Chapter 1

Question 1

Pay given to employees who are covered by overtime and reporting provisions of the Fair Labor Standards Act. Nonexempts have pay calculated at an hourly rate.

Answer 1

Wages

Question 2

Employee belief that returns and/or rewards are due regardless or individual or company performance

Answer 2

Entitlement

Question 3

An individual’s willingness to engage in some behavior. Concerned with what energizes human behavior, what directs such behavior, and how this behavior is maintained.

Answer 3

Motivation

Question 4

An individual’s capability to engage in a specific behavior.

Answer 4

Ability

Question 5

The degree to which pay influences individual and aggregate motivation
among employees at any point in time

Answer 5

Incentive Effect

Question 6

The effect that pay can have on the composition of the workforce. Different
types of pay strategies may cause different types of people to apply to and stay
with an organization.

Answer 6

Sorting Effect

Question 7

The complete pay package for employees, including all forms of money,
bonuses, benefits, services, and stock

Answer 7

Total Compensation

Question 8

The nonquantifiable returns employees get from employment, such as social
satisfaction, friendship, feeling of belonging, or accomplishment.

Answer 8

Relational Returns

Question 9

Pay given to employees who are exempt from regulations of the Fair Labor Standards Act and hence do not receive overtime pay. Exempt pay is calculated at an annual or monthly rate.

Answer 9

Salary

Question 10

Jobs not subject to provisions of the Fair Labor Standards Act with respect to
minimum wage and overtime. Include most executives,
administrators, professionals, and outside sales representatives

Answer 10

Exempt

Question 11

The informal rules, rituals, and value systems that influence how people
behave

Answer 11

Culture

Question 12

Given as increments to base pay and are based on performance

Answer 12

Merit increases

Question 13

Based on a performance rating but are paid in the form of a lump sum rather than becoming a permanent part of the base salary

Answer 13

Merit bonuses

Question 14

Payment tied directly to achievement of performance standards. Directly tied to a profit index (sales, production level) and employee costs;
thus, they rise and fall in line with revenues

Answer 14

Commission

Question 15

Pay tied to productivity or some measure that can vary with the firm’s
profitability

Answer 15

Variable Pay

Question 16

What are the three building blocks of The Pay Model?

Answer 16

Policies, Techniques, and Objectives

Question 17

Improving performance, increasing quality, delighting customers and stockholders, and controlling labor costs

Answer 17

Efficiency

Question 18

Conforming to federal and state compensation laws and regulations.

Answer 18

Compliance

Question 19

The process used to make pay decisions

Answer 19

Procedural fairness

Question 20

The pay relationships among organizations; focus attention on the
competitive positions reflected in these relationships.

Answer 20

External competitiveness

Question 21

The pay relationships among jobs or skill levels within a single
organization; focuses attention on employee and management acceptance
of those relationships. It involves establishing equal pay for jobs of equal
worth and acceptable pay differentials for jobs of unequal worth.

Answer 21

Internal alignment

Question 22

Base wage plus cash bonus; does not include benefits or stock options.

Answer 22

Total Cash

Question 23

A single rate, rather than a range of rates, for all individuals performing a
certain job. Ignores seniority and performance differences.

Answer 23

Flat Rate

Question 24

Comparisons among individuals doing the same job for the same organization.

Answer 24

Employee Contributions

Question 25

Relative emphasis among compensation components such as base pay, merit,
incentives, and benefits.

Answer 25

Pay Mix

Question 26

Group incentive restricted to team members with payout usually based on
improvements in productivity, customer satisfaction, financial performance, or
quality of goods and services directly attributable to the team

Answer 26

Team Incentives

Question 27

Mechanisms or technologies of compensation management, such as job
analysis, job descriptions, market surveys, job evaluation, and the like, that tie
the four basic pay policies to the pay objectives

Answer 27

Pay Techniques