Question 1

Which of the following is NOT a factor that is taken into account in the balance sheet approach to international compensation?

Accepted Answer

The balance sheet approach to international compensation typically includes base pay, differentials, incentives, and assistance programs but does not typically include golden parachutes, which are large payments given to executives upon termination.

Question 2

Which type of long-term incentive makes up the largest portion of an executive's pay?

Accepted Answer

Stock options often make up the largest portion of an executive's pay package. They provide the right to purchase company stock at a set price, offering potential for significant financial gain if the company's stock price increases, aligning executives' interests with those of the shareholders.

Question 3

All of these are characteristics of piecework pay plans EXCEPT

Accepted Answer

Piecework pay plans often include a base hourly rate in addition to the payment workers receive for each unit they produce. This ensures that workers are compensated for their time even if production is slow or halted due to factors beyond their control.

Question 4

Team-based compensation plans are effective in all of these situations EXCEPT

Accepted Answer

Team-based compensation plans are less effective when team members compete with each other because this competition can undermine collaboration and the shared purpose that makes team-based compensation successful.

Question 5

Criteria used in creating job evaluation plans include all of these EXCEPT:

Accepted Answer

The answer of Criteria used in creating job evaluation plans...

Question 6

Cesar, a satellite architect, accepted an overseas assignment for his company when the company agreed to provide a car and chauffeur, a beach villa, a sailboat, and a lump sum payment of $600,000.What kind of pay factor was used?

Accepted Answer

The answer of Cesar, a satellite architect, accepted an overseas...

Question 7

Which of the following types of variable pay is most commonly used for sales workers?

Accepted Answer

Commissions are the most commonly used form of variable pay for sales workers, as they directly link the amount of sales generated by the employee to their compensation, incentivizing higher sales performance.

Question 8

Edrian works for a bank that recently acquired his consulting shop.He has a "green-circled" job for the wage curve.His manager is likely to tell him:

Accepted Answer

A "green-circled" job indicates that the employee's salary is below the minimum of the pay range for their position. Therefore, Edrian is likely to receive a salary adjustment to bring his pay within the appropriate range.

Question 9

What type of compensation plan would be appropriate for employees who have tasks that are interdependent and require cooperation by all team members?

Accepted Answer

Group incentive plans are appropriate for tasks that require cooperation and interdependence among team members, as they encourage collective effort and reward the team as a whole.

Question 10

Rayshard works for an automobile salvage firm.Last year he started going to monthly meetings with managers and coworkers to evaluate labor-saving ideas.One idea, raising the crane level by 8 feet to clear the building, saved them $2 million.Each of the employees received a $200 bonus for the implementation of that idea.What kind of compensation system is used?

Accepted Answer

The Scanlon Plan is a type of gainsharing program where employees receive bonuses for cost-saving measures, particularly those that improve labor efficiency. The scenario describes a situation where employees collectively benefit from a cost-saving idea, which aligns with the principles of the Scanlon Plan.

Question 11

Dana, a compensation specialist for a large hospital in Phoenix is reviewing pay rates for nurses and nursing technicians in other health care organizations in the Phoenix area.She is also making sure her organization is giving as much vacation and shift differentials as her competition.What is she studying?

Accepted Answer

Dana is conducting a compensation survey, which involves collecting and analyzing data on wages, benefits, and other forms of compensation from other organizations to ensure competitive and fair pay practices.

Question 12

International compensation packages typically include four factors, base bay, differentials, incentives and assistance programs.This approach is referred to as

Accepted Answer

The balance sheet approach is used in international compensation to ensure that expatriates maintain their home country living standard while working abroad, incorporating elements like base pay, differentials, incentives, and assistance programs.

Question 13

Jean, a geologic specialist, agreed to accept an overseas assignment for her company after the company agreed to store her yacht, provide security service 24/7, and arrange for Mimi, her cat, to go with her.What kind of pay factor was used?

Accepted Answer

The company's agreement to store Jean's yacht, provide 24/7 security service, and arrange for her cat's relocation are all forms of assistance programs, which are benefits designed to help employees with personal needs.

Question 14

Al's company just instituted a new compensation program for managers.Pay is based on competencies such as leadership, problem solving and strategic planning.Pay levels are preset and reflect the degree of competency.What kind of compensation system was used?

Accepted Answer

The described compensation system is Broad-banding, which groups a wide range of jobs into a few broad bands, with pay based on competencies and the level of those competencies rather than specific job titles or duties. This allows for more flexibility and growth within the company.

Question 15

Shameka is the new compensation manager of a large manufacturing company.She is currently redesigning the pay structure.She wants to be able to break down jobs based on identifiable factors and the degree to which these criteria exist on the different jobs in her company.What job evaluation method should Shameka use?

Accepted Answer

The point method of job evaluation involves breaking down jobs based on identifiable factors (such as skills, responsibilities, effort, and working conditions) and then assigning points to each factor based on the degree to which each factor is present in the job. This method allows for a detailed and quantifiable analysis of job components, which aligns with Shameka's goal of redesigning the pay structure by evaluating jobs based on specific criteria.

Question 16

As the HR manager of Company XYZ., Victoria is currently working on the reward system.She wants to be able to pay and reward employees based on their skills, knowledge, and behaviors.What pay system should Victoria use?

Accepted Answer

The competency-based plan is designed to pay and reward employees based on their skills, knowledge, and behaviors, aligning with Victoria's objectives for the reward system.

Question 17

Which method breaks down jobs based on identifiable criteria and the degree to which these criteria exist on the job?

Accepted Answer

The point method breaks down jobs based on identifiable criteria (such as skills, responsibilities, effort, and working conditions) and the degree to which these criteria exist on the job. Points are assigned to each criterion, and the total points determine the job's relative value.

Question 18

Jon, a U.S.petroleum engineer, moved his family to Saudi Arabia for a two-year assignment.The company provided him a travel allotment, a food allowance of $1000 a month, and $2000 a month for housing to maintain his standard of living.What kind of pay factor was used?

Accepted Answer

Differentials are additional payments made to employees to compensate for differences in cost of living or working conditions, such as the travel allotment, food allowance, and housing provided to Jon.

Question 19

Andres is the general manager of a plant that manufactures tires.He wants to introduce a plant-wide incentive program focusing on cooperation between management and employees through sharing problems, goals, and ideas.What incentive system should Andres use?

Accepted Answer

The Scanlon plan is designed to encourage cooperation between management and employees by focusing on sharing problems, goals, and ideas, which aligns with Andres's objective for the incentive program. This plan typically involves employees in decision-making processes and shares the financial benefits of improved performance.

Question 20

What is the incentive plan that uses a mathematical formula to determine employee bonuses?

Accepted Answer

IMPROSHARE (Improved Productivity through Sharing) is an incentive plan that uses a mathematical formula to determine employee bonuses based on productivity improvements.

Quiz 10: Establishing Rewards and Pay Plans