CHAPTER 1
Strategic Compensati on: A Component of Human Resource Systems
Multiple Choice Questions
1. Which type of compensation program is based, in part, on the human capital theory?
a) merit pay
b) seniority pay
c) incentive pay
d) skill-based pay
Answer: b (H, pg. 6)
2. Passage of this Act requires compensation professionals to demonstrate that alleged
discriminatory pay practices are a business necessity.
a) Civil Rights Act of 1991
b) Equal Pay Act of 1938
c) Fair Labor Standards Act of 1938
d) Davis-Bacon Act of 1931
Answer: a (H, pg. 23)
3. What represents employees’ critical psychological states that result from performing their
job?
a) fringe compensation
b) core compensation
c) intrinsic compensation
d) extrinsic compensation
Answer: c (M, pg. 3)
,4. Which theory states that employees’ knowledge and skills generate productive capital?
a) job characteristics theory
b) expectancy theory
c) equity theory
d) human capital theory
Answer: d (H, pg. 6)
5. What is a cooperative effort between employees and their employers to promote
rewarding work experiences throughout employees’ work lives called?
a) employment termination
b) career development
c) labor-management relations
d) training
Answer: b (M, pg. 18)
6. Tuition reimbursement is considered which of the following?
a) a legally-required benefit
b) a protection program
c) a discretionary benefit
d) pay for time-not-worked
Answer: c (E, pg. 11)
7. Which of the following does NOT lead to experienced meaningfulness of work?
a) skill variety
b) task significance
c) differentiation
d) task identity
Answer: c (H, pg. 4)
,8. Which constituency group turns to compensation professionals for advice about setting
appropriate pay rates for jobs?
a) employees
b) line managers
c) unions
d) executives
Answer: b (M, pg. 22)
9. What is a systematic process for gathering, documenting, and analyzing information in
order to describe jobs?
a) job evaluation
b) internal consistency
c) job analysis
d) strategic analysis
Answer: c (H, pg 21)
10. Which of the following are the three broad categories of discretionary benefits?
a) welfare practices, services, paid time-off
b) protection programs, paid time-off, services
c) paid time-off, welfare practices, protection programs
d) services, protection programs, welfare practices
Answer: b (E, pg. 7)
11. What is a planned effort to facilitate employees’ learning of job-related knowledge, skills,
or behaviors?
a) training
b) labor-management relations
c) career development
d) performance appraisal
Answer: a (E, pg. 18)
, 12. These practices were designed to control labor costs and gave rise to individual incentive
pay systems.
a) time and motion studies
b) welfare
c) scientific management
d) job analysis
Answer: c (H, pg. 9)
13. This term refers to the degree to which the job enables a person to complete an entire job
from start to finish.
a). skill variety
b) feedback
c) task identity
d) task significance
Answer: c (H, pg. 4)
14. Which of the following include any of a variety of programs that provide pay for time-not-
worked, employee services, and protection programs?
a) core compensation
b) intrinsic compensation
c) employee benefits
d) B & C
Answer: c (E, pg. 7)
Strategic Compensati on: A Component of Human Resource Systems
Multiple Choice Questions
1. Which type of compensation program is based, in part, on the human capital theory?
a) merit pay
b) seniority pay
c) incentive pay
d) skill-based pay
Answer: b (H, pg. 6)
2. Passage of this Act requires compensation professionals to demonstrate that alleged
discriminatory pay practices are a business necessity.
a) Civil Rights Act of 1991
b) Equal Pay Act of 1938
c) Fair Labor Standards Act of 1938
d) Davis-Bacon Act of 1931
Answer: a (H, pg. 23)
3. What represents employees’ critical psychological states that result from performing their
job?
a) fringe compensation
b) core compensation
c) intrinsic compensation
d) extrinsic compensation
Answer: c (M, pg. 3)
,4. Which theory states that employees’ knowledge and skills generate productive capital?
a) job characteristics theory
b) expectancy theory
c) equity theory
d) human capital theory
Answer: d (H, pg. 6)
5. What is a cooperative effort between employees and their employers to promote
rewarding work experiences throughout employees’ work lives called?
a) employment termination
b) career development
c) labor-management relations
d) training
Answer: b (M, pg. 18)
6. Tuition reimbursement is considered which of the following?
a) a legally-required benefit
b) a protection program
c) a discretionary benefit
d) pay for time-not-worked
Answer: c (E, pg. 11)
7. Which of the following does NOT lead to experienced meaningfulness of work?
a) skill variety
b) task significance
c) differentiation
d) task identity
Answer: c (H, pg. 4)
,8. Which constituency group turns to compensation professionals for advice about setting
appropriate pay rates for jobs?
a) employees
b) line managers
c) unions
d) executives
Answer: b (M, pg. 22)
9. What is a systematic process for gathering, documenting, and analyzing information in
order to describe jobs?
a) job evaluation
b) internal consistency
c) job analysis
d) strategic analysis
Answer: c (H, pg 21)
10. Which of the following are the three broad categories of discretionary benefits?
a) welfare practices, services, paid time-off
b) protection programs, paid time-off, services
c) paid time-off, welfare practices, protection programs
d) services, protection programs, welfare practices
Answer: b (E, pg. 7)
11. What is a planned effort to facilitate employees’ learning of job-related knowledge, skills,
or behaviors?
a) training
b) labor-management relations
c) career development
d) performance appraisal
Answer: a (E, pg. 18)
, 12. These practices were designed to control labor costs and gave rise to individual incentive
pay systems.
a) time and motion studies
b) welfare
c) scientific management
d) job analysis
Answer: c (H, pg. 9)
13. This term refers to the degree to which the job enables a person to complete an entire job
from start to finish.
a). skill variety
b) feedback
c) task identity
d) task significance
Answer: c (H, pg. 4)
14. Which of the following include any of a variety of programs that provide pay for time-not-
worked, employee services, and protection programs?
a) core compensation
b) intrinsic compensation
c) employee benefits
d) B & C
Answer: c (E, pg. 7)
