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MGT205 Human Resource Management

Module 6 Quiz  

Question 1Brenda, the chief technical officer of a telecommunications company, is a member of the Golden Scion Country Club, one of the most exclusive country clubs in the United States. Having a membership in such country clubs is usually expensive. It is, however, free of cost for Brenda as it is paid for by her company. In the given scenario, which of the following options best describes the membership given to Brenda by her company?

  A remittance

  A perquisite

  A life-cycle benefit

  A hardship premium

 Question 2Which of the following is true of an organization’s pay-for-knowledge approach?

  It most likely involves the hourly workers of an organization.

  It refers to an inexpensive method of improving employees’ skills.

  It aligns perfectly with an organization’s traditional incentive systems.

  It rewards employees for mastering information that relates to global issues.

 Question 3Pay compression is least likely to develop when the market rate for starting salaries increases at a rate faster than an organization can raise pay for individuals who are already on the payroll.



 Question 4In the context of mandated employee benefits, the government pays the cost of workers’ compensation insurance.



 Question 5Grenstall Inc., a software development firm, has adopted a new job-evaluation system in which managers are asked to objectively quantify the value of eight to ten compensable factors of each job in the organization. These compensable factors are based on their importance to that particular job and may include skill, physical effort, mental effort, and responsibility so forth. In this system, jobs are compared against a standard of key ratings. Which of the following job-evaluation systems is Grenstall Inc. most likely using in the given scenario?

  The market-basket analysis method

  The classification system

  The factor-comparison method

  The point system

 Question 6Which of the following occurs when individuals with substantially different levels of experience, performance abilities, or both in an organization are paid wages or salaries that are relatively equal?

  Pay compression

  Wage elasticity

  Pay inversion

  External inequity

 Question 7Which of the following refers to the extent to which the compensation of any individual in an organization is formally made available to other individuals?

  Wage and salary administration

  Pay secrecy

  Pay inversion

  Pay compression

 Question 8Bonuses are typically a function of the performance of the organization and are less dependent on the perceived performance of the executive.



 Question 9Which of the following is a problem of the Social Security system?

  Social Security benefits do not directly depend on the withholdings assessed against the employee who is retiring.

  Individuals can avail full Social Security benefits as early as at the age of 55, which puts undue pressure on a firm’s resources.

  The state often lacks a sufficient amount of funds needed to cover all retirees.

  It provides limited income to those retirees who do not have other sources of income, that is, no part-time work or pension plans.

 Question 10Organizations that practice pay secrecy:

  encourage greater camaraderie and teamwork among employees.

  experience pay inversion in the long run.

  believe an individual’s pay is not for public knowledge.

  motivate low performers to work harder for better compensation.

 Question 11Employee assistance plans are designed to help employees who require urgent medical support for family members in case of accidents.



 Question 12The Employee Retirement Income Security Act (ERISA) of 1974:

  prevents organizations from establishing private pension plans.

  provides protection for the funding underlying pension plans.

  includes provisions for minimum wages and child labor.

  makes vesting rights operational after 3 years of service at the most.

 Question 13A leading placement consultancy firm gathered and presented information about the average compensation for attorneys to its clients. This information included data on the compensation paid by other law firms in a specific geographic region. The firm used this information to inform its clients about the companies that have the most external equity. Which of the following methods has the placement consultancy firm most likely used to gather information about compensation rates at different firms?

  Job evaluation

  A pay survey

  A maturity curve

  The point system

Question 14The Social Security system is aimed at providing a minimum subsistence amount to individuals who are between jobs.



 Question 15Barry & Finch, a law firm in Connecticut, performs job evaluation by organizing different sets of jobs in the firm into clusters called grades. The job evaluator then writes definitions and descriptions of each grade, which serves as a tool for deciding the compensation for each job. Which of the following job-evaluation methods is Barry & Finch using in the given scenario?

  The classification system

  The market-basket analysis method

  The factor-comparison method

  The point system

 Question 16Jennifer, an account manager in an automobile company, has work experience of 6 years and has become one of the best employees of the company in the 2 years since joining. However, she resigns from her job when she finds out that most of the new employees with only 2 or 3 years of experience in the company are paid the same salary as hers. In the given scenario, Jennifer most likely resigns because of _____.

  pay compression

  wage elasticity

  pay inversion

  external inequity

 Question 17In the context of nonmandated employee benefits, contributions to private pension plans come solely from the employer.



 Question 18Which of the following statements is true of the Employee Retirement Income Security Act (ERISA) of 1974?

  It prevents organizations from establishing private pension plans.

  It specifies which employees are covered by overtime provisions and which are exempt.

  It allows an employee to carry a portion of his or her benefits to another job.

  It makes vesting rights operational after 4 years of service at the most.

 Question 19The basic aim of the Affordable Care Act was to lower the number of uninsured employees.



 Question 20Which of the following statements is true of life-cycle benefits?

  They can be availed only at the end of an employee’s service with an organization.

  They refer to fitness workshops that help employees stay healthy.

  They include child-care and elder-care benefits.

  They are benefits that an employee’s family receives after the employee’s death.

 Question 21Which of the following is the second step in the factor-comparison method for job evaluation in an organization?

  The comparison factors to be used are selected and defined.

  Benchmark or key jobs in the organization are identified.

  A job-comparison chart is developed to display benchmark jobs.

  The benchmark jobs in the organization are grouped into grades.

 Question 22Which of the following is an issue related to executive compensation?

  Little or no relationship seems to exist between the performance of an organization and the compensation paid to its senior executives.

  Most senior executives are exempt from the perquisites provided by an organization to its employees.

  Executive compensation in the United States is far lower than that paid to senior executives in other countries.

  Executive compensation only involves incentive pay, which is based on the years of service in an organization and commission from the clients brought to it.

 Question 23Workers’ compensation is a nonmandated employee benefit.



Question 24The most commonly used method of job evaluation is the point system.



 Question 25Which of the following statements is true of cafeteria-style benefits plans offered by organizations?

  Cafeteria-style benefits are funded jointly by the employer and the government.

  They typically take the form of referrals for employees with a disabled parent or one who needs constant care.

  Some evidence suggests that these programs can lead to increased satisfaction and reduced turnover.

  They are benefits targeted at different stages in an employee’s life.

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