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per worker.
The big grocery chains were not proposing cutting health care insurance benefits
for their existing employees. Instead, they proposed putting any new employees
hired after the new contract went into effect into a separate insurance pool, an
d contributing Rs56.7 per hour for their health insurance coverage. That meant n
ew employee s health insurance would cost each new employee perhaps Rs420 per week
. And, if that Rs420 per week wasn t enough to cover the cost of health care, then
the employees would have to pay more or do without some of their benefits.
It was difficult situation for all the parties involved. For the grocery chain e
mployers sky rocketing health care cost per undermining their competitiveness; a
nd the current employees feared any step down the slippery slope that might even
tually mean cutting their own health benefits. The unions did not welcome a situ
ation in which they d end up representing two classes of employees, one(the existi
ng employees) who had excellent health insurance benefits, another(newly hired e
mployees)whose benefits were relatively meager and who might therefore be unhapp
y from the moment they took their jobs and joined the union.
Please give your answer in at least 25 words and press save and continue button.
1.
Assume you are mediating this dispute. Discuss three creative solutions
you would suggest for how the grocers could reduce the health insurance benefits
and the cost of their total benefits package without making any employees pay m
ore?
2.
From the grocery chains point of view, what is the downside of having tw
o classes of employees, one of which has superior health insurance benefits? How
would you suggest they handle the problem?
Assignment C
Question No. 1
All of the following are compensation objectives of the organization EXCEPT
Options
legal compliance with relevant laws and regulations.
internal, external and individual equity for employees.
the lowest total cost of compensation among direct competitors.
performance enhancement for the organization
Question No. 2
If an organization s competitive strategy relies on long-term relationships with t
he clients who purchase the organization s goods and services, the organization sh
ould reward its employees from its executives to its sales staff with incentives
based on
Options
quarterly sales.
annual profits.
prices of its stocks in daily trading.
a rolling five-year measure of financial performance
Question No. 3
Compensation is one of the organization s largest expenditures. Compensation philo
sophies and systems vary from one organization to the next. Why is that?
Options
There is no one right way
Question No. 9
Which type of compensation is linked directly to individual, team, or organizati
onal performance?
Options
variable pay
direct pay
wages
salary
Question No. 10
A/an ____ is an indirect reward given to an employee or group of employees becau
se they are members of the organization.
Options
incentive
bonus
benefit
motivator
Question No. 11
In an organization with a performance-oriented philosophy,
Options
employees only get raises if their productivity has been satisfactory or better
.
all employees can at least count on an annual cost-of-living adjustment to thei
r salaries.
bonuses are based on what other companies in the industries are paying.
marginal performers tend to be satisfied with their compensation.
Question No. 12
Justin is an hourly employee of Furnace Brick, a company that manufactures a spe
cial high-heat-resistant brick for industrial kilns. Justin is unhappy with the
new compensation system introduced by the company s new plant manager and HR direc
tor. This system has eliminated the practice of annual raises, the Christmas bon
us, and raises based on seniority for a new system that ties every employee s rais
e to how well Furnace Brick is performing in the market. Moreover, the plant man
ager has announced that twenty percent of the employees in the plant will receiv
e no raise at all this year, regardless of the company s performance. Furnace Bric
k has moved from a/an ____ compensation philosophy, to a/an____ compensation phi
losophy.
Options
wage-based, salary-based
paternalistic, competitive
entitlement, performanc
meet-the-market, lag-the-market
Question No. 13
Jack and Jerry are twins. Both started working at competing firms in the same in
dustry. Jack and Jerry were given exactly the same starting salary. They have be
en with their companies for ten years, and both have identical positions and ide
ntical performance ratings. Both Jack and Jerry are consistently average perform
ers. Jack works at a company with an entitlement compensation philosophy. Jerry
works at a company with a pay-for-performance compensation philosophy. The two c
ompanies are identical in revenue and profitability. They allocate the same budg
et amount for employee raises each year. All other factors remaining equal, whic
h of the following statements is most likely to be true?
Options
Jerry will have a higher salary than Jack.
Jack will have a higher salary than Jerry.
Jerry and Jack will have identical salaries.
Jerry and Jack will have identical levels of pay satisfaction.
Question No. 14
At Artistic Floral Creations, the non-managerial employees all receive the same
pay increase every year. Usually this increase is about 5%, but some years it ha
s been as high as 10% depending on changes in the cost-of-living. Artistic Flora
l Creations has a/an ____ philosophy of compensation.
Options
performance
entitlement
quartile-based
total rewards
Question No. 15
Simon is outraged that his co-worker Missy was given a raise. Simon believes Mi
ssy got the raise because she married the chairman of the board s son. Simon s sense
of ____ has been violated.
Options
compensatory equity
distributive justice
external equity
procedural justice
Question No. 16
In terms of procedural justice, the process of determining base pay, allocating
pay increases, and measuring performance all must be seen by employees as
Options
fair.
legal.
performance-based.
non-discriminatory.
Question No. 17
Amanda is upset because she makes the same salary as Carl does, even though Aman
da has 18 clients and Carl has only 11 clients. Amanda is making a judgment abou
t
Options
discriminatory compensation.
procedural justice.
internal equity.
external equity.
Question No. 18
Typical compensation appeals procedures require the employee to discuss the prob
lem first with
Options
the organizational ombuds.
the EEOC.
the HR department.
his/her supervisor.
Question No. 19
Organizations that have specific policies about where they wish to position them
selves in the labor market use a/an ____ strategy.
Options
industry
quartile
benchmarking
labor market
Question No. 20
Abundance Nurseries needs large numbers of unskilled employees every spring and
summer to plant, maintain, and harvest the flower fields. Abundance is located i
n an area where there is a large supply of unskilled workers, and it has few pro
blems recruiting workers as needed. It would be reasonable for Abundance Nurseri
es to position its pay for these workers in the ____ -quartile of the labor mark
et.
Options
first
second
third
fourth
Question No. 21
A company that structures its compensation system so that half of its competitor
s pay their employees more than it does and half of its competitors pay less tha
n it does is using a ____ the market strategy.
Options
lag
meet
lead
follow
Question No. 22
A third-quartile approach is a compensation strategy
Options
in which the company pays higher wages than its competitors do.
to pay below the average in the labor market.
where one-third of the competitors in the labor market pay higher wages than wh
at the company does.
in which the company pays the median of what its competitors pay.
Question No. 23
Larry has decided to go back to his hometown of Mellonburg and set up an archite
ctural design business for green homes. Mellonburg is a depressed farming communit
y of 1,351 residents. It is 20 miles from the nearest restaurant, 70 miles from
the nearest Starbucks coffee shop, and the local schools are the worst in the st
ate. The winters are severe, the summers are oppressive. Few single people live
there, and the social and cultural life is negligible. In order to attract good
quality architects, Larry will probably
Options
need to ignore the market compensation for architects and pay the architects on
an entitlement basis.
be able to lag the market significantly in pay because of the low cost of livin
g.
have pay more than the market because of the unappealing location.
make market comparisons irrelevant by hiring the architects as independent cont
ractors.
Question No. 24
Paul is a single parent. He received consistently high performance appraisals fr
om his employer, until the company went bankrupt. Now, Paul is looking for a new
job. As the recruiter at MilqueMaid Chocolate, you are very interested in Paul
. But, your firm has a lag-the-market compensation strategy. You know that Paul
has had an offer from a firm that has a meet-the-market strategy. You are not a
uthorized to offer Paul a market-level salary. Your best way to lure Paul to Mi
lqueMaid is to
Options
point out MilqueMaid s broad-based
emphasize MilqueMaid s entitlement
discuss the method that MilqueMaid
discuss MilqueMaid s broadband pay
Question No. 25
An organization can benefit from a properly designed and implemented competencybased pay system through
Options
lower overall labor costs.
reduction of overtime costs by the move to an all-salaried workforce.
greater workforce skills and knowledge.
higher employee satisfaction with pay
Question No. 26
In a competency-based pay system employees are paid
Options
on the skills and knowledge they have, whether they use these or not.
according to their job performance, measured either by quality or quantity.
on the basis of their scores on annual competency tests.
on whether they have added value to the organization in the last
Question No. 27
As HR director, you are discussing the implementation of a competency-based comp
ensation system with the company s CEO. You point out that in order for the compet
ency system to be effective
Options
the company
the company
the company
the company
Question No. 28
Which of the following is the typical structure of team-based compensation?
Options
individual pay-for-performance based on team member input
skill-based pay plus a percentage of base pay
equal pay for each team member based on team performance
team-based variable pay on top of individual base pay
Question No. 29
Ernest, a U.S. citizen employee is being assigned to the company s German office
in Munich because of his intimate knowledge of the company s main product. Ernest
was previously stationed at the company headquarters in Kansas City. Al,l of t
he following issues should be taken into account when determining Ernest s pay dur
ing the years he works in Munich EXCEPT
Options
the compensation that a German would make in a similar job in Munich.
German income tax policies.
cost of living differences between Kansas City and Munich.
fluctuations between the value of the dollar and the euro.
Question No. 30
In a true pay-for-performance system, which of the following employees would qua
lify for incentive reward?
Options
Jack has met his sales quota even though he was hospitalized for appendicitis d
uring the year.
Otto manages to meet the minimum required sales on his store location despite t
he fact that the business building next door, where he receives most of his cust
omer traffic, has closed.
Charlene performs up to expectations as a science teacher at a magnet high scho
ol.
Chris brings in 20 percent more new clients for the branch bank than is require
d.
Question No. 31
All of the following are potential outcomes of a successful pay-for-performance
plan EXCEPT
Options
greater predictability of employee pay.
retention of high performers.
improved safety records.
aligning employee behavior with organizational business goals.
Question No. 32
What are variable pay plans?
Options
methods of tying compensation to the Consumer Price Index (CPI) in order to kee
p up with inflation
additional tangible rewards given to employees for performance beyond normal ex
pectations
compensation that increases as employees gain new job-related knowledge, skills
, and abilities
incentives to meet required performance standards
Question No. 33
Question No. 37
In a TV interview, the CEO of Trevelyan, Inc., commented that the pay-for-perfo
rmance system used by her company was effective because, Now everyone is pulling
in the same direction. What does the CEO mean by this observation?
Options
The pay-for-performance system is linking employee performance and the organiza
tion s strategic goals.
Employees are being motivated to gain more competencies and skills..
Question No. 39
It is important to make sure that what is being rewarded by the compensation sy
stem is strongly tied to organizational objectives, because people tend to
Options
guess what they think management wants done.
produce what is convenient.
produce what is measured and rewarded.
avoid doing unpleasant tasks.
Question No. 40
Bonuses are less costly to the organization than general wage increases, because
Options
bonuses receive preferential tax treatment.
the annual amount given as a bonus tends to be smaller than the annual amount g
iven as a raise.
bonuses are frequently given in the form of non-cash items.
bonuses do not become part of employees' base wages.
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