,Strategic Compensation: A Human Resource Management Approach, 10e (Martocchio)
Chapter 1 Strategic Compensation: A Component of Human Resource Systems
1) ________ refers to the design and implementation of compensation systems to reinforce the
objectives of both HR strategies and competitive business strategies.
A) Extrinsic compensation
B) Strategic compensation
C) Strategic analysis
D) Intrinsic compensation
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
2) Protection programs are what type of compensation benefits?
A) external
B) non-monetary rewards
C) internal
D) monetary
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
3) Which of the following is an example of a core compensation?
A) medical insurance
B) vacations
C) day care assistance
D) monetary compensation
Answer: D
Difficulty: Easy
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
1
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,4) Since the economic recession (2007-2009) ended, fewer companies have offered pay
increases, and those that do are offering lower amounts. Approximately, how much have pay
increases been?
A) less than 2 percent
B) 2 percent up to 2.9 percent
C) 3 percent up to 3.8 percent
D) 4 percent or more
Answer: C
Difficulty: Challenging
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
5) This concept describes a company's success when the company acquires or develops
capabilities that facilitate outperforming the competition.
A) differentiation
B) capital
C) compensation practices
D) competitive advantage
Answer: D
Difficulty: Easy
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
6) Which of the following refers to the planned use of company resources-financial capital,
equipment capital, and human capital-to promote and sustain competitive advantage?
A) strategic analysis
B) comparative analysis
C) 360 degree analysis
D) competitive business strategy
Answer: D
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
7) ________ compensation refers to the mental state of employees as a result of their
performance on the job.
Answer: Intrinsic
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
2
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, 8) Compensation represents both the intrinsic and extrinsic rewards employees receive for
performing their jobs. Together, both intrinsic and extrinsic compensation describe a company's
total compensation system. Briefly describe both types of rewards and indicate the professionals
who are responsible for managing them.
Answer: Intrinsic compensation reflects employees' psychological mind-sets that result from
performing their jobs. Extrinsic compensation includes both monetary and nonmonetary rewards.
Organizational development professionals promote intrinsic compensation through effective job
design. Compensation professionals are responsible for extrinsic compensation. Extrinsic
compensation includes both monetary and nonmonetary rewards. Compensation professionals
establish monetary compensation programs to reward employees according to their job
performance levels or for learning job-related knowledge or skills. Nonmonetary rewards include
protection programs (e.g., medical insurance), paid time off (e.g., vacations), and services (e.g.,
day care assistance). Most compensation professionals refer to nonmonetary rewards as
employee benefits.
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
9) Which of following enables companies to generate income, higher company stock prices,
economic value, strong positive brand identity, and reputation?
A) capital
B) assets
C) competency
D) human capital
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.2: Summarize the role of compensation as a strategic business partner.
10) As a strategic business partner, HR and compensation professionals today need to think most
like whom?
A) vice president of human resources
B) chief financial officer (CFO)
C) chief executive officer (CEO)
D) comptroller
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
3
Copyright © 2020 Pearson Education, Inc.
Chapter 1 Strategic Compensation: A Component of Human Resource Systems
1) ________ refers to the design and implementation of compensation systems to reinforce the
objectives of both HR strategies and competitive business strategies.
A) Extrinsic compensation
B) Strategic compensation
C) Strategic analysis
D) Intrinsic compensation
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
2) Protection programs are what type of compensation benefits?
A) external
B) non-monetary rewards
C) internal
D) monetary
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
3) Which of the following is an example of a core compensation?
A) medical insurance
B) vacations
C) day care assistance
D) monetary compensation
Answer: D
Difficulty: Easy
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
1
Copyright © 2020 Pearson Education, Inc.
,4) Since the economic recession (2007-2009) ended, fewer companies have offered pay
increases, and those that do are offering lower amounts. Approximately, how much have pay
increases been?
A) less than 2 percent
B) 2 percent up to 2.9 percent
C) 3 percent up to 3.8 percent
D) 4 percent or more
Answer: C
Difficulty: Challenging
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
5) This concept describes a company's success when the company acquires or develops
capabilities that facilitate outperforming the competition.
A) differentiation
B) capital
C) compensation practices
D) competitive advantage
Answer: D
Difficulty: Easy
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
6) Which of the following refers to the planned use of company resources-financial capital,
equipment capital, and human capital-to promote and sustain competitive advantage?
A) strategic analysis
B) comparative analysis
C) 360 degree analysis
D) competitive business strategy
Answer: D
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
7) ________ compensation refers to the mental state of employees as a result of their
performance on the job.
Answer: Intrinsic
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
2
Copyright © 2020 Pearson Education, Inc.
, 8) Compensation represents both the intrinsic and extrinsic rewards employees receive for
performing their jobs. Together, both intrinsic and extrinsic compensation describe a company's
total compensation system. Briefly describe both types of rewards and indicate the professionals
who are responsible for managing them.
Answer: Intrinsic compensation reflects employees' psychological mind-sets that result from
performing their jobs. Extrinsic compensation includes both monetary and nonmonetary rewards.
Organizational development professionals promote intrinsic compensation through effective job
design. Compensation professionals are responsible for extrinsic compensation. Extrinsic
compensation includes both monetary and nonmonetary rewards. Compensation professionals
establish monetary compensation programs to reward employees according to their job
performance levels or for learning job-related knowledge or skills. Nonmonetary rewards include
protection programs (e.g., medical insurance), paid time off (e.g., vacations), and services (e.g.,
day care assistance). Most compensation professionals refer to nonmonetary rewards as
employee benefits.
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
9) Which of following enables companies to generate income, higher company stock prices,
economic value, strong positive brand identity, and reputation?
A) capital
B) assets
C) competency
D) human capital
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.2: Summarize the role of compensation as a strategic business partner.
10) As a strategic business partner, HR and compensation professionals today need to think most
like whom?
A) vice president of human resources
B) chief financial officer (CFO)
C) chief executive officer (CEO)
D) comptroller
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
3
Copyright © 2020 Pearson Education, Inc.
