Compensation Management
Exam Answer Key
Course Introduction
Compensation Management explores the strategic and operational aspects of designing and administering employee compensation systems. The course covers foundational concepts such as job evaluation, salary surveys, pay structure development, and performance-based reward systems. Emphasis is placed on balancing internal equity and external competitiveness, understanding legal considerations, and aligning compensation practices with organizational goals. Students also examine benefits administration, incentive programs, and the role of compensation in motivating and retaining talent. Through case studies and practical applications, the course equips students with the skills necessary to develop and manage effective compensation strategies in diverse organizational contexts.
Recommended Textbook
Managing Human Resources 6th canadian edition by Monica Belcourt
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Page 2
Chapter 1: The World of Human Resources Management
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Sample Questions
Q1) Organization C is attempting to manage reactive change within the organization. This organization is radically changing every process through redesigning and rethinking from the ground up. The firm needs a dramatic change in order to survive. Which of the following best captures what Organization C is implementing?
A) Six Sigma
B) continuous improvement
C) reengineering
D) total quality management
Answer: C
Q2) An increased reliance on outsourcing is likely to increase the morale and productivity of the employees that remain on the job.
A)True
B)False
Answer: False
Q3) One of the responsibilities of HR managers is to provide advice and counsel to line managers.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Strategy and Human Resources Planning
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Sample Questions
Q1) What is the most important information obtained from a Markov analysis?
A) human capital readiness
B) what types of employees work in each department
C) how many individuals are in each job in each department
D) what positions are going to be coming open and will require a new hire
Answer: D
Q2) Smith Frozen Foods performs a yearly employee survey to assess how its employees feel about safety on the job, the comfort of the working conditions, and their general level of satisfaction with their work, managers, and co-workers. Smith Frozen Foods is most likely performing which of the following?
A) a job satisfaction survey
B) an environmental analysis
C) a cultural audit
D) an engagement measure
Answer: C
Q3) Attrition and early retirement are means for organizations to reduce excess labour.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Equity and Diversity in Human Resources Management
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Sample Questions
Q1) "Phil's Antique Superstore" is hiring ten new customer service agents. All three of Phil's stores are housed in historic landmark buildings that are "heritage" sites and do not have wheelchair ramp access. Phil, the owner, has indicated that city bylaws will not allow him to renovate and add a wheelchair ramp to his buildings because of their heritage status. This fact makes the ability to go up stairs which of the following?
A) an undue hardship
B) a reasonable accommodation
C) a bona fide occupational qualification to work at Phil's
D) a system barrier to working at Phil's
Answer: C
Q2) Employers covered by the federal Employment Equity Act are required to consult with designated employees' representatives or, in a unionized setting, with bargaining agents.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Job Analysis, Employee Involvement, and
Flexible Work Schedules
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Sample Questions
Q1) In the job characteristics model, skill variety refers to the amount of freedom held by the employee to schedule work and perform activities.
A)True
B)False
Q2) At Eastman Kodak Company, teams are responsible for manufacturing entire product lines. This type of team is referred to as a "task force."
A)True
B)False
Q3) Job analysis is now considered outdated because it can't keep up with the current state of change in today's fast-paced work world.
A)True
B)False
Q4) A job consists of different duties and responsibilities performed by one person. A)True
B)False
Q5) What are the advantages and disadvantages of flextime or flexible working hours?
Q6) What is the role of job analysis in HRM, and how does it relate to other HRM functions?
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Chapter 5: Expanding the Talent Pool: Recruitment and Careers
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Sample Questions
Q1) Learning in Development (LID) is a high-tech firm that specializes in applications for hand-held devices. It is looking for a cheap, fast, and effective way of recruiting new candidates. Which of the following strategies would best suit LID?
A) Internet recruiting
B) executive search firms
C) labour unions
D) walk-in job applicants
Q2) Which of the following is the best description of the use of applications and résumés for filling positions?
A) The percentage of acceptable applications from this source is generally not very high. B) Applications and résumés are an important source of recruitment, especially for large retail organizations.
C) In combination with electronic screening, applications and résumés are a powerful HR tool.
D) Applications and résumés are the most commonly used tactic by job seekers.
Q3) Describe the five stages of career development, particularly stages one and two, and briefly describe what stages three through five have in common.
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Page 7
Chapter 6: Employee Selection
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Sample Questions
Q1) Why has interest in person-organization fit been increasing?
A) because of organizations' increased need for teamwork and flexibility
B) because of the movement toward union-free hiring
C) because job descriptions are becoming more rigid
D) because of advances in selection tools
Q2) Validity refers to what a selection procedure measures and how well it measures it.
A)True
B)False
Q3) Concurrent validity involves testing applicants and obtaining criterion data after they have been on the job for some indefinite period.
A)True
B)False
Q4) A comprehensive analysis of honesty tests reveals that they are valid for predicting theft, disciplinary problems, absenteeism, and job performance.
A)True
B)False
Q5) Measuring KSAOs of an applicant against the competencies required for the job is called person-organization fit.
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Chapter 7: Training and Development
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Sample Questions
Q1) Organization analysis, task analysis, and person analysis are all part of which of the following phases of the system model?
A) the training and development phase
B) the analysis phase
C) the needs assessment phase
D) the evaluation phase
Q2) Which of the following types of learning methods would be well-suited to teach air-traffic controllers how use the radar display?
A) the simulation method
B) programmed instruction
C) audiovisual learning
D) on-the-job training
Q3) Role-playing consists of assuming the attitudes and behaviour of others, often a supervisor and a subordinate.
A)True
B)False
Q4) Orientation is an ongoing process.
A)True
B)False
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Chapter 8: Appraising and Improving Performance
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Sample Questions
Q1) In most instances, one person can easily observe and evaluate an employee's performance.
A)True
B)False
Q2) Which of the following is exemplified by a manager rating an employee higher than he or she deserves in order to look good as a manager in the eyes of the manager's own superiors?
A) criterion deficiency
B) organizational politics
C) criterion contamination
D) administrative appraisal purpose
Q3) Which of the following best describes a behaviourally anchored rating scale?
A) It typically has construct validity.
B) It typically has content validity.
C) It can be used to rate employees across many different jobs.
D) It costs the least to develop.
Q4) In general, performance appraisal can be classified as either administrative or developmental.
A)True
B)False
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Chapter 9: Managing Compensation
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Sample Questions
Q1) Which of the following can pay secrecy NOT do?
A) generate distrust in the compensation system
B) reduce employee motivation
C) inhibit organizational effectiveness
D) generate feelings of commitment
Q2) Competence-based pay systems compensate employees for the different skills or knowledge they possess rather than for the job they hold in a designated job category.
A)True
B)False
Q3) Which of the following clauses are found in some labour agreements that periodically adjust compensation rates to reflect increases in cost of living?
A) maintenance clauses
B) escalator clauses
C) roll-up clauses
D) guarantee clauses
Q4) Briefly discuss the provisions of the Employment Standards Acts pertaining to employee compensation.
Q5) Briefly explain the different job evaluation systems.
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Chapter 10: Pay For Performance: Incentive Rewards
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Sample Questions
Q1) Identify and briefly describe one gainsharing plan that encourages maximum effort and cooperation but is not tied to profit fluctuations, as are profit-sharing plans.
Q2) What is the purpose of a profit-sharing plan?
A) to allow workers to contribute ideas and suggestions
B) to motivate a total commitment to the organization as a whole
C) to enable workers to share in labour cost savings
D) to instill commitment to the employee's immediate work group
Q3) A merit raise is a form of bonus that is given to an employee beyond their base wage.
A)True B)False
Q4) Straight commission plans may induce salespeople to grant price concessions. A)True B)False
Q5) Performance measures are rather simple to develop and standardize, as sales volume is an objective measure of performance that is not dependent upon external factors.
A)True
B)False
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Chapter 11: Employee Benefits
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Sample Questions
Q1) To reflect the social changes Canada is facing, employers are increasingly tailoring their benefits programs to be family-friendly.
A)True
B)False
Q2) Which of the following statements does NOT describe workers' compensation?
A) All employers pay the same premium rate to be eligible for workers' compensation.
B) Employers share collective liability, though contributions may vary among employers in the same industry.
C) Workers' compensation is based on loss of earnings.
D) The system is no-fault and nonadversarial, and thus offers no recourse to the courts.
Q3) Which of the following types of pension plan, with fixed payouts, is falling out of use?
A) contributory plan
B) registered retirement savings plan (RRSP)
C) defined benefit plan
D) defined contribution plan
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13
Chapter 12: Safety and Health
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Q1) Stress is any demand on the individual that requires coping behaviour.
A)True
B)False
Q2) Employers have many responsibilities in providing safe workplaces for employees.
A)True
B)False
Q3) It is the supervisor's duty to ensure that workers use or wear safety equipment, devices, or clothing.
A)True
B)False
Q4) What program aims to help employees with nutrition, weight control, and avoidance of substances harmful to health?
A) a fitness program
B) an employee assistance program
C) a health service programs.
D) workplace fitness and health
Q5) Occupational health and safety are regulated solely by the federal government.
Q6) Burnout is an early stage of distress.
A)True
B)False
Page 14
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Chapter 13: Employee Rights and Discipline
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Q1) One of the goals of discipline is that it should be seen as training that moulds and strengthens the desirable conduct-or corrects undesirable conduct-and develops self-control.
A)True
B)False
Q2) In order to be effective, employee discipline must take place as soon as possible after the problem is verified.
A)True
B)False
Q3) Tammy Faye, a university student, is doing research on cases decided by the Supreme Court on employee dismissals for threatening co-workers on the job. Which of the following regimes of employment law is Tammy doing research on?
A) criminal law
B) common law
C) statutory regulation
D) Supreme Court law
Q4) Organizations are required by law to comply with ethical guidelines.
A)True
B)False
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Chapter 14: The Dynamics of Labour Relations
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Q1) More than 70 percent of all public employees are unionized.
A)True
B)False
Q2) Unionization restricts the freedom of management to formulate HR policy unilaterally.
A)True
B)False
Q3) Which of the following is NOT one of the key reasons why workers join unions in Canada?
A) to earn higher pay
B) to fulfill social needs
C) to get a voice in their work lives
D) to change the government
Q4) The majority of workers in Canada are governed by legislation at which of the following levels/jurisdictions?
A) provincial
B) international
C) municipal
D) federal
Q5) Explain the impact of unionization on managers.
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Chapter 15: International Human Resources Management
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Sample Questions
Q1) Learning how people think and act in their relations with others is a part of cultural training that prepares employees for working internationally.
A)True
B)False
Q2) Which of the following best describes transnational teams?
A) They tend to be focused on projects that span multiple countries.
B) They tend to be homogenous.
C) They are usually comprised of members with generalized skills.
D) They are usually comprised of members from the same region.
Q3) Cultural environment includes all of the following components EXCEPT which one?
A) education/human capital
B) religious beliefs
C) corporate structure
D) values and ideologies
Q4) Transnational teams are composed of members from multiple nationalities working on projects that span multiple countries.
A)True
B)False
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Chapter 16: Creating High Performance Work Systems
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Q1) Which of the following is NOT a tangible symbol of commitment between labour and management?
A) the establishment of joint forums with explicit mandates
B) clauses in the collective bargaining agreement
C) a policy document clarifying union involvement
D) good-faith negotiations
Q2) Even if employees are underutilized, organizations can still operate at full performance.
A)True
B)False
Q3) What type of fit describes high-performance work systems that support the organization's goals and strategies?
A) internal fit
B) horizontal fit
C) external fit
D) lateral fit
Q4) Most employees welcome change efforts.
A)True
B)False
Q5) What are the fundamental principles of high-performance work systems?
Page 18
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