MJ12e-TB-ch12 - Chapter 12-Total Rewards and Compensation...

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Chapter 12—Total Rewards and Compensation MULTIPLE CHOICE 1. McDonald’s global rewards program has resulted in lower managerial and employee turnover. In this type of total rewards system why would turnover decline? a. All employees benefit from higher pay, and are less likely to quit. b. Employees receive equal bonuses based on growth in McDonald’s profits, and this fair treatment makes employees less likely to quit. c. The increased in employee competition from varying reward levels based on performance encourages high performers to stay. d. Higher performers receive higher incentives than lower performers, so high performers would be less likely to quit. ANS: D PTS: 1 DIF: Challenging REF: p. 359 OBJ: 1 NAT: AACSB Analytic LOC: HRM TOP: Application 2. Compensation is one of the organization’s largest expenditures. Compensation philosophies and sys- tems vary from one organization to the next. Why is that? a. There is no “one right way” to compensate employees. Many systems will work equally well in any organization. b. Different organizations have different organizational objectives and strategies. c. Legal requirements mandate different types of compensation systems depending on the or- ganization’s industry. d. Organizations depend heavily on consultants to design their compensation systems, and each consulting firm has its own system. ANS: B PTS: 1 DIF: Challenging REF: p. 360 OBJ: 1 NAT: AACSB Reflective Thinking LOC: Strategy TOP: Conceptual 3. All of the following are compensation objectives of the organization EXCEPT a. legal compliance with relevant laws and regulations. b. internal, external and individual equity for employees. c. the lowest total cost of compensation in the industry. d. performance enhancement for the organization. ANS: C PTS: 1 DIF: Challenging REF: p. 360 OBJ: 1 NAT: AACSB Reflective Thinking LOC: HRM TOP: Conceptual 4. The total rewards compensation approach has three main components. Which of the following is NOT one of these components? 5. In a total rewards compensation approach, it is critical to balance
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