A Framework for Human Resource Management 7th Edition by Gary Dessler – Test Bank A+

Description

Framework for Human Resource Management, 7e (Dessler)

Chapter 6 Performance Management and Appraisal

1) The process of evaluating an employee’s current and/or past performance relative to his or her performance standards is called ________.

1. A) recruitment
2. B) employee selection
3. C) performance appraisal
4. D) organizational development

Answer: C

Diff: 1 Page Ref: 158

Objective: Chapter objective 1

2) When goal setting, performance appraisal, and development are consolidated into a single, common system designed to ensure that employee performance supports a company’s strategy, it is called ________.

1. A) strategic organizational development
2. B) performance management
3. C) performance appraisal
4. D) human resource management

Answer: B

Diff: 1 Page Ref: 159

Objective: Chapter objective 1

3) Managers following a traditional performance appraisal system will typically meet with employees on a ________ basis.

1. A) weekly
2. B) monthly
3. C) bi-monthly
4. D) yearly

Answer: D

Diff: 2 Page Ref: 159

Objective: Chapter objective 1

4) Which of the following is not one of the guidelines for effective goal setting?

1. A) assign specific goals
2. B) assign measurable goals
3. C) assign challenging but doable goals
4. D) assign consequences for performance

Answer: D

Diff: 2 Page Ref: 160

Objective: Chapter objective 1

5) The “S” in the acronym for SMART goals stands for ________.

1. A) specific
2. B) straightforward
3. C) strategic
4. D) support

Answer: A

Diff: 1 Page Ref: 160

Objective: Chapter objective 1

6) The “M” in the acronym for SMART goals stands for ________.

1. A) moderate
2. B) measurable
3. C) meaningful
4. D) merit

Answer: B

Diff: 2 Page Ref: 160

Objective: Chapter objective 1

7) The “A” in the acronym for SMART goals stands for ________.

1. A) actionable
2. B) appropriate
3. C) attainable
4. D) asset

Answer: C

Diff: 2 Page Ref: 160

Objective: Chapter objective 1

8) Participatively set goals result in higher performance than assigned goals when the ________.

1. A) participatively set goals are more difficult
2. B) assigned goals are more difficult
3. C) rewards are also higher
4. D) goals are doable

Answer: A

Diff: 3 Page Ref: 160

Objective: Chapter objective 1

9) When using goal setting in performance management, the goals should be ________.

1. A) difficult
2. B) doable
3. C) specific
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 160

Objective: Chapter objective 1

10) Who is the primary person responsible for doing the actual appraising of an employee’s performance?

1. A) the employee’s direct supervisor
2. B) the company appraiser
3. C) the EEO contact person
4. D) None of the above.

Answer: A

Diff: 2 Page Ref: 160

Objective: Chapter objective 2

11) Because in most organizations there is a hierarchy of goals, employee performance standards should ________.

1. A) be standard
2. B) make sense in terms of the broader organizational goals
3. C) be decided by the top executive
4. D) All of the above.

Answer: B

Diff: 3 Page Ref: 158

Objective: Chapter objective 1

12) Which of the following is a reason to appraise subordinates’ performance?

1. A) appraisals provide important data for promotion and salary decisions
2. B) appraisal let supervisors and subordinates develop plans to correct performance deficiencies
3. C) appraisals serve as useful career planning purposes
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 158-159

Objective: Chapter objective 1

13) Besides the supervisor, which of the following is available to managers as an alternative source of performance appraisal information?

1. A) peers
2. B) rating committees
3. C) the employee
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 160-161

Objective: Chapter objective 2

14) Which of the following is a valid appraisal source?

1. A) self-ratings
2. B) 360-degree feedback
3. C) subordinates
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 161-162

Objective: Chapter objective 2

15) Which of the following is a way to increase 360-degree appraisals?

1. A) anchor the 360-degree items with behavioral competencies
2. B) assess the costs of the program and carefully train the people giving and receiving feedback
3. C) make sure the feedback given is productive, unbiased ad development oriented
4. D) All of the above.

Answer: A

Diff: 1 Page Ref: 172

Skill: AACSB: Reflective Thinking

Objective: Chapter objective 1

16) Which performance appraisal technique lists traits and a range of performance?

1. A) alternation ranking
2. B) graphic rating scale
3. C) Likert
4. D) MBO
5. E) constant sum rating scale

Answer: B

Diff: 2 Page Ref: 161-162

Objective: Chapter objective 1

17) The ________ method of performance appraisal involves listing all the subordinates to be rated, indicating the employee who is the highest on each characteristic being measured and who is the lowest, and then alternating between the next highest and lowest until all employees have been ranked.

1. A) alternation ranking
2. B) graphic rating scale
3. C) MBO
4. D) constant sum rating scale

Answer: A

Diff: 2 Page Ref: 162

Objective: Chapter objective 3

18) Alternation ranking refers to an appraisal method, which ________.

1. A) is based on progress made toward the accomplishment of measurable goals
2. B) requires that the supervisor keep a log of positive and negative examples of a subordinate’s work-related behavior
3. C) requires a supervisor to evaluate performance by assigning predetermined percentages of those being rated into performance categories
4. D) involves listing all the subordinates to be rated, indicating the employee who is the highest on each characteristic being measured and who is the lowest, and then alternating between the next highest and lowest until all employees have been ranked

Answer: D

Diff: 2 Page Ref: 162

Objective: Chapter objective 3

19) Suppose you have five employees to rate. You make a chart of all possible pairs of employees for each trait being evaluated. Then, you indicate the better employee of the pair for each pair. Finally, you add up the number of positives for each employee. In this case, you have used the ________ method of performance appraisal.

1. A) graphic ranking scale
2. B) alternation ranking
3. C) paired comparison
4. D) forced distribution

Answer: C

Diff: 2 Page Ref: 162

Objective: Chapter objective 3

20) Forced distribution refers to an appraisal method, which ________.

1. A) is based on progress made toward the accomplishment of measurable goals
2. B) combines the benefits of narratives, critical incidents, and quantified scales by assigning scale points with specific examples of good or poor performance
3. C) requires a supervisor to evaluate performance by assigning predetermined percentages of those being rated into performance categories
4. D) involves listing all the subordinates to be rated, indicating the employee who is the highest on each characteristic being measured and who is the lowest, and then alternating between the next highest and lowest until all employees have been ranked

Answer: C

Diff: 2 Page Ref: 162

Objective: Chapter objective 3

21) When a supervisor evaluates performance by assigning predetermined percentages of ratees into performance categories, he or she has used the ________ method of performance appraisal.

1. A) constant sum ranking scale
2. B) alternation ranking
3. C) paired comparison
4. D) forced distribution

Answer: D

Diff: 2 Page Ref: 162

Objective: Chapter objective 3

22) John, the supervisor of the manufacturing department, is in the process of evaluating his staff’s performance. He has determined that 15% of the group will be identified as high performers, 20% as above average performers, 30% as average performers, 20% as below average performers, and 15% as poor performers. John is using a ________ method.

1. A) graphic rating scale
2. B) constant sum ranking scale
3. C) forced distribution
4. D) alternation ranking

Answer: C

Diff: 3 Page Ref: 162

Skill: AACSB: Reflective Thinking

Objective: Chapter objective 3

23) Which of the following measurement methods rates employee performance relative to other employees?

1. A) graphic rating scale
2. B) forced distribution
3. C) Likert scale
4. D) critical incident method

Answer: B

Diff: 2 Page Ref: 162

Objective: Chapter objective 3

24) Which of the following is a criticism of the forced distribution method?

1. A) it damages morale
2. B) it promotes unfairly
3. C) it promotes those who play the game well
4. D) None of the above.

Answer: A

Diff: 2 Page Ref: 162

Objective: Chapter objective 3

25) To protect against bias claims when using the forced distribution method employers should ________.

1. A) appoint a review committee to review any employee’s low ranking
2. B) train raters to be objective
3. C) consider using multiple raters in conjunction with the method
4. D) All of the above.

Answer: D

Diff: 3 Page Ref: 162

Objective: Chapter objective 3

26) With the ________ method, the supervisor keeps a log of positive and negative examples of a subordinate’s work-related behavior.

1. A) alternation ranking
2. B) constant sums rating
3. C) narrative forms
4. D) critical incident

Answer: D

Diff: 1 Page Ref: 166

Objective: Chapter objective 3

27) The critical incident technique refers to an appraisal method, which ________.

1. A) is based on progress made toward the accomplishment of measurable goals
2. B) combines the benefits of narratives, critical incidents, and quantified scales by assigning scale points with specific examples of good or poor performance
3. C) requires that the supervisor keep a log of positive and negative examples of a subordinate’s work-related behavior
4. D) involves listing all the subordinates to be rated, crossing out the names of any not known well enough to rank, indicating the employee who is the highest on each characteristic being measured and who is the lowest, and then alternating between the next highest and lowest until all employees have been ranked

Answer: C

Diff: 2 Page Ref: 166

Objective: Chapter objective 3

28) All of the following are advantages of using the critical incident method for appraising performance except that:

1. A) it provides examples of good performance.
2. B) it does not include a numerical rating.
3. C) it provides examples of poor performance.
4. D) incidents can be tied to performance goals.

Answer: B

Diff: 3 Page Ref: 166, 172

Skill: AACSB: Analytical Skills

Objective: Chapter objective 3

29) Which appraisal method combines the benefits of narratives, critical incidents, and quantified scales by assigning scale points with specific examples of good or poor performance?

1. A) behaviorally anchored rating scale
2. B) graphic rating scale
3. C) alternation ranking
4. D) None of the above.

Answer: A

Diff: 1 Page Ref: 166-167

Objective: Chapter objective 3

30) Behaviorally anchored rating scale (BARS) refers to an appraisal method, which ________.

1. A) is based on progress made toward the accomplishment of measurable goals
2. B) combines the benefits of narratives, critical incidents, and quantified scales by assigning scale points with specific examples of good or poor performance
3. C) requires that the supervisor keep a log of positive and negative examples of a subordinate’s work-related behavior
4. D) requires a supervisor to evaluate performance by assigning predetermined percentages of those being rated into performance categories

Answer: B

Diff: 2 Page Ref: 166-167

Objective: Chapter objective 3

31) Management by objectives (MBO) refers to an appraisal method, which ________.

1. A) is based on progress made toward the accomplishment of measurable goals
2. B) combines the benefits of narratives, critical incidents, and quantified scales by assigning scale points with specific examples of good or poor performance
3. C) requires that the supervisor keep a log of positive and negative examples of a subordinate’s work-related behavior
4. D) involves listing all the subordinates to be rated, crossing out the names of any not known well enough to rank, indicating the employee who is the highest on each characteristic being measured and who is the lowest, and then alternating between the next highest and lowest until all employees have been ranked

Answer: A

Diff: 2 Page Ref: 166-167

Objective: Chapter objective 3

32) What is the first step in the Management by Objectives Method?

1. A) set the organization’s goals
2. B) set departmental goals
3. C) discuss departmental goals
4. D) define expected results

Answer: A

Diff: 2 Page Ref: 166

Objective: Chapter objective 3

33) What is the second step in the Management by Objectives Method?

1. A) set the organization’s goals
2. B) set departmental goals
3. C) discuss departmental goals
4. D) define expected results

Answer: B

Diff: 2 Page Ref: 166

Objective: Chapter objective 3

34) What is the third step in the Management by Objectives Method?

1. A) set the organization’s goals
2. B) set departmental goals
3. C) discuss departmental goals
4. D) define expected results

Answer: C

Diff: 2 Page Ref: 166

Objective: Chapter objective 3

35) What is the fourth step in the Management by Objectives Method?

1. A) set the organization’s goals
2. B) set departmental goals
3. C) discuss departmental goals
4. D) define expected results

Answer: D

Diff: 2 Page Ref: 166

Objective: Chapter objective 3

36) What is the fifth step in the Management by Objectives Method?

1. A) conduct performance reviews and measure the results
2. B) set departmental goals
3. C) discuss departmental goals
4. D) define expected results

Answer: A

Diff: 2 Page Ref: 167

Objective: Chapter objective 3

37) In how many ways is performance management different from performance appraisal?

1. A) 4
2. B) 3
3. C) 2
4. D) None

Answer: A

Diff: 2 Page Ref: 179

Objective: Chapter objective 6

38) Which of the following is a reason for the use of performance management in organizations?

1. A) it contributes to total quality
2. B) it is better than performance appraisal
3. C) it is important because it helps in strategic planning
4. D) All of the above.

Answer: D

Diff: 2 Page Ref: 167

Objective: Chapter objective 6

39) What is the last step in the Management by Objectives Method?

1. A) provide feedback
2. B) set departmental goals
3. C) discuss departmental goals
4. D) define expected results

Answer: A

Diff: 2 Page Ref: 180

Objective: Chapter objective 3

40) When different supervisors define levels of performance (good, fair, poor) differently, unfair appraisals could result due to a problem with ________.

1. A) unclear standards
2. B) halo effects
3. C) complexity
4. D) leniency

Answer: A

Diff: 2 Page Ref: 185

Objective: Chapter objective 5

41) ________ is defined as the influence of a rater’s general impression on ratings of specific ratee qualities.

1. A) Impression management
2. B) Halo effect
3. C) Central tendency
4. D) Bias

Answer: B

Diff: 2 Page Ref: 171

Objective: Chapter objective 4

42) Jason is generally considered unfriendly at work. His supervisor rates him low on the trait “gets along well with others” but also rates him lower on other traits unrelated to socialization at work. Jason’s performance appraisal may be unfair due to ________.

1. A) impression management
2. B) stereotyping
3. C) halo effects
4. D) strictness

Answer: C

Diff: 3 Page Ref: 171

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

43) Some supervisors, when filling in rating scales, tend to avoid the highs and lows on the scale and rate most people in the middle. This ________ means that all employees may be rated average.

1. A) stereotyping
2. B) central tendency
3. C) strictness
4. D) leniency

Answer: B

Diff: 2 Page Ref: 171

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

44) The best way of reducing the problem of central tendency in performance appraisals is to ________.

1. A) rank employees
2. B) be aware of the problem
3. C) train supervisors to avoid it
4. D) consider the purpose of the appraisal

Answer: A

Diff: 3 Page Ref: 185

Objective: Chapter objective 5

45) The ________ problem occurs when supervisors tend to rate all their subordinates consistently high.

1. A) leniency
2. B) strictness
3. C) bias
4. D) halo effect

Answer: A

Diff: 1 Page Ref: 171

Objective: Chapter objective 4

46) The ________ problem occurs when supervisors tend to rate all their subordinates consistently low.

1. A) central tendency
2. B) leniency
3. C) strictness
4. D) bias

Answer: C

Diff: 1 Page Ref: 171

Objective: Chapter objective 4

47) One personality study focused on how individual traits influenced the evaluations that students gave their peers. Raters who scored higher on ________ tended to give their peers lower ratings.

1. A) agreeableness
2. B) extroversion
3. C) conscientiousness
4. D) openness

Answer: C

Diff: 3 Page Ref: 171

Objective: Chapter objective 4

48) Which personality trait is associated with performance appraisal ratings that are too lenient?

1. A) agreeableness
2. B) extroversion
3. C) conscientiousness
4. D) openness

Answer: A

Diff: 3 Page Ref: 171

Objective: Chapter objective 4

49) One way of reducing the problems of leniency or strictness in performance appraisals is to ________.

1. A) rank employees
2. B) be aware of the problem
3. C) train supervisors to avoid it
4. D) consider the purpose of the appraisal

Answer: A

Diff: 3 Page Ref: 171

Objective: Chapter objective 4

50) When an employee’s personal characteristics such as gender influence a supervisor’s evaluation of his or her performance, the problem of ________ has occurred.

1. A) bias
2. B) stereotyping
3. C) central tendency
4. D) halo affect

Answer: A

Diff: 3 Page Ref: 171

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

51) Which of the following could result in a legally questionable appraisal process?

1. A) conduct a job analysis to establish criteria and standards for successful performance
2. B) base appraisals on subjective supervisory observations
3. C) administer and score appraisals in a standardized fashion
4. D) use clearly defined job performance dimensions

Answer: B

Diff: 3 Page Ref: 173

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

52) Who is in the best position to observe and evaluate an employee’s performance for the purposes of a performance appraisal?

1. A) peers
2. B) rating committees
3. C) top management
4. D) immediate supervisor

Answer: D

Diff: 1 Page Ref: 162

Skill: AACSB: Analytical Skills

Objective: Chapter objective 2

53) Performance appraisals may be conducted by ________.

1. A) the immediate supervisor
2. B) peers
3. C) rating committees
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 160-162

Objective: Chapter objective 2

54) Rating committees, made up of an employee’s immediate supervisor along with other supervisors, usually have ________ other members.

1. A) 1-2
2. B) 3-4
3. C) 6-7
4. D) 8-9

Answer: B

Diff: 2 Page Ref: 161

Objective: Chapter objective 2

55) Peer appraisals have been shown to result in a(n) ________.

1. A) reduction of social loafing in the team
2. B) reduction of group cohesion
3. C) decrease in satisfaction with the group
4. D) tendency to inaccurately predict who would be promoted

Answer: A

Diff: 3 Page Ref: 161

Skill: AACSB: Reflective Thinking

Objective: Chapter objective 2

56) What usually occurs when employees rate themselves in a performance appraisal?

1. A) interrater reliability is higher
2. B) appraisals are subject to halo effects
3. C) ratings are higher than when rated by supervisors or peers
4. D) ratings are about the same as when determined by peers

Answer: C

Diff: 1 Page Ref: 161

Objective: Chapter objective 2

57) Firms that use ________ let subordinates anonymously rate their supervisor’s performance.

1. A) downward feedback
2. B) upward feedback
3. C) narratives
4. D) critical incidents

Answer: B

Diff: 2 Page Ref: 161

Objective: Chapter objective 2

58) What process allows top management to diagnose the management styles of supervisors, identify potential “people” problems, and take corrective action with individual supervisors as necessary?

1. A) strategic performance appraisal
2. B) organizational development
3. C) upward feedback
4. D) critical incidents

Answer: C

Diff: 3 Page Ref: 161

Skill: AACSB: Analytical Skills

Objective: Chapter objective 2

59) When subordinates provide feedback for supervisors, the comments should be anonymous because identifiable responses tend to result in more ________.

1. A) critical ratings
2. B) negative attitudes from managers receiving the feedback
3. C) inflated ratings
4. D) All of the above.

Answer: C

Diff: 3 Page Ref: 161

Skill: AACSB: Communication

Objective: Chapter objective 2

60) ________ is a process for enabling employees to better understand and develop their career skills and interests and to use these skills and interests most effectively within the company and afterwards.

1. A) Organizational development
2. B) Career management
3. C) Career development
4. D) Career planning

Answer: B

Diff: 1 Page Ref: 174-175

Objective: Chapter objective 5

61) Career management refers to the ________.

1. A) the lifelong series of activities that contributes to a person’s career exploration, establishment, success, and fulfillment
2. B) process for enabling employees to better understand and develop their career skills and interests and to use these skills and interests most effectively within the company and afterwards
3. C) process of using activities like training and appraisal to provide a career focus
4. D) occupational positions a person has over his or her lifetime

Answer: B

Diff: 2 Page Ref: 174-175

Objective: Chapter objective 5

62) The lifelong series of activities that contributes to a person’s career exploration, establishment, success, and fulfillment is called ________.

1. A) organizational development
2. B) career management
3. C) career development
4. D) career planning

Answer: C

Diff: 1 Page Ref: 175

Objective: Chapter objective 5

63) Career development refers to the ________.

1. A) process through which someone becomes aware of personal skills, interests, knowledge, motivations; acquires information about opportunities; identifies career goals; and establishes action plans to attain those goals
2. B) the lifelong series of activities that contributes to a person’s career exploration, establishment, success, and fulfillment
3. C) process for enabling employees to better understand and develop their career skills and interests and to use these skills and interests most effectively within the company and afterwards
4. D) process of using activities like training and appraisal to provide a career focus

Answer: B

Diff: 2 Page Ref: 175

Objective: Chapter objective 5

64) Career planning refers to the ________.

1. A) process through which someone becomes aware of personal skills, interests, knowledge, motivations; acquires information about opportunities; identifies career goals; and establishes action plans to attain those goals
2. B) the lifelong series of activities that contributes to a person’s career exploration, establishment, success, and fulfillment
3. C) process of using activities like training and appraisal to provide a career focus
4. D) occupational positions a person has over his or her lifetime

Answer: A

Diff: 2 Page Ref: 175

Objective: Chapter objective 5

65) The process through which someone becomes aware of personal skills, interests, knowledge, motivations; acquires information about opportunities; identifies career goals; and establishes action plans to attain those goals is called ________.

1. A) organizational development
2. B) career management
3. C) career development
4. D) career planning

Answer: D

Diff: 1 Page Ref: 175

Objective: Chapter objective 5

66) Jackie is working with a coach to identify her personal skills and interests. Then she plans to get information about opportunities that fit her skills and interests and set career goals for what she seeks to accomplish. Jackie is in the midst of ________.

1. A) organizational development
2. B) career development
3. C) career planning
4. D) training

Answer: C

Diff: 1 Page Ref: 175

Skill: AACSB: Analytical Skills

Objective: Chapter objective 5

67) Who is responsible for the planning, guiding, and developing an employee’s career?

1. A) the immediate supervisor
2. B) the employee
3. C) the organization
4. D) the development officer

Answer: B

Diff: 1 Page Ref: 175

Objective: Chapter objective 5

68) Responsibility for career development should always be left to the ________.

1. A) employee
2. B) supervisor
3. C) manager
4. D) career success team

Answer: A

Diff: 1 Page Ref: 175

Objective: Chapter objective 5

69) Assessing interests, seeking out career information, and utilizing development opportunities are all part of the ________ role in career development.

1. A) individual’s
2. B) manager’s
3. C) supervisor’s
4. D) company’s

Answer: A

Diff: 2 Page Ref: 175

Objective: Chapter objective 5

70) When Amanda interviewed for a job with the employment commission, the interviewer warned her that the job could be very stressful with long hours and a lot of bureaucracy. The interviewer was trying to provide ________.

1. A) reality shock
2. B) a realistic job interview
3. C) disincentive
4. D) a challenge

Answer: B

Diff: 2 Page Ref: 176

Objective: Chapter objective 5

71) Miranda wants to make partner at her law firm. She is worried, though, because everyone understands that 70-hour work weeks are the norm for someone striving to make partner. Miranda wants to be fair to her family as well as excel at work. To address this problem, the law firm could help by ________.

1. A) providing Miranda with a career coach
2. B) encouraging Miranda to join a career success team
3. C) eliminating institutional barriers that disproportionately affect women
4. D) encouraging Miranda to temporarily work in a different job

Answer: C

Diff: 2 Page Ref: 177

Skill: AACSB: Analytical Skills

Objective: Chapter objective 5

72) Which of the following best captures the meaning of the term, glass ceiling?

1. A) structural, yet subtle barriers in corporate environments which inhibit the rise of talented women to positions of leadership
2. B) inadequate networking opportunities which result in a lack of an “old girl’s network” to mirror that of men
3. C) unspoken decision by corporate leadership that women should not be encouraged to advance beyond middle management levels
4. D) the lack of desire among women to pursue jobs with extreme levels of responsibility and authority

Answer: A

Diff: 2 Page Ref: 177

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 5

73) What is another term for 360-degree feedback?

1. A) feedback loop
2. B) multi-source feedback
3. C) upward feedback
4. D) wheel feedback

Answer: B

Diff: 3 Page Ref: 161

Skill: AACSB: Reflective Thinking

Objective: Chapter objective 1

74) When conducting an appraisal interview, supervisors should do all of the following except:

1. A) compare the person’s performance to a standard.
2. B) encourage the employee to talk.
3. C) give specific examples of poor performance.
4. D) compare the person’s performance to that of other employees.

Answer: D

Diff: 3 Page Ref: 173

Skill: AACSB: Communication

Objective: Chapter objective 4

75) When a supervisor must criticize a subordinate in an appraisal interview, it is best to ________.

1. A) hold the meeting with other people who can diffuse the negative situation
2. B) provide examples of critical incidents
3. C) acknowledge the supervisor’s personal biases in the situation
4. D) provide feedback once per year

Answer: B

Diff: 3 Page Ref: 166

Objective: Chapter objective 3

76) Performance appraisals assume that the employee understood what his or her performance standards were.

Answer: TRUE

Diff: 1 Page Ref: 158

Objective: Chapter objective 1

77) Managers should appraise employees with respect to the specific goals by which he or she expected to be measured.

Answer: TRUE

Diff: 1 Page Ref: 158

Objective: Chapter objective 1

78) Setting useful goals is easy to do.

Answer: FALSE

Diff: 1 Page Ref: 160

Objective: Chapter objective 1

79) Most managers are very willing and able to set measurable goals for their subordinates.

Answer: FALSE

Diff: 1 Page Ref: 160

Objective: Chapter objective 1

80) 360-Degree feedback is usually used for developmental purposes rather than pay purposes.

Answer: TRUE

Diff: 1 Page Ref: 166

Objective: Chapter objective 1

81) The forced distribution method is sometimes referred to as the “rank and yank” method.

Answer: TRUE

Diff: 2 Page Ref: 162

Objective: Chapter objective 2

82) The critical incident method forces supervisors to consider all the important aspects of an employee’s performance.

Answer: TRUE

Diff: 1 Page Ref: 166

Objective: Chapter objective 3

83) In practice, appraisal forms often blend several approaches to appraisal into one.

Answer: TRUE

Diff: 2 Page Ref: 166

Objective: Chapter objective 3

84) Electronic performance monitoring seems to raise employee stress levels.

Answer: TRUE

Diff: 2 Page Ref: 168-170

Objective: Chapter objective 3

85) A properly designed performance management system utilizes yearly meetings to ensure continuous improvement in the employee’s capacity and performance.

Answer: FALSE

Diff: 2 Page Ref: 159

Objective: Chapter objective 1

86) Goals should be challenging, but not so difficult that they appear impossible or unrealistic.

Answer: TRUE

Diff: 1 Page Ref: 160

Objective: Chapter objective 1

87) The evidence suggests that participatively set goals consistently result in higher performance than assigned goals.

Answer: FALSE

Diff: 2 Page Ref: 160

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

88) The HR department conducts performance appraisals, develops the appraisal tools, and monitors the appraisal system.

Answer: FALSE

Diff: 3 Page Ref: 162

Objective: Chapter objective 2

89) Once you have a supervisor to conduct a performance appraisal there is no need to worry about anything else.

Answer: FALSE

Diff: 3 Page Ref: 162

Objective: Chapter objective 2

90) The alternation ranking method is the simplest and most popular technique for appraising performance.

Answer: FALSE

Diff: 2 Page Ref: 162

Objective: Chapter objective 2

91) Quantitative goals are best.

Answer: TRUE

Diff: 2 Page Ref: 160, 172

Objective: Chapter objective 1

92) The forced distribution method is similar to grading on a curve meaning that predetermined percentages of those being rated are placed into performance categories.

Answer: TRUE

Diff: 2 Page Ref: 162

Objective: Chapter objective 2

93) The basic problem with rankings is that while it is not difficult to identify the extreme good and bad performers, it is difficult to differentiate meaningfully between the others.

Answer: TRUE

Diff: 3 Page Ref: 165

Objective: Chapter objective 3

94) BARS is a rating approach that involves keeping a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing it with the employee at predetermined times.

Answer: FALSE

Diff: 1 Page Ref: 166

Objective: Chapter objective 3

95) MBO relates an employee’s work goals to his or her departmental goals and to the organization’s goals.

Answer: TRUE

Diff: 2 Page Ref: 166-167

Objective: Chapter objective 3

96) Electronic performance monitoring (EPM) allows supervisors to electronically monitor the amount of computerized data an employee is process each day.

Answer: TRUE

Diff: 1 Page Ref: 168-170

Skill: AACSB: Use of IT

Objective: Chapter objective 3

97) The advantages of the BARS appraisal tool include accuracy, clear standards, and consistency.

Answer: TRUE

Diff: 2 Page Ref: 166

Objective: Chapter objective 3

98) Graphic rating scales are the most reliable for rating performance.

Answer: FALSE

Diff: 2 Page Ref: 162-164

Objective: Chapter objective 3

99) Central tendency is defined as the influence of a rater’s general impression on ratings of specific ratee qualities.

Answer: FALSE

Diff: 2 Page Ref: 171

Objective: Chapter objective 4

100) Peer appraisals have been shown to have an immediate positive impact on improving task motivation, cohesion, and satisfaction, while reducing social loafing.

Answer: TRUE

Diff: 2 Page Ref: 160-161

Objective: Chapter objective 2

101) Managers who receive feedback from subordinates who identify themselves view the upward appraisal process more negatively than do managers who receive anonymous feedback.

Answer: FALSE

Diff: 3 Page Ref: 161

Objective: Chapter objective 1

102) An appraisal interview is used to make plans for new hires as they move through the selection and training process.

Answer: FALSE

Diff: 2 Page Ref: 172-173

Objective: Chapter objective 4

103) Career development is the lifelong series of activities that contributes to a person’s career exploration, establishment, success, and fulfillment.

Answer: TRUE

Diff: 1 Page Ref: 175

Objective: Chapter objective 5

104) A career is the occupational positions one holds at a single organization.

Answer: FALSE

Diff: 1 Page Ref: 174-175

Objective: Chapter objective 5

105) The employee, the manager, and the employer should all share the responsibility for an employee’s career development and career success.

Answer: FALSE

Diff: 1 Page Ref: 176

Objective: Chapter objective 5

106) Matching individual strengths and weaknesses with occupational opportunities and threats is the key to the career planning process.

Answer: TRUE

Diff: 2 Page Ref: 175

Objective: Chapter objective 7

107) The barriers for women to advance at work are referred to as the glass ceiling because it is so easy to break through it.

Answer: FALSE

Diff: 2 Page Ref: 177

Objective: Chapter objective 5

108) 360-degree feedback is generally used for development purposes, rather than for pay increases.

Answer: TRUE

Diff: 2 Page Ref: 177

Objective: Chapter objective 5

109) 360-degree feedback is sometimes called the wheel of feedback because ratings are collected from all around an employee.

Answer: FALSE

Diff: 1 Page Ref: 177

Objective: Chapter objective 5

110) Explain what the SMART acronym tells us about goal setting.

Answer: SMART stands for specific, measurable, attainable, relevant, and timely. Goals should be specific and the desired result should be clearly stated. The goals should be measurable and answer the question “how much.” The goals should be attainable and not too difficult or too easy. The goals should be relevant and clearly derive from what the manager and the company want to achieve. The goals should be timely and reflect deadlines and milestones.

Diff: 2 Page Ref: 160

Skill: AACSB: Communication

Objective: Chapter objective 2

111) Why do we have performance management?

Answer: Performance management is necessary because it leads to quality improvement, it is more appropriate than performance appraisals and it is an important in strategic planning.

Diff: 2 Page Ref: 179

Skill: AACSB: Communication

Objective: Chapter objective 6

112) Explain the three steps in the performance appraisal process.

Answer: The performance appraisal process itself contains three steps: 1) give the subordinate enough notice to review his or her work, and to compile questions and comments, 2) study his or her job description, compare the employee’s performance to his or her standards, and review the files of the person’s previous appraisals, and 3) find a mutually agreeable time for the interview and leave enough time—perhaps one half-hour—for lower-level personnel such as clerical workers and maintenance staff, and an hour or so for management employees. Defining the job means making sure the manager and employee agree on his or her duties and job standards. Appraising performance means comparing the employee’s actual performance to the standards that have been set. Finally, the performance appraisal process requires one or more feedback sessions. In these sessions, the manager and employee discuss the employee’s performance and progress and make plans for any development required.

Diff: 3 Page Ref: 173

Skill: AACSB: Reflective Thinking

Objective: Chapter objective 1

113) Explain how an MBO program works and describe the six steps involved in this type of program.

Answer: MBO programs basically require managers to set specific and measurable goals with each employee and then to periodically discuss the employee’s progress toward these goals. It is usually a comprehensive, organization-wide goal setting and appraisal program. The six steps it consists of are listed below:

• Step 1: Set the organization’s goals. The first step involves the establishment of an organization-wide plan for the coming year and to set company goals.
• Step 2: Set departmental goals. Next, department heads will take these company goals and, in conjunction with their superiors, set goals for their departments.
• Step 3: Discuss departmental goals. Department heads will discuss the departmental goals with all subordinates and ask employees to set their own preliminary individual goals. These individual goals should show how each employee can contribute to the department’s goals.
• Step 4: Define expected results. Department heads and their employees set short-term individual performance targets.
• Step 5: Performance reviews. Department heads compare each employee’s actual and targeted performance.
• Step 6: Provide feedback. Department heads and employees discuss and evaluate the employee’s progress.

Diff: 2 Page Ref: 166-167

Skill: AACSB: Communication

Objective: Chapter objective 3

114) There are several guidelines for developing an appraisal that is legally defensible. Identify four of these guidelines.

Answer:

Seven guidelines are given in the text.

• Base performance appraisal criteria on a documented job analysis.
• At the start of the period, communicate performance standards in writing.
• Base appraisals on separate evaluations of each of the job’s performance dimensions.
• Include an employee appeals process.
• One appraiser should never have absolute authority to determine a personnel action.
• Document all information in writing.
• Train supervisors to use the appraisal instruments.

(The student should elaborate on the four chosen to show comprehension of the material.)

Diff: 3 Page Ref: 173

Skill: AACSB: Communication

Objective: Chapter objective 4

115) What is the main difference between performance appraisal and performance management?

Answer: Performance management focuses on continuously monitoring and aligning employees’ performance with their goals. On the other hand, performance appraisal focuses on evaluating past performance.

Diff: 2 Page Ref: 179

Objective: Chapter objective 6

116) What roles and responsibilities should a manager have in an employee’s career development?

Answer: The manager should provide timely performance feedback, developmental assignments and support. The manager should participate in career development discussions. The manager should support employee development plans.

Diff: 1 Page Ref: 179

Skill: AACSB: Communication

Objective: Chapter objective 6

117) What steps can organizations take to enhance the promotional and career prospects for their female employees?

Answer: There are several steps companies can take to enhance the prospects for women. First, organizations should take the career interests of women employees seriously. They should identify institutional barriers and eliminate them. For instance, requiring late evening meetings disproportionately affects women. Companies should improve the opportunities for networking and mentoring. They should eliminate the glass ceiling; though this is a difficult challenge. Finally, companies can institute flexible schedules to provide women the opportunity to meet their obligations at home and at work successfully. Likewise, instituting career tracks can enable women to periodically reduce their time at work while still remaining on a career track.

Diff: 2 Page Ref: 177

Skill: AACSB: Communication

Objective: Chapter objective 5

A Framework for Human Resource Management, 7e (Dessler)

Chapter 7 Compensating Employees

1) ________ refers to all forms of pay or rewards going to employees and arising from their employment.

1. A) Reimbursement
2. B) Employee compensation
3. C) Salary
4. D) Benefits

Answer: B

Diff: 1 Page Ref: 188

Objective: Chapter objective 1

2) Direct financial payments include all of the following except:

1. A) wages.
2. B) insurance.
3. C) salaries.
4. D) incentives.

Answer: B

Diff: 1 Page Ref: 188

Objective: Chapter objective 1

3) Which of the following is categorized as an indirect payment portion of employee compensation?

1. A) wages
2. B) salaries
3. C) employer-paid insurance
4. D) bonuses

Answer: C

Diff: 2 Page Ref: 188

Objective: Chapter objective 1

4) Which of the following factors affects the design of any pay plan?

1. A) legal
2. B) union
3. C) equity
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 188

Objective: Chapter objective 2

5) Which compensation-related law contains minimum wage, maximum hours, overtime pay, equal pay, and child labor provisions?

1. A) Davis-Bacon Act
2. B) Fair Wages Act
3. C) Civil Rights Act
4. D) Fair Labor Standards Act

Answer: D

Diff: 3 Page Ref: 188

Objective: Chapter objective 1

6) Which of the following is addressed by the Fair Labor Standards Act?

1. A) minimum wage
2. B) maximum hours
3. C) child labor
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 188

Objective: Chapter objective 1

7) The Fair Labor Standards Act covers workers employed in ________.

1. A) manufacturing
2. B) retailing
3. C) service industries
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 188

Objective: Chapter objective 1

8) Which law makes it illegal to discriminate against any individual with respect to compensation because of race, color, religion, sex, or national origin?

1. A) Fair Labor Standards Act
2. B) Civil Rights Act
3. C) Employer Retirement Income Security Act
4. D) Davis-Bacon Act

Answer: B

Diff: 2 Page Ref: 189

Objective: Chapter objective 1

9) According to the Fair Labor Standards Act, if a worker covered by the act works more than 40 hours, he or she will receive overtime pay at a rate of ________ of normal pay for any hours worked over 40 in a workweek.

1. A) 50%
2. B) 100%
3. C) 125%
4. D) 150%

Answer: D

Diff: 3 Page Ref: 188

Objective: Chapter objective 1

10) Jill works as a cashier at a grocery store. She earns $8 an hour (or $320 for a 40-hour week). Last week, she worked 44 hours. Given standard requirements from the FLSA, what did she earn last week?

1. A) $320
2. B) $336
3. C) $344
4. D) $368

Answer: D

Diff: 3 Page Ref: 188

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

11) Jack worked 6 hours of overtime this week but has decided to take time off instead of overtime pay. How many hours will Jack get off?

1. A) 3 hours
2. B) 6 hours
3. C) 9 hours
4. D) 12 hours

Answer: C

Diff: 3 Page Ref: 188

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

12) Which of the following occupations must adhere to overtime and minimum pay provisions stated in the Fair Labor Standards Act?

1. A) paralegals
2. B) pharmacists
3. C) attorneys
4. D) department heads

Answer: A

Diff: 2 Page Ref: 188

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

13) All of the following occupations are exempt from the overtime provisions stated in the Fair Labor Standards Act except:

1. A) physicians.
2. B) dentists.
3. C) management trainees.
4. D) teachers.

Answer: C

Diff: 2 Page Ref: 188

Objective: Chapter objective 1

14) The ________ states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work.

1. A) American Disabilities Act
2. B) Civil Rights Act
3. C) Employer Retirement Income Security Act
4. D) Equal Pay Act

Answer: D

Diff: 2 Page Ref: 202189

Objective: Chapter objective 1

15) Under which condition is it acceptable for employees of the opposite sex to receive different pay for doing roughly equivalent work?

1. A) when the difference exists despite equal skills
2. B) when the difference exists despite similar responsibility
3. C) when the difference exists because of a merit system
4. D) it is never acceptable

Answer: C

Diff: 3 Page Ref: 189

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

16) Which of the following professions is considered “nonexempt” from provisions of the Fair Labor Standards Act?

1. A) attorney
2. B) physician
3. C) management trainee
4. D) general manager

Answer: C

Diff: 2 Page Ref: 188

Objective: Chapter objective 1

17) The ________ prohibits discriminating against employees who are 40 years of age and older in all aspects of employment, including compensation.

1. A) Fair Labor Standards Act
2. B) Civil Rights Act
3. C) Equal Pay Act
4. D) Age Discrimination in Employment Act

Answer: D

Diff: 2 Page Ref: 189

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

18) According to the Family and Medical Leave Act, eligible employees can take up to ________ weeks of unpaid, job-protected leave for the birth of a child or for the care of a child, spouse, or parent.

1. A) two
2. B) four
3. C) six
4. D) twelve

Answer: D

Diff: 2 Page Ref: 204

Objective: Chapter objective 1

19) According to the Family and Medical Leave Act, eligible employees can take unpaid, job-protected leave for the ________.

1. A) care of a child
2. B) birth of a child
3. C) care of a parent
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 204

Objective: Chapter objective 1

20) Which of the following is true for employers who use independent contractors?

1. A) Fair Labor Standards Act regulations do not apply
2. B) Social Security taxes are higher than for regular employees
3. C) State income taxes are charged at a higher rate
4. D) Social Security taxes are charged at a higher rate

Answer: A

Diff: 2 Page Ref: 189

Objective: Chapter objective 1

21) The ________ allows a firm to borrow against employee stock held in trust.

1. A) Fair Labor Standards Act
2. B) Civil Rights Act
3. C) Employer Retirement Income Security Act
4. D) National Labor Relations Act

Answer: C

Diff: 2 Page Ref: 201

Objective: Chapter objective 1

22) Historically, the main issue in collective bargaining is ________.

1. A) time off with pay
2. B) wage rates
3. C) income security
4. D) health care benefits

Answer: B

Diff: 2 Page Ref: 190

Objective: Chapter objective 1

23) Unions negotiate all of the following pay-related issues except:

1. A) wage rates
2. B) income security
3. C) unpaid leave to care for an immediate family member
4. D) time off with pay

Answer: C

Diff: 3 Page Ref: 204

Objective: Chapter objective 1

24) Which form of equity refers to how a job’s pay rate in one company compares to the job’s pay rate in other companies?

1. A) external
2. B) internal
3. C) distributive
4. D) procedural

Answer: A

Diff: 3 Page Ref: 190

Objective: Chapter objective 1

25) Jason is an information systems technician in a town in North Carolina with a population of 100,000. He earns $35,000/year. He recently found out that a nearby town with a similar population pays people in the same position $40,000/year. Jason is concerned with the ________ form of equity.

1. A) distributive
2. B) procedural
3. C) internal
4. D) external

Answer: D

Diff: 3 Page Ref: 190

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

26) Which form of equity refers to how fair a job’s pay rate is, when compared to other jobs within the same company?

1. A) external
2. B) internal
3. C) distributive
4. D) individual

Answer: B

Diff: 1 Page Ref: 190

Objective: Chapter objective 1

27) Jack is a sales manager and he recently learned that human resource managers with similar responsibilities and spans of control earn more than he does. Jack is concerned with the ________ form of equity.

1. A) external
2. B) internal
3. C) distributive
4. D) individual

Answer: B

Diff: 3 Page Ref: 190

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

28) External equity refers to ________.

1. A) how a job’s pay rate in one company compares the job’s pay rate in other companies
2. B) how fair the job’s pay rate is, when compared to other jobs within the same company
3. C) the fairness of an individual’s pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual’s performance
4. D) the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay

Answer: A

Diff: 2 Page Ref: 190

Objective: Chapter objective 1

29) Internal equity refers to ________.

1. A) how a job’s pay rate in one company compares the job’s pay rate in other companies
2. B) how fair the job’s pay rate is, when compared to other jobs within the same company
3. C) the fairness of an individual’s pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual’s performance
4. D) the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay

Answer: B

Diff: 2 Page Ref: 190

Objective: Chapter objective 1

30) ________ is a formal and systematic comparison of jobs to determine the worth of one job relative to another.

1. A) Job analysis
2. B) Job evaluation
3. C) Benchmark analysis
4. D) Job ranking

Answer: B

Diff: 1 Page Ref: 191

Objective: Chapter objective 2

31) Which of the following is not one of the compensable factors emphasized in the Equal Pay Act?

1. A) skills
2. B) effort
3. C) accountability
4. D) responsibility

Answer: C

Diff: 2 Page Ref: 191

Objective: Chapter objective 2

32) Factors that establish how the jobs compare to one another and set the pay for each job are called ________ factors.

1. A) compensable
2. B) job evaluation
3. C) ranking
4. D) analysis

Answer: A

Diff: 1 Page Ref: 191

Objective: Chapter objective 2

33) When using the job classification method of job evaluation, raters categorize jobs into groups of similar jobs called ________.

1. A) classes
2. B) grades
3. C) sections
4. D) cohorts

Answer: A

Diff: 2 Page Ref: 191

Objective: Chapter objective 2

34) When using the job classification method of job evaluation, raters categorize jobs into groups of jobs that are similar in difficulty but not in context called ________.

1. A) classes
2. B) grades
3. C) sections
4. D) cohorts

Answer: B

Diff: 2 Page Ref: 191

Objective: Chapter objective 2

35) The point method of job evaluation entails ________.

1. A) identifying several compensable factors, each having several degrees, and the degree to which each of these factors is present in the job
2. B) ranking each job relative to all other jobs based on some overall factor
3. C) using raters to categorize jobs into groups
4. D) deciding which jobs have more of the chosen compensable factors

Answer: A

Diff: 2 Page Ref: 192

Objective: Chapter objective 2

36) Which job evaluation method is a quantitative technique involving the identification of several compensable factors and the degree to which each of these factors is present in the job?

1. A) ranking method
2. B) point method
3. C) factor comparison
4. D) job classification method

Answer: B

Diff: 2 Page Ref: 192

Objective: Chapter objective 2

37) A ________ is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

1. A) pay group
2. B) benchmark
3. C) pay grade
4. D) class

Answer: C

Diff: 1 Page Ref: 192

Objective: Chapter objective 2

38) The ________ shows the pay rates currently paid for jobs in each pay grade, relative to the points or rankings assigned to each job or grade by the job evaluation.

1. A) pay group
2. B) pay grade
3. C) class
4. D) wage curve

Answer: D

Diff: 1 Page Ref: 193

Objective: Chapter objective 2

39) What is the purpose of the wage curve?

1. A) to show the relationship between the value of the job as determined by one of the job evaluation methods and the current average pay rates for your grades
2. B) to equate jobs of approximately equal difficulty or importance as established by job evaluation
3. C) to assign pay rates to pay grades
4. D) to choose benchmark jobs within each pay grade

Answer: A

Diff: 3 Page Ref: 193

Objective: Chapter objective 2

40) Which of the following is typically included in compensation packages for a company’s top executives?

1. A) short-term and long-term incentives
2. B) perks
3. C) executive benefits
4. D) All of the above.

Answer: D

Diff: 1 Page Ref: 196

Objective: Chapter objective 2

41) Supplemental executive retirement plans and supplemental life insurance are classified as ________ in executive compensation packages.

1. A) base pay
2. B) short-term incentives
3. C) long-term incentives
4. D) executive benefits

Answer: D

Diff: 1 Page Ref: 209

Objective: Chapter objective 2

42) A company using competency-based pay compensates for all of the following except an employee’s ________.

1. A) range of skills
2. B) job title
3. C) depth of knowledge
4. D) type of skills

Answer: B

Diff: 3 Page Ref: 196

Objective: Chapter objective 2

43) ________ means collapsing salary grades and ranges into just a few wide levels or bands, each of which contains a relatively wide range of jobs and salary levels.

1. A) Comparable worth
2. B) Strategic compensation
3. C) Broadbanding
4. D) Job grading

Answer: C

Diff: 1 Page Ref: 212

44) According to the Sarbanes-Oxley Act of 2002, if a company must restate financial statements due to material noncompliance with a financial reporting requirement, the act requires that the CEO ________.

1. A) repay any bonuses received during the 12 months prior to the issuance of the financial statements in question
2. B) make a public apology to stock holders
3. C) resign from the position of CEO
4. D) All of the above.

Answer: A

Diff: 2 Page Ref: 215

45) What type of pay plan is being used when workers are paid a sum for each unit they produce?

1. A) base pay
2. B) competency-based pay
3. C) job-based pay
4. D) piecework

Answer: D

Diff: 1 Page Ref: 198

Objective: Chapter objective 3

46) ________ is any salary increase the firm awards to an individual employee based on his or her individual performance.

1. A) Merit pay
2. B) Variable pay
3. C) Competency-based pay
4. D) Piecework

Answer: A

Diff: 1 Page Ref: 198

Objective: Chapter objective 3

47) How does merit pay differ from a bonus?

1. A) Merit pay becomes part of an employee’s base pay, but a bonus does not.
2. B) A bonus becomes part of an employee’s base pay, but merit pay does not.
3. C) Merit pay is linked to individual performance, while a bonus is not.
4. D) A bonus is linked to individual performance, while merit pay is linked to company performance

Answer: A

Diff: 2 Page Ref: 198

Objective: Chapter objective 3

48) Which of the following is true of recognition programs?

1. A) They have a positive impact on performance.
2. B) They are expensive to administer.
3. C) They reduce extrinsic motivation.
4. D) Both A and B.

Answer: D

Diff: 2 Page Ref: 190

Objective: Chapter objective 1

49) All of the following are advantages of team incentives except that:

1. A) team planning is reinforced.
2. B) worker’s pay may not be proportional to his or her efforts.
3. C) jealousy is reduced.
4. D) collaboration is encouraged.

Answer: B

Diff: 2 Page Ref: 198

Objective: Chapter objective 3

50) What type of profit-sharing plan involves the awarded shares of stock as part of the incentive plan?

1. A) cash plan
2. B) Lincoln incentive system
3. C) Jefferson incentive system
4. D) ESOP

Answer: D

Diff: 1 Page Ref: 199

Objective: Chapter objective 3

51) Which profit-sharing plan provides tax advantages for the employer at fair market value?

1. A) cash plan
2. B) Jefferson incentive system
3. C) deferred profit-sharing plan
4. D) ESOP

Answer: C

Diff: 1 Page Ref: 199

Objective: Chapter objective 3

52) Companywide plans in which a corporation contributes shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm’s stock for employees are called ________.

1. A) cash plans
2. B) Jefferson incentive systems
3. C) deferred profit-sharing plans
4. D) employee stock ownership plans

Answer: D

Diff: 1 Page Ref: 199

Objective: Chapter objective 3

53) Which plan uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement?

1. A) cash plan
2. B) Jefferson incentive system
3. C) deferred profit-sharing plan
4. D) employee stock ownership plan

Answer: D

Diff: 1 Page Ref: 199

Objective: Chapter objective 3

54) The Scanlon plan includes all of the following features except:

1. A) improving productivity.
2. B) an emphasis on individual achievement.
3. C) sharing.
4. D) financial gains.

Answer: B

Diff: 1 Page Ref: 216, 202

Objective: Chapter objective 3

55) Which incentive plan is based on a philosophy that managers and employees must cooperate together?

1. A) cash plan
2. B) Scanlon plan
3. C) deferred profit-sharing plan
4. D) employee stock ownership plan

Answer: B

Diff: 2 Page Ref: 216, 202

Objective: Chapter objective 3

56) A(n) ________ plan is an incentive plan that engages many or all employees in a common effort to achieve a company’s productivity objectives with any resulting cost-savings gains shared among employees and the company.

1. A) Scanlon
2. B) Lincoln incentive
3. C) Gainsharing
4. D) ESOP

Answer: C

Diff: 2 Page Ref: 201

Objective: Chapter objective 3

57) Gainsharing is an incentive plan that ________.

1. A) uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement
2. B) engages many or all employees in a common effort to achieve a company’s productivity objectives with any resulting cost-savings gains shared among employees and the company
3. C) contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm’s stock for employees
4. D) involves the firm simply distributing a percentage of profits as profit shares to employees at regular intervals

Answer: B

Diff: 2 Page Ref: 201

Objective: Chapter objective 3

58) The indirect financial and nonfinancial payments employees receive for continuing employment with the company are called ________.

1. A) reimbursement
2. B) employee compensation
3. C) salary
4. D) benefits

Answer: D

Diff: 1 Page Ref: 203

Objective: Chapter objective 4

59) Nonfinancial payments like health and life insurance, pensions, time off with pay, and child care facilities are examples of ________.

1. A) variable pay
2. B) competency-based incentives
3. C) benefits
4. D) salary

Answer: C

Diff: 1 Page Ref: 203

Objective: Chapter objective 4

60) Approximately what percentage of employers offer some health insurance coverage?

1. A) 25%
2. B) 40%
3. C) 60%
4. D) 99%

Answer: D

Diff: 2 Page Ref: 203

Objective: Chapter objective 4

61) Which of the following benefits is required by federal or state law?

1. A) disability insurance
2. B) workers’ compensation
3. C) paid time off for vacations and holidays
4. D) pensions

Answer: B

Diff: 2 Page Ref: 210

Objective: Chapter objective 4

62) Which regulation covers pension plans and requires employers to have written plan documents that establish terms such as eligibility and participation?

1. A) Employee Retirement Income Security Act (ERISA)
2. B) Economic Growth and Tax Relief Conciliation Act
3. C) Newborn Mother’s Protection Act
4. D) Health Insurance Portability and Accountability Act

Answer: A

Diff: 2 Page Ref: 210

Objective: Chapter objective 4

63) Which regulation ensures that an employer must grant an employee up to 12 weeks of leave in a twelve-month period for the birth or care of a newborn child, placement of a child for adoption, to care for a spouse, child, or parent with a serious health condition, or to care for the employee’s own serious health condition?

1. A) Family and Medical Leave Act
2. B) Economic Growth and Tax Relief Conciliation Act
3. C) Job Creation and Worker Assistance Act
4. D) Newborn Mother’s Protection Act
5. E) Health Insurance Portability and Accountability Act

Answer: A

Diff: 2 Page Ref: 205

Objective: Chapter objective 4

64) The Family and Medical Leave Act ________.

1. A) provides guidelines regarding what rates of return employers should use in computing their pension plan values
2. B) ensures that an employer must grant an employee up to 12 weeks of leave in a twelve-month period for the birth or care of a newborn child, placement of a child for adoption, to care for a spouse, child, or parent with a serious health condition, or to care for the employee’s own serious health condition
3. C) prohibits an employer’s health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively-determined minimum stay
4. D) sets minimum requirements for protecting individuals’ health-care data accessibility and confidentiality

Answer: B

Diff: 2 Page Ref: 205

Objective: Chapter objective 4

65) How many weeks may an employee take as unpaid leave under the Family and Medical Leave Act?

1. A) two
2. B) four
3. C) six
4. D) twelve

Answer: D

Diff: 1 Page Ref: 205

Objective: Chapter objective 4

66) Which of the following is false regarding the application of the Family and Medical Leave Act?

1. A) Up to 12 weeks must be granted in a twelve-month period.
2. B) To be eligible, an employee must have worked for the employer for at least twelve months.
3. C) No advance notice is necessary.
4. D) To be eligible, an employee must have worked for a minimum of 1250 hours in the past twelve months.

Answer: C

Diff: 3 Page Ref: 205

Objective: Chapter objective 4

67) Holidays, vacations, jury duty, funeral leave, military duty, personal days, sick leave, sabbatical leave, and maternity leave are classified as ________ benefits.

1. A) supplemental pay
2. B) insurance
3. C) services
4. D) premium

Answer: A

Diff: 1 Page Ref: 216

Objective: Chapter objective 4

68) ________ provides benefits if a person is unable to work through no fault of his or her own.

1. A) Supplemental pay benefits
2. B) Unemployment insurance
3. C) Retirement
4. D) Health insurance

Answer: B

Diff: 2 Page Ref: 203

Objective: Chapter objective 4

69) Who contributes funds to workers’ compensation benefits?

1. A) each state
2. B) federal government
3. C) employers
4. D) All of the above.

Answer: C

Diff: 2 Page Ref: 206

Objective: Chapter objective 4

70) The goal of ________ is to provide sure, prompt income and medical benefits to work-related accident victims or their dependents, regardless of fault.

1. A) severance pay
2. B) sick leave
3. C) workers’ compensation
4. D) the Health Insurance Portability and Accountability Act

Answer: C

Diff: 2 Page Ref: 206

Objective: Chapter objective 4

71) Which of the following benefits could be awarded as workers’ compensation?

1. A) cash benefit
2. B) medical services
3. C) time off with pay
4. D) Both A and B.

Answer: D

Diff: 1 Page Ref: 206

Objective: Chapter objective 4

72) Which of the following conditions must be met for an injured employee to earn workers’ compensation from his or her employer?

1. A) The injury must have occurred while the employee was on the job.
2. B) The employee suffered the injury through no fault of his or her own.
3. C) The employee must have worked for a minimum of 1250 hours during the past twelve consecutive months.
4. D) All of the above.

Answer: A

Diff: 3 Page Ref: 206

Objective: Chapter objective 4

73) Which health benefit listed below is offered by almost all employers?

1. A) mental health insurance
2. B) chiropractic insurance
3. C) medical care insurance
4. D) wellness program

Answer: C

Diff: 2 Page Ref: 204

Objective: Chapter objective 4

74) A(n) ________ is a medical organization consisting of specialists operating out of a community-based health care center that provides routine medical services to employees who pay a nominal fee.

1. A) PPO
2. B) HMO
3. C) DMO
4. D) hospital

Answer: B

Diff: 1 Page Ref: 206

Objective: Chapter objective 4

75) ________ are groups of health care providers that contract with employers, insurance companies, or third-party payers to provide medical care services at a reduced fee.

1. A) PPOs
2. B) HMOs
3. C) DMOs
4. D) Hospitals

Answer: A

Diff: 1 Page Ref: 206

Objective: Chapter objective 4

76) The ________ requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any employee not able to work, with respect to all benefits, including sick leave and disability benefits, health and medical insurance.

1. A) Family and Medical Leave Act
2. B) Pregnancy Discrimination Act
3. C) Comprehensive Omnibus Budget Reconciliation Act
4. D) American Disabilities Act

Answer: B

Diff: 2 Page Ref: 207

Objective: Chapter objective 4

77) Which regulation listed below requires that most private employers continue to make health benefits available to terminated or retired employees and their families for a period of time?

1. A) Family and Medical Leave Act
2. B) Pregnancy Discrimination Act
3. C) Comprehensive Omnibus Budget Reconciliation Act
4. D) Health Insurance Portability and Accountability Act

Answer: C

Diff: 2 Page Ref: 207

Objective: Chapter objective 4

78) The Pregnancy Discrimination Act ________.

1. A) requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any employee not able to work, with respect to all benefits, including sick leave and disability benefits, health and medical insurance
2. B) covers pension plans and requires employers to have written plan documents that establish terms such as eligibility and participation
3. C) prohibits an employer’s health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively-determined minimum stay
4. D) sets minimum requirements for protecting individuals’ health-care data accessibility and confidentiality

Answer: A

Diff: 2 Page Ref: 207

Objective: Chapter objective 4

79) The Comprehensive Omnibus Budget Reconciliation Act requires most private employers to continue to make health benefits available to terminated or retired employees and their families for a period of time, generally ________.

1. A) 6 months
2. B) 12 months
3. C) 18 months
4. D) 24 months

Answer: C

Diff: 1 Page Ref: 207

Objective: Chapter objective 4

80) The full retirement age according to Social Security for individuals born in 1960 or later is ________.

1. A) 62
2. B) 65
3. C) 67
4. D) 70

Answer: C

Diff: 2 Page Ref: 209

Objective: Chapter objective 4

81) Social Security provides all of the following benefits except:

1. A) income if retirement is at age 62 or later and individual is insured under the Social Security Act.
2. B) death benefits to surviving dependents for those insured under the Social Security Act
3. C) Medicare.
4. D) income if retirement is at age 55 or later.

Answer: D

Diff: 1 Page Ref: 209

Objective: Chapter objective 4

82) When an employer makes all of the contributions to the pension plan, the pension plan is classified as ________.

1. A) qualified
2. B) non-qualified
3. C) defined contribution
4. D) non-contributory

Answer: D

Diff: 1 Page Ref: 209

Objective: Chapter objective 4

83) Malcolm is interviewing for a new job and he is evaluating the quality of the pension plans offered for each company he is considering. One company offers a pension plan in which the company will make all contributions to the plan and will base his pension benefit on a formula linked to his pay at the time of retirement and the number of years he was with the firm. This pension plan could be classified as ________.

1. A) qualified, defined benefit
2. B) non-contributory, defined benefit
3. C) non-contributory, defined contribution
4. D) contributory, qualified

Answer: B

Diff: 2 Page Ref: 209

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

84) Jenny’s pension plan encourages her to contribute at least 5% of her annual salary in addition to the set amount that her company contributes. She is given choices regarding how the money is invested. When she retires, the amount she has available will depend on how much she invested herself, and the rate of return on the investments she chose. This pension plan could be classified as ________.

1. A) qualified, defined benefit
2. B) non-contributory, defined benefit
3. C) contributory, defined contribution
4. D) contributory, defined benefit

Answer: C

Diff: 2 Page Ref: 209

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

85) A defined contribution pension plan encourages employees to contribute a portion of their earnings to the fund with an employer contribution that is matched to that of the employee in whole or part is called a(n) ________.

1. A) savings and thrift plan
2. B) matching plan
3. C) deferred profit-sharing plan
4. D) employee stock ownership plan

Answer: A

Diff: 2 Page Ref: 209

Objective: Chapter objective 4

86) ________ provide services like personal legal and financial counseling, child care referrals, elder care referrals adoption assistance, mental health counseling, and life event planning.

1. A) Social Security programs
2. B) Pension plans
3. C) Employee Assistance Programs
4. D) Family-friendly benefits

Answer: C

Diff: 1 Page Ref: 211

Objective: Chapter objective 4

87) ________ seek to enable employees to better meet the demands of their family and work lives.

1. A) Sick leave
2. B) Family-friendly benefits
3. C) Pay plans
4. D) Benefit management systems

Answer: B

Diff: 1 Page Ref: 210

Objective: Chapter objective 4

88) ESOP is an incentive plan that ________.

1. A) uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement
2. B) engages many or all employees in a common effort to achieve a company’s productivity objectives with any resulting cost-savings gains shared among employees and the company
3. C) contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm’s stock for employees
4. D) provides tax advantages for employees by deferring income taxes, often until the employee retires

Answer: D

Diff: 2 Page Ref: 201

Objective: Chapter objective 3

89) An employee stock ownership plan is an incentive plan that ________.

1. A) engages many or all employees in a common effort to achieve a company’s productivity objectives with any resulting cost-savings gains shared among employees and the company
2. B) focuses on the sharing of benefits between employer and employees
3. C) contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm’s stock for employees
4. D) involves the firm distributing total annual profits each year among employees based on their merit rating

Answer: C

Diff: 2 Page Ref: 201

Objective: Chapter objective 3

90) Plans that put some portion of the employee’s weekly pay at risk to encourage goal attainment are called ________ pay plans.

1. A) at-risk variable
2. B) Rucker
3. C) Improshare
4. D) Scanlon

Answer: A

Diff: 1 Page Ref: 188

Objective: Chapter objective 3

91) Financial benefits like employer-paid insurance and vacations are not a part of employee compensation.

Answer: FALSE

Diff: 1 Page Ref: 200

Objective: Chapter objective 1

92) Historically, the main issue in collective bargaining is wage rates.

Answer: TRUE

Diff: 2 Page Ref: 190

Objective: Chapter objective 1

93) Indirect payments that contribute to an employee’s compensation include variable pay, such as commissions and bonuses.

Answer: FALSE

Diff: 2 Page Ref: 198

Objective: Chapter objective 1

94) When employees work more than 40 hours per week, employers must pay overtime at a rate of at least one and a half times the normal pay for any hours worked over 40 in a workweek.

Answer: TRUE

Diff: 2 Page Ref: 198

Objective: Chapter objective 1

95) Because the minimum wage is set by the Fair Labor Standards Act, all states adhere to that wage.

Answer: FALSE

Diff: 3 Page Ref: 198

Objective: Chapter objective 1

96) The Equal Pay Act states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work.

Answer: TRUE

Diff: 2 Page Ref: 189

Objective: Chapter objective 1

97) While laws exist to protect against discrimination in compensation based on gender and age, no law protects against such discrimination against persons with disabilities.

Answer: FALSE

Diff: 2 Page Ref: 189

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

98) The provision of the Family and Medical Leave Act that entitles employees to take up to 12 weeks of unpaid, job-protected leave for the birth of a child only applies to women.

Answer: FALSE

Diff: 2 Page Ref: 205

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 4

99) Some employers may misclassify employees as independent contractors to reduce the taxes they must pay.

Answer: TRUE

Diff: 2 Page Ref: 189

Objective: Chapter objective 1

100) External equity refers to how fair the job’s pay rate is, when compared to other jobs within the same company.

Answer: FALSE

Diff: 2 Page Ref: 203

Objective: Chapter objective 3

101) The Equal Pay Act focuses on three compensable factors—know-how, problem solving, and accountability.

Answer: FALSE

Diff: 3 Page Ref: 189

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

102) The Sarbanes-Oxley Act of 2002 makes board members personally liable for violating their fiduciary responsibilities to their shareholders.

Answer: TRUE

Diff: 2 Page Ref: 189

Objective: Chapter objective 1

103) All merit increases are cumulative in that they become a part of an employee’s base salary.

Answer: FALSE

Diff: 1 Page Ref: 201

Objective: Chapter objective 3

104) A key advantage of employee stock ownership plans is that the company gets a tax advantage equal to the fair market value of the shares that are transferred to the trustee and can also claim an income tax deduction for dividends paid on ESOP-owned stock.

Answer: TRUE

Diff: 2 Page Ref: 201

Objective: Chapter objective 3

105) The Scanlon plan is a type of gainsharing plan.

Answer: TRUE

Diff: 2 Page Ref: 202

Objective: Chapter objective 3

106) Scanlon plans involve putting some portion of an employee’s weekly pay at risk for the opportunity to earn incentives if the employee meets or exceeds his or her goals.

Answer: FALSE

Diff: 2 Page Ref: 202

Objective: Chapter objective 3

110) Job classification is the simplest of the job evaluation methods.

Answer: FALSE

Diff: 1 Page Ref: 191

Objective: Chapter objective 2

107) Competencies are demonstrable characteristics of a person including knowledge, skills, and behaviors that enable performance.

Answer: TRUE

Diff: 2 Page Ref: 198

Objective: Chapter objective 3

108) The primary advantage of broadbanding is that it provides greater flexibility into employee assignments.

Answer: TRUE

Diff: 3 Page Ref: 213

109) About 99% of employers in the United States offer some form of health insurance coverage.

Answer: TRUE

Diff: 2 Page Ref: 204

Objective: Chapter objective 4

110) Employee benefits account for about one-third of wages and salaries.

Answer: TRUE

Diff: 2 Page Ref: 204

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

111) Workers’ compensation benefits can be medical or monetary.

Answer: TRUE

Diff: 2 Page Ref: 206

Objective: Chapter objective 4

112) If an employee is injured at work due to a blatant disregard for company safety policies, the company is not required to pay workers’ compensation.

Answer: FALSE

Diff: 3 Page Ref: 206

Objective: Chapter objective 4

113) Women affected by pregnancy and childbirth are eligible for the same benefits as disabled employees.

Answer: TRUE

Diff: 2 Page Ref: 207

Objective: Chapter objective 4

114) The American Disabilities Act makes it illegal for employers to discriminate against women by providing benefits of a lower amount or duration for pregnancy, childbirth, or related medical conditions.

Answer: FALSE

Diff: 3 Page Ref: 189

Objective: Chapter objective 2

115) The Comprehensive Omnibus Budget Reconciliation Act ensures that employers are not responsible for making health benefits available to terminated or retired employees and their families.

Answer: FALSE

Diff: 2 Page Ref: 207

Objective: Chapter objective 4

116) There is no limit to the amount an employee can contribute pre-tax into a 401(k) plan each year.

Answer: FALSE

Diff: 2 Page Ref: 210

Objective: Chapter objective 4

117) Broadbanding refers to the requirement to pay men and women equal wages for jobs of comparable value to the employer.

Answer: FALSE

Diff: 1 Page Ref: 213

Objective: Chapter objective 4

118) List the steps used to establish pay rates while ensuring external, internal, and procedural equity.

Answer:

The five steps are as follows.

• Conduct a salary survey of what other employers are paying for comparable jobs.
• Determine the worth of each job in your organization through job evaluation.
• Group similar jobs into pay grades.
• Price each pay grade by using wave curves.
• Fine-tune pay rates.

Diff: 2 Page Ref: 204

Skill: AACSB: Communication

Objective: Chapter objective 2

119) List the steps used in the job ranking method of job evaluation.

Answer:

The steps in the job ranking method are as follows.

• Obtain job information
• Select jobs
• Select compensable factors
• Rank jobs
• Combine ratings and average the rankings

Diff: 2 Page Ref: 191

Skill: AACSB: Communication

Objective: Chapter objective 2

120) What are the steps for pricing jobs with a wage curve?

Answer: First, find the average pay for each pay grade, since each of the pay grades consists of several jobs. Next, plot the pay rates for each pay grade. Then, fit a line, called a wage line, through the points. Finally, price the jobs. Wages along the wage line are the target wages or salary rats for the jobs in each pay grade.

Diff: 3 Page Ref: 191

Skill: AACSB: Communication

Objective: Chapter objective 3

121) Explain the advantages of employee stock ownership plans.

Answer: The company that offers the ESOP receives a tax deduction equal to the fair market value of the shares that are transferred to the trustee and can claim an income tax deduction for dividends paid on ESOP-owned stock. Employees aren’t taxed until they receive a distribution from the trust, usually at retirement when the tax rate is lower. The Employee Retirement Income Security Act allows a firm to borrow against employee stock held in trust and then repay the loan in pretax rather than after-tax dollars. ESOPs also help shareholders of closely held corporations to diversify their assets by placing some of their own shares of the company’s stock into the ESOP trust and purchasing other marketable securities for themselves in their place. ESOPs also encourage employees to develop a sense of ownership in and commitment to the firm. They provide increased financial incentives, create a sense of ownership, and help to build teamwork.

Diff: 2 Page Ref: 201-202

Skill: AACSB: Communication

Objective: Chapter objective 3

122) Explain the purpose of sick leave and why sick leave pay causes difficulties for many employers.

Answer: Sick leave provides pay to employees when they are out of work due to illness. Most sick leave policies grant full pay for a set number of sick days and the sick days accumulate over time. The problem with sick leave is that many employees use sick leave for reasons other than illness. Some use the days as vacation or to take care of family issues, personal needs, and stress.

Diff: 1 Page Ref: 205

Skill: AACSB: Communication

Objective: Chapter objective 4

123) Why do employers provide severance pay to employees who are being terminated? Offer at least three reasons. What standards guide the amount of severance pay offered?

Answer: Severance pay is a one-time payment offered when terminating an employee. There are several reasons for a firm to offer severance pay. It shows good will to the employee. It is good public relations. It is fair since most employers expect to receive notice in advance of an employee leaving to offer the same sort of notice to the employee. It can protect the company from litigation from disgruntled former employees. The amounts vary from one to two weeks to as much as 39 weeks. The pay can be provided in one lump-sum payment or by continuing salary for a set time period. Many firms establish severance pay at the rate of one week of severance pay for each year of service.

Diff: 2 Page Ref: 205

Skill: AACSB: Communication

Objective: Chapter objective 4

124) Explain the three types of benefits provided by Social Security.

Answer: Social Security provides retirement benefits, death benefits, and disability payments. Retirement benefits provide income to those who retire at age 62 or after. Death benefits provide monthly payments to dependents of the deceased individual regardless of the individual’s age at death. Disability payments provide payments to employees who become totally disabled and to their dependents if they work and meet certain requirements.

Diff: 1 Page Ref: 223

Skill: AACSB: Communication

Objective: Chapter objective 4

125) Explain the three classifications that apply to basic pension plans.

Answer: The three classifications are contributory versus non-contributory plans, qualified versus non-qualified plans, and defined contribution versus defined benefit plans. In a contributory pension plan, the employee can contribute while in a non-contributory plan, the employer makes all the contributions. Qualified plans offer tax deductions for some contributions while non-qualified plans get less favorable tax treatment for both employees and employers. With defined benefit plans, the employee knows ahead of time the pension benefits he or she will receive. The defined pension benefit is set by a formula that ties the person’s retirement pension to an amount equal to a percentage of the person’s pre-retirement pay, multiplied by the number of years he or she worked for the company. Defined contribution plans specify what contribution the employee and employer will make to the employee’s retirement or savings fund.

Diff: 3 Page Ref: 223

Skill: AACSB: Communication

Objective: Chapter objective 4

126) Why are family-friendly benefits increasingly valuable to employees? What are some examples of family-friendly benefits?

Answer: There are many trends that increase the value of family-friendly benefits. There are more households in which both adults work. There are more one-parent households. More women are in the workforce while also struggling to fulfill familial obligations. People are working harder and longer with less time to manage life outside of work. Family-friendly benefits can vary from organization to organization. Some examples include child care, elder care, fitness facilities, and concierge services.

Diff: 2 Page Ref: 225

Skill: AACSB: Communication

Objective: Chapter objective 3