HUMAN RESOURCE MANAGEMENT -
FINAL EXAM QUESTIONS AND
ANSWERS WITH VERIFIED SOLUTIONS
2024
Pay level - ANSWER the compensation decision concerning how much to pay employees relative to what
they could earn doing the same job elsewhere; external equity, internal equity
External equity - ANSWER employee perceptions of fairness based on how much they are paid relative to
people working in other organizations; determined using pay surveys
Pay survey - ANSWER gathering information to learn how much employees are being paid by other
organizations
Internal equity - ANSWER employee perceptions of fairness based on how much they are paid relative to
others working in the same organization; determined using point systems
Point system - ANSWER a process of assigning numerical values to each job in order to compare the
value of contributions within and across organizations
Meet-the-market strategy - ANSWER a compensation decision to pay employees an amount similar to
what they can make working for other organizations
Lead-the-market strategy - ANSWER a compensation decision to pay employees an amount above what
they might earn working for another organization
Lag-the-market strategy - ANSWER a compensation decision to pay employees an amount below what
they might earn working for another organization
Transactional commitment - ANSWER a sense of obligation to an organization that is created primarily by
financial incentives; Bargain Laborer, Free Agent
, Relational commitment - ANSWER a sense of loyalty to an organization that is based not only on financial
incentives but also on social ties; Loyal Soldier, Committed Expert
Uniform rewards - ANSWER a reward system that minimizes differences among workers and offers
similar compensation to all employees; Bargain Laborer, Loyal Soldier
Variable rewards - ANSWER a reward system that pays some employees substantially more than others
in order to emphasize differences between high and low performers; Free Agent, Committed Expert
Reinforcement theory - ANSWER a psychological theory suggesting that people are motivated by
antecedents (environmental cues) and consequents (rewards and punishment); pay-for-performance
Pay-for-performance - ANSWER compensation practices that use differences in employee performance
to determine differences in pay
Goal-setting theory - ANSWER a psychological theory suggesting that an individual's conscious choices
explain motivation
Justice theory - ANSWER a psychological theory suggesting that motivation is driven by beliefs about
fairness
Equity theory - ANSWER a justice perspective suggesting that people determine the fairness of their pay
by comparing what they give to and receive from the organization with what others give and receive;
distributive justice, procedural justice
Distributive justice - ANSWER perceptions of fairness based on the outcomes (such as pay) received from
an organization
Procedural justice - ANSWER perceptions of fairness based on the processes used to allocate outcomes
such as pay
Expectancy theory - ANSWER a psychological theory suggesting that people are motivated by a
combination of three beliefs: valence, instrumentality, and expectancy
FINAL EXAM QUESTIONS AND
ANSWERS WITH VERIFIED SOLUTIONS
2024
Pay level - ANSWER the compensation decision concerning how much to pay employees relative to what
they could earn doing the same job elsewhere; external equity, internal equity
External equity - ANSWER employee perceptions of fairness based on how much they are paid relative to
people working in other organizations; determined using pay surveys
Pay survey - ANSWER gathering information to learn how much employees are being paid by other
organizations
Internal equity - ANSWER employee perceptions of fairness based on how much they are paid relative to
others working in the same organization; determined using point systems
Point system - ANSWER a process of assigning numerical values to each job in order to compare the
value of contributions within and across organizations
Meet-the-market strategy - ANSWER a compensation decision to pay employees an amount similar to
what they can make working for other organizations
Lead-the-market strategy - ANSWER a compensation decision to pay employees an amount above what
they might earn working for another organization
Lag-the-market strategy - ANSWER a compensation decision to pay employees an amount below what
they might earn working for another organization
Transactional commitment - ANSWER a sense of obligation to an organization that is created primarily by
financial incentives; Bargain Laborer, Free Agent
, Relational commitment - ANSWER a sense of loyalty to an organization that is based not only on financial
incentives but also on social ties; Loyal Soldier, Committed Expert
Uniform rewards - ANSWER a reward system that minimizes differences among workers and offers
similar compensation to all employees; Bargain Laborer, Loyal Soldier
Variable rewards - ANSWER a reward system that pays some employees substantially more than others
in order to emphasize differences between high and low performers; Free Agent, Committed Expert
Reinforcement theory - ANSWER a psychological theory suggesting that people are motivated by
antecedents (environmental cues) and consequents (rewards and punishment); pay-for-performance
Pay-for-performance - ANSWER compensation practices that use differences in employee performance
to determine differences in pay
Goal-setting theory - ANSWER a psychological theory suggesting that an individual's conscious choices
explain motivation
Justice theory - ANSWER a psychological theory suggesting that motivation is driven by beliefs about
fairness
Equity theory - ANSWER a justice perspective suggesting that people determine the fairness of their pay
by comparing what they give to and receive from the organization with what others give and receive;
distributive justice, procedural justice
Distributive justice - ANSWER perceptions of fairness based on the outcomes (such as pay) received from
an organization
Procedural justice - ANSWER perceptions of fairness based on the processes used to allocate outcomes
such as pay
Expectancy theory - ANSWER a psychological theory suggesting that people are motivated by a
combination of three beliefs: valence, instrumentality, and expectancy
