Quiz 4

Question 1

internal vs. external equity

Answer 1

will pay be fair within the company or fair compared to other employers

Question 2

fixed vs. variable pay

Answer 2

will pay be paid through base salaries or fluctuate depending on various criteria

Question 3

job vs. individual pay

Answer 3

will pay be based on particular job or overall skill & knowledge employee brings

Question 4

egalitarianism vs. elitism

Answer 4

egalitarianism - place most employees under same compensation system
elitism - establish different plans by organization level or group

Question 5

below-market vs. above-market

Answer 5

will pay be at, above or below market levels

Question 6

monetary vs. nonmonetary awards

Answer 6

will compensation plan use monetary or nonmonetary rewards to motivate employees

Question 7

open vs. secret pay

Answer 7

will employees have access to information about other worker’s compensations or will this info be withheld

Question 8

centralization vs. decentralization of pay decisions

Answer 8

will compensation be decided in controlled central location or delegated to managers

Question 9

job based compensation plans

Answer 9

achieving internal, external, and individual equity

Question 10

achieving internal equity

Answer 10

job evaluation - provides importance of each job to the firm

Question 11

achieving external equity

Answer 11

identify benchmark jobs & check salaries

establish pay policy (lead, lag, or market rate)

Question 12

achieving individual equity

Answer 12

individual assigned pay within a range

Question 13

within-pay-range positioning criteria

Answer 13

previous experience
seniority
performance appraisal ratings

Question 14

skill based compensation plans

Answer 14

skill mastery increases pay, based on 3 types of skills; workforce is more flexible but training costs are higher

Question 15

3 types of skills

Answer 15

depth - specialized area
breadth - jobs/tasks in firm
vertical - self-management

Question 16

fair labor standards act

Answer 16

exempt/non-exempt employees, minimum wage and overtime

Question 17

equal pay act

Answer 17

male and female employees must be paid the same for jobs of comparable worth, with some exemptions (seniority, job performance, etc)

Question 18

what should a compensation system design do?

Answer 18

enable the firm to achieve strategic objectives and be molded to unique characteristics of firm

Question 19

what is pay-for-performance?

Answer 19

incentive system that rewards individuals and groups based on their contributions

Question 20

p-f-p challenges

Answer 20

"do only what you get paid for" syndrome
unethical behavior
competition
measuring performance is difficult
high stress

Question 21

advantages of individual-based p-f-p plans

Answer 21

performance rewarded is likely to be repeated
helps shape goals
individual equity
individualistic culture in U.S.

Question 22

disadvantages of individual-based p-f-p plans

Answer 22

can promote single-mindedness
goals not given priority
inflexibility

Question 23

advantages of team-based p-f-p plans

Answer 23

foster group cohesiveness

easier to asses team performance

Question 24

disadvantages of team-based p-f-p plans

Answer 24

free-riders
social pressures to limit performance
intergroup competition

Question 25

why would an employer want to reward excellent customer service?

Answer 25

to retain customers and encourage employees to provide better service

Question 26

employee benefits

Answer 26

group membership rewards that protect employees and their families from risks that could jeopardize health & financial security

Question 27

co-pay

Answer 27

small payment employees pay for each visit to a physician, health plan covers the rest

Question 28

deductible

Answer 28

annual out-of-pocket expenditure that employee must make before insurance makes any reimbursements

Question 29

what are the legally required benefits?

Answer 29

``` health insurance social security worker's compensation unemployment insurance family & medical leave ```

Question 30

benefits of social security

Answer 30

disability insurance retirement income medicare survivor benefits

Question 31

unemployment insurance

Answer 31

has to be actively seeking work and have left job involuntarily for former employer to provide supplemental unemployment benefits

Question 32

worker's compensation

Answer 32

if an employee is injured on the job and unable to work they are compensated for their time lost at work

Question 33

FMLA

Answer 33

up to 12 weeks unpaid leave for birth, adoption, to care for a sick relative, or if employee becomes seriously ill

Question 34

voluntary types of benefits

Answer 34

retirement insurance paid time off employee services

Question 35

COBRA of 1985

Answer 35

allows employees to continue health insurance after their employment has terminated

Question 36

HIPAA

Answer 36

employee may transfer between health insurance plans without a gap in coverage if they have a preexisting condition

Question 37

types of health insurance

Answer 37

traditional, health maintenance organizations (HMO), preferred provider organizations (PPO)

Question 38

3 parts of compensation

Answer 38

benefits, salary, incentives