent, market
pricing can be difficult to use.

OBJ: LO: 9-4 NAT: BUSPROG: Analytic TOP: Job Pricing
KEY: Bloom's: Application
6. Compare and contrast the four most used methods to evaluate jobs.
ANS:
The nonquantitative ranking method subjectively compares jobs to each other based on their
overall worth to the organization or their relative difficulty, ranking them from most to least
valuable. The ranking is based on subjective judgments of characteristics including skill, the
mental and physical effort required, responsibility, and working conditions. Because of the
number of comparisons required, the ranking method is best for smaller organizations with
less than 30 jobs to be evaluated.
The job classification method subjectively classifies jobs into an existing hierarchy of
grades or categories. Each level in a grade or category has a description and list of associated
job titles, and each job is subjectively assigned to the grade or category that is the closest
match with the entire job. A common set of job grading standards developed for an
occupation, that distinguish different levels of work, are used to ensure equity in assigning
jobs to a grade or category
The point factor method of job evaluation uses a set of compensable factors to
determine the value of each job. In applying the point factor method, benchmark jobs are
selected based on their having equitable pay (neither overpaid nor underpaid) and representing
a wide range of the compensable factors. These benchmark jobs are rated on each factor, and
the resulting points are summed to produce a total point score for each job. The benchmark
jobs are then grouped by their total point scores and assigned to pay grades with similarly
rated jobs with the total pay for each job divided into pay for each factor. Any necessary
adjustments are then made to ensure equitable valuing of each factor.
The Hay Group Guide Chart-Profile Method is a point-factor system is used to
produce both a profile and a point score for each position. The Hay Group method dates to the
1950s and is used extensively to evaluate executive, managerial, supervisory, and professional
white- and blue-collar jobs. For each job, a point-factor system is used to produce a profile in
which the weight and relationship of the factors reflects the size and nature of the job. For
example, for research jobs, problem solving is weighted more heavily than accountability, but
the reverse is true for production line jobs.
19
KEY: Bloom's: Application
7. What is a pay grade? Which type of pay grade describes the job you have now?
ANS:
A pay grade or pay scale is derived from factors including necessary education, tasks
performed, and required skills and abilities. New hires typically start at the minimum pay rate
and work their way up the pay grade. Organizations usually design pay grades by looking at
the positions in their company and identifying basic factors including education needed, tasks
involved, and skills and abilities required. The military’s pay grade structure compensates its
people based on their rank and their time in service at that rank. This type of approach works
well because employees know from the time of enlisting what their base income is, as well as
what it will be after a certain length of time. Although this method of delineating and
communicating compensation grades works for most positions, it doesn’t work as well for
positions such as CEO or sales representative.
(Answers on personal pay grade will vary.)

KEY: Bloom's: Evaluation
8. Compare and contrast the types of equity, giving examples of each. Include the terms
comparable worth, wage rate compression, and equity perception in your discussion.
ANS:
Compensation equity is evaluated both internally and externally. Internal equity exists when
employees perceive their pay to be fair relative to the pay of other jobs in the organization.
Most people would find it inequitable if a lower level position is paid more than their job.
Employee equity refers to the perceived fairness of the relative pay between employees
performing similar jobs for the same organization. If a new employee with less experience and
lower skills is paid more than a higher performing, experienced employee then the
experienced employee is likely to perceive unfairness. External equity exists when an
organization’s employees believe that their pay is fair when compared to what other
employers pay their employees who perform similar jobs. If a local competitor pays
employees 20 percent more than their current employer pays them, they probably don’t feel
that this is fair.
Because employees who feel unfairly paid are less motivated and more likely to leave,
it is important to attend to equity perceptions when developing or evaluating a compensation
system. Two of the most common equity issues in compensation are comparable worth and
wage rate compression. The idea of comparable worth is that if two jobs have equal difficulty
requirements, the pay should be the same, regardless of who fills them. The issue is not
whether women and men should be paid the same for doing the same job, but that jobs that
tend to be held by women tend to be paid less than those that tend to be held by men even
though the jobs contribute equally to organizational performance.
20
Test Bank for Human Resource Management 1st Edition by Phillips
The reasons why the gender pay gap exists are still unclear, although factors including
discrimination against women, women staying out of the workforce for extended periods due
to family responsibilities, and job evaluation techniques that undervalue female occupations
are all thought to contribute to the issue.
Wage rate compression happens when starting salaries for new hires exceed the
salaries paid to experienced employees. Wage rate compression is an internal equity issue that
can create morale problems and increase turnover of highly skilled and experienced
employees as they seek higher salaries elsewhere. The primary cause of wage rate
compression is increasing market rates for skills that are in short supply.

OBJ: LO: 9-4 NAT: BUSPROG: Analytic TOP: Compensation Issues
KEY: Bloom's: Analysis
21
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Chapter 9: Base Compensation

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

4. There is one main type of compensation.

ANS: F PTS: 1 DIF: Difficulty: Easy

5. Incentive pay is a popular form of indirect compensation.

ANS: T PTS: 1 DIF: Difficulty: Easy

6. Base pay reflects the size and scope of an employee’s responsibilities.

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Moderate

Visit TestBankBell.com to get complete for all chapters

ANS: F PTS: 1 DIF: Difficulty: Easy

9. There are numerous laws requiring severance pay.

ANS: F PTS: 1 DIF: Difficulty: Challenging

ANS: T PTS: 1 DIF: Difficulty: Easy

11. Compensation is not considered a strategic tool.

ANS: F PTS: 1 DIF: Difficulty: Moderate

12. A strategic perspective on compensation focuses on tailoring a firm’s compensation system to

ANS: T PTS: 1 DIF: Difficulty: Moderate

ANS: T PTS: 1 DIF: Difficulty: Moderate

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: F PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

ANS: T PTS: 1 DIF: Difficulty: Easy

1. __________ is compensation received in the form of salary, wages, commissions, stock

2. __________ is/are the largest element of base compensation.

4. Indirect financial compensation is also referred to as __________.

5. __________ is a popular form of indirect compensation.

6. __________ includes casual dress codes and flexible work hours.

7. Development opportunities can be considered a type of __________.

8. __________ typically reflects the size and scope of an employee’s responsibilities.

12. There is no legal requirement to provide __________.

14. __________ pays employees a set amount regardless of performance.

20. __________ is the relative emphasis given to different compensation components.

24. A pay __________ pays their frontline employees as little as possible.

35. __________ influence compensation through the process of collective bargaining.

52. A __________ is the range of possible pay for a group of jobs.

54. A __________ clarifies compensation by communicating what an employee’s base

58. __________ equity is evaluated both internally and externally.

PTS: 1 DIF: Difficulty: Moderate REF: p. 290

2. What are the goals of a strategic compensation system?

A strategic perspective on compensation focuses on tailoring a firm’s compensation system to

PTS: 1 DIF: Difficulty: Moderate REF: p. 292

PTS: 1 DIF: Difficulty: Challenging REF: p. 295

4. What are some global issues surrounding compensation?

PTS: 1 DIF: Difficulty: Challenging REF: p. 298

PTS: 1 DIF: Difficulty: Challenging REF: p. 298

PTS: 1 DIF: Difficulty: Challenging REF: p. 304

PTS: 1 DIF: Difficulty: Challenging REF: p. 307

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