11. The perceived fairness of
what an employer pays, relative to what other employers pay for the same type
of labor, is a description of:
a) the distributive justice model of compensation.
b) the labor market model of compensation.
c) egalitarianism in compensation.
d) internal equity in compensation.
e) external equity in compensation.
12. A company designs its
compensation system around the philosophy that employees exchange their
contributions to the company for a set of outcomes, i.e., pay. As a
consequence, employees feel fairly compensated when the ratio of their inputs
and outputs is equivalent to those of other employees whose job demands are
similar to their own. This companyâ€™s compensation system is based on a _____
a) balanced equity
b) labor market
c) free market
d) distributive justice
distributive justice model:
is the least common of the two
encourages employees to
examine the companies and employees.
encourages open rather than
d) ensures that employees will receive above-market
e) ensures secret pay.
14. You are trying to convince the
management of Marcelle, Inc. to pay its employees the â€œgoing rateâ€, no more, no
less. You are trying to:
reach external equity.
reach internal equity.
reduce Marcelleâ€™s work force.
increase Marcelleâ€™s work
create an elitist compensation
15. According to your text, which of the following
questions is key in developing an effective compensation plan?
a) How many employees are there in the company?
Will the company compensate
employees primarily with nonmonetary rewards or monetary rewards?
c) What is the companyâ€™s market share?
d) What is the average age of employees in the
e) All of the above
16. A company using a labor market-based model holds the philosophy
a) employees exchange their contributions for pay.
b) the wage rate for any given job is set at the point where the
supply of labor equals the demand for that labor in the marketplace.
c) internal equity is more important than external equity.
d) egalitarian pay policies are more effective than elitist.
e) nonmonetary rewards are more effective motivators than monetary
17. Balancing equity is often a difficult issue
in the management of compensation
a) pay is a hygiene factor, not a motivator, so no matter what you
do, you will never get higher productivity through compensation.
b) EEOC regulations are extensive and complicated.
c) internal and external equity often oppose one another.
d) of the impact of the issue of fixed versus
e) of managementâ€™s general reluctance to change pay structures.
18. Firms that emphasize
generally have little need for innovation.
are older, more established firms.
are smaller and newer.
often compensate employees with nonmonetary rewards, rather than
e) already maintain internal equity.
19. Variable compensation
systems work best:
a) with smaller, less well-established firms with younger employees.
b) in difficult economies with high inflation.
c) when the job market is flooded with qualified
d) in larger, established companies that need significant
e) with large employee workforces just after a major layoff.
average, ____ of a U.S. employeeâ€™s pay is variable.