gomez_tif_10 - Part V Compensation Chapter 10 Managing...

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Part V Compensation Chapter 10 Managing Compensation OBJECTIVE QUESTIONS 1. In the opening case in chapter 10, an experienced computer programmer complains that new hires start at Sigma, Inc. at 15% more than his salary. Dr. Smith’s answer reveals that Sigma’s compensation system is built on a(n) ______ compensation model. a) balanced equity b) distributive justice c) labor market d) free market e) egalitarian Answer: c C--Integration Page: 300 2. In the opening case in chapter 10, a secretary complains that janitors make more money than she does. Her complaints and Dr. Smith’s response show that Sigma’s compensation system: a) may lack internal equity. b) uses variable pay to induce performance. c) uses individual-based pay. d) stresses non-monetary rewards. e) is a decentralized pay system. Answer: a C--Integration Page: 301 3. The compensation system of a company: a) has no bearing on the labor costs of the business. b) relates exclusively to attracting employees. c) has a direct relationship on labor costs and whether employee costs contribute or detract from business profitability. d) is free from all government regulation. e) all of the above Answer: c M--Recall Page: 301 62
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Part V Compensation 4. Compensation consists of a number of elements. An employee’s base compensation: a) is that portion of an employee’s pay mix designed to reward good performance. b) consists of a wide variety of programs, such as health insurance, time off, etc. c) is his/her fixed pay, and is generally the largest part of his/her total compensation package. d) is made up of the special “extras” or perks that are allocated, based on status within the company. e) consists of the bonuses or profit sharing that underpin the employee’s total compensation. Answer: c E--Recall Page: 301 5. Employees’ total compensation consists of which of the following? a) Base compensation, personnel costs, payroll b) Payroll, base compensation, indirect compensation c) Benefits, pay incentives, personnel costs d) Base compensation, pay incentives, indirect compensation e) Payroll, pay incentives, base compensatio Answer: d E--Recall Page: 301 6. Perquisites, also called “perks”: a) are a special type of benefits, generally reserved for upper-level managers. b) are a special type of pay incentive, generally reserved for upper-level managers. c) make up 60% of employees’ total compensation. d) is another name for indirect compensation that includes health benefits, vacation and unemployment compensation. e) make up 30% of employees’ total compensation. Answer: a M--Recall Page: 301 7. Indirect compensation in a pay mix consists of: a) the salary or hourly wage the employee receives on a regular basis. b) the variety of programs, such as health insurance, time off, etc., the employee
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gomez_tif_10 - Part V Compensation Chapter 10 Managing...

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