Compensation, 14e Barry Gerhart, Jerry Newman (Test Bank All
Chapters, 100% Original Verified, A+ Grade) Answers At The End Of
Each Chapter
Chapter 1
1) Total CEO annual compensation at S&P 500 companies is roughly $12.3 million. At just
over half that total ($6.5 million), which compensation component comprises the majority of
that total compensation amount?
A) Stock option awards
B) Salary
C) Stock grants
D) Bonuses
2) The "say on pay" and clawback provisions are included in which of the following federal
laws?
A) The Dodd-Frank Wall Street Reform and Consumer Protection Act
B) The Affordable Care Act of 2010
C) The Fair Labor Standards Act (FLSA)
D) The Cost-of-Living Act (COLA)
3) One of the reasons why the great majority of the uninsured in the United States are from
working families is that
A) many larger employers do not offer health insurance as it does not guarantee an
increase in productivity levels.
B) health insurance is costlier for larger employers.
C) many small employers are much less likely than larger employers to offer health
insurance to their employees.
D) most workers decline health insurance when it is offered by their employers.
4) The degree to which pay influences individual and aggregate motivation among employees at
any point in time is referred to as a(n):
A) sorting effect.
B) incentive effect.
C) turnover effect.
D) directional effect.
Version 1 1
,5) Which of the following is an example of a relational return?
A) A short-term incentive
B) Employment security
C) Allowances
D) Income protection
6) Which of the following is given as an increment to base pay in recognition of past work
behavior?
A) Merit bonuses
B) Relational returns
C) Merit increases
D) A short-term incentive
7) GreenRain Corporation faces an increase in its employee turnover rate. The CEO calls for a
board meeting with the senior executives to discuss the issue. Who among the following
suggests increasing the relational returns that employees receive to reduce the turnover rate at
GreenRain?
A) Tom, who suggests increasing the decision-making authorities given to the employees
to make work more challenging
B) Deena, who suggests providing more work/life balance to the employees by
increasing the number of paid leaves
C) Syed, who suggests increasing the medical insurance coverage offered to the
employees
D) Liam, who suggests increasing merit bonuses
8) Which of the following statements concerning cash compensation and the Fair Labor
Standards Act is true?
A) Nonexempt employees have their pay calculated at an hourly wage.
B) Exempt workers receive overtime pay.
C) Managers and professionals usually fit the category of nonexempt worker.
D) Labeling all base pay as "salary" means the employer does not have to follow the
FLSA regulations.
Version 1 2
,9) Which of the following is true of incentives?
A) They are determined after past performance is evaluated.
B) They are linked to subjective performance measures.
C) They permanently increase labor costs.
D) They are re-earned each pay period.
10) Which of the following companies is taking efforts to improve the work/life balance of its
employees?
A) MH Corporation, which increases the number of paid holidays given to its senior
employees
B) Kay Corporation, which increases the transport allowance for its employees by 10
percent
C) Haywire Corporation, which allows its employees to buy company stocks at a
reduced price of $30 per share
D) Halo Corporation, which increases the variable pay of its employees
11) Variable pay may also be called
A) relational returns.
B) merit increases.
C) COLAs.
D) incentives.
12) Which of the following is often the largest component in an executive pay package?
A) Base pay
B) Stock options
C) Merit bonuses
D) Incentives
13) Unlike merit increases, merit bonuses are
A) distributed in every quarter.
B) based on duration of service.
C) paid in the form of a lump sum.
D) included in the base salary.
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, 14) Robert, the CEO of GameTrack Corporation, wants to restructure its pay plan without
increasing labor costs in the long run. He is most likely to achieve this, while retaining his
top employees, by:
A) increasing base pay and decreasing variable pay.
B) increasing incentive pay and decreasing base pay.
C) hiring more employees and reducing marginal product output requirements.
D) providing across-the-board increases on a monthly basis.
15) Incentives do not permanently increase labor costs because:
A) they rely on a subjective rating of performance.
B) they are given based on the past performances of employees.
C) they increase the base wage.
D) they are one-time payments.
16) A difference between incentives and merit increases is that incentives
A) do not increase the base wage, whereas merit increases increase the base wage.
B) cannot be tied to the performance of an individual, whereas merit increases can be
tied to the performance of an individual.
C) rely on a subjective measure of performance, whereas merit increases rely on an
objective measure of performance.
D) are relational returns, whereas merit increases are part of the total compensation.
17) Which of the following is a fundamental objective, and NOT a policy, of the pay model?
A) Fairness
B) Competitiveness
C) Contributions
D) Alignment
18) Which of the following is a policy, and NOT an objective, of the pay model?
A) Ethics
B) Competitiveness
C) Efficiency
D) Fairness
Version 1 4
Chapters, 100% Original Verified, A+ Grade) Answers At The End Of
Each Chapter
Chapter 1
1) Total CEO annual compensation at S&P 500 companies is roughly $12.3 million. At just
over half that total ($6.5 million), which compensation component comprises the majority of
that total compensation amount?
A) Stock option awards
B) Salary
C) Stock grants
D) Bonuses
2) The "say on pay" and clawback provisions are included in which of the following federal
laws?
A) The Dodd-Frank Wall Street Reform and Consumer Protection Act
B) The Affordable Care Act of 2010
C) The Fair Labor Standards Act (FLSA)
D) The Cost-of-Living Act (COLA)
3) One of the reasons why the great majority of the uninsured in the United States are from
working families is that
A) many larger employers do not offer health insurance as it does not guarantee an
increase in productivity levels.
B) health insurance is costlier for larger employers.
C) many small employers are much less likely than larger employers to offer health
insurance to their employees.
D) most workers decline health insurance when it is offered by their employers.
4) The degree to which pay influences individual and aggregate motivation among employees at
any point in time is referred to as a(n):
A) sorting effect.
B) incentive effect.
C) turnover effect.
D) directional effect.
Version 1 1
,5) Which of the following is an example of a relational return?
A) A short-term incentive
B) Employment security
C) Allowances
D) Income protection
6) Which of the following is given as an increment to base pay in recognition of past work
behavior?
A) Merit bonuses
B) Relational returns
C) Merit increases
D) A short-term incentive
7) GreenRain Corporation faces an increase in its employee turnover rate. The CEO calls for a
board meeting with the senior executives to discuss the issue. Who among the following
suggests increasing the relational returns that employees receive to reduce the turnover rate at
GreenRain?
A) Tom, who suggests increasing the decision-making authorities given to the employees
to make work more challenging
B) Deena, who suggests providing more work/life balance to the employees by
increasing the number of paid leaves
C) Syed, who suggests increasing the medical insurance coverage offered to the
employees
D) Liam, who suggests increasing merit bonuses
8) Which of the following statements concerning cash compensation and the Fair Labor
Standards Act is true?
A) Nonexempt employees have their pay calculated at an hourly wage.
B) Exempt workers receive overtime pay.
C) Managers and professionals usually fit the category of nonexempt worker.
D) Labeling all base pay as "salary" means the employer does not have to follow the
FLSA regulations.
Version 1 2
,9) Which of the following is true of incentives?
A) They are determined after past performance is evaluated.
B) They are linked to subjective performance measures.
C) They permanently increase labor costs.
D) They are re-earned each pay period.
10) Which of the following companies is taking efforts to improve the work/life balance of its
employees?
A) MH Corporation, which increases the number of paid holidays given to its senior
employees
B) Kay Corporation, which increases the transport allowance for its employees by 10
percent
C) Haywire Corporation, which allows its employees to buy company stocks at a
reduced price of $30 per share
D) Halo Corporation, which increases the variable pay of its employees
11) Variable pay may also be called
A) relational returns.
B) merit increases.
C) COLAs.
D) incentives.
12) Which of the following is often the largest component in an executive pay package?
A) Base pay
B) Stock options
C) Merit bonuses
D) Incentives
13) Unlike merit increases, merit bonuses are
A) distributed in every quarter.
B) based on duration of service.
C) paid in the form of a lump sum.
D) included in the base salary.
Version 1 3
, 14) Robert, the CEO of GameTrack Corporation, wants to restructure its pay plan without
increasing labor costs in the long run. He is most likely to achieve this, while retaining his
top employees, by:
A) increasing base pay and decreasing variable pay.
B) increasing incentive pay and decreasing base pay.
C) hiring more employees and reducing marginal product output requirements.
D) providing across-the-board increases on a monthly basis.
15) Incentives do not permanently increase labor costs because:
A) they rely on a subjective rating of performance.
B) they are given based on the past performances of employees.
C) they increase the base wage.
D) they are one-time payments.
16) A difference between incentives and merit increases is that incentives
A) do not increase the base wage, whereas merit increases increase the base wage.
B) cannot be tied to the performance of an individual, whereas merit increases can be
tied to the performance of an individual.
C) rely on a subjective measure of performance, whereas merit increases rely on an
objective measure of performance.
D) are relational returns, whereas merit increases are part of the total compensation.
17) Which of the following is a fundamental objective, and NOT a policy, of the pay model?
A) Fairness
B) Competitiveness
C) Contributions
D) Alignment
18) Which of the following is a policy, and NOT an objective, of the pay model?
A) Ethics
B) Competitiveness
C) Efficiency
D) Fairness
Version 1 4
