Total Compensation Exam Review
Unit 1
1. Which of the following statements most accurately describes extrinsic rewards?
a. They focus on factors inherent in the work itself—the job content.
b. They satisfy higher-order human needs.
c. They include monetary and nonmonetary rewards and come from the job context.
d. They involve skill variety, task identity, task significance, autonomy, and feedback.
2. Joe, a service manager, loves his job. He particularly appreciates the level of autonomy his job
provides. From a rewards perspective, which kind of reward appears to be motivating Joe?
a. extrinsic
b. incentives
c. intrinsic
d. compensation
3. Your company is experiencing high turnover and poor work quality. Exit interviews indicate that
a large percentage of employees indicate boredom as the primary cause for quitting your
company. Almost 100 percent were satisfied with their compensation packages. Which of the
following actions may reduce your high turnover rate?
a. providing a pension option and offering a retirement planning service
b. introducing pay-for-performance plans
c. trying to enrich the jobs to make them more interesting
d. offering dental and medical coverage
4. Which of the following would be an example of an extrinsic reward?
a. interesting and meaningful work
b. pay for performance based on the number of units produced per hour
c. being able to see the company’s product being used by a satisfied customer
d. work that allows for enhanced personal development
,5. What does a firm’s compensation strategy identify?
a. all of the financial and nonfinancial rewards of work
b. the total amount of cash compensation employees will receive
c. the mix of intrinsic rewards
d. the mix and total amount of base, performance, and indirect pay
6. Which of the following would be the best choice for a compensation system?
a. A competitive base pay and incentives are offered.
b. Employees share in the organization’s profits.
c. Compensation is linked to knowledge.
d. The system is cost effective and achieves company goals.
7. You recently transferred from a smaller manufacturing firm to a larger one and discovered that,
although entirely different, both compensation systems are effective. How is this possible?
a. Both companies have well-trained managers.
b. Both companies do similar work and hire the same kinds of employees.
c. Both systems fit the organization and its strategy.
d. Both provide compensation packages that lead the marketplace.
8. What can you determine by examining a firm’s contextual variables?
a. the managerial strategy that a firm is actually using
b. the type of structure the organization should be using
c. the firm’s competitive advantage and required resources
d. organizational goals, mission, and vision
9. What can you determine by examining a firm’s structural variables?
a. the managerial strategy a firm is actually using
b. the managerial strategy a firm should be using
c. a firm’s corporate strategy
d. the corporate strategy a firm should be using
,10. You have been asked to explain to a manager the notion of structural variables within the
context of a strategic framework for compensation. Which of the following variables would you
elaborate on?
a. how work is divided into subtasks
b. the market the company serves
c. the level of differentiation in the products and services offered by the company
d. the company’s products’ life cycle
11. You are in the process of designing a new reward system for your firm. What is the most
important single determinant of what will or will not be a successful reward system for your
firm?
a. the particular managerial strategy used
b. the interrelationships among the structural variables
c. corporate strategy
d. competitive advantage
12. You have recently been hired by a manufacturing company in Vancouver, British Columbia. You
conclude that the company is using a high-involvement management strategy. Which of the
following variables would you review to support your aforementioned conclusion?
a. structural variables
b. organizational policies and procedures
c. contextual variables
d. behaviours of managers
13. Which of the following sets of strategies reflects different assumptions about employees and
how they should be managed?
a. classical, human relations, and high-involvement
b. low-cost, differentiator, and focused differentiator
c. corporate, competitive, and business
d. defender, prospector, and analyzer
, 14. Which of the following characteristics are common in a classical organization?
a. joint employee–management planning and goal setting
b. intrinsic rewards often being used as a reward system
c. loyal employees who are dedicated to the norms of the organization
d. strong management control over employees
15. Which of the following rewards are normally associated with a high-involvement managerial
strategy?
a. high levels of pay and benefits
b. providing employees with the opportunity to grow professionally
c. providing employees with a pleasant team environment
d. promotions based on a high level of production
16. Which reward strategy is appropriate for companies using a human relations approach to
management?
a. Rewards are mainly extrinsic and focus on loyalty to the organization.
b. A wide variety of both intrinsic and extrinsic rewards are used.
c. Only extrinsic rewards are offered.
d. Only intrinsic rewards are offered.
17. Which of the following key cultural values would be detrimental to a high-involvement
organization?
a. honesty
b. trustworthiness
c. doing things the way they have always been done
d. open communication
Unit 1
1. Which of the following statements most accurately describes extrinsic rewards?
a. They focus on factors inherent in the work itself—the job content.
b. They satisfy higher-order human needs.
c. They include monetary and nonmonetary rewards and come from the job context.
d. They involve skill variety, task identity, task significance, autonomy, and feedback.
2. Joe, a service manager, loves his job. He particularly appreciates the level of autonomy his job
provides. From a rewards perspective, which kind of reward appears to be motivating Joe?
a. extrinsic
b. incentives
c. intrinsic
d. compensation
3. Your company is experiencing high turnover and poor work quality. Exit interviews indicate that
a large percentage of employees indicate boredom as the primary cause for quitting your
company. Almost 100 percent were satisfied with their compensation packages. Which of the
following actions may reduce your high turnover rate?
a. providing a pension option and offering a retirement planning service
b. introducing pay-for-performance plans
c. trying to enrich the jobs to make them more interesting
d. offering dental and medical coverage
4. Which of the following would be an example of an extrinsic reward?
a. interesting and meaningful work
b. pay for performance based on the number of units produced per hour
c. being able to see the company’s product being used by a satisfied customer
d. work that allows for enhanced personal development
,5. What does a firm’s compensation strategy identify?
a. all of the financial and nonfinancial rewards of work
b. the total amount of cash compensation employees will receive
c. the mix of intrinsic rewards
d. the mix and total amount of base, performance, and indirect pay
6. Which of the following would be the best choice for a compensation system?
a. A competitive base pay and incentives are offered.
b. Employees share in the organization’s profits.
c. Compensation is linked to knowledge.
d. The system is cost effective and achieves company goals.
7. You recently transferred from a smaller manufacturing firm to a larger one and discovered that,
although entirely different, both compensation systems are effective. How is this possible?
a. Both companies have well-trained managers.
b. Both companies do similar work and hire the same kinds of employees.
c. Both systems fit the organization and its strategy.
d. Both provide compensation packages that lead the marketplace.
8. What can you determine by examining a firm’s contextual variables?
a. the managerial strategy that a firm is actually using
b. the type of structure the organization should be using
c. the firm’s competitive advantage and required resources
d. organizational goals, mission, and vision
9. What can you determine by examining a firm’s structural variables?
a. the managerial strategy a firm is actually using
b. the managerial strategy a firm should be using
c. a firm’s corporate strategy
d. the corporate strategy a firm should be using
,10. You have been asked to explain to a manager the notion of structural variables within the
context of a strategic framework for compensation. Which of the following variables would you
elaborate on?
a. how work is divided into subtasks
b. the market the company serves
c. the level of differentiation in the products and services offered by the company
d. the company’s products’ life cycle
11. You are in the process of designing a new reward system for your firm. What is the most
important single determinant of what will or will not be a successful reward system for your
firm?
a. the particular managerial strategy used
b. the interrelationships among the structural variables
c. corporate strategy
d. competitive advantage
12. You have recently been hired by a manufacturing company in Vancouver, British Columbia. You
conclude that the company is using a high-involvement management strategy. Which of the
following variables would you review to support your aforementioned conclusion?
a. structural variables
b. organizational policies and procedures
c. contextual variables
d. behaviours of managers
13. Which of the following sets of strategies reflects different assumptions about employees and
how they should be managed?
a. classical, human relations, and high-involvement
b. low-cost, differentiator, and focused differentiator
c. corporate, competitive, and business
d. defender, prospector, and analyzer
, 14. Which of the following characteristics are common in a classical organization?
a. joint employee–management planning and goal setting
b. intrinsic rewards often being used as a reward system
c. loyal employees who are dedicated to the norms of the organization
d. strong management control over employees
15. Which of the following rewards are normally associated with a high-involvement managerial
strategy?
a. high levels of pay and benefits
b. providing employees with the opportunity to grow professionally
c. providing employees with a pleasant team environment
d. promotions based on a high level of production
16. Which reward strategy is appropriate for companies using a human relations approach to
management?
a. Rewards are mainly extrinsic and focus on loyalty to the organization.
b. A wide variety of both intrinsic and extrinsic rewards are used.
c. Only extrinsic rewards are offered.
d. Only intrinsic rewards are offered.
17. Which of the following key cultural values would be detrimental to a high-involvement
organization?
a. honesty
b. trustworthiness
c. doing things the way they have always been done
d. open communication
