,TESTBANK FOR Strategic Compensation A Human
Resource Management Approach, 11th edition
Joseph J. Martocchio
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Strategic Compensation: A Human Resource Management Approach, 11e (Martocchio)
Chapter 1 Strategic Compensation: A Component of Human Resource Systems
1) ________ refers to the design and implementation of compensation systems to reinforce the
objectives of both HR strategies and competitive business strategies.
A) Extrinsic compensation
B) Strategic compensation
C) Strategic analysis
D) Intrinsic compensation
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
2) Protection programs are what type of compensation benefits?
A) External
B) Non-monetary rewards
C) Internal
D) Monetary
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
3) Which of the following is NOT an example of a core compensation?
A) Medical insurance
B) End-of-year bonuses
C) Merit pay
D) Monetary compensation
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
1
Copyright © 2025 Pearson Education, Inc.
,4) Since the COVID-19 epidemic restrictions eased and allowed employees to return to work,
many companies have been offering higher pay increases. Approximately, how much have pay
increases been?
A) Less than 2%
B) 2% up to 2.9%
C) 3% up to 3.8%
D) 4% or more
Answer: D
Difficulty: Challenging
Skill: Concept
AACSB: Application of Knowledge
LO: 1.1: Define strategic compensation.
5) Employee benefits refer to ________.
A) salary and bonuses
B) monetary compensation
C) nonmonetary rewards
D) effective compensation practices
Answer: C
Difficulty: Easy
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
6) Which of the following is a specific tactical HR compensation decision?
A) Performance appraisal
B) Seniority pay
C) Recruitment
D) Training
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
7) ________ compensation refers to the mental state of employees as a result of their
performance on the job.
A) Intrinsic
B) Extrinsic
C) Core
D) Monetary
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
2
Copyright © 2025 Pearson Education, Inc.
,8) Compensation represents both the intrinsic and extrinsic rewards employees receive for
performing their jobs. Briefly describe both types of rewards and indicate the professionals who
are responsible for managing them.
Answer: Intrinsic compensation reflects employees' psychological mind-sets that result from
performing their jobs. Extrinsic compensation includes both monetary and nonmonetary rewards.
Organizational development professionals promote intrinsic compensation through effective job
design. Compensation professionals are responsible for extrinsic compensation. Extrinsic
compensation includes both monetary and nonmonetary rewards. Compensation professionals
establish monetary compensation programs to reward employees according to their job
performance levels or for learning job-related knowledge or skills. Nonmonetary rewards include
protection programs (e.g., medical insurance), paid time off (e.g., vacations), and services (e.g.,
day care assistance). Most compensation professionals refer to nonmonetary rewards as
employee benefits.
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
9) Which of following contributed greatly to the need for a strategic approach to compensation?
A) Advances in technology
B) Dramatic increases in CEO compensation
C) Higher productivity per worker
D) Greater inequality in wealth
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.2: Summarize the role of compensation as a strategic business partner.
10) Which of the following shifts in workforce composition makes it necessary to have a
strategic approach to compensation issues?
A) Fewer employees are earning college degrees.
B) More women entered the labor force after the pandemic.
C) A leadership gap due to retiring baby boomers.
D) Most younger employees do not have the same work ethic.
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
3
Copyright © 2025 Pearson Education, Inc.
,11) In GE'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 (HR) function
B) Gain an understanding of HR competencies, global leadership skills, and business acumen
C) Gain an understanding of the width of specialization for each HR function
D) Gain an understanding of HR from a generalist's perspective
Answer: B
Difficulty: Easy
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
12) A mass spectrometer in a research lab is an example of which of the following?
A) Human capital
B) Financial capital
C) Capital equipment
D) Performance enhancers
Answer: C
Difficulty: Moderate
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
13) Which of the following tools can compensation professionals use to leverage the value of
human capital?
A) Higher minimum wages
B) Skill-based pay programs
C) Compensation based on length of employment
D) Employee unionization support
Answer: B
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.2: Summarize the role of compensation as a strategic business partner.
4
Copyright © 2025 Pearson Education, Inc.
,14) Compensation professionals can provide a strategic contribution to a firm when they can
answer yes to three distinct questions. Which of the following is NOT one of those questions?
A) Does compensation strategy fit well with the objectives of competitive business and HR
strategies?
B) Does the compensation reward all employees based on tenure with the firm?
C) Does the choice and design of compensation practices fit well to support compensation
strategy?
D) Does the implementation of compensation practices effectively direct employee behavior to
enhance job performance that supports the choice of compensation practices?
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
15) Which of the following government provisions gives companies the ability to recoup
research and development costs as well as earn profits for a limited period of time?
A) Reverse opportunity
B) Trademarks
C) Patent protection
D) Bankruptcy preference
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
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
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
5
Copyright © 2025 Pearson Education, Inc.
,17) IKEA, a furniture manufacturer, sources its products to countries where labor 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
D) Lowest-cost strategy
Answer: D
Difficulty: Moderate
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
18) Which of the following tools is used by firms following a differentiation strategy to enhance
employee creativity and willingness to take risks?
A) Design thinking
B) Pay-for-performance
C) Short-term incentive pay
D) Machine learning
Answer: A
Difficulty: Easy
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
19) Which of these actions would HR encourage in attempting to create a lowest-cost
competitive strategy?
A) High level of service
B) Low customer involvement
C) Cost minimization in operations, marketing, and HR
D) High concern for the quality of output
Answer: C
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
20) How do compensation professionals support the company's strategic initiatives?
Answer: Compensation professionals support strategic initiatives through the design and
implementation of compensation systems. Compensation professionals make decisions about
whether to use (and how to design) pay-for-performance practices, whether to set pay levels that
exceed typical market pay rates, and whether to create a pay mix that emphasizes long-term over
short-term incentives. The totality of choices should fit the firm's strategy whether it is a cost
leadership or a differentiation strategy.
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
6
Copyright © 2025 Pearson Education, Inc.
,21) Explain how differentiation strategies can lead to brand loyalty and why that is important.
Answer: A differentiation strategy can take many forms, including design or brand image,
technology, features, customer service, and price. These differences can lead to a competitive
advantage through building brand loyalty among devoted consumers who prefer the
differentiated offerings. Brand-loyal consumers are probably less sensitive to price increases,
which enables companies to invest in research and development initiatives to further differentiate
themselves from competing companies.
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
22) Give an example of how PepsiCo uses design thinking.
Answer: PepsiCo embraces the importance of design thinking. For example, the company
designers created the Pepsi Spire, which is a high-tech beverage dispensing machine with a
futuristic design. Former PepsiCo CEO Indra Nooyi had this to say about the company's design
approach: "Other companies with dispensing machines have focused on adding a few more
buttons and combinations of flavors. Our design guys essentially said that we're talking about a
fundamentally different interaction between consumer and machine."
Difficulty: Challenging
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
23) What is one work-related change driven by the COVID-19 pandemic?
Answer: About 58% of companies now permit employees to work from home at least part of
the week.
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
24) Which law made it illegal to pay women less for performing equal work as men?
A) Equal Pay Act of 1963
B) Civil Rights Act of 1964
C) Davis-Bacon Act of 1931
D) Fair Labor Standards Act of 1938
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
7
Copyright © 2025 Pearson Education, Inc.
, 25) Which of these factors is considered a compensable factor by compensation professionals?
A) Gender
B) Responsibility
C) Age
D) Geographic region
Answer: B
Difficulty: Challenging
Skill: Concept
AACSB: Reflective Thinking
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
26) Periodic adjustments to pay based on changes in the consumer price index (CPI) are known
as ________.
A) seniority pay
B) merit pay
C) COLAs
D) skill-based pay
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
27) Jason works at a call center for an insurance company, and he has been answering calls
regarding auto insurance. Recently, he started to attend a training program about home insurance.
What type of pay system would reward Jason for completion of this training?
A) Incentive pay
B) Merit pay
C) Seniority pay
D) Pay-for-knowledge
Answer: D
Difficulty: Moderate
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
8
Copyright © 2025 Pearson Education, Inc.
Resource Management Approach, 11th edition
Joseph J. Martocchio
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Strategic Compensation: A Human Resource Management Approach, 11e (Martocchio)
Chapter 1 Strategic Compensation: A Component of Human Resource Systems
1) ________ refers to the design and implementation of compensation systems to reinforce the
objectives of both HR strategies and competitive business strategies.
A) Extrinsic compensation
B) Strategic compensation
C) Strategic analysis
D) Intrinsic compensation
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
2) Protection programs are what type of compensation benefits?
A) External
B) Non-monetary rewards
C) Internal
D) Monetary
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
3) Which of the following is NOT an example of a core compensation?
A) Medical insurance
B) End-of-year bonuses
C) Merit pay
D) Monetary compensation
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
1
Copyright © 2025 Pearson Education, Inc.
,4) Since the COVID-19 epidemic restrictions eased and allowed employees to return to work,
many companies have been offering higher pay increases. Approximately, how much have pay
increases been?
A) Less than 2%
B) 2% up to 2.9%
C) 3% up to 3.8%
D) 4% or more
Answer: D
Difficulty: Challenging
Skill: Concept
AACSB: Application of Knowledge
LO: 1.1: Define strategic compensation.
5) Employee benefits refer to ________.
A) salary and bonuses
B) monetary compensation
C) nonmonetary rewards
D) effective compensation practices
Answer: C
Difficulty: Easy
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
6) Which of the following is a specific tactical HR compensation decision?
A) Performance appraisal
B) Seniority pay
C) Recruitment
D) Training
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
7) ________ compensation refers to the mental state of employees as a result of their
performance on the job.
A) Intrinsic
B) Extrinsic
C) Core
D) Monetary
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.1: Define strategic compensation.
2
Copyright © 2025 Pearson Education, Inc.
,8) Compensation represents both the intrinsic and extrinsic rewards employees receive for
performing their jobs. Briefly describe both types of rewards and indicate the professionals who
are responsible for managing them.
Answer: Intrinsic compensation reflects employees' psychological mind-sets that result from
performing their jobs. Extrinsic compensation includes both monetary and nonmonetary rewards.
Organizational development professionals promote intrinsic compensation through effective job
design. Compensation professionals are responsible for extrinsic compensation. Extrinsic
compensation includes both monetary and nonmonetary rewards. Compensation professionals
establish monetary compensation programs to reward employees according to their job
performance levels or for learning job-related knowledge or skills. Nonmonetary rewards include
protection programs (e.g., medical insurance), paid time off (e.g., vacations), and services (e.g.,
day care assistance). Most compensation professionals refer to nonmonetary rewards as
employee benefits.
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.1: Define strategic compensation.
9) Which of following contributed greatly to the need for a strategic approach to compensation?
A) Advances in technology
B) Dramatic increases in CEO compensation
C) Higher productivity per worker
D) Greater inequality in wealth
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.2: Summarize the role of compensation as a strategic business partner.
10) Which of the following shifts in workforce composition makes it necessary to have a
strategic approach to compensation issues?
A) Fewer employees are earning college degrees.
B) More women entered the labor force after the pandemic.
C) A leadership gap due to retiring baby boomers.
D) Most younger employees do not have the same work ethic.
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
3
Copyright © 2025 Pearson Education, Inc.
,11) In GE'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 (HR) function
B) Gain an understanding of HR competencies, global leadership skills, and business acumen
C) Gain an understanding of the width of specialization for each HR function
D) Gain an understanding of HR from a generalist's perspective
Answer: B
Difficulty: Easy
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
12) A mass spectrometer in a research lab is an example of which of the following?
A) Human capital
B) Financial capital
C) Capital equipment
D) Performance enhancers
Answer: C
Difficulty: Moderate
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.2: Summarize the role of compensation as a strategic business partner.
13) Which of the following tools can compensation professionals use to leverage the value of
human capital?
A) Higher minimum wages
B) Skill-based pay programs
C) Compensation based on length of employment
D) Employee unionization support
Answer: B
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.2: Summarize the role of compensation as a strategic business partner.
4
Copyright © 2025 Pearson Education, Inc.
,14) Compensation professionals can provide a strategic contribution to a firm when they can
answer yes to three distinct questions. Which of the following is NOT one of those questions?
A) Does compensation strategy fit well with the objectives of competitive business and HR
strategies?
B) Does the compensation reward all employees based on tenure with the firm?
C) Does the choice and design of compensation practices fit well to support compensation
strategy?
D) Does the implementation of compensation practices effectively direct employee behavior to
enhance job performance that supports the choice of compensation practices?
Answer: B
Difficulty: Moderate
Skill: Concept
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
15) Which of the following government provisions gives companies the ability to recoup
research and development costs as well as earn profits for a limited period of time?
A) Reverse opportunity
B) Trademarks
C) Patent protection
D) Bankruptcy preference
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
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
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
5
Copyright © 2025 Pearson Education, Inc.
,17) IKEA, a furniture manufacturer, sources its products to countries where labor 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
D) Lowest-cost strategy
Answer: D
Difficulty: Moderate
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
18) Which of the following tools is used by firms following a differentiation strategy to enhance
employee creativity and willingness to take risks?
A) Design thinking
B) Pay-for-performance
C) Short-term incentive pay
D) Machine learning
Answer: A
Difficulty: Easy
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
19) Which of these actions would HR encourage in attempting to create a lowest-cost
competitive strategy?
A) High level of service
B) Low customer involvement
C) Cost minimization in operations, marketing, and HR
D) High concern for the quality of output
Answer: C
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
20) How do compensation professionals support the company's strategic initiatives?
Answer: Compensation professionals support strategic initiatives through the design and
implementation of compensation systems. Compensation professionals make decisions about
whether to use (and how to design) pay-for-performance practices, whether to set pay levels that
exceed typical market pay rates, and whether to create a pay mix that emphasizes long-term over
short-term incentives. The totality of choices should fit the firm's strategy whether it is a cost
leadership or a differentiation strategy.
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
6
Copyright © 2025 Pearson Education, Inc.
,21) Explain how differentiation strategies can lead to brand loyalty and why that is important.
Answer: A differentiation strategy can take many forms, including design or brand image,
technology, features, customer service, and price. These differences can lead to a competitive
advantage through building brand loyalty among devoted consumers who prefer the
differentiated offerings. Brand-loyal consumers are probably less sensitive to price increases,
which enables companies to invest in research and development initiatives to further differentiate
themselves from competing companies.
Difficulty: Challenging
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
22) Give an example of how PepsiCo uses design thinking.
Answer: PepsiCo embraces the importance of design thinking. For example, the company
designers created the Pepsi Spire, which is a high-tech beverage dispensing machine with a
futuristic design. Former PepsiCo CEO Indra Nooyi had this to say about the company's design
approach: "Other companies with dispensing machines have focused on adding a few more
buttons and combinations of flavors. Our design guys essentially said that we're talking about a
fundamentally different interaction between consumer and machine."
Difficulty: Challenging
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.3: Explain strategic compensation decisions.
23) What is one work-related change driven by the COVID-19 pandemic?
Answer: About 58% of companies now permit employees to work from home at least part of
the week.
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.3: Explain strategic compensation decisions.
24) Which law made it illegal to pay women less for performing equal work as men?
A) Equal Pay Act of 1963
B) Civil Rights Act of 1964
C) Davis-Bacon Act of 1931
D) Fair Labor Standards Act of 1938
Answer: A
Difficulty: Moderate
Skill: Concept
AACSB: Reflective Thinking
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
7
Copyright © 2025 Pearson Education, Inc.
, 25) Which of these factors is considered a compensable factor by compensation professionals?
A) Gender
B) Responsibility
C) Age
D) Geographic region
Answer: B
Difficulty: Challenging
Skill: Concept
AACSB: Reflective Thinking
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
26) Periodic adjustments to pay based on changes in the consumer price index (CPI) are known
as ________.
A) seniority pay
B) merit pay
C) COLAs
D) skill-based pay
Answer: C
Difficulty: Moderate
Skill: Concept
AACSB: Analytical Thinking
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
27) Jason works at a call center for an insurance company, and he has been answering calls
regarding auto insurance. Recently, he started to attend a training program about home insurance.
What type of pay system would reward Jason for completion of this training?
A) Incentive pay
B) Merit pay
C) Seniority pay
D) Pay-for-knowledge
Answer: D
Difficulty: Moderate
Skill: Application of Knowledge
AACSB: Application of Knowledge
LO: 1.4: Identify and discuss the building blocks and structural elements of strategic
compensation systems.
8
Copyright © 2025 Pearson Education, Inc.
