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Test Bank for Strategic Compensation: A Human Resources Management Approach,
Second Edition
Chapter 1 Strategic Compensation: A Component of Human Resources Management
Multiple Choice Questions
1) ________ refers to the design and implementation of compensation systems to reinforce the
objectives of both HRM strategies and competitive business strategies.
A) Extrinsic compensation
B) Strategic compensation
C) Strategic analysis
D) Intrinsic compensation
Answer: B
Difficulty: Moderate
Skill: Concept
LO: 1.1: Define strategic compensation.
2)____ refers to multiple HRM practices to reinforce competitive business strategy.
A) Human resources management industry practices
B) Human resources management legislation
C) Human resources management strategies
D) Human resources management theories
Answer: C
Difficulty: Moderate
Skill: Concept
LO: 1.1: Define strategic compensation.
3) Which of the following describes a human resources management or compensation strategic
business partner?
A) An HRM practitioner that works within the relevant HRM legislation.
B) An HRM practitioner that works within the relevant HRM best practices.
C) An HRM practitioner that works within the relevant organizational strategies.
D) An HRM practitioner is not a strategic business partner.
Answer: C
Difficulty: Moderate
Skill: Concept
LO: 1.1: Define strategic compensation.
4) Protection or benefits programs are what type of compensation benefits?
A) external
B) non-monetary rewards
C) internal
D) monetary
Answer: B
Difficulty: Moderate
Skill: Concept
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LO: 1.1: Define strategic compensation.
5) Government sponsored benefits ________________.
A) are not applicable in all provinces and territories
B) only applies to government employees
C) are a form of taxation
D) are a form of social insurance
Answer: D
Difficulty: Moderate
Skill: Concept
LO: 1.1: Define strategic compensation.
6) Job analysis is ________________.
A) an elective process for gathering, documenting, and analyzing information in order to
describe jobs.
B) is a systematic process for gathering, documenting, and analyzing information in order to
describe jobs.
C) is a systematic process for gathering and analyzing information in order to pay jobs.
D) is a systematic process for analyzing information in order to describe jobs.
Answer: B
Difficulty: Moderate
Skill: Concept
LO: 1.1: Define strategic compensation.
7) 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
LO: 1.1: Define strategic compensation.
8) This concept describes an organization's success when the organization 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
LO: 1.1: Define strategic compensation.
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9) Which of the following refers to the planned use of organizational 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
LO: 1.1: Define strategic compensation.
10) Which of following enables organizations to generate income, higher organization 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
LO: 1.2: Summarize the role of compensation as a strategic business partner.
11) As a strategic business partner, HRM and compensation professionals today need to think
most like whom?
A) vice president operations
B) chief financial officer (CFO)
C) chief executive officer (CEO)
D) controller
Answer: C
Difficulty: Moderate
Skill: Concept
LO: 1.2: Summarize the role of compensation as a strategic business partner.
12) In General Electric's human resource leadership program (HRLP), successful participants
will achieve which of the following?
A) gain an understanding of the depth of specialization for each (HRM) function
B) gain an understanding of HRM competencies, global leadership skills, and business acumen
C) gain an understanding of the depth of specialization for each HRM function
D) gain an understanding of HRM from a generalist's perspective
Answer: B
Difficulty: Easy
Skill: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
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13) Cash and equipment such as a lab equipment in a research lab are examples of which of the
following?
A) non-liquid assets
B) organizational structure
C) capital
D) liquid assets
Answer: C
Difficulty: Moderate
Skill: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
14) Discerning threats and opportunities is the main focus of which activity?
A) human resource planning
B) environmental scanning
C) job evaluation
D) job analysis
Answer: B
Difficulty: Moderate
Skill: Concept
LO: 1.3: Explain strategic compensation decisions.
15) This term suggests that a loss is likely for the organization, and that the individual will be left
with little control.
A) reverse opportunity
B) negative equity
C) threat
D) foreclosure
Answer: C
Difficulty: Easy
Skill: Concept
LO: 1.3: Explain strategic compensation decisions.
16) Which of the following competitive strategies does Apple Computer use?
A) lowest-cost strategy
B) differentiation strategy
C) total quality management strategy
D) human capital strategy
Answer: B
Difficulty: Moderate
Skill: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
17) IKEA sources its products to countries where labour is cheaper and provides a low level of
service. Which of the following competitive strategies does IKEA use?
A) differentiation strategy
B) high quality strategy
C) brand notoriety
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