MANA 3320 Test 3 Review Exam
Questions and Answers
If employees conclude that they are under-rewarded, they are likely to make up the
difference in one of three ways: way 1 - ANSWER-the might put forth less effort
(reducing their inputs)
If employees conclude that they are under-rewarded, they are likely to make up the
difference in one of three ways: way 2 - ANSWER-they might find a way to increase
their outcomes (stealing)
If employees conclude that they are under-rewarded, they are likely to make up the
difference in one of three ways: way 3 - ANSWER-they might withdraw (by leaving
the org or refusing to cooperate)
Employees' beliefs about fairness do NOT influence their willingness to accept
transfers or promotions (true/false) - ANSWER-false
pay ranges - ANSWER-a set of possible pay rates defined by a minimum, maximum,
and midpoint (market rate) of pay for employees holding a particular job or a job
within a particular pay grade
red-circle rate - ANSWER-pay at a rate that falls above pay range for the job
green-circle rate - ANSWER-pay at a rate that falls below pay range for the job
compa-ratio - ANSWER-the ratio of average pay to midpoint of pay range
For compa-ratio, if average equals midpoint, CR is - ANSWER-1
For compa-ratio, if average pay is above midpoint, CR is - ANSWER-greater than 1
For compa-ratio, if average pay is below midpoint, CR is - ANSWER-less than 1
write the formula for compa-ratio - ANSWER-average salary/ midpoint of pay range
pay differentials - ANSWER-adjustments to a pay rate to reflect differences in
working conditions or labor markets
Do US businesses provide pay differentials based on geographic location? -
ANSWER-Yes
what is the most common approach for pay differentials? - ANSWER-to move an
employee higher in the pay structure to compensate for higher living costs
, Can pay differentials be due to work hour requirements (ex working a night shift or
working weekends)? - ANSWER-Yes
merit pay - ANSWER-a system of linking pay increases to ratings on performance
appraisals
What two factors are used in a merit increase grid? - ANSWER-individual's
performance rating and individual's compa-ratio (the employee's salary/midpoint of
their salary range)
individual-based compensation works when: reasons 1-4 - ANSWER-the firm has a
relatively educated workforce, employees often do different jobs, technology
changes frequently, and employee participation and teamwork are encouraged
individual-based compensation works when: reasons 5-7 - ANSWER-opportunities
for upward mobility are limited, opportunities to learn new skills are present, and the
costs of employee turnover and absenteeism in terms of lost production are high
gainsharing - ANSWER-group incentive program that measures improves in
productivity and effectiveness and distributes a portion of each to employees
list the benefits of gainsharing - ANSWER-addresses challenge of identifying
appropriate performance measures for complex jobs and frees employees to
determine how to improve their own and their group's performance
show the formula for the target ratio in a scanlon plan - ANSWER-target ratio: labor
costs/ sales value of production
show the formula for the goal of a scanlon plan - ANSWER-goal: target ratio x sales
value of production
show the formula for the gain of a scanlon plan - ANSWER-gain: goal - actual costs
what are two options for paying for organizational performance - ANSWER-stock
options and ESOPs
what does ESOP stand for? - ANSWER-Employee Stock Ownership Plan
stock options - ANSWER-rights to buy a certain number of shares of stock at a
specified price
ESOPs - ANSWER-an arrangement in which the org distributes shares of stock to all
its employees by placing it in trust
what is the most common form of employee ownsership? - ANSWER-ESOP
formula for motivation - ANSWER-motivation = E x I x V
expectancy - ANSWER-the connection between behavior and the outcome
Questions and Answers
If employees conclude that they are under-rewarded, they are likely to make up the
difference in one of three ways: way 1 - ANSWER-the might put forth less effort
(reducing their inputs)
If employees conclude that they are under-rewarded, they are likely to make up the
difference in one of three ways: way 2 - ANSWER-they might find a way to increase
their outcomes (stealing)
If employees conclude that they are under-rewarded, they are likely to make up the
difference in one of three ways: way 3 - ANSWER-they might withdraw (by leaving
the org or refusing to cooperate)
Employees' beliefs about fairness do NOT influence their willingness to accept
transfers or promotions (true/false) - ANSWER-false
pay ranges - ANSWER-a set of possible pay rates defined by a minimum, maximum,
and midpoint (market rate) of pay for employees holding a particular job or a job
within a particular pay grade
red-circle rate - ANSWER-pay at a rate that falls above pay range for the job
green-circle rate - ANSWER-pay at a rate that falls below pay range for the job
compa-ratio - ANSWER-the ratio of average pay to midpoint of pay range
For compa-ratio, if average equals midpoint, CR is - ANSWER-1
For compa-ratio, if average pay is above midpoint, CR is - ANSWER-greater than 1
For compa-ratio, if average pay is below midpoint, CR is - ANSWER-less than 1
write the formula for compa-ratio - ANSWER-average salary/ midpoint of pay range
pay differentials - ANSWER-adjustments to a pay rate to reflect differences in
working conditions or labor markets
Do US businesses provide pay differentials based on geographic location? -
ANSWER-Yes
what is the most common approach for pay differentials? - ANSWER-to move an
employee higher in the pay structure to compensate for higher living costs
, Can pay differentials be due to work hour requirements (ex working a night shift or
working weekends)? - ANSWER-Yes
merit pay - ANSWER-a system of linking pay increases to ratings on performance
appraisals
What two factors are used in a merit increase grid? - ANSWER-individual's
performance rating and individual's compa-ratio (the employee's salary/midpoint of
their salary range)
individual-based compensation works when: reasons 1-4 - ANSWER-the firm has a
relatively educated workforce, employees often do different jobs, technology
changes frequently, and employee participation and teamwork are encouraged
individual-based compensation works when: reasons 5-7 - ANSWER-opportunities
for upward mobility are limited, opportunities to learn new skills are present, and the
costs of employee turnover and absenteeism in terms of lost production are high
gainsharing - ANSWER-group incentive program that measures improves in
productivity and effectiveness and distributes a portion of each to employees
list the benefits of gainsharing - ANSWER-addresses challenge of identifying
appropriate performance measures for complex jobs and frees employees to
determine how to improve their own and their group's performance
show the formula for the target ratio in a scanlon plan - ANSWER-target ratio: labor
costs/ sales value of production
show the formula for the goal of a scanlon plan - ANSWER-goal: target ratio x sales
value of production
show the formula for the gain of a scanlon plan - ANSWER-gain: goal - actual costs
what are two options for paying for organizational performance - ANSWER-stock
options and ESOPs
what does ESOP stand for? - ANSWER-Employee Stock Ownership Plan
stock options - ANSWER-rights to buy a certain number of shares of stock at a
specified price
ESOPs - ANSWER-an arrangement in which the org distributes shares of stock to all
its employees by placing it in trust
what is the most common form of employee ownsership? - ANSWER-ESOP
formula for motivation - ANSWER-motivation = E x I x V
expectancy - ANSWER-the connection between behavior and the outcome
