Human Resource Management 14th Edition by Ace Test Banks

Human Resource Management 14th Edition

By R. Wayne Mondy, Joseph Martocchio

Human Resource Management, 14e (Mondy) Chapter 1 Human Resource Management: An Overview 1) The utilization of individuals to achieve organizational objectives is known as ________. A) human resource leadership B) human resource management C) human resource staffing D) human resource planning Answer: B Explanation: B) Human resource management (HRM) is the utilization of individuals to achieve organizational objectives. Basically, all managers get things done through the efforts of others. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) HR professionals only work with ________. A) other HR professionals B) only HR specialists C) all managers throughout the company D) every person who has applied for employment Answer: C Explanation: C) Human resource management (HRM) is the use of individuals to achieve organizational objectives. Basically, all managers get things done through the efforts of others. Consequently, managers at every level must concern themselves with HRM. Individuals dealing with human resource matters face a multitude of challenges, ranging from a constantly changing workforce to ever-present government regulations, a technological revolution, and the economy of the United States and the world. Furthermore, global competition has forced both large and small organizations to be more conscious of costs and productivity. Because of the critical nature of human resource issues, these matters must receive major attention from upper management. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

3) Human resource management (HRM) is the utilization of individuals to achieve organizational objectives. Answer: TRUE Explanation: Human resource management (HRM) is the utilization of individuals to achieve organizational objectives. Basically, all managers get things done through the efforts of others. Consequently, managers at every level must concern themselves with HRM. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 4) Global competition is rarely relevant to the work of HR professionals. Answer: FALSE Explanation: Global competition has forced both large and small organizations to be more conscious of costs and productivity. Because of the critical nature of human resource issues, these matters must receive major attention from upper management. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) What is human resource management? What are the six functional areas of HRM? Answer: Human resource management (HRM) is the utilization of individuals to achieve organizational objectives. Basically, all managers get things done through the efforts of others. Consequently, managers at every level must concern themselves with HRM. Six functional areas are associated with effective HRM: staffing, HR development, performance management, compensation, safety and health, and employee and labor relations. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1, 2

6) What is the staffing function of HRM? Identify and discuss what staffing involves. Answer: Staffing is the process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve organizational objectives. Staffing involves the following activities: job analysis, human resource planning, recruitment, and selection. Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization. It affects virtually every aspect of HRM. Human resource planning is the systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period. The data provided set the stage for other HR actions. Recruitment is the process of attracting applicants on a timely basis, in sufficient numbers, and with appropriate qualifications. Selection is the process of choosing the individual best suited for the job and organization from a pool of applicants. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 1, 2 7) Avid Technology, Inc. was recently included on Fortune's list of 100 best companies. Which HR function will most significantly be affected by this achievement? A) performance appraisal B) safety and health C) recruitment D) research Answer: C Explanation: C) Achieving acknowledgment by an external source is a good way for a brand to be recognized. Being listed on Fortune's list of 100 best companies will most likely assist in the company's recruitment and retention programs. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 8) Lauren is an HR manager at a marketing firm. Which of the following functions is LEAST likely to be an aspect of Lauren's job? A) staffing B) employee safety C) product testing D) employee and labor relations Answer: C Explanation: C) Six functional areas are associated with effective HRM: staffing, HR development, performance management, compensation, safety and health, and employee and labor relations. Difficulty: Easy Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 3 Copyright © 2016 Pearson Education, Inc.

9) The staffing process involves all of the following functions EXCEPT ________. A) job analysis B) recruitment C) product placement D) selection Answer: C Explanation: C) Staffing involves job analysis, human resource planning, recruitment, and selection. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 10) As an HR manager in charge of staffing for a restaurant chain, John is most likely NOT responsible for ________. A) training B) job analysis C) recruitment D) selection Answer: A Explanation: A) Staffing is the process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve organizational objectives. Staffing involves job analysis, human resource planning, recruitment, and selection. Training is an aspect of HR development. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 11) What is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization? A) strategic planning B) job enlargement C) recruitment D) job analysis Answer: D Explanation: D) Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization. It impacts virtually every aspect of HRM, including planning, recruitment, and selection. Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 4 Copyright © 2016 Pearson Education, Inc.

12) The systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time is referred to as ________. A) HR planning B) recruitment C) job analysis D) performance appraisal Answer: A Explanation: A) Human resource planning is the systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period. The data provided set the stage for recruitment or other HR actions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 13) The process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization is referred to as ________. A) HR planning B) selection C) appraisal D) recruitment Answer: D Explanation: D) Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization. Human resource planning is the systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period. The data provided set the stage for recruitment or other HR actions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

14) Lyle, an HR specialist at a publishing company, is in the process of choosing from a group of applicants the individual best suited for an assistant editor position. Lyle is most likely involved in the function of ________. A) recruitment B) HR planning C) job analysis D) selection Answer: D Explanation: D) Selection is the process of choosing from a group of applicants the individual best suited for a particular position and the organization. Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 15) Which HRM function consists of training and development, individual career planning and development activities, organization development, and performance management and appraisal? A) management by objectives B) employee and labor relations C) organizational development D) human resource development Answer: D Explanation: D) Human resource development is a major HRM function consisting not only of training and development but also of career planning and development activities, organization development, and performance management and appraisal. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

16) Connor works as an accountant at Price Waterhouse and is scheduled to meet with his manager for a formal review and evaluation of his strengths and weaknesses. In which of the following activities is Connor most likely participating? A) performance appraisal B) career development C) succession planning D) job analysis Answer: A Explanation: A) Performance appraisal is a formal system of review and evaluation of individual or team task performance. It affords employees the opportunity to capitalize on their strengths and overcome identified deficiencies, thereby helping them to become more satisfied and productive employees. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 17) Which of the following provides learners with the knowledge and skills needed for their present jobs? A) training B) development C) career planning D) succession planning Answer: A Explanation: A) Training is designed to provide learners with the knowledge and skills needed for their present jobs. Development involves learning that goes beyond today's job and has a more long-term focus. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 18) Which of the following involves learning that goes beyond today's job and has a more longterm focus? A) training B) career planning C) development D) organizational development Answer: C Explanation: C) Development involves learning that goes beyond today's job and has a more long-term focus. Training is designed to provide learners with the knowledge and skills needed for their present jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 7 Copyright © 2016 Pearson Education, Inc.

19) An ongoing process whereby an individual sets career goals and identifies the means to achieve them is called ________. A) succession planning B) career development C) career planning D) training Answer: C Explanation: C) Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 20) According to surveys, today's employees will work for approximately ________ companies and will change careers ________ times in their working lives. A) 3; 3 B) 5; 7 C) 9 to 11; 3 D) 11 to 13; 5 Answer: C Explanation: C) According to the Bureau of Labor Statistics, today's employees will work for approximately 9 to 11 companies during their careers based on the assumption that most people will work 30 to 40 years. A survey conducted by NYU's School of Continuing and Professional Studies showed that on average, individuals will change careers (not merely "jobs") three times in their life. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

21) A formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed is referred to as ________. A) career development B) succession planning C) career planning D) performance management Answer: A Explanation: A) Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 22) Which term refers to the planned and systematic attempt to change an organization and improve its performance? A) organization development B) corporate development C) performance management D) organization training Answer: A Explanation: A) Organization development (OD) is planned and systematic attempts to change the organization, typically to a more behavioral environment. OD applies to an entire system, such as a company or a plant. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

23) Which of the following terms refers to a goal-oriented process that is directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and the organization? A) team strategic management B) performance management C) organization development D) career development Answer: B Explanation: B) Performance management is a goal-oriented process that is directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. Organization development (OD) is planned and systematic attempts to change the organization, typically to a more behavioral environment. OD applies to an entire system, such as a company or a plant. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 24) Raj, a software engineer, recently met with his manager for a review and evaluation of Raj's performance over the last six months. In which of the following did Raj most likely participate? A) performance management B) performance appraisal C) organizational appraisal D) succession planning Answer: B Explanation: B) Performance appraisal is a formal system of review and evaluation of individual or team task performance. It affords employees the opportunity to capitalize on their strengths and overcome identified deficiencies, thereby helping them to become more satisfied and productive employees. Performance management is a goal-oriented process that is directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2

25) What HR tool gives employees the opportunity to capitalize on their strengths and overcome identified deficiencies? A) manager self-service B) employee orientation C) performance appraisal D) selection tests Answer: C Explanation: C) Performance appraisal is a formal system of review and evaluation of individual or team task performance. It affords employees the opportunity to capitalize on their strengths and overcome identified deficiencies, thereby helping them to become more satisfied and productive employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 26) Compensation, as described in your text, refers to the ________. A) total of all rewards provided to employees in return for their services B) wages individuals receive each pay period C) wage schedules and wage rates listed in the union contract D) internal alignment of intrinsic awards Answer: A Explanation: A) As used in the text, the term compensation includes the total of all rewards provided to employees in return for their services. The rewards may be one or a combination of direct financial compensation, indirect financial compensation, and nonfinancial compensation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 27) All of the following are categories of employee compensation EXCEPT ________. A) direct financial B) nonfinancial C) indirect financial D) stock capital Answer: D Explanation: D) As used in the text, the term compensation includes the total of all rewards provided to employees in return for their services. The rewards may be one or a combination of direct financial compensation, indirect financial compensation, and nonfinancial compensation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

28) Wages, salaries, and commissions are most likely examples of ________. A) direct financial compensation B) indirect financial compensation C) employment incentives D) employment benefits Answer: A Explanation: A) Direct financial compensation is the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Indirect financial compensation refers to the financial rewards that are not included in direct compensation, such as paid vacations, sick leave, holidays, and medical insurance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 29) Ellen enjoys working at Starbucks because of her interactions with customers and coworkers. The satisfaction that Ellen feels would best be categorized as ________. A) emotional health B) nonfinancial compensation C) performance satisfaction D) indirect financial compensation Answer: B Explanation: B) Nonfinancial compensation is the satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works. Indirect financial compensation refers to the financial rewards that are not included in direct compensation, such as paid vacations, sick leave, holidays, and medical insurance. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 30) Ben works at a small advertising agency as a graphic artist. Ben enjoys his job because the company allows employees to have flexible schedules and to telecommute when necessary. Which of the following best describes this type of employee compensation? A) indirect financial compensation B) direct financial compensation C) nonfinancial compensation D) required compensation Answer: C Explanation: C) Nonfinancial compensation refers to the physical environment in which the person works, which includes the schedule the firm allows. Flexible scheduling and telecommuting are neither direct nor indirect forms of financial compensation. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 12 Copyright © 2016 Pearson Education, Inc.

31) As a public school teacher, Molly has accrued 14 days of sick leave, which is a type of ________ compensation. A) direct financial B) indirect financial C) nonfinancial D) mandatory Answer: B Explanation: B) Indirect financial compensation refers to the financial rewards that are not included in direct compensation, such as paid vacations, sick leave, holidays, and medical insurance. Nonfinancial compensation is the satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 32) What is the primary reason that firms are more attentive to employee safety and health than they were in the past? A) federal legislation B) health care costs C) labor unions D) tax benefits Answer: A Explanation: A) Today, because of federal and state legislation that reflects societal concern, most organizations have become attentive to their employees' safety and health. Health care, unions, and taxes are less relevant factors. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 33) What human resource management task involves protecting employees from injuries caused by work-related accidents? A) accident prevention B) injury analysis C) job analysis D) safety Answer: D Explanation: D) Safety involves protecting employees from injuries caused by work-related accidents. Health refers to the employees' freedom from physical or emotional illness. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

34) Healthy and safe employees are more likely to ________. A) earn managerial promotions B) request salary increases C) remain productive D) join labor unions Answer: C Explanation: C) Health and safety are important because employees who work in a safe environment and enjoy good health are more likely to be productive and yield long-term benefits to the organization. Such employees will not necessarily be promoted, request raises, or join unions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 35) Approximately half of all employees at ABC Manufacturing are union members. Which of the following is ABC Manufacturing required by law to do with the labor unions? A) bargain with them in good faith B) make concessions to them C) help them organize activities D) pay dues for their new members Answer: A Explanation: A) Businesses are required by law to recognize a union and bargain with it in good faith if the firm's employees want the union to represent them. In the past, this relationship was an accepted way of life for many employers, but most firms today would rather have a union-free environment. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 36) What human resource task pervades all functional areas of human resource management? A) health and safety B) development C) training D) research Answer: D Explanation: D) Although human resource research is not a distinct HRM function, it pervades all functional areas, and the researcher's laboratory is the entire work environment. For instance, a study related to recruitment may suggest the type of worker most likely to succeed in a particular firm. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

37) Staffing is the process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve the organization's objectives. Answer: TRUE Explanation: Staffing is the process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve organizational objectives. Staffing involves job analysis, human resource planning, recruitment, and selection. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 38) According to the Small Business Administration, the majority of business are small. Answer: TRUE Explanation: However, today, many college graduates obtain jobs in small businesses. In fact, growth of small business is often a primary driver for the economy. Therefore, the practice of HR as it is conducted in small businesses is discussed at various times in your text Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 39) Human resource planning is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization. Answer: FALSE Explanation: Human resource development is a major HRM function consisting not only of training and development, but also of career planning and development activities, organization development, and performance management and appraisal. HR planning involves matching internal and external supplies of people with job openings over a certain period of time. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 40) Recruitment is the process of attracting qualified individuals and encouraging them to apply for work with the organization. Answer: TRUE Explanation: Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

41) Human resource development involves training, career planning, organization development, and performance management. Answer: TRUE Explanation: Human resource development is a major HRM function consisting not only of training and development but also of career planning and development activities, organization development, and performance management and appraisal. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 42) Training primarily focuses on the long-term career needs of employees. Answer: FALSE Explanation: Training is designed to provide learners with the knowledge and skills needed for their present jobs. Development involves learning that goes beyond today's job and has a more long-term focus. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 43) Development involves learning that goes beyond an employee's present job. Answer: TRUE Explanation: Development involves learning that goes beyond today's job and has a more longterm focus. Training is designed to provide learners with the knowledge and skills needed for their present jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 44) Career planning is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Answer: FALSE Explanation: Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

45) Organization development is the planned and systematic attempts to change the organization, typically to a more behavioral environment. Answer: TRUE Explanation: Organization development (OD) is planned and systematic attempts to change the organization, typically to a more behavioral environment. OD applies to an entire system, such as a company or a plant. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 46) Performance management is a formal system of review and evaluation of individual or team task performance. Answer: FALSE Explanation: Performance appraisal is a formal system of review and evaluation of individual or team task performance. Performance management is a goal-oriented process that is directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 47) Indirect financial compensation is the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Answer: FALSE Explanation: Direct financial compensation is the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Indirect financial compensation, which is also known as benefits, refers to the financial rewards that are not included in direct compensation, such as paid vacations, sick leave, holidays, and medical insurance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 48) Employee health and safety are a primary concern for businesses because of numerous federal and state laws. Answer: TRUE Explanation: Safety involves protecting employees from injuries caused by work-related accidents. Health refers to the employees' freedom from physical or emotional illness. Today, because of federal and state legislation that reflects societal concern, most organizations have become attentive to their employees' safety and health. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 17 Copyright © 2016 Pearson Education, Inc.

49) Today, most firms would prefer having employees belong to unions because the unions handle health benefits. Answer: FALSE Explanation: Businesses are required by law to recognize a union and bargain with it in good faith if the firm's employees want the union to represent them. In the past, this relationship was an accepted way of life for many employers, but most firms today would rather have a union-free environment. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 50) Industrial relations requires HR specialists to negotiate with competing businesses for market share. Answer: FALSE Explanation: When a labor union represents a firm's employees, the human resource activity is often referred to as industrial relations, which handles the job of collective bargaining. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 51) Human resource research is a distinct HRM function that requires a special department in most large firms. Answer: FALSE Explanation: Although human resource research is not a distinct HRM function, it pervades all functional areas, and the researcher's laboratory is the entire work environment. Firms do not typically have specified HR research departments. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 52) What is HR research? Why would HR research be important for a firm? Answer: Although human resource research is not a distinct HRM function, it pervades all functional areas, and the researcher's laboratory is the entire work environment. For instance, a study related to recruitment may suggest the type of worker most likely to succeed in a particular firm. Research on job safety may identify the causes of certain work-related accidents. The reasons for problems such as excessive absenteeism or excessive grievances may not be readily apparent. However, when such problems occur, human resource research can often shed light on their causes and offer possible solutions. Human resource research is clearly an important key to developing the most productive and satisfied workforce possible. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 2 18 Copyright © 2016 Pearson Education, Inc.

53) Which term refers to employees who have joined together for the purpose of dealing with an employer? A) political party B) organization C) union D) PEO Answer: C Explanation: C) A union is comprised of employees who have joined together for the purpose of dealing with their employer. In a unionized organization, the union rather than the individual employee negotiates an agreement with management. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2, 5 54) Jenny works in the HR department of Southwest Airlines, and she specializes in industrial relations. In which of the following activities would Jenny most likely participate? A) outsourcing tasks B) testing job candidates C) handling collective bargaining D) monitoring employee safety issues Answer: C Explanation: C) When a labor union represents a firm's employees, the human resource activity is often referred to as industrial relations, which handles the job of collective bargaining. Jenny is less likely to deal with outsourcing, testing, or monitoring safety. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 3 55) A human resource information system (HRIS) is essential to all of the following HR responsibilities EXCEPT ________. A) recruitment and selection B) creation of mobile HR applications C) oversight of legal and regulatory compliance D) benefits administration Answer: B Explanation: B) A human resource information system is any organized approach for obtaining relevant and timely information on which to base human resource decisions. An HRIS supports mainstay HR responsibilities: such as planning, recruitment, selection, oversight of legal and regulatory compliance, benefits administration, and safeguarding confidential employee information. Mobile HR applications are created by software developers. Difficulty: Challenging Skill: Concept AACSB: Information technology Learning Obj.: 3 19 Copyright © 2016 Pearson Education, Inc.

56) Many HR departments are most likely becoming smaller because ________. A) federal agencies monitor HR functions B) HR telecommuting is gaining popularity C) external groups are performing HR functions D) there is no way to explain the role of HR professionals as strategic business partners Answer: C Explanation: C) Many HR departments continue to get smaller because others outside the HR department are now performing certain functions. HR outsourcing, shared service centers, professional employer organizations, and line managers now assist in the accomplishment of many traditional human resource activities. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 57) Jennifer works in an advisory or staff capacity, working with other managers to help them deal with human resource matters. Jennifer is most likely employed as a(n) ________. A) account executive B) line manager C) HR manager D) project manager Answer: C Explanation: C) A human resource manager typically acts in an advisory or staff capacity, working with other managers to help them deal with human resource matters. The HR manager has been primarily responsible for coordinating the management of HR to help the organization achieve its goals. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 3 58) The human resource manager normally operates in what capacity? A) line B) production C) matrix D) staff Answer: D Explanation: D) A human resource manager typically acts in an advisory or staff capacity, working with other managers to help them deal with human resource matters. The HR manager has been primarily responsible for coordinating the management of HR to help the organization achieve its goals. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

59) The process of hiring an external provider to do the work that was previously done internally is referred to as ________. A) broadbanding B) job enlarging C) outsourcing D) onboarding Answer: C Explanation: C) HR outsourcing is the process of hiring external HR professionals to do the HR work that was previously done internally. The key to HR outsourcing success is to determine which functions to outsource, the extent to which they should be outsourced, and which ones to keep in-house. HR outsourcing focuses primarily on routine, transaction-oriented processes and clerical work. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 60) Lee Shultz, the operations manager for Acme Bolts, has just learned that an experienced arc welder has resigned. He contacts the manager of human resources, Reba Cole, asking her to send him some qualified welders for him to interview. In this case, ________. A) Lee is only concerned about accomplishing operations goals B) Reba is only concerned about accomplishing human resource goals C) Lee and Reba see organizational goals from the same perspective D) both are concerned with accomplishing organizational goals, but from different perspectives Answer: D Explanation: D) Lee's primary responsibility is operations; Reba's primary responsibility is human resources. However, both Lee and Reba are concerned with accomplishing organizational goals, even though their perspectives are different. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 3

61) Today HR outsourcing can be done in different ways. Which of the following is one of those ways? A) discrete services outsourcing B) project management outsourcing C) external recruitment process outsourcing D) parts supply outsourcing Answer: B Explanation: B) HR outsourcing is done in different ways, including discrete services and business process outsourcing. With discrete services, one element of a business process or a single set of high-volume repetitive functions is outsourced to a third party. Business process outsourcing (BPO) represents the transfer of the majority of HR services to a third party. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 62) A firm that outsources only benefits administration to a third party is most likely using ________. A) discrete services B) multiprocess services C) business process outsourcing D) single service outsourcing Answer: A Explanation: A) With discrete services, one element of a business process or a single set of highvolume repetitive functions is outsourced to a third party. Benefits have been the HR task most likely to be outsourced. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 63) Whirlpool Corporation has an agreement with IBM for the HR outsourcer to handle Whirlpool's workforce administration, compensation, recruitment, training, and performance reporting. This type of outsourcing is known as ________. A) process control outsourcing B) discrete services outsourcing C) business process outsourcing D) single task outsourcing Answer: C Explanation: C) Business process outsourcing (BPO) represents the transfer of the majority of HR services to a third party. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 3

64) Which HR task is most likely to be outsourced? A) training and development B) benefits administration C) payroll and compensation D) recruitment Answer: B Explanation: B) Benefits have been the HR task most likely to be outsourced. "Benefits administration has become so complex that it really takes someone who works with it every single day to keep track of all of the different laws and changes that are going on," said Dan Thomas, president of Trivalent Benefits Consulting Inc. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 65) Which of the following takes routine, transaction-based activities that are dispersed throughout the organization and consolidates them in one place? A) outsourcing centers B) shared service centers C) consolidation centers D) human resource centers Answer: B Explanation: B) A shared service center (SSC), also known as a center of expertise, takes routine, transaction-based activities dispersed throughout the organization and consolidates them in one place. Shared service centers provide an alternative to HR outsourcing and can often provide the same cost savings and customer service. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 66) Shared service centers provide an alternative to HR ________ and can often provide the same cost savings and customer service. A) outsourcing B) onboarding C) broadbanding D) downsizing Answer: A Explanation: A) A shared service center (SSC), also known as a center of expertise, takes routine, transaction based activities dispersed throughout the organization and consolidates them in one place. Shared service centers provide an alternative to HR outsourcing and can often provide the same cost savings and customer service. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 23 Copyright © 2016 Pearson Education, Inc.

67) Which term refers to a company that leases employees to other businesses? A) shared service center B) human resource provider C) external employer organization D) professional employer organization Answer: D Explanation: D) A professional employer organization (PEO) is a company that leases employees to other businesses. When a decision is made to use a PEO, the company releases its employees, who are then hired by the PEO. The PEO then manages the administrative needs associated with employees. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 68) Which of the following is a true statement about professional employer organizations? A) PEOs have the right to hire and fire the client company's employees. B) PEOs are less popular than in the past due to technology improvements. C) PEOs run day-to-day operations for client companies. D) PEOs lease employees from other businesses. Answer: A Explanation: A) Since the PEO is the employees' legal employer it has the right to hire, fire, discipline, and reassign an employee. Although PEOs have been available since the early 1980s, they have recently become more popular. PEOs handle administrative tasks so that client companies can focus on strategy. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

69) Shelby Organic Foods is a fast growing firm that produces organic frozen food entrees. The firm employs 700 people and expects to hire more in the next few years. Currently, all of the firm's HR tasks are handled internally by Shelby's HR department. However, top executives at Shelby are considering the idea of outsourcing benefits administration. Which of the following questions is LEAST relevant to the decision to outsource Shelby's benefits administration tasks? A) What is the cost difference for Shelby between handling benefits internally and externally? B) How much time is spent by Shelby's HR department handling benefits administration tasks? C) Which Shelby HR professional should oversee benefits administration at the shared service center? D) How knowledgeable is Shelby's HR staff about benefits administration and federal health care laws? Answer: C Explanation: C) Questions about cost, time, and legal knowledge are particularly important to ask before Shelby outsources any HR tasks. A shared service center is not a form of outsourcing. SSCs consolidate an organization's HR activities into one location and handle the HR tasks internally. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 3 70) Shelby Organic Foods is a fast growing firm that produces organic frozen food entrees. The firm employs 700 people and expects to hire more in the next few years. Currently, all of the firm's HR tasks are handled internally by Shelby's HR department. However, top executives at Shelby are considering the idea of outsourcing benefits administration. Which of the following best supports the idea of outsourcing benefits administration? A) Shelby employees enroll for health benefits through the firm's intranet. B) Shelby's HR manager recently participated in a strategic planning session. C) The benefits specialist at HR is knowledgeable about changing healthcare laws. D) Benefits administration is highly time consuming for the Shelby HR department. Answer: D Explanation: D) Benefits administration can be a high-volume, repetitive task that is time consuming for HR professionals. Outsourcing benefits administration would allow the HR department to focus on strategic organizational issues. Also, benefits administration has become so complex that it takes someone who works regularly with benefits administration to keep track of all of the different laws and changes that are going on. If Shelby has a specialist who understands the laws, then outsourcing is unnecessary. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 3

71) Shelby Organic Foods is a fast growing firm that produces organic frozen food entrees. The firm employs 700 people and expects to hire more in the next few years. Currently, all of the firm's HR tasks are handled internally by Shelby's HR department. However, top executives at Shelby are considering the idea of outsourcing benefits administration. Which of the following most likely undermines the idea of outsourcing benefits administration? A) Employees use Shelby's intranet to self-manage their own benefits. B) Staff managers at Shelby discuss benefits packages with new employees. C) Shelby's HR manager regularly meets with the firm's insurance provider. D) Shelby recently began offering employees a flexible spending plan for benefits. Answer: A Explanation: A) If the employees at Shelby are able to manage their own benefits through the firm's intranet, then outsourcing may not be necessary at this time because the HR department is most likely not overwhelmed with benefits administration tasks. Discussing benefits information, changing providers, and offering flexible benefits are less relevant to the decision to outsource. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 3 72) Which term refers to individuals that are directly involved in accomplishing the primary purpose of the organization? A) HR managers B) line managers C) staff managers D) sales managers Answer: B Explanation: B) Individuals directly involved in accomplishing the primary purpose of the organization are line managers. As the traditional work of HR managers diminishes, line managers are stepping up and performing some duties typically done by HR professionals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

73) Why are line managers most likely performing more HR tasks today? A) competition from PEOs B) implementation of EEO laws C) automation of HR processes D) expansion of HR departments Answer: C Explanation: C) Managers are being assisted by manager self-service, the use of software, and the corporate network to automate paper-based human resource processes that require a manager's approval, record-keeping or input, and processes that support the manager's job. Everything from recruitment, selection, performance appraisal, to employee development has been automated to assist line managers in performing traditional HR tasks. Difficulty: Challenging Skill: Concept AACSB: Information technology Learning Obj.: 3 74) A human resource manager is an individual who normally acts in an advisory or staff capacity by assisting other managers with HR issues. Answer: TRUE Explanation: Traditionally, a human resource manager was an individual who normally acted in an advisory or staff capacity, working with other managers to help them deal with HR matters. The HR manager was primarily responsible for coordinating the management of human resources to help the organization achieve its goals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 75) In today's workplace, outsourcing is focused more on saving money than on improving service quality and saving time. Answer: FALSE Explanation: Today, outsourcing agreements are focusing more on quality of service and saving time, which is often more important that saving money. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

76) Business process outsourcing involves transferring one element of a business process, such as benefits administration, to a third party. Answer: FALSE Explanation: Business process outsourcing (BPO) represents the transfer of the majority of HR services to a third party. With discrete services, one element of a business process or a single set of high-volume repetitive functions is outsourced to a third party. Benefits have been the HR task most likely to be outsourced with discrete services. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 77) A shared service center (SSC), also known as a center of expertise, takes routine, transactionbased activities dispersed throughout the organization and consolidates them in one place. Answer: TRUE Explanation: A shared service center (SSC), also known as a center of expertise, takes routine, transaction based activities dispersed throughout the organization and consolidates them in one place. For example, a company with 20 strategic business units could consolidate routine HR tasks and perform them in one location. Shared service centers provide an alternative to HR outsourcing and can often provide the same cost savings and customer service. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 78) A professional employer organization (PEO) leases employees to other organizations. Answer: TRUE Explanation: When a decision is made to use a PEO, the company releases its employees. The PEO hires those employees and leases them to the company. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 79) Shared service centers typically handle tasks associated with benefits and pension administration, payroll, and relocation assistance, but succession planning and global training activities remain the responsibility of the firm's HR department. Answer: FALSE Explanation: The most common HR functions that use SSCs are benefits and pension administration, payroll, relocation assistance and recruitment support, global training and development, succession planning, and talent retention. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 80) Billings Manufacturing has made the decision to use a professional employer organization. 28 Copyright © 2016 Pearson Education, Inc.

As a result, Billings will release its employees, who will then be hired by the PEO. Answer: TRUE Explanation: A professional employer organization (PEO) is a company that leases employees to other businesses. When a decision is made to use a PEO, the company releases its employees, who are then hired by the PEO. The PEO then manages the administrative needs associated with employees. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 81) Individuals directly involved in accomplishing the primary purpose of the organization are line managers. Answer: TRUE Explanation: Individuals directly involved in accomplishing the primary purpose of the organization are line managers. As the traditional work of HR managers diminishes, line managers are stepping up and performing some duties typically done by human resource professionals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 82) What is a line manager and what role does a line manager play in HR? Why do you think line managers are involved with HR now more than in the past? Answer: Individuals directly involved in accomplishing the primary purpose of the organization are line managers. As the traditional work of HR managers diminishes, line managers are stepping up and performing some duties typically done by human resource professionals. Automation has assisted greatly in this process. Managers are being assisted by manager selfservice, the use of software, and the corporate network to automate paper-based human resource processes that require a manager's approval, record-keeping or input, and processes that support the manager's job. Everything from recruitment, selection, performance appraisal, to employee development has been automated to assist line managers in performing traditional HR tasks. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 3

83) What technology assists HR professionals? How has technology altered the HR organization? Answer: With the increased sophistication of technology has come the ability to design more useful human resource information systems (HRIS). An HRIS is any organized approach for obtaining relevant and timely information on which to base human resource decisions. Think of an HRIS as an umbrella for merging the various subsystems, such as applicant tracking systems, online assessment, and automated reference checking. Today, mainstay HR responsibilities such as recruitment, selection, oversight of legal and regulatory compliance, benefits administration, and the safeguarding of confidential employee information cannot be carried out effectively without HRIS. Line managers, HR outsourcing, HR shared service centers, and professional employer organizations are now handling many of the traditional HR tasks because of technology. In addition, many activities associated with staffing have been automated, so line managers can be more involved in the selection process. Difficulty: Challenging Skill: Synthesis AACSB: Information technology Learning Obj.: 3, 5 84) The meaning of value creation differs according to a company's ________. A) size B) mission C) age D) none of the above Answer: B Explanation: B) The meaning of value creation differs according to a company's mission. It is useful to think about the differences between for-profit and not-for-profit organizations. For example, Microsoft and Frito Lay are for-profit companies that strive to generate annual profits for company shareholders. These companies promote profit generation by selling quality software and quality snack products, respectively. The American Red Cross is an illustration of a not-for-profit organization that relies on charitable monetary contributions and grant money to create societal value. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

85) In recent years, HR professionals have increasingly been expected to ________. A) serve as strategic planners B) handle administrative tasks C) implement federal guidelines D) act as employee advocates Answer: A Explanation: A) Today, HR professions are increasingly expected to take on the role of being a strategic partner with upper management. No longer is an administrative and compliance role acceptable as their primary jobs. HR executives have become a strategic partner in achieving organizational plans and results. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 86) The duties of today's HR professionals are moving from a transactional to a strategic model. As such, they work toward ________. A) keeping track of government regulations B) supporting day-to-day operational processes C) solving strategic problems in the organization D) solving transactional problems in the organization Answer: C Explanation: C) Today, HR professions are increasingly taking on the role of being a strategic partner with upper management. In this role, HR professionals are moving from a transactional to a strategic model, and they work toward solving strategic problems in the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 87) The rapidly evolving world of HR will increasingly require HR professionals to ________. A) focus exclusively on learning new trends in the HR profession B) thoroughly understand all aspects of what the companies they work for do C) focus their attention on compliance with government regulation D) integrate their operations with the finance department operations Answer: B Explanation: B) The rapidly evolving world of HR will increasingly require HR professionals to thoroughly understand all aspects of what the companies they work for do. Essentially, they must know more than just HR work. In moving from a transactional to a strategic model, HR professionals work toward solving strategic problems in the organization. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

88) A useful way to better understand how HR serves as a strategic business partner is to think about the use of the following for value creation: ________. A) balance sheet B) capital C) outsourcing D) professional employee organization Answer: B Explanation: B) A useful way to better understand how HR serves as a strategic business partner is to think about the use of capital for value creation. Capital refers to the factors that enable companies to generate income, higher company stock prices, economic value, strong positive brand identity, and reputation. There is a variety of capital that companies use to create value, including financial capital (for example, cash), capital equipment (for instance, state-of-the-art robotics used in manufacturing), and human capital (employees). Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 89) In today's workplace, HR is ________. A) moving towards a narrower focus on personnel B) focusing more on administrative tasks C) focusing more on strategic planning D) moving towards a wider focus on training Answer: C Explanation: C) In the past, HR focused exclusively on personnel and associated administrative tasks. With the increase of automation and technology, HR managers have more time to assist with strategic and business planning. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

90) Burton Pharmaceuticals is a fast-growing drug company based in Dallas. Top executives at Burton realize that human capital plays an essential role in the continued success of the firm, and they want HR to participate in strategic planning. Which of the following questions is LEAST relevant to determining whether HR currently plays a strategic role at Burton? A) Is HR rated by Burton's customers? B) Is HR present at Burton's restructuring discussions? C) Does Burton's HR provide an annual report on its ROI? D) Does HR utilize current technology in recruiting Burton employees? Answer: D Explanation: D) The rating HR receives from customers and the participation of HR in strategy and restructuring meetings are both indicators that the firm's HR is involved strategically. An annual report from HR regarding return on investment would also indicate a strategic involvement. Technology used by Burton's HR in recruiting is important to hiring practices but not to strategic planning. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4 91) Burton Pharmaceuticals is a fast-growing drug company based in Dallas. Top executives at Burton realize that human capital plays an essential role in the continued success of the firm, and they want HR to participate in strategic planning. Which of the following, if true, best supports the argument that HR should be more involved in strategic planning at Burton? A) Burton plans to acquire another drug company within the next six months. B) Burton recently settled a lawsuit related to charges of unfair hiring practices. C) Burton primarily hires sales representatives who have medical backgrounds. D) Burton experienced a small profit loss last quarter due to increased competition. Answer: A Explanation: A) Acquiring another firm would expand the number of employees at Burton, which means that HR should be involved in the process to ensure that human capital is used appropriately. Lawsuits, employee backgrounds, and competitors are less relevant to HR becoming involved in strategic planning at Burton. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4

92) Burton Pharmaceuticals is a fast-growing drug company based in Dallas. Top executives at Burton realize that human capital plays an essential role in the continued success of the firm, and they want HR to participate in strategic planning. Which of the following, if true, suggests that HR is already involved in strategic planning at Burton? A) HR representatives attend merger and acquisition discussions. B) HR handles all compliance issues related to OSHA and the ADA. C) HR regularly updates job analysis and job specification information. D) HR representatives monitor employee training needs and interests. Answer: A Explanation: A) Attending merger and acquisition meetings suggests that HR participates in strategic planning. Legal compliance, job specifications, and training are important issues that are relevant to any HR department, but they do not indicate that Burton's HR department is involved in strategic planning. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4 93) Working as a strategic business partner requires a much deeper and broader understanding of business issues. Answer: TRUE Explanation: HR professionals have changed the way they work. Working as a strategic business partner requires a much deeper and broader understanding of business issues. Possible strategic tasks for HR include making workforce strategies fundamental to company strategies and goals; increasing HR's role in strategic planning, mergers, and acquisitions; developing awareness or an understanding of the business; and helping line managers achieve their goals. A useful way to better understand how HR serves as a strategic business partner is to think about the use of capital for value creation. Capital refers to the factors that enable companies to generate income, higher company stock prices, economic value, strong positive brand identity, and reputation. There is a variety of capital that companies use to create value, including financial capital (cash) and capital equipment (state-of-the-art robotics used in manufacturing). Employees represent a specific type of capital called human capital. Human capital, as defined by economists, refers to sets of collective skills, knowledge, and ability that employees can apply to create value for their employers, and HR professionals are instrumental in managing human capital (employees). Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

94) Companies rely on capital to create value. These include human capital, financial capital, and environmental capital. Answer: FALSE Explanation: Capital refers to the factors that enable companies to generate income, higher company stock prices, economic value, strong positive brand identity, and reputation. There is a variety of capital that companies use to create value, including financial capital (cash) and capital equipment (state-of-the-art robotics used in manufacturing) and human capital. Employees represent a specific type of capital called human capital. Human capital, as defined by economists, refers to sets of collective skills, knowledge, and ability that employees can apply to create value for their employers. Companies purchase the use of human capital by paying employees an hourly wage, salary, or bonuses and providing benefits such as paid vacation and health insurance. Also, companies help develop human capital to their advantage by offering training programs aimed at further boosting employee productivity. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 95) Every company relies on different combinations of capital. Answer: TRUE Explanation: Every organization relies on capital to create value, but, the combination of capital used to create value differs from company to company. For example, Frito Lay uses state-of-theart manufacturing equipment, and the American Red Cross does not. However, every organization shares in common the employment of individuals and the necessity of managing employees to successfully create value. Indeed, HRM is the business function of managing employees to facilitate an organization's efforts to create value. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 96) What embodies the values and standards that guide people's behavior? A) societal trends B) employer brands C) organizational policies D) corporate mission statements Answer: B Explanation: B) An employer brand embodies the values and standards that guide people's behavior. Through employer branding, people get to know what the company stands for, the people it hires, the fit between jobs and people, and the results it recognizes and rewards. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

97) Which of the following is NOT an environment factor? A) competition B) customers C) mission D) shareholders Answer: C Explanation: C) Factors outside an organization's boundaries make up the environment. These factors include the legal considerations, labor market, society, political parties, unions, shareholders, competition, customers, technology, the economy, and unanticipated events. Each factor, either separately or in combination with others, can create constraints or opportunities for HRM. Mission refers to the objectives of the company, and it may be shaped, in part, by environmental factors. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 98) Which term refers to potential employees located within a specific geographic area? A) forecasted allocation B) labor market C) labor union D) employee relations Answer: B Explanation: B) Potential employees located within the geographic area from which employees are normally recruited comprise the labor market. The capabilities of a firm's employees determine, to a large extent, how well the organization can perform its mission. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 99) Which of the following is the discipline of dealing with what is right and wrong? A) corporate social responsibility B) sociology C) cultural norms D) ethics Answer: D Explanation: D) Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Corporate social responsibility is closely related to ethics. Corporate social responsibility is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5

100) The implied obligation of managers, acting in their official capacities, to serve or protect the interests of groups other than themselves is referred to as ________. A) ethics B) managerial values C) political activism D) corporate social responsibility Answer: D Explanation: D) Corporate social responsibility is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Corporate social responsibility is closely related to ethics, which involves making decisions of right and wrong. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 101) Which of the following is the discipline most closely related to corporate social responsibility? A) sociology B) psychology C) ethics D) philosophy Answer: C Explanation: C) Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Corporate social responsibility is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 102) Unions are treated as an environmental factor because they act as a ________ when dealing with a firm. A) supervisor B) political party C) third party D) shareholder Answer: C Explanation: C) Unions are treated as an environmental factor because, essentially, they become a third party when dealing with the company. In a unionized organization, the union rather than the individual employee negotiates an agreement with management. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 37 Copyright © 2016 Pearson Education, Inc.

103) The pilots of various U.S. airlines are threatening to strike unless they receive wage increases. The pilots belong to a union. Which of the following would most likely negotiate an agreement with airline management? A) union representatives B) employee supervisors C) government agencies D) individual employees Answer: A Explanation: A) In a unionized organization, the union rather than the individual employee negotiates an agreement with management. In this case, the union would represent the pilots when negotiating with the airlines. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 104) Which term refers to the owners of a corporation? A) managers B) executives C) presidents D) shareholders Answer: D Explanation: D) The owners of a corporation are called shareholders. Because shareholders, or stockholders, have invested money in the firm, they may at times challenge programs considered by management to be beneficial to the organization. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 105) Which of the following is a FALSE statement about environmental factors? A) Stockholders influence managerial decisions in a corporation. B) Customer satisfaction plays a role in human resource decisions. C) Unions negotiate with management on behalf of individual employees. D) The labor market rarely changes because population remains relatively stable. Answer: D Explanation: D) The labor market is always changing, and these shifts inevitably cause changes in the workforce of an organization. In turn, changes in individuals within an organization affect the way management must deal with its workforce. Stockholders and customers affect HR decisions, and unions serve as negotiators for members. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

106) What are the people who actually use a firm's goods and services called? A) managers B) shareholders C) customers D) employers Answer: C Explanation: C) Customers use a firm's goods and services, and they are part of the external environment. Because sales are crucial to the firm's survival, management has the task of ensuring that its employment practices do not antagonize the customers it serves. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 107) Customers are considered an environmental factor because they ________. A) use the Internet to research products B) generate employer branding C) expect quality products and after-purchase service D) invest in corporations Answer: C Explanation: C) Customers constantly demand high-quality products and after-purchase service. Therefore, a firm's workforce should be capable of providing top-quality goods and services. These conditions relate directly to the skills, qualifications, and motivations of the organization's employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 108) According to your textbook, cloud computing ________. A) has done little to enhance HR mobility B) requires expensive, time-consuming upgrades for HR staff C) allows HR professionals to access applications from virtually anywhere D) has largely been ignored by HR professionals Answer: C Explanation: C) A major factor contributing to HR mobility is cloud computing. Cloud computing permits businesses to buy what they need, when they need it. HR professionals can be virtually anywhere and access the cloud, all through any standard Web. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5

109) Which of the following terms refers to any organized approach for obtaining relevant and timely information on which to base HR decisions? A) HR strategic planning system B) HR information system C) HR core function D) HR development Answer: B Explanation: B) With the increased sophistication of technology has come the ability to design more useful human resource information systems (HRIS). An HRIS is any organized approach for obtaining relevant and timely information on which to base human resource decisions. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5 110) In most cases, when the economy is booming, recruiting qualified workers is ________. A) easier B) dynamic C) more difficult D) more systematic Answer: C Explanation: C) As a generalization, when the economy is booming, it is more difficult to recruit qualified workers. On the other hand, when a downturn is experienced, as with the recession of 2008/10, more applicants are typically available. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 111) According to the text, which of the following would most likely be categorized as an unanticipated event in the HRM environment? A) recessions B) hurricanes C) employee retirements D) stock and bond market losses Answer: B Explanation: B) Unanticipated events are occurrences in the environment that cannot be foreseen, such as hurricanes, oil spills, and earthquakes. Recessions, staff changes, and economic shifts are more predictable than natural disasters. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

112) Which of the following can help employees influence various terms of employment such as wages and work hours? A) voluntary employee benefit association B) union C) management cooperative D) all of the above Answer: B Explanation: B) A union consists of employees who have joined together for the purpose of negotiating terms of employment such as wages and work hours. The United Auto Workers is an example of a large labor union. Unions are treated as an environmental factor because, essentially, they become a third party when dealing with the company. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 113) Which of the following are the two dominant political parties in the United States? A) Democrats and Socialist B) Democratic and Republicans C) Republicans and Socialist D) Democrat and Communist Answer: B Explanation: B) The Democratic and Republican parties are the two major political parties in the United States. These parties often have differing opinions on how HRM should be accomplished. For example, Democrats tend to favor government regulation that protects the rights of virtually all employees to receive at least a minimum wage (the Fair Labor Standards Act) and health insurance (Patient Protection Affordability and Accountability Act). Republicans, on the other hand, tend not to favor government regulation, believing that businesses should have as much flexibility as possible to operate successfully. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 114) Society pressures a firm's HRM by expecting corporate social responsibility and ethical decision-making. Answer: TRUE Explanation: Society may also exert pressure on HRM. The public is no longer content to accept, without question, the actions of business. To remain acceptable to the general public, a firm must accomplish its purpose while complying with societal norms. Corporate social responsibility is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 41 Copyright © 2016 Pearson Education, Inc.

115) Although shareholders invest money in a firm, they have very little influence on management. Answer: FALSE Explanation: Because shareholders, or stockholders, have invested money in the firm, they may at times challenge programs considered by management to be beneficial to the organization. Stockholders are wielding increasing influence, and management may be forced to justify the merits of a particular program in terms of how it will affect future projects, costs, revenues, profits, and even benefits to society as a whole. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 116) Although most large firms use HR information systems to handle benefits administration, recruitment and legal compliance tasks have not yet been automated. Answer: FALSE Explanation: Today, mainstay HR responsibilities such as recruitment, selection, oversight of legal and regulatory compliance, benefits administration, and the safeguarding of confidential employee information cannot be carried out effectively without HRIS. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5 117) What is strategic planning? What role can HR professionals play in strategic planning? Answer: Strategic planning is an ongoing process that is constantly changing in order to find a competitive advantage. Strategic planning attempts to position the organization in terms of the external environment. Companies always need to look for ways to stay competitive, gain market share, and be the first to innovate a new product or service. Today, HR professions are increasingly taking on the role of being a strategic partner with upper management. In this role, HR professionals are able to focus on matters that are truly important to the company as a whole. They can help the CEO and CFO understand the role human capital plays in the organization and the way it combines with business processes to expand or shrink shareholder value. HR professionals are integrating the goals of HR with the goals of the organization and focusing on expanding its strategic and high-level corporate participation with an emphasis on adding value. Difficulty: Challenging Skill: Synthesis AACSB: Reflective thinking Learning Obj.: 5

118) How do society, politics, and culture affect HRM? As an HR professional, why is it important to be aware of these factors? Answer: Society, politics, and culture exert pressure on HRM. To remain acceptable to the general public, a firm must accomplish its purpose while complying with societal norms. Closely related to society, but not the same, are political parties. The two major political parties in the United States often have differing opinions on human resource topics. On a global perspective, countries change governments from time to time, which may affect how human resource management is practiced. Recognizing the cultural differences present in a workplace can also help managers achieve maximum effectiveness. Cultural differences between countries influence global business. This borderless world adds dramatically to the difficulty of managing human capital. Cultural differences reveal themselves in everything from the workplace environments to very divergent concepts of time, space, and social interaction. Difficulty: Challenging Skill: Critical thinking AACSB: Diverse and multicultural work environments Learning Obj.: 5, 9 119) The way in which employees may judge culture differently could lead to ________. A) a change in a company's mission B) employee turnover C) the implementation of pay-for-performance plans D) profitability Answer: B Explanation: B) The assessment of how desirable the organization's culture is may differ for each employee. One person may perceive the environment as bad, and another may see the same environment as positive. An employee may actually leave an organization in the hope of finding a more compatible culture. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 120) The ________ signifies the system of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms. A) motivation model B) network system C) corporate culture D) behavioral paradigm Answer: C Explanation: C) Corporate culture is the system of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

121) Management's perception of the degree to which the prospective employee will fit in with the firm's culture and value system is known as ________. A) discrimination B) stereotyping C) employer branding D) organizational fit Answer: D Explanation: D) Organizational fit is management's perception of the degree to which the prospective employee will fit into the firm's culture and value system. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 6 122) Which activity is engaged to create an inclusive corporate culture? A) diversity management B) corporate social responsibility C) equal employment opportunity D) affirmative action Answer: A Explanation: A) Diversity managment is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Equal employment opportunity refers to a variety of federal laws and executive orders that prohibit companies from discriminating against individuals on the basis of personal characteristics or religious beliefs. For example, the Age Discrimination in Employment Act prohibits taking adverse action against individuals on the basis of age. Affirmative action is a requirement of companies that conduct business with the federal government. Companies must take proactive steps to employ individuals from underrepresented minority groups such as based on race or sex. Difficulty: Moderate Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 6 123) Organizational fit refers to a corporate image or culture, which attracts and retains the type of employees the firm is seeking. Answer: FALSE Explanation: Organizational fit refers to management's perception of the degree to which a prospective employee will fit in with the firm's culture and system of values. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

124) What is a "corporate culture"? Why is it a major factor in a company's internal environment? Answer: Corporate culture is the system of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms. As an environmental factor affecting human resource management, corporate culture refers to the firm's social and psychological climate. Culture gives people a sense of how to behave and what they ought to be doing. Each individual gradually forms such perceptions over time, as the person performs assigned activities under the general guidance of a superior and a set of organizational policies. The culture existing within a firm influences employees' degree of satisfaction with the job, as well as the level and quality of their performance. The assessment of how desirable the organization's culture is may differ for each employee. One person may perceive the environment as bad, and another may see the same environment as positive. An employee may actually leave an organization in the hope of finding a more compatible culture. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 6 125) The firm's corporate image or culture that attracts and retains ideal employees is best known as ________. A) job branding B) brand culture C) HR branding D) employer branding Answer: D Explanation: D) Employer branding is the firm's corporate image or culture created to attract and retain the type of employees the firm is seeking. Through employer branding, people get to know what the company stands for, the people it hires, the fit between jobs and people, and the results it recognizes and rewards. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

126) The primary purpose of employer branding is to ________. A) promote employee benefits B) sell consumer products C) attract quality employees D) encourage media mentions Answer: C Explanation: C) Employer branding is the firm's corporate image or culture created to attract and retain the type of employees the firm is seeking. Through employer branding, people get to know what the company stands for, the people it hires, the fit between jobs and people, and the results it recognizes and rewards. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 127) Being on which list of "100 best" is so desirable that some organizations try to change their culture and philosophies to get on the list? A) Working Mother list of 100 best companies B) Fortune magazine's 100 Best Companies to Work For C) Business Ethics magazine list of 100 Best Corporate Citizens D) Computerworld list of Best Places to Work Answer: B Explanation: B) Achieving acknowledgment by an external source is a good way for a brand to be recognized. Being listed on Fortune magazine's 100 Best Companies to Work For is so desirable that some organizations try to change their culture and philosophies to get on the list. Inclusion on another magazine's list is less helpful than being on Fortune's. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 128) Employer branding refers to the firm's corporate image or culture. Answer: TRUE Explanation: Employer branding is the firm's corporate image or culture created to attract and retain the type of employees the firm is seeking. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

129) Employment branding is an extension of the marketing department and has limited impact on recruitment and retention. Answer: FALSE Explanation: Employer branding has become a major recruitment and retention strategy. With employer branding, everyone in the company works to promote the image of the firm, not just one department. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 130) Only large well-known firms have employer branding; small businesses do not. Answer: FALSE Explanation: All companies have a brand, which is the firm's image or culture that attracts and retains employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 131) Employer branding is about pursuing an inclusive corporate culture in which newcomers feel welcome and everyone sees the value of his or her job. Answer: FALSE Explanation: Employer branding is the firm's corporate image and culture. It is what the company stands for in the public eye. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 132) According to the Small Business Administration, all of the following EXCEPT ________ are part of the definition of a small business. A) limited to a local marketplace B) independently owned and operated C) organized for profit D) not dominant in its field Answer: A Explanation: A) The SBA defines a small business as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

133) In a typical small business, HR functions are often handled by ________. A) outside vendors B) compensation analysts C) HRM specialists D) line managers Answer: D Explanation: D) Small businesses often do not have a formal HR unit or HRM specialist. Rather line managers often handle the HR functions. The focus of their activities is generally on hiring and retaining capable employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 134) The cultural norms of Japan promote ________. A) competition between employees B) unionization C) competency-based pay D) loyalty and teamwork Answer: D Explanation: D) The cultural norms of Japan promote loyalty and teamwork. The work culture there is one in which honesty and hard work are prized assets. In Japan, most managers tend to remain with the same company for life. In the United States, senior executives often change companies, but the Japanese believe strongly that leaving a job is to be avoided out of respect for the business team. In Japan, if a boss gives detailed instructions to a subordinate, it is like saying the person is incompetent. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 135) Provide a brief definition of a country's culture. How does the culture of a country affect global business? Answer: A country's culture is the set of values, symbols, beliefs, languages, and norms that guide human behavior within the country. It is learned behavior that develops as individuals grow from childhood to adulthood. As one goes from one side of this country to the other, a wide range of cultural differences will be experienced. The same can be said in traveling from north to south. Cultural differences are intensified when going from one country to another. These cultural differences exert a major influence on global business. Cultural differences reveal themselves in everything from the workplace environments to differences in the concept of time, space, and social interaction. Companies operating in the global environment must understand that cultural differences add dramatically to the difficulty of managing human capital. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 9 48 Copyright © 2016 Pearson Education, Inc.

136) About how many times greater is the median annual compensation for HR managers compared to the median annual earnings for all jobs? A) 3 times as much B) 10 times as much C) 2 times as much D) 5 times as much Answer: A Explanation: A) The median annual compensation for HR managers was $99,720, which is nearly three times the median annual earnings for all jobs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 137) What is the best term for a top-level manager who reports directly to the corporation's chief executive officer (CEO) or to the head of a major division? A) executive B) generalist C) specialist D) contractor Answer: A Explanation: A) An executive is a top-level manager who reports directly to the corporation's chief executive officer (CEO) or to the head of a major division. A generalist, who may be an executive, performs tasks in a variety of HR-related areas. A specialist may be an HR executive, manager, or nonmanager who is typically concerned with only one of the five functional areas of HRM. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 138) A human resource generalist normally performs tasks ________. A) for only entry level positions and employees B) for either compensation or labor relations C) in fewer than three functional areas D) in a variety of HR-related areas Answer: D Explanation: D) A generalist, who may be an executive, performs tasks in a variety of HRrelated areas. A specialist is typically concerned with only one of the five functional areas of HRM. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

139) A person who may be an executive and performs tasks in a variety of HR-related areas is best known as a ________. A) specialist B) manager C) generalist D) supervisor Answer: C Explanation: C) A generalist, who may be an executive, performs tasks in a variety of HRrelated areas. A specialist may be an HR executive, manager, or nonmanager who is typically concerned with only one of the five functional areas of HRM. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 140) Which of the following positions would be considered a human resource specialist? A) human resource manager B) compensation manager C) vice president human resources D) marketing manager Answer: B Explanation: B) A specialist is typically concerned with only one of the five functional areas of HRM. A compensation manager focuses only on compensation, while HR managers and executives are involved in multiple HR functions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 141) Erin is a benefits analyst with a large accounting firm. Erin is most likely which type of employee? A) executive B) generalist C) specialist D) contractor Answer: C Explanation: C) A specialist is typically concerned with only one of the five functional areas of HRM. Erin focuses exclusively on benefits, so she is a specialist. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10

142) Joanna is the vice president of industrial relations at Reese Enterprises. Which two HR designations best categorize Joanna? A) generalist and specialist B) executive and generalist C) executive and specialist D) manager and generalist Answer: C Explanation: C) A specialist may be an HR executive, manager, or nonmanager who is typically concerned with only one of the five functional areas of HRM. In this case, Joanna focuses on industrial relations, which means she is a specialist, but she is also a vice president, which makes her an executive. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 143) Rob is the Vice President of Human Resources at Roswell Manufacturing. Which two HR designations best categorize Rob? A) specialist and generalist B) executive and generalist C) executive and specialist D) manager and specialist Answer: B Explanation: B) A generalist, who may be an executive, performs tasks in a variety of HRrelated areas. A specialist is typically concerned with only one of the five functional areas of HRM. As vice president of HR, Rob is both an executive and a generalist. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 144) A profession is characterized by the existence of a common body of knowledge and a ________. A) procedure for certifying members B) specified educational requirement C) requirement for periodic re-accreditation D) functional procedure for designated activities Answer: A Explanation: A) A profession is a vocation characterized by the existence of a common body of knowledge and a procedure for certifying members. Performance standards are established by members of the profession rather than by outsiders. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

145) Which of the following is not a prominent professional organization in the field of human resources? A) ASTD B) SHRM C) HRCI D) OSHA Answer: D Explanation: D) The following are prominent HR organizations: the Society for Human Resource Management (SHRM), the Human Resource Certification Institute (HRCI), and the American Society for Training and Development (ASTD). The Occupational Safety & Health Administration (OSHA) was established in 1970 as a part of the United States Department of Labor to ensure the health and safety of U.S. workers. OSHA is not an organization established to promote the HR profession or development of HR professionals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 146) According to the U.S. Bureau of Labor Statistics, opportunities for employment in the HR profession remain steady. Answer: FALSE Explanation: To the contrary, employment of human resources managers is projected to grow 13 percent from 2012 to 2022, about as fast as the average for all occupations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 147) Richard works as an HR generalist at a furniture manufacturing firm, so he focuses on a single functional area of human resources. Answer: FALSE Explanation: A generalist performs tasks in a variety of HR-related areas and is involved in several, or all, of the five HRM functions. A specialist is typically concerned with only one of the five functional areas of HRM, so Richard is a specialist rather than a generalist. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 10

148) The performance standards of a profession are established by outside accreditation agencies. Answer: FALSE Explanation: A profession is a vocation that is characterized by a common body of knowledge and a procedure for certifying members. Performance standards are established by members, rather than by outsiders; that is, the profession is self-regulated. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 149) The median annual compensation for HR managers is half as much as the median annual earnings for all jobs. Answer: FALSE Explanation: The median annual compensation for HR managers was $99,720, which is nearly three times the median annual earnings for all jobs. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 150) Describe some of the reasons for the expected growth in employment opportunities in HR. Answer: Employment growth largely depends on the performance and growth of individual companies. However, as new companies form and organizations expand their operations, they will need more human resources managers to oversee and administer their programs. Managers will also be needed to ensure that firms adhere to changing, complex employment laws regarding occupational safety and health, equal employment opportunity, healthcare, wages, and retirement plans. For example, adoption of the Affordable Care Act may spur the need to hire more managers to help implement this program. Although job opportunities are expected to vary based on the staffing needs of individual companies, very strong competition can be expected for most positions. Job opportunities should be best in the management of companies and enterprises industry as organizations continue to use outside firms to assist with some of their human resources functions. Candidates with certification or a master's degree-particularly those with a concentration in human resources management-should have the best job prospects. Those with a solid background in human resources programs, policies, and employment law should also have better job opportunities. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 10

Human Resource Management, 14e (Mondy) Chapter 2 Business Ethics and Corporate Social Responsibility 1) Which term refers to the discipline that deals with what is good and bad or right and wrong? A) morals and traditions B) social responsibility C) cultural norms D) ethics Answer: D Explanation: D) Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 1 2) Ethics, corporate social responsibility, and corporate sustainability are everyone's business, including HR professionals. Answer: TRUE Explanation: Ethics, CSR, and corporate sustainability are everyone’s business. Human resources (HR) professionals particularly concern themselves with establishing policies to promote ethical behavior and unethical behavior. In addition, the human resource management (HRM) function’s leadership works with other executive leadership to identify training opportunities for educating employees about how they may make positive contributions to these objectives and developing performance-based pay programs that align employee performance with CSR and social responsibility goals. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 1 3) Citizenship is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Answer: FALSE Explanation: Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 1

4) What is the difference between ethics and corporate social responsibility as each concept applies to corporations? Answer: Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Ethics is about deciding whether an action is good or bad and what to do about it if it is bad. Those in management make ethical (or unethical) decisions every day regarding hiring, safety, and compensation. Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. When a corporation behaves as if it has a conscience, it is said to be socially responsible. CSR considers the overall influence of corporations on society at large and goes beyond the interests of shareholders. It is how a company as a whole behaves toward society. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 1 5) Which of the following firms has NOT been exposed for ethical abuses and corrupt conduct? A) Enron B) Lehman Brothers C) WorldCom D) General Electric (GE) Answer: D Explanation: D) Enron, Lehman Brothers, and WorldCom have been involved with ethical and illegal problems. General Electric (GE) has a history of honesty and transparency. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2 6) In a recent survey, what percent of investors said they would move their account if they discovered the company was involved in unethical behavior? A) 17% B) 37% C) 67% D) 97% Answer: C Explanation: C) CEOs have to be clear that unethical behavior is not acceptable. In one survey, 67 percent of investors said they would move their account if they discovered the company was involved in unethical behavior. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2

7) The CEO of GE begins and ends each annual meeting by ________. A) introducing the firm's senior officials B) reviewing the firm's financial details C) stating the firm's integrity principles D) asking stockholders for their opinions Answer: C Explanation: C) Jeff Immelt, GE's CEO, begins and ends each annual meeting of 220 officers and of its 600 senior managers by restating the company's fundamental integrity principles: "GE's business success is built on our reputation with all stakeholders for lawful and ethical behavior. Commercial considerations never justify cutting corners. Upholding this standard is the specific responsibility of the leaders in the room." Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2 8) What do most of the 500 largest corporations in the United States have? A) social responsibility audits B) environmental audits C) codes of ethics D) podcasts Answer: C Explanation: C) Most of the 500 largest corporations in the United States now have a code of ethics, which encompasses written conduct standards, internal education, and formal agreements on industry standards, ethics offices, social accounting, and social projects. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2 9) With regards to ethics, most of the 500 largest corporations in the U.S. now have a code of ethics. Which of the following would LEAST likely be included in the codes? A) ethics offices B) social accounting C) conduct standards D) performance appraisals Answer: D Explanation: D) Most of the 500 largest corporations in the United States now have a code of ethics, which encompasses written conduct standards, internal education, and formal agreements on industry standards, ethics offices, social accounting, and social projects. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2

10) The minimum standards of ethical behavior in a firm are based on ________, while higher standards are established by ________. A) corporate policies; human resources B) co-workers; mission statements C) organizational culture; laws D) laws; corporate leadership Answer: D Explanation: D) Compliance with the law sets the minimum standard of ethical behavior; ethics is much more, however. There must be leaders who are able and willing to instill ethics throughout the culture of the organization because laws are only the beginning of the solution. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2 11) Surveys indicate that 25% of investors would move their account if they discovered the company was involved in unethical behavior. Answer: FALSE Explanation: In one survey, 67 percent of investors said they would move their account if they discovered the company was involved in unethical behavior. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2 12) Most of the 500 largest corporations in the U.S. now have a code of ethics. Answer: TRUE Explanation: Most of the 500 largest corporations in the United States now have a code of ethics, which encompasses written conduct standards, internal education, and formal agreements on industry standards, ethics offices, social accounting, and social projects. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2 13) Unethical practices are limited to Wall Street because of the money and pressure involved. Answer: FALSE Explanation: Business ethics scandals continue to be headline news today. Lying on résumés, obstruction of justice, destruction of records, stock price manipulation, and cutting corners to meet Wall Street's expectation. However, business is not alone. There is virtually no occupation that has not had its own painful ethical crises in recent years. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2

14) Compliance with the law sets the minimum standard for ethical behavior in business. Answer: TRUE Explanation: Compliance with the law sets the minimum standard for ethical behavior; ethics, however, is much more. There must be leaders who are able and willing to instill ethics throughout the culture of the organization. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 2 15) A major source of ethical guidance is the behavior and advice of people that psychologists call ________. A) internal monitors B) third-party respondents C) disinterested parties D) significant others Answer: D Explanation: D) Another source of ethical guidance is the behavior and advice of the people psychologists call "significant others"-our parents, friends, role models, and members of our churches, clubs, and associations. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3 16) According to your textbook, sources of ethical guidance should ________. A) lead to your beliefs or a conviction about what is right or wrong B) have little effect on a person's pursuit of what is expedient C) be nothing more than the subject matter of philosophical discussions D) remain abstractions that don't pertain to day-to-day living in today's world Answer: A Explanation: A) The sources of ethical guidance should lead to your beliefs or a conviction about what is right or wrong. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3

17) Laws ________ ethical behavior. A) mandate B) offer guidance to C) have nothing to do with D) None of the above Answer: B Explanation: B) Laws offer guidance to ethical behavior, prohibiting acts that can be especially harmful to others. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3 18) Which of the following would LEAST likely be a source of ethical guidance? A) holy books B) laws C) friends D) tests Answer: D Explanation: D) One might use a number of sources to determine what is right or wrong, good or bad, moral or immoral. These sources include the Bible and other holy books. Another source of ethical guidance is the behavior and advice of our parents, friends, and role models. Laws also offer guidance to ethical behavior, prohibiting acts that can be especially harmful to others. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3 19) As a professional, what should be your primary source of ethical guidance in the workplace? A) corporate HR policies B) corporate code of ethics C) corporate mission statement D) corporate procedures Answer: A Explanation: A) For most professionals, there are written codes of ethics that prescribe certain behavior. Without this written code of ethical conscience, it might be easy to say, "Everyone does it," "Just this once won't hurt," or "No one will ever know." Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 3

20) Sources of ethical guidance exclude laws because laws are mandated by the government and not personal beliefs and values. Answer: FALSE Explanation: Laws also offer guidance to ethical behavior, prohibiting acts that can be especially harmful to others. They codify what society has deemed to be unacceptable. If a certain behavior is illegal, most would consider it to be unethical as well. There are exceptions, of course. For example, through the 1950s, laws in most southern states relegated blacks to the backs of buses and otherwise assigned them inferior status. Martin Luther King Jr. resisted such laws and, in fact, engaged in civil disobedience and other nonviolent forms of resistance to their enforcement. King won the Nobel Peace Prize for his efforts. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3 21) According to the model of ethics, advice from friends, holy books, and laws serve as sources of ethical guidance. Answer: TRUE Explanation: People use a number of sources to determine what is right or wrong, good or bad, moral or immoral. These sources include the Bible and other holy books, the inner conscience, friends, family members, and laws. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3 22) According to psychologists, the behavior and advice of "significant others" is a source of ethical guidance. Answer: TRUE Explanation: A major source of ethical guidance is the behavior and advice of the people psychologists call "significant others"-our parents, friends, and role models and members of our churches, clubs, and associations. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3 23) Laws offer guidance to ethical behavior, prohibiting acts that can be especially harmful to others. Answer: TRUE Explanation: Laws also offer guidance to ethical behavior, prohibiting acts that can be especially harmful to others. They codify what society has deemed to be unacceptable. If a certain behavior is illegal, most would consider it to be unethical as well. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 3 7 Copyright © 2016 Pearson Education, Inc.

24) In the legal use of the term, a whistleblower is someone who ________. A) serves as a part-time referee in sporting events B) has an ethical obligation to shield his or her employer from lawsuits C) participates in an activity that is protected by federal law D) serves as a majordomo at political dinners Answer: C Explanation: C) In the legal use of the term, a whistleblower is someone who is protected by the following federal laws: the False Claims Act, the Internal Revenue Service's Informant Claims Program, The Dodd-Frank Wall Street Reform and Consumer Protection Act, and the SarbanesOxley Act of 2002. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 25) When comparing the effectiveness of whistleblowers and external auditors in uncovering corporate wrongdoings, ________ in public companies. A) whistleblower tips discovered 54.1 percent of uncovered fraud schemes B) external auditors discovered 54.1 percent of uncovered fraud schemes C) whistleblower tips discovered 4.1 percent of uncovered fraud schemes D) whistleblower tips are no more effective than external auditors at discovering fraud schemes Answer: A Explanation: A) Many believe that information provided by whistleblowers is much more effective in uncovering wrongdoings than are external auditors. In testimony to the Senate Banking Committee, Certified Fraud Examiner Harry Markopolos stated, "Whistleblower tips detected 54.1 percent of uncovered fraud schemes in public companies. External auditors detected a mere 4.1 percent of fraud schemes." Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 26) Whistleblower protection has been around since ________. A) the passage of the Sarbanes-Oxley Act of 2002 B) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 C) the Federal False Claims Act of 1863 D) the Whistleblowers Anonymity Act of 2005 Answer: C Explanation: C) The use of whistleblowers has been around since 1863 when President Lincoln signed into law the Federal False Claims Act, which was designed to protect the United States from purchases of fake gunpowder during the Civil War. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 8 Copyright © 2016 Pearson Education, Inc.

27) Companies are concerned about the whistleblower part of the Dodd-Frank Act for all of the following reasons except that informants might ________. A) skip internal channels and go straight to government authorities B) use the whistleblower provision to settle other grievances with their companies C) overload internal compliance channels and thus hinder internal compliance efforts D) All of the above Answer: C Explanation: C) Companies have some uneasiness regarding the whistleblower provision of the Dodd-Frank Act. The major concern is that the rules run counter to a firm's internal compliance efforts. Companies are afraid that employees will not go through internal channels first and instead go directly to government authorities. Another fear is that an employee might have another grievance with the company and use the whistleblower provision to get back at the company. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 28) All of the following EXCEPT ________ are major components of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A) protecting investors B) promoting too-big-to-fail bailouts C) maintaining an advance warning system D) enforcing regulations that are already on the books Answer: B Explanation: B) The Dodd-Frank Wall Street Reform and Consumer Protection Act ends the possibility that taxpayers will be asked to bail out financial firms that threaten the economy. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 29) The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in ________. A) 1863 B) 1933 C) 2001 D) 2010 Answer: D Explanation: D) The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in 2010. The act was brought on by the worst financial crisis since the Great Depression. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

30) Which of the following laws was NOT enacted for the purpose of legislating business ethics? A) Federal Sentencing Guidelines for Organizations Act B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Taft-Hartley Act Answer: D Explanation: D) The Taft-Hartley Act was enacted to monitor the power and activities of unions. The other three laws were three attempts made by the government to legislate business ethics. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 31) What law prohibits the release of source selection and proposal information? A) Federal Sentencing Guidelines for Organizations B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Federal Contract Protection Act Answer: B Explanation: B) The Procurement Integrity Act of 1988 prohibits the release of source selection and contractor bid or proposal information. Also, a former employee who served in certain positions on a procurement action or contract in excess of $10 million is barred from receiving compensation as an employee or consultant from that contractor for one year. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 32) Which law prohibits a former employee who served in certain positions on a contract in excess of $10 million from receiving compensation as an employee or consultant from that contractor for one year? A) Federal Sentencing Guidelines for Organizations B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Federal Contract Protection Act Answer: B Explanation: B) The Procurement Integrity Act of 1988 prohibits the release of source selection and contractor bid or proposal information. Also, a former employee who served in certain positions on a procurement action or contract in excess of $10 million is barred from receiving compensation as an employee or consultant from that contractor for one year. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

33) What law was passed in response to reports of military contracts for $500 toilet seats? A) Federal Sentencing Guidelines for Organizations B) Sarbanes-Oxley Act C) Federal Contract Protection Act D) Procurement Integrity Act Answer: D Explanation: D) The Procurement Integrity Act of 1988 prohibits the release of source selection and contractor bid or proposal information. The Act was passed after there were reports of military contracts for $500 toilet seats. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 34) What federal law offers easier punishments for wayward corporations that have ethics programs in place? A) Federal Sentencing Guidelines for Organizations B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Federal Contract Protection Act Answer: A Explanation: A) The 1992 Federal Sentencing Guidelines for Organizations Act (FSGO) outlined an effective ethics training program and explained the seven minimum requirements for an effective program to prevent and detect violations. The FSGO promised softer punishments for wayward corporations that already had ethics programs in place. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 35) What federal law outlined an effective ethics training program and explained the seven minimum requirements for an effective program to prevent and detect violations? A) Federal Sentencing Guidelines for Organizations B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Federal Contract Protection Act Answer: A Explanation: A) The 1992 Federal Sentencing Guidelines for Organizations Act (FSGO) outlined an effective ethics training program and explained the seven minimum requirements for an effective program to prevent and detect violations. The FSGO promised softer punishments for wayward corporations that already had ethics programs in place. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

36) Which of the following was NOT included in the FSGO? A) guidelines for ethics standards B) job security for whistleblowers C) guidelines for providing ethics training D) system for anonymously reporting misconduct Answer: B Explanation: B) The FSGO promised softer punishments for wayward corporations that already had ethics programs in place. In the law were recommendations regarding standards, ethics training, and a system to report misconduct anonymously. The Sarbanes-Oxley Act provided protections for whistleblowers. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 37) According to the FSGO, ________ were supposed to be responsible for the prevention of white collar crimes in an organization. A) attorneys B) top executives C) common stockholders D) organizational stakeholders Answer: B Explanation: B) According to the FSGO, executives were supposed to be responsible for the misconduct of those lower in the organization. If executives were proactive in their efforts to prevent white collar crime it would lessen a judgment against them and reduce the liability. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 38) Which law most likely prompted organizations to create codes of ethics and install ethics hotlines? A) Corporate and Auditing Accountability, Responsibility, and Transparency Act B) Federal Sentencing Guidelines for Organizations Act C) Procurement Integrity Act D) McCarran-Ferguson Act Answer: B Explanation: B) The McCarran-Ferguson Act relates insurance regulation rather than business ethics. The FSGO led organizations to create ethics officer positions, install ethics hotlines, and develop codes of ethics in hopes of lessening ethics judgments against the firm and reducing the firm's liability. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

39) Which law criminalizes many corporate acts that were previously relegated to various regulatory structures? A) Federal Sentencing Guidelines for Organizations B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Federal Contract Protection Act Answer: C Explanation: C) The Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 criminalized many corporate acts that were previously relegated to various regulatory structures. Known as the Sarbanes-Oxley Act, its primary focus is to redress accounting and financial reporting abuses in light of corporate scandals. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 40) Which law was passed to redress accounting and financial reporting abuses in light of corporate scandals? A) Federal Sentencing Guidelines for Organizations B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Federal Contract Protection Act Answer: C Explanation: C) The Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 criminalized many corporate acts that were previously relegated to various regulatory structures. Known as the Sarbanes-Oxley Act, its primary focus is to redress accounting and financial reporting abuses in light of corporate scandals. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 41) Which law contains broad employee whistle-blower protections against firms and managers that retaliate or harass employees who report suspected corporate wrongdoing? A) Sarbanes-Oxley Act B) Procurement Integrity Act C) Federal Sentencing Guidelines for Organizations D) Federal Contract Protection Act Answer: A Explanation: A) The Sarbanes-Oxley Act contains broad employee whistle-blower protections that subject corporations and their managerial personnel to significant civil and criminal penalties for retaliating, harassing, or discriminating against employees who report suspected corporate wrongdoing. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 13 Copyright © 2016 Pearson Education, Inc.

42) Erica, an accountant, notices suspicious accounting practices at the firm where she is employed. She wants to report the unethical behavior to authorities but is worried that she might be harassed or demoted as a result. Which law was passed to protect Erica in this situation? A) Federal Contract Protection Act B) Procurement Integrity Act C) Taft-Hartley Act D) Sarbanes-Oxley Act Answer: D Explanation: D) The Sarbanes-Oxley Act contains broad employee whistle-blower protections that subject corporations and their managerial personnel to significant civil and criminal penalties for retaliating, harassing, or discriminating against employees who report suspected corporate wrongdoing. Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 4 43) John provides information to the SEC about conduct by his employer that he believes constitutes securities fraud. Which law most likely protects John from being demoted for his actions? A) Federal Contract Protection Act B) Procurement Integrity Act C) Sarbanes-Oxley Act D) Taft-Hartley Act Answer: C Explanation: C) The Sarbanes-Oxley Act states that management may not discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee protected by the Act. It protects any employee who lawfully provides information to governmental authorities concerning conduct he or she reasonably believes constitutes mail, wire, or securities fraud; violations of any rule or regulation issued by the SEC; or violations of any other federal law relating to fraud against shareholders. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

44) Which 2003 Supreme Court case upheld Sarbanes-Oxley's whistleblower-protection rule? A) Dothard v Rawlingson B) Bechtel v Competitive Technologies Inc. C) O'Connor v Consolidated Coin Caterers Corp. D) Grutter v Bollinger Answer: B Explanation: B) In the 2003 Bechtel v Competitive Technologies Inc. Supreme Court case involving wrongful termination under Sarbanes-Oxley's whistle-blower-protection rule, the Court ruled that the company violated the Act by firing two employees and ordered them reinstated. They were fired because during a meeting they had raised concerns about the company's decision not to report, on its SEC filing, an act they thought should have been disclosed. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 45) The Supreme Court ruling in Bechtel v Competitive Technologies Inc. upheld which federal law? A) McCarran-Ferguson Act B) Sarbanes-Oxley Act C) Davis-Bacon Act D) Taft-Hartley Act Answer: B Explanation: B) In the 2003 Bechtel v Competitive Technologies Inc. Supreme Court case involving wrongful termination under Sarbanes-Oxley's whistle-blower-protection rule, the Court ruled that the company violated the Act by firing two employees and ordered them reinstated. They were fired because during a meeting they had raised concerns about the company's decision not to report, on its SEC filing, an act they thought should have been disclosed. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

46) According to the Sarbanes-Oxley Act, any SEC reporting bank that does not have a code of ethics must ________. A) submit a report to Congress B) provide an explanation C) pay a significant fine D) develop an ethics code Answer: B Explanation: B) Sarbanes-Oxley requires publicly traded companies to disclose whether or not they have adopted a code of ethics for senior officers. The Act does not require SEC reporting banks and bank-holding companies to have a code of ethics, but if an SEC reporting company does not have one, it must explain why. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 47) Which of the following is NOT required by the Sarbanes-Oxley Act? A) Publicly traded firms must disclose whether they have a code of ethics for top executives. B) Publicly traded firms must not discharge employees who report ethical abuses. C) Bank-holding companies and SEC reporting banks must have codes of ethics. D) Corporations must not provide financial loans to executives or directors. Answer: C Explanation: C) The Sarbanes-Oxley Act does not require SEC reporting banks and bankholding companies to have a code of ethics. It requires publicly traded companies to disclose whether or not they have adopted a code of ethics for senior officers. The Act states that management may not discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee protected by the Act. The law prohibits loans to executives and directors. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 48) The primary purpose of an ethics audit is to ________. A) ensure that EEO policies are being implemented B) supplement a company's code of ethics C) evaluate a company's ethical culture D) interview ethics training candidates Answer: C Explanation: C) An ethics audit is simply a systematic, independent, and documented process for obtaining evidence regarding the status of an organization's ethical culture. It is taking a closer look at a firm's ethical culture instead of just allowing it to remain unexamined. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 16 Copyright © 2016 Pearson Education, Inc.

49) Harvey Electronics has used a number of methods to create an ethical culture that both employees and customers appreciate. What is the most effective way for the firm to sustain its ethical culture? A) asking job candidates ethical questions B) implementing an ethics audit regularly C) publishing the firm's code of ethics periodically D) ensuring that new employees receive ethics training Answer: B Explanation: B) One way to create and sustain an ethical culture is to audit your ethics, much as you might audit your finances each year. An ethics audit is simply a systematic, independent, and documented process for obtaining evidence regarding the status of an organization's ethical culture. It is taking a closer look at a firm's ethical culture instead of just allowing it to remain unexamined. Difficulty: Challenging Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 4 50) According to the Malcolm Baldrige National Quality Award, senior leaders should ________. A) serve as figureheads B) serve as role models C) delegate responsibility for ethical behavior to middle managers D) operate outside of ethical constraints that apply to rank and file employees Answer: B Explanation: B) According to criteria for the Malcolm Baldrige National Quality Award, senior leaders should serve as role models for the rest of their organizations. Baldrige applicants are asked questions about how senior leaders create an environment that fosters legal and ethical behavior. They need to show how the leaders address governance matters such as fiscal accountability and independence in audits. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

51) A recent survey of 358 compliance and ethical professionals revealed that ________. A) nearly seventy-five percent of companies include ethical compliance as a basis of compensation B) twenty-seven percent of companies penalize employees for practicing ethical behavior C) about one company in six ties employee bonuses and incentives to ethical performance D) None of the above Answer: C Explanation: C) A survey of 358 compliance and ethics professionals by the Society of Corporate Compliance and Ethics (SCCE) and Health Care Compliance Association found that only a few companies have made ethics and compliance a process for determining how employees are compensated, and only about one company in six ties employee bonuses and incentives to ethical performance. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 52) The garment factory building collapse in Bangladesh in 2013 in which 1,127 people lost their lives, is simply an example of poor engineering. Answer: FALSE Explanation: Although some companies continue to say that they are fully committed to CSR, their less-than-socially-responsible behavior does not support their stated commitment. The garment factory building collapse in Bangladesh in 2013 stands among history's worst industrial disasters, officially claiming 1,127 lives. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 53) The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in 2010. Answer: TRUE Explanation: The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in 2010, in response to the greatest financial crisis since the Great Depression. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

54) The Procurement Integrity Act of 1988 was passed after reports of military contracts for $500 toilet seats and $5,000 hammers. Answer: TRUE Explanation: The Procurement Integrity Act of 1988, prohibits the release of source selection and contractor bid or proposal information. The Act was passed after there were reports of military contracts for $500 toilet seats and $5,000 hammers. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 55) According to the Procurement Integrity Act, if a firm that has an ethics program in place is found guilty of misconduct, the firm will receive a reduced punishment. Answer: FALSE Explanation: The Federal Sentencing Guidelines for Organizations Act promised softer punishments for wayward corporations that already had ethics programs in place. The Procurement Integrity Act of 1988, prohibits the release of source selection and contractor bid or proposal information. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 56) Although laws cannot mandate ethics, they may be able to identify the baseline separating what is good and what is bad. Answer: TRUE Explanation: Many experts contend that ethics cannot be legislated. Although laws cannot mandate ethics, they may be able to identify the baseline separating what is good and what is bad. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 57) The Corporate and Auditing Accountability, Responsibility and Transparency Act is also known as the Sarbanes-Oxley Act. Answer: TRUE Explanation: The Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 was passed to legislate business ethics. The act, also known as the Sarbanes-Oxley Act, criminalized many corporate acts that were previously relegated to various regulatory structures. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

58) The Federal Sentencing Guidelines for Organizations Act contains broad employee whistleblower protections that subject corporations to penalties for retaliating against employees who report suspected corporate wrongdoing. Answer: FALSE Explanation: The Sarbanes-Oxley Act contains broad employee whistle-blower protections that subject corporations and their managerial personnel to significant civil and criminal penalties for retaliating, harassing, or discriminating against employees who report suspected corporate wrongdoing. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 59) The Sarbanes-Oxley Act was passed in response to reports of out-of-control military spending. Answer: FALSE Explanation: The Sarbanes-Oxley Act was passed to redress accounting and financial reporting abuses in light of corporate scandals rather than military spending. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 60) In the 2003 case Bechtel v Competitive Technologies Inc., the Supreme Court overturned Sarbanes-Oxley's whistleblower-protection rule. Answer: FALSE Explanation: Bechtel v Competitive Technologies Inc. involved wrongful termination under Sarbanes-Oxley's whistleblower protection rule. The Court ruled that the company violated the Act by firing two employees and ordered them reinstated, so the whistleblower protection rule was upheld. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 61) The Corporate and Auditing Accountability, Responsibility and Transparency Act requires SEC reporting banks and bank holding companies to have a code of ethics. Answer: FALSE Explanation: The Corporate and Auditing Accountability, Responsibility and Transparency Act does not require SEC reporting banks and bank holding companies to have a code of ethics, but if an SEC reporting company does not have one, it must explain why. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4

62) Identify and discuss the federal government's four attempts to legislate business ethics since the late 1980s. Answer: The Procurement Integrity Act of 1988 prohibited the release of source selection and contractor bid or proposal information. In addition, a former employee who served in certain positions on a procurement action or contract in excess of $10 million cannot receive compensation as an employee or consultant from that contractor for one year. The second attempt occurred with the passage of the 1992 Federal Sentencing Guidelines for Organizations Act (FSGO), which outlined an effective ethics training program and explained the seven minimum requirements for an effective program to prevent and detect violations. The third attempt at legislating business ethics was the Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 (Sarbanes-Oxley Act), which criminalized many corporate acts that were previously relegated to various regulatory structures. The primary focus of the Sarbanes-Oxley Act is to redress accounting and financial reporting abuses in light of corporate scandals. The fourth, the Dodd-Frank Wall Street Reform and Consumer Protection Act, was signed into law in 2010. The act was brought on by the worst financial crisis since the Great Depression, which resulted in the loss of 8 million jobs, failed businesses, a drop in housing prices, and wiped out personal savings of many workers. As the financial crisis advanced, it became clear that executive compensation played a major role in the financial services sector as well as in the capital markets following the collapse of investment services firms as Lehman Brothers, Merrill Lynch, Bear Stearns, and AIG. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 4 63) Contemporary organizations are redesigning their ethics programs to facilitate a broader, more consistent process that ________. A) embraces chaos and forges new paradigms B) incorporates the analysis of outcomes and continual improvement C) uses outcome analysis to focus on short-term goals D) relies on expediency and situational management Answer: B Explanation: B) Contemporary organizations are redesigning their ethics programs to facilitate a broader, more consistent process that incorporates the analysis of outcomes and continual improvement. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5

64) An ethical culture consists of all of the following factors EXCEPT ________. A) ethical leadership B) guerilla marketing C) values D) accountability Answer: B Explanation: B) An ethical culture is made up of factors such as ethical leadership, accountability, and values. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 65) Executives and managers at ABC Enterprises actively encourage a strong ethical culture at the firm. Which of the following would be the most likely result of the firm's actions? A) increased employee interest in development programs B) frequent use of human resource information systems C) changes in corporate communication methods D) improvements in organizational performance Answer: D Explanation: D) By fostering a strong ethical culture, firms are better able to gain the confidence and loyalty of their employees and other stakeholders, which can result in reduced financial, legal, and reputation risks, as well as improvements in organizational performance. Difficulty: Challenging Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 5 66) Which term refers to a statement of the values adopted by the company, its employees and its directors? A) code of ethics B) ethical policies C) vision statement D) code of conduct Answer: A Explanation: A) The code of ethics is a statement of the values adopted by the company, its employees, and its directors, and sets the official tone of top management regarding expected behavior. A code of conduct tells employees what the rules of conduct are. The code of ethics helps employees know what to do when there is not a rule for something. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5

67) Julia works as a production supervisor, and she believes one of her subordinates is drinking during his lunch break. Julia's employer does not have a specific rule regarding the subordinate's behavior. Which of the following would most likely assist Julia with her problem in this situation? A) corporate code of ethics B) corporate vision statement C) corporate code of conduct D) federal legislation Answer: A Explanation: A) A distinction needs to be made between a code of conduct and a code of ethics; the former should tell employees what the rules of conduct are. The code of ethics helps employees know what to do when there is not a rule for something. Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 5 68) Lincoln Enterprises recently fired two employees who were caught stealing tools from the firm's warehouse. As a result, the CEO of Lincoln wants to strengthen the firm's ethical culture and prevent future violations by redesigning the firm's ethics program. Which of the following questions is LEAST relevant when developing Lincoln's new ethics program? A) What behavior is expected of Lincoln employees? B) What is the opinion of stakeholders regarding Lincoln's ethics? C) How are ethical situations communicated and resolved at Lincoln? D) What is the process for Lincoln establishing a corporate giving program? Answer: D Explanation: D) Corporate giving programs are types of CSR programs and are less relevant to how the firm redesigns its ethics program. The firm should review the expected behavior of employees, the thoughts of stakeholders, and the current procedures for handling ethical problems. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5

69) Which of the following is NOT a major provision in the SHRM code of ethics? A) professional responsibility B) cultural understanding C) professional development D) fairness and justice Answer: B Explanation: B) Major provisions in the SHRM code of ethics include professional responsibility, professional development, ethical leadership, fairness and justice, conflicts of interest, and use of information. Cultural understanding is not a provision in the SHRM code of ethics. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 70) Vision Technologies wants to gain the confidence of employees and customers by developing a strong ethical culture. Which of the following methods would be the best way for the firm's HR department to accomplish this goal? A) placing the code of ethics on the firm's intranet B) posting the code of ethics in the breakroom C) providing ethics training to employees D) having employees sign ethics contracts Answer: C Explanation: C) To build and sustain an ethical culture, organizations need a comprehensive framework that encompasses communication of behavior expectations, training on ethics and compliance issues, stakeholder input, resolution of reported matters, and analysis of the entire ethics program. Posting a code of ethics online or in a breakroom is less likely to be effective. Having employees sign ethics contracts is helpful but less effective than providing training. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 71) A code of ethics establishes the ________ that the organization lives by. A) policies B) procedures C) values D) technologies Answer: C Explanation: C) The code of ethics is a statement of the values adopted by the company, its employees, and its directors, and sets the official tone of top management regarding expected behavior. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 24 Copyright © 2016 Pearson Education, Inc.

72) Riley Manufacturing recently developed a code of ethics. Which of the following topics is most likely covered in the document? A) business conduct B) fair competition C) HR issues D) all of the above Answer: D Explanation: D) Topics typically covered in a code of ethics might be business conduct, fair competition, and workplace and HR issues. Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 5 73) According to Walmart's code of ethics, Edward, an employee in the sales department, cannot accept gifts from suppliers because such actions would be a ________. A) conflict of interest B) double standard C) regulatory breach D) discriminatory act Answer: A Explanation: A) Firms involving purchasing and sales typically establish in a code of ethics that accepting gifts from suppliers constitutes a conflict of interest. At Walmart, it is considered unethical to accept gifts from suppliers. Gifts are either destroyed or given to charity. Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 5 74) In order to maintain the importance of a code of ethics to employees, large firms frequently ________. A) write a code of conduct B) send a memo to all employees C) appoint an ethics officer D) put the ethical code on the intranet Answer: C Explanation: C) To keep the code on the front burner for employees, larger firms appoint an ethics officer. The ethics officer is the point person in guiding everyone in the company toward ethical actions. This individual should be a person who understands the work environment. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5

75) At Tyson Foods, Lily serves as the point person who guides everyone in the firm towards ethical actions. Lily most likely serves as the firm's ________. A) chief financial officer B) HR manager C) ethics officer D) safety officer Answer: C Explanation: C) The ethics officer is the point person in guiding everyone in the company toward ethical actions. This individual should be a person who understands the work environment. Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 5 76) Which law prohibits bribes of foreign government officials or business executives? A) Federal and Foreign Bribery Act B) Foreign Corrupt Practices Act C) Corruption Practices Act D) Sarbanes-Oxley Act Answer: B Explanation: B) U.S. companies must comply with the Foreign Corrupt Practices Act, which prohibits bribes of foreign government officials or business executives. Obviously, the law does not prevent foreign competitors from bribing government or business officials to get business, and such practices are common in many countries. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 77) Which quality is emphasized more than in the past for the Baldrige National Quality Award? A) interpersonal skills B) leadership ethics C) personal motivation D) community service Answer: B Explanation: B) Even the criteria for winning the Baldrige National Quality Award have changed, and an increased emphasis on ethics in leadership is now stressed. The criteria say senior leaders should serve as role models for the rest of their organizations. Baldrige applicants are asked questions about how senior leaders create an environment that fosters and requires legal and ethical behavior, and how the leaders address governance matters such as fiscal accountability and independence in audits. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 26 Copyright © 2016 Pearson Education, Inc.

78) According to research studies, unethical companies financially outperform ethical companies, although ethical companies are more successful with recruiting. Answer: FALSE Explanation: Dov Seidman, a management guru who advocates corporate virtue to many companies believes that companies that "outbehave" their competitors ethically will generally outperform them financially. Further, the ethical-or unethical-behavior of an organization is a critical factor for new college graduates seeking jobs, according to the National Association of Colleges and Employers. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 79) A code of ethics establishes the rules that organization lives by and becomes part of the organization's corporate culture. Answer: TRUE Explanation: The code of ethics is a statement of the values adopted by the company, its employees, and its directors, and sets the official tone of top management regarding expected behavior. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 80) How do firms benefit from a strong ethical culture? How can HR departments foster such cultures? Answer: By fostering a strong ethical culture, firms are better able to gain the confidence and loyalty of their employees and other stakeholders, which can result in reduced financial, legal, and reputation risks, as well as improvements in organizational performance. HR professionals can help foster an ethical culture, but that means more than just hanging the ethics codes posters on walls. Instead, since the HR professionals' primary job is dealing with people, they must help to instill ethical practices into the corporate culture. Those values must be clearly communicated to all employees, early and often, beginning with the interviewing process, reinforced during employee orientation, and regularly recognized during performance reviews, public ceremonies, celebrations, and awards. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5

81) Why is a code of ethics important? What should be included in a firm's code of ethics? Answer: A code of ethics helps foster a strong ethical culture. To build and sustain an ethical culture, organizations need a comprehensive framework that encompasses communication of behavior expectations, training on ethics and compliance issues, stakeholder input, resolution of reported matters, and analysis of the entire ethics program. The code of ethics helps employees know what to do when there is not a rule for something. The code of ethics is a statement of the values adopted by the company, its employees, and its directors, and sets the official tone of top management regarding expected behavior. The code of ethics should include expectations about business conduct, fair competition, and workplace and HR issues. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 5 82) Which one of the following statements about HR and ethics is FALSE? A) It is sufficient for HR representatives to say that everyone should be ethical. B) The ethical bearing of those in HR affects the credibility of the entire organization. C) HR representatives should maintain a dialogue with workers about ethical behavior. D) HR professionals can help foster an ethical culture. Answer: A Explanation: A) HR should review, develop, and enforce organizational policies to ensure a high level of ethics throughout the organization. It is insufficient to say that everyone should be ethical. Dialogue should be developed, so that workers know what is ethical and unethical in their specific area of operations. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 83) According to a recent report by the Society for Human Resource Management, ________. A) integrity and ethical behavior are marginally important for HR executives B) the operations department should be the repository for corporate ethics C) it is the duty of HR professionals to help create an ethical climate in their organization D) business ethics and corporate culture are independent elements in today's workplace Answer: C Explanation: C) According to a recent SHRM report, integrity and ethical behavior rank in the top five competencies needed for senior HR leaders. Moreover, it is the duty of HR professionals to help create an ethical climate in their organization. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6

84) Which term refers to the application of ethical principles to human resource relationships and activities? A) morals B) social ethics C) business ethics D) human resource ethics Answer: D Explanation: D) Human resource ethics is the application of ethical principles to HR relationships and activities. It is vitally important that those who work in HRM understand those practices that are unacceptable and ensure that organizational members behave ethically in dealing with others. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 85) Which of the following is NOT one of the triple bottom line factors of corporate social responsibility? A) society B) environment C) economy D) culture Answer: D Explanation: D) Companies such as Nike, Kodak, and Intel have demonstrated the ability to manage the "triple bottom line" of social responsibility (society, environment, and economy). Culture is not one of the factors. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 86) The implied, enforced, or felt obligation of managers, acting in their official capacities, to serve or protect the interests of groups other than themselves is known as ________. A) human resource ethics B) environmental morality C) corporate social responsibility D) business centered morality Answer: C Explanation: C) Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. When a corporation behaves as if it has a conscience, it is said to be socially responsible. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 29 Copyright © 2016 Pearson Education, Inc.

87) When a corporation behaves as if it has a conscience, it is said to be ________. A) globally ethical B) socially responsible C) participative D) charitable Answer: B Explanation: B) When a corporation behaves as if it has a conscience, it is said to be socially responsible. Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 88) Which term best describes how a company as a whole behaves towards society? A) corporate social responsibility B) business ethics C) social morality D) equal opportunity Answer: A Explanation: A) Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. CSR considers the overall influence of corporations on society at large and goes beyond the interests of shareholders. It is how a company as a whole behaves toward society. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 89) Which HR practice would most likely be improved through a firm's efforts at corporate social responsibility? A) benefits B) recruiting C) compensation D) succession planning Answer: B Explanation: B) CSR has impacted the recruiting process for many firms. Current generations of workers are interested in working for firms that stress CSR. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6

90) According to Deborah Leipziger of the Ethical Corporation Institute, the more credible social responsibility efforts ________. A) cannot be sustained in global commerce B) don't require a commitment from top management C) tend to be led by key players in a company D) are incompatible with corporate profit motives Answer: C Explanation: C) Deborah Leipziger, an Ethical Corporation Institute researcher, said: "The more credible efforts tend to be led by key players within a company." An organization's top executives usually determine a corporation's approach to social responsibility. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 91) Which one of the following is not one of the 2011 Global 100 Most Sustainable Corporations in the world? A) Kraft Foods, Inc. B) Baxter International, Inc. C) Weyerhaeuser Co. D) Exxon Mobil Corporation Answer: D Explanation: D) Weyerhaeuser Co., Kraft Foods, Inc., and Baxter International, Inc. are among the 2011 Global 100 Most Sustainable Corporations in the World. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 92) Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Answer: TRUE Explanation: Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. When a corporation behaves as if it has a conscience, it is said to be socially responsible. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6

93) What is corporate social responsibility (CSR)? Identify and discuss the characteristics of a CSR company. Answer: Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. A company that espouses CSR behaves as if it has a conscience. Furthermore, it strives to manage the "triple bottom line" of social responsibility (society, environment, and economy). A CSR firm considers its overall influence on society at large and goes beyond the interests of its shareholders. Such a company will issue corporate social responsibility reports that detail its environmental, labor, and corporate-giving practices. Because social responsibility has moved from nice-to-do to must-do, a CSR company may create the position of director of corporate social responsibility. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 6 94) Recent research into the relationship between ethical behavior and an employee's pay discovered that most companies base pay on ________. A) entitlement and custom rather than on ethical behavior B) performance metrics and ethical behavior C) ethical behavior instead of entitlement and custom D) guidelines presented in books on philosophy and religion Answer: A Explanation: A) The importance of linking pay to performance is an appropriate topic when discussing ethics. It is well known in the compensation world that "what you reward is what you get." If the statement is correct, then a problem exists because most companies do not link pay to ethical behavior but base pay on entitlement and custom. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 7

95) Angie, an HR manager, has been given the task of strengthening the ethical culture at her firm. Which of the following activities would be most beneficial? A) e-mailing ethics codes to all employees B) posting ethics code posters in the hallways C) writing a memo about ethics to top executives D) discussing ethics during performance appraisals Answer: D Explanation: D) HR professionals can help foster an ethical culture, but that means more than just hanging the ethics codes posters on walls. Instead, since the HR professionals' primary job is dealing with people, they must help to instill ethical practices into the corporate culture. Those values must be clearly communicated to all employees, early and often, beginning with the interviewing process and reinforced during performance reviews. Difficulty: Challenging Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 7 96) According to a recent survey by Brighter Planet, although more firms are engaging in green activities, the effectiveness of these efforts has declined. Some believe that the problem with corporate social responsibility is that ________. A) no universal set of corporate social responsibility guidelines is available B) each firm has to follow a universal set of corporate social responsibility guidelines C) corporations really don't want to pursue social responsibility D) corporate social responsibility is a load of value-destroying nonsense Answer: B Explanation: B) Brighter Planet, a sustainability technology company, discovered in a recent survey that although more firms are engaging in green activities, the effectiveness of these efforts has declined. Some believe that the problem with CSR is that it consists of a universal set of guidelines such as the "triple bottom line." To be "socially responsible," each firm has to follow the same guidelines instead of what would be the most appropriate strategy for each firm. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 7 97) Milton Friedman, a Nobel Prize winning economist, asserted that ________. A) as a firm creates wealth for its shareholders, society as a whole will also receive benefits B) the pursuit of social responsibility does not affect the price of a company's stock C) as a firm pursues corporate sustainability, it will create wealth for its stockholders D) stockholders should quit whining and get behind corporate social responsibility Answer: A Explanation: A) According to Friedman, as a firm creates wealth for its shareholders, society as a whole will also be benefited. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 7 33 Copyright © 2016 Pearson Education, Inc.

98) Surveys indicate that most companies link employee bonuses to ethical performance. Answer: FALSE Explanation: A survey of 358 compliance and ethics professionals by the Society of Corporate Compliance and Ethics (SCCE) and the Health Care Compliance Association found that only a few companies have made ethics and compliance a process for determining how employees are compensated, and only about one company in six ties employee bonuses and incentives to ethical performance. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 7 99) Preparing ethics training for global organizations is ________ than preparing training for U.S. employees. A) more complicated B) less complicated C) no different D) None of the above Answer: A Explanation: A) Ethics training for global organizations is more complicated than preparing training for U.S. employees. One must also train for the country in which the global company operates. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 100) KPMG uses all of the following approaches EXCEPT ________ to handle ethical issues. A) adopting expedient, site-specific procedures B) providing multiple channels for raising alarms C) ensuring consistent investigation and resolution of all reported matters D) eliminating fear of retaliation for those who raise questions Answer: A Explanation: A) At KPMG, there are three fundamental factors in handling ethics issues: provide multiple channels for raising alarms, eliminate fear of retaliation for those who raise questions, and ensure consistent investigation and resolution of all matters reported. Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 8

101) Ethics training should be part of a ________. A) reactive strategy B) contextual strategy C) defensive strategy D) proactive strategy Answer: D Explanation: D) Ethics training should be part of a proactive, not reactive, strategy. Regular training builds awareness of common ethical issues and provides tools for effective problem solving. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 102) Lincoln Enterprises recently fired two employees who were caught stealing tools from the firm's warehouse. As a result, the CEO of Lincoln wants to strengthen the firm's ethical culture and prevent future violations by requiring employees to participate in ethics training programs. Which of the following best supports the CEO's idea? A) Lincoln Enterprises desires the respect of citizens in the local community. B) The social contract developed by Lincoln Enterprises addresses employee concerns. C) HR managers at Lincoln Enterprises provide new employees with policy handbooks. D) The Sarbanes-Oxley Act requires Lincoln Enterprises to provide ethics training courses. Answer: A Explanation: A) Companies that consistently rank high on the lists of best corporate citizens tend to make ethics training part of a company-wide initiative to promote integrity. If Lincoln wants the respect of the community, then ethics training would be beneficial. Social contracts primarily relate to corporate social responsibility rather than ethics programs. Providing ethics information in a handbook is typically insufficient. The FSGO required ethics training programs, not the Sarbanes-Oxley Act. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8

103) Lincoln Enterprises recently fired two employees who were caught stealing tools from the firm's warehouse. As a result, the CEO of Lincoln wants to strengthen the firm's ethical culture and prevent future violations by requiring employees to participate in ethics training programs. Which of the following most likely undermines the CEO's idea? A) Middle managers at Lincoln regularly receive reports of questionable employee behavior. B) Since Lincoln Enterprises is a global firm, the training program would need to be translated. C) Senior managers at Lincoln indicate that valuable work time would be lost with a training program. D) Competitors of Lincoln Enterprises provide regular ethics training programs to managers and employees. Answer: C Explanation: C) Ethics training should begin at the top and be driven down the organization by senior management. If senior managers at Lincoln fail to see the value of an ethics program, then the program will not be effective because top management sets the ethical tone. Middle managers are the ones who will likely be the first to receive reports of unethical behavior, so if Lincoln's middle managers are hearing about issues then the training would be useful. The global nature of the firm and the firm's competition are less relevant issues. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 104) According to research, what characteristic is most frequently shared by firms that receive high rankings for corporate social responsibility? A) encouraging employees to participate in civic activities B) requiring managers to understand ethics laws C) promoting integrity through ethics training D) linking compensation to ethical behaviors Answer: C Explanation: C) Companies that consistently rank high on the lists of best corporate citizens tend to make ethics training part of a company-wide initiative to promote integrity. Only a small percentage of firms link pay to ethics. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8

105) The concept of ________ has evolved from the traditional view of corporate social responsibility. A) social scaffolding B) planetary progressivism C) work-life balance D) corporate sustainability Answer: D Explanation: D) Corporate sustainability has evolved from the more traditional view of corporate social responsibility. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 106) A sustainable corporation is capable of continuing ________. A) in today's marketplace B) in the marketplace of the future C) not only in today's marketplace but also in the marketplace of the future D) None of the above Answer: C Explanation: C) In recent years, sustainability has been expanded to include the social, economic, environmental, and cultural systems needed to support an organization. This type of organization is capable of continuing both now and in the future. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 107) In a business sense, one can think of corporate sustainability as providing ________. A) long-term profitability B) short-run cash flow C) intermediate tax breaks D) just-in-time inventory management Answer: A Explanation: A) One could think of corporate sustainability in a business sense as providing long-term profitability. Thus, sustainability should be a fundamental part of business strategy, product development, talent development, and capital investment. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8

108) ________ is a business and investment approach that strives to use the best business practices to meet the needs of current and future shareholders. A) Corporate social responsibility B) Corporate sustainability C) First-in, first-out inventory management D) Cash-flow maximization Answer: B Explanation: B) Corporate sustainability may be thought of as being a business and investment approach that strives to use the best business practices to meet the needs of current and future shareholders. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 109) Sustainability has been an integral part of ________ for more than 65 years. A) McDonald's B) Home Depot C) JP Morgan Chase D) Johnson & Johnson Answer: D Explanation: D) Tish Lascelle with Johnson & Johnson said, "Sustainability is embedded in our culture. It's been a part of who we are for more than 65 years, long before the notion of sustainability became trendy." Difficulty: Moderate Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 8 110) The philosophy of sustainability at Dow Chemical is exemplified by the slogan ________. A) "Better living through chemistry." B) "If you can't do it better, why do it?" C) "If we don't do it, somebody else will." D) "With chemicals, there's no such thing as a bad day." Answer: B Explanation: B) Dow Chemical's way of thinking regarding sustainability is, "If you can't do it better, why do it?" This philosophy is at the very heart of sustainability at Dow. Every decision is made with the future in mind. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8

111) Ethics training should ________. A) start at the bottom and move upward through all organizational levels B) focus only on the employees who deal with the public on a day-to-day basis C) begin at the top and continue through all levels of the organization D) start with mid-level management and move laterally through the organization Answer: C Explanation: C) Ethics training should begin at the top and continue through all levels in the organization. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 112) According to the Corporate Knights' seventh annual report on the world's most sustainable corporations, all of the following EXCEPT ________ is among the top five U.S. companies with most green-friendly, sustainable practices. A) General Electric Co. B) Johnson & Johnson C) Archer Daniels Midland Co. D) Intel Corporation Answer: C Explanation: C) Corporate Knights, a Toronto-based media company and sustainability reporter, recently released its seventh annual report of the world's best sustainable corporations. The top five U.S. companies with the most green-friendly, sustainable practices were Johnson & Johnson, Intel Corp., General Electric Co., Agilent Technologies, Inc., and Johnson Controls Inc. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 113) According to the FSGO, firms must provide ethical training to employees. Answer: TRUE Explanation: The Federal Sentencing Guidelines for Organizations Act outlined an effective ethics training program and explained the seven minimum requirements for an effective program to prevent and detect violations. The fourth requirement stated, "Educate employees in the company's standards and procedures through publications and training." Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8

114) Ethics training for global firms requires accurate translations as well as localization. Answer: TRUE Explanation: Ethics training for global organizations is more complicated than preparing the training for U.S. employees. Experts say that localization is as important as the accuracy of the translation process. Learners need to be able to connect in a way that is believable to them. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 115) What role should ethics training play in a corporation's overall strategy? Answer: Companies that consistently rank high on the lists of best corporate citizens tend to make ethics training part of a company-wide initiative to promote integrity. Ethics training should be part of a proactive, not reactive, strategy. Regular training builds awareness of common ethical issues and provides tools for effective problem solving. Ethics training should begin at the top and continue through all levels in the organization. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 8 116) The model in which environmental, social, and economic responsibilities are satisfied concurrently is known as ________. A) corporate social responsibility B) global activism C) giving back to the planet D) restoration and revivification Answer: A Explanation: A) Corporate social responsibility is the model in which environmental, social, and economic responsibilities are satisfied concurrently. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9

117) Over the years, Procter & Gamble has pursued programs in all of the following areas EXCEPT ________. A) strip mining in Eastern Kentucky B) employment opportunities for women and minorities C) environment-protection technology D) involvement in civic activities and the political process Answer: A Explanation: A) Procter & Gamble has long believed it has a responsibility for the long-term benefit of society as well as the company. Over the years, P&G has pursued programs to strengthen U.S. education, to encourage employment opportunities for minorities and women, to develop and implement environment-protection technology, and to encourage employee involvement in civic activities and the political process. Difficulty: Easy Skill: Application of knowledge AACSB: Ethical understanding and reasoning Learning Obj.: 9 118) A global organization known as ________ helps member companies achieve success in ways that respect ethical values, people, communities, and the environment. A) Global Businesses United for Change B) World Commission on Sustainability C) Socially Responsible Corporate Citizens D) Business for Social Responsibility Answer: D Explanation: D) Business for Social Responsibility is a global organization that helps member companies achieve success in ways that respect ethical values, people, communities, and the environment. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 119) In his book Capitalism and Freedom, Milton Friedman argues that ________. A) doing well while doing good is an essential corporate mantra B) socially responsible behavior adds to the corporation's bottom line C) corporations are responsible for the environment, society, and profits D) the only social responsibility of business is to increase profits Answer: D Explanation: D) In his book Capitalism and Freedom, Friedman argued that the only social responsibility of business was to increase its profits. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9

120) Before the 2010 oil spill in the Gulf of Mexico, British Petroleum (BP) had ________. A) provided sustainability training to its oil rig workers B) been fined more than $100 million for safety violations C) never claimed to be anything more than an oil company D) invested billions in stronger safety protocols on its drilling rigs Answer: B Explanation: B) Long before the enormous oil spill in 2010, BP promoted itself as a producer of alternative energies, claiming that BP stood for "Beyond Petroleum." Many believe that BP would have been much better off if it had spent more time and effort in training its employees on its oil drilling platforms, establishing stronger safety protocols, and waiting until its oil rigs were safe to operate. Even during this public relations campaign, BP had been "fined more than $100 million for safety violations." Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 121) Which of the following companies announced that it would double its green technology research expenditures and "make money doing it"? A) General Electric B) Burger King C) Procter & Gamble D) Hewlett-Packard Answer: A Explanation: A) When GE CEO Jeffrey Immelt announced that the company would double its spending on green technology research, it was no grand attempt to save the planet; it was an example of astute business strategy. Immelt said, "We plan to make money doing it." Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 122) Who usually determines a corporation's approach to social responsibility? A) government B) stockholders C) top executives D) board of directors Answer: C Explanation: C) An organization's top executives usually determine a corporation's approach to social responsibility. For example, when McDonald's began, it was Ray Kroc's philosophy to be a community-based business. His philosophy from the very beginning was to give back to the communities that McDonald's served. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 42 Copyright © 2016 Pearson Education, Inc.

123) A study on global CSR conducted during the recent economic downturn discovered all of the following EXCEPT ________. A) 22 percent of respondents think the crisis will have a negative impact on CSR B) 35 percent of respondents think CSR has become a victim of its own hype C) 44 percent of respondents think the crisis will cause CSR to be applied more often D) 28 percent of respondents think the real meaning of CSR will change Answer: B Explanation: B) In the study on global CSR conducted during the economic breakdown, 44 percent believe that CSR policies will be applied more often as a result of the crisis, 28 percent think that the real meaning of CSR will change in the framework of the new conditions, and 22 percent believe that the crisis will have a negative impact on CSR. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 124) According to the Nobel-Prize-winning economist, Milton Friedman, the only social responsibility of a business is to increase its profits. Answer: TRUE Explanation: In his book Capitalism and Freedom, Friedman argued that the only social responsibility of business was to increase its profits. He asserted that as a firm creates wealth for its shareholders, society as a whole will also be benefited. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 125) Many organizations today refer to the "triple bottom line" suggesting that attention is now being paid to social and environmental concerns as well as economic issues. Answer: TRUE Explanation: The "triple bottom line" refers to three factors of corporate social responsibilitysociety, environment, and economy. Firms that demonstrate the ability to manage all three factors represent the top five percent of socially responsible companies. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9

126) Procter & Gamble has served as a leader in corporate social responsibility by developing and implementing environment-protection technology and encouraging employees to participate in civic activities. Answer: TRUE Explanation: Procter & Gamble has long believed it has a responsibility for the long-term benefit of society as well as the company. Over the years, P&G has pursued programs to strengthen U.S. education, to encourage employment opportunities for minorities and women, to develop and implement environment-protection technology, and to encourage employee involvement in civic activities and the political process. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 127) An organization's middle managers usually initiate a corporation's approach to social responsibility. Answer: FALSE Explanation: Usually, top executives in a firm determine the organization's approach to CSR. Lower level managers are more active in implementing policies. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 128) Corporate social responsibility is the model in which the pursuit of profit is replaced by the pursuit of social and environmental goals. Answer: FALSE Explanation: Corporate social responsibility is the model in which economic, social, and environmental responsibilities are satisfied concurrently. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 129) According to the World Commission on Environment and Sustainability, when a company creates wealth for its shareholders, society as a whole will also benefit. Answer: FALSE Explanation: In his book Capitalism and Freedom, Friedman argued that the only social responsibility of business was to increase its profits. He asserted that as a firm creates wealth for its shareholders, society as a whole will also be benefited. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9

130) Before the 2010 oil spill in the Gulf of Mexico, British Petroleum promoted itself as being eco-friendly, stating that BP stood for "Beyond Petroleum." Answer: TRUE Explanation: Long before the enormous oil spill in 2010, BP promoted itself as being ecofriendly. Its literature stated that BP stood for "Beyond Petroleum." BP marketed itself as a producer of alternative energies, an image that was seriously damaged by the devastating oil spill in the Gulf of Mexico. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 9 131) Identify and discuss the arguments against corporate social responsibility. Answer: Not all companies have embraced the concept of corporate social responsibility. Some have challenged the concept that doing well is doing good (DWDG). They believe that although appealing to some, DWDG is also profoundly wrong. Milton Friedman taught at the University of Chicago for more than three decades and was a recipient of the Nobel Memorial Prize in Economic Sciences. In his book Capitalism and Freedom, he argued that the only social responsibility of business was to increase its profits. According to Friedman, as a firm creates wealth for its shareholders, society as a whole will also be benefited. Friedman disciples continue to condemn CSR as a hotchpotch of "value-destroying nonsense." Some argue that publicly endorsing a culture of ethics and social responsibility is merely a public relations campaign. Long before the oil spill in 2010, BP marketed itself as a producer of alternative energies. Many believe that BP would have been much better off if it had spent more time and effort in training its employees on its oil drilling platforms, establishing stronger safety protocols, and waiting until they were safe to operate. Brighter Planet, a sustainability technology company, discovered in a recent survey that although more firms are engaging in green activities, the effectiveness of these efforts has declined. Some believe that the problem with CSR is that it consists of a universal set of guidelines such as the "triple bottom line" (society, environment, and economy). To be "socially responsible," each firm has to follow the same guidelines instead of what would be the most appropriate strategy for each firm. Difficulty: Challenging Skill: Critical thinking AACSB: Ethical understanding and reasoning Learning Obj.: 9

132) According to the World Commission on Environment and Sustainability, the narrow definition of sustainability is ________. A) meeting the needs of the present without compromising the ability of future generations to meet their own needs B) foregoing the needs of the present to enhance the ability of future generations to meet their own needs C) meeting the needs of the present without considering the ability of future generations to meet their own needs D) pursuing the needs of the present while assuming that future generations will do the same Answer: A Explanation: A) According to the World Commission on Environment and Sustainability, the narrow definition of sustainability is "meeting the needs of the present without compromising the ability of future generations to meet their own needs." Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 10 133) After more than 15 years of corporate social responsibility programs, Bangladesh's garment workers are ________. A) paid a living wage B) among the worst paid in the world C) offered benefits, such as health care and paid vacations D) some of the best paid workers in the world Answer: B Explanation: B) After more than 15 years of corporate social responsibility programs, Bangladesh's garment workers are among the worst paid in the world. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 10 134) According to a sustainability survey commissioned by the consulting firm KPMG, approximately ________ of large and mid-sized companies worldwide have an active sustainability program in place. A) 62 percent B) 11 percent C) 33 percent D) 75 percent Answer: A Explanation: A) Approximately 62 percent of large and medium-sized companies worldwide have an active sustainability program in place, and another 11 percent are developing one, according to a sustainability survey commissioned by consulting firm KPMG. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 10 46 Copyright © 2016 Pearson Education, Inc.

135) Corporate social responsibility and corporate sustainability are unrelated terms. Answer: FALSE Explanation: Corporate sustainability has evolved from the more traditional view of corporate social responsibility. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 10 136) In a narrow sense, the term "sustainability" can be defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs. Answer: TRUE Explanation: According to the World Commission on Environment and Sustainability, the narrow definition of sustainability is "meeting the needs of the present without compromising the ability of future generations to meet their own needs." Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 10 137) Identify the term "sustainability" and discuss its role in business. Answer: Corporate sustainability has evolved from the more traditional view of corporate social responsibility. According to the World Commission on Environment and Sustainability, the narrow definition of sustainability is "meeting the needs of the present without compromising the ability of future generations to meet their own needs." In addition, sustainability includes the social, economic, environmental, and cultural systems needed to support an organization. Furthermore, corporate sustainability is a business and investment approach that strives to use the best business practices to meet the needs of current and future shareholders. Today it relates to how an organization's decisions could affect society and the environment as a whole. One could think of corporate sustainability in a business sense as providing long-term profitability. Thus, sustainability should be a fundamental part of business strategy, product development, talent development, and capital investment. Difficulty: Challenging Skill: Critical thinking AACSB: Ethical understanding and reasoning Learning Obj.: 10

138) Which term refers to a systematic assessment of a company's activities in terms of social impact? A) managerial appraisal B) social audit C) social responsibility metric D) ethics audit Answer: B Explanation: B) A social audit is a systematic assessment of a company's activities in terms of its social impact. To overcome the negative publicity of corporate misdeeds and to restore trust, businesses are now conducting audits of their social responsibility activities, not just financial audits. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11 139) Which of the following is NOT a topic included in the social responsibility audit focus? A) open communication B) treatment of employees C) leadership D) management structure Answer: D Explanation: D) A social audit is a systematic assessment of a company's activities in terms of its social impact. Some of the topics included in the audit focus on core values such as social responsibility, open communication, treatment of employees, confidentiality, and leadership but not management structure. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11 140) Which of the following is NOT one of the types of social audits currently being utilized? A) simple inventory of activities B) analysis of social and cultural norms C) compilation of socially relevant expenditures D) determination of social impact Answer: B Explanation: B) An increasing number of companies, as well as public and voluntary sector organizations, are trying to assess their social performance systematically. Three possible types of social audits are currently being used: (1) simple inventory of activities, (2) compilation of socially relevant expenditures, and (3) determination of social impact. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11

141) Which of the following would NOT be considered a socially-oriented activity for a firm? A) ADA adherence B) minority training C) corporate giving D) pollution control Answer: A Explanation: A) Socially oriented activities undertaken by the firm might include minority employment and training, support of minority enterprises, pollution control, and corporate giving. Complying with the ADA is legally required. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11 142) According to your textbook, the ideal social audit would involve ________. A) presenting an inventory list of socially responsible activities B) calculating socially relevant expenditures C) determining the true benefits to society of any socially oriented business activity D) adding terms and definitions to the lexicon of socially responsible behavior Answer: C Explanation: C) The ideal social audit would go well beyond a simple listing and involve determining the true benefits to society of any socially oriented business activity. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 143) A social audit is a systematic assessment of a company's activities in terms of its social impact. Answer: TRUE Explanation: To overcome the negative publicity of corporate misdeeds and to restore trust, businesses are now conducting audits of their social responsibility activities, not just financial audits. A social audit is a systematic assessment of a company's activities in terms of its social impact. Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11 144) The ideal social audit lists socially responsible activities and how much each one costs. Answer: FALSE Explanation: The ideal social audit would go well beyond a simple listing and involve determining the true benefits to society of any socially oriented business activity. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11 49 Copyright © 2016 Pearson Education, Inc.

145) A typical social audit in a business focuses on corporate revenues, cash flows, and retained earnings. Answer: FALSE Explanation: A typical business social audit focuses on core values such as social responsibility, open communication, treatment of employees, confidentiality, and leadership. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11 146) What is the purpose of a social audit? What methods are available to firms that want to conduct social audits? Answer: To overcome the negative publicity of corporate misdeeds and to restore trust, businesses are now conducting audits of their social responsibility activities, not just financial audits. A social audit is a systematic assessment of a company's activities in terms of its social impact. Three possible types of social audits are currently being used: (1) simple inventory of activities, (2) compilation of socially relevant expenditures, and (3) determination of social impact. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 11 147) There is greater recognition among some leading global CSR organizations that CSR efforts are an exercise in ________. A) legislating laws that may or may not protect employee rights B) reputational management C) employee branding D) ensuring that Wall Street firms maximize profits Answer: B Explanation: B) There is a growing recognition among some leading global CSR organizations that the first 15 years of CSR efforts have not produced the desired results, and that significant changes will have to be made if CSR is to be anything more than an expensive exercise in "reputational management." Dan Rees, director of the UK's Ethical Trading Initiative, said, "CSR in general has become a bit of a victim of its own hype. . . . we have to stop pretending that companies in and of themselves can on their own transform industrial relations in foreign lands." Difficulty: Moderate Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 12

148) Firms competing in the global environment continue the lowest possible production costs while still being in compliance with national laws and also be socially responsible. Answer: FALSE Explanation: The global environment has traditionally judged management primarily on furthering the firm's bottom line. If this is so, it may be easier to be socially responsible in a prospering economy but more difficult when the economy is bad. Recently, some global firms appear to be questioning the wisdom of being socially responsible. Difficulty: Challenging Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 12 149) From a global perspective, it may be easier to be socially responsible in a prospering economy but more difficult when the economy is bad. Answer: TRUE Explanation: The global business world often judges management primarily on protecting the firm's bottom line. Therefore, it may be easy to be socially responsible in a prospering economy but more difficult when the economy is bad. Difficulty: Easy Skill: Concept AACSB: Ethical understanding and reasoning Learning Obj.: 12 150) What is the status of global CSR since the recession of 2008-2010? Answer: The question being asked is, "Can firms competing in the global environment continue the lowest possible production costs while still being in compliance with national laws and also be socially responsible?" The global business world often judges management primarily on protecting the firm's bottom line. Hence, it may be easy to be socially responsible in a prospering economy but more difficult when the economy is bad. There is a growing recognition among leading global CSR organizations that the first 15 years of CSR efforts have produced mixed results, and that significant changes will have to be made if CSR is to be anything more than an expensive exercise in "reputational management." Dan Rees, director of the UK's Ethical Trading Initiative, said, "CSR in general has become a bit of a victim of its own hype…we have to stop pretending that companies in and of themselves can on their own transform industrial relations in foreign lands." However, a recent study does not fully support these conclusions. In the study on global CSR conducted during the economic breakdown, 44 percent believe that CSR policies will be applied more often as a result of the crisis, 28 percent think that the real meaning of CSR will change in the framework of the new conditions, and 22 percent believe that the crisis will have a negative impact on CSR. Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 12

Human Resource Management, 14e (Mondy) Chapter 3 Equal Employment Opportunity, Affirmative Action, and Workforce Diversity 1) Legislation (federal, state, and local), Supreme Court decisions, and executive orders require both public and private organizations to tap the abilities of a workforce that was largely underused before the mid-1960s. Answer: TRUE Explanation: Legislation (federal, state, and local), Supreme Court decisions, and executive orders require both public and private organizations to tap the abilities of a workforce that was largely underused before the mid-1960s. The concept of equal employment opportunity has undergone much modification and fine-tuning since the passage of the Equal Pay Act of 1963, the Civil Rights Act of 1964, and the Age Discrimination in Employment Act of 1967. Difficulty: Easy Skill: Critical thinking AACSB: Diverse and multicultural work environments Learning Obj.: 1 2) Although equal employment opportunity has come a long way since the early 1960s, continuing efforts are required because some problems still exist. Answer: TRUE Explanation: Although equal employment opportunity has come a long way since the early 1960s, continuing efforts are required because some problems still exist. Although perfection is elusive, the majority of businesses today do attempt to make employment decisions based on who is the best qualified, as opposed to whether an individual is of a certain gender, race, religion, color, national origin, or age or is disabled. Difficulty: Easy Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 1 3) Which federal legislation is based on the Thirteenth Amendment to the U.S. Constitution? A) Equal Pay Act of 1963 B) Civil Rights Act of 1866 C) Rehabilitation Act of 1973 D) Age Discrimination Act of 1967 Answer: B Explanation: B) The oldest federal legislation affecting staffing is the Civil Rights Act of 1866, which is based on the Thirteenth Amendment to the U.S. Constitution. Specifically, this Act provides that all citizens have the same right "as enjoyed by white citizens. . . to inherit, purchase. . . hold, and convey. . . property, [and that] all persons. . . shall have the same right to make and enforce contracts. . . as enjoyed by white citizens." Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 4) On which amendment to the U.S. Constitution was civil rights established? 1 Copyright © 2016 Pearson Education, Inc.

A) Thirteenth Amendment B) First Amendment C) Fifth Amendment D) Fourteenth Amendment Answer: A Explanation: A) The oldest federal legislation affecting staffing is the Civil Rights Act of 1866, which is based on the Thirteenth Amendment to the U.S. Constitution. The Thirteenth Amendment abolished slavery in the United States and provides that "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction." The Civil Rights Act of 1866 granted citizenship and the same rights enjoyed by white citizens to all male persons in the United States "without distinction of race or color, or previous condition of slavery or involuntary servitude." Subsequently, the Fourteenth Amendment to the U.S. Constitution was enacted to ensure that the Civil Rights Act passed in 1866 would remain valid ensuring that "all persons born in the United States...excluding Indians not taxed..." were citizens and were to be given "full and equal benefit of all laws." The First Amendment protects the right to freedom of speech, and the Fifth Amendment requires that an individual is innocent of a crime until proven guilty. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

5) ________ describes one of the notable exceptions to discrimination as covered by Title VII. A) Gender in female-dominated jobs B) Bona fide occupational qualification (BFOQ) C) Age of females when age is unrelated to job performance D) all of the above Answer: B Explanation: B) Three notable exceptions to discrimination as covered by Title VII are bona fide occupational qualifications (BFOQs), seniority and merit systems, and testing and educational requirements. According to the act it is not an unlawful employment practice for an employer to hire and employ employees on the basis of his religion, sex, or national origin in those certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business or enterprise. For example, religious institutions, such as churches or synagogues, may legally refuse to hire teachers whose religious conviction is different from that of the hiring institution. The second exception to discrimination under Title VII is a bona fide seniority system such as the type normally contained in a union contract. Differences in employment conditions among workers are permitted, provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin. Third, in the matter of testing and educational requirements, Title VII states that it is not "an unlawful employment practice for an employer to give, and to act upon, the results of any professionally developed ability test provided that such test, its administration, or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex, or national origin." The common element among the three exceptions is that employment-related decisions are job-based rather than on protected differences such as age. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 6) Which act prohibits an employer from paying an employee of one gender less money than an employee of the opposite gender where the jobs require equal skills, effort, and responsibility and are performed under similar working conditions? A) Walsh-Healey Act B) Davis-Bacon Act C) Fair Labor Standards Act D) Equal Pay Act Answer: D Explanation: D) Passed as an amendment to the Fair Labor Standards Act, the Equal Pay Act of 1963 (EPA) prohibits an employer from paying an employee of one gender less money than an employee of the opposite gender, if both employees do work that is substantially the same. The Act was passed largely to overcome the outdated belief that a man should be paid more in society than a woman and covers work within the same physical place of business. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 3 Copyright © 2016 Pearson Education, Inc.

7) The Equal Pay Act permits pay distinctions to be made based on certain factors. Which of the following is NOT one of those factors? A) gender B) merit system C) seniority system D) production quality Answer: A Explanation: A) Passed as an amendment to the Fair Labor Standards Act, the Equal Pay Act of 1963 (EPA) prohibits an employer from paying an employee of one gender less money than an employee of the opposite gender, if both employees do work that is substantially the same. Pay differences are allowable based on merit, seniority, and production quality. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 8) What Supreme Court case ruled that discrimination charges must be filed within 180 days of the allegedly discriminatory pay decision? A) Ledbetter v Goodyear Tire & Rubber Co., Inc. B) Espinoza v Farah Manufacturing Company C) Weber v Kaiser Aluminum Corporation D) Albemarle Paper Company v Moody Answer: A Explanation: A) In the 2007 Supreme Court case of Ledbetter v Goodyear Tire & Rubber Co., Inc., the Court said that discrimination charges must be filed within 180 days after the allegedly discriminatory pay decision. Lilly Ledbetter had worked for Goodyear for many years but she did not realize until she was close to retirement that she was being discriminated against because of pay. Since she did not file a discrimination charge within 180 day of her employment, the Supreme Court ruled against her. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

9) The Equal Employment Opportunity Commission (EEOC) possesses the authority to ________. A) investigate and reconcile whether a claim of discrimination should be brought to a federal judge B) notify legal authorities of illegal discrimination C) investigate and reconcile charges of illegal discrimination D) prove illegal discrimination in a court of law Answer: C Explanation: C) The EEOC possesses the authority to investigate and reconcile charges of illegal discrimination. Title VII protects employees who work for all private sector employers; local, state, and federal governments; and educational institutions that employ 15 or more individuals. Title VII also applies to private and public employment agencies, labor organizations, and joint labor management committees controlling apprenticeship and training. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 10) According to Title VII of the Civil Rights Act of 1964, employers may not discriminate based on ________. A) age B) religion C) disability D) pregnancy Answer: B Explanation: B) Under Title VII, it is illegal for an employer to discriminate in hiring, firing, promoting, compensating, or in terms, conditions, or privileges of employment on the basis of race, color, sex, religion, or national origin. Other laws address discrimination based on age, disability, and pregnancy. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

11) You are an HR manager with a large manufacturing firm. Yesterday, you heard one of your recruiters ask an applicant the following question: "What is your religion?" Would this be an employment standard to avoid? If this is an employment standard to avoid, what law or court decision is it based upon? A) No, it is an acceptable question. B) Yes, Phillips v Martin Marietta Corporation C) Yes, Griggs v Duke Power Company D) Yes, Civil Rights Act of 1964 Answer: D Explanation: D) Under Title VII, it is illegal for an employer to discriminate in hiring, firing, promoting, compensating, or in terms, conditions, or privileges of employment on the basis of race, color, sex, religion, or national origin. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 2 12) Title VII of the Civil Rights Act applies to employers with ________ or more employees. A) 15 B) 25 C) 50 D) 75 Answer: A Explanation: A) Title VII covers employers engaged in or affecting interstate commerce who have 15 or more employees for each working day in each of 20 calendar weeks in the current or preceding calendar year. Also included in the definition of employers are state and local governments, schools, colleges, unions, and private employment agencies that procure employees for an employer with 15 or more employees. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

13) The burden of proving the necessity for a BFOQ rests entirely on the ________. A) OFCCP B) EEOC C) employer D) employee Answer: C Explanation: C) According to Title VII, it is not: an unlawful employment practice for an employer to hire and employ employees. . . on the basis of his religion, sex, or national origin in those certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business or enterprise. The burden of proving the necessity for a BFOQ rests entirely on the employer. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 14) Which of the following agencies is responsible for enforcing Title VII? A) Bureau of Labor Statistics B) Department of Justice C) EEOC D) OFCCP Answer: C Explanation: C) The Civil Rights Act of 1964 also created the Equal Employment Opportunity Commission (EEOC) and assigned enforcement of Title VII to this agency. Consisting of five members appointed by the president, the EEOC is empowered to investigate, conciliate, and litigate charges of discrimination arising under provisions of Title VII. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 15) What is the most significant regulation issued by EEOC? A) Federal Guidelines on Discrimination B) Uniform Guidelines on Employee Selection Procedures C) Adverse Impact Selection Guidelines and Procedures D) Universal Guidelines on Selection and Discrimination Answer: B Explanation: B) The EEOC is empowered to investigate, conciliate, and litigate charges of discrimination arising under provisions of Title VII. In addition, the commission has the responsibility of issuing procedural regulations and interpretations of Title VII and the other statutes it enforces. The most significant regulation issued by EEOC is the Uniform Guidelines on Employee Selection Procedures. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 7 Copyright © 2016 Pearson Education, Inc.

16) You are a human resource manager with a large manufacturing firm. Yesterday you heard one of your recruiters ask an applicant the following question: "How old are you?" Would this be an employment standard to avoid? If this is an employment standard to avoid, what law or court decision is it based on? A) No, it is an acceptable question. B) Yes, Age Discrimination in Employment Act C) Yes, Civil Rights Act of 1991 D) Yes, American with Disabilities Act Answer: B Explanation: B) The Age Discrimination in Employment Act (ADEA) prohibits employers from discriminating against individuals who are age 40 or older. Questions asked about an applicant's age or date of birth may be ill-advised. However, a firm may ask for age information to comply with the child labor law. For example, the question could be asked, "Are you under the age of 18?" Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 2 17) The Age Discrimination Act is administered by the ________. A) Department of Justice B) Department of Labor C) EEOC D) OFCCP Answer: C Explanation: C) The EEOC is responsible for administering the ADEA. The Act pertains to employers who have 20 or more employees for 20 or more calendar weeks (either in the current or preceding calendar year); unions with 25 or more members; employment agencies; and federal, state, and local government subunits. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

18) The Age Discrimination Act differs from Title VII of the Civil Rights Act in that it ________. A) provides for a trial by jury B) does not cover exempt employees C) is administered by the EEOC D) does not pertain to employment agencies Answer: A Explanation: A) The Age Discrimination in Employment Act differs from Title VII of the Civil Rights Act in providing for a trial by jury and carrying a possible criminal penalty for violation of the Act. The trial-by-jury provision is important because juries are thought to have great sympathy for older people who may have been discriminated against. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 19) Which of the following is NOT true about the Age Discrimination in Employment Act? A) provides for a trial by jury B) applies to anyone age 40 or older C) carries a criminal penalty provision D) applies to firms with at least 10 employees Answer: D Explanation: D) The Act pertains to employers who have at least 20 employees but not 10. The ADEA provides for a trial by jury and carries a possible criminal penalty for violation. The law prohibits employer discrimination against anyone age 40 or older. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 20) Tom is a pilot for Southwest Airlines. According to court rulings, at what age must Tom retire from his job as a commercial pilot? A) 55 B) 60 C) 65 D) 70 Answer: C Explanation: C) Courts have continued to rule that the Federal Aviation Administration adequately explained its longstanding rule that it can force commercial pilots to retire at age 60. The age 60 rule was first imposed in 1959 and was long controversial. However, in 2007, the retirement age for commercial pilots was raised to 65. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2

21) Anita is applying for a job with Greyhound Bus to work as an intercity bus driver. According to a 1974 court ruling regarding Greyhound, Anita must be age ________ or younger. A) 35 B) 45 C) 55 D) 65 Answer: A Explanation: A) In a 1974 Seventh Circuit Court decision, the court ruled that Greyhound did not violate the ADEA when it refused to hire persons 35 years of age or older as intercity bus drivers because the likelihood of risk or harm to its passengers was involved. Greyhound presented evidence concerning degenerative physical and sensory changes that humans undergo at about age 35 that have a detrimental effect on driving skills, and that the changes are not detectable by physical tests. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 22) Kayla, who has dyslexia, is employed by a non-profit organization that has received a $90,000 federal grant. Which law most likely protects Kayla against employer discrimination? A) Uniformed Services Employment Act of 1994 B) Civil Rights Act of 1991 C) Age Discrimination in Employment Act of 1967 D) Rehabilitation Act of 1973 Answer: D Explanation: D) The Rehabilitation Act prohibits discrimination against disabled workers who are employed by certain government contractors and subcontractors and organizations that receive federal grants in excess of $2,500. Protected under the Act are diseases and conditions such as epilepsy, cancer, cardiovascular disorders, AIDS, blindness, deafness, mental retardation, emotional disorders, and dyslexia. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2

23) Under the Rehabilitation Act, if the contract or subcontract exceeds ________, or if the contractor has ________ or more employees, a written affirmative action program must be prepared. A) $25,000; 25 B) $50,000; 50 C) $100,000; 100 D) $250,000; 250 Answer: B Explanation: B) If the contract or subcontract exceeds $50,000, or if the contractor has 50 or more employees, the employer must prepare a written affirmative action plan for review by the Office of Federal Contract Compliance Programs (OFCCP), which administers the Act. In it, the contractor must specify that reasonable steps are being taken to hire and promote disabled persons. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 24) The Rehabilitation Act is administered by the ________. A) Department of Labor B) Department of Justice C) Equal Employment Opportunity Commission D) Office of Federal Contract Compliance Programs Answer: D Explanation: D) The Office of Federal Contract Compliance Programs (OFCCP) administers the Rehabilitation Act. The EEOC administers many other employee discrimination laws, such as the ADA and ADEA. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

25) Holly, an IT specialist at a bank, is eight months pregnant and experiencing some medical complications. As a result, Holly's doctor has ordered Holly to remain home on bed rest for the last month of her pregnancy. According to the Pregnancy Discrimination Act, Holly is entitled to receive ________. A) disability benefits B) flexible benefits C) scheduling options D) early retirement Answer: A Explanation: A) Under the Pregnancy Discrimination Act, a woman unable to work for pregnancy-related reasons is entitled to disability benefits or sick leave on the same basis as employees unable to work for other medical reasons. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 26) Which law establishes criminal and civil sanctions against employers who hire an individual knowing he or she is an unauthorized alien? A) Illegal Immigration Reform and Immigrant Responsibility Act B) Immigration Reform and Control Act C) Homeland Security Act D) Rehabilitation Act Answer: B Explanation: B) The desire to stem illegal immigration prompted Congress to enact the Immigration Reform and Control Act (IRCA) of 1986. The IRCA granted amnesty to approximately 1.7 million long-term unauthorized workers in an effort to bring them out of the shadows and improve their labor market opportunities. It also established criminal and civil sanctions against employers who knowingly hire unauthorized aliens. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

27) All of the following are provisions of the Immigration Reform and Control Act of 1986 EXCEPT ________. A) employers that hire illegal aliens could face criminal charges B) illegal aliens denied employment visas for at least 180 days C) illegal aliens denied federally funded welfare benefits D) employment eligibility must be verified Answer: B Explanation: B) The IRCA established criminal and civil sanctions against employers who knowingly hire unauthorized aliens. The Act also makes unlawful the hiring of anyone unless the person's employment authorization and identity are verified. The IRCA denied illegal aliens federally funded welfare benefits. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 28) In the Uniformed Services Employment and Reemployment Rights Act (USERRA), the ________ ensures that a returning employee is not penalized for the time spent on active duty. A) disparate treatment principle B) adverse impact principle C) equal protection principle D) escalator principle Answer: D Explanation: D) Known as the escalator principle, this requirement is designed to ensure that a returning employee is not penalized (by losing a pay raise, promotion, etc.) for the time spent on active duty, not exceeding five years. In order to accomplish this, organizations should track factors ranging from compensation to promotions that employees would have received had they not been on military leave. There are no special rights under USERRA for temporary workers or the new hires taking over the Reserve or National Guide members' jobs. Disparate treatment and adverse impact are forms of discrimination associated with Equal Employment Opportunity laws. Equal protection is a principle of the Fourteenth Amendment of the U.S. Constitution. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

29) In 2008, the Americans with Disabilities Act Amendments Act ________. A) excluded millions of people from the ADA's protection B) narrowed the ADA's definition of "disability" C) left the ADA's definition of "disability" unchanged D) brought millions more people within the ADA's protection Answer: D Explanation: D) The Americans with Disabilities Act Amendments Act (ADAAA) brings millions more people within the ADA's protection. The ADAAA expands the definition of "disability," so that many more applicants and employees are eligible for reasonable accommodations. The ADAAA broadened the ADA's definition of disability by expanding the term "major life activities." Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 30) Title I of the Genetic Information Nondiscrimination Act (GINA) makes it unlawful to determine employee eligibility for participation in a company's ________. A) training programs B) group health plan C) incentive pay system D) all of the above Answer: B Explanation: B) Title I of GINA applies to employer-sponsored group health plans. This title generally prohibits discrimination in group premiums based on genetic information and the use of genetic information as a basis for determining eligibility or setting health insurance premiums. Title I also places limitations on genetic testing and the collection of genetic information. Title II of GINA prohibits the use of genetic information in the employment setting for making employment decisions such as hiring decisions, compensation, training, and termination. GINA further restricts the deliberate acquisition of genetic information by employers and others covered by Title II, and strictly limits disclosing genetic information. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

31) The Americans with Disabilities Act prohibits discrimination during ________. A) recruitment and selection only B) layoffs and leaves only C) hiring and firing only D) all employment practices Answer: D Explanation: D) The Americans with Disabilities Act (ADA) prohibits discrimination against qualified individuals with disabilities. The ADA prohibits discrimination in all employment practices, including job application procedures, hiring, firing, advancement, compensation, training, and other terms, conditions, and privileges of employment. It applies to recruitment, advertising, tenure, layoffs, leaves, benefits, and all other employment-related activities. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 32) Which law amended the Civil Rights Act of 1964 and provided appropriate remedies for intentional discrimination in the workplace? A) Age Discrimination in Employment Act of 1967 B) Americans with Disabilities Act of 1990 C) Rehabilitation Act of 1973 D) Civil Rights Act of 1991 Answer: D Explanation: D) The Civil Rights Act of 1991 amended five statutes: (1) the Civil Rights Act of 1866; (2) Title VII of the Civil Rights Act of 1964, as Amended; (3) the Age Discrimination in Employment Act of 1967, as Amended; (4) the Rehabilitation Act of 1973; and (5) the Americans with Disabilities Act of 1990. The Civil Rights Act of 1991 provides appropriate remedies for intentional discrimination and unlawful harassment in the workplace. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 33) Which act codified the concepts of business necessity and job related? A) Immigration Act of 1990 B) Americans with Disabilities Act of 1990 C) Civil Rights Act of 1978 D) Civil Rights Act of 1991 Answer: D Explanation: D) The Civil Rights Act of 1991 served to codify the concepts of business necessity and job-related pronounced by the Supreme Court in Griggs v Duke Power Co. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

34) Hannigan Lumber employs 155 workers. One of the firm's former employees used the Civil Rights Act of 1991 to file and win a discrimination lawsuit against Hannigan Lumber. What is the maximum amount of punitive damages that the former employee could receive? A) $50,000 B) $100,000 C) $200,000 D) $300,000 Answer: B Explanation: B) Under the Civil Rights Act of 1991, a complaining party may recover punitive damages if the complaining party demonstrates that the company engaged in a discriminatory practice with malice or with reckless indifference to the law. However, the following limits, based on the number of people employed by the company, were placed on the amount of the award: Between 15 and 100 employees–$50,000 Between 101 and 200 employees–$100,000 Between 201 and 500 employees–$200,000 More than 500 employees–$300,000 Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 35) The primary purpose of the Uniformed Services Employment and Reemployment Rights Act is to ________. A) protect the jobs of National Guard members and Reservists B) ensure that sufficient benefits are provided to war veterans C) provide government jobs to National Guard members D) help Reservists find new jobs after military service Answer: A Explanation: A) The Uniformed Services Employment and Reemployment Rights Act (USERRA) provides protection to Reservists and National Guard members. Under this Act, those workers are entitled to return to their civilian employment after completing their military service. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

36) The ________ is a requirement designed to ensure that a soldier who is a returning employee is not penalized for the time spent on active duty. A) protection principle B) universal principle C) escalator principle D) temporary principle Answer: C Explanation: C) As a general rule, a returning employee is entitled to reemployment in the same job position that he or she would have attained with reasonable certainty if not for the absence to serve in the military. Known as the escalator principle, this requirement is designed to ensure that a returning employee is not penalized (by losing a pay raise, promotion, etc.) for the time spent on active duty, not exceeding five years. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 37) The Veterans Opportunity to Work Act (VOW) of 2011 makes it ________. A) more likely that returning veterans would have to take a cut in pay when they return to their jobs B) harder for veterans to return to their civilian employment after completing their military service C) easier for employees who are veterans to pursue hostile work environment claims against employers D) harder for employees who are veterans to pursue hostile work environment claims against employers Answer: C Explanation: C) The Veterans Opportunity to Work (VOW) Act passed in 2011 amended the Uniformed Services Employment and Reemployment Rights Act. It is now easier for employees to sue employers based on hostile work environment claims related to an employee's military status. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

38) When EEOC regulations conflict with state or local civil rights regulations, which will be followed? A) federal laws B) state laws C) local laws D) the law that favors women and minorities Answer: D Explanation: D) Numerous state and local laws also affect equal employment opportunity. A number of states and some cities have passed fair employment practice laws prohibiting discrimination on the basis of race, color, religion, gender, or national origin. When EEOC regulations conflict with state or local civil rights regulations, the legislation more favorable to women and minorities applies. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 39) All private employers who are subject to the ________ as amended with 100 employees or more must annually submit an EEO-1 report. A) Civil Rights Act of 1964 B) Fair Labor Standards Act C) Office of Federal Contract Compliance Programs D) Executive Order 1115 Answer: A Explanation: A) All private employers who are subject to the Civil Rights Act of 1964 as amended with 100 employees or more must annually submit an EEO-1 report. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

40) Lisa believes she has been discriminated against by her employer and intends to file charges with the EEOC. Lisa must file the discrimination charges within ________ days of the alleged act; however, the time is extended to ________ days if a state or local agency becomes involved in the case. A) 50; 100 B) 100; 200 C) 150; 300 D) 180; 300 Answer: D Explanation: D) Charges may be filed by one of the presidentially appointed EEOC commissioners, by any aggrieved person, or by anyone acting on behalf of an aggrieved person. Charges must be filed within 180 days of the alleged act; however, the time is extended to 300 days if a state or local agency is involved in the case. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 41) Denise, an accounts manager for a restaurant chain, has filed a discrimination charge with the EEOC. What is the most likely next step in the EEOC process? A) EEOC conducts an investigation. B) EEOC attempts a no-fault settlement. C) EEOC recommends proceeding with litigation. D) EEOC attempts to reach a conciliation between the parties. Answer: B Explanation: B) When a charge is filed, the EEOC first attempts a no-fault settlement. Essentially, the organization charged with the violation is invited to settle the case with no admission of guilt. Most charges are settled at this stage. Failing settlement, the EEOC investigates the charges, attempts conciliation, and makes recommendations about litigation. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 2 42) The United States Department of Labor (USDL) ensures that employers doing business with the federal government comply with nondiscrimination and affirmative action laws. Answer: FALSE Explanation: The Office of Contract Compliance Programs (OFCCP) is responsible for ensuring that employers doing business with the federal government comply with the laws and regulations requiring nondiscrimination and affirmative action. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

43) The Age Discrimination in Employment Act of 1967 prohibited employers from discriminating against individuals who were 40 to 50 years old. Answer: FALSE Explanation: As originally enacted, the Age Discrimination in Employment Act (ADEA) prohibited employers from discriminating against individuals who were 40 to 65 years old. The 1978 amendment provided protection for individuals who were at least 40, but less than 70 years old. In a 1986 amendment, employer discrimination against anyone age 40 or older is illegal. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 44) The 1974 Seventh Circuit Court ruled that Greyhound did not violate the ADEA when it refused to hire persons 35 years of age or older as intercity bus drivers. Answer: TRUE Explanation: The 1974 Seventh Circuit Court ruled that Greyhound did not violate the ADEA when it refused to hire persons 35 years of age or older as intercity bus drivers. Again, the likelihood of risk or harm to its passengers was involved. Greyhound presented evidence concerning degenerative physical and sensory changes that humans undergo at about age 35 that have a detrimental effect on driving skills, and that the changes are not detectable by physical tests. Difficulty: Moderate Skill: Critical thinking AACSB: Application of knowledge Learning Obj.: 2 45) The Rehabilitation Act prohibits discrimination against disabled workers who are employed by certain government contractors and subcontractors and organizations that receive federal grants in excess of $100,000. Answer: FALSE Explanation: The Rehabilitation Act prohibits discrimination against disabled workers who are employed by certain government contractors and subcontractors and organizations that receive federal grants in excess of $2,500. Individuals are considered disabled if they have a physical or mental impairment that substantially limits one or more major life activities or if they have a record of such impairment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

46) The Equal Employment Opportunity Commission administers the Rehabilitation Act of 1973. Answer: FALSE Explanation: The Office of Federal Contract Compliance Programs (OFCCP) administers the Rehabilitation Act. The Rehabilitation Act prohibits discrimination against disabled workers who are employed by certain government contractors and subcontractors and organizations that receive federal grants in excess of $2,500. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 47) The Pregnancy Discrimination Act prohibits discrimination in employment based on pregnancy, childbirth, or related medical conditions. Answer: TRUE Explanation: Passed as an amendment to Title VII of the Civil Rights Act, the Pregnancy Discrimination Act prohibits discrimination in employment based on pregnancy, childbirth, or related medical conditions. Questions regarding a woman's family and childbearing plans should not be asked. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 48) The 1986 Immigration Reform and Control Act (IRCA) established criminal and civil sanctions against employers who knowingly hire unauthorized aliens. Answer: TRUE Explanation: The desire to stem illegal immigration prompted Congress to enact the Immigration Reform and Control Act (IRCA) of 1986. The IRCA established criminal and civil sanctions against employers who knowingly hire unauthorized aliens. The Act also makes unlawful the hiring of anyone unless the person's employment authorization and identity are verified. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 49) The Americans with Disabilities Act Amendments Act of 2008 limits the definition of "disability," so that fewer applicants and employees are eligible for reasonable accommodations. Answer: FALSE Explanation: The Americans with Disabilities Act Amendments Act of 2008 expands the definition of "disability," so that more applicants and employees are eligible for reasonable accommodations. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 21 Copyright © 2016 Pearson Education, Inc.

50) What is the purpose of the EEOC? What is the relationship between Title VII and the EEOC? Answer: Title VII of the Civil Rights Act created the Equal Employment Opportunity Commission (EEOC) and assigned enforcement of Title VII to this agency. Consisting of five members appointed by the president, the EEOC is empowered to investigate, conciliate, and litigate charges of discrimination arising under provisions of Title VII. In addition, the commission has the responsibility of issuing procedural regulations and interpretations of Title VII and the other statutes it enforces. Under Title VII, filing a discrimination charge initiates EEOC action. Charges may be filed by one of the presidentially appointed EEOC commissioners, by any aggrieved person, or by anyone acting on behalf of an aggrieved person. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 2, 4 51) The most common complaint brought to the Equal Employment Opportunity Commission (EEOC) are charges of discrimination based on ________. A) sex B) age C) race D) disability Answer: C Explanation: C) The EEOC continually receives complaints. According to the EEOC, employees filed 99,412 workplace discrimination charges in 2012. The most common claims focused on discrimination on the basis of race (33.7 percent), sex (30.5 percent) and age (23.0 percent). In 2012, the EEOC obtained approximately $365.4 million in monetary relief for thousands of discrimination victims as well as significant nonmonetary remedies from employers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

52) Which two groups have the primary responsibility to ensure equal employment opportunity? A) government agencies (Department of Labor and EEOC) and employees B) government agencies (Department of Labor and OFCCP) and employers C) government agencies (EEOC and OFCCP) and employees D) government agencies (EEOC and OFCCP) and employers Answer: D Explanation: D) The main groups that take responsibility for establishing and supporting equal employment opportunity includes the government (Equal Opportunity Commission and Office of Federal Contract Compliance Programs) and employers. Employees do play a role by understanding behaviors that may violate EEO laws, but the employer has the primary duty to educate employees. The Department of Labor administers some employment-related laws, but not laws that fall under the EEO domain. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 53) After the EEOC has completed its investigation, what will it issue? A) a substantial fine to the employer if probable cause is found B) a probable cause or a no probable cause statement C) a mandate to file a discrimination claim in a court of law if probable cause is found D) a mandate that the employer provide training to managers and supervisors to prevent illegal employment discrimination Answer: B Explanation: B) After the EEOC has completed its investigation, it will issue a probable cause or a no probable cause statement. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3

54) In the event that the EEOC issues a probable cause statement in response to a claim of employment discrimination, the next step involves ________. A) requiring that the employer provide affected employee(s) with a monetary award B) a review for litigation potential C) attempted conciliation D) fining the employer Answer: C Explanation: C) In the event of a probable cause statement, the next step involves attempted conciliation. In the event this effort fails, the case will be reviewed for litigation potential. Some of the factors that determine whether the EEOC will pursue litigation are (1) the number of people affected by the alleged practice; (2) the amount of money involved in the charge; (3) other charges against the employer; and (4) the type of charge. Recommendations for litigation are then passed on to the general counsel of the EEOC. If the recommendation is against litigation, a right-to-sue notice will be issued to the charging party. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 3 55) Most EEOC charges are settled through a no-fault settlement. Answer: TRUE Explanation: When a charge is filed, the EEOC first attempts a no-fault settlement. Essentially, the organization charged with the violation is invited to settle the case with no admission of guilt. Most charges are settled at this stage. Failing settlement, the EEOC investigates the charges. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3

56) Which Supreme Court decision upheld that the company discriminated against two white workers who filed a claim of discrimination because they were terminated, but not a black employee, who was also accused of misappropriating company property? A) Phillips v Martin Marietta Corporation B) McDonald v Santa Fe Trail Transportation Company C) Espinoza v Farah Manufacturing Company D) Weber v Kaiser Aluminum and Chemical Corporation Answer: B Explanation: B) McDonald v Santa Fe Trail Transportation Company offers an example of disparate treatment. Three of the company's employees, two whites and one black, had allegedly misappropriated 60 gallons of antifreeze. Santa Fe took disciplinary action against the workers by terminating the two whites, but not the black employee. The discharged white workers filed suit against the company, charging that their termination violated both Title VII and the Civil Rights Act of 1866. The Supreme Court agreed with the plaintiffs that they had been the recipients of unequal treatment on the basis of their race. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 57) Adverse impact is said to occur if women and minorities are not hired at the rate of at least ________ of the best-achieving group. A) 90 percent B) 51 percent C) 80 percent D) 30 percent Answer: C Explanation: C) Adverse impact, a concept established by the Uniform Guidelines, occurs if women and minorities are not hired at the rate of at least 80 percent of the best-achieving group. Under the Uniform Guidelines, adverse impact has been described in terms of selection rates, the selection rate being the number of qualified applicants hired or promoted, divided by the total number of qualified applicants. This has also been called the four-fifths rule, which is actually a guideline subject to interpretation by the EEOC. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

58) Assuming that adverse impact is shown, what are the two avenues available to employers if they still desire to use a particular selection standard? A) validation of a selection test, establishing a bona fide occupational qualification (BFOQ) B) validation of a selection test, establishing that the employer did not intend to illegally discriminate against employees C) validation of a selection test, establishing business necessity D) none of the above Answer: A Explanation: A) Assuming that adverse impact is shown, employers have two avenues available to them if they still desire to use a particular selection standard. First, the employer may validate a selection device by showing that it is indeed a predictor of success. For instance, the employer may be able to show a strong relationship between the selection device and job performance, and that if it did not use this procedure, the firm's training costs would become prohibitive. If the device has proved to be a predictor of job performance, business necessity has been established. The second avenue available to employers should adverse impact be shown is the bona fide occupational qualification (BFOQ) defense. The BFOQ defense means that only one group is capable of performing the job successfully. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 4 59) The Uniform Guidelines adopted a ________ approach in assessing whether a firm's employment practices are discriminatory. A) process fairness B) bottom-line C) distributive fairness D) compensatory Answer: B Explanation: B) The Uniform Guidelines adopted the bottom-line approach in assessing whether a firm's employment practices are discriminatory. For example, if a number of separate procedures are used in making a selection decision, the enforcement agencies will focus on the end result of these procedures to determine whether adverse impact has occurred. Essentially, the EEOC is more concerned with what is occurring than how it occurs. It admits that discriminatory employment practices that cannot be validated may exist; however, the net effect, or the bottom line, of the selection procedures is the focus of the EEOC attention. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

60) According to the Uniform Guidelines, any instrument or procedure used in the selection decision is considered a(n) ________. A) disparate tool B) appraisal C) necessity D) test Answer: D Explanation: D) According to the Uniform Guidelines, selection procedures include the full range of assessment techniques from traditional paper-and-pencil tests, performance tests, testing programs or probationary periods, and physical, education, and work experience requirement through informal or casual interviews and unscored application forms. Using this definition, virtually any instrument or procedure used in the selection decision is considered a test. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 61) As an HR manager, which of the following would most likely help you make legal employment decisions? A) NACElink Network B) Job Analysis Software C) Uniform Guidelines D) Shared Service Center Answer: C Explanation: C) The Uniform Guidelines provide a single set of principles that were designed to assist employers in complying with federal prohibitions against employment practices that discriminate on the basis of race, color, religion, sex, and national origin. The Uniform Guidelines provide a framework for making legal employment decisions about hiring, promotion, demotion, referral, retention, licensing and certification, the proper use of tests, and other selection procedures. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 4

62) What term means that an employer treats some people less favorably than others because of race, religion, sex, national origin, or age? A) adverse impact B) disparate treatment C) overt discrimination D) unintentional discrimination Answer: B Explanation: B) Disparate treatment means that an employer treats some employees less favorably than others because of race, religion, color, sex, national origin, or age. Adverse impact occurs if women and minorities are not hired at the rate of at least 80 percent of the bestachieving group. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 63) Prior to the issuance of the Uniform Guidelines, the only way to prove job relatedness was through ________. A) test validation B) adverse impact C) four-fifths rule D) court litigation Answer: A Explanation: A) Prior to the issuance of the Uniform Guidelines, the only way to prove jobrelatedness was to validate each test. The Uniform Guidelines do not require validation in all cases but when the selection device produces an adverse impact on a minority group. Adverse impact, a concept established by the Uniform Guidelines, occurs if women and minorities are not hired at the rate of at least 80 percent of the best-achieving group. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

64) According to the Uniform Guidelines, test validation is essential only when selection devices produce ________. A) adverse impact B) systemic discrimination C) racial discrimination D) disparate treatment Answer: A Explanation: A) The Uniform Guidelines do not require validation in all cases but when the selection device produces an adverse impact on a minority group. Adverse impact, a concept established by the Uniform Guidelines, occurs if women and minorities are not hired at the rate of at least 80 percent of the best-achieving group. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 65) Which of the following occurs if women and minorities are not hired at the rate of at least 80% of the best achieving group of applicants? A) disparate treatment B) negligent hiring C) geocentric staffing D) adverse impact Answer: D Explanation: D) Adverse impact, a concept established by the Uniform Guidelines, occurs if women and minorities are not hired at the rate of at least 80 percent of the best-achieving group. Disparate treatment means that an employer treats some employees less favorably than others because of race, religion, color, sex, national origin, or age. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 66) Adverse impact is determined through application of ________. A) affirmative action programs B) the four-fifths rule C) previous court decisions D) EO 11246. Answer: B Explanation: B) Under the Uniform Guidelines, adverse impact has been described in terms of selection rates, the selection rate being the number of qualified applicants hired or promoted, divided by the total number of qualified applicants. This has also been called the four-fifths rule, which is actually a guideline subject to interpretation by the EEOC. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 29 Copyright © 2016 Pearson Education, Inc.

67) During 2010, 400 people were hired for a particular job. Of the total, 300 were white and 100 were black. There were 1,500 applicants for these jobs, of whom 1,000 were white and 500 were black. Compute for adverse impact. Does adverse impact exist? A) .76, Yes B) .85, No C) .66, Yes D) .89, No Answer: C Explanation: C) The success rate for the least-achieving group (often women and minority applicants) is determined by dividing the number of members of a specific group employed in a period by the number of qualified applicants in a period. The success rate of best-achieving group applicants is determined by dividing the number of people in the best-achieving group employed by the number of the best-achieving group applicants in a period. Using this formula, blacks were determined to be the least-achieving group because 100/500 = .2. Whites were determined to be the best-achieving group because 300/100 = .3. Using the adverse formula, you have: .2/.3 = 66.67%. Therefore, adverse impact exists. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4 68) Elway Tire Company is a large manufacturing firm based in Texas. The highly diverse workforce at Elway requires the HR managers to ensure that all employment practices comply with local, state, and federal laws. Elway is expanding its operations and has recently hired 400 new technicians, of whom 300 were white and 100 were Hispanic. There were 1,500 qualified applicants for the jobs, of whom 1,000 were white and 500 were Hispanic. The HR manager needs to determine if adverse impact exists. Which of the following is a true statement given the facts provided? A) Whites and Hispanics were determined to be equally achieving. B) Whites were determined to be adversely impacted in hiring. C) Hispanics were determined to be the least-achieving group. D) Hispanics were determined to be the best-achieving group. Answer: C Explanation: C) The success rate for the least-achieving group is determined by dividing the number of members of a specific group employed in a period by the number of qualified applicants in a period. In this case, Hispanics were the least-achieving group because 100/500 = .2. The success rate of best-achieving group applicants is determined by dividing the number of people in the best-achieving group employed by the number of the best-achieving group applicants in a period. In this case, whites were the best-achieving group because 300/1,000 = .3. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4

69) Elway Tire Company is a large manufacturing firm based in Texas. The highly diverse workforce at Elway requires the HR managers to ensure that all employment practices comply with local, state, and federal laws. Elway is expanding its operations and has recently hired 400 new technicians, of whom 300 were white and 100 were Hispanic. There were 1,500 qualified applicants for the jobs, of whom 1,000 were white and 500 were Hispanic. The HR manager needs to determine if adverse impact exists. Which of the following is a true statement given the facts provided? A) Both adverse impact and disparate treatment exist. B) Adverse impact cannot be determined. C) Adverse impact does not exist. D) Adverse impact exists. Answer: D Explanation: D) Adverse impact is determined by dividing the success rate for the leastachieving group of applicants (100/500 = .2) by the success rate for the best-achieving group of applicants (300/1,000 = .3). Adverse impact exists because 0.2/0.3 = 66.67%. Adverse impact occurs if women and minorities are not hired at the rate of at least 80 percent of the bestachieving group. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4 70) The Uniform Guidelines provide a single set of principles to assist employers in complying with federal prohibitions against discriminatory employment practices. Answer: TRUE Explanation: The Uniform Guidelines provide a single set of principles that were designed to assist employers, labor organizations, employment agencies, and licensing and certification boards in complying with federal prohibitions against employment practices that discriminate on the basis of race, color, religion, sex, and national origin. The Uniform Guidelines provide a framework for making legal employment decisions about hiring, promotion, demotion, referral, retention, licensing and certification, the proper use of tests, and other selection procedures. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 71) Adverse impact occurs if women and minorities are not hired at the rate of at least 80 percent of the best-achieving group. Answer: TRUE Explanation: Adverse impact, a concept established by the Uniform Guidelines, occurs if women and minorities are not hired at the rate of at least 80 percent of the best-achieving group. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

72) How can age be a BFOQ? Provide specific examples in your answer. Answer: Age can actually be a bona fide occupational qualification when it is reasonably necessary to the essence of the business, and the employer has a rational or factual basis for believing that all, or substantially all, people within an age class would not be able to perform satisfactorily. Courts have continued to rule that the Federal Aviation Administration adequately explained its longstanding rule that it can force commercial pilots to retire at age 60. However, in 2007, the retirement age for commercial pilots was raised to 65. The courts also supported the decision that Greyhound did not violate the ADEA when it refused to hire persons 35 years of age or older as intercity bus drivers. Again, the likelihood of risk or harm to its passengers was involved. Greyhound presented evidence concerning degenerative physical and sensory changes that humans undergo at about age 35 that have a detrimental effect on driving skills, and that the changes are not detectable by physical tests. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4 73) In a brief essay, explain the concepts of disparate treatment and adverse impact. Answer: Unlawful employment discrimination, as established through various Supreme Court decisions, can be divided into two broad categories: adverse impact and disparate treatment. Disparate treatment means that an employer treats some employees less favorably than others because of race, religion, color, sex, national origin, or age. It is the most easily understood form of discrimination. For example, males are treated differently from females; whites are treated differently from blacks. The crux of disparate treatment is different treatment on the basis of some nonallowable criterion. Prior to the issuance of the Uniform Guidelines, the only way to prove job-relatedness was to validate each test. The Uniform Guidelines do not require validation in all cases. Essentially, it is required only in instances in which the test or other selection device produces an adverse impact on a minority group. Adverse impact, a concept established by the Uniform Guidelines, occurs if women and minorities are not hired at the rate of at least 80 percent of the best-achieving group. Under the Uniform Guidelines, adverse impact has been described in terms of selection rates, the selection rate being the number of qualified applicants hired or promoted, divided by the total number of qualified applicants. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4

74) In 1998, President Bill Clinton included ________ as a protected class in government executive orders. A) ethnicity B) disabilities C) sexual orientation D) religion Answer: C Explanation: C) President Bill Clinton amended Executive Order 11478 with Executive Order 13087, which adds sexual orientation to the list of protected classes. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 5 75) President Bill Clinton amended Executive Order 11478 by adding ________ to the list of protected classes. A) age B) sexual orientation C) disabilities D) genetic predisposition for disabilities Answer: B Explanation: B) President Richard M. Nixon issued Executive Order 11478 in 1969. It covers the federal civilian workforce. This executive order prohibits discrimination in employment on the basis of race, color, religion, sex, national origin, handicap, and age. And, it requires all federal government departments and agencies to take affirmative steps to promote employment opportunities for those classes it covered. In 1998, President Bill Clinton amended Executive Order 11478 with Executive Order 13087, which adds sexual orientation to the list of protected classes. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5

76) Executive Order 11478 is most like which of the following laws? A) Title II of the Americans with Disabilities Act B) Title VII of the Civil Rights Act of 1964 C) Title VII of the Civil Rights Act of 1991 D) Title I of the Genetic Information Nondiscrimination Act Answer: B Explanation: B) President Richard M. Nixon issued Executive Order 11478 in 1969. It covers the federal civilian workforce. This executive order prohibits discrimination in employment on the basis of race, color, religion, sex, national origin, handicap, and age. And, it requires all federal government departments and agencies to take affirmative steps to promote employment opportunities for those classes it covered. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 77) The Office of Federal Contract Compliance Programs (OFCCP) is very specific about what should be included in a(n) ________. A) affirmative action plan B) non discrimination statement C) hiring plan D) OFCCP report on selection tests Answer: A Explanation: A) The OFCCP is very specific about what should be included in an affirmative action plan (AAP). A policy statement has to be developed that reflects the CEO's attitude regarding equal employment opportunity, assigns overall responsibility for preparing and implementing the AAP, and provides for reporting and monitoring procedures. The policy should state that the firm intends to recruit, hire, train, and promote persons in all job titles without regard to race, color, religion, gender, or national origin, except where gender is a bona fide occupational qualification (BFOQ). Recently protected military veterans and individuals with disabilities have been included in affirmative action. The policy should guarantee that all human resource actions involving areas such as compensation, benefits, transfers, layoffs, return from layoffs, company-sponsored training, education, tuition assistance, and social and recreational programs will be administered without regard to race, color, religion, gender, or national origin. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

78) Which term refers to a directive issued by the president that has the effect of a Congressional law? A) presidential citation B) executive order C) executive mandate D) administrative directive Answer: B Explanation: B) An executive order (EO) is a directive issued by the president and has the force and effect of a law enacted by Congress as it applies to federal agencies and federal contractors. Many believe that the concept of affirmative action got its beginning in 1948 when President Harry S. Truman officially ended racial segregation in all branches of the military by issuing Executive Order 9981. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 79) Which Executive Order amended EO 11246 and changed the word creed to religion and added sex discrimination to the other prohibited items? A) EO 11838 B) EO 10988 C) EO 11375 D) EO 11102 Answer: C Explanation: C) In 1968, EO 11375, which changed the word "creed" to "religion" and added sex discrimination to the other prohibited items, amended EO 11246. These EOs are enforced by the Department of Labor through the Office of Federal Contract Compliance Programs (OFCCP). Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

80) Affirmative action programs involve hiring women or minorities ________. A) in equal numbers B) according to local and state quotas C) according to existing Executive Orders D) in proportion to their representation in the relevant labor market Answer: D Explanation: D) An affirmative action program is an approach developed by organizations with government contracts to demonstrate that workers are employed in proportion to their representation in the firm's relevant labor market. An affirmative action program may be voluntarily implemented by an organization. In such an event, goals are established and action is taken to hire and move minorities and women up in the organization. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 81) Federal laws require firms to implement affirmative action programs, which are monitored by the EEOC. Answer: FALSE Explanation: An affirmative action program may be voluntarily implemented by an organization. In such an event, goals are established and action is taken to hire and move minorities and women up in the organization. In other situations, an AAP may be mandated by the OFCCP. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 82) One or more jobs that have similar content, wage rates, and opportunities is known as a job group. Answer: TRUE Explanation: A job group is defined as one or more jobs having similar content, wage rates, and opportunities. Job groups are important when assessing AAPs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

83) France considers a hostile environment as the only basis for sexual harassment claims. Answer: FALSE Explanation: France considers quid pro quo as the only form of sexual harassment claims. The country does not recognize claims of a sexually hostile work environment. However, France considers the request for sexual favors for a job or promotion to be a criminal matter with the possibility of prison. Difficulty: Easy Skill: Critical thinking AACSB: Diverse and multicultural work environments Learning Obj.: 5 84) What is the difference between diversity management and affirmative action? Answer: Diversity management is ensuring that factors are in place to provide for and encourage the continued development of a diverse workforce by melding these actual and perceived differences among workers to achieve maximum productivity. Diversity management is about pursuing an inclusive culture in which newcomers feel welcome, and everyone sees the value of his or her job. An affirmative action program (AAP) is an approach developed by organizations with government contracts to demonstrate that workers are employed in proportion to their representation in the firm's relevant labor market. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 5, 9 85) Which case established that firms may not require pre-employment medical examinations before making hiring decisions? A) Noe v Delta Airlines B) Premeaux v Continental Airlines C) Leonel v American Airlines D) Phelps v Northwest Airlines Answer: C Explanation: C) The EEOC guidelines on pre-employment inquiries and tests regarding disabilities prohibit inquiries and medical examinations intended to gain information about applicants' disabilities before a conditional job offer. In the Supreme Court case of Leonel v American Airlines, the Court ruled that the airline violated the ADA's required sequence for prehire medical inquiries/examinations by making medical inquiries and requiring individuals to take medical examinations before completing and making its hiring decisions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

86) You are a human resource manager with a large manufacturing firm. Yesterday, you heard one of your recruiters ask an applicant the following question: "What previous medical conditions have you experienced?" Would this be an employment standard to avoid? If this is an employment standard to avoid, what law or court decision is it based on? A) No, Weber v Kaiser Aluminum and Chemical Corporation B) Yes, Age Discrimination in Employment Act C) Yes, Civil Rights Act of 1991 D) Yes, American with Disabilities Act Answer: D Explanation: D) The guiding principle of the ADA is to ask only about potential employees' ability to do the job, and not about their disabilities. Lawful inquiries include those regarding performance of specific functions or possession of training, while illegal inquiries include those that ask about previous medical conditions or extent of prior drug use. Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 6 87) All of the following were changes that resulted from the ADAAA being enacted in 2008 EXCEPT ________. A) expanding the definition of "disability" B) eliminating the "substantially limited" requirement C) minimizing protections for current illegal drug users D) defining and expanding the term "major life activities" Answer: C Explanation: C) The ADA Amendments Act broadened the ADA's definition of disability by expanding the term "major life activities." The law also did away with the "substantially limited" requirement for those regarded as having a disability. The ADA does not protect current illegal drug users. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 88) Quid pro quo represents a type of ________ discrimination. A) age B) sexual orientation C) sex D) disabilities Answer: C Explanation: C) There are two distinct types of sexual harassment: (1) where a hostile work environment is created, and (2) when there is a quid pro quo, for example, an offer of promotion or pay raise in exchange for sex. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 38 Copyright © 2016 Pearson Education, Inc.

89) What are the fundamental principles of the Faragher v City of Boca Raton and Burlington Industries, Inc. v Ellerth cases in the realm of sexual harassment? A) employers are not liable for the acts of their supervisors, regardless of whether the employer is aware of the sexual harassment act B) employers are totally liable for the acts of their supervisors only when the employer is aware of the sexual harassment act. C) employers are liable for the acts of their supervisors, even if there was not intent to engage in sexual harassment D) employers are totally liable for the acts of their supervisors, regardless of whether the employer is aware of the sexual harassment act. Answer: D Explanation: D) Employers are totally liable for the acts of their supervisors, regardless of whether the employer is aware of the sexual harassment act. In Faragher v City of Boca Raton and Burlington Industries, Inc. v Ellerth, the Supreme Court held that an employer is strictly liable, meaning that it has absolutely no defense, when sexual harassment by a supervisor involves a tangible employment action. Courts expect employers to carefully train supervisors so they do not engage in any type of behavior that could be construed as sexual harassment. In addition, all employees should be trained so as to understand their rights and responsibilities Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 90) What was the first sexual harassment case to reach the U.S. Supreme Court? A) Dothard v Rawlingson B) Meritor Savings Bank v Vinson C) Phillips v Martin Marietta D) American Tobacco Company v Patterson Answer: B Explanation: B) The first sexual harassment case to reach the U.S. Supreme Court was the case of Meritor Savings Bank v Vinson in 1986. In the Vinson decision, the Supreme Court recognized for the first time that Title VII could be used for offensive-environment claims. According to the EEOC, specific actions that could create a hostile workplace include a pattern of threatening, intimidating, or hostile acts and remarks, negative sexual stereotyping, or the display of written or graphic materials considered degrading. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

91) In which Supreme Court decision was it held that same-sex sexual harassment may be unlawful under Title VII? A) Oncale v Sundowner Offshore Services B) Meritor Savings Bank v Vinson C) Harris v Forklift Systems, Inc. D) Miller v Bank of America Answer: A Explanation: A) The Supreme Court, in the case of Oncale v Sundowner Offshore Services, held that same-sex sexual harassment may be unlawful under Title VII. The Supreme Court decided that a plaintiff could make out a claim for sexual harassment as long as the harassing conduct was because of sex. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 92) All of the following selection procedures are most likely discriminatory with regard to national origin EXCEPT denying employment based upon ________. A) fluency in English B) foreign training C) foreign education D) job knowledge Answer: D Explanation: D) Fluency in English requirements may be discriminatory, although firms may require employees to speak only in English if business necessity can be shown. Denying employment opportunities to an individual because of his or her foreign training or education, or practices that require an individual to be foreign trained or educated may be discriminatory. Denying applicants because they lack job knowledge is acceptable. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

93) Which term refers to discrimination against employees based on their obligations to care for family members? A) elderly care discrimination B) family care discrimination C) caregiver discrimination D) religious discrimination Answer: C Explanation: C) Caregiver or family responsibility discrimination is discrimination against employees based on their obligations to care for family members. The EEOC has issued a technical assistance document on how employers of workers with caregiving responsibilities can avoid violations of Title VII of the 1964 Civil Rights Act. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 94) As an HR manager at a global electronics firm, you have employees who practice many different religions. As a result, you have a number of employees who are prohibited from working on certain days of the week. Which of the following would be the LEAST appropriate method for accommodating an employee's religious practices? A) voluntary substitutes B) flexible scheduling C) vertical movements D) changes in job assignments Answer: C Explanation: C) The Guidelines on Discrimination Because of Religion identify several means of accommodating religious practices that prohibit working on certain days. Some of the methods suggested included voluntary substitutes, flexible scheduling, lateral transfer, and change of job assignments. Promoting an employee would not necessarily solve the primary problem. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

95) Kelly, an HR manager, has a male employee whose religious practices do not permit him to pay union dues. Which of the following should Kelly most likely ask the employee to do instead of paying union dues? A) work extra hours B) give his personal days to a co-worker C) donate an equivalent amount of money to a charity D) give an equivalent amount of money to his church or synagogue Answer: C Explanation: C) The Guidelines on Discrimination Because of Religion identify several means of accommodating religious practices. Some collective bargaining agreements include a provision that each employee must join the union or pay the union a sum equivalent to dues. When an employee's religious beliefs prevent compliance, the union should accommodate the employee by permitting that person to make an equivalent donation to a charitable organization. Difficulty: Moderate Skill: Application AACSB: Reflective thinking Learning Obj.: 6 96) Which executive order (EO) made it the policy of the government to provide equal opportunity in federal government for all qualified persons? A) EO 11246 B) EO 10988 C) EO 11375 D) EO 11838 Answer: A Explanation: A) EO 11246 establishes the policy of the U.S. government as providing equal opportunity in federal employment for all qualified people. It prohibits discrimination in employment because of race, creed, color, or national origin. The order also requires promoting the full realization of equal employment opportunity through a positive, continuing program in each executive department and agency. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

97) Which of the following was stipulated by Executive Order 11246? A) affirmative action B) uniform selection guidelines C) equal employment opportunity D) adverse impact and disparate treatment Answer: A Explanation: A) Affirmative action, stipulated by EO 11246, requires covered employers to take positive steps to ensure employment of applicants and treatment of employees during employment without regard to race, creed, color, or national origin. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 98) National origin applies exclusively to individuals who came from, or whose forebears came from, a particular country. Answer: FALSE Explanation: National origin protection also covers (1) marriage or association with a person of a specific national origin; (2) membership in, or association with, an organization identified with, or seeking to promote the interests of national groups; (3) attendance at, or participation in, schools, churches, temples, or mosques generally used by persons of a national origin group; and (4) use of an individual's or spouse's name that is associated with a national origin group. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 99) According to the Uniform Guidelines on Sexual Harassment, employers are only liable for the sexual harassment acts of their managers when they have knowledge of the sexual harassment taking place. Answer: FALSE Explanation: According to these guidelines, employers are totally liable for the acts of their supervisors, regardless of whether the employer is aware of the sexual harassment act. In Faragher v City of Boca Raton and Burlington Industries, Inc. v Ellerth, the Supreme Court held that an employer is strictly liable, meaning that it has absolutely no defense, when sexual harassment by a supervisor involves a tangible employment action. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

100) According to the Supreme Court's decision in TWA v Hardison, employers have an obligation to accommodate sincerely held religious practices. Answer: TRUE Explanation: According to the Supreme Court's decision in TWA v Hardison, employers have an obligation to accommodate sincerely held religious practices, as long as the requested accommodation does not create more than a minimum cost to the employer. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 101) What is the purpose of the Uniform Guidelines on Employee Selection Procedures? Answer: The Uniform Guidelines provide a single set of principles that were designed to assist employers, labor organizations, employment agencies, and licensing and certification boards in complying with federal prohibitions against employment practices that discriminate on the basis of race, color, religion, sex, and national origin. The Uniform Guidelines provide a framework for making legal employment decisions about hiring, promotion, demotion, referral, retention, licensing and certification, the proper use of tests, and other selection procedures. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

102) Describe caregiver discrimination. Explain why it is becoming more prevalent. Answer: Caregiver (family responsibility) discrimination is discrimination against employees based on their obligations to care for family members. The EEOC has issued a technical assistance document on how employers of workers with caregiving responsibilities can avoid violations of Title VII of the 1964 Civil Rights Act and other fair employment laws and reduce the likelihood of discrimination complaints. According to the EEOC, the guidance is not binding on employers but rather offers best practices that are proactive measures that go beyond federal nondiscrimination requirements. Federal law does not prohibit discrimination on the basis of "caregiver status" but rather it is concerned when workers with caregiving responsibilities are treated differently based on a characteristic that is protected by laws, such as gender, race, or association with an individual with a disability. Caregiver discrimination has become the new battleground in employment claims. Examples of possible caregiver discrimination violations include treating male caregivers more favorably than female caregivers; reassigning a woman to less desirable projects based on the assumption that, as a new mother, she will be less committed to her job; or lowering subjective evaluations of a female employee's work performance after she becomes the primary caregiver of her grandchildren, despite the absence of an actual decline in work performance. In recent years, employees have begun filing more and more caregiver discrimination lawsuits. The challenge for employers is to develop the right mix of flexibility and fairness in work scheduling, leave policies, dependent-care assistance, and benefits. This will promote positive employee relations, recruit and retain a diverse and well-qualified workforce, address and resolve job-related issues, and defend against claims of unfair or unlawful conduct. Difficulty: Challenging Skill: Synthesis AACSB: Reflective thinking Learning Obj.: 6

103) Provide the EEOC's definition of sexual harassment. Based on this definition, explain whether employers are responsible for the acts of their supervisors. Answer: EEOC Definition of Sexual Harassment: Unwelcome sexual advances, requests for sexual favors, and verbal or physical conduct of a sexual nature that occur under any of the following situations: 1. When submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment. 2. When submission to or rejection of such contact by an individual is used as the basis for employment decisions affecting such individual. 3. When such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment. According to these guidelines, employers are totally liable for the acts of their supervisors, regardless of whether the employer is aware of the sexual harassment act. In Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, the Supreme Court held that an employer is strictly liable, meaning that it has absolutely no defense, when sexual harassment by a supervisor involves a tangible employment action. Courts expect employers to carefully train supervisors so they do not engage in any type of behavior that could be construed as sexual harassment. In addition, all employees should be trained so as to understand their rights and responsibilities. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 6 104) Why is there potential for sexual harassment to occur when individuals from two different cultures interact? A) some behaviors that violate cultural norms of one country may not be perceived as a problem in another culture B) most men, regardless of cultural beliefs, are prone to engage in sexual harassment C) sexual harassment is universal D) none of the above Answer: A Explanation: A) When individuals from two different cultures interact, there is a potential for sexual harassment problems. For example, some behaviors that violate U.S. cultural norms may not be perceived as a problem in another culture. In many Mediterranean and Latin countries, physical contact and sensuality are a common part of socializing. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 7

105) What is one important reason why millions of working-age women continue to experience sexual harassment? A) human nature B) many countries do not have laws that prohibit sexual harassment C) many countries with sexual harassment laws do not enforce them D) age discrimination is a far more serious issue than sexual harassment Answer: B Explanation: B) The level of enforcement against workplace sexual harassment varies considerably from country to country. Although 117 countries outlaw sexual harassment in the workplace, 311 million working-age women continue to live and work in countries without this legal protection. In a recent study, 26 percent of the workers surveyed in India said they had been sexually harassed, whereas only 1 percent of Sweden's employees said that they had been sexually harassed. Chinese workers had the second highest rate of sexual harassment victimization (18 percent), followed by Saudi Arabia (16 percent). Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 106) When individuals from two different cultures interact, there is a potential for sexual harassment problems. Answer: TRUE Explanation: When individuals from two different cultures interact, there is a potential for sexual harassment problems. For example, some behaviors that violate U.S. cultural norms may not be perceived as a problem in another culture. In many Mediterranean and Latin countries, physical contact and sensuality are a common part of socializing. Difficulty: Moderate Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 7 107) Sexual harassment is a universal phenomenon across cultures. Answer: FALSE Explanation: When individuals from two different cultures interact, there is a potential for sexual harassment problems. For example, some behaviors that violate U.S. cultural norms may not be perceived as a problem in another culture. In many Mediterranean and Latin countries, physical contact and sensuality are a common part of socializing. Difficulty: Moderate Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 7

108) In today's workplace, the definition of diversity is ________. A) focused on affirmative action B) constantly changing and expanding C) understood by everyone in the workplace D) all about equal employment opportunity Answer: B Explanation: B) Diversity is more than equal employment and affirmative action; the actual definition is constantly changing and expanding. Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 8 109) What term refers to any perceived difference among people, such as age, profession, lifestyle, or position? A) diversity B) culture C) climate D) environment Answer: A Explanation: A) Diversity refers to any perceived difference among people: age, race, religion, functional specialty, profession, sexual orientation, geographic origin, lifestyle, tenure with the organization or position, and any other perceived difference. The challenge for managers in the future will be to recognize that people with characteristics that are common but are different from those in the mainstream, often think, act, learn, and communicate differently. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 8

110) Why do some managers find the issue of diversity and diversity management to be challenging? A) managing diversity is not required by law B) there are few differences between equal employment opportunity and diversity C) the definition of diversity is constantly changing D) the laws governing the management of diversity are not well specified Answer: C Explanation: C) The challenge for managers is to recognize that people with characteristics that are common but are different from those in the mainstream, often think, act, learn, and communicate differently. Diversity is more than equal employment and affirmative action; the actual definition is constantly changing and expanding. Unlike Equal Employment Opportunity and Affirmative Action, promoting a diverse workforce is not required by law. Companies choose to embrace workforce diversity as a strategic choice. Capitalizing on a diverse workforce may be seen as contributing to a company's objectives such as profit, productivity, and morale. Diversity is inclusive, encompassing everyone in the workplace. Diversity management is aimed at creating a workplace in which every employee fits, feels accepted, has value, and contributes. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 8 111) In today's workplace, diversity is primarily concerned with race and gender. Answer: FALSE Explanation: Twenty-five years ago, diversity was primarily concerned with race and gender. Today, the definition is quite different. Diversity refers to any perceived difference among people: age, race, religion, functional specialty, profession, sexual orientation, geographic origin, life-style, tenure with the organization or position, and any other perceived difference. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 112) According to ________, "Diversity is about our relatedness, our connectedness, our interactions, where the lines cross." A) Barack Obama B) Harris Sussman C) R. Roosevelt Thomas, Jr. D) Kathy Hannan Answer: B Explanation: B) In his book The Future and the Work Ahead of Us, Harris Sussman writes, "Diversity is about our relatedness, our connectedness, our interactions, where the lines cross. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9

113) According to diversity experts, diversity management requires employers to do all of the following EXCEPT ________. A) develop patience B) keep an open mind C) maintain a quota system D) cultivate cultural awareness Answer: C Explanation: C) Because every person, culture, and business situation is unique, there are no simple rules for managing diversity; but diversity experts say that employers need to develop patience, open-mindedness, acceptance, and cultural awareness. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9 114) In order to achieve diversity in the workplace, management must ________. A) foster a culture that values individuals and their wide array of needs and contributions B) walk a fine line between political correctness and protectionism C) focus on laws, court decisions, and executive orders D) cultivate the bureaucracy and preserve the status quo Answer: A Explanation: A) Achieving diversity is more than being politically correct; it is about fostering a culture that values individuals and their wide array of needs and contributions. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9 115) Which term refers to ensuring that factors are in place to encourage the continued development of a productive and diverse workforce by melding actual and perceived differences among workers? A) EEOC management B) affirmative management C) diversity management D) adverse impact management Answer: C Explanation: C) Diversity management is ensuring that factors are in place to provide for and encourage the continued development of a diverse workforce by melding these actual and perceived differences among workers to achieve maximum productivity. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9

116) Creating a supportive work environment in which all people can be effective is a characteristic of ________. A) EEOC guidelines B) affirmative action C) diversity management D) adverse impact management Answer: C Explanation: C) Diversity management is about pursuing an inclusive culture in which newcomers feel welcome, and everyone sees the value of his or her job. It involves creating a supportive culture in which all employees can be effective. In creating this culture it is important that top management strongly support workplace diversity as a company goal and include diversity initiatives in their companies' business strategies. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9 117) The terms "diversity management" and "equal employment opportunity" mean the same thing. Answer: FALSE Explanation: Diversity management and equal employment opportunity are different. Equal employment opportunity focuses on laws, court decisions, and executive orders. Diversity management is about pursuing an inclusive corporate culture in which newcomers feel welcome, and everyone sees the value of his or her job. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 118) The challenge for managers in the coming decades will be to recognize that people with common, but different characteristics from the mainstream, often think, act, learn, and communicate differently. Answer: TRUE Explanation: The challenge for managers in the future will be to recognize that people with characteristics that are common but are different from those in the mainstream, often think, act, learn, and communicate differently. Because every person, culture, and business situation is unique, there are no simple rules for managing diversity, but diversity experts say that employers need to develop patience, open-mindedness, acceptance, and cultural awareness. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9

119) Diversity management involves implementing EEOC rules to ensure that hiring discrimination does not occur. Answer: FALSE Explanation: Diversity management is ensuring that factors are in place to provide for and encourage the continued development of a diverse workforce by melding these actual and perceived differences among workers to achieve maximum productivity. Diversity management is about pursuing an inclusive culture in which newcomers feel welcome, not necessarily implementing EEOC rules. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9 120) Diversity management requires managers to ensure that factors are in place to encourage the continued development of a diverse workforce by melding any differences among workers in order to achieve maximum productivity. Answer: TRUE Explanation: Diversity management is ensuring that factors are in place to provide for and encourage the continued development of a diverse workforce by melding these actual and perceived differences among workers to achieve maximum productivity. Diversity management is about pursuing an inclusive culture in which newcomers feel welcome. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 9 121) Programs that highlight a firm's diversity management program can be used to help attract desirable recruits. Answer: TRUE Explanation: If an organization wants to remain competitive in the marketplace, diversity has to be a part of its strategic goals. Programs that highlight a firm's diversity management program can be used to help attract desirable recruits. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

122) What are the various components of a diverse workforce? What is diversity management? How can firms benefit from implementing diversity management programs? Answer: Single parents, working mothers, dual-career families, older workers, disabled workers, immigrants, and workers of color are components that make up a diverse workforce. Diversity management is ensuring that factors are in place to provide for and encourage the continued development of a diverse workforce by melding these actual and perceived differences among workers to achieve maximum productivity. Promoting diversity can be a sound business strategy that leads to increased market share and a reputation as being a place people want to work. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 9, 10 123) President Obama decided that the 1996 Defense of Marriage Act that bars federal recognition of same sex marriages ________. A) was constitutional B) was immune from constitutional questions C) was unconstitutional D) was neutral from a constitutional point of view Answer: C Explanation: C) President Obama decided that the 1996 Defense of Marriage Act that bars federal recognition of same sex marriages was unconstitutional and told the Justice Department to stop defending the law in court, bringing harsh criticism from many congressional members. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 124) Polls in the U.S.A. show that the public is evenly divided on ________. A) equal rights for gay people B) same-sex marriage C) advancement opportunities for gays in the workplace D) overturning "don't ask, don't tell" Answer: B Explanation: B) Nearly 90 percent of Americans favor equality of opportunity in the workplace. But the public remains virtually evenly divided on same-sex marriage. To date, 17 states have legalized same-sex marriage. Twenty-one states have passed some form of nondiscrimination law protecting gay and lesbian workers from sexual-orientation bias Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10

125) It is estimated that ________ of Fortune 500 firms ban discrimination on the basis of sexual orientation. A) 50% B) 86% C) 36% D) 25% Answer: B Explanation: B) An estimated 86 percent of Fortune 500 firms now ban discrimination on the basis of sexual orientation, up from 61 percent in 2002, and approximately 50 percent also ban discrimination against transsexuals, compared with 3 percent in 2002 Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 126) Women-owned businesses account for nearly ________ of all enterprises in the market today. A) one-quarter B) one-half C) one-third D) two-thirds Answer: C Explanation: C) In 2010, for the first time ever, women made up the majority of the U.S. workforce. Women-owned businesses now account for nearly one-third of all enterprises in the market today. The American Express Open State of Women-Owned Businesses Report shows the number of women-owned firms from 1997 to 2011 increased by 50 percent Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 127) Managers at Quick Communications have noticed that the firm frequently loses talented female employees after they have children. Which of the following would most likely help the firm retain these female employees? A) offering job rotation opportunities B) expanding healthcare benefits C) offering flexible schedules D) emphasizing diversity Answer: C Explanation: C) Quick Communications is losing talented employees in whom they have made substantial investments. Flextime, telecommuting, and job sharing have a major impact on retaining women in the workforce. Job rotation, benefits, and diversity are less likely to assist female workers with balancing family and career. Difficulty: Challenging Skill: Application AACSB: Diverse and multicultural work environments Learning Obj.: 10 54 Copyright © 2016 Pearson Education, Inc.

128) Tanya and Jack are married and have two children. Tanya works as a nurse at a local hospital, and Jack is an accountant. Which term best describes Tanya and Jack? A) dual-career family B) multi-career couple C) baby boomer couple D) diverse family Answer: A Explanation: A) The increasing number of dual-career families, families in which both husband and wife have jobs and family responsibilities, presents both challenges and opportunities for organizations. The majority of children growing up today have both parents working outside the home. Difficulty: Moderate Skill: Application AACSB: Diverse and multicultural work environments Learning Obj.: 10 129) According to Professor Ella Bell, what term refers to the stress of coping with membership in two cultures simultaneously? A) minority stress B) cultural stress C) role reversal D) bicultural stress Answer: D Explanation: D) Ella Bell, professor of organizational behavior at MIT, refers to dual membership in the dominant culture and an ethnic culture as biculturalism. In her study of African-American women, Bell identifies the stress of coping with membership in two cultures simultaneously as bicultural stress. She indicates that role conflict, competing roles from two cultures; and role overload, too many expectations to comfortably fulfill, are common characteristics of bicultural stress. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10

130) In the aftermath of the 2007-2009 recession, many Baby Boomers are delaying retirement. According to U.S. Bureau of Labor Statistics, ________ will be working in 2022. A) 3 million workers 65 and over B) 20 million workers 65 and over C) 11 million workers 65 and over D) 7 million workers 65 and over Answer: C Explanation: C) Many Boomers will resist retirement, some because they feel healthy enough to continue work and others because their retirement income was hit hard by the economy. The U.S. Bureau of Labor Statistics estimates that about 11 million workers 65 and older will be working in 2022, up from about 6 million today. Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 131) When Walgreens opened a state-of-the-art distribution center in Windsor, Connecticut, the firm had a goal of filling at least one-third of all jobs with ________. A) minority women B) individuals with disabilities C) workers over the age of 55 D) young workers with limited skills Answer: B Explanation: B) Walgreens recently opened its second state-of-the-art distribution center in Windsor, Connecticut, designed specifically to employ people with disabilities. Its goal is to fill at least one-third of the available jobs with individuals with disabilities. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 132) Which of the following is an example of an employer de-skilling a job to make it possible for lower-skilled workers to enter the workforce? A) Burger King paying above the minimum wage B) Walmart offering succession training programs C) McDonald's using pictures on cash register keys D) Target hiring seasonal employees at its warehouses Answer: C Explanation: C) More jobs can be de-skilled, making it possible for lower-skilled workers to do them. A well-known example of de-skilling is McDonald's use of pictures on its cash register keys. Difficulty: Challenging Skill: Application AACSB: Diverse and multicultural work environments Learning Obj.: 10

133) What is the LEAST likely reason that the trend in layoffs involves retaining older workers rather than younger workers? A) Older workers are less expensive for firms to employ. B) Federal laws protect older workers from discrimination. C) Older workers serve as role models for younger workers. D) The customer service skills of older workers are desired by firms. Answer: A Explanation: A) Despite massive layoffs resulting from the recession of 2008/10, many other companies tried to keep the over 55 worker. This trend may be due, in part, to legal concerns based on the Age Discrimination in Employment Act, which protects workers 40 and older against discrimination. However, a large part of this movement is the desire to keep the experienced workers on board in anticipation of an economic upturn. Older workers are role models who have the specialized skills that firms need, but they typically earn higher rather than lower salaries because of seniority. Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 134) The concept of ________ as a legitimate workplace diversity issue has gained increasing recognition. A) multigenerational diversity B) race and ethnicity C) sexual orientation D) disability Answer: A Explanation: A) Four generations are now participating in the workforce and each has different defining characteristics and nicknames. Shirley A. Davis, SHRM's director of diversity and inclusion initiatives, said, "In all parts of the world, there is another category of diversity that cannot be overlooked: multigenerational diversity." Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10

135) The invisible barrier in organizations which prevents many women and minorities from achieving top level management positions is called the ________. A) glass ceiling B) marble mantle C) stone staircase D) granite hurdle Answer: A Explanation: A) The glass ceiling is the invisible barrier in organizations that impedes women and minorities from career advancement. This Glass Ceiling Act established a Glass Ceiling Commission to study the manner in which businesses fill management and decision-making positions, the developmental and skill-enhancing practices used to foster the necessary qualifications for advancement to such positions, and the compensation programs and reward structures currently used in the workplace. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 136) Polls show that only 40 percent of Americans favor equal employment rights for gay people. Answer: FALSE Explanation: Polls show that nearly 90 percent of Americans favor equality of opportunity in the workplace for gay people. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 137) An estimated 86 percent of Fortune 500 firms now ban discrimination on the basis of sexual orientation. Answer: TRUE Explanation: An estimated 86 percent of Fortune 500 firms now ban discrimination on the basis of sexual orientation, up from 61 percent in 2002. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

138) The number of single-parent households in the United States has decreased primarily because the number of marriages ending in divorce has dropped sharply in recent years. Answer: FALSE Explanation: The number of single-parent households in the United States is growing. Although the divorce rate peaked in the early 1980s, the percentage of marriages ending in divorce remains around 50 percent. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 139) Approximately 70 percent of mothers with school-age children are in the workforce. Answer: TRUE Explanation: Approximately 70 percent of mothers with children under 18 are in the workforce. If this valuable segment of the workforce is to be utilized effectively, organizations must embrace the importance of addressing work-family issues. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 140) Firms that are considered excellent places to work by working mothers typically offer flextime and telecommuting options. Answer: TRUE Explanation: More and more companies provide paid maternity leave, and some offer paternity leave. Companies that were chosen in the top among Working Mother magazine's 100 best companies to work for placed greater emphasis on work-life balance, telecommuting, and flextime. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 141) In today's workplace, women make up the majority of the American workforce. Answer: TRUE Explanation: In 2010, for the first time ever, women made up the majority of the American workforce. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

142) The U.S. Bureau of Labor Statistics estimates that 7.3 million workers 65 and over will be working in 2022, down from about 13.2 million today. Answer: FALSE Explanation: Many Boomers will resist retirement, some because they feel healthy enough to continue to work and others because their retirement income was hit hard by the economy. The U.S. Bureau of Labor Statistics estimates that about 11 million workers 65 and older will be working in 2022, up from about 6 million today. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 143) Surveys indicate that employers who hire disabled employees are less likely to hire additional disabled employees because of the costs associated with ADA compliance. Answer: FALSE Explanation: A recent Department of Labor survey found that a majority of large businesses are hiring people with disabilities and discovering that costs for accommodations differ very little from those for the general employee population. The survey also showed that once an employer hires one person with a disability, it is much more likely that employer will hire other people with disabilities. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 144) The H-1B employment visa is no longer available because of the high unemployment rate that began during the 2007/2009 recession. Answer: FALSE Explanation: The H-1B employment visa continues to bring in upwards of 135,000 skilled foreign workers annually despite the high unemployment rate in the United States. Until the recession of 2007/09 hit the United States, demand far outpaced supply, and companies constantly encouraged Congress to raise the cap. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

145) The members of Generation X, born between the mid-1960s and the late 1970s, believe in lifetime job security. Answer: FALSE Explanation: Generation Xers recognize that their careers cannot be founded securely on a relationship with any one employer. They are very skeptical about the business world and job security. They think of themselves more as free agents in a mobile workforce and expect to build career security, not job security, by acquiring marketable skills and expertise. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 146) Members of Generation Y are also known as Digital Natives. Answer: FALSE Explanation: Generation Yers (often referred to as the echo boomers, Millennials, and Nexters) were born between the late 1970s and the mid-1990s. The members of Generation Z (Digital Natives) represent the Internet-assimilated children born between 1995 and 2009. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 147) The concept of "multigenerational diversity" has gained increasing recognition as a workplace issue. Answer: TRUE Explanation: Four generations are now participating in the workforce, and each has different defining characteristics and nicknames. The concept of generational differences as a legitimate workplace diversity issue has gained increasing recognition. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10 148) The H-1B employment visa allows U.S. citizens the opportunity to work for companies located outside the United States. Answer: FALSE Explanation: The H-1B employment visa brings in approximately 135,000 skilled foreign workers annually to the United States, including some 30,000 researchers and academicians not subject to the annual visa cap set by Congress. Of those 135,000, the majority are distributed to employers through a lottery system each April held by U.S. Citizenship and Immigration Services, an arm of the U.S. Department of Homeland Security. However, the exact number of H-1B visa holders is difficult to determine. A three-year initial visa can be renewed for another three years, and if a worker is on track for a green card, H-1B status can be renewed annually. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 61 Copyright © 2016 Pearson Education, Inc.

149) What is diversity management? Answer: Diversity management is ensuring that factors are in place to provide for and encourage the continued development of a diverse workforce by combining these actual and perceived differences among workers to achieve maximum productivity. Because every person, culture, and business situation is unique, there are no simple rules for managing diversity; but diversity experts say that employers need to develop patience, open-mindedness, acceptance, and cultural awareness. Diversity management focuses on the principle that all workers regardless of any factor are entitled to the same privileges and opportunities. According to R. Roosevelt Thomas Jr., former president of the American Institute for Managing Diversity, "diversity and diversity management are about managing and engaging people who are different and similar, all for the benefit of the organization and its goals." If organizations want to remain competitive in the marketplace, diversity has to be a part of the strategic goal. New York-based accounting giant KPMG employs more than 23,000 people in the United States. It has a complex diversity program that includes a diversity advisory board, diversity networks, diversity recruiting, accountability mechanisms, scorecards, mandatory training, and a diversity officer. Kathy Hannan, national managing partner for diversity and corporate social responsibility with KPMG, reports directly to the CEO. Programs that highlight a firm's diversity management program can be used to help attract desirable recruits. Difficulty: Challenging Skill: Concept AACSB: Reflective thinking Learning Obj.: 10 150) What is multigenerational diversity? How does it affect the contemporary workplace? Answer: Four generations are now participating in the workforce; therefore, the concept of generational differences as a legitimate workplace diversity issue has gained increasing recognition. Baby boomers are remaining on the job longer because of the economy and often find themselves working with Generation Y employees. Traditionally, discussions of workplace diversity tended to focus on topics of race, ethnicity, gender, sexual orientation, and disability. Shirley A. Davis, SHRM's director of diversity and inclusion initiatives, said, "In all parts of the world, there is another category of diversity that cannot be overlooked: multigenerational diversity." Today, there are greater numbers of workers from each segment that bring both new opportunities and challenges. If organizations want to thrive in this competitive environment of global talent management, they need employees and managers who are aware of and skilled in dealing with the different generations that make up the workforce. Difficulty: Challenging Skill: Synthesis AACSB: Reflective thinking Learning Obj.: 10

Human Resource Management, 14e (Mondy) Chapter 4 Strategic Planning, Human Resource Planning, and Job Analysis 1) Which of the following is NOT a time when job analysis is performed? A) when new jobs are created B) when an organization is founded C) when jobs are changed significantly D) when an organization faces a downturn Answer: D Explanation: D) Job analysis is performed on three occasions: (1) when the organization is founded and a job analysis program is initiated for the first time; (2) when new jobs are created; and (3) when jobs are changed significantly as a result of new technologies, methods, procedures, or systems. Job analysis is less likely to be performed when a company experiences lower sales. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) Two fundamental business strategies are ________. A) lowest cost and highest quality B) differentiation and turnaround C) lowest cost and differentiation D) lowest cost and turnaround Answer: C Explanation: C) There are two fundamental strategies: lowest cost and differentiation. Lowestcost strategy focuses on gaining competitive advantage by being the lowest-cost producer of a product or service within the marketplace, while selling the product or service at a price advantage relative to the industry average. Companies adopt differentiation strategies to develop products or services that are unique from those of their competitors. Differentiation strategy can take many forms, including design or brand image, technology, features, customer service, and price. Differentiation strategies lead to competitive advantage through building brand loyalty among devoted consumers. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

3) Brand loyalty is most characteristic of which competitive strategy? A) differentiation B) turnaround C) innovation D) lowest cost Answer: A Explanation: A) Companies adopt differentiation strategies to develop products or services that are unique from those of their competitors. Differentiation strategy can take many forms, including design or brand image, technology, features, customer service, and price. Differentiation strategies lead to competitive advantage through building brand loyalty among devoted consumers. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 1 4) How have HR executives taken a greater strategic role in organizations? A) they participate in the strategic planning process when time permits B) they rely on the CEO for direction C) they implement the organization's strategic plan D) they are actively involved in the organization's strategic planning process Answer: D Explanation: D) HR executives are now focusing their attention on how HR can help the organization achieve its strategic objectives. Thus, HR executives are highly involved in the strategic planning process. In the past they often waited until the strategic plan was formulated before beginning strategic planning, which is the process by which top management determines overall organizational purposes and objectives and how they are achieved. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

5) Which is a true statement about price premiums for differentiated products? A) consumers are relatively insensitive to premium prices B) consumers are highly sensitive to price premiums C) consumers are ambivalent to price premiums D) none of the above Answer: A Explanation: A) Companies adopt differentiation strategies to develop products or services that are unique from those of their competitors. Differentiation strategy can take many forms, including design or brand image, technology, features, customer service, and price. Differentiation strategies lead to competitive advantage through building brand loyalty among devoted consumers. Brand-loyal consumers are less sensitive to price increases, which enables companies to invest in R&D initiatives to further differentiate themselves from competing companies. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 6) What is the process called by which top management determines overall organizational purposes and objectives and how they are to be achieved? A) objective planning B) organizational planning C) strategic planning D) tactical planning Answer: C Explanation: C) Strategic planning is the process by which top management determines overall organizational purposes and objectives and how they are achieved. It is an ongoing process that quickly changes in order to gain a competitive advantage. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

7) Which of the following is NOT a step in the strategic planning process? A) assessing the organization B) determining financial outlays C) determining the organizational mission D) setting specific objectives and direction Answer: B Explanation: B) Strategic planning at all levels of the organization can be divided into four steps: (1) determination of the organizational mission, (2) assessment of the organization and its environment, (3) setting of specific objectives or direction, and (4) determination of strategies to accomplish those objectives. The strategic planning process described here is basically a derivative of the SWOT (strengths, weaknesses, opportunities, and threats) framework that affects organizational performance, but it is less structured. Assessing financial outlays is important to the success of a firm but does not relate to strategic planning. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 8) What is the first step in the strategic planning process? A) setting specific objectives B) implementing long-term goals C) assessing the business environment D) determining the organizational mission Answer: D Explanation: D) Strategic planning at all levels of the organization can be divided into four steps: (1) determination of the organizational mission, (2) assessment of the organization and its environment, (3) setting of specific objectives or direction, and (4) determination of strategies to accomplish those objectives. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

9) The marketing department at ABC Widget Company has been assigned the task of developing a strategic plan. The marketing team has completed the first three steps of strategic planning. Which of the following steps does the marketing department need to take in order to complete the strategic planning assignment? A) determine the strategies needed to accomplish specific objectives B) evaluate the organizational mission of the ABC Widget Company C) establish short-term and long-term directions for the group D) assess the primary competitors of the ABC Widget Company Answer: A Explanation: A) Strategic planning at all levels of the organization can be divided into four steps: (1) determination of the organizational mission, (2) assessment of the organization and its environment, (3) setting of specific objectives or direction, and (4) determination of strategies to accomplish those objectives. Difficulty: Challenging Skill: Application AACSB: Reflective thinking Learning Obj.: 1 10) Which of the following serves as the basis for the strategic planning process? A) SWOT B) O*NET C) AAP D) ATS Answer: A Explanation: A) The strategic planning process is basically a derivative of the SWOT (strengths, weaknesses, opportunities, and threats) framework that affects organizational performance, but it is less structured. Strategic planning involves determining the firm's mission, assessing the firm's structure, setting objectives, and developing strategies. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 11) Which of the following terms refers to a unit's continuing purpose, or reason for being? A) mission B) goal C) objective D) policy Answer: A Explanation: A) The first step in the strategic planning process is to determine the corporate mission. The mission is a unit's continuing purpose, or reason for being. The corporate mission is the sum total of the organization's ongoing purpose. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5 Copyright © 2016 Pearson Education, Inc.

12) The owners of a start-up company are in the process of developing a corporate mission statement. Which of the following questions is LEAST likely to help them create an effective mission statement? A) Should we emphasize financial stability to employees? B) What are the greatest threats to the success of the firm? C) Should we maximize profit and shareholders' dividends? D) What is upper management attempting to accomplish? Answer: B Explanation: B) The corporate mission is the sum total of the organization's ongoing purpose. Arriving at a mission statement should involve answering the questions: What are we in management attempting to do for whom? Should we maximize profit so shareholders will receive higher dividends or so share price will increase? Or should we emphasize stability of earnings so employees will remain secure? Threats to the firm's success are addressed later in the strategic planning process. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 13) In strategic planning, the purpose of a SWOT analysis is to assess the organization's ________. A) information technology B) anticipated long-term goals C) perceived value and structure D) internal and external environment Answer: D Explanation: D) Once the mission has been determined, the organization should assess its strengths and weaknesses in the internal environment and the threats and opportunities from the external environment (often referred as a SWOT analysis). Making strategic plans involves information flows from both the internal and the external environments. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

14) What is the desired end result of any activity called? A) policy B) mission C) objective D) procedure Answer: C Explanation: C) Objectives are desired end results and they typically have four characteristics. They should be expressed in writing, be measurable, be specific as to time, and be challenging but attainable. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 15) Which of the following is NOT a characteristic of an objective? A) measurable B) universal in nature C) expressed in writing D) challenging but attainable Answer: B Explanation: B) Objectives are desired end results and they typically have four characteristics. They should be expressed in writing, be measurable, be specific as to time, and be challenging but attainable. People and organizations have different objectives, so they are not universal. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 16) Which of the following should most likely be accomplished before setting an objective? A) cost benefit analysis of every alternative B) SWOT analysis of all competitors C) performance analysis of each employee D) job analysis for each position Answer: A Explanation: A) Objectives should be developed only after a cost-benefit analysis of each alternative is considered. Strategic objectives might be directed at factors such as profitability, customer satisfaction, financial returns, technological leadership, and operating efficiency. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

17) What primarily determines which type of organizational structure is best for a company? A) age of the firm B) needs of the firm C) product or service D) corporate competition Answer: B Explanation: B) A company's organizational structure (illustrated by its organizational chart) is determined by the needs of the firm. It may be informal and highly changeable in small, uncomplicated businesses. By contrast, large, diverse, and complex organizations usually have a highly formalized structure. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 18) Compared with lowest-cost strategies, successful attainment of differentiation strategies depends on ________. A) employee creativity B) openness to novel work approaches C) willingness to take risks D) all of the above Answer: D Explanation: D) For the lowest-cost strategy, the imperative is to reduce output costs per employee. The desired employee roles for attaining a lowest-cost strategy include repetitive and predictable behaviors, a relatively short-term focus, primarily autonomous or individual activity, high concern for quantity of output, and a primary concern for results. The key employees' roles for differentiation strategies include highly creative behavior, a relatively long-term focus, cooperative and interdependent behavior, and a greater degree of risk taking. Compared with lowest-cost strategies, successful attainment of differentiation strategies depends on employee creativity, openness to novel work approaches, and willingness to take risks. In addition, differentiation strategies require longer time frames to provide sufficient opportunity to yield the benefits of these behaviors. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

19) Strategic planning at all levels of the organization can be divided into four steps: (1) determination of the organizational mission, (2) assessment of the organization and its environment, (3) setting of specific objectives or direction, and (4) determination of strategies to accomplish those objectives. Answer: TRUE Explanation: Strategic planning is the process by which top management determines overall organizational purposes and objectives and how they are achieved. Strategic planning is ongoing as firms seek a competitive advantage through these four steps. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 20) The mission of a firm involves determining the principles on which management decisions will be based. Answer: TRUE Explanation: The corporate mission is the sum total of the organization's ongoing purpose. Mission determination also requires deciding on the principles on which management decisions will be based. Will the corporation be honorable or dishonorable, ruthless or considerate, devious or forthright, in dealing with its various constituents. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 21) The systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time is referred to as ________. A) strategic planning B) personnel forecasting C) human resource planning D) human capital supply analysis Answer: C Explanation: C) Human resource planning (workforce planning) is the systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specific period of time. In a recent survey, the primary focus of companies now is workforce planning. Through workforce planning, organizations attempt to predict future human resource needs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

22) According to a recent poll, 53 percent of companies are either already using or plan to use ________ to identify skills gaps in their workforce. A) workforce planning B) employee training C) succession planning D) work sampling Answer: A Explanation: A) A recent poll found that 53 percent of the respondents conducted, or planned to conduct, a strategic workforce planning assessment to identify skills gaps. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 23) What activity precedes the human resource planning process? A) HR forecasting B) strategic planning C) HR demand analysis D) labor supply analysis Answer: B Explanation: B) HR planning is preceded by strategic planning. HR planning would be difficult if top management did not first determine the organization's purposes and objectives. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 24) What are the two components of human resource planning? A) demand and objectives B) strategy and requirements C) requirements and availability D) availability and objectives Answer: C Explanation: C) Human resource planning has two components: requirements and availability. A requirements forecast involves determining the number, skill, and location of employees the organization will need at future dates in order to meet its goals. The determination of whether the firm will be able to secure employees with the necessary skills, and from what sources, is called an availability forecast. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

25) Steve is an HR specialist at Cisco Systems. Steve needs to determine the number, skill, and location of employees that Cisco will need in 12 months in order to achieve the firm's strategic plan. Which of the following would best meet Steve's needs? A) requirements forecast B) labor supply analysis C) availability forecast D) sales forecasting Answer: A Explanation: A) A requirements forecast involves determining the number, skill, and location of employees the organization will need at future dates in order to meet its goals. The determination of whether the firm will be able to secure employees with the necessary skills, and from what sources, is called an availability forecast. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 26) A firm becomes aware of having a surplus or shortage of employees as a result of comparing ________. A) availability and tasks B) tasks and performance C) skills and requirements D) requirements and availability Answer: D Explanation: D) When employee requirements and availability have been analyzed, the firm can determine whether it will have a surplus or shortage of employees. Ways must be found to reduce the number of employees if a surplus is projected. If a worker shortage is forecast, the firm must obtain the proper quantity and quality of workers from outside the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 27) What is the primary reason for implementing human resource planning on a continuous basis? A) employing temporary workers B) changing business environments C) selling goods to overseas customers D) recruiting workers on Internet job sites Answer: B Explanation: B) Because conditions in the external and internal environments can change quickly, the human resource planning process must be continuous. Changing conditions could affect the entire organization, thereby requiring extensive modification of forecasts. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 11 Copyright © 2016 Pearson Education, Inc.

28) Human resource planning is the process by which top management determines overall organizational purposes and objectives and how they are to be achieved. It is an ongoing process that is dynamic and ever changing. Answer: FALSE Explanation: Strategic planning rather than HR planning is the process by which top management determines overall organizational purposes and objectives and how they are achieved. Strategic planning is ongoing as firms seek a competitive advantage. HR planning involves matching internal and external job candidates with positions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 29) Human resource planning is a minor concern for most organizations especially during difficult economic periods. Answer: FALSE Explanation: In a recent survey, the primary focus of companies now is workforce planning. Through workforce planning, organizations attempt to predict future human resource needs. The recession of 2007/2009 caused HR workforce planning to become even more important to organizations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 30) When employee requirements and availability have been analyzed, the firm can determine whether it will have a surplus or shortage of employees. Answer: TRUE Explanation: When employee requirements and availability have been analyzed, the firm can determine whether it will have a surplus or shortage of employees. Ways must be found to reduce the number of employees if a surplus is projected. If a worker shortage is forecast, the firm must obtain the proper quantity and quality of workers from outside the organization. In this case, external recruitment and selection are required. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

31) AAA Technology manufactures 2,000 cell phones each week, which requires 20,000 hours of work from assemblers during a 40-hour week. How many assemblers does AAA need each week? A) 200 B) 400 C) 500 D) 800 Answer: C Explanation: C) AAA can calculate how many employees are needed to produce 2,000 phones each week by dividing the number of hours of work by the work week (20,000/40). Therefore, AAA needs 500 assemblers to produce 2,000 cell phones each week. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 3 32) Which of the following is a forecasting technique that uses the organization's current level of employment as the starting point for determining future staffing? A) bottom-up approach B) zero-base forecasting C) the Delphi technique D) simulation Answer: B Explanation: B) The zero-base forecasting method uses the organization's current level of employment as the starting point for determining future staffing needs. In the bottom-up forecast, each successive level in the organization, starting with the lowest, forecasts its requirements, ultimately providing an aggregate forecast of employees needed. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 33) What forecasting technique involves an analysis to determine whether the firm can justify filling an open position? A) bottom-up approach B) simulation C) Delphi technique D) zero-base forecasting Answer: D Explanation: D) The key to zero-base forecasting is a thorough analysis of human resource needs. If an employee retires, is fired, or leaves the firm for any other reason, the position is not automatically filled. Instead, an analysis is made to determine whether the firm can justify filling it. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 13 Copyright © 2016 Pearson Education, Inc.

34) In ________, each successive level in the organization, starting with the lowest, forecasts its requirements, ultimately providing an aggregate forecast of employees needed. A) simulation forecasting B) zero-base forecasting C) cycle forecasting D) bottom-up forecasting Answer: D Explanation: D) In the bottom-up forecast, each successive level in the organization, starting with the lowest, forecasts its requirements, ultimately providing an aggregate forecast of employees needed. The zero-base forecasting method uses the organization's current level of employment as the starting point for determining future staffing needs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 35) Wilson Marketing, Inc. uses the bottom-up forecasting method. Who is considered the most knowledgeable about employment requirements at the firm? A) HR managers B) statisticians C) unit managers D) stockholders Answer: C Explanation: C) In the bottom-up forecast, each successive level in the organization, starting with the lowest, forecasts its requirements, ultimately providing an aggregate forecast of employees needed. It is based on the reasoning that the manager in each unit is most knowledgeable about employment requirements. Beginning with the lowest-level work units in the organization, each unit manager makes an estimate of personnel needs for the period of time encompassed by the planning cycle. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3

36) What relationship tends to exist between demand (sales volume) and the number of employees needed? A) positive B) highly negative C) unrelated D) somewhat negative Answer: A Explanation: A) One of the most useful predictors of employment levels is sales volume. The relationship between demand and the number of employees needed is a positive one. As sales decrease, so does the number of employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 37) In the zero-based forecasting method, each successive level in the organization, starting with the lowest, forecasts its requirements, ultimately providing an aggregate forecast of employees needed. Answer: FALSE Explanation: In the bottom-up forecast, each successive level in the organization, starting with the lowest, forecasts its requirements, ultimately providing an aggregate forecast of employees needed. The zero-base forecasting method uses the organization's current level of employment as the starting point for determining future staffing needs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

38) Identify and discuss zero-base forecasting and bottom-up forecasting. Answer: The zero-base forecast uses the organization's current level of employment as the starting point for determining future staffing needs. If an employee retires, is fired, or leaves the firm for any reason, the position is not automatically filled. Instead, an analysis is made to determine whether the firm can justify filling it. Equal concern is shown for creating new positions when they appear to be needed. The key to zero-base forecasting is a thorough analysis of human resource needs. Frequently, the position is not filled and the work is spread out among remaining employees, as often is the case with firms that downsize. Plans may also involve outsourcing or other approaches as an alternative to hiring. In the bottom-up forecast, each successive level in the organization, starting with the lowest, forecasts its requirements, ultimately providing an aggregate forecast of employees needed. It is based on the reasoning that the manager in each unit is most knowledgeable about employment requirements. Beginning with the lowest-level work units in the organization, each unit manager makes an estimate of personnel needs for the period of time encompassed by the planning cycle. As the process moves upward in the company, each successively higher level of management in turn makes its own estimates of needs, incorporating the input from each of the immediately preceding levels. The result, ultimately, is an aggregate forecast of needs for the entire organization. This process is often highly interactive in that estimated requirements from the previous level are discussed, negotiated, and re-estimated with the next level of management as the forecast moves upward through the organization. The interactive aspect of managerial estimating is one of the advantages of this procedure because it forces managers to justify their anticipated staffing needs. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 39) Which of the following involves determining whether the firm will be able to secure employees with the necessary skills and from what sources these individuals may be obtained? A) planning forecast B) requirement forecast C) strategic forecast D) availability forecast Answer: D Explanation: D) The determination of whether the firm will be able to secure employees with the necessary skills, and from what sources, is called an availability forecast. A requirements forecast involves determining the number, skill, and location of employees the organization will need at future dates in order to meet its goals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

40) An availability forecast involves determining the number, skill, and location of employees the organization will need at future dates in order to meet its goals. Answer: FALSE Explanation: A requirements forecast involves determining the number, skill, and location of employees the organization will need at future dates in order to meet its goals. The determination of whether the firm will be able to secure employees with the necessary skills, and from what sources, is called an availability forecast. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 41) The only source used to determine whether the needed employees are available is from outside the organization. Answer: FALSE Explanation: The determination of whether the firm will be able to secure employees with the necessary skills, and from what sources, is an availability forecast. It helps to show whether the needed employees may be obtained from within the company, from outside the organization, or from a combination of the two sources. Another possibility is that the required skills are not immediately available from any feasible source. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 42) Which of the following is NOT an action firms take when a shortage of workers is forecasted? A) explore new recruiting methods B) encourage early retirements C) offer compensation incentives D) provide training programs Answer: B Explanation: B) When firms are faced with a shortage of workers, organizations will have to intensify their efforts to recruit the necessary people to meet the needs of the firm. Some possible actions include innovative recruiting, compensation incentives, and training. Early retirements would create a greater shortage of workers. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5

43) Which of the following is NOT an alternative to laying off employees? A) implementing a restricted hiring policy B) lowering employment standards C) mandating reduced hours D) downsizing the workforce Answer: B Explanation: B) Lowering employment standards is a method for dealing with a shortage of workers rather than a surplus. Restricted hiring policies, reduced hours, and layoffs are methods for handling worker surpluses. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5 44) Flexible work hours, telecommuting, child-care centers, and signing bonuses are compensation incentives used by firms during high-demand situations. Answer: TRUE Explanation: Firms competing for workers in a high-demand situation may have to rely on compensation incentives. Premium pay is one obvious method; however, this approach may trigger a bidding war that the organization cannot sustain for an extended period. To offset the bidding war, some organizations have signing bonuses to entice individuals to join the firm. More subtle forms of rewards may be required to attract employees to a firm, such as four-day workweeks, flexible working hours, telecommuting, part-time employment, and child-care centers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 45) Innovative recruiting, compensation incentives, and training programs are used by firms when a surplus of employees is forecasted. Answer: FALSE Explanation: New types of recruiting, compensation packages, and training programs are offered by firms during times of employee shortages. When a surplus exists, firms are more likely to downsize or reduce worker hours. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

46) A hard freeze means that a firm is only hiring to fill critical positions. Answer: FALSE Explanation: A hard freeze means that no new workers are hired to replace a vacated position. A soft freeze means that the company is only hiring to fill critical positions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 47) ABC Manufacturing is financially struggling during an economic downturn. As a result, HR and managers are evaluating every position at ABC to determine the ones that the firm cannot survive without and continuing to hire only for those positions. ABC is most likely implementing a smart freeze. Answer: TRUE Explanation: A new term, smart freeze, entered the HR vocabulary with the recession of 2007/2009. HR and managers evaluate every position to determine the ones the company could not survive without and those that are difficult to fill and continue to hire them. Some companies are even laying off some marginal workers in critical positions and seeking more qualified workers to fill these positions. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5 48) Encouraging workers to use their vacation time, offering early retirement packages, and increasing the use of contingent workers are commonly used alternatives to layoffs. Answer: FALSE Explanation: As a way to avoid layoffs, many firms encourage employees to use vacation time or take early retirement. However, firms reduce rather than increase the use of contingent workers to avoid layoffs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

49) Describe the factors that will necessitate the need for health care professionals, in particular, nurses. Answer: Demand for healthcare services will increase because of the aging population, since older people typically have more medical problems than younger people. Nurses also will be needed to educate and to care for patients with various chronic conditions, such as arthritis, dementia, diabetes, and obesity. In addition, the number of individuals who have access to healthcare services will increase, as a result of federal health insurance reform. More nurses will be needed to care for these patients. The financial pressure on hospitals to discharge patients as soon as possible may result in more people admitted to long-term care facilities, outpatient care centers, and greater need for home healthcare. Job growth is expected in facilities that provide long-term rehabilitation for stroke and head injury patients, as well as facilities that treat people with Alzheimer's disease. In addition, because many older people prefer to be treated at home or in residential care facilities, registered nurses will be in demand in those settings. Growth is also expected to be faster than average in outpatient care centers where patients do not stay overnight, such as those that provide same-day chemotherapy, rehabilitation, and surgery. In addition, an increased number of procedures, as well as more sophisticated procedures previously done only in hospitals, are performed in ambulatory care settings and physicians' offices. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 5 50) According to your textbook, ________ of small business owners say they're prepared for succession planning. A) 31% B) 75% C) 15% D) 40% Answer: A Explanation: A) Succession planning is often neglected in small businesses because it is generally thought of in terms of replacing CEOs and key executives within larger businesses. But, succession planning is just as, or more, important for small businesses. A problem, however, is that only 31 percent of small business owners say their businesses are extremely or very prepared for such an event. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

51) The process of ensuring that a qualified person is available to assume a key managerial position once the position is vacant is referred to as ________. A) strategic planning B) departure planning C) succession planning D) skill planning Answer: C Explanation: C) Succession planning is the process of ensuring that qualified persons are available to assume key managerial positions once the positions are vacant. This definition includes untimely deaths, resignations, terminations, or the orderly retirements of key managerial personnel. The goal is to help ensure a smooth transition and operational efficiency, but the transition is often difficult. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 52) Succession planning is the process of ensuring that qualified persons are available to assume key managerial positions once the positions are vacant. Answer: TRUE Explanation: Succession planning ensures that qualified people are in place to lead a firm when resignations or retirements result in vacant managerial positions. Succession planning helps ensure that a firm maintains operational efficiency. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 53) According to experts, the tenure for CEOs is lengthening. Answer: FALSE Explanation: The premature firing of CEOs is no longer a rare event. CEOs are being terminated more quickly than in the past. Estimates are that the tenure for CEOs will continue to grow shorter, which explains why succession planning is increasingly important. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 54) The current trend with succession planning is to focus exclusively on top executive positions. Answer: FALSE Explanation: In recent years, succession planning is going much deeper into the workforce. In the past, top executive positions were the only focus of succession planning. However, most firms now expand succession planning to middle management. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 21 Copyright © 2016 Pearson Education, Inc.

55) What is succession planning? How has succession planning changed in recent years? Answer: Succession planning is the process of ensuring that qualified persons are available to assume key managerial positions once the positions are vacant because of untimely deaths, resignations, terminations, or retirements. The goal is to help ensure a smooth transition and operational efficiency. In recent years, succession planning is going much deeper into the workforce. In the past, succession planning focused on the top level of the company but not the levels where all the work was performed. Firms are moving away from traditional succession planning and expanding succession planning programs into middle management. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 6 56) The systematic process of determining the skills, duties and knowledge required for performing jobs in an organization is referred to as a job ________. A) description B) specification C) qualification D) analysis Answer: D Explanation: D) Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization. With job analysis, the tasks needed to perform the job are identified. Traditionally, it is an essential and pervasive HR technique and the starting point for other HR activities. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 57) Which term refers to a group of tasks that must be performed if an organization is to achieve its goals? A) occupational specialty B) job C) position D) post Answer: B Explanation: B) A job consists of a group of tasks that must be performed for an organization to achieve its goals. A job may require the services of one person, such as that of the president, or the services of 75, as might be the case with machine operators in a large firm. A position is the collection of tasks and responsibilities performed by one person; there is a position for every individual in an organization. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 22 Copyright © 2016 Pearson Education, Inc.

58) Which of the following refers to the collection of tasks and responsibilities performed by one person? A) job B) position C) job cluster D) work group Answer: B Explanation: B) A position is the collection of tasks and responsibilities performed by one person; there is a position for every individual in an organization. A job may require the services of one person or many people. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 59) In a workgroup consisting of a supervisor, two analysts, and four clerks, how many jobs and positions are involved? A) 3 jobs; 7 positions B) 6 jobs; 1 position C) 7 jobs; 3 positions D) 1 job; 6 positions Answer: A Explanation: A) A position is the collection of tasks and responsibilities performed by one person; there is a position for every individual in an organization. A job may require the services of one person or many people. In this case, there are 3 jobs, supervisor, analyst, and clerk, and there are 7 positions. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 7 60) Jessie, an HR specialist, has been assigned the task of performing a job analysis for a new position created at the firm. Which of the following questions is LEAST relevant to the job analysis that Jessie will conduct? A) Where is the job to be accomplished? B) What qualifications are needed to perform the job? C) When is the job to be completed? D) What is the national hourly rate for this job? Answer: D Explanation: D) Job analysis provides a summary of a job's duties and responsibilities, its relationship to other jobs, the knowledge and skills required, and working conditions under which it is performed. The national hourly rate for a job is less relevant to a job analysis. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 7 23 Copyright © 2016 Pearson Education, Inc.

61) Why are most job analyses conducted? A) creation of new jobs B) obsolescence in jobs C) changes in the nature of jobs D) requirements of upper management Answer: C Explanation: C) Job analysis is primarily performed because of changes in the nature of jobs as a result of new technologies or procedures. The creation of new jobs explains a smaller percentage of job analyses. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 62) Job analysis information is used to prepare ________. A) job requisitions B) budget reports C) job specifications D) corporate assessments Answer: C Explanation: C) Job analysis is most often performed because of changes in the nature of jobs and is used to prepare both job descriptions and job specifications. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 63) A document that provides information regarding the tasks, duties, and responsibilities of the job is referred to as a ________. A) job analysis B) job description C) job specification D) job document Answer: B Explanation: B) The job description is a document that provides information regarding the essential tasks, duties, and responsibilities of the job. The minimum acceptable qualifications a person should possess in order to perform a particular job are contained in the job specification. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

64) Which of the following provides the minimum acceptable qualifications that a person should possess to perform the job? A) job title B) job description C) job specification D) job evaluation Answer: C Explanation: C) The minimum acceptable qualifications a person should possess in order to perform a particular job are contained in the job specification. The job description is a document that provides information regarding the essential tasks, duties, and responsibilities of the job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 65) How does job analysis primarily benefit an HR manager? A) improves public relations B) adheres to federal standards C) provides guidelines for staffing D) outlines labor negotiation requirements Answer: C Explanation: C) The importance of job analysis is well documented in the Uniform Guidelines on Employee Selection Procedures. Job analysis data are needed to defend decisions involving termination, promotion, transfers, and demotions. Job analysis provides the basis for tying the HR functions together and the foundation for developing a sound HR program. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 7 66) Job description information benefits HR management in all of the following ways EXCEPT ________. A) supporting the legality of employment practices B) specifying safety and health issues C) mandating staffing diversity D) identifying training needs Answer: C Explanation: C) A well written job description helps support the legality of promotions, transfers, and demotions and identifies health issues related to a job. Training and development needs also stem from a job description. However, minority hiring practices are not mandated by job descriptions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

67) Which document clarifies the importance of a well-prepared job analysis? A) Federal Register # 12 B) Uniform Guidelines on Employee Selection Procedures C) EEOC Register of Guidelines D) OFCCP Federal Register Answer: B Explanation: B) The importance of job analysis is well documented in the Uniform Guidelines on Employee Selection Procedures. Job analysis data are needed to defend decisions involving termination, promotion, transfers, and demotions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 68) Job planning is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization. Answer: FALSE Explanation: Job analysis is the term for determining the skills and duties needed for a job. The tasks needed to perform a job are identified through job analysis. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 69) A job consists of a group of tasks that must be performed for an organization to achieve its goals. Answer: TRUE Explanation: A job consists of a group of tasks that must be performed for an organization to achieve its goals. A job may require the services of one person, such as that of the president, or the services of 75, as might be the case with machine operators in a large firm. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 70) A position may require the services of ten to twelve people depending on the size of the organization. Answer: FALSE Explanation: A job consists of a group of tasks that must be performed for an organization to achieve its goals. A job may require the services of one person, such as that of the president, or the services of 75, as might be the case with machine operators in a large firm. A position is the collection of tasks and responsibilities performed by one person rather than multiple people. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 26 Copyright © 2016 Pearson Education, Inc.

71) In a work group consisting of a supervisor, two senior clerks, and four data processing clerks, there are three jobs and four positions. Answer: FALSE Explanation: A job consists of a group of tasks that must be performed for an organization to achieve its goals. A position is the collection of tasks and responsibilities performed by one person rather than multiple people. In this case, there are three jobs and seven positions. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 7 72) Job analysis is most often performed because of changes in the nature of jobs. Answer: TRUE Explanation: Job analysis is performed on three occasions: (1) when the organization is founded and a job analysis program is initiated for the first time; (2) when new jobs are created; and (3) when jobs are changed significantly as a result of new technologies, methods, procedures, or systems. Job analysis is most often performed because of changes in the nature of jobs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 73) What are the primary reasons for conducting a job analysis? What individuals in an organization typically conduct the job analysis? Answer: Job analysis is performed on three occasions: (1) when the organization is founded and a job analysis program is initiated for the first time; (2) when new jobs are created; and (3) when jobs are changed significantly as a result of new technologies, methods, procedures, or systems. Job analysis is performed for the purposes of staffing, training, performance appraisals, compensation, safety, labor relations, and legal issues. The people who participate in job analysis should include, at a minimum, the employee and the employee's immediate supervisor. Large organizations may have one or more job analysts, but in small organizations line supervisors may be responsible for job analysis. Organizations that lack the technical expertise may use outside consultants to perform job analysis. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 7

74) All of the following EXCEPT ________ are included in job specifications. A) knowledge B) skills C) responsibilities D) abilities Answer: C Explanation: C) The minimum acceptable qualifications (knowledge, skills, and abilities) a person should possess in order to perform a particular job are contained in the job specification. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7, 10 75) Define competency and competency modeling. Explain their importance as alternatives to job analysis. Answer: The term competency has become an increasingly important topic in HR practice because of the changing nature of work. Competencies build on the use of knowledge, skills, and abilities, which we describe with job analysis, to describe work. Competency modeling specifies and defines all the competencies necessary for success in a group of jobs that are set within an industry context. Competencies refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations. Traditionally, as we have seen, work has been described by many dimensions including knowledge, skills, and abilities. Indeed, although this is largely still the case, HR professionals have embraced the ideas of competencies as the field has increasingly taken on strategic importance. Oftentimes, HR professionals' identification of competencies is derived from an analysis of the overall strategic statements of companies. For example, GE emphasizes three strategic goals for corporate growth: Globalization, Product Services, and Six Sigma (quality improvement). The purpose of job analysis is to obtain answers to six important questions: What physical and mental tasks does the worker accomplish? When is the job to be completed? Where is the job to be accomplished? How does the worker do the job? And, why is the job done? In a nutshell, competencies and competency modelling focus on employee characteristics while job analysis mainly focuses on job content such as tasks and duties. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7, 14

76) Why is it important in today's business environment to have a sound job analysis system? What methods are available for collecting job analysis data? Answer: In today's rapidly changing work environment, the need for a sound job analysis system is critical. New jobs are being created, and old jobs are being redesigned or eliminated. A job analysis that was conducted only a few years ago may now be obsolete. Some have even suggested that changes are occurring too fast to maintain an effective job analysis system. Job analysis has traditionally been conducted in a number of different ways because organizational needs and resources for conducting job analysis differ. Questionnaires, observation, interviews, and employee diaries are the most common methods for collecting job analysis information. The importance of job analysis is well documented in the Uniform Guidelines on Employee Selection Procedures. Job analysis data are needed to defend decisions involving termination, promotion, transfers, and demotions. Job analysis provides the basis for tying the HR functions together and the foundation for developing a sound HR program. Data derived from job analysis in the form of the job description/specification can have an impact on virtually every aspect of HR management. In practice, both the job description and job specification are combined into one document with the job specification presented after the job description. For example, job description information often proves beneficial in identifying training and development needs. If it suggests that the job requires a particular knowledge, skill, or ability, and the person filling the position does not possess all the qualifications required, training or development are probably in order. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 7, 8, 9 77) What studies are conducted to determine how long it takes for a task to be performed? A) job analysis B) work measurement C) job evaluation D) work process Answer: B Explanation: B) Work measurement studies are often needed to determine how long it takes to perform a task. Such studies are conducted for the purpose of preparing a job analysis. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

78) Which of the following is NOT a fundamental component of the job analysis process? A) identifying relevant machines, tools, and equipment B) identifying relevant laws C) identifying tasks D) identifying exclusively the necessary knowledge, skills, and abilities Answer: B Explanation: B) Considerable information is needed for the successful accomplishment of job analysis. The job analyst identifies the job's actual duties and responsibilities and gathers the other types of data such as work activities; worker-oriented activities; machines, tools, equipment, and work aids used; and personal requirements. This information is used to help determine the job skills needed. In addition, the job analyst looks at job-related tangibles and intangibles, such as the knowledge needed, the materials processed, and the goods made or services performed. Essential functions of the job are determined in this process. Focusing exclusively on knowledge, skills, and abilities is the essence of competencies and competency modeling. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 79) Social context is relevant information collected during many job analysis efforts. Answer: TRUE Explanation: With regard to job content, the analyst studies the work schedule, financial and nonfinancial incentives, and physical working conditions. Specific education, training, and work experience pertinent to the job are identified. Because many jobs are often performed in conjunction with others, organizational and social contexts are also noted. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 80) In which of the following occupations would observation be the least useful method of job analysis? A) forklift operator B) financial analyst C) assembly line worker D) baggage handler Answer: B Explanation: B) Observation alone is usually an insufficient means of conducting job analysis when mental skills are dominant in a job. Observing a financial analyst at work would not reveal much about the requirements of the job. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9

81) Monica is an HR manager who needs to conduct a job analysis quickly and economically. Which method should Monica use? A) questionnaire B) observation C) interview D) employee recording Answer: A Explanation: A) Questionnaires are typically quick and economical to use. The job analyst may administer a structured questionnaire to employees, who identify the tasks they perform. Observations, interviews, and employee recordings require more time and money than questionnaires. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 82) A ________ is a comprehensive job analysis approach that concentrates on the interaction between the work, the workers, and the organization. A) functional job analysis B) position analysis questionnaire C) guidelines-oriented job analysis D) fundamental analysis schedule Answer: A Explanation: A) Functional job analysis (FJA) is a comprehensive job analysis approach that concentrates on the interactions among the work, the worker, and the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 83) Mario, an HR specialist at General Motors, needs to conduct a job analysis for the position of an assembly line operator. Which job analysis method would be most appropriate for Mario to use? A) simulation B) observation C) benchmarking D) employee recording Answer: B Explanation: B) The observation method is used primarily to gather information on jobs emphasizing manual skills, such as those of a machine operator. When using the observation method, the job analyst watches the worker perform job tasks and records his or her observations. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 31 Copyright © 2016 Pearson Education, Inc.

84) Mario, an HR specialist at General Motors, needs to conduct a job analysis for the position of a financial analyst position. Which job analysis method is LEAST appropriate for Mario to use? A) interview B) employee recording C) questionnaire D) observation Answer: D Explanation: D) The observation method is used primarily to gather information on jobs emphasizing manual skills, such as those of an assembly line operator. A financial analyst performs more mental than physical activity, so the observation method would be least appropriate. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 85) The HR department at Top Choice Manufacturing has been asked to collect job analysis information about general worker behaviors rather than tasks. Which job analysis method would be most appropriate? A) position analysis questionnaire B) functional job analysis C) personal interview D) observation Answer: A Explanation: A) The PAQ is a structured job analysis questionnaire that uses a checklist to collect data about general worker behaviors instead of tasks. The functional job analysis focuses on specific job outputs and identifies job tasks in terms of task statements. Both interviews and observations collect task related information. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9

86) Which of the following is a true statement regarding job analysis methods? A) A single analysis method is typically used to ensure consistency. B) Analysts often use a combination of methods for accurate job descriptions or specifications. C) Questionnaires minimize employee exaggeration. D) Observation is the best method for all jobs. Answer: B Explanation: B) Usually an analyst does not use one job analysis method exclusively. A combination of methods is often more appropriate. In analyzing clerical and administrative jobs, the analyst might use questionnaires supported by interviews and limited observation. In studying production jobs, interviews supplemented by extensive work observations may provide the necessary data. Basically, the analyst should use the combination of techniques needed for accurate job descriptions/specifications. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 87) The people who participate in job analysis should include, at a minimum, the employee and the ________. A) immediate supervisor B) human resource manager C) human resource department D) job analysis committee Answer: A Explanation: A) The person who conducts job analysis is interested in gathering data on what is involved in performing a particular job. The people who participate in job analysis should include, at a minimum, the employee and the employee's immediate supervisor. Large organizations may have one or more job analysts, but in small organizations line supervisors may be responsible for the task. Organizations that lack the technical expertise may use outside consultants to perform job analysis. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

88) Outside consultants would most likely be hired to conduct job analyses when an organization ________. A) is unusually large B) is highly profitable C) lacks technical expertise D) lacks global sales offices Answer: C Explanation: C) Organizations that lack the technical expertise may use outside consultants to perform job analysis. Large organizations may have one or more job analysts, but in small organizations line supervisors may be responsible for job analysis. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 89) The person who conducts job analysis is interested in gathering ________. A) data on what is involved in performing a particular job B) information about the competitive marketplace for talent C) information about what it's like to work for a particular company D) data to reveal hiring trends in various industries Answer: A Explanation: A) The person who conducts job analysis is interested in gathering data on what is involved in performing a particular job. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 90) Using questionnaires is typically a quick, economical job-analysis method. Answer: TRUE Explanation: Questionnaires are typically quick and economical to use for job analysis. The job analyst may administer a structured questionnaire to employees, who identify the tasks they perform. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 91) The observation method is primarily used to gather information when mental skills play a dominant role in a job. Answer: FALSE Explanation: The observation method is primarily used to gather information on jobs emphasizing manual skills. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 34 Copyright © 2016 Pearson Education, Inc.

92) The structure of job analysis questionnaires eliminates the possibility of employees exaggerating their tasks and responsibilities. Answer: FALSE Explanation: Questionnaires are typically quick and economical to use. However, some employees may tend to exaggerate the significance of their tasks, suggesting more responsibility than actually exist. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 93) What document should provide concise statements of what employees are expected to do on the job and indicate what employees do, how they do it, and the conditions under which the duties are performed? A) job specification B) job description C) job identification D) job evaluation Answer: B Explanation: B) A job description should provide concise statements of what employees are expected to do on the job, how they do it, and the conditions under which the duties are performed. Concise and accurate job descriptions are the starting point for most HR tasks. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 94) Which of the following is LEAST likely to be included in a job description? A) major duties performed B) percentage of time devoted to each duty C) performance standards to be achieved D) specific details about benefits and compensation Answer: D Explanation: D) A job description should provide concise statements of what employees are expected to do on the job, how they do it, and the conditions under which the duties are performed. Job descriptions are not likely to include information about benefits and salary. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

95) Which section in the job description includes the job title, the department, the reporting relationship, and a job number or code? A) job summary B) job identification C) duties performed D) job specification Answer: B Explanation: B) The job identification section of a job description includes the job title, the department, the reporting relationship, and a job number or code. A good title will closely approximate the nature of the work content and will distinguish that job from others. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 96) The job identification section of the job description includes the ________. A) required skills of the job B) size of company C) reporting relationship D) primary duties and tasks Answer: C Explanation: C) The job identification section includes the job title, the department, the reporting relationship, and a job number or code. Skills, company size, and duties are not included in the job identification section. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 97) Which of the following helps ensure that a job description does not become obsolete? A) providing the job requisition number B) including the job analysis date C) providing an overview of the job D) listing the major job duties Answer: B Explanation: B) The job analysis date is placed on the job description to aid in identifying job changes that would make the description obsolete. This practice ensures periodic review of job content and minimizes the number of obsolete job descriptions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

98) In the job description, which element provides a concise overview of the job? A) job summary B) job identification C) purpose statement D) performance standards Answer: A Explanation: A) The job summary provides a concise overview of the job. It is generally a short paragraph that states job content. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 99) All of the following are items typically included in the job specification EXCEPT ________. A) educational requirements B) required compensation C) physical capabilities D) personality traits Answer: B Explanation: B) Items typically included in the job specification are factors that are job-related, such as educational requirements, experience, and job-related personality traits and physical abilities. Compensation is not likely to be covered in a job specification. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 100) The primary reason for reviewing job analysis results with employees is to ________. A) ensure that they are accurate, clear, and understandable B) comply with state laws C) negotiate their salary D) comply with union requirements Answer: A Explanation: A) After jobs have been analyzed and the descriptions written, the results should be reviewed with the supervisor and the worker to ensure that they are accurate, clear, and understandable. The courtesy of reviewing results with employees helps to gain their acceptance. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

101) Job specifications provide information regarding the essential tasks, duties, and responsibilities of the job. Answer: FALSE Explanation: The minimum acceptable qualifications a person should possess in order to perform a particular job are contained in the job specification. The job description is a document that provides information regarding the essential tasks, duties, and responsibilities of the job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 102) The job identification section of the job description includes the job title, the department, the reporting relationship, and a job number or code. Answer: TRUE Explanation: The job identification section includes the job title, the department, the reporting relationship, and a job number or code. A good job title will closely approximate the nature of the work content and will distinguish that job from others. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 103) The job summary approximates the nature of the work content and will distinguish that job from others. Answer: FALSE Explanation: The job summary provides a concise overview of the job. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

104) The Standard Occupational Classification (SOC) of 2010 does not ________. A) reflect actual changes in the nature or organization of work activities in the economy B) allow organizations to seek greater recognition for their members' occupations C) allow organizations to seek a higher profile for their members' occupations D) include sweeping changes in the descriptions of nearly all current occupations Answer: D Explanation: D) The 2010 Standard Occupational Classification (SOC) system is used by federal statistical agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data. All workers are classified into one of 840 detailed occupations according to their occupational definition. To facilitate classification, detailed occupations are combined to form 461 broad occupations, 97 minor groups, and 23 major groups. Detailed occupations in the SOC with similar job duties, and in some cases skills, education, or training, are grouped together. The federal government updates job descriptions for all U.S. workers every 10 years. Most current occupations will be unaffected except perhaps for a change in the description's wording. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 105) What is a comprehensive government-developed database of worker attributes and job characteristics? A) G*NET B) Job Identification Network C) O*NET D) Job Analysis System Answer: C Explanation: C) O*NET, the Occupational Information Network, is a comprehensive, government-developed database of worker attributes and job characteristics. It is the nation's primary source of occupational information. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

106) One of the primary advantages of O*NET is that it ________. A) provides a list of all federal and state job openings B) serves as a recruiting tool for small and large firms C) maintains current job requirement information D) tracks changes in the U.S. job market Answer: C Explanation: C) O*NET, the Occupational Information Network, is a comprehensive, government-developed database of worker attributes and job characteristics. It is the nation's primary source of occupational information. Its flexible design captures rapidly changing job requirements. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 107) The ________ contains job descriptions for all U.S. workers in more than 800 occupations. A) Standard Occupational Classification (SOC) B) Occupational Position Paper (OPP) C) Workplace Status Assessment (WSA) D) Federal Employment Guide (FEG) Answer: A Explanation: A) The federal government updates job descriptions for all U.S. workers in more than 800 occupations every 10 years. The 2010 SOC of federal government's job descriptions for U.S. workers was replaced in 2000. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 108) The ________ is the essential foundation for facilitating career counseling, education, employment, and training activities. A) Job Almanac B) Public Broadcasting Network C) Occupational Information Network D) Small Business Administration Answer: C Explanation: C) The Occupational Information Network (O*NET) provides the essential foundation for facilitating career counseling, education, employment, and training activities by containing information about knowledge, skills, abilities; interests; general work activities; and work context. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

109) Which agency administers O*NET? A) U.S. Department of Labor Wage and Hour Division B) U.S. Department of the Census C) U.S. Department of Labor's Employment and Training Administration D) U.S. Bureau of Labor Statistics Answer: C Explanation: C) O*NET is administered by U.S. Department of Labor's Employment and Training Administration. The Wage and Hour Division administers laws such as the Fair Labor Standards Act. The Census Department focuses mainly on counting the population. The U.S. Bureau of Labor Statistics publishes a wide range of data including pay, employment, unemployment, and accident rates. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 11 110) The Standard Occupational Classification identifies ________ occupations. A) 97 B) 461 C) 750 D) 840 Answer: D Explanation: D) All workers are classified into one of 840 detailed occupations according to their occupational definition. To facilitate classification, detailed occupations are combined to form 461 broad occupations, 97 minor groups, and 23 major groups. Detailed occupations in the SOC with similar job duties, and in some cases skills, education, or training, are grouped together. Difficulty: Easy Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 11

111) In a brief essay, discuss how technological tools, such as O*NET and HR databases, benefit HR managers. Answer: Technology has vastly changed how HR managers perform their duties. O*NET, the Occupational Information Network is a flexible, easy-to-use database system that provides a common language for defining and describing occupations. Its flexible design also captures rapidly changing job requirements. It provides the essential foundation for facilitating career counseling, education, employment, and training activities by containing information about knowledge, skills, abilities; interests; general work activities; and work context. An HR database contains employee information which permits management to make HR decisions. Information that might appear in such databases includes work history, experience, skills, certifications, and training. The employee information that is included in such databases can affect virtually any topic related to the management of human resources. HR databases allow HR managers to match internal employees to appropriate positions. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 11 112) Job analysis for team members is typically more ________. A) impossible to define B) broadly defined C) simple to define D) narrowly defined Answer: B Explanation: B) With team design, there are no narrow jobs. Today, the work that departments do is often bundled into teams. The members of these teams have a far greater depth and breadth of skills than would have been required in traditional jobs. Such job analysis is not simple, but it is not impossible either. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 113) A team job description is broad given the greater scope of work than for traditional jobs. Answer: TRUE Explanation: With team design, there are no narrow job descriptions. Today, the work that departments do is often bundled into teams. The members of these teams have a far greater depth and breadth of skills than would have been required in traditional jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

114) Which law requires employees to be categorized as exempt or nonexempt? A) Fair Labor Standards Act B) Equal Pay Act C) Civil Rights Act D) Americans with Disabilities Act Answer: A Explanation: A) According to the Fair Labor Standards Act, employees are categorized as exempt or nonexempt. Job analysis is basic to this determination. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 115) Which worker would receive time and a half for working more than 40 hours per week? A) union B) managers C) exempt D) nonexempt Answer: D Explanation: D) According to the Fair Labor Standards Act, employees are categorized as exempt or nonexempt. Nonexempt workers receive time and a half for overtime, while exempt workers, such as managers, do not receive overtime pay. Whether or not an employee is a union member is irrelevant. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 13 116) When pay differences exist, ________ can be used to show whether jobs are substantially equal in terms of skill, effort, responsibility, or working conditions. A) job specifications B) job descriptions C) performance analyses D) specification descriptions Answer: B Explanation: B) According to the Equal Pay Act, when pay differences exist, job descriptions can be used to show whether jobs are substantially equal in terms of skill, effort, responsibility, or working conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

117) The ABC Company requires all maintenance supervisors to have a high school diploma, but the firm has never conducted a job analysis for the position to ensure that the standard is essential to performing the job. As a result, the ABC Company is most vulnerable to ________. A) labor union strikes B) criminal investigations C) discrimination lawsuits D) OSHA fines Answer: C Explanation: C) Placing a selection standard in the job specification without having determined its necessity through job analysis makes the firm vulnerable in discrimination suits. When job analysis is not performed, defending certain qualifications established for the job is usually difficult based on the Civil Rights Act. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 13 118) Under which Act are job descriptions required to specify elements of the job that endanger health or are considered unsatisfactory or distasteful by the majority of the population? A) Occupational Safety and Health Act B) Fair Labor Standards Act C) Americans with Disabilities Act D) Civil Rights Act Answer: A Explanation: A) According to OSHA, job descriptions must indicate elements of a job that are dangerous, unsatisfactory, or distasteful to most people. Firms can defend themselves by showing workers job descriptions in advance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 119) Under which Act are employers required to make reasonable accommodations for workers with disabilities who are able to perform the essential functions of a job? A) Americans with Disabilities Act B) Fair Labor Standards Act C) Occupational Safety and Health Act D) Civil Rights Act Answer: A Explanation: A) According to the ADA, employers must make reasonable accommodations for disabled workers who can perform essential job functions. Reasonable accommodations involve modifying the work environment to make it accessible for all employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 44 Copyright © 2016 Pearson Education, Inc.

120) The EEOC defines ________ as any modification or adjustment to a job, an employment practice, or the work environment that makes it possible for an individual with a disability to enjoy an equal employment opportunity. A) modification adjustment B) reasonable accommodation C) essential accommodation D) functional accommodation Answer: B Explanation: B) According to the ADA, employers must make reasonable accommodations for disabled workers who can perform essential job functions. Reasonable accommodations involve modifying the work environment to make it accessible for all employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 121) According to the Equal Pay Act, exempt workers must be paid time and a half when they work more than 40 hours per week. Answer: FALSE Explanation: According to the Fair Labor Standards Act, workers are either exempt or nonexempt. Nonexempt workers must be paid time and a half for overtime, but overtime pay is not required for exempt employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 122) Job descriptions are required by OSHA to specify elements of the job that endanger health or are considered unsatisfactory or distasteful by the majority of the population. Answer: TRUE Explanation: According to the Occupational Safety and Health Act, job descriptions are required to specify elements of the job that endanger health or are considered unsatisfactory or distasteful by the majority of the population. Showing the job description to the employee in advance is a good legal defense for the employer. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 13

123) What type of information is necessary for a job analysis? How can a job analysis provide a legal defense for a firm's employment practices? What specific laws require a thorough job analysis? Answer: The job analyst identifies the job's actual duties, responsibilities, and essential functions. Information is collected regarding work activities; worker-oriented activities; and the types of machines, tools, equipment, and work aids used in the job. In addition, the job analyst looks at job-related tangibles and intangibles, such as the knowledge needed, the materials processed, and the goods made or services performed A properly prepared job analysis is particularly important for supporting the legality of employment practices. Job analysis data are needed to defend decisions involving termination, promotion, transfers, and demotions. Effective job analysis is essential to sound human resource management as an organization recruits, selects, and promotes employees. Legislation requiring thorough job analysis includes the Fair Labor Standards Act, Equal Pay Act, Civil Rights Act, Occupational Safety and Health Act, and Americans with Disabilities Act. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 13 124) Competencies refer to an individual's capability to orchestrate and apply combinations of ________ over time to perform work successfully. A) knowledge, skills, and abilities B) job duties, job specifications, and job identification C) jobs, positions, and tasks D) positions, job identification, and skills Answer: A Explanation: A) Competencies refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations. Traditionally, as we have seen, work has been described by many dimensions including knowledge, skills, and abilities. Indeed, although this is largely still the case, HR professionals have embraced the ideas of competencies as the field has increasingly taken on strategic importance. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 14

125) Oftentimes, HR professionals' identification of competencies is derived from an analysis of ________. A) observation methods B) overall strategic statements C) job descriptions D) global talent management Answer: B Explanation: B) Oftentimes, HR professionals' identification of competencies is derived from an analysis of the overall strategic statements of companies. For example, GE emphasizes three strategic goals for corporate growth: Globalization, Product Services, and Six Sigma (quality improvement). Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 126) Competencies refer to job characteristics. Answer: FALSE Explanation: Competencies refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations. Traditionally, as we have seen, work has been described by many dimensions including knowledge, skills, and abilities. Indeed, although this is largely still the case, HR professionals have embraced the ideas of competencies as the field has increasingly taken on strategic importance. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 127) Competency modeling refers to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities. Answer: FALSE Explanation: Competency modeling specifies and defines all the competencies necessary for success in a group of jobs that are set within an industry context. Competencies refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14

128) The process of determining the specific tasks to be performed, the methods used in performing these tasks, and how the job relates to other work in the organization refers to ________. A) job design B) job analysis C) job enrichment D) job enlargement Answer: A Explanation: A) Job design is the process of determining the specific tasks to be performed, the methods used in performing these tasks, and how the job relates to other work in the organization. Job enrichment and job enlargements are methods of implementing job design. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 129) Which term refers to basic changes in the content and level of responsibility of a job so as to provide greater challenges to the worker? A) job rotation B) job analysis C) job enrichment D) job enlargement Answer: C Explanation: C) Job enrichment consists of basic changes in the content and level of responsibility of a job so as to provide greater challenges to the worker. Job enrichment provides a vertical expansion of responsibilities. Job rotation and job enlargement are other methods of job design. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 130) Who first advocated the concept of job enrichment? A) Frederick Herzberg B) Victor Vroom C) Abraham Maslow D) Robert Noe Answer: A Explanation: A) Herzberg was a proponent of job enrichment. Job enrichment provides workers with a vertical expansion of responsibilities. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

131) Which of the following terms refers to increasing the number of tasks a worker performs, with all of the tasks at the same level of responsibility? A) job design B) job rotation C) job enrichment D) job enlargement Answer: D Explanation: D) Job enlargement adds variety by having workers perform more tasks at the same level of responsibility. Job rotation, job enrichment, and job enlargement are methods of job design. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 132) Audrey is a recent college graduate who was hired by a computer manufacturing firm. Each week, Audrey will be assigned to a different department in order to broaden her understanding of the firm and help her understand a variety of jobs. In which of the following is Audrey most likely participating? A) job rotation B) job evaluation C) job enrichment D) job enlargement Answer: A Explanation: A) Job rotation moves employees from one job to another to broaden their experience. Higher-level tasks often require this breadth of knowledge. Rotational training programs help employees understand a variety of jobs and their interrelationships, thereby improving productivity. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 15

133) Which term refers to the fundamental rethinking and radical redesign of business processes to become more competitive? A) reengineering B) total process quality C) total quality management D) management by objectives Answer: A Explanation: A) Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed. Reengineering focuses on the overall aspects of job designs, organizational structures, and management systems. It stresses that work should be organized around outcomes as opposed to tasks or functions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 134) As an HR specialist at a large auto manufacturer, you have noticed that many of the technicians employed by your firm are bored with their jobs, not meeting performance goals, and frequently absent. Which of the following would most likely resolve some of these problems among technicians? A) implementing a job rotation program B) conducting a new job analysis C) initiating a hiring freeze D) downsizing the firm Answer: A Explanation: A) Job rotation is often used by organizations to relieve boredom, stimulate better performance, reduce absenteeism, and provide additional flexibility in job assignments. Rotational training programs help employees understand a variety of jobs and their interrelationships, thereby improving productivity. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 15

135) Reengineering stresses that work should be organized around ________. A) functional units as opposed to corporate titles B) inputs as opposed to results C) tasks or functions as opposed to outcomes D) outcomes as opposed to tasks or functions Answer: D Explanation: D) Reengineering focuses on the overall aspects of job design, organizational structures, and management systems. Reengineering organizes work around outcomes as opposed to tasks or functions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 136) Job design is the process of determining the specific tasks to be performed, the methods used in performing these tasks, and how the job relates to other work in the organization. Answer: TRUE Explanation: Job design involves determining what tasks need to be accomplished, how to accomplish them, and how a job relates to other aspects of a company. Job enrichment, job enlargement, and job rotation are methods of job design. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 137) Frederick Herzberg outlined five principles related to job enlargement. Answer: FALSE Explanation: Herzberg advocated job enrichment rather than job enlargement. He described five principles to follow when implementing job enrichment, which involves expanding the responsibilities of a worker. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 138) With job enrichment, employees should be given more authority over their work and provided with timely feedback on their performance. Answer: TRUE Explanation: Job enrichment is a job design method that is intended to give the worker a feeling of achievement and responsibility. Principles of job enrichment include giving workers more authority and offering timely feedback. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

139) Job development involves increasing the number of tasks a worker performs, all of which are at the same level of responsibility. Answer: FALSE Explanation: Job enlargement involves increasing the number of tasks a worker performs, all of which are at the same level of responsibility. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 140) Job rotation (cross-training) moves employees from one job to another to broaden their experience. Answer: TRUE Explanation: Job rotation (cross-training) moves employees from one job to another to broaden their experience. Rotational training programs help employees understand a variety of jobs and their relationships. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 141) The primary purpose of reengineering is to implement incremental changes within an organization. Answer: FALSE Explanation: Reengineering essentially involves the firm rethinking and redesigning its business system to become more competitive. Incremental change is not what is desired; instead, radical changes are wanted that will alter entire operations at one time. Essentially, the firm must rethink and redesign its business system from the ground up. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 142) In a brief essay, explain the difference between job enrichment and job enlargement. Answer: There is a clear distinction between job enrichment and job enlargement. Job enlargement is defined as increasing the number of tasks a worker performs, with all of the tasks at the same level of responsibility. Job enlargement involves providing greater variety to the worker. For example, instead of knowing how to operate only one machine, a person is taught to operate two or even three, but no higher level of responsibility is required. Job enrichment consists of basic changes in the content and level of responsibility of a job so as to provide greater challenges to the worker. Job enrichment provides a vertical expansion of responsibilities. The worker has the opportunity to derive a feeling of achievement, recognition, responsibility, and personal growth in performing the job. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 52 Copyright © 2016 Pearson Education, Inc.

143) Talent management does not include ________. A) building culture B) writing job descriptions C) taking business goals into consideration D) integrated talent acquisition Answer: B Explanation: B) Talent management is a strategic endeavor to optimize the use of human capital, which enables an organization to drive short- and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 16 144) Which of the following is one of the greatest challenges to global talent management? A) an aging population B) language barriers C) a lack of strategic planning outside the United States D) uncertain economic conditions Answer: A Explanation: A) Vic Speers, director of talent management at Hudson, a provider of talent management services worldwide, says, "The second war for talent is brewing. Young and talented employees are increasingly rare and firms are faced with an aging population where more people retire every year than join the workforce." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 16 145) Which of the following terms refers to the strategic attempt to optimize the use of human capital? A) talent management B) social networking C) job enlargement D) onboarding Answer: A Explanation: A) Talent management is a strategic endeavor to optimize the use of human capital, which enables an organization to drive short- and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 16 53 Copyright © 2016 Pearson Education, Inc.

146) The strategic endeavor to optimize the use of human capital is called ________. A) workforce equilibrium B) constructivism C) talent management D) management recruitment Answer: C Explanation: C) Talent management is a strategic endeavor to optimize the use of human capital, which enables an organization to drive short- and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 16 147) Talent management enables an organization to drive short-term and long-term results by building all of the following EXCEPT ________. A) culture B) entrenchment C) capacity D) capability Answer: B Explanation: B) Talent management is a strategic endeavor to optimize the use of human capital, which enables an organization to drive short- and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 16 148) All of the following EXCEPT ________ are key components of global talent management. A) a level playing field B) performance management C) compensation and rewards D) leadership and development Answer: A Explanation: A) Talent management attempts to ensure that the right person is in the right job at the right time. Six key components of talent management include recruitment, compensation and rewards, performance management, succession management, engagement and retention, and leadership development. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 16

149) The main purpose of talent management systems is ensuring that the best people are in the most appropriate jobs at all times. Answer: TRUE Explanation: Talent management integrates HR topics such as compensation, recruiting, performance management, learning management, career development, and succession planning. It attempts to ensure that the right person is in the right job at the right time. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 16 150) What is talent management? Answer: Talent management is a strategic endeavor to optimize the use of human capital, which enables an organization to drive short- and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals. Six key components of talent management include recruitment, compensation and rewards, performance management, succession management, engagement and retention, and leadership development. Talent management attempts to ensure that the right person is in the right job at the right time. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 16

Human Resource Management, 14e (Mondy) Chapter 5 Recruitment 1) The process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications to apply for jobs with an organization is known as ________. A) development B) selection C) recruitment D) planning Answer: C Explanation: C) Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications to apply for jobs with an organization. The firm may then select those applicants with qualifications most closely related to job descriptions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) What does recruitment involve? A) encouraging qualified people to apply for employment with a firm B) selecting qualified people for employment at a firm C) attracting and selecting employees for the firm D) determining sources of employees Answer: A Explanation: A) Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications to apply for jobs with an organization. The firm may then select those applicants with qualifications most closely related to job descriptions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 3) Recruitment is the process of attracting qualified individuals and encouraging them to apply for jobs with an organization. Answer: TRUE Explanation: Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications to apply for jobs with an organization. The firm may then select those applicants with qualifications most closely related to job descriptions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

4) Recruiting programs have little impact on a firm's financial status. Answer: FALSE Explanation: It is estimated that just the cost of replacing an employee alone when a bad decision is made is two to three times the employee's annual salary. Thus, a properly functioning recruiting program can have a major impact on the bottom line of a company. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) Discuss why the recruitment process can promote or detract from a company's success? Answer: Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications to apply for jobs with an organization. The firm may then select those applicants with qualifications most closely related to job descriptions. Finding the appropriate way of encouraging qualified candidates to apply for employment is extremely important, however, because recruiting costs can be expensive. Thus, a properly functioning recruiting program can have a major impact on the bottom line of a company. The recruitment process is critical because employees quickly become either assets or liabilities based on how they contribute to the value of the company. How many times have we heard CEOs state, "Our employees are our most important asset"? Instead they should be saying, "The right employees are our most important asset." Hiring the best people available has never been more critical than it is today because of the economy and global competition. A company's ability to recruit and manage talent has become the measure for the overall health and longevity of the organization. It is estimated that just the cost of replacing an employee alone when a bad decision is made is two to three times the employee's annual salary. Therefore, it is crucial to have a finely tuned recruitment process if the selection process is to function properly. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 1

6) What is recruitment? How do labor market conditions affect recruitment? Answer: Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications to apply for jobs with an organization. The firm may then select those applicants with qualifications most closely related to job descriptions. Of particular importance to the success of recruitment is the demand for and supply of specific skills in the labor market. In general, a firm's recruitment process is often simplified when the unemployment rate in an organization's labor market is high. The number of unsolicited applicants is usually greater, and the increased size of the labor pool provides a better opportunity for attracting qualified applicants. However, if demand for a particular skill is high relative to supply, an extraordinary recruiting effort may be required. Further, the area where recruitment takes place often impacts the labor market conditions.Today, the labor market for many professional and technical positions is much broader and truly global. Even in a depressed economy, top-quality workers are in demand and forward-thinking organizations are looking to entice these individuals to join their firms. For example, wind turbine technicians are in considerably high growth in wind electricity generation. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1, 8 7) The recruitment process most likely begins when a manager ________. A) initiates an employee requisition B) administers employment tests C) interviews candidates D) trains a recruiter Answer: A Explanation: A) Frequently, recruitment begins when a manager initiates an employee requisition, a document that specifies job title, department, the date the employee is needed for work, and other details. With this information, managers can refer to the appropriate job description to determine the qualifications the recruited person needs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

8) Which term refers to a document that specifies various details, including job title, department, and the date the employee is needed for work? A) job description B) job specification C) recruitment source D) employee requisition Answer: D Explanation: D) Frequently, recruitment begins when a manager initiates an employee requisition, a document that specifies job title, department, the date the employee is needed for work, and other details. With this information, managers can refer to the appropriate job description to determine the qualifications the recruited person needs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 9) Jeremy, an HR manager, has received an employee requisition for a data analyst job at his firm. Which of the following would most likely help Jeremy determine the qualifications the recruited person needs for the data analyst job? A) job posting B) job identifier C) job description D) job-knowledge test Answer: C Explanation: C) Frequently, recruitment begins when a manager initiates an employee requisition, a document that specifies job title, department, the date the employee is needed for work, and other details. With this information, managers can refer to the appropriate job description to determine the qualifications the recruited person needs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 10) Which term refers to where qualified individuals are located? A) job posts B) job boards C) recruitment sources D) employee requisitions Answer: C Explanation: C) Recruitment sources are where qualified candidates are located, such as colleges or competitors. Tapping productive sources of applicants and using suitable recruitment methods are essential to maximizing recruiting efficiency and effectiveness. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 4 Copyright © 2016 Pearson Education, Inc.

11) Which term refers to specific means through which potential employees are attracted to the firm? A) employment descriptions B) recruitment methods C) recruitment sources D) job postings Answer: B Explanation: B) Recruitment methods are the specific means used to attract potential employees to the firm, such as online recruiting. Tapping productive sources of applicants and using suitable recruitment methods are essential to maximizing recruiting efficiency and effectiveness. When a firm identifies the sources of candidates, it uses appropriate methods for either internal or external recruitment to accomplish recruitment objectives. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 12) The recruitment process entails several activities EXCEPT ________. A) making a job offer B) determining whether it will be necessary to search outside the company for potential talent C) selecting the appropriate recruitment methods D) tapping productive sources of applicants Answer: A Explanation: A) Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization. Frequently, recruitment begins when a manager initiates an employee requisition, a document that specifies job title, department, the date the employee is needed for work, and other details. With this information, managers can refer to the appropriate job description to determine the qualifications the recruited person needs. The next step in the recruitment process is to determine whether qualified employees are available within the firm (the internal source) or if it is necessary to look to external sources, such as colleges, universities, and other organizations. Because of the high cost of recruitment, organizations need to use the most productive recruitment sources and methods available. Tapping productive sources of applicants and using suitable recruitment methods are essential to maximizing recruiting efficiency and effectiveness. When a firm identifies the sources of candidates, it uses appropriate methods for either internal or external recruitment to accomplish recruitment objectives. A candidate responds to the firm's recruitment efforts by submitting professional and personal data on either an application for employment or a résumé, depending on the company's policy. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

13) Recruitment usually begins when a manager initiates an employee requisition, a document that specifies job title, department, the date the employee is needed for work, and other details. Answer: TRUE Explanation: Frequently, recruitment begins when a manager initiates an employee requisition, a document that specifies job title, department, the date the employee is needed for work, and other details. With this information, managers can refer to the appropriate job description to determine the qualifications the recruited person needs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 14) Colleges, universities, vocational schools, and competing firms are types of recruitment sources. Answer: TRUE Explanation: Recruitment sources are where qualified candidates are located, such as colleges or competitors. Recruitment methods are the specific means used to attract potential employees to the firm, such as online recruiting. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 15) What are the steps involved in the recruitment process? Answer: Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization. Frequently, recruitment begins when a manager initiates an employee requisition, a document that specifies job title, department, the date the employee is needed for work, and other details. With this information, managers can refer to the appropriate job description to determine the qualifications the recruited person needs. The next step in the recruitment process is to determine whether qualified employees are available within the firm (the internal source) or if it is necessary to look to external sources, such as colleges, universities, and other organizations. Because of the high cost of recruitment, organizations need to use the most productive recruitment sources and methods available. Tapping productive sources of applicants and using suitable recruitment methods are essential to maximizing recruiting efficiency and effectiveness. When a firm identifies the sources of candidates, it uses appropriate methods for either internal or external recruitment to accomplish recruitment objectives. A candidate responds to the firm's recruitment efforts by submitting professional and personal data on either an application for employment or a résumé, depending on the company's policy. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 2

16) Job postings and job bidding procedures enable current employees of an organization to ________. A) request promotions and salary raises B) locate skilled subordinate workers C) receive training for new positions D) learn about current job openings Answer: D Explanation: D) The job posting and bidding procedures can help minimize the commonly heard complaint that insiders never hear of a job opening until it is filled. Job posting is a procedure for informing employees that job openings exist. Job bidding is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 17) Which of the following is NOT an internal recruitment method? A) employment agency B) employee referral C) job bidding D) job posting Answer: A Explanation: A) Employee referrals, job bidding procedures, and job postings are internal recruiting methods. Employment agencies are external sources for job candidates. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 18) The procedure for communicating to employees the fact that job openings exist is known as ________. A) job bidding B) skills inventory C) job posting D) job analysis Answer: C Explanation: C) Job posting is a procedure for informing employees that job openings exist. Job bidding is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

19) Which of the following is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted position? A) skills inventory B) employee requisition C) job enlargement D) job bidding Answer: D Explanation: D) Job bidding is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Job posting is a procedure for informing employees that job openings exist. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 20) The complaint that employees never hear of a position until it is filled can best be handled through a system of ________. A) networking and onboarding B) job analysis and staffing C) job posting and bidding D) recruiting and testing Answer: C Explanation: C) The job posting and bidding procedures can help minimize the commonly heard complaint that insiders never hear of a job opening until it is filled. Job posting is a procedure for informing employees that job openings exist. Job bidding is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

21) According to your text, what continues to be the way that top performers are primarily identified? A) employee referrals B) headhunters C) internships D) job fairs Answer: A Explanation: A) Employee referrals continue to be the way that top performers are identified. Organizations like Southwest Airlines, Microsoft, Disney, and Ritz Carlton reportedly get from 50 to 70 percent of their new hires exclusively through employee referrals. These organizations have found that their employees can serve an important role in the recruitment process by actively soliciting applications from among their friends and associates. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 22) Every employee at Raymond Consulting has been asked to include an e-mail footer that states "Raymond Consulting is looking for amazing employees." Which recruitment method is the firm using? A) employee enlistment B) job bidding C) employee referrals D) job posting Answer: A Explanation: A) Employee enlistment is a unique form of employee referral in which every employee becomes a company recruiter by using e-mail footers or business cards to communicate that the firm is hiring. Employee referrals involve employees referring friends and associates for jobs. Job bidding is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Job posting is a procedure for informing employees that job openings exist. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

23) Universal Engineering provides employees with cards that state "We are always looking for great engineers. For additional information, log on to our Web site." Which recruiting method is Universal Engineering using? A) job posting B) job bidding C) employee enlistment D) online job board notifications Answer: C Explanation: C) Employee enlistment is a unique form of employee referral in which every employee becomes a company recruiter. This is not the same as merely asking employees to refer friends to the company. The technique can be accomplished by giving employees special cards or having employees include e-mail footers regarding the firm's hiring needs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 24) By having companies maintain detailed staffing and recruitment records, the EEOC can determine whether a firm's hiring practices are legal. Answer: TRUE Explanation: Equal Employment Opportunity Commission (EEOC) guidelines suggest that companies with more than 100 employees keep staffing records for a minimum of two years. This information enables a compilation of demographic data, including age, race, and gender, based on that applicant pool. The EEOC uses these data to determine whether a company's hiring practices are discriminatory. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 25) Management should be able to use employee databases to identify current employees who are capable of filling available positions. Answer: TRUE Explanation: Management should be able to identify current employees who are capable of filling positions as they become available. Helpful tools used for internal recruitment include employee databases, job postings, and job bidding procedures. Databases can be valuable in locating talent internally and supporting the concept of promotion from within. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

26) Job posting is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Answer: FALSE Explanation: Job posting is a procedure for informing employees that job openings exist. Job bidding is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 27) Organizations need to be sure to treat internal candidates properly so they will not be prompted to leave if they do not get the job. Answer: TRUE Explanation: Organizations need to be sure to treat internal candidates properly so they will not be discouraged or prompted to leave if they do not get the job. When bidders are unsuccessful, someone must explain to them why they were not selected. Management must choose the most qualified applicant or else the system will lack credibility. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 28) Online job boards are the most effective method used by employers such as Microsoft and Southwest Airlines to identify top performers. Answer: FALSE Explanation: Employee referrals continue to be the way that top performers are identified. Organizations like Southwest Airlines, Microsoft, Disney, and Ritz Carlton reportedly get many of their new hires exclusively through employee referrals. It is just human nature that people do not want to recommend a person unless they believe they are going to fit in and be productive. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 29) The EEOC Compliance Manual warns that relying on word-of-mouth recruiting may generate applicant pools that do not reflect diversity in the labor market. Answer: TRUE Explanation: The EEOC Compliance Manual, issued in 2014, updates guidance on the prohibition of discrimination under Title VII of the Civil Rights Act of 1964. The manual explicitly warns that recruiting only at select colleges or relying on word-of-mouth recruiting, which includes employee referral programs, may generate applicant pools that do not reflect diversity in the labor market. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 11 Copyright © 2016 Pearson Education, Inc.

30) Job bidding is a unique form of employee referral where every employee becomes a company recruiter. Answer: FALSE Explanation: Employee enlistment is a unique form of employee referral in which every employee becomes a company recruiter by using business cards that mention the firm is hiring. Job bidding is a procedure that permits employees who believe that they possess the required qualifications to apply for a posted job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 31) Which of the following describes laws or policies adopted by some states to reduce unfair barriers to employment of people with criminal records? A) break the box B) give a chance C) ban the box D) fill the box Answer: C Explanation: C) As of this writing, 11 states have implemented Ban the Box laws or policies that reduce unfair barriers to employment of people with criminal records. Four of the 11 states' laws prohibit deliberate exclusion of ex-offenders from employment consideration by public and private employers (Hawaii, Massachusetts, Minnesota, and Rhode Island). According to Multicultural Foodservice & Hospitality Alliance President Gerry Fernandez, "I'm aware of several chains that have programs to hire ex-offenders, though they do not want publicity. Who do you think works third shift, where they don't come in contact with customers?" Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

32) A poorly conceived recruitment process could undermine the ________. A) ability to motivate employees to perform their jobs well B) reputation of the firm C) training and development needs assessment activities D) selection process Answer: D Explanation: D) Of particular importance to the success of recruitment is the demand for and supply of specific skills in the labor market. The recruitment method that proves to be most successful will depend to an extent on whether the recruited individual is an active or passive job seeker. Legal matters also play a significant role in recruitment practices in the United States. This is not surprising because the candidate and the employer first make contact during the recruitment process. A poorly conceived recruiting process can do much to create problems in the selection process. Therefore, it is essential for organizations to emphasize nondiscriminatory practices at this stage. The Office of Federal Contract Compliance Programs (OFCCP) has issued guidelines concerning the online recruiting policies of federal contractors and subcontractors. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 33) Which of the following is NOT an external recruitment source? A) universities B) employee databases C) military personnel D) self-employed workers Answer: B Explanation: B) Universities, military personnel, and self-employed workers are all considered sources for external recruitment. A firm's employee database would be a source for internal recruitment. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

34) O'Neal Engine Repair is a local business that services large and small engines and also does auto body work. The business is growing, and the owner needs to hire three more mechanics. Which of the following would most likely provide O'Neal's with the best source of entry-level mechanics? A) vocational school B) state university C) online job board D) job bidding Answer: A Explanation: A) Organizations concerned with recruiting clerical and other entry-level employees often depend on high schools and vocational schools. Many of these institutions have outstanding training programs for specific occupational skills, such as home appliance repair and small engine mechanics. Universities and job boards are less likely sources for mechanics. Difficulty: Moderate Skill: Critical thinking AACSB: Application of knowledge Learning Obj.: 4 35) What recruitment source has two-year programs designed for both a terminal education and preparation for a four-year university degree program? A) high schools B) community colleges C) private universities D) virtual career fairs Answer: B Explanation: B) Many community colleges are sensitive to the specific employment needs in their local labor markets and graduate highly-sought-after students with marketable skills. Typically, community colleges have two-year programs designed for both a terminal education and preparation for a four-year university degree program. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

36) Entry-level professional and management employees are typically recruited from what source? A) competitors B) universities C) vocational schools D) local high schools Answer: B Explanation: B) Colleges and universities represent a major recruitment source for many organizations. Organizations typically find potential professional and management employees in these institutions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 37) Milton Marketing needs to hire two account managers, and the firm wants job candidates who have recent experience in that position. Which of the following would be the best recruitment source for Milton Marketing? A) competitors in the labor market B) colleges and universities C) community colleges D) unemployed people Answer: A Explanation: A) When recent experience is required, competitors and other firms in the same industry or geographic area may be the most important source of recruits. The most highly qualified applicants often come directly from competitors in the same labor market, as people typically do not enter the workforce loaded with experience and job skills. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 38) What is the process of actively recruiting employees from competitors called? A) stealing B) plundering C) poaching D) rustling Answer: C Explanation: C) When recent experience is required, competitors and other firms in the same industry or geographic area may be the most important source of recruits. Another name for actively recruiting employees from competitors is called poaching. In fact, the most highly qualified applicants often come directly from competitors in the same labor market, as people typically do not enter the workforce loaded with experience and job skills. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 15 Copyright © 2016 Pearson Education, Inc.

39) The most highly qualified experienced applicants often come from what source? A) the unemployed B) colleges and universities C) community colleges D) industry competitors Answer: D Explanation: D) When recent experience is required, competitors and other firms in the same industry or geographic area may be the most important source of recruits. Another name for actively recruiting employees from competitors is called poaching. In fact, the most highly qualified applicants often come directly from competitors in the same labor market, as people typically do not enter the workforce loaded with experience and job skills. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 40) During the recession of 2007/2009, many well-qualified employees at Advanced Control were laid off when the firm struggled financially. The firm has actively stayed in touch with these former employees in hopes of rehiring them when the economy improves. Which of the following best supports the argument that Advanced Control should rehire these former employees? A) Advanced Control knows the strengths and weaknesses of the employees. B) Advanced Control will avoid being sued for discriminatory hiring practices. C) Advanced Control will prevent competitors from learning trade secrets. D) Advanced Control has already established employee database information. Answer: A Explanation: A) The advantage of tracking former employees is that the firm knows their strengths and weaknesses and the ex-employees know the company. Tracking, recruiting, and hiring a former employee can be a tremendous benefit and can encourage others to stay with the firm. Difficulty: Challenging Skill: Critical thinking AACSB: Application of knowledge Learning Obj.: 4

41) During the recession of 2007/2009, which of the following recruitment sources grew most significantly? A) former criminal offenders B) former military personnel C) self-employed individuals D) unemployed workers Answer: D Explanation: D) Qualified applicants join the unemployment rolls every day for various reasons. Companies may downsize their operations, go out of business, or merge with other firms, leaving qualified workers without jobs, which was certainly the case in the recession of 2007/09 In 2010, over six million people had been out of work for six months or more. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 42) If discouraged workers who gave up looking for jobs are counted, the total unemployment rate in the U.S.A. for 2014 was about ________. A) 16 percent B) 10 percent C) 12 percent D) 13 percent Answer: D Explanation: D) According to the U.S. Bureau of Labor Statistics, the total number of job openings in 2014 was 4 million, with more than 10.2 million unemployed workers. In January 2014, the unemployment rate was 6.6 percent; however, if discouraged workers who have given up looking for jobs are counted, the total unemployment rate was about 12.7 percent. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 43) According to a recent analysis by the National Employment Law Project, ________ has an arrest or conviction that would appear in a routine criminal background check. A) two out of three U.S. adults B) more than one in four U.S. adults C) nearly fifteen percent of U.S. adults D) less than one in ten U.S. adults Answer: B Explanation: B) A recent analysis by the National Employment Law Project shows that more than one in four U.S. adults has an arrest or conviction that would appear in a routine criminal background check. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 17 Copyright © 2016 Pearson Education, Inc.

44) Which of the following best explains why GE and Walmart hire former service members? A) technologically skilled B) proven work history C) physically healthy D) unique creativity Answer: B Explanation: B) Hiring former service members may make sense to a lot of employers because many of these individuals typically have a proven work history and are flexible, motivated, and drug-free. Understanding technology, being healthy, and showing creativity are less likely to explain the interest in former service members. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 45) Kevin recently resigned from the army and is searching for a civilian job. Which of the following Web sites would most likely benefit Kevin? A) servicejobs.com B) armyjobs.com C) hirepatriots.com D) militaryjobs.com Answer: C Explanation: C) Service members nationwide looking for jobs can also go to HirePatriots.com. "We help citizens and businesses to thank our current military, veterans, and their spouses by posting their job opportunities on our free military job posting and search Web site," said Mark Baird, president of Patriotic Hearts. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 4 46) Rehiring former employees is associated with ________. A) experienced managers B) the boomerang effect C) technical specialists D) active candidates Answer: B Explanation: B) Today's young workers are more likely to change jobs and later return to a former employer than their counterparts who entered the workforce 20 or 30 years ago, and smart employers try to get their best ex-employees to come back. The boomerang effect might happen because there was a strong bond with previous coworkers or the new job was not what the employee envisioned. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 4 18 Copyright © 2016 Pearson Education, Inc.

47) Ban the box refers to laws or policies that prevent the employment of individuals with criminal records. Answer: FALSE Explanation: As of this writing, 11 states have implemented Ban the Box laws or policies that reduce unfair barriers to employment of people with criminal records. Four of the 11 states' laws prohibit deliberate exclusion of ex-offenders from employment consideration by public and private employers (Hawaii, Massachusetts, Minnesota, and Rhode Island). According to Multicultural Foodservice & Hospitality Alliance President Gerry Fernandez, "I'm aware of several chains that have programs to hire ex-offenders, though they do not want publicity. Who do you think works third shift, where they don't come in contact with customers?" Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 48) Organizations who need to recruit clerical and other entry-level operative employees often depend on high schools and vocational schools. Answer: TRUE Explanation: Organizations concerned with recruiting clerical and other entry-level employees often depend on high schools and vocational schools. Many of these institutions have outstanding training programs for specific occupational skills, such as home appliance repair and small engine mechanics. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 49) Firms typically find potential management employees in colleges and universities. Answer: TRUE Explanation: Colleges and universities represent a major recruitment source for many organizations. Organizations typically find potential professional, technical, and management employees in these institutions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 50) When recent experience is required, former employees or unemployed workers are the most important source of recruits. Answer: FALSE Explanation: When recent experience is required, competitors and other firms in the same industry or geographic area may be the most important source of recruits. Former employees and unemployed workers are less likely to have the most recent experience necessary. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 19 Copyright © 2016 Pearson Education, Inc.

51) Tracking and recruiting former employees is more common now than it was in the past. Answer: TRUE Explanation: At one time, when employees quit, their managers and peers tended to view them as being disloyal, ungrateful, and they were "punished" with no-return policies. A common attitude was that if you left your firm, you did not appreciate what the company had done for you. Today's young workers are more likely to change jobs and later return to a former employer than their counterparts who entered the workforce 20 or 30 years ago and smart employers try to get their best ex-employees to come back. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 52) Former service members are recruited by many employers because many of these individuals typically have a proven work history and are flexible, motivated, and drug free. Answer: TRUE Explanation: Hiring of former service members may make sense to a lot of employers because many of these individuals typically have a proven work history and are flexible, motivated, and drug-free. Another valuable characteristic of veterans is their goal and team orientation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 53) Ex-offenders are a viable source of employees for restaurants and farms. Answer: TRUE Explanation: Ex-offenders are a viable labor pool for restaurants. Several restaurant chains have programs to hire ex-offenders, for working third shift. In another example, supermarket retail consultant and restaurateur Howard Solganik has launched a program that puts ex-offenders to work helping area farmers increase the supply of local, seasonal produce accessible to consumers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

54) What are the main reasons that firms use external recruitment sources? What are the benefits of recruiting at vocational schools, community colleges, and universities? Answer: At times, a firm must look beyond its own borders to find employees, particularly when expanding its workforce. External recruitment is needed to: (1) fill entry-level jobs; (2) acquire skills not possessed by current employees; and (3) obtain employees with different backgrounds to provide a diversity of ideas. Organizations concerned with recruiting clerical and other entrylevel employees often depend on high schools and vocational schools. Many of these institutions have outstanding training programs for specific occupational skills, such as home appliance repair and small engine mechanics. Many community colleges are sensitive to the specific employment needs in their local labor markets and graduate highly-sought-after students with marketable skills. Many community colleges also have excellent mid-management programs combined with training for specific trades. Colleges and universities represent a major recruitment source for many organizations. Organizations typically find potential professional, technical, and management employees in these institutions. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 4 55) Why would a firm look to competitors for recruits? What role do general purpose job boards play in recruitment? Answer: When recent experience is required, competitors and other firms in the same industry or geographic area may be the most important source of recruits. Another name for actively recruiting employees from competitors is called poaching. It has been estimated that poaching may account for 30 percent of the movement in labor. In fact, the most highly qualified applicants often come directly from competitors in the same labor market. Competitors and other firms serve as external sources of recruitment for high-quality talent. Even organizations that have policies of promotion from within occasionally look elsewhere to fill positions. For example, the rapidly expanding shale gas industry has found itself desperate for experienced engineering talent as demand quickly outpaces supply. Firms use general-purpose job boards by typing in key job criteria, skills, and experience, and indicating their geographic location. Job seekers can search for jobs by category, experience, education, location, or any combination of categories. General-purpose job boards continue to attract large number of applicants, but their use has declined somewhat in recent years. Many believe that the general-purpose big job boards are best for job seekers in professions that experience high turnover like sales but often are less effective for highly qualified applicants or those looking for work in smaller industries. They are also not as effective in finding jobs for senior level positions because most firms prefer referrals or Web sites such as LinkedIn. The two most widely recognized general employment Web sites are, Monster.com and CareerBuilder.com. Difficulty: Challenging Skill: Synthesis AACSB: Information technology Learning Obj.: 4, 5

56) The disposable workforce reference applies to ________. A) contingent workers B) offshored employees C) retired workers D) hourly employees Answer: A Explanation: A) Contingent workers, described as the "disposable workforce" have a nontraditional relationship with the worksite employer and work as part-timers, temporaries, or independent contractors. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 57) Harold's Department Stores frequently use contingent workers. What is the most likely reason that the firm uses contingency workers ? A) implementing telecommuting B) minimizing specialty training C) having scheduling flexibility D) experiencing exceptional work ethics Answer: C Explanation: C) Contingent workers permit distinct advantages: maximum flexibility for the employer and lower labor costs. Firms want flexibility with their workforces because they want to be able to ramp up or scale back based on business needs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 58) Which of the following is true about contingent workers? A) contingent workers are primarily unskilled workers B) contingent workers do not have an implicit or explicit contract for ongoing employment C) contingent workers usually have the choice to continue employment after completion of their initial assignments D) all of the above Answer: B Explanation: B) According to the U.S. Bureau of Labor Statistics, contingent workers are those who do not have an implicit or explicit contract for ongoing employment. Persons who do not expect to continue in their jobs for such personal reasons as retirement or returning to school are not considered contingent workers, provided that they would have the option of continuing in the job were it not for these reasons. Contingent workers are represented in many occupational groups, including skilled (for example, accountants) and unskilled (for example, janitorial work). Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 22 Copyright © 2016 Pearson Education, Inc.

59) Executive recruiting director Owen Williams regularly uses his smartphone and the mobile version of LinkedIn to post job listings and connect to potential candidates. This is an example of ________ in action. A) digital recruitment B) leading edge recruiting C) social media recruitment D) mobile recruiting Answer: D Explanation: D) The world of recruiting via mobile technology is moving at lightning speed. Recruiters use mobile apps to post jobs, run text message–based recruiting campaigns, create online communities for potential new hires to learn about their companies, monitor social networks for news about industries they hire for, and keep in touch with staff and outside agencies. These tasks previously had to be done from a desktop or laptop computer. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 60) What has revolutionized the way companies recruit employees and job seekers search and apply for jobs? A) online recruitment methods B) state employment agencies C) local job fairs D) headhunters Answer: A Explanation: A) Online recruiting has revolutionized the way companies recruit employees and job seekers search and apply for jobs. Employment agencies, job fairs, and recruiters have been in existence for some time, so they have not altered how firms and job seekers make connections. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5

61) Alan works in the HR department at a manufacturing firm, and his primary responsibility is to use the firm's Web site to monitor and coordinate recruitment activities. Which term most likely describes Alan's position at the firm? A) Webmaster B) data analyst C) Internet recruiter D) technical recruiter Answer: C Explanation: C) The Internet recruiter, also called a "cyber recruiter," is a person whose primary responsibility is to use the Internet in the recruitment process. Most companies currently post jobs on their corporate career Web site. Individuals must be in place to monitor and coordinate these activities. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 5 62) An employee whose primary task is to use the Internet in the recruitment process is best known as a(n) ________. A) online manager B) IT recruiter C) cyber recruiter D) headhunter Answer: C Explanation: C) The Internet recruiter, also called a "cyber recruiter," is a person whose primary responsibility is to use the Internet in the recruitment process. Most companies currently post jobs on their corporate career Web site. Individuals must be in place to monitor and coordinate these activities. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5 63) An event at a local university allowed students to visit virtual employer booths and submit their résumés online 24 hours a day, seven days a week. What is this recruitment method called? A) mass recruiting B) universal recruiting C) virtual job fair D) corporate job board Answer: C Explanation: C) A virtual job fair is an online recruiting method engaged in by a single employer or group of employers to attract a large number of applicants. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 5 24 Copyright © 2016 Pearson Education, Inc.

64) Heather is searching for a job as a software designer. She is currently reviewing available positions on Cisco's Web site to determine if any openings at the firm match her qualifications. Which of the following terms best describes the Web site that Heather is using to find a job? A) human resources Web site B) corporate career Web site C) recruiting Web site D) niche Web site Answer: B Explanation: B) Corporate career Web sites are job sites accessible from a company homepage that list the company positions available and provide a way for applicants to apply for specific jobs. They have become a major resource for both job seekers and companies seeking new employees. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 5 65) Which term refers to a job site that is accessible from a company homepage that lists available jobs at the company and provides a way for applicants to apply for jobs? A) corporate career Web site B) Internet niche job board C) corporate Weblog D) general purpose job board Answer: A Explanation: A) Corporate career Web sites are job sites accessible from a company homepage that list the company positions available and provide a way for applicants to apply for specific jobs. They have become a major resource for both job seekers and companies seeking new employees. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5

66) Which of the following is a characteristic of an effective corporate career Web site? A) indicates appraisal methods B) specifies health benefit plans C) provides a brief job description D) promotes the firm in a positive tone Answer: D Explanation: D) A career Web site should be upbeat and informative. It should be used as a selling device that promotes the company to prospective job candidates. Writing effective recruitment ads on the Internet is different from the short, one-inch-column ads in the Sunday newspaper. The Internet provides enough space to fully describe the job, location, and company. A good Web site should provide a feeling of the kind of corporate culture that exists within the company. Difficulty: Challenging Skill: Concept AACSB: Information technology Learning Obj.: 5 67) Employers and employment agencies are using Weblogs to ________. A) share information about job applicants B) discuss company policies and procedures C) conduct background checks of applicants D) hire contingent workers for short-term projects Answer: C Explanation: C) Weblogs, or blogs, have changed the ways in which individuals access information. Some employers and employment agencies have discovered that blogging is a way to do detailed and stealthy background checks. Difficulty: Challenging Skill: Concept AACSB: Information technology Learning Obj.: 5 68) Natalie is using Monster.com and CareerBuilder.com in her job search. These sites are examples of ________. A) Weblogs B) cyber recruiters C) corporate career Web sites D) general-purpose job boards Answer: D Explanation: D) Firms use general-purpose job boards, such as Monster.com and CareerBuilder.com, by typing in key job criteria, skills, and experience, and indicating their geographic location. Job seekers can search for jobs by category, experience, education, location, or any combination of categories. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 5 26 Copyright © 2016 Pearson Education, Inc.

69) Experts suggest that general-purpose job boards, such as Monster.com, are best for job seekers in professions ________. A) that require graduate level degrees B) that require technological skills C) within small industries D) with high-turnover Answer: D Explanation: D) Many believe that the general-purpose big job boards are best for job seekers in professions that experience high turnover, like sales, but often are less effective for highly qualified applicants or those looking for work in smaller industries. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5 70) Which of the following is a national recruiting network and suite of Web-based recruiting and career services automation tools for colleges, employers, and job candidates? A) CareerBuilder.com B) Monster.com C) NACElink Network D) AllianceQ database Answer: C Explanation: C) The NACElink Network, the result of an alliance among the National Association of Colleges and Employers, DirectEmployers Association, and Symplicity Corporation, is a national recruiting network and suite of Web-based recruiting and career services automation tools serving the needs of colleges, employers, and job candidates. The system includes three components: job posting, résumé database, and interview scheduling. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 71) Which of the following is NOT one of the components of the NACElink Network? A) job posting B) résumé database C) interview scheduling D) virtual interviewing Answer: D Explanation: D) The NACElink Network, the result of an alliance among the National Association of Colleges and Employers, DirectEmployers Association, and Symplicity Corporation, is a national recruiting network and suite of Web-based recruiting and career services automation tools serving the needs of colleges, employers, and job candidates. The system includes three components: job posting, résumé database, and interview scheduling. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5 27 Copyright © 2016 Pearson Education, Inc.

72) AllianceQ is best described as a(n) ________. A) alliance of colleges and employers B) shared pool of job candidates C) general-purpose job board D) international niche site Answer: B Explanation: B) In a potential blow to headhunters and a boost to managers seeking to slash recruiting costs, certain large companies have begun pooling job candidates through a consortium known as AllianceQ. Those passed over by one company are invited to submit their résumés to the AllianceQ database. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5 73) What are Web sites that cater to a specific profession called? A) niche sites B) Weblogs C) Web links D) contract sites Answer: A Explanation: A) Sites that specialize by industry and level of employment are becoming much more common. Niche sites are Web sites that cater to highly specialized job markets such as a particular profession, industry, education, location, or any combination of these specialties. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5 74) Which of the following is NOT a niche site? A) dice.com B) monster.com C) TVjobs.com D) joyjobs.com Answer: B Explanation: B) Niche sites are Web sites that cater to highly specialized job markets such as a particular profession, industry, education, location, or any combination of these specialties. Monster.com is a general-purpose job board, while the other sites are for niche markets. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5

75) Jeff wants to find a job in the technical field. Which niche site would be most beneficial to Jeff? A) cfo.com B) joyjobs.com C) dice.com D) coolworks.com Answer: C Explanation: C) Dice.com is a niche site with postings for technical jobs. Difficulty: Easy Skill: Application AACSB: Information technology Learning Obj.: 5 76) What can be said about general-purpose job board? A) the use of general-purpose job boards has decreased B) the use of general-purpose job boards has increased C) the use of general-purpose job boards is ineffective for job seekers in professions that experience high turnover D) the use of general-purpose job boards is effective for attracting applicants for executive-level jobs Answer: A Explanation: A) Firms use general-purpose job boards by typing in key job criteria, skills, and experience, and indicating their geographic location. Job seekers can search for jobs by category, experience, education, location, or any combination of categories. General-purpose job boards continue to attract large number of applicants, but their use has declined somewhat in recent years. Many believe that the general-purpose big job boards are best for job seekers in professions that experience high turnover like sales but often are less effective for highly qualified applicants or those looking for work in smaller industries. They are also not as effective in finding jobs for senior level positions because most firms prefer referrals or Web sites such as LinkedIn. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5 77) Contingent workers have a non-traditional relationship with worksite employers and work as part-timers, temporaries, or independent contractors. Answer: TRUE Explanation: Contingent workers, described as the "disposable workforce," have a nontraditional relationship with the worksite employer and work as part-timers, temporaries, or independent contractors. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

78) Contingent workers offer employers flexibility, which is important in an unstable economy. Answer: TRUE Explanation: Contingent workers are the human equivalents of just-in-time inventory. These disposable workers permit maximum flexibility for the employer and lower labor costs. Historically, contingent workers have been called the bookends of recessions. They are the first to go when a recession begins and the last to be recalled when the economy gets better. However, toward the end of the recent recession, many companies were reversing this trend and following the strategy of holding off on the hiring of regular full-time employees and choosing instead to use contingent workers. Companies are now using contingent workers as a continuing strategy in both good and bad times. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 79) Mobile recruiting involves holding job fairs, offering internships, hosting open houses, and visiting community colleges and vocational schools. Answer: FALSE Explanation: Mobile recruiting involves the use of mobile apps to post jobs, run text messagebased recruiting campaigns, create online communities for potential new hires to learn about their companies, monitor social networks for news about industries they hire for, and keep in touch with staff and outside agencies. These tasks previously had to be done from a desktop or laptop computer. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 80) The cyber recruiter uses the Internet to monitor and coordinate a firm's recruitment activities. Answer: TRUE Explanation: The Internet recruiter, also called a "cyber recruiter," is a person whose primary responsibility is to use the Internet in the recruitment process. Most companies currently post jobs on their corporate career Web site. Individuals must be in place to monitor and coordinate these activities. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5

81) Virtual job fairs are accessible from a company homepage that lists the company positions available and provides a way for applicants to apply for specific jobs. Answer: FALSE Explanation: A virtual job fair is an online recruiting method engaged in by a single employer or group of employers to attract a large number of applicants. Corporate career Web sites are job sites accessible from a company homepage that list the company positions available and provide a way for applicants to apply for specific jobs. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5 82) Recently, corporate career Web sites are becoming more accessible to job seekers through handheld mobile devices. Answer: TRUE Explanation: Of late, another dimension has entered the equation with regard to making the corporate career Web site accessible to job seekers. Now it is important that job boards and recruitment sites are easy to use on handheld mobile devices. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5 83) Employers and employment agencies use blogging to conduct background checks on job applicants. Answer: TRUE Explanation: Weblogs, or blogs, have changed the ways in which individuals access information. Some employers and employment agencies have discovered that blogging is a way to do detailed and stealthy background checks. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5 84) The NACElink Network is a general purpose job board. Answer: FALSE Explanation: The NACElink Network is the result of an alliance among the National Association of Colleges and Employers, DirectEmployers Association, and Symplicity Corporation. It is a national recruiting network and suite of Web-based recruiting and career services automation tools serving the needs of colleges, employers, and job candidates. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 5

85) Freelance.com and guru.com are Web sites for contract workers to advertise their skills. Answer: TRUE Explanation: Contract workers are part of the contingent workforce and an alternative to recruitment. Sites such as freelance.com and guru.com assist these workers. These sites let workers advertise their skills, set their price, and pick an employer. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5 86) What is the contingent workforce? What is the outlook for the contingent workforce going forward? Answer: Contingent workers are those who do not have an implicit or explicit contract for ongoing employment. Persons who do not expect to continue in their jobs for such personal reasons as retirement or returning to school are not considered contingent workers, provided that they would have the option of continuing in the job were it not for these reasons. Given the slowly recovering job market since the economic downturn ended in 2009, the prevalence of contingent workers in companies is noteworthy. Contingent workers are the human equivalents of just-in-time inventory. These disposable workers permit maximum flexibility for the employer and lower labor costs. Historically, contingent workers have been called the bookends of recessions. They are the first to go when a recession begins and the last to be recalled when the economy gets better. However, toward the end of the recent recession, many companies were reversing this trend and following the strategy of holding off on the hiring of regular full-time employees and choosing instead to use contingent workers. Companies are now using contingent workers as a continuing strategy in both good and bad times. The latest recession caused companies to rethink the way work gets done. This brought a refocus on the use of contingent workers, who can be added or cut as demand requires. In fact, the pace of contingent job growth suggests a shift toward more use of temporary labor at the expense of permanent jobs. A recent study found that high-performing organizations have increased their use of contingent workers from traditional administrative positions to technical support, operations, and high-skilled professional positions, including engineering, legal, and finance. If the use of contingent workers is indeed the trend, the manner that human resource is practiced will experience considerable change. Difficulty: Challenging Skill: Synthesis AACSB: Information technology Learning Obj.: 5

87) What should a company have if it is likely to attract unsolicited applicants? A) above average base pay B) well-designed web interface to facilitate making application C) positive image or employer brand D) sign-on bonuses Answer: C Explanation: C) A company must have a positive image or employer brand to attract unsolicited applicants. If an organization has the reputation of being a good place to work, it may be able to attract qualified prospects even without extensive recruitment efforts. Acting on their own initiative, well-qualified workers may seek out a specific company to apply for a job. Unsolicited applicants who apply because they are favorably impressed with the firm's reputation often prove to be valuable employees. In the Internet age, applicants can go to the firm's corporate career Web site and walk in by making an application online. Compensation such as base pay and signon bonuses are more likely to be relevant considerations after an applicant is offered a job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 88) What traditional recruitment method communicates the firm's employment needs to the public through media such as newspapers and industry publications? A) internships B) recruiters C) job fairs D) advertising Answer: D Explanation: D) Advertising communicates the firm's employment needs to the public through media such as newspapers, trade journals, radio, television, and billboards. Although few individuals base their decision to change jobs on advertising, ads create awareness, generate interest, and encourage a prospect to seek more information about the firm and the job opportunities that it provides. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

89) Maria, an HR manager at a software firm, wants a low cost method for generating broad interest in her firm to attract job candidates. Which of the following would be the best method for Maria to use? A) TV ad B) billboard C) career fair D) newspaper ad Answer: D Explanation: D) A traditional common form of advertising that provides broad coverage at a relatively low cost is the newspaper ad. Radio, billboards, and television are likely to be more expensive than newspapers or journals, but, in specific situations, they may prove successful. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 6 90) Jack, an HR manager at an electronics firm, has been informed that he needs to hire twenty technicians immediately. Which of the following would most likely be the best method for quickly attracting experienced technicians? A) job fair B) event recruiting C) radio advertisement D) newspaper advertisement Answer: C Explanation: C) In situations in which hiring needs are urgent, television and radio may provide good results. Broadcast messages can let people know that an organization is seeking recruits. Job fairs, event recruiting, and newspaper ads are less likely to recruit candidates quickly. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 91) Which of the following is primarily used to recruit white collar employees for specific niches in the job market? A) private employment agency B) community job fair C) radio advertising D) special event Answer: A Explanation: A) Private employment agencies, often called "head hunters," are best known for recruiting white collar employees and offer an important service in bringing qualified applicants and open positions together. Today, private employment agencies often specialize in filling a particular niche in the job market. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 34 Copyright © 2016 Pearson Education, Inc.

92) Individuals are often turned off by private employment agencies because of their ________. A) lack of technology B) inconvenience C) requirements D) fees Answer: D Explanation: D) Private employment agencies' fees can range up to 35 percent of a person's first year salary. The one-time fees that some agencies charge often turn off candidates, although many private employment agencies deal primarily with firms that pay the fees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 93) ________ are operated by each state but receive overall policy direction from the U.S. Employment Service. A) Newspapers B) Special events agencies C) Private recruitment agencies D) Public employment agencies Answer: D Explanation: D) Public employment agencies are operated by each state but receive overall policy direction from the U.S. Employment Service. Public employment agencies have become increasingly involved in matching people with technical, professional, and managerial positions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 94) Which of the following would most likely operate a public employment agency located in Albany, New York? A) EEOC B) City of Albany C) State of New York D) Department of Labor Answer: C Explanation: C) Public employment agencies are operated by each state but receive overall policy direction from the U.S. Employment Service. Therefore, a public employment agency in Albany, New York would be operated by the State of New York. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

95) Which of the following pays for the services provided by public employment agencies? A) state governments that run the agencies B) employees who are placed in jobs C) individuals who apply for jobs D) employers who hire workers Answer: A Explanation: A) Public employment agencies are operated by each state but receive overall policy direction from the U.S. Employment Service. Public employment agencies have become increasingly involved in matching people with technical, professional, and managerial positions. The government covers the costs of their services. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 96) Technical and vocational schools, community colleges, colleges, and universities are the primary focus of ________. A) public recruitment agencies B) private employment agencies C) executive search firms D) recruiters Answer: D Explanation: D) Recruiters most commonly focus on technical and vocational schools, community colleges, colleges, and universities. Some firms are using videoconferencing with equipment at both corporate headquarters and on college campuses. Recruiters can communicate with college career counselors and interview students through a videoconferencing system without leaving the office. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 97) The student placement director at a university helps corporate recruiters in all of the following ways EXCEPT ________. A) negotiating salaries and benefits B) identifying qualified candidates C) providing interview rooms D) scheduling interviews Answer: A Explanation: A) The key contact for recruiters on college and university campuses is often the student placement director. Placement services identify qualified candidates, schedule interviews, and provide suitable rooms for interviews, but they are not involved in negotiations. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 36 Copyright © 2016 Pearson Education, Inc.

98) Which of the following is an effort on the part of a single employer or group of employers to attract a large number of applicants to one location for interviews? A) mass recruiting B) event recruiting C) job board D) job fair Answer: D Explanation: D) A job fair is a recruiting method engaged in by a single employer or group of employers to attract a large number of applicants to one location for interviews. From an employer's viewpoint, a primary advantage of job fairs is the opportunity to meet a large number of candidates in a short time. Conversely, applicants may have convenient access to a number of employers. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 99) Which method of external recruiting is designed primarily for students? A) radio advertising B) employment agencies C) internships D) employee referrals Answer: C Explanation: C) An internship is a special form of recruitment that involves placing a student in a temporary job with no obligation either by the company to hire the student permanently or by the student to accept a permanent position with the firm following graduation. An internship typically involves a temporary job for the summer months or a part-time job during the school year. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

100) Which recruitment method especially aids students in determining whether a given company would be a desirable employer? A) college recruiting B) job analysis C) event recruiting D) internship Answer: D Explanation: D) An internship is a special form of recruitment that involves placing a student in a temporary job with no obligation either by the company to hire the student permanently or by the student to accept a permanent position with the firm following graduation. An internship typically involves a temporary job for the summer months or a part-time job during the school year and helps students and employers determine if the match is a good one. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 101) Organizations used by firms to locate experienced professionals when other sources prove inadequate are referred to as ________. A) employee leasing firms B) executive search firms C) private employment agencies D) professional associations Answer: B Explanation: B) Executive search firms are organizations used by some firms to locate experienced professionals and executives when other sources prove inadequate. The key benefit of executive search firms is the targeting of ideal candidates. In addition, the search firm can find those not actively looking for a job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

102) A representative from an executive search firm would most likely ________. A) write a potential job candidate's résumé to match the client's needs B) temporarily hire employees for a client to train and interview C) interview a client's managers about the required job qualifications D) create newspaper advertisements for a client's available positions Answer: C Explanation: C) An executive search firm's representatives often visit the client's offices and interview the company's management. This enables them to gain a clear understanding of the company's goals and the job qualifications required. After obtaining this information, they contact and interview potential candidates, check references, and refer the best-qualified person to the client for the selection decision. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 103) Which of the following is LEAST likely to be offered by a professional association? A) job referral services B) recruitment services C) reduced headhunter fees D) Web site job advertisements Answer: C Explanation: C) Virtually every professional group publishes a journal and has a Web site that is widely used by its members. Many professional associations provide recruitment and placement services for their members. Jobs advertised are placed in the journal in hard copy and also advertised on the professional group's Web site. Professional associations are less likely to offer reduced fees for executive recruiters. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

104) An organization that has a reputation of being a good place to work will most likely ________. A) receive unsolicited applications B) participate in college recruiting C) sponsor local events D) hold open houses Answer: A Explanation: A) If an organization has the reputation of being a good place to work, it may be able to attract qualified prospects even without extensive recruitment efforts, such as college recruiting, event recruiting, or open houses. Acting on their own initiative, well-qualified workers may seek out a specific company to apply for a job. Unsolicited applicants who apply because they are favorably impressed with the firm's reputation often prove to be valuable employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 105) Which recruitment method pairs potential hires and managers in a warm, casual environment that encourages on-the-spot job offers? A) college internships B) university recruiting C) employee referrals D) open houses Answer: D Explanation: D) Open houses are a valuable recruiting tool, especially during days of low unemployment. Here, firms pair potential hires and recruiters in a warm, casual environment that encourages on-the-spot job offers. Open houses are cheaper and faster than hiring through recruitment agencies, and they are also more popular than job fairs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

106) Recruiters who go to marathons or bike races that are attended by individuals the company is seeking are participating in ________. A) event recruiting B) special event C) open houses D) job fairs Answer: A Explanation: A) Event recruiting involves having recruiters go to events being attended by individuals the company is seeking. Cisco Systems pioneered event recruiting as a recruitment approach. In the case of programmers in the Silicon Valley, the choice spots have been marathons and bike races. Companies that participate in these events become involved in some way that promotes their name and cause. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 107) Which recruitment method gives a company the opportunity to reflect its image by promoting its name and a specific cause? A) open houses B) event recruiting C) virtual job fairs D) internships Answer: B Explanation: B) Event recruiting involves having recruiters go to events being attended by individuals the company is seeking. Companies that participate in events, such as bike races or marathons, promote their name and cause and have a chance to reflect their image to potential job candidates. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

108) In 2014, ________ of firms surveyed by NACE offered signing bonuses. A) 55 percent B) 47 percent C) 42 percent D) 50 percent Answer: B Explanation: B) Employers use sign-on bonuses to attract top talent, particularly in high-demand fields such as health care, sales, marketing, and accounting. Bonuses allow a firm to pay a premium to attract individuals without dramatically upsetting its salary scale. Even as Wall Street continued to lay off workers, some firms were offering sign-on bonuses for top management talent. NACE's Job Outlook 2014 survey, 47 percent of employers planned to offer signing bonuses to college graduates. Signing bonuses are most commonly found in the utilities, transportation, management consulting, and pharmaceutical manufacturing industry. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 109) What is the primary reason that employers use sign-on bonuses? A) eliminate the need to offer costly stock-options B) attract talented workers in high-demand fields C) recruit young, energetic workers into sales jobs D) encourage workers to apply for technical jobs Answer: B Explanation: B) Employers use sign-on bonuses to attract top talent, particularly within highdemand fields such as health care, sales, marketing, accounting, and finance. Employers are not necessarily trying to attract young workers, but those that exhibit skills. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 110) What recruitment method was Google using when it sponsored its Code Jam? A) Internet recruiting B) competitive games C) event recruiting D) open house Answer: B Explanation: B) Google uses competitive games to get individuals interested in applying for technical positions. It sponsors an annual computer programming competition, Google Code Jam, in which students from around the world enter and the winners of the competition are sure to be noticed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 42 Copyright © 2016 Pearson Education, Inc.

111) Google uses competitive games as a means to ________. A) earn advertising revenue B) attract the general public to its search engine C) market its Android operating system D) identify top talent for potential employment Answer: D Explanation: D) Google has a unique way to get individuals interested in applying for technical positions. Google Code Jam is an international programming competition hosted and administered by Google. The competition began in 2003 as a means to identify top engineering talent for potential employment. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 112) Certain media attract audiences that are more homogeneous in terms of employment skills, education, and orientation. Answer: TRUE Explanation: Certain media attract audiences that are more homogeneous in terms of employment skills, education, and orientation. Advertisements placed in publications such as the Wall Street Journal relate primarily to managerial, professional, and technical positions. The readers of these publications are generally individuals qualified for many of the positions advertised. Focusing on a specific labor market minimizes the likelihood of receiving marginally qualified or even totally unqualified applicants. Like most professional publications, jobs that are advertised in the paper copy of the Journal are also available on the publication's Web site. Journals specific to particular trades are also widely used. For example, Automotive News might have jobs related to the automobile industry and American Drycleaner likely will list jobs in the dry cleaning business. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 113) Sign-on bonuses are NOT used as a recruiting tool. Answer: FALSE Explanation: Employers use sign-on bonuses to attract top talent, particularly in high-demand fields such as health care, sales, marketing, and accounting. Bonuses allow a firm to pay a premium to attract individuals without dramatically upsetting its salary scale. Even as Wall Street continued to lay off workers, some firms were offering sign-on bonuses for top management talent. NACE's Job Outlook 2014 survey, 47 percent of employers planned to offer signing bonuses to college graduates. Signing bonuses are most commonly found in the utilities, transportation, management consulting, and pharmaceutical manufacturing industry. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 43 Copyright © 2016 Pearson Education, Inc.

114) Public employment agencies are operated by the federal government and given policy direction through the EEOC. Answer: FALSE Explanation: Public employment agencies are operated by each state but receive overall policy direction from the U.S. Employment Service. Public employment agencies have become increasingly involved in matching people with technical, professional, and managerial positions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 115) An internship allows students to contribute to a firm and to observe business practices firsthand. Answer: TRUE Explanation: During the internship, the student gets to view business practices firsthand. At the same time, the intern contributes to the firm by performing needed tasks. In addition to other benefits, internships provide opportunities for students to bridge the gap from business theory to practice. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 116) As a form of recruitment, internships involve placing a student in a permanent job to help pay for his or her college tuition. Answer: FALSE Explanation: An internship is a special form of recruitment that involves placing a student in a temporary job with no obligation either by the company to hire the student permanently or by the student to accept a permanent position with the firm following graduation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

117) What would be the most likely external recruitment source for a firm that has an immediate need for an experienced IT manager? A) universities B) competitors C) vocational schools D) self-employed individuals Answer: B Explanation: B) Firms with an immediate need for a skilled IT manager would most likely look at a competitor's employees. Universities, vocational schools, and self-employed individuals are less likely sources in this case. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 118) HealthCorp has an immediate need for an experienced IT manager. The firm's HR manager has decided that the best external source for the position is the firm's competitors in the labor market. Which of the following methods would most likely be LEAST effective for HealthCorp? A) media advertising B) competitive games C) executive search firm D) professional association Answer: B Explanation: B) It would most likely be appropriate for HealthCorp to advertise the job in the newspaper or online. Alternatively, an executive search firm may serve as viable options. In addition, the recruiter may attend meetings of professional information technology associations. One or more of these methods will likely yield a pool of qualified applicants but using competitive games would be less likely to fill the position quickly or attract experienced individuals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

119) What would be the most likely external recruitment source for a firm that needs 30 entrylevel machine operators? A) vocational schools B) community colleges C) state universities D) former military soldiers Answer: A Explanation: A) For a firm that needs numerous entry-level machine operators, high schools and vocational schools would be good recruitment sources. Methods of recruitment might include newspaper ads, public employment agencies, recruiters, visiting vocational schools, and employee referrals. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 120) U.S. Manufacturing needs to hire 30 entry-level machine operators, which the firm will train. Which recruitment method would most likely be appropriate for the firm? A) public employment agencies B) professional associations C) private employment agencies D) executive search firms Answer: A Explanation: A) Public employment agencies would be the best source for finding appropriate applicants for U.S. Manufacturing. Professional associations would not be the best source in this case because the firm needs entry-level applicants. Private employment agencies and executive search firms are best known for recruiting white-collar employees and managers rather than entry-level workers. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

121) Which one of the following is not typical of passive job seekers? A) They are looking for a new challenge. B) They are employed. C) They are happy with their employer. D) They are content in their current role. Answer: A Explanation: A) Passive job seekers are potential job candidates who are typically employed, satisfied with their employer, and content in their current role. But, if the right opportunity came along, they might like to learn more. These individuals want to move slower and will ask a lot of questions before making a job change. They are more hesitant to risk leaving a good job for a new challenge and increased risk. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 122) A firm's recruitment process would most likely be easier if the unemployment rate in an organization's labor market was ________. A) low B) high C) average D) fluctuating Answer: B Explanation: B) Of particular importance to the success of recruitment is the demand for and supply of specific skills in the labor market. In general, a firm's recruitment process is often simplified when the unemployment rate in an organization's labor market is high. The number of unsolicited applicants is usually greater, and the increased size of the labor pool provides a better opportunity for attracting qualified applicants. However, if demand for a particular skill is high relative to supply, an extraordinary recruiting effort may be required. Further, the area where recruitment takes place often impacts the labor market conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

123) Michael is presently employed as a loan officer at a local bank, but dislikes his job. Michael has posted his résumé on Monster.com and CareerBuilder.com in hopes of landing a job at another organization. Which of the following best describes Michael? A) contingent worker B) active job seeker C) contract employee D) passive candidate Answer: B Explanation: B) Active job seekers, whether presently employed or not, are committed to finding another job. They place their résumés on job boards and contact friends, associates, or companies to learn about job opportunities. Passive candidates, on the other hand, are typically employed, satisfied with their employer, and content in their current role. However, if the right opportunity came along, they might like to learn more. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 124) Erin is presently employed as a public relations specialist at a news organization. Erin enjoys her job and the company. Recently, Erin learned of an available position at an advertising agency that sounds interesting. Erin is gathering information about the position, although she is unsure whether leaving her current job would be wise. Which of the following best describes Erin? A) contingent worker B) active job seeker C) contract employee D) passive candidate Answer: D Explanation: D) Passive candidates are typically employed, satisfied with their employer, and content in their current role. However, if the right opportunity came along, they might like to learn more. Active job seekers, whether presently employed or not, are committed to finding another job. They place their résumés on job boards and contact friends, associates, or companies to learn about job opportunities. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

125) Kelly and Associates employs 150 people. According to the EEOC guidelines, the firm should keep recruitment records for a minimum of ________. A) six months B) one year C) two years D) five years Answer: C Explanation: C) EEOC guidelines suggest that companies with more than 100 employees keep staffing records for a minimum of two years. The threshold coverage is 50 employees if dealing with the Office of Federal Contract Compliance Programs (OFCCP). Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 126) The EEOC and OFCCP require firms to keep their staffing records in order to ________. A) ensure that qualified individuals are filling positions B) gather statistical information for federal tax purposes C) assess whether a firm's hiring practices are discriminatory D) create publication materials about firms in various industries Answer: C Explanation: C) EEOC and OFCCP guidelines suggest that companies keep staffing records for a minimum of two years. This information enables a compilation of demographic data, including age, race, and gender, based on that applicant pool. The EEOC uses these data to determine whether a company's hiring practices are discriminatory. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 127) According to OFCCP guidelines, which of the following does NOT describe an Internet applicant? A) A job seeker applies for a position through a firm's Web site. B) A job seeker sends an e-mail to the Webmaster of an organization. C) A job seeker has not indicated that he or she is no longer interested in a position. D) A job seeker indicates that he or she meets the position's basic qualifications. Answer: B Explanation: B) According to OCCP rules, there are four criteria to determine whether an individual is an Internet applicant. 1. The job seeker has expressed interest through the Internet. 2. The employer considers the job seeker for employment in a particular open position. 3. The job seeker has indicated he or she meets the position's basic qualifications. 4. The applicant has not indicated he or she is no longer interested in the position. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 49 Copyright © 2016 Pearson Education, Inc.

128) What is a potential problem for firms that rely too heavily on social network sites for recruiting? A) high set-up costs B) unreliable technology C) corporate poaching D) age and race discrimination Answer: D Explanation: D) Depending heavily on social networking sites for recruiting could lead to age and race discrimination suits because the sites contain few minority and older people. Also, candidates have sued companies because they believe they were rejected for a job based on content posted on their profile on a social networking site. Difficulty: Challenging Skill: Concept AACSB: Information technology Learning Obj.: 8 129) Active job seekers are always unemployed, while passive candidates are generally satisfied with their current jobs. Answer: FALSE Explanation: Active job seekers, whether presently employed or not, are committed to finding another job. These individuals are usually easier to identify because their names have been placed in the job market. Passive candidates, on the other hand, are typically employed, satisfied with their employer, and content in their current role. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 130) EEOC guidelines suggest that companies with more than 100 employees keep staffing records for a minimum of four years. Answer: FALSE Explanation: Equal Employment Opportunity Commission (EEOC) guidelines suggest that companies with more than 100 employees keep staffing records for a minimum of two years. The threshold coverage is 50 employees if dealing with the Office of Federal Contract Compliance Programs (OFCCP). Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

131) What are the advantages and disadvantages of using employee referrals for recruiting? Answer: Employee referrals continue to be the way that top performers are identified. It is just human nature that people do not want to recommend a person unless they believe they are going to fit in and be productive. Thus, it is a powerful recruiting tool. Costs associated with employee referrals are very low compared to advertising or agencies. Using referrals also reduces turnover among both new and existing employees because applicants come prescreened for culture fit. A note of caution should be observed with regard to the extensive use of employee referral. The EEOC Compliance Manual updates guidance on the prohibition of discrimination under Title VII of the Civil Rights Act of 1964. The manual explicitly warns that relying on word-of-mouth recruiting, which includes employee referral programs, may generate applicant pools that do not reflect diversity in the labor market. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 8 132) Pro-Cleaning Corporation needs additional employees, but the firm lacks the finances involved in recruiting and selection. All of the following are alternatives to recruiting that would help Pro-Cleaning EXCEPT ________. A) onshoring B) overtime pay C) implementing e-learning processes D) promotion from within Answer: C Explanation: C) Recruitment and selection costs are significant when you consider all the related expenses. Therefore, Pro-Cleaning should consider alternatives such as onshoring, overtime pay, and promotion from within before engaging in recruitment. E-learning is for training rather than recruiting. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

133) What is perhaps the most common approach to meeting short-term fluctuations in work volume? A) paying overtime B) re-hiring retirees C) leasing employees D) hiring temporary employees Answer: A Explanation: A) Perhaps the most commonly used alternative to recruitment, especially in meeting short-term fluctuations in work volume, is overtime. Overtime may help both employer and employee. The employer benefits by avoiding recruitment, selection, and training costs. The employees gain from increased income during the overtime period. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 134) All of the following are disadvantages associated with overtime EXCEPT ________. A) employees become too accustomed to the added income B) employees become too tired to work at a normal rate C) employees pace themselves to ensure overtime D) employees require additional training Answer: D Explanation: D) Employees may become fatigued and lack the energy to perform at a normal rate. Consciously or not, employees may pace themselves to ensure overtime. They may also become accustomed to the added income resulting from overtime pay and elevate their standard of living. It is less likely that employees would require additional training because they are working longer hours. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 135) The policy of filling vacancies above the entry-level positions with present employees is referred to as ________. A) promotion from within B) promotion by merit C) performance promotion D) seniority promotion Answer: A Explanation: A) Promotion from within (PFW) is the policy of filling vacancies above entrylevel positions with current employees. When an organization emphasizes promotion from within, its workers have an incentive to strive for advancement. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 52 Copyright © 2016 Pearson Education, Inc.

136) Firms are most likely using promotion from within more frequently because the policy ________. A) meets EEOC requirements B) eases the repatriation process C) improves employee motivation D) lessens the need for employee development Answer: C Explanation: C) When an organization emphasizes promotion from within, its workers have an incentive to strive for advancement. Motivation provided by this practice often improves employee morale. For this reason, managers appear to be using internal promotions more and more. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 137) A strictly applied promotion from within policy eventually leads to ________. A) morale deterioration B) inbreeding C) increased risk taking D) gainsharing Answer: B Explanation: B) A strictly applied "PFW" policy eventually leads to inbreeding, a lack of crossfertilization, and a lack of creativity. Although seldom achieved, a good goal would be to fill 80 percent of openings above entry-level positions from within. Frequently, new blood provides new ideas and innovation that must take place for firms to remain competitive. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 138) Onshoring involves moving jobs not to another country but to lower-cost American cities. Answer: TRUE Explanation: Onshoring involves moving jobs not to another country but to lower-cost American cities. Some companies might like to offshore their jobs but the government may require onshore handling of certain financial, health, and defense data. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

139) By using overtime, an employer avoids the costs and time associated with recruiting, selecting, and training employees. Answer: TRUE Explanation: Perhaps the most commonly used alternative to recruitment, especially in meeting short-term fluctuations in work volume, is overtime. Overtime may help both employer and employee. The employer benefits by avoiding recruitment, selection, and training costs. The employees gain from increased income during the overtime period. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 140) Most modern firms strive for a rigid promotion from within policy to develop a strong organizational culture and foster creativity. Answer: FALSE Explanation: Most firms do not adhere rigidly to a practice of promotion from within. A strictly applied "PFW" policy eventually leads to inbreeding, a lack of cross-fertilization, and a lack of creativity. Although seldom achieved, a good goal would be to fill 80 percent of openings above entry-level positions from within. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 141) What are some alternatives to recruitment? What are the possible benefits of using such alternatives? Answer: Outsourcing, offshoring, contingent workers, and overtime are alternatives to recruitment. Even when HR planning indicates a need for additional employees, a firm may decide against increasing the size of its workforce. Recruitment and selection costs are significant when you consider all the related expenses. Contingent workers provide firms with a high degree of flexibility, which is beneficial during financial ups and downs. Overtime minimizes the need to select and train new employees. Therefore, a firm should consider these alternatives before engaging in recruitment. Difficulty: Easy Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 9

142) What is a promotion from within policy? What are the advantages and disadvantages of such a policy? Answer: Promotion from within (PFW) is the policy of filling vacancies above entry-level positions with current employees. When an organization emphasizes promotion from within, its workers have an incentive to strive for advancement. When employees see co-workers promoted, they become more aware of their own opportunities. Motivation provided by this practice often improves employee morale. Another advantage of internal recruitment is that the organization is usually well aware of its employees' capabilities. The employee has a track record, as opposed to being an unknown entity. Also, the company's investment in the individual may yield a higher return. Still another positive factor is the employee's knowledge of the firm, its policies, and its people. However, a strictly applied "PFW" policy eventually leads to inbreeding, a lack of crossfertilization, and a lack of creativity. New blood provides new ideas and innovation that must take place for firms to remain competitive. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 9 143) Ultra Cosmetics is in the process of hiring an external provider to handle all of the firm's administrative tasks, which were once handled internally. Ultra Cosmetics is most likely participating in ________. A) broadbanding B) outsourcing C) employee leasing D) recruiting Answer: B Explanation: B) Outsourcing is the process of hiring an external provider to do the work that was previously done internally. Outsourcing has become a widespread and increasingly popular alternative involving virtually every business area. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

144) Soundgear Electronics recently shifted all of its customer support services to a vendor in India. Soundgear is most likely involved in the activity of ________. A) telecommuting B) offshoring C) recruiting D) staffing Answer: B Explanation: B) Offshoring refers to the migration of all or a significant part of the development, maintenance and delivery of services to a vendor located in another country, typically in developing countries like India and China. Offshoring is considered an alternative to recruiting. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 145) The trend in bringing offshored jobs back to the United States is known as ________. A) recapturing B) reshoring C) regaining D) reestablishing Answer: B Explanation: B) Reshoring is the reverse of offshoring and involves bringing work back to the United States. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 146) Which of the following is not contributing to reshoring-bringing offshored work back to the United States? A) the decline in value of the U.S. dollar B) decreasing labor costs in overseas countries C) higher costs for packaging and inventory D) rising costs for currency exchange Answer: B Explanation: B) Reshoring is the reverse of offshoring and involves bringing work back to the United States. A number of factors are fueling the reshoring trend. Some of the reasons cited included rising costs for currency exchange, transportation, and labor in countries that were once much less expensive. There are often hidden expenses such as higher costs for travel, packaging, shipping, and inventory. In addition, wages have been rising in countries where manufacturing has been outsourced. Also, the decline of the U.S. dollar has provided a fiscal climate advantageous to manufacturing machine tools in North America. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 56 Copyright © 2016 Pearson Education, Inc.

147) The migration of all or a significant part of the development, maintenance, and delivery of services to an overseas vendor is known as outsourcing. Answer: FALSE Explanation: Offshoring refers to the migration of all or a significant part of the development, maintenance and delivery of services to a vendor located in another country, typically in developing countries like India and China. Outsourcing is the process of hiring an external provider to do the work that was previously done internally but not necessarily to an overseas vendor. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 148) Outsourcing is the process of hiring an external provider to do the work that was previously done internally. Answer: TRUE Explanation: Outsourcing is the process of hiring an external provider to do the work that was previously done internally. Outsourcing has become a widespread and increasingly popular alternative involving virtually every business area. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 149) Reshoring is the reverse of offshoring and involves bringing work back to the United States. Answer: TRUE Explanation: Reshoring is the reverse of offshoring and involves bringing work back to the United States. Advocates of reshoring believe that manufacturers should calculate the total impact of offshoring because there are often hidden expenses such as higher costs for travel, packaging, shipping, and inventory. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

150) What are offshoring and reshoring? Identify the trends that are compelling companies to consider each. Answer: Offshoring is the migration of all or a significant part of the development, maintenance, and delivery of services to a company located in another country. From a recruitment standpoint, the shift moves from a labor pool in the home country to labor pools in overseas countries where business is being transplanted. With rare exception, employees do not move with the jobs. Traditionally, the reason given for offshoring is to reduce costs. Today, increased quality service is also being given as reasons for offshoring. Another rationale is labor cost savings because wages and salaries in many other countries, particularly in Asia, have generally been lower than in the United States. Offshoring growth concentrates in information technology, software development, and innovation services (product design, research and development, and engineering services). However, offshoring activities increasingly are being reversed. Reshoring is the reverse of offshoring and involves bringing work back to the United States. Advocates of reshoring believe that manufacturers should calculate the total impact of offshoring because there are often hidden expenses such as higher costs for travel, packaging, shipping, and inventory. Also, rising wages in countries where wages were predominantly lower have contributed to reshoring activities. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 10

Human Resource Management, 14e (Mondy) Chapter 6 Selection 1) Members of Congress who claim that E-Verify fails to prevent employers from hiring illegal immigrants advocate replacing the system with one based on ________. A) nanotechnology B) fingerprinting C) graphology D) biometrics Answer: D Explanation: D) A biometric identification card is the primary focus of immigration reform legislation advocated by Schumer. It would be the primary tool in a national system for identifying people. Biometrics deal with a variety of traits that are not subject to change, including fingerprints, facial patterns, eye retinas and irises, venous patterns of the hands, and hand and palm geometry. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) What is the primary criticism against a national identification system based on biometric data? A) EEOC laws B) political risks C) immigration influxes D) privacy and security risks Answer: D Explanation: D) A biometric identification card is the primary focus of immigration reform legislation being debated in Congress. It would be the primary tool in a national system for identifying people. To accomplish this, every U.S. worker would have to present a birth certificate and other identification documents, then have his or her biometric, such as a fingerprint, captured. Some say such databases would create privacy and security risk, while others argue that the government already has considerable information on each of us. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

3) Which term refers to the process of choosing from a group of qualified applicants the individual best suited for a particular position? A) recruitment B) selection C) HR planning D) job bidding Answer: B Explanation: B) Selection is the process of choosing from a group of applicants the individual best suited for a particular position and the organization. Properly matching people with jobs and the organization is the goal of the selection process. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 4) Which of the following is the primary factor that determines the success or failure of a company? A) visionary business strategy B) high-tech control systems C) sound organizational structure D) competent employees Answer: D Explanation: D) If a firm hires many bad apples, it cannot be successful for long even if it has perfect plans, a sound organizational structure, and finely tuned control systems. Competent people must be available to ensure the attainment of organizational goals. Today, with many firms having access to the same technology, people make the real difference. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) Selection is the process of choosing from a group of applicants the individual best suited for a particular position and organization. Answer: TRUE Explanation: Selection is the process of choosing from a group of applicants the individual best suited for a particular position and the organization. Properly matching people with jobs and the organization is the goal of the selection process. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 1

6) Hiring the wrong person is time consuming but has little monetary or emotional impact on the firm and its employees. Answer: FALSE Explanation: A firm that selects high-quality employees reaps substantial benefits, which recur every year the employee is on the payroll. On the other hand, poor selection decisions can cause irreparable damage. A bad hire can negatively affect the morale of the entire staff, especially in a position where teamwork is critical. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 1 7) Why is employee selection important? How can applicant tracking systems improve the selection process? Answer: Selection is the process of choosing from a group of applicants the individual best suited for a particular position and the organization. Properly matching people with jobs and the organization is the goal of the selection process. If individuals are overqualified, underqualified, or for any reason do not fit either the job or the organization's culture, they will be ineffective and probably leave the firm, voluntarily or otherwise. There are many ways to improve productivity, but none is more powerful than making the right hiring decision. A firm that selects high-quality employees reaps substantial benefits, which recur every year the employee is on the payroll. On the other hand, poor selection decisions can cause irreparable damage. A bad hire can negatively affect the morale of the entire staff, especially in a position where teamwork is critical. An applicant tracking system (ATS) is a software application designed to help an enterprise select employees more efficiently. They often involve screening résumés and spotting qualified candidates, conducting personality and skills tests, and handling background checks. In most cases, the goal is not merely to reduce costs but also to speed up the hiring process and find people who fit an organization's success profile. Difficulty: Challenging Skill: Synthesis AACSB: Information technology Learning Obj.: 1, 2

8) The selection process typically begins with the ________. A) application review B) employment interview C) background check D) preliminary interview Answer: D Explanation: D) The selection process varies by organization, but it typically begins with preliminary screening. Next, applicants complete the firm's application for employment or provide a résumé. Then they progress through a series of selection tests, one or more employment interviews, and pre-employment screening, including background and reference checks. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 9) Carlos, an HR manager, has reviewed the applications and résumés of five candidates for a data analyst position at his firm. Which of the following is the most likely next step that Carlos will take in the selection process? A) interviewing applicants for prescreening B) having applicants take physical exams C) checking applicants' references D) giving applicants selection tests Answer: D Explanation: D) The selection process varies by organization, but it typically begins with preliminary screening. Next, applicants complete the firm's application for employment or provide a résumé. Then they progress through a series of selection tests, one or more employment interviews, and pre-employment screening, including background and reference checks. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

10) What is a software application designed to help an enterprise select employees more efficiently? A) applicant tracking system B) selection tracking process C) cognitive aptitude test D) job selection system Answer: A Explanation: A) An applicant tracking system (ATS) is a software application designed to help an enterprise select employees more efficiently. Current ATSs permit human resource and line managers to oversee the entire selection process. They often involve screening résumés and spotting qualified candidates, conducting personality and skills tests, and handling background checks. Difficulty: Easy Skill: Application AACSB: Information technology Learning Obj.: 2 11) Applicant tracking systems are being redesigned to include ________. A) automated résumé ranking tools B) background check capabilities C) customized input forms D) quality-of-hire metrics Answer: D Explanation: D) Current ATS features include individual applicant tracking, requisition tracking, automated résumé ranking, background and reference checking, and input form customizing. Developers of applicant tracking systems are now focusing efforts on developing quality-of-hire metrics. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 2 12) What are the two possible outcomes of a good selection decision? A) cognitive invalid or valid B) a qualified candidate is offered employment or an unqualified candidate is not offered employment C) qualified candidate not offered employment or unqualified candidate offered employment D) low reliability or high validity Answer: B Explanation: B) A good selection decision results in either one of two outcomes. First, job candidates who do not meet the standard for employment are not offered employment. Second, job candidates who do meet the standard for employment are offered employment, and those individuals accept the company's offer of employment. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 5 Copyright © 2016 Pearson Education, Inc.

13) What is the general purpose of the selection process? What steps are involved in the selection process? Answer: The general purpose of the selection process is to determine if the applicant is qualified, to educate the candidate, and to assess his or her cultural fit. The selection process typically begins with preliminary screening. Next, applicants complete the firm's application for employment or provide a résumé. Then they progress through a series of selection tests, one or more employment interviews, and pre-employment screening, including background and reference checks. The hiring manager then offers the successful applicant a job, subject to successful completion of a medical examination. An applicant may be rejected at any time during the selection process. To a point, the more screening tools used to assess a good fit, the greater the chance of making a good selection decision. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 2 14) The primary purpose of the preliminary interview is ________. A) gathering a detailed work history from applicants B) measuring the likelihood of an applicant's success C) eliminating unqualified applicants D) determining applicant interest Answer: C Explanation: C) The basic purpose of the preliminary screening is to eliminate those who obviously do not meet the position's requirements. The preliminary screening may take the form of reviewing for obviously unqualified applicants with a brief interview, test, or only a review of the application or résumé for obvious mismatches. Later in the selection process, HR may gather a detailed work history and test and interview candidates. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 15) The selection process usually begins with the preliminary screening interview. Answer: TRUE Explanation: The selection process typically begins with preliminary screening. Next, applicants complete the firm's application for employment or provide a résumé. Then they progress through a series of selection tests, one or more employment interviews, and pre-employment screening, including background and reference checks. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

16) Preliminary screening attempts to eliminate unqualified candidates quickly. Answer: TRUE Explanation: The basic purpose of the preliminary screening is to eliminate those who obviously do not meet the position's requirements. The preliminary screening may take the form of reviewing for obviously unqualified applicants with a brief interview, test, or only a review of the application or résumé for obvious mismatches. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 17) Which of the following would LEAST likely appear as a preprinted statement on most job application forms? A) statement that the applicant's former employers will not be contacted B) statement that the applicant certifies everything on the form is true C) statement that the company is an employment at will organization D) statement that the applicant gives permission to have his or her references checked Answer: A Explanation: A) Several preprinted statements are usually included on the application form. First, by signing the form, the applicant certifies that information provided on the form is accurate and true. Employers will likely reject candidates who make false claims for major issues. Second, when not prohibited by state law, the form should also state that the position is employment at will and that either the employer or the employee can terminate employment at any time for any reason. Finally, the form should contain a statement whereby the candidate gives permission to have his or her background and references checked. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 18) Tyra, an HR manager at an automotive parts facility, received 500 online applications for 30 job openings in the production department. To determine if an applicant is qualified, Tyra will most likely compare the information provided in each application to a ________. A) job description B) job-knowledge test C) merit pay program D) gainsharing assessment Answer: A Explanation: A) Managers compare the information contained in a completed application to the job description to determine whether a potential match exists between the firm's requirements and the applicant's qualifications. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

19) Which of the following should NOT be requested on a job application form? A) experience B) education C) birthplace D) skills Answer: C Explanation: C) An employment application form must reflect not only the firm's informational needs but also Equal Employment Opportunity Commission (EEOC) requirements. Potentially discriminatory questions inquiring about such factors as gender, race, age, convictions, national origin, citizenship, birthplace, dependents, disabilities, religion, color, and marital status should not be used. Asking candidates about their experience, education, and skills is acceptable. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 20) A goal-directed summary of a person's experience, education, and training developed for use in the selection process is known as a(n) ________. A) résumé B) application form C) job requisition D) work sample test Answer: A Explanation: A) A résumé is a goal-directed summary of a person's experience, education, and training developed for use in the selection process. Professional and managerial applicants often begin the selection process by submitting a résumé. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 21) Which term refers to words or phrases that are used to search databases for résumés that match? A) application match B) job objective C) résumé hit D) keyword Answer: D Explanation: D) Keywords refer to those words or phrases that are used to search databases for résumés that match. A keyword résumé contains an adequate description of the job seeker's characteristics and industry-specific experience presented in keyword terms in order to accommodate the computer search process. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 8 Copyright © 2016 Pearson Education, Inc.

22) What type of résumé presents the job seeker's characteristics and experience in terms that accommodate the computer search process? A) cyber résumé B) hard hit résumé C) electronic résumé D) keyword résumé Answer: D Explanation: D) A keyword résumé contains an adequate description of the job seeker's characteristics and industry-specific experience presented in keyword terms in order to accommodate the computer search process. Keywords refer to those words or phrases that are used to search databases for résumés that match. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 23) Robert, a recent college graduate, is applying to accounting firms for an entry-level position. Since most large firms use applicant-tracking systems, which of the following words or phrases would be LEAST beneficial? A) problem solving B) PowerPoint 2010 C) organized D) bilingual Answer: C Explanation: C) Applicant-tracking systems look for keywords, which tend to be more of the noun or noun-phrase type (Word 2007, UNIX, Biochemist) as opposed to power action verbs often found in traditional résumés (developed, coordinated, organized). Another way to look at keyword phrases is to think in terms of job duties. According to CareerBuilder.com, the terms employers search for most often are: problem solving and decision making, oral and written communication, leadership, and bilingual. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 24) Federal employment laws prohibit application forms from indicating a position is employment at will. Answer: FALSE Explanation: When not prohibited by state law, an application form should state that the position is employment at will and that either the employer or the employee can terminate employment at any time for any reason. Federal laws do not prohibit these statements. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

25) An application form is a goal-directed outline of a person's experience, education, and training developed for use in the selection process. Answer: FALSE Explanation: A résumé is a goal-directed summary of a person's experience, education, and training developed for use in the selection process. Application forms indicate the information a firm needs from an applicant and EEOC requirements. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 26) Most large companies use applicant-tracking systems to sort résumés, but these systems lack the capability of flagging suspicious résumés, which is problematic for HR departments. Answer: FALSE Explanation: When sending a résumé via the Internet, applicants should realize that most large companies now use applicant-tracking systems. Some systems flag résumés that appear to misrepresent the truth, present misleading information, or are in other ways suspicious. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 4 27) In today's workplace, you can assume that managers and HR employees will review your résumé. Answer: FALSE Explanation: The use of applicant-tracking systems coupled with the downsizing of human resource departments, has resulted in a situation where many résumés are never seen by human eyes once they enter the system. Therefore, a job applicant should use keywords in his or her résumé to make it as computer/scanner friendly as possible so that its life in a database will be extended. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 4

28) Modern job seekers should use keywords to ensure that their résumés are not immediately discarded by a firm's applicant-tracking system. Answer: TRUE Explanation: The use of applicant-tracking systems coupled with the downsizing of human resource departments, has resulted in a situation where many résumés are never seen by human eyes once they enter the system. Therefore, a job applicant should make his or her résumé as computer/scanner friendly with keywords as possible so that its life in a database will be extended. Keywords refer to those words or phrases that are used to search databases for résumés that match. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 4 29) The keyword résumé uses keyword terms to describe an applicant's characteristics and industry-specific experience to accommodate the computer search process. Answer: TRUE Explanation: A keyword résumé contains an adequate description of the job seeker's characteristics and industry-specific experience presented in keyword terms in order to accommodate the computer search process. The keywords are often job titles, skills, or areas of expertise related to the position. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 30) What type of information should be included in a résumé? How have applicant-tracking systems altered the way résumés are written? Answer: A résumé is a goal-directed summary of a person's experience, education, and training developed for use in the selection process. Most résumés include an objective for the specific position the applicant is seeking. The rest of the résumé should be directed toward showing how a person has the necessary skills and competencies necessary to accomplish the position identified in the career objective statement. Only information necessary to show a relationship to the objective should be included. The résumé should be designed to present the applicant in a positive light but care should be taken to not exaggerate excessively. The applicant should use a résumé to show that he or she has an understanding of the job, as well as how his or her job history can assist in accomplishing the job. Because of applicant-tracking systems and the downsizing of human resource departments, human eyes never see many résumés once they enter the system. Therefore, a job applicant should make his or her résumé as computer or scanner friendly as possible, so that its life in a database will be extended. To do that, the résumé should be built upon a keyword style-using job titles, skills, or areas of expertise, and job duties related to the position. Difficulty: Challenging Skill: Synthesis AACSB: Information technology Learning Obj.: 4 11 Copyright © 2016 Pearson Education, Inc.

31) Which of the following factors would most likely be rated in a selection test? A) habits B) family life C) motivation D) financial equity Answer: C Explanation: C) Recognizing the shortcomings of other selection tools, many firms have added selection tests to their hiring process. These tests rate factors such as aptitude, personality, abilities, and motivation of potential employees, allowing managers to choose candidates according to how they will fit into the open positions and corporate culture. Selection tests are less likely to measure a candidate's habits, family life, or financial equity. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 32) Selection tests may accurately predict an applicant's ability to perform the job, but they are less successful in indicating the extent to which the individual has the necessary ________. A) experience B) education C) motivation D) qualifications Answer: C Explanation: C) Job performance depends on an individual's ability and motivation to do the work. Selection tests may accurately predict an applicant's ability to perform the job, the "can do," but they are less successful in indicating the extent to which the individual will be motivated to perform it, the "will do." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 33) Experts suggest that a slight amount of test anxiety is ________. A) abnormal B) beneficial C) detrimental D) unprofessional Answer: B Explanation: B) Test anxiety can be a problem. Applicants often become quite anxious when confronting yet another hurdle that might eliminate them from consideration. Although a great deal of anxiety is detrimental to test performance, a slight degree is helpful. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

34) The uniformity of the procedures and conditions related to administering tests is referred to as ________. A) objectivity B) norms C) standardization D) reliability Answer: C Explanation: C) Standardization is the uniformity of the procedures and conditions related to administering tests. In order to compare the performance of several applicants on the same test, it is necessary for all to take the test under conditions that are as identical as possible. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 35) Which of the following relates most closely to test conditions? A) objectivity B) norms C) standardization D) reliability Answer: C Explanation: C) Standardization is the uniformity of the procedures and conditions related to administering tests. In order to compare the performance of several applicants on the same test, it is necessary for all to take the test under conditions that are as identical as possible. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 36) When everyone scoring a test obtains the same results, the test is said to be ________. A) reliable B) objective C) valid D) consistent Answer: B Explanation: B) Objectivity in testing occurs when everyone scoring a test obtains the same results. Multiple choice and true-false tests are objective. The person taking the test either chooses the correct answer or does not. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

37) What provides a frame of reference for comparing an applicant's performance with the performance of similar individuals? A) norms B) keywords C) objectivity D) reliability Answer: A Explanation: A) A norm is a frame of reference for comparing an applicant's performance with that of others. Specifically, a norm reflects the distribution of many scores obtained by people similar to the applicant being tested. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 38) A selection tool that provides consistent results is said to be ________. A) valid B) reliable C) objective D) standardized Answer: B Explanation: B) Reliability is the extent to which a selection test provides consistent results. Reliability data reveal the degree of confidence placed in a test. Validity is the extent to which a test measures what it claims to measure. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 39) A student takes an IQ test one week and scores 140. The student retakes the test one week later and scores 90. Which of the following best describes the test? A) unreliable B) abnormal C) subjective D) objective Answer: A Explanation: A) Reliability is the extent to which a selection test provides consistent results. Reliability data reveal the degree of confidence placed in a test. If a person scores 140 on a certain intelligence test this week and retakes the test next week and scores 90, the test reliability would likely be low. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

40) The basic requirement for a selection test is that it be ________. A) valid B) reliable C) objective D) standardized Answer: A Explanation: A) The basic requirement for a selection test is that it be valid. Validity is the extent to which a test measures what it claims to measure. If a test cannot indicate ability to perform the job, it has no value. And, if used, it will result in poor hiring decisions and a potential legal liability for the employer. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 41) The extent to which a test measures what it claims to measure is known as ________. A) reliability B) subjectivity C) validity D) objectivity Answer: C Explanation: C) The basic requirement for a selection test is that it be valid. Validity is the extent to which a test measures what it claims to measure. If a test cannot indicate ability to perform the job, it has no value. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 42) Validity is commonly reported as a ________. A) standard deviation B) standard error C) selection procedure D) correlation coefficient Answer: D Explanation: D) Validity, commonly reported as a correlation coefficient, summarizes the relationship between two variables. Naturally, no test will be 100 percent accurate, yet organizations strive for the highest feasible coefficient. If a job performance test has a high positive correlation coefficient, most prospective employees who score high on the test will probably later prove to be high performers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

43) When are employers required to validate their selection tests? A) There is no such requirement. B) All selection tests are validated automatically. C) when an employment discrimination lawsuit has been filed D) when the selection process results in an adverse impact on a protected group Answer: D Explanation: D) Title VII requires the test to work without having an adverse impact on minorities, females, and individuals with backgrounds or characteristics protected under the law. If using the test results in an adverse impact on certain members of protected groups, the firm must validate the test. Employers are not required to validate their selection tests automatically. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 44) When criterion-related validity is used, the scores on the selection test are compared to ________. A) scores on the pre-test B) job performance factors C) scores on the post-test D) a national norm Answer: B Explanation: B) Criterion-related validity is a test validation method that compares the scores on selection tests to some aspect of job performance determined, for example, by performance appraisal. Performance measures might include quantity and quality of work, turnover, and absenteeism. A close relationship between the score on the test and job performance suggests that the test is valid. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 45) Comparing the scores on selection tests to some aspect of job performance is referred to as ________. A) objective-related validity B) standardized-related validity C) normality-related validity D) criterion-related validity Answer: D Explanation: D) Criterion-related validity is a test validation method that compares the scores on selection tests to some aspect of job performance determined, for example, by performance appraisal. Performance measures might include quantity and quality of work, turnover, and absenteeism. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 16 Copyright © 2016 Pearson Education, Inc.

46) Which of the following is determined when a firm obtains test scores and criterion data at approximately the same time? A) predictive validity B) concurrent validity C) construct validity D) content validity Answer: B Explanation: B) Concurrent validity is determined when the firm obtains test scores and the criterion data at essentially the same time. For instance, it administers the test to all currently employed telemarketers and compares the results with company records that contain current information about each employee's job performance. If the test is able to identify productive and less productive workers, one could say that it is valid. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 47) Which of the following involves administering a test and later obtaining criterion information? A) predictive validity B) concurrent validity C) construct validity D) content validity Answer: A Explanation: A) Predictive validity involves administering a test and later obtaining the criterion information. For instance, all applicants take the test but the firm uses other selection criteria, not the test results, to make the selection decision. Concurrent validity is determined when the firm obtains test scores and the criterion data at essentially the same time. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 48) As an HR manager, why would you most likely NOT use predictive validity to validate a selection test? A) lack of technical soundness B) stressful for job applicants C) associated time and cost D) poor motivation test Answer: C Explanation: C) Predictive validity involves administering a test and later obtaining the criterion information. Predictive validity is a technically sound procedure. Because of the time and cost involved, however, its use is often not feasible. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 17 Copyright © 2016 Pearson Education, Inc.

49) A test validation method whereby a person performs certain tasks that are actually required by the job is referred to as ________. A) concurrent validity B) content validity C) construct validity D) predictive validity Answer: B Explanation: B) Content validity is a test validation method whereby a person performs certain tasks that are actually required by the job or completes a paper-and-pencil test that measures relevant job knowledge. Predictive validity involves administering a test and later obtaining the criterion information. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 50) Kyla is applying for a job at a telecommunications company as a terminal operator, which primarily involves word processing tasks. Kyla has been asked to take a word processing test, so the firm is most likely using ________ in the selection process. A) construct validity B) content validity C) concurrent validity D) predictive validity Answer: B Explanation: B) Content validity is a test validation method whereby a person performs certain tasks that are actually required by the job, such as word processing in this example. This form of validation requires thorough job analysis and carefully prepared job descriptions. Predictive validity involves administering a test and later obtaining the criterion information. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

51) A test validation method that determines whether a test measures certain traits that job analysis finds to be important in performing a job is referred to as ________ validity. A) construct B) content C) concurrent D) predictive Answer: A Explanation: A) Construct validity is a test validation method that determines whether a test measures certain constructs, or traits, that job analysis finds to be important in performing a job. For instance, a job may require a high degree of creativity or reasoning ability. Content validity is a test validation method whereby a person performs certain tasks that are actually required by the job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 52) During the selection process for an IT position, Jeff was required to take a test that measured his memory and vocabulary. Which type of test did Jeff most likely take? A) work-sample B) psychomotor abilities C) job knowledge D) cognitive ability Answer: D Explanation: D) Cognitive ability tests are tests that determine general reasoning ability, memory, vocabulary, verbal fluency, and numerical ability. Cognitive ability tests are a form of IQ tests. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 53) Hannah is applying for a job as a technician at a manufacturing facility. The job requires employees to use magnifying lenses when assembling products, so Hannah's psychomotor abilities were tested. Which type of test did Hannah most likely take? A) cognitive aptitude B) psychomotor abilities C) job knowledge D) work-sample Answer: B Explanation: B) Psychomotor abilities tests measure strength, coordination, and dexterity. Cognitive aptitude tests determine general reasoning ability, memory, vocabulary, verbal fluency, and numerical ability. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 19 Copyright © 2016 Pearson Education, Inc.

54) During the selection process for a telemarketing position, Alex was given a test to measure his awareness of the job's duties. Which type of test did Alex most likely take? A) psychomotor abilities B) cognitive aptitude C) job knowledge D) work-sample Answer: C Explanation: C) Job-knowledge tests are tests that measure a candidate's knowledge of the duties of the job for which he or she is applying. Psychomotor abilities tests are tests that measure strength, coordination, and dexterity. Cognitive aptitude tests are tests that determine general reasoning ability, memory, vocabulary, verbal fluency, and numerical ability. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 55) Kim is applying for a job as an accounts specialist, which will require extensive use of Excel. During the selection process, the employer provides Kim with data and asks her to compile an Excel spreadsheet with the information. Which type of test did Kim most likely take? A) cognitive aptitude B) psychomotor abilities C) job knowledge D) work-sample Answer: D Explanation: D) Work-sample tests are tests that require an applicant to perform a task or set of tasks representative of the job, such as compiling a spreadsheet. Cognitive aptitude tests are tests that determine general reasoning ability, memory, vocabulary, verbal fluency, and numerical ability. Psychomotor abilities tests are tests that measure strength, coordination, and dexterity. Job-knowledge tests are tests that measure a candidate's knowledge of the duties of the job for which he or she is applying. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

56) Craig is applying for a sales position at a commercial real estate firm. The HR manager gave Craig the Myers-Briggs test during the selection process. Which of the following is most likely being measured by the firm? A) personality traits B) cognitive abilities C) vocational interest D) psychomotor skills Answer: A Explanation: A) Personality tests are self-reported measures of traits, temperaments, or dispositions. More and more companies are using specially designed personality tests such as Myers-Briggs to identify top sales recruits. Vocational interest tests are tests that indicate the occupation a person is most interested in and the one likely to provide satisfaction. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 57) Kara took a test that indicated she has a predisposition for breast cancer. What type of test did Kara most likely take? A) blood B) genetic C) urine D) skin Answer: B Explanation: B) Genetic testing is performed to identify predisposition to inherited diseases, including cancer, heart disease, neurological disorders, and congenital diseases. DNA-testing companies can tell us our potential risk for breast cancer, cystic fibrosis, and Alzheimer's disease and other common chronic conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 58) Which law protects healthy individuals who have a genetic predisposition for a disease? A) Americans with Disabilities Act B) Family and Medical Leave Act C) Davis-Bacon Act D) Equal Pay Act Answer: A Explanation: A) The EEOC has issued guidelines stating that healthy individuals with a genetic predisposition to a disease, and thus perceived as disabled, are protected by the Americans with Disabilities Act. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 21 Copyright © 2016 Pearson Education, Inc.

59) The ________ is designed to prohibit the improper use of genetic information in health insurance and employment. A) Freedom of Information Act B) Federal Genealogy Act C) Americans with Disabilities Act D) Genetic Information Nondiscrimination Act Answer: D Explanation: D) The Genetic Information Nondiscrimination Act of 2008 (GINA) is designed to prohibit the improper use of genetic information in health insurance and employment. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 60) Which Act limited the use of polygraph tests in the private sector? A) Lie Detector Protection Act of 2001 B) Federal Polygraph Protection Act of 1999 C) Polygraph Confirmation Act of 1990 D) Employee Polygraph Protection Act of 1988 Answer: D Explanation: D) The Employee Polygraph Protection Act of 1988 severely limited the use of polygraph tests in the private sector. It made unlawful the use of a polygraph test by any employer engaged in interstate commerce. However, the Act does not apply to governmental employers, and there are other limited exceptions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 61) Persons who take polygraph tests have all of the following rights EXCEPT the ________. A) right to refuse or discontinue a test B) right to a written notice before testing C) right to review results prior to distribution D) right not to have test results disclosed to unauthorized persons Answer: C Explanation: C) The Employee Polygraph Protection Act of 1988 severely limited the use of polygraph tests in the private sector. Persons who take polygraph tests have a number of specific rights. For example, they have the right to a written notice before testing, the right to refuse or discontinue a test, and the right not to have test results disclosed to unauthorized persons. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

62) What selection technique requires individuals to perform activities similar to those they might encounter in an actual job? A) psychomotor abilities test B) assessment center C) vocational interest test D) job-related center Answer: B Explanation: B) An assessment center is a selection approach that requires individuals to perform activities similar to those they might encounter in an actual job. The assessment center is one of the most powerful tools for assessing managerial talent because it is designed to determine if they will be effective in performing a specific job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 63) Firms most likely use assessment centers during the selection process to ________. A) compare applicants with current employees B) predict the job performance of applicants C) assess an applicant's job motivation D) ensure applicants are healthy Answer: B Explanation: B) An assessment center is a selection approach that requires individuals to perform activities similar to those they might encounter in an actual job. Research has established the validity of the assessment center approach to predicting performance. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 64) Kelly is applying for a position with Citibank and will be participating in an assessment center. Which of the following activities is Kelly LEAST likely to do in the assessment center? A) in-basket exercises B) management games C) psychomotor abilities tests D) leaderless discussion groups Answer: C Explanation: C) In an assessment center, candidates perform a number of exercises that simulate the tasks they will carry out in the job they seek. Among the typical assessment center tests, the applicants may complete in-basket exercises and perform in management games, leaderless discussion groups, mock interviews, and other simulations. Psychomotor abilities tests are selection tests that are not part of assessment centers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 23 Copyright © 2016 Pearson Education, Inc.

65) Studies indicate that selection tests accurately predict the extent to which an individual will be motivated to perform a specific job. Answer: FALSE Explanation: Job performance depends on an individual's ability and motivation to do the work. Selection tests may accurately predict an applicant's ability to perform the job, the "can do," but they are less successful in indicating the extent to which the individual will be motivated to perform it, the "will do." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 66) The problems of hiring unqualified or less qualified candidates and rejecting qualified candidates have been eliminated since firms began using selection tests. Answer: FALSE Explanation: The problems of hiring unqualified or less-qualified candidates and rejecting qualified candidates will continue regardless of the procedures followed. Well-developed tests administered by competent professionals help organizations minimize such consequences. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 67) Objectivity refers to the uniformity of the procedures and conditions related to administering tests. Answer: FALSE Explanation: Standardization is the uniformity of the procedures and conditions related to administering tests. In order to compare the performance of several applicants on the same test, it is necessary for all to take the test under conditions that are as identical as possible. In testing, objectivity occurs when everyone scoring a test obtains the same results. Multiple-choice and true-false tests are objective. The person taking the test either chooses the correct answer or does not. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 68) Validity in testing occurs when everyone scoring a test obtains the same results. Answer: FALSE Explanation: Objectivity in testing occurs when everyone scoring a test obtains the same results. Multiple choice and true-false tests are objective. Validity is the extent to which a test measures what it claims to measure. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 24 Copyright © 2016 Pearson Education, Inc.

69) Validity is the extent to which a selection test provides consistent results. Answer: FALSE Explanation: Reliability is the extent to which a selection test provides consistent results. Validity refers to the extent to which a test measures what it claims to measure Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 70) Title VII requires the test to work without having an adverse impact on minorities, females, and individuals with backgrounds or characteristics protected under the law. Answer: TRUE Explanation: Title VII requires the test to work without having an adverse impact on minorities, females, and individuals with backgrounds or characteristics protected under the law. If using the test results in an adverse impact on certain members of protected groups, the firm must have a compelling reason why it is used; that is, it must validate the test. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 71) Criterion-related validity is determined by comparing the scores on selection tests to an aspect of job performance, such as quality of work. Answer: TRUE Explanation: Criterion-related validity is a test validation method that compares the scores on selection tests to some aspect of job performance determined, for example, by performance appraisal. Performance measures might include quantity and quality of work, turnover, and absenteeism. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 72) Construct validity is a test validation method that determines whether a test measures personal traits that are important in performing a job. Answer: TRUE Explanation: Construct validity is a test validation method that determines whether a test measures certain constructs, or traits, that job analysis finds to be important in performing a job. For instance, a job may require a high degree of creativity or reasoning ability. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

73) Predictive validity is considered an inexpensive and quick method for establishing the validity of a selection test. Answer: FALSE Explanation: Predictive validity involves administering a test and later obtaining the criterion information. For instance, all applicants take the test but the firm uses other selection criteria, not the test results, to make the selection decision. Predictive validity is a technically sound procedure. Because of the time and cost involved, however, its use is often not feasible. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 74) An IQ test is a type of cognitive ability test. Answer: TRUE Explanation: Cognitive ability tests are tests that determine general reasoning ability, memory, vocabulary, verbal fluency, and numerical ability. Cognitive ability tests are a form of IQ tests. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 75) Psychomotor abilities tests measure a candidate's knowledge of the duties of the job for which he or she is applying. Answer: FALSE Explanation: Psychomotor abilities tests are tests that measure strength, coordination, and dexterity. Job-knowledge tests are tests that measure a candidate's knowledge of the duties of the job for which he or she is applying. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 76) Job-knowledge tests require an applicant to perform a task or set of tasks representative of the job. Answer: FALSE Explanation: Work-sample tests require an applicant to perform a task or set of tasks representative of the job. Job-knowledge tests measure a candidate's knowledge of the duties of the job for which he or she is applying. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

77) Personality tests assess an applicant's traits and temperaments and help firms determine an individual's leadership and teamwork skills. Answer: TRUE Explanation: Personality tests are self-reported measures of traits, temperaments, or dispositions. Personality tests, unlike ability tests, are not time constrained and do not measure specific problem-solving skills. These questionnaires tap into softer areas, such as leadership, teamwork, and personal assertiveness. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 78) An assessment center is a selection approach that requires individuals to perform activities similar to those they might encounter in an actual job. Answer: TRUE Explanation: An assessment center is a selection approach that requires individuals to perform activities similar to those they might encounter in an actual job. The assessment center is one of the most powerful tools for assessing managerial talent because it is designed to determine if they will be effective in performing a specific job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 79) What are the advantages and disadvantages of using selection tests? What are some of the characteristics of well-designed selection tests? Answer: Research indicates that customized tests can be a reliable and accurate means to predict on-the-job performance. Organizations use tests to identify attitudes and job-related skills that interviews cannot recognize. Also, the cost of employment testing is small in comparison to ultimate hiring costs. They are a more efficient way to get at that type of information and may result in better-qualified people being hired. Selection tests do not assess a person's motivation, which is important for a successful hire. Selection tests may also be unintentionally discriminatory. Properly designed selection tests are standardized, objective, based on sound norms, reliable, and, of utmost importance, valid. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 5

80) In a brief essay, discuss the uses for cognitive ability tests, psychomotor abilities tests, and work-sample tests. Provide specific examples to illustrate your response. Answer: Cognitive ability tests are tests that determine general reasoning ability, memory, vocabulary, verbal fluency, and numerical ability. They may be helpful in identifying job candidates who have extensive knowledge bases. As the content of jobs becomes broader and more fluid, employees must be able to adapt quickly to job changes and rapid technological advances. The National Football League uses the Wonderlic Personnel Test which is designed as a way to measure cognitive ability, the applicant's natural aptitude for learning new information. Psychomotor abilities tests are tests that measure strength, coordination, and dexterity. Miniaturization in assembly operations has accelerated the development of tests to determine these abilities. Much of this work is so delicate that magnifying lenses are necessary, and the psychomotor abilities required to perform the tasks are critical. Work-sample tests are tests that require an applicant to perform a task or set of tasks representative of the job. For positions that require heavy use of spreadsheets, having the applicant sit at a computer and construct a sample spreadsheet, with data the firm provides, will be useful in assessing a required ability. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 5 81) What is a goal-oriented conversation in which the interviewer and applicant exchange information called? A) recruitment interview B) training interview C) development interview D) employment interview Answer: D Explanation: D) The employment interview is a goal-oriented conversation in which the interviewer and applicant exchange information. Interviews are not always valid predictors of job success. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6

82) What selection method continues to be the primary method companies use to evaluate applicants? A) background checks B) cognitive ability tests C) employment interviews D) assessment centers Answer: C Explanation: C) Interviews continue to be the primary method companies use to evaluate applicants. The employment interview is especially important because the applicants who reach this stage are the survivors. They have endured preliminary screening, had their applications reviewed, and scored satisfactorily on selection tests. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 83) Robert, an HR manager, is preparing to interview candidates for a software engineer position. Which of the following is LEAST likely to appear on Robert's interview planning checklist? A) developing questions related to the qualities sought B) prescreening additional applicants with behavioral selection tests C) comparing an applicant's application and résumé with job requirements D) preparing a step-by-step plan to present the position, company, division, and department Answer: B Explanation: B) After listing job requirements, it is helpful to have an interview checklist that includes: compare an applicant's application and résumé with job description; develop questions related to the qualities sought; prepare a step-by-step plan to present the position, company, division, and department; and determine how to ask for examples of past job-related applicant behavior. Prescreening occurs earlier in the selection process and is unlikely to occur in preparation for interviews. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

84) Which of the following issues is LEAST relevant during an employment interview? A) occupational experience B) interpersonal skills C) personal likes and dislikes D) academic achievement Answer: C Explanation: C) During an interview, an interviewer will most likely assess the candidate's occupational experience, interpersonal skills, and academic record. The candidate's likes and dislikes are less relevant during a job interview. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 6 85) A ________ refers to a tendency of an interviewer to form a generalized positive impression of an applicant, and rate that person highly on all rating criteria even if the applicant really doesn't deserve a high rating for every one of them. A) contrast bias B) stereotyping bias C) premature judgment bias D) positive halo error bias Answer: D Explanation: D) A positive halo bias occurs when the interviewer generalizes one positive first impression feature of the candidate. Such might be the case with discovering that you have something in common with the applicant. The opposite could occur with negative horn bias where the interviewer's first impression of the candidate creates a negative first impression that exists throughout the interview. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 6 86) A(n) ________ occurs when an interviewer assumes that an applicant has certain traits because he or she is a member of a certain class. A) contrast bias B) stereotyping bias C) premature judgment bias D) interview illusion bias Answer: B Explanation: B) Stereotyping bias occurs when the interviewer assumes that the applicant has certain traits because he or she is a member of a certain class. The classic case of stereotyping bias is when an interviewer assumes that a women applicant cannot meet a certain physical requirement such as being able to lift 50 pounds. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 6 30 Copyright © 2016 Pearson Education, Inc.

87) The concept of ________ suggests that interviewers often make a judgment about a candidate during the first few minutes of the interview. A) stereotyping bias B) contrast bias C) interview illusion bias D) premature judgment bias Answer: D Explanation: D) Premature judgment bias suggests that interviewers often make a judgment about candidates in the first few minutes of the interview. Apparently, these interviewers believe that they have the ability to determine immediately whether a candidate will be successful or not. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6 88) What does the unstructured interview involve? A) asking candidates probing, open-ended questions B) using novice interviewers to assess candidates C) validating candidate test scores against norms D) asking identical questions to all candidates Answer: A Explanation: A) An unstructured interview is one in which the interviewer asks probing, openended questions. This type of interview is comprehensive, and the interviewer encourages the applicant to do much of the talking. Structured interviews involve asking the same questions to all candidates. Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 6 89) What type of interview is comprehensive and involves the applicant talking more than the interviewer? A) unstructured B) structured C) stress D) directive Answer: A Explanation: A) An unstructured interview is one in which the interviewer asks probing, openended questions. This type of interview is comprehensive, and the interviewer encourages the applicant to do much of the talking. Structured interviews involve asking the same questions to all candidates. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 6

90) What type of interview has potential legal problems because of the likelihood of discussing potentially discriminatory information? A) structured B) unstructured C) stress D) directive Answer: B Explanation: B) The unstructured interview is often more time consuming than the structured interview and results in obtaining different information from different candidates. This adds to the potential legal woes of organizations using this approach. Compounding the problem is the likelihood of discussing ill-advised, potentially discriminatory information. The applicant who is being encouraged to pour his heart out may volunteer facts that the interviewer does not need or want to know. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 6 91) A structured interview usually contains all of the following questions EXCEPT ________. A) situational questions B) job knowledge questions C) job sample simulation questions D) family and medical history questions Answer: D Explanation: D) Structured interviews typically include situational, job knowledge, job sample simulation, and worker requirement questions. Asking an applicant questions regarding family and medical history may be deemed discriminatory. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 6

92) Behavioral interviews are primarily intended to determine all of the following qualities about an applicant EXCEPT the applicant's ability to ________. A) work under pressure B) quantify task results C) work with other people D) resolve difficult problems Answer: B Explanation: B) Behavioral interviews ask applicants about specific events as opposed to just having them tell about themselves. They are designed to test applicants' abilities to work under pressure and to work with others and to determine whether they can resolve conflicts. The behavioral interview assists in determining if a person is functionally sound and if the applicant will be a good fit in the organization. Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 6 93) A structured interview where applicants are asked to relate actual incidents from their past relevant to the target job is referred to as a ________. A) stress interview B) career related preview C) behavioral interview D) realistic interview Answer: C Explanation: C) The behavioral interview is a structured interview in which applicants are asked to relate actual incidents from their past relevant to the target job. Once used exclusively for senior executive positions, behavioral interviewing is now a popular technique for lower-level positions also. The assumption is that past behavior is the best predictor of future behavior. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6

94) During a job interview, Sara is asked to describe a time when she was responsible for motivating others. Which of the following most likely describes this type of interview? A) group interview B) stress interview C) board interview D) behavioral interview Answer: D Explanation: D) Behavioral interviewers look for three main things: a description of a challenging situation, what the candidate did about it, and measurable results. In the behavioral interview, the situational behaviors are selected for their relevance to job success. Questions are formed from the behaviors by asking applicants how they performed in the described situation, such as when Sara was responsible for motivating a group. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 95) Several applicants interacting in the presence of one or more interviewers is typical of what type of interview? A) stress B) board C) group D) role-play Answer: C Explanation: C) In a group interview, several applicants interact in the presence of one or more company representatives. This approach, although not mutually exclusive of other interview types, may provide useful insights into the candidates' interpersonal competence as they engage in a group discussion. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6

96) Several of the firm's representatives interviewing a candidate at the same time is typical of what type of interview? A) group B) board C) stress D) role-play Answer: B Explanation: B) In a board interview, several of the firm's representatives interview a candidate at the same time. Companies use the board interview to gain multiple viewpoints because there are many cross-functional workplace relationships in business these days. In a group interview, several applicants interact in the presence of one or more company representatives. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6 97) What type of interview is most likely being conducted when an interviewer says, "I think your answer is totally inadequate: it doesn't deal with my concerns at all, can't you do better than that?" A) stress B) board C) group D) behavioral Answer: A Explanation: A) The question provides an example of a stress interview question. In stress interviews, the interviewer purposely creates anxiety. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 98) Purposely making the candidate uncomfortable by asking blunt and often discourteous questions would most likely occur during a ________ interview. A) nondirective B) stress C) board D) group Answer: B Explanation: B) Most interviewers strive to minimize stress for the candidate. However, in the stress interview, the interviewer deliberately makes the candidate uncomfortable by asking blunt and often discourteous questions. The purpose is to determine the applicant's tolerance for stress that may accompany the job. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6 35 Copyright © 2016 Pearson Education, Inc.

99) What process conveys positive and negative job information to the applicant in an unbiased manner? A) advancement related preview B) career related preview C) job-related preview D) realistic job preview Answer: D Explanation: D) A realistic job preview (RJP) conveys both positive and negative job information to the applicant in an unbiased manner. An RJP conveys information about tasks the person would perform and the behavior required to fit into the culture of the organization. This approach helps applicants develop a more accurate perception of the job and the firm. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6 100) When should a realistic job preview be given to applicants? A) after a job offer is made B) early in the selection process C) during a performance appraisal D) during employee orientation Answer: B Explanation: B) An RJP conveys information about tasks the person would perform and the behavior required to fit into the culture of the organization. This approach helps applicants develop a more accurate perception of the job and the firm and should be done early in the selection process and before a job offer is made. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 6 101) The most basic interviewing rule is to ________. A) dominate every aspect of the interview B) never let a job applicant see you sweat C) ask only job-related questions D) save the realistic job preview until after the candidate has been hired Answer: C Explanation: C) Although no questions are illegal, many are clearly hiring standards to avoid. When they are asked, the responses generated create a legal liability for the employer. The most basic interviewing rule is this: "Ask only job-related questions." Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 6

102) Situational interviews focus on how an individual handled job-related circumstances in the past. Answer: FALSE Explanation: The situational interview creates hypothetical situations candidates would be likely to encounter on the job and asks how they would handle them. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 103) Interviews are valid predictors of success on the job, which is why they are commonly used to evaluate applicants. Answer: FALSE Explanation: Traditionally, interviews have not been valid predictors of success on the job. In fact, courts are often suspicious of hiring decisions based primarily on interview results because of their inherently subjective nature. Nevertheless, interviews continue to be the primary method companies use to evaluate applicants. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 104) In the board interview, the interviewer deliberately makes the candidate uncomfortable by asking blunt and often discourteous questions. Answer: FALSE Explanation: Most interviewers strive to minimize stress for the candidate. However, in the stress interview, the interviewer deliberately makes the candidate uncomfortable by asking blunt and often discourteous questions. The purpose is to determine the applicant's tolerance for stress that may accompany the job. In a board interview, several of the firm's representatives interview a candidate at the same time. Companies use the board interview to gain multiple viewpoints, because there are many cross-functional workplace relationships in business these days. Once the interview is complete, the board members pool their evaluation of the candidate. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 105) During an unstructured interview, an interviewer will most likely ask open-ended questions to encourage the applicant to talk. Answer: TRUE Explanation: An unstructured interview is one in which the interviewer asks probing, openended questions. This type of interview is comprehensive, and the interviewer encourages the applicant to do much of the talking. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 37 Copyright © 2016 Pearson Education, Inc.

106) Unstructured interviews are often time-consuming and result in obtaining different information from different candidates. Answer: TRUE Explanation: The unstructured interview is often more time consuming than the structured interview and results in obtaining different information from different candidates. This adds to the potential legal woes of organizations using this approach. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 107) As an HR manager, how would you prepare to conduct an employment interview? What is the difference between structured, unstructured, and behavioral interviews? Answer: Interview planning is essential to effective employment interviews. A primary consideration should be the speed in which the process occurs. The physical location of the interview should be both pleasant and private, providing for a minimum of interruptions. The interviewer should become familiar with the applicant's qualifications by reviewing the data collected from other selection tools. As preparation for the interview, the interviewer should develop a job profile based on the job description/specification. After listing job requirements, it is helpful to have an interview checklist that includes: (1) comparing a candidate's application and résumé with job description; (2) developing questions related to the qualities sought; (3) preparing a step-by-step plan to present the position, company, division, and department; and (4) determining how to ask for examples of past job-related applicant behavior. An unstructured interview is one in which the interviewer asks probing, open-ended questions. This type of interview is comprehensive, and the interviewer encourages the applicant to do most of the talking. In the structured interview, the interviewer asks each applicant for a particular job the same series of job-related questions. The behavioral interview is a structured interview in which applicants are asked to relate actual incidents from their past relevant to the target job. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 6

108) What is the difference between group interviews, board (or panel) interviews, and stress interviews? What are the typical areas that are assessed and discussed during an employment interview? Answer: In a group interview, several applicants interact in the presence of one or more company representatives. This approach may provide useful insights into the candidates' interpersonal competence as they engage in a group discussion. In a board interview, several of the firm's representatives interview a candidate at the same time. Companies use the board interview to gain multiple viewpoints because there are many cross-functional workplace relationships in business these days. In the stress interview, the interviewer deliberately makes the candidate uncomfortable by asking blunt and often discourteous questions. The purpose is to determine the applicant's tolerance for stress that may accompany the job. During an interview, the interviewer seeks additional job-related information to complement data provided by other selection tools. The interview permits clarification of certain points, the uncovering of additional information, and the elaboration of data needed to make a sound selection decision. The interviewer should provide information about the company, the job, and expectations of the candidate. Other areas typically included in the interview are occupational experience, academic achievement, interpersonal skills, personal qualities, and organizational fit. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 6 109) The HR manager at a manufacturing plant is required to use E-Verify to check the information provided on each employee's ________. A) I-9 B) W-2 C) W-4 D) 1099 Answer: A Explanation: A) The employment eligibility verification form I-9 must be filled out by U.S. job applicants, but it allows any number of documents to be used to demonstrate their legal right to work in the United States. Every employee hired since 1986 must have a completed Form I-9 on file. An additional level of verification involves the use of E-Verify to check out new hires, and its use is required for federal contractors and subcontractors with contracts of $100,000 or more. Recently, the U.S. Supreme Court granted states the right to require employers to use the federal E-Verify system to check on the eligibility of employees to work in the United States. E-Verify is a Web-based system that lets employers check Social Security and visa numbers submitted by workers against government databases. The system is not checking for citizenship, but for eligibility to be lawfully employed in the United States. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

110) The primary reason for conducting background investigations is to ________. A) hire better workers B) check personal references C) verify educational credentials D) prevent employment discrimination Answer: A Explanation: A) The principal reason for conducting background investigations is to hire better workers. On the surface an applicant may look qualified, but a background investigation is needed to determine the accuracy of the information. Background investigations involve obtaining data from various sources, including previous employers, business associates, credit bureaus, government agencies, and academic institutions, and the purpose is to ensure that qualified workers are hired. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 7 111) Which term refers to validations from those who know the applicant that provide additional insight into the information furnished by the applicant? A) background tests B) employer referrals C) polygraph tests D) reference checks Answer: D Explanation: D) Reference checks are validations from those who know the applicant that provide additional insight into the information furnished by the applicant and allow verification of its accuracy. They are a valuable source of information to supplement the background investigation. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 7

112) Which term refers to the liability a company incurs when it fails to conduct a reasonable investigation of an applicant's background, and then assigns a potentially dangerous person to a position in which he or she can inflict harm? A) negligent retention B) negligent supervision C) negligent hiring D) negligent referral Answer: C Explanation: C) Negligent hiring is the liability an employer incurs when it fails to conduct a reasonable investigation of an applicant's background, and then assigns a potentially dangerous person to a position in which he or she can inflict harm. The typical negligent hiring case involves a deliberate inflicting of harm committed by an employee including fraud, assault, battery, or interference with contractual relations. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 7 113) Which of the following jobs would put an employer particularly at risk for a charge of negligent hiring? A) grocery store manager B) machine operator C) home health attendant D) college professor Answer: C Explanation: C) Employers who operate home-service businesses, day-care centers, and home health care operations are particularly at risk of negligent hiring because employees could potentially be alone with clients. The primary consideration in negligent hiring is whether the risk of harm from a dangerous employee was reasonably foreseeable. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 7 114) Failure to validate is the liability an employer incurs when it does not conduct a reasonable investigation of an applicant's background, and then assigns a potentially dangerous person to a position in which he or she can inflict harm. Answer: FALSE Explanation: Negligent hiring is the liability an employer incurs when it does not conduct a reasonable investigation of an applicant's background, and then assigns a potentially dangerous person to a position in which he or she can inflict harm. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

115) A growing number of firms use social networking sites, such as Facebook and LinkedIn, to investigate the backgrounds of potential employees. Answer: TRUE Explanation: An increasing number of employers are using social networking Web sites to conduct background investigations on potential employees. Employers use an applicant's personal Web site, LinkedIn profile, and postings made on an industry blog to find out about individuals they are considering hiring. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 7 116) How are companies using LinkedIn in their recruitment efforts? Answer: LinkedIn is very useful for companies in their recruitment efforts. In fact, the largest and fastest-growing part of LinkedIn's business is "hiring solutions," which include a variety of services for in-house and external recruiters. These services include online job postings and ways to organize job searches. A major benefit is the ability to quickly identify and contact passive candidates, those who seem to have the necessary background, education, and skills but are not actively seeking work. Since companies value passive candidates for more senior positions, LinkedIn has become an even more valuable source for hiring to fill these positions. More and more companies are looking to cut costs and are shifting recruiting money to LinkedIn. Filling senior positions once meant paying executive search firms thousands of dollars for each job. But with social networks like LinkedIn, in-house recruiters now have another way to reach such talent. Difficulty: Challenging Skill: Synthesis AACSB: Information technology Learning Obj.: 7

117) What are background investigations? Why are they an important part of the hiring process? Answer: Background investigation is more important than ever due to the rise in negligent hiring lawsuits, recent corporate scandals, and national security concerns. At this stage of the selection process, the candidate looks qualified on the surface. It is now time to determine the accuracy of the information submitted or to determine whether vital information was not submitted. Background investigations involve obtaining data from various sources, including previous employers, business associates, credit bureaus, government agencies, and academic institutions. For example, criminal background investigations are used to ensure a safe work environment, to reduce legal liability for negligent hiring, and to eliminate or reduce criminal activity in the workplace. In addition, credit checks are used to reduce theft and measure an applicant's financial responsibility. The intensity of background investigations depends on the nature of the open position's tasks and its relationship to customers or clients. To be legally safe, employers should ask applicants to sign a liability waiver permitting a background investigation. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 7 118) All of the following are reasons to conduct drug testing EXCEPT for ________. A) minimizing workplace hazards B) maintaining compliance with government regulation C) determining the level of psychomotor ability of an applicant D) maintaining lower health and disability insurance premiums Answer: C Explanation: C) There are a variety of reasons for choosing to test applicants for drug use. Primarily, the use of illegal drugs, which impairs judgment and psychomotor coordination, may create workplace hazards. Pre-empting drug-related accidents through systematic drug testing may reduce the cost to provide employees with disability insurance. In addition, health care claims may be higher for drug users than for those who do not use illegal substances. Ultimately, employers bear the cost of higher health insurance premiums. Finally, wherever called for by industry standards or government regulation, drug testing helps companies to maintain compliance. Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 8

119) Which federal law states that all medical exams must be directly relevant to the job requirements and that a firm cannot order a medical exam until the applicant is offered employment? A) Occupational Safety and Health Act B) Americans with Disabilities Act C) Uniform Guidelines Act D) Fair Labor Standards Act Answer: B Explanation: B) The Americans with Disabilities Act (ADA) does not prohibit pre-employment medical examinations. However, it does determine the point at which they may be administered during the selection process. The ADA explicitly states that all exams must be directly relevant to the job requirements and that a firm cannot order a medical exam until the applicant is offered employment. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 8 120) The human resource manager normally makes the final selection decision. Answer: FALSE Explanation: The person who normally makes the final selection is the manager who will be responsible for the new employee's performance. In making this decision, the manager will review results of the selection methods used. All will not likely be weighted the same. The question then becomes, "Which data are most predictive of job success?" For each firm or group of jobs, the optimal selection method may be different. HR managers oversee the selection process and provide advice to managers who seek to hire new employees. Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 8

121) Over the past year, the company has a workforce of 500 employees. During that period, it hired 200 employees. What is the turnover rate? A) 250 percent B) 300 percent C) 60 percent D) 40 percent Answer: D Explanation: D) Turnover rate is the number of times on average that employees have to be replaced during a year. For example, if a company has 200 employees and 200 workers had been hired during the year, a 100 percent turnover rate would be experienced. As one might expect, a 100 percent rate is quite costly to the organization, and ways need to be found to reduce the rate. For this question, the turnover rate is calculated as 200 employees hired divided by the total number of employees (500), yielding a turnover rate of 40 percent. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 9 122) The term "False Starts" refers to which of the following? A) job candidates who are from competing firms B) job candidates who fail employee selection tests C) employees who fail to meet performance goals D) employees who quit within 120 days of being hired Answer: D Explanation: D) Employees who are hired and then quit within 120 days are called "False Starts" and considered to be especially expensive, since the company spends money on their hire but then quickly must spend even more to replace them. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 9 123) What recruitment/selection metric focuses on the number of applicants who accepted the job divided by the number who were offered the job? A) recruiting costs B) selection rate C) acceptance rate D) turnover rate Answer: C Explanation: C) Once an offer has been extended, the firm has said that this applicant meets the requirements for the position. The acceptance rate is the number of applicants who accepted the job divided by the number who were offered the job. If this rate is unusually low, it would be wise to determine the reason that jobs are being turned down. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 9 45 Copyright © 2016 Pearson Education, Inc.

124) What is the main problem of having a low acceptance rate? A) increasing training needs B) increasing recruiting costs C) limited number of available positions D) limited number of qualified candidates Answer: B Explanation: B) The acceptance rate is the number of applicants who accepted the job divided by the number who were offered the job. If this rate is unusually low, it would be wise to determine the reason that jobs are being turned down. Low acceptance rates mean high recruiting costs. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 9 125) Which metric focuses on the number of applicants hired from a group of candidates expressed as a percentage? A) recruiting costs B) selection rate C) acceptance rate D) turnover rate Answer: B Explanation: B) The number of applicants hired from a group of candidates expressed as a percentage is the selection rate. Certainly, the selection rate is affected by the condition of the economy. Also, the validity of the selection process will impact the selection rate. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 9 126) Which metric focuses on the percentage of applicants from a particular source that advance to the next stage of the selection process? A) yield rate B) turnover rate C) acceptance rate D) selection rate Answer: A Explanation: A) A yield rate is the percentage of applicants from a particular source and method that make it to the next stage of the selection process. For example, if 100 applicants submitted their résumés through the firm's corporate career Web site and 25 were asked in for an interview, the yield rate for the corporate career Web site would be 25 percent. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 9

127) Many recruiters believe that ________ is the most important metric to use in the selection process. A) quality of hire B) acceptance rate C) return on recruiting revenue D) turnover yield Answer: A Explanation: A) Many recruiters believe that quality of hire is the most important metric to use in the selection process. Some possible measures to determine the quality of hire might be communication effectiveness, ability to motivate others, leadership ability, and cultural fit. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 9 128) A company's ________ is the number of times on average that employees have to be replaced during a year. A) retention percentage B) quantity of hire C) turnover rate D) cost per hire Answer: C Explanation: C) Turnover rate is the number of times on average that employees have to be replaced during a year. Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 9 129) HR professionals use metrics to evaluate recruitment and selection effectiveness by determining the turnover rate, selection rate, and acceptance rate. Answer: TRUE Explanation: Turnover rate, recruitment costs, selection rate, and acceptance rate are some of the factors taken into consideration to help judge the effectiveness of recruitment and selection procedures. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

130) Marshall Consulting needs to hire a new CEO in the next two months. As an HR manager at Marshall Consulting, which of the following is your most important task when filling this position? A) conducting extensive background checks B) devising new selection tests C) creating application forms D) gathering biometric data Answer: A Explanation: A) Organizations usually take different approaches to filling positions at varying levels. When filling an executive position, HR needs to conduct extensive background checks and schedule multiple interviews with the candidates. Creating new tests and forms are less essential for such a high level position, and gathering biometric data is unlikely to be necessary. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 131) VRA Technologies needs to hire a data entry specialist. As an HR manager at the firm, which of the following is your most important task when filling this position? A) conducting multiple background checks B) requiring a word processing test C) checking medical histories D) calling personal references Answer: B Explanation: B) Organizations usually take different approaches to filling positions at varying levels. When filling a clerical position, HR would most likely focus on candidates taking wordprocessing tests. Background checks and personal references are important, but less critical than assessing a candidate's typing skills. Checking medical histories would be illegal. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 132) Which term refers to the number of qualified applicants recruited for a particular job? A) job pool B) labor market C) applicant pool D) applicant market Answer: C Explanation: C) The number of qualified applicants recruited for a particular job makes up the applicant pool. The expansion and contraction of the labor market affects the size of the applicant pool. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 48 Copyright © 2016 Pearson Education, Inc.

133) The selection ratio is the number of people hired for a particular job compared to the number of qualified individuals in the ________. A) workforce B) population C) applicant pool D) labor market Answer: C Explanation: C) The number of people hired for a particular job compared to the number of qualified individuals in the applicant pool is often expressed as a selection ratio. The number of qualified applicants recruited for a particular job makes up the applicant pool. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 134) If the selection ratio is 1.00, how many qualified applicants are there for one open position at a firm? A) 0 B) 1 C) 10 D) 100 Answer: B Explanation: B) A selection ratio of 1.00 indicates that there was only one qualified applicant for an open position. The lower the ratio falls below 1.00, the more alternatives the manager has in making a selection decision. For example, a selection ratio of 0.10 indicates that there were 10 qualified applicants for an open position. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 135) What refers to management's perception of the degree to which the prospective employee will fit in with the firm's culture or value system? A) occupational fit B) personality fit C) co-worker fit D) organizational fit Answer: D Explanation: D) Organizational fit refers to management's perception of the degree to which the prospective employee will fit in with the firm's culture or value system. There are numerous reasons that a hire does not work out but none is as important as cultural fit. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

136) Which of the following selection ratios indicates the highest number of qualified applicants for a position? A) 10.0 B) 1.00 C) 0.10 D) 0.01 Answer: D Explanation: D) A selection ratio of 0.01 indicates that there were 100 qualified applicants for one job. A selection ratio of 1.00 indicates that there was only one qualified applicant for an open position. A selection ratio of 0.10 indicates that there were 10 qualified applicants for an open position. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 137) Which of the following can serve as a substitute for certain selection tools and as a method of determining an employee's suitability? A) probationary period B) stress interview C) reference check D) selection ratio Answer: A Explanation: A) Many firms use a probationary period that permits them to evaluate an employee's ability based on established performance. The purpose of a probationary period is to establish the suitability of a new employee for the role that has been offered to them and to resolve any issues there might be in the new employee's performance over the first three months or so. This practice may be either a substitute for certain phases of the selection process or a check on the validity of the process. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 138) What is the length of the typical probationary period? A) 30 to 60 days B) 60 to 90 days C) 90 to 180 days D) one year Answer: B Explanation: B) Many firms use a probationary period that permits them to evaluate an employee's ability based on established performance. This period is typically from 60 to 90 days. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 50 Copyright © 2016 Pearson Education, Inc.

139) Applicant tracking systems are primarily used for ________. A) generating legally appropriate interview questions B) sorting résumés from online job boards C) measuring the quality of applicants D) tracking HR manager requisitions Answer: B Explanation: B) ATSs are used extensively to help ease the labor-intensive process of sorting résumés from online job boards. In most cases, the goal is not merely to reduce costs but also to speed up the hiring process and find people who fit an organization's success profile. ATSs can develop prescreening questions and track requisitions, and in the future may be able to measure applicant quality; however, sorting résumés is the primary use of ATSs. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 10 140) The purpose of ________ is to help a company manage potential and actual applicants in an organized manner. A) applicant tracking B) candidate relationship management C) human capital metrics D) work-sample validity Answer: B Explanation: B) The purpose of candidate relationship management (CRM) is to help manage potential and actual applicants in an organized manner. It is useful in managing the relationship between the company and prospective applicants. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 141) The selection process affects, and is affected by, virtually every other HR function. Answer: TRUE Explanation: The selection process affects, and is affected by, virtually every other HR function. If the compensation package is inferior to those provided by competitors, hiring the bestqualified applicants will be difficult or impossible. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 10

142) The manner in which an organization fills a position is always the same for every job within the organization. Answer: FALSE Explanation: Organizations usually take different approaches to filling positions at varying levels. For instance, consider the differences in hiring a chief executive officer versus filling a clerical position. Extensive background checks and multiple interviews would most likely apply for the executive position. On the other hand, an applicant for a clerical position would probably take a word-processing test and perhaps have a short employment interview. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 10 143) The number of qualified applicants recruited for a particular job makes up the applicant pool. Answer: TRUE Explanation: The number of qualified applicants recruited for a particular job makes up the applicant pool. The process can be truly selective only if there are several qualified applicants. The expansion and contraction of the labor market affects the size of the applicant pool. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 10 144) Organizational fit refers to management's perception of the degree to which the prospective employee will fit in with the firm's culture or value system. Answer: TRUE Explanation: A hiring criterion that historically is not prominently mentioned in the literature is organizational fit. Organizational fit refers to management's perception of the degree to which the prospective employee will fit in with the firm's culture or value system. There are numerous reasons that a hire does not work out, but none is as important as cultural fit. Difficulty: Easy Skill: Application AACSB: Analytical thinking Learning Obj.: 10 145) A selection ratio of .10 indicates that there is only one qualified applicant for an open position. Answer: FALSE Explanation: A selection ratio of 1.00 indicates that there was only one qualified applicant for an open position. The lower the ratio falls below 1.00, the more alternatives the manager has in making a selection decision. A selection ratio of 0.10 indicates that there were 10 qualified applicants for an open position. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 10 52 Copyright © 2016 Pearson Education, Inc.

146) During probationary periods, which typically last from 30 to 60 days, firms evaluate employees for suitability and skill. Answer: FALSE Explanation: Many firms use a probationary period that permits them to evaluate an employee's ability based on established performance. The purpose of a probationary period is to establish the suitability of a new employee for the role that has been offered to them. However, the period typically lasts from 60 to 90 days. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 10 147) Applicant tracking systems are primarily used by firms to contact former employees about available positions. Answer: FALSE Explanation: An applicant tracking system (ATS) is a software application designed to help an enterprise select employees more efficiently. ATSs are used extensively to help ease the laborintensive process of sorting résumés from online job boards. ATSs are not necessarily used to contact former employees unless those employees have applied for jobs. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 10 148) Comparing the decision-making styles of U.S. executives and Asian executives reveals that ________. A) American business leaders often put strategic decisions up for a vote B) Japanese business leaders tend to make decisions by consensus C) Japanese CEOs prefer to make decisions alone D) American CEOs have little leeway when making large, strategic decisions Answer: B Explanation: B) Think of global business styles as a continuum with U.S. executives at one end and their Asian counterparts at the other. America and Japan provide an excellent example for studying cross-cultural leadership interaction due to the cultural differences between the countries. American CEOs differ in styles, but most have a common denominator; they have more leeway to make large, strategic decisions themselves. Japanese leaders tend to make decisions by consensus. Difficulty: Moderate Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 11

149) When determining which leadership style will be more appropriate for a company, ________ plays a major role in determining whether an executive will be successful or not. A) a company's product line B) a manager's educational background C) a country's culture D) None of the above Answer: C Explanation: C) When determining which leadership style will be more appropriate for a company, a country's culture plays a major role in determining whether an executive will be successful or not. Since the vast majority of firms are deeply rooted in the culture of their home countries, leaders who adhere to the cultural norms have a better chance of success. Difficulty: Moderate Skill: Application AACSB: Analytical thinking Learning Obj.: 11 150) What role does culture play in determining business leadership styles? Answer: When determining which leadership style will be more appropriate for a company, a country's culture plays a major role in determining whether an executive will be successful or not. Regardless of how far-flung their markets and operations, multinational leaders typically retain and reflect the cultural mores of their home countries. Since the vast majority of firms are deeply rooted in the culture of their home countries, leaders who adhere to the cultural norms have a better chance of success. Think of global business styles as a continuum with U.S. executives at one end and their Asian counterparts at the other. America and Japan provide an excellent example for studying crosscultural leadership interaction due to the cultural differences between the countries. American CEOs differ in styles, but most have a common denominator; they have more leeway to make large, strategic decisions themselves. Japanese leaders tend to make decisions by consensus. Some wonder if it is possible for the various styles of executives to ever come together. It is too early to tell. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 11

Human Resource Management, 14e (Mondy) Chapter 7 Performance Management and Appraisal 1) Which term refers to a goal-oriented process directed toward ensuring that organizational processes are in place to maximize productivity of employees, teams, and the organization? A) performance appraisal B) strategic HR planning C) performance management D) development analysis Answer: C Explanation: C) Performance management (PM) is a goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. It is a major player in accomplishing organizational strategy in that it involves measuring and improving the value of the workforce. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) With performance management, a close relationship exists between performance and ________. A) finances B) competition C) HR selection D) incentive goals Answer: D Explanation: D) PM includes incentive goals and the corresponding incentive values so that the relationship can be clearly understood and communicated. There is a close relationship between incentives and performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

3) With performance management, the effort of every worker should be directed toward ________. A) improving compensation awareness B) analyzing corporate understanding C) enhancing overall organizational fit D) achieving strategic goals Answer: D Explanation: D) Every person in the organization is a part of the PM system. Each part of the system, such as training, appraisal, and rewards, is integrated and linked for the purpose of continuous organizational effectiveness. With PM, the effort of each and every worker should be directed toward achieving strategic goals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 4) Performance management helps to achieve organizational strategy and requires improving the value of the workforce. Answer: TRUE Explanation: Performance management is a goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. It is a major player in accomplishing organizational strategy in that it involves measuring and improving the value of the workforce. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) Performance appraisal is an ongoing process, while performance management occurs at a specific time. Answer: FALSE Explanation: Although every HR function contributes to performance management, training and performance appraisal play a more significant role. Whereas performance appraisal occurs at a specific time, performance management is a dynamic, ongoing, continuous process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

6) Performance appraisal may be the single largest contributor to organizational effectiveness. Answer: FALSE Explanation: PM may be the single largest contributor to organizational effectiveness in recent years. An effective PM system should be the responsibility of everyone in the organization starting with the CEO and moving throughout the entire organization because companies that disregard PM do not prosper. Performance appraisal is a formal system of review and evaluation of individual or team task performance. A critical point in the definition is the word formal because, in actuality, managers should be reviewing an individual's performance on a continuing basis. Performance appraisal is an important activity, but it is focused on specific employee performance events. Whereas performance appraisal occurs at a specific time, PM is a dynamic, continuous process. Every individual in the organization is a part of the PM system. Every component of the system is integrated to ensure continuous organizational effectiveness. With PM, every worker's efforts should focus on achieving strategic goals. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 7) What is the difference between performance management and performance appraisal? What is the relationship between the performance management and performance appraisal? Answer: Performance management (PM) is a goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. It is a major player in accomplishing organizational strategy in that it involves measuring and improving the value of the workforce. PM includes incentive goals and the corresponding incentive values so that the relationship can be clearly understood and communicated. Performance appraisal (PA) is a formal system of review and evaluation of individual or team task performance. PA is especially critical to the success of performance management. Although performance appraisal is but one component of performance management, it is vital, in that it directly reflects the organization's strategic plan. Although evaluation of team performance is critical when teams exist in an organization, the focus of PA in most firms remains on the individual employee. Regardless of the emphasis, an effective appraisal system evaluates accomplishments and initiates plans for development, goals, and objectives. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 1, 2

8) A formal system of review and evaluation of an individual or team task performance is referred to as ________. A) performance appraisal B) strategic planning C) performance management D) succession planning Answer: A Explanation: A) Performance appraisal (PA) is a formal system of review and evaluation of individual or team task performance. PA is especially critical to the success of performance management, which is a goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and the organization. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 9) Performance appraisals are used for all of the following purposes EXCEPT ________. A) identifying training needs B) defending personnel decisions C) implementing selection tests D) providing employee feedback Answer: C Explanation: C) Performance appraisals are used to provide feedback, encourage performance improvement, make valid decisions, justify terminations, identify training and development needs, and defend personnel decisions. PAs could be used to validate selection tests but not necessarily for implementing them. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 10) Performance appraisal is an informal system of review and evaluation of individual or team task performance. Answer: FALSE Explanation: Performance appraisal is a formal system of review and evaluation of individual or team task performance. A critical point in the definition is the word formal, because in actuality, managers should be reviewing an individual's performance on a continuing basis. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

11) HR managers use performance appraisal data for recruitment, selection, compensation, and training purposes. Answer: TRUE Explanation: PA data is potentially valuable for virtually every human resource functional area including recruitment, selection, compensation, and training. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 12) Sam is employed as an account associate at a publishing firm. Which of the following would most likely help Sam with career planning and development? A) applicant tracking systems B) compensation programs C) performance appraisals D) work sample tests Answer: C Explanation: C) Performance appraisal data is essential in assessing an employee's strengths and weaknesses and in determining the person's potential. Managers may use such information to counsel subordinates and assist them in developing and implementing their career plans. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 13) Which of the following is a problem associated with performance appraisals? A) Technical skills are not sufficiently assessed. B) Performance does not indicate training needs. C) Line managers are unfamiliar with subordinates. D) Past performance does not necessarily indicate future potential. Answer: D Explanation: D) Although past behaviors may be a good predictor of future behaviors in some jobs, an employee's past performance may not accurately indicate future performance in other jobs. Most PAs stress technical skills and ignore other equally important skills. PAs are useful indicators of training needs. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

14) To which of the following HR practices is performance appraisal least related? A) internal employee relations B) training and development C) compensation D) recruitment Answer: D Explanation: D) Performance appraisal is least relevant to recruitment because external job applicants have not performed work in the company. PA provides useful information for making decisions related to internal employee relations, training and development, and compensation. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 15) As an HR manager, how could you use performance appraisal information for HR tasks such as training and development, recruitment, and compensation? Answer: Performance appraisal should point out an employee's specific needs for training and development. By identifying deficiencies that adversely affect performance, T&D programs can be developed that permit individuals to build on their strengths and minimize their deficiencies. An appraisal system does not guarantee properly trained and developed employees. However, determining T&D needs is more precise when appraisal data are available. Also, PA evaluation ratings may be helpful in predicting the performance of job applicants. For example, it may be determined that a firm's successful employees (identified through performance evaluations) exhibit certain behaviors when performing key tasks. These data may then provide benchmarks for evaluating applicant responses obtained through behavioral interviews. Finally, PA results provide a basis for rational decisions regarding pay adjustments. Most managers believe that you should reward outstanding job performance tangibly with pay increases. They believe that the behaviors you reward are the behaviors you get. Rewarding behaviors necessary for accomplishing organizational objectives is at the heart of a firm's strategic plan. To encourage good performance, a firm should design and implement a reliable performance appraisal system and then reward the most productive workers and teams accordingly. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 3

16) What is the first step of the performance appraisal process? A) establishing employee job expectations B) identifying specific performance goals C) conducting a thorough job analysis D) evaluating work performance Answer: B Explanation: B) The starting point for the PA process is identifying specific performance goals. An appraisal system probably cannot effectively serve every desired purpose, so management should select the specific goals it believes to be most important and realistically achievable. Later in the process an employee's performance is evaluated. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 17) What is the most common cause for the failure of performance appraisal systems? A) unclear goals and expectations B) irrelevant development plans C) time consuming for managers D) high implementation costs Answer: A Explanation: A) The starting point for the PA process is identifying specific performance goals. An appraisal system probably cannot effectively serve every desired purpose, so management should select the specific goals it believes to be most important and realistically achievable. Too many PA systems fail because management expects too much from one method and does not determine specifically what it wants the system to accomplish. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 18) What is the final step in the appraisal process? A) reviewing the appraisal with the employee B) examining the work performance of the employee C) appraising the work performance of the employee D) communicating performance criteria to the employee Answer: A Explanation: A) The starting point for the PA process is identifying specific performance goals. Then the manager communicates performance criteria to the employee before examining and appraising job performance. At the end of the appraisal period, the appraiser and the employee together review work performance and evaluate it against established performance standards. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

19) In most cases, the first step of the performance appraisal process involves identifying specific performance goals. Answer: TRUE Explanation: The starting point for the PA process is identifying specific performance goals. An appraisal system probably cannot effectively serve every desired purpose, so management should select the specific goals it believes to be most important and realistically achievable. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 20) Performance appraisal has many purposes, including evaluation (for example, pay raise consideration) and development (for example, training and development planning). Answer: TRUE Explanation: An appraisal system probably cannot effectively serve every desired purpose, so management should select the specific goals it believes to be most important and realistically achievable. For example, some firms may want to stress employee development, whereas other organizations may want to focus on pay adjustments. Many firms rely on PA results to help inform decisions to terminate employment, particularly after a regular pattern of inadequate job performance. In any case, PA serves a developmental purpose, evaluative purpose, or both. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 21) What are the steps in the performance appraisal process? What are the characteristics of an effective PA process? Answer: The starting point for the PA process is identifying specific performance goals. An appraisal system probably cannot effectively serve every desired purpose, so management should select the specific goals it believes to be most important and realistically achievable. The next step in this ongoing cycle continues with establishing performance criteria (standards) and communicating these performance expectations to those concerned. Then the work is performed and the supervisor appraises the performance. At the end of the appraisal period, the appraiser and the employee together review work performance and evaluate it against established performance standards. This review helps determine how well employees have met these standards, determines reasons for deficiencies, and develops a plan to correct the problems. An effective PA process has job-related criteria, clear performance expectations, standardized instruments and procedures, trained appraisers, due process, and open communication. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 4, 10

22) Which of the following is NOT a standard used in effective performance appraisal systems? A) competencies B) behavior C) years of service D) traits Answer: C Explanation: C) Although years of service may signal experience which may be associated with higher job performance, it is not a performance appraisal standard. For example, every employee with 10 years of service are unlikely to perform equally well. Traits, behaviors, and competencies are often used as PA standards. Traits represent an individual's predisposition to think, feel, and behave, and many traits are usually thought of as being biologically created. Behaviors are typically viewed as resulting from a variety of sources including traits and situational context. Competencies refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations. Competencies may be technical in nature, relate to interpersonal skills, or are business oriented. For example, analytical thinking and achievement orientation might be essential in professional jobs. The competencies selected for evaluation purposes should be those that are closely associated with job success. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 23) Which of the following is a common appraisal criteria? A) traits B) behaviors C) competencies D) all of the above Answer: D Explanation: D) Management must carefully select performance criteria as it pertains to achieving corporate goals. The most common appraisal criteria are traits, behaviors, and competencies. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

24) Appearance and cognitive aptitude are examples of which appraisal criteria? A) goal achievement B) competencies C) behaviors D) traits Answer: D Explanation: D) The most common appraisal criteria are traits, behaviors, and competencies. Certain employee traits such as attitude, appearance, and initiative are the basis for some evaluations. However, many of these commonly used qualities are subjective and may be either unrelated to job performance or difficult to define. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 25) Which case ruled that general characteristics such as leadership, appearance, and personal conduct are subjective and may be unrelated to job performance? A) Campbell v Miller Construction B) Smith v Ardron Construction C) Anderson v West Coast Energy D) Wade v Mississippi Cooperative Extension Service Answer: D Explanation: D) Certain employee traits such as attitude, appearance, and initiative are the basis for some evaluations. However, many of these commonly used qualities are subjective and may be either unrelated to job performance or difficult to define. In such cases, inaccurate evaluations may occur and create legal problems for the organization as well, which was the case in Wade v Mississippi Cooperative Extension Service. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

26) As a manager, which of the following traits would be LEAST appropriate to consider when conducting a subordinate's performance appraisal? A) loyalty B) organizational commitment C) job-related competencies D) job-related knowledge Answer: A Explanation: A) Many of these commonly used traits, behaviors, and competencies are subjective and may be either unrelated to job performance or difficult to define. In such cases, inaccurate evaluations may occur and create legal problems for the organization as well. This was the case in Wade v. Mississippi Cooperative Extension Service where the circuit court ruled that traits such as adaptability, judgment, appearance, and attitude may be used when shown to be job-related. Public acceptance, grooming, and loyalty are less likely to be appropriate for PA purposes. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5 27) Gina and her team members at Marshall Marketing recently received their annual performance appraisals. Each team member was evaluated for developing others, cooperation, and customer service orientation. Which of the following best describes these criteria? A) traits B) behaviors C) goal achievement D) improvement potential Answer: B Explanation: B) When an individual's task outcome is difficult to determine, organizations may evaluate the person's task-related behaviors. For individuals working in teams, developing others, teamwork and cooperation, or customer service orientation might be appropriate behaviors to evaluate. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5

28) What performance criteria include a broad range of knowledge, skills, traits, and behaviors that are needed to perform a job successfully? A) credibilities B) competencies C) accomplishments D) future possibilities Answer: B Explanation: B) Competencies refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations. Competencies may be technical in nature, relate to interpersonal skills, or are business oriented. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 29) Competencies chosen for performance appraisal purposes should be closely related to ________. A) job success B) job seniority C) pay grade D) skill level Answer: A Explanation: A) Competencies include a broad range of knowledge, skills, traits, and behaviors that may be technical in nature, relate to interpersonal skills, or be business-oriented. The competencies selected for evaluation purposes should be those that are closely associated with job success. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

30) Monica, a sales consultant, will receive a performance appraisal soon. Monica's supervisor will be assessing Monica's ability to deliver products to clients according to schedule and her ability to meet customer quality requirements. Which performance standard is most likely important to Monica's employer? A) improvement potential B) strategic contribution C) goal achievement D) employee traits Answer: C Explanation: C) If organizations consider ends more important than means, goal achievement outcomes become an appropriate factor to evaluate. At lower organizational levels, the outcomes might be meeting the customer's quality requirements and delivering according to the promised schedule. It is unclear from the information provided whether improvement potential, strategic contribution, and traits are important to Monica's employer. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 5 31) If a firm wants to emphasize the future, including the behaviors and outcomes needed to develop the employee, and, in the process, achieve the firm's goals, what performance criteria should be used? A) improvement potential B) competencies C) goal achievement D) traits Answer: A Explanation: A) A firm that wants to focus on the future instead of the past needs improvement potential standards. Firms can emphasize the future, including the behaviors and outcomes needed to develop the employee, and, in the process, achieve the firm's goals. This involves an assessment of the employee's potential. Including potential in the evaluation process helps to ensure more effective career planning and development. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 32) Traits such as adaptability, judgment, appearance, and attitude may be used in performance appraisals if they are job-related. Answer: TRUE Explanation: Certain traits may relate to job performance and, if this connection is established, using them may be appropriate. Traits such as adaptability, judgment, appearance, and attitude may be used when shown to be job-related. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 13 Copyright © 2016 Pearson Education, Inc.

33) Desired behaviors may be appropriate as evaluation criteria because if they are recognized and rewarded, employees tend to repeat them. Answer: TRUE Explanation: Desired behaviors may be appropriate as evaluation criteria because if they are recognized and rewarded, employees tend to repeat them. If certain behaviors result in desired outcomes, there is merit in using them in the evaluation process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 34) Behaviors include a broad range of knowledge, skills, and traits that may be technical in nature, relate to interpersonal skills, or be business oriented. Answer: FALSE Explanation: Competencies include a broad range of knowledge, skills, traits, and behaviors that may be technical in nature, relate to interpersonal skills, or are business-oriented. Some managers recommend that cultural competencies such as ethics and integrity be used for all jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 35) If organizations consider ends more important than means, goal achievement should be a factor in performance appraisals. Answer: TRUE Explanation: If organizations consider ends more important than means, goal achievement outcomes become an appropriate factor to evaluate. The outcomes established should be within the control of the individual or team and should be those results that lead to the firm's success. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 36) Focusing on an employee's potential during a performance appraisal ensures that more effective career planning and development will occur. Answer: TRUE Explanation: Firms should emphasize the future, including the behaviors and outcomes needed to develop the employee, and, in the process, achieve the firm's goals. This involves an assessment of the employee's potential. Including potential in the evaluation process helps to ensure more effective career planning and development. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

37) Identify and explain the three primary standards that may be used in designing performance appraisal standards. Answer: Traits, behaviors, and competencies are often used as PA standards. Traits represent an individual's predisposition to think, feel, and behave, and many traits are usually thought of as being biologically created. A personality trait is more ingrained with an individual as with a person being introverted or extroverted, or less conscientious or more conscientious. Behaviors are typically viewed as resulting from a variety of sources including traits and situational context. For example, a highly conscientious person is more likely to engage in behaviors that lead to timely task completion than someone who is less conscientious because conscientiousness is associated with dutifulness. Employees who tend to be less conscientious may step up their game in situations where they have the opportunity to earn substantial performance-based bonuses than in situations where pay is the same regardless of performance differences. A behavior may have been learned from parents, from significant friends, or from a certain work environment. A behavior can be changed, but traits are usually more established. Desired behaviors may be appropriate as evaluation criteria because if they are recognized and rewarded, employees tend to repeat them. If certain behaviors result in desired outcomes, there is merit in using them in the evaluation process. Competencies refer to an individual's capability to orchestrate and apply combinations of knowledge, skills, and abilities consistently over time to perform work successfully in the required work situations. Competencies may be technical in nature, relate to interpersonal skills, or are business oriented. For example, analytical thinking and achievement orientation might be essential in professional jobs. The competencies selected for evaluation purposes should be those that are closely associated with job success. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 5 38) When developing a performance appraisal system for telecommuters, managers should do all of the following EXCEPT ________. A) make sure that telecommuters are not treated differently from office-based workers B) apply objective measures common to all employees when evaluating telecommuters C) create different performance standards for common job duties performed by office-based workers and telecommuters D) create a well-defined understanding of job roles and performance measures Answer: C Explanation: C) When conducting performance appraisals for telecommuters, managers must ensure that employees who are not in the office are not treated differently from in-office workers. Certainly, there should be a well-defined understanding of job roles and performance measures. Objective measurements that apply to in-office worker s should also apply to telecommuters. Employers must take care not to vary the performance standards and metrics for virtual workers who have job duties that are similar to those of office-based counterparts. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

39) Which of the following is primarily responsible for coordinating the design and implementation of performance appraisal programs? A) high-level executives B) shared service center managers C) labor union representatives D) human resource departments Answer: D Explanation: D) Often the human resource department is responsible for coordinating the design and implementation of performance appraisal programs. However, it is essential that line managers play a key role from beginning to end. These individuals usually conduct the appraisals, and they must directly participate in the program if it is to succeed. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 40) Which of the following has traditionally been responsible for evaluating employee performance? A) team members B) subordinates C) immediate supervisors D) top corporate customers Answer: C Explanation: C) An employee's immediate supervisor has traditionally been the most logical choice for evaluating performance and this continues to be the case. The supervisor is usually in an excellent position to observe the employee's job performance and the supervisor has the responsibility for managing a particular unit. Team members, subordinates, and customers perform appraisals less frequently. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

41) All of the following are reasons that immediate supervisors conduct most performance appraisals EXCEPT that supervisors ________. A) regularly observe their employees' job performance B) coordinate employees' flexible spending benefits C) manage all aspects of work within a particular unit D) need subordinates who are appropriately trained Answer: B Explanation: B) An employee's immediate supervisor has traditionally been the most logical choice for evaluating performance and this continues to be the case. The supervisor is usually in an excellent position to observe the employee's job performance, and the supervisor has the responsibility for managing a particular unit. Also, subordinate training and development is an important element in every manager's job. Supervisors do not manage employee benefits. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 42) Which of the following is the most likely problem of supervisors evaluating subordinates? A) focusing too much on a single performance standard B) coordinating employee training needs and programs C) being responsible for only one department within the firm D) lacking opportunities to observe the employee's job performance Answer: A Explanation: A) On the negative side, the immediate supervisor may emphasize certain aspects of employee performance and neglect others. However, the fact that supervisors handle training, manage single departments, and observe employee performance make them the appropriate people to conduct performance appraisals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

43) Adam, an IT specialist, is more technically knowledgeable than his boss. What would be the most appropriate way to overcome this disadvantage for Adam's performance appraisal? A) obtaining performance input from Adam's customers B) providing Adam's supervisor with additional training C) allowing Adam to assess the supervisor's performance D) integrating appraisal criteria suggested by Adam Answer: D Explanation: D) When the appraised employee is more technically knowledgeable than the boss, performance appraisal becomes a problem. One suggestion for overcoming this disadvantage is to bring subordinates into the process more closely. Adam could suggest ways to fairly evaluate his own performance, and then Adam's boss could use the suggestions as part of the appraisal criteria. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 6 44) What is the benefit of having subordinates evaluate supervisors? A) increasing the opportunity to expand a department B) decreasing the reliance on traditional performance appraisals C) increasing a supervisor's awareness of the work group's needs D) decreasing a supervisor's authority over subordinates in a work group Answer: C Explanation: C) Firms reason that subordinates are in an excellent position to view their superiors' managerial effectiveness. Advocates believe that this approach leads supervisors to become especially conscious of the work group's needs and to do a better job of managing. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 45) What is essential when subordinates are given the opportunity to evaluate their supervisor? A) training subordinates how to evaluate performance B) teaching evaluators how to measure performance C) guaranteeing anonymity of the evaluators D) benchmarking all evaluations Answer: C Explanation: C) Critics of subordinates reviewing supervisors are concerned that the manager (and instructors) will be caught up in a popularity contest or that employees will be fearful of reprisal. If this approach has a chance for success, one thing is clear: the evaluators must be guaranteed anonymity. Ensuring this might be particularly difficult in a small department and especially if demographic data on the appraisal form could identify raters. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 18 Copyright © 2016 Pearson Education, Inc.

46) Which of the following is NOT an advantage associated with using team members to appraise performance? A) Team members are familiar with each other's performance. B) Team members are receptive to criticism from co-workers. C) Peer review relies on more than one opinion. D) Peer pressure motivates members of a team. Answer: B Explanation: B) A major strength of using peers to appraise performance is that they work closely with the evaluated employee and probably have an undistorted perspective on typical performance, especially in team assignments. In addition, peer pressure is a powerful motivator for team members, and peer review involves numerous opinions and is not dependent on one individual. Problems with peer evaluations include the reluctance of some people who work closely together, especially on teams, to criticize each other. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 47) What appraisal method appeals to managers who want employees to participate in their own evaluation and development? A) superior B) peer appraisal C) subordinate D) self-appraisal Answer: D Explanation: D) As a complement to other approaches, self-appraisal has great appeal to managers who are primarily concerned with employee participation and development. If employees understand their objectives and the criteria used for evaluation, they are in a good position to appraise their own performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

48) A&B Enterprises may add customer appraisals as a component of employee performance appraisals. All of the following are most likely reasons for A&B to use customer appraisals EXCEPT ________. A) fostering change B) holding employees accountable C) evaluating development programs D) demonstrating customer commitment Answer: C Explanation: C) Customer behavior determines a firm's degree of success. Therefore, some organizations believe it is important to obtain performance input from this critical source. Organizations use this approach because it demonstrates a commitment to the customer, holds employees accountable, and fosters change. Customer appraisals are less likely to be used to evaluate training and development programs. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 6 49) A popular appraisal method that involves input from multiple levels within the firm and external sources is best known as ________. A) 360-degree feedback evaluation B) rating scale C) critical incident D) paired comparison Answer: A Explanation: A) The 360-degree feedback evaluation method is a popular performance appraisal method that involves evaluation input from multiple levels within the firm as well as external sources. The 360-degree method is unlike traditional performance reviews, which provide employees with feedback only from supervisors. Rating scale, critical incident, and paired comparison are other types of appraisal methods. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

50) Kyra works as a marketing assistant and will be receiving a performance appraisal soon. Kyra will receive ratings from her supervisors, team members, subordinates, and customers. Kyra will also be asked to review her own performance. Which performance appraisal method is most likely used at Kyra's firm? A) rating scales method B) work standards method C) critical incident method D) 360-degree feedback evaluation method Answer: D Explanation: D) The 360-degree feedback evaluation method is a popular performance appraisal method that involves evaluation input from multiple levels within the firm as well as external sources. In this method, people all around the rated employee may provide ratings, including senior managers, the employee himself or herself, supervisors, subordinates, peers, team members, and internal or external customers. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 6 51) Dixon Manufacturing is a large firm that produces automotive parts for sports cars. Employees at Dixon receive annual performance appraisals from their supervisors. However, top executives at Dixon have decided that performance appraisals should be conducted more frequently and that a new method of appraisal should be implemented. Which of the following, if true, best supports the argument that the 360-degree feedback evaluation method is the most appropriate performance appraisal tool for Dixon to use? A) Numerous Dixon employees have complained that the current appraisal method is biased and have threatened to sue the firm. B) Executives at Dixon want a performance appraisal method that focuses on an employee's potential for success at the firm. C) Employees at Dixon participated in developing their own performance standards when they were first hired by the firm. D) Due to the firm's large staff, executives want an appraisal method that is both quick and cost effective. Answer: A Explanation: A) 360-degree feedback shifts the responsibility for evaluation to more than one person, which provides a more objective measure of a person's performance. Including the perspective of multiple sources results in a broader view of the employee's performance, minimizes biases, and makes the process more legally defensible. However, 360-degree feedback is time consuming and can be costly. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 6

52) What is the biggest risk associated with the 360-degree feedback evaluation method? A) poor individual development B) minimal effectiveness C) questionable legality D) lack of confidentiality Answer: D Explanation: D) The biggest risk with 360-degree feedback is confidentiality. Many firms outsource the process to make participants feel comfortable that the information they share and receive is completely anonymous, but the information is very sensitive and, in the wrong hands, could impact careers. An advantage of the method is that it is legally defensible. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 53) A supervisor wants to give a pay raise to a certain employee and, in order to justify this action, the supervisor gives the employee a high performance evaluation. Which of the following best describes this problem? A) halo error B) stereotyping C) recent behavior bias D) evaluation manipulation Answer: D Explanation: D) In some instances, managers control virtually every aspect of the appraisal process and are therefore in a position to manipulate the system. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 54) It is essential that line managers play a key role in performance appraisal from beginning to end. Answer: TRUE Explanation: Often the human resource department is responsible for coordinating the design and implementation of performance appraisal programs. However, it is essential that line managers play a key role from beginning to end. These individuals usually conduct the appraisals, and they must directly participate in the program if it is to succeed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

55) The primary disadvantage of using peers to appraise performance is that they do not work closely enough with evaluated employees to provide useful feedback. Answer: FALSE Explanation: A major strength of using peers to appraise performance is that they work closely with the evaluated employee and probably have an undistorted perspective on typical performance, especially in team assignments. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 56) Organizations that structure employees into self-directed teams are using peers to appraise performance less frequently because of time constraints. Answer: FALSE Explanation: A major strength of using peers to appraise performance is that they work closely with the evaluated employee and probably have an undistorted perspective on typical performance, especially in team assignments. Organizations are increasingly using teams, including those that are self-directed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 57) If employees understand their objectives and the criteria used for evaluation, they can effectively appraise their own performance. Answer: TRUE Explanation: If employees understand their objectives and the criteria used for evaluation, they are in a good position to appraise their own performance. Many people know what they do well on the job and what they need to improve. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 58) Organizations use customer appraisal because it demonstrates a commitment to the customer and holds employees accountable. Answer: TRUE Explanation: Customer behavior determines a firm's degree of success. Therefore, some organizations believe it is important to obtain performance input from this critical source. Organizations use this approach because it demonstrates a commitment to the customer, holds employees accountable, and fosters change. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

59) The 360-degree feedback evaluation method involves evaluation input from multiple levels within the firm as well as external sources. Answer: TRUE Explanation: The 360-degree feedback evaluation method is a popular performance appraisal method that involves evaluation input from multiple levels within the firm as well as external sources. The 360-degree method is unlike traditional performance reviews, which provide employees with feedback only from supervisors. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 60) Results from 360-degree programs are used by firms for succession planning, training, professional development, and performance management. Answer: TRUE Explanation: As many as 90 percent of Fortune 500 companies use some form of 360-degree feedback for either employee evaluation or development. Many companies use results from 360degree programs not only for conventional applications but also for succession planning, training, and professional development. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 61) The rating scale method focuses on skills needed across organizational boundaries. Answer: FALSE Explanation: Unlike traditional approaches, 360-degree feedback focuses on skills needed across organizational boundaries. The rating scales method is a performance appraisal method that rates employees according to defined factors and is less focused on organizational needs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 62) Having multiple raters makes the 360-degree feedback evaluation method more legally defensible and more costly. Answer: TRUE Explanation: Having multiple raters also makes the process more legally defensible. However, an appraisal system involving numerous evaluators will naturally take more time and, therefore, be more costly. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

63) The most significant risk associated with 360-degree feedback is confidentiality. Answer: TRUE Explanation: The biggest risk with 360-degree feedback is confidentiality. Many firms outsource the process to make participants feel comfortable that the information they share and receive is completely anonymous, but the information is very sensitive and, in the wrong hands, could impact careers. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 64) A typical job might have 8-10 dimensions under BARS, each with a separate rating scale. Answer: TRUE Explanation: A typical job might have 8-10 dimensions under BARS, each with a separate rating scale. The designers of BARS write the incidents as expectations to emphasize the fact that the employee does not have to demonstrate the exact behavior that is used as an anchor to be rated at that level. Because a complete array of behaviors that characterize a particular job would take many pages of description, it is not feasible to place examples of all job behaviors on the scale. Experts therefore list only those behaviors that they believe are most representative of the job the employee must perform. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 65) What are the pros and cons of having an immediate supervisor involved in the performance appraisal process? Answer: An employee's immediate supervisor has traditionally been the most logical choice for evaluating performance, and this continues to be the case. The supervisor is usually in an excellent position to observe the employee's job performance, and the supervisor has the responsibility for managing a particular unit. When someone else has the task of evaluating subordinates, the supervisor's authority may be undermined. Also, subordinate T&D is an important element in every manager's job, and as previously mentioned, appraisal programs and employee development are usually closely related. On the negative side, the immediate supervisor may emphasize certain aspects of employee performance and neglect others. Also managers have been known to manipulate evaluations to justify pay increases and promotions and vice versa. In most instances, the immediate supervisor will probably continue to be involved in evaluating performance. Organizations will seek alternatives, however, because of technological advances and a desire to broaden the perspective of the appraisal. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 6

66) What are the advantages and disadvantages of having peers and team members appraise an employee's performance? Answer: A major strength of using peers to appraise performance is that they work closely with the evaluated employee and probably have an undistorted perspective on typical performance, especially in team assignments. The rationale for evaluations conducted by team members includes the following: 1.Team members know each other's performance better than anyone and can, therefore, evaluate performance more accurately. 2. Peer pressure is a powerful motivator for team members. 3. Members who recognize that peers within the team will be evaluating their work show increased commitment and productivity. Problems with peer evaluations include the reluctance of some people who work closely together, especially on teams, to criticize each other. On the other hand, if an employee has been at odds with another worker he or she might really "unload on the enemy," resulting in an unfair evaluation. Another problem concerns peers who interact infrequently and lack the information needed to make an accurate assessment. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 6 67) In the current business climate, firms may want to consider evaluating performance more often because ________. A) the law requires that companies conduct performance appraisals often B) changes in the business climate occur rapidly C) companies wish to avoid negligent retention D) companies use performance appraisal as a labor cost savings tool Answer: B Explanation: B) In the current business climate, firms may want to consider evaluating performance more often. Changes occur so fast that employees need to look at objectives and their own roles throughout the year to see whether changes are in order. Southwest Airlines has asked its managers to have monthly check-ins with staff rather than semiannual ones. Employees with Royal Caribbean Cruises are evaluated approximately three weeks prior to the completion of their contract, which is typically six months. Some even consider these relatively shorter intervals to be too long: "Think of a sports team: A coach doesn't wait until the end of a season to give his players feedback." Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

68) Managing employee performance should be a ________ process if it is to be the most effective. A) formal B) continuous C) structured D) bi-annual Answer: B Explanation: B) Although there is nothing magical about the period for formal appraisal reviews, in most organizations they occur either annually or semiannually. Even more significant, however, is the continuous interaction (primarily informal), including coaching and other developmental activities, that continues throughout the appraisal period. Managers should be conditioned to understand that managing performance is a continuous process that is built into their job every day. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 69) Managing performance is extraneous to a manager's daily job duties. Answer: FALSE Explanation: Formal performance appraisals are prepared at specific intervals. However, managers should be conditioned to understand that managing performance is a continuous process that is built into their job every day. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 70) Experts recommend performing evaluations on hiring anniversaries rather than on a calendar basis in order to make essential comparisons between employees. Answer: FALSE Explanation: In the interest of consistency, it may be advisable to perform evaluations on a calendar basis rather than on anniversaries. If firms do not conduct all appraisals at the same time, it may be impossible to make needed comparisons between employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

71) The ________ of appraisal compares each employee's performance to a predetermined standard or expected level of output. A) critical incident method B) work standards method C) forced distribution method D) behaviorally anchored rating scale method Answer: B Explanation: B) The work standards method of performance appraisal compares each employee's performance to a predetermined standard or expected level of output. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 72) The ________ of appraisal requires managers to keep written records of highly favorable and unfavorable work actions. A) rating scales method B) work standards method C) forced distribution method D) critical incident method Answer: D Explanation: D) The critical incident method of performance appraisal requires keeping written records of highly favorable and unfavorable employee work actions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

73) Dixon Manufacturing is a large firm that produces automotive parts for sports cars. Employees at Dixon receive annual performance appraisals from their supervisors. However, top executives at Dixon have decided that performance appraisals should be conducted more frequently and that a new method of appraisal should be implemented. Which of the following, if true, best supports the argument that the BARS method is the most appropriate performance appraisal tool for Dixon to use? A) Dixon recently invested in an applicant tracking system to help HR manage recruiting and selection tasks. B) Dixon supervisors want to provide subordinates with upward feedback to illustrate employee ratings. C) Dixon has provided HR with a small budget for implementing a new performance appraisal system. D) Dixon supervisors want specific examples of good and poor behavior in order to facilitate rating discussions. Answer: D Explanation: D) The BARS method is based on the CIT (Critical Incident Technique), and these scales are developed in the same fashion with one exception. For the CIT, a critical incident would be written as "the incumbent completed the task in a timely fashion." For the BARS format, this incident would be written as "the incumbent is expected to complete the task in a timely fashion." The designers of BARS write the incidents as expectations to emphasize the fact that the employee does not have to demonstrate the exact behavior that is used as an anchor to be rated at that level. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 8 74) Dixon Manufacturing is a large firm that produces automotive parts for sports cars. Employees at Dixon receive annual performance appraisals from their supervisors. However, top executives at Dixon have decided that performance appraisals should be conducted more frequently and that a new method of appraisal should be implemented. Which of the following, if true, best supports the argument that the forced distribution method is the most appropriate performance appraisal tool for Dixon to use? A) Organizational fit is a problem among newly hired Dixon employees. B) Many managers at Dixon are hesitant to fire poor performing employees. C) Dixon organizes most departments into project-based teams of employees. D) Multiple appraisals are needed at Dixon to minimize employee discrimination. Answer: B Explanation: B) Many companies use forced distribution approaches to minimize the tendency for supervisors to rate most employees as excellent performers. This tendency usually arises out of supervisors' self-promotion motives. Supervisors often provide positive performance ratings to most of their employees because they do not want to alienate them. After all, their performance as supervisors depends largely on how well their employees perform their jobs. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 8 29 Copyright © 2016 Pearson Education, Inc.

75) Dixon Manufacturing is a large firm that produces automotive parts for sports cars. Employees at Dixon receive annual performance appraisals from their supervisors. However, top executives at Dixon have decided that performance appraisals should be conducted more frequently and that a new method of appraisal should be implemented. Which of the following, if true, best supports the argument that the forced distribution method is the most appropriate performance appraisal tool for Dixon to use? A) Employees at Dixon are provided training opportunities based on performance appraisal results. B) Dixon executives want the firm to become a high performing work system within five years. C) Dixon will be reducing its workforce and eliminating the lowest performing employees. D) Supervisors at Dixon work with HR to hire, fire, and train all employees. Answer: C Explanation: C) An alternative approach, called a forced distribution method PA and sometimes referred to as a stacked ranking system, assigns employees to groups that represent the entire range of performance. For example, three categories that might be used are best performers, moderate performers, and poor performers. A forced distribution approach, in which the rater must place a specific number of employees into each of the performance groups, can be used with this method. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 8 76) Which statement about traits is most accurate? A) traits do influence behavior, but these do not fully account for behavior B) traits are readily translated into job performance C) traits influence motivation, but not job performance D) traits determine a person's personality profile Answer: A Explanation: A) Traits represent a predisposition to behave, think, or feel. Although traits do influence behavior, these do not fully account for behavior. Traits and personality, although not identical, are individual characteristics that are not likely to change over time. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

77) Departmental managers at Global Industries are required to maintain written records of highly favorable and unfavorable employee actions. Which performance appraisal method is most likely used by Global Industries? A) ranking B) rating scales C) critical incidents D) paired comparison Answer: C Explanation: C) The critical incident method is a performance appraisal method that requires keeping written records of highly favorable and unfavorable employee work actions. The rating scales method is a performance appraisal method that rates employees according to defined factors. The ranking method, which includes the paired comparison method, is a performance appraisal method in which the rater ranks all employees from a group in order of overall performance. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 78) Which appraisal method is most likely to cover the entire evaluation period and not focus on the last few weeks or months? A) essay B) rating scale C) critical incident D) paired comparison Answer: C Explanation: C) The critical incident method is a performance appraisal method that requires keeping written records of highly favorable and unfavorable employee work actions. At the end of the appraisal period, the rater uses these records along with other data to evaluate employee performance. With this method, the appraisal is more likely to cover the entire evaluation period and not focus on the past few weeks or months. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

79) When Erin, a manager, provides performance appraisals to her subordinates, she writes a brief narrative describing an employee's performance relative to a predetermined standard. Which type of appraisal method is Erin most likely using? A) work standards method B) essay method C) BARS method D) ranking method Answer: A Explanation: A) The work standards method is a PA method that compares each employee's performance to a predetermined standard or expected level of output. Standards reflect the normal output of an average worker operating at a normal pace. Firms may apply work standards to virtually all types of jobs, but production jobs generally receive the most attention. The essay method is a performance appraisal method in which the rater writes a brief narrative describing the employee's performance. The BARS method and CIT method focus on behavioral incidents. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 8 80) Marco, who works on an assembly line at GM, received his annual performance appraisal, which compared his job performance to an expected level of output. Which method is most likely used by GM? A) BARS B) ranking C) critical incident D) work standards Answer: D Explanation: D) The work standards method is a performance appraisal method that compares each employee's performance to a predetermined standard or expected level of output. Standards reflect the normal output of an average worker operating at a normal pace. Firms may apply work standards to virtually all types of jobs, but production jobs generally receive the most attention. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 8

81) A worker in which of the following jobs would most likely be evaluated with the work standards performance appraisal method? A) sales assistant B) assembly line worker C) mechanical engineer D) personal finance specialist Answer: B Explanation: B) The work standards method is a performance appraisal method that compares each employee's performance to a predetermined standard or expected level of output. Standards reflect the normal output of an average worker operating at a normal pace. Firms may apply work standards to virtually all types of jobs, but production jobs generally receive the most attention. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 8 82) What is the primary advantage of using the work standards method? A) anonymity B) objectivity C) flexibility D) acceptability Answer: B Explanation: B) An obvious advantage of using standards as appraisal criteria is objectivity. However, in order for employees to perceive that the standards are objective, they should understand clearly how the standards were set. The work standards method is not anonymous or flexible. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

83) When it is time for Margaret to provide performance appraisals, she organizes her subordinates in a list from best employee to worst employee. Which method does Margaret most likely use? A) critical incident B) 360-degree C) comparison D) work standards Answer: C Explanation: C) Comparison systems evaluate a given employee's performance against that of other employees. Employees are ranked from the best performer to the poorest performer. In simplest form, supervisors rank each employee and establish a performance hierarchy such that the employee with the best performance receives the highest ranking. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 8 84) In which performance appraisal method is the performance of each employee compared with every other employee in the group? A) forced distribution B) rating scales C) paired comparison D) weighted checklists Answer: C Explanation: C) Paired comparison is a variation of the ranking method in which the performance of each employee is compared with that of every other employee in the group. A single criterion, such as overall performance, is often the basis for this comparison. The employee who receives the greatest number of favorable comparisons receives the highest ranking. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

85) Paired comparison is a performance appraisal method that typically uses ________. A) one criterion B) critical incidents C) job analysis factors D) aspects such as attitude and appearance Answer: A Explanation: A) Paired comparison is a variation of the ranking method in which the performance of each employee is compared with that of every other employee in the group. A single criterion, such as overall performance or traits, is often the basis for this comparison. The employee who receives the greatest number of favorable comparisons receives the highest ranking. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 86) In which performance appraisal method are individuals assigned to a limited number of categories similar to a normal frequency distribution? A) essay B) rating scales C) weighted checklist D) forced distribution Answer: D Explanation: D) The forced distribution method of performance appraisal requires the rater to assign individuals in a work group to a limited number of categories, similar to a normal frequency distribution. The purpose of forced distribution is to keep managers from being excessively lenient and having a disproportionate number of employees in the "superior" category. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 87) The purpose of the ________ of performance appraisal is to keep managers from being excessively lenient and having a disproportionate number of employees in the superior category. A) BARS method B) rating scale method C) results-based method D) forced distribution method Answer: D Explanation: D) The purpose of the forced distribution method of performance appraisal is to keep managers from being excessively lenient and having a disproportionate number of employees in the "superior" category. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 35 Copyright © 2016 Pearson Education, Inc.

88) How many levels are typical of most forced distribution systems? A) 2 B) 3 C) 4 D) 5 Answer: B Explanation: B) The forced distribution method of performance appraisal requires the rater to assign individuals in a work group to a limited number of categories, similar to a normal frequency distribution. Forced distribution systems tend to be based on as few as three levels. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 89) What performance appraisal system has been described as fostering cutthroat competition, paranoia, and general ill will among employees? A) 360-feedback B) rating scales C) forced distribution D) BARS Answer: C Explanation: C) Some managers believe that the forced distribution method of appraisal fosters cutthroat competition, paranoia, and general ill will, and destroys employee loyalty. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 90) Which performance appraisal system is known as the rank-and-yank system? A) forced distribution B) rating scales C) forced choice D) BARS Answer: A Explanation: A) The forced distribution method of performance appraisal requires the rater to assign individuals in a work group to a limited number of categories, similar to a normal frequency distribution. Rank-and-yank is used to describe the forced distribution method because firms sometimes use the rankings as a basis for firing low-performing employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

91) Which two methods are combined in the BARS method? A) essay and forced distribution B) critical incident and rating scales C) work standards and critical incident D) forced distribution and 360-feedback Answer: B Explanation: B) The behaviorally anchored rating scale (BARS) method is a performance appraisal method that combines elements of the traditional rating scales and critical incident methods; various performance levels are shown along a scale with each described in terms of an employee's specific job behavior. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 92) In which performance appraisal method, are various performance levels shown along a scale that incorporates only positive performance behaviors? A) forced distribution B) rating scales C) forced choice D) BOS Answer: D Explanation: D) The behaviorally observation scale (BOS) displays illustrations of positive incidents (or behaviors) of job performance for various job dimensions. The evaluator rates the employee on each behavior according to the extent to which the employee performs in a manner consistent with each behavioral description. Scores from each job dimension are averaged to provide an overall rating of performance. BOS is developed in the same way as a BARS instrument, except that it incorporates only positive performance behaviors. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 93) A primary deficiency of BARS is that the behaviors used are based on ________. A) short-term results B) co-worker opinions C) personality traits D) employee activities Answer: D Explanation: D) A specific deficiency of BARS is that the behaviors used are activity oriented rather than results oriented. Yet, among the various appraisal techniques, the BARS method is perhaps the most highly defensible in court because it is based on actual observable job behaviors. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 37 Copyright © 2016 Pearson Education, Inc.

94) Which performance appraisal is highly defensible in court because it is based on actual observable job behaviors? A) forced distribution B) rating scales C) forced choice D) BARS Answer: D Explanation: D) Among the various appraisal techniques, the BARS method is perhaps the most highly defensible in court because it is based on actual observable job behaviors. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 95) Ellen and her manager jointly agree on goals for Ellen's next appraisal period. Which performance appraisal method is most likely used by Ellen's employer? A) management by objectives B) critical incidents C) work standards D) BARS Answer: A Explanation: A) The manager and subordinate jointly agree on objectives for the next appraisal period in a results-based system. At the end of the appraisal period, an evaluation focuses on how well the employee achieved this objective. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 8 96) Which category of performance appraisal system is closely related to the management by objectives (MBO) system? A) forced distribution B) BOS C) results-based D) BARS Answer: C Explanation: C) The manager and subordinate jointly agree on objectives for the next appraisal period in a results-based system, in the past a form of management by objectives. Forced distribution is a comparison method. BOS and BARS are specific behavioral systems. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

97) The critical incident method is an appraisal approach that rates employees according to defined factors. Answer: FALSE Explanation: The rating scales method is a performance appraisal method that rates employees according to defined factors. The critical incident method is a performance appraisal method that requires keeping written records of highly favorable and unfavorable employee work actions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 98) Each comparative system performance appraisal practice leads to a natural distribution of performance ratings rather than a predetermined distribution. Answer: FALSE Explanation: Some, but not all, comparison methods lead to a natural distribution of performance ratings. In a forced distribution method, raters assigns employees to groups that represent the entire range of performance. For example, three categories that might be used are best performers, moderate performers, and poor performers. A forced distribution approach requires that a rater place a specific number of employees into each of the performance groups. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 99) The rating scale method requires keeping written records of highly favorable and highly unfavorable employee work actions. Answer: FALSE Explanation: The critical incident method is a performance appraisal method that requires keeping written records of highly favorable and unfavorable employee work actions. The rating scales method is a performance appraisal method that rates employees according to defined factors. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 100) The work standards method compares each employee's performance to a predetermined standard. Answer: TRUE Explanation: The work standards method is a performance appraisal method that compares each employee's performance to a predetermined standard or expected level of output. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

101) The critical incident method is a variation of the ranking method in which the performance of each employee is compared with every other employee in the group. Answer: FALSE Explanation: Paired comparison is a variation of the ranking method in which the performance of each employee is compared with that of every other employee in the group. A single criterion, such as overall performance, is often the basis for this comparison. The critical incident method is a performance appraisal method that requires keeping written records of highly favorable and unfavorable employee work actions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 102) Some companies use the forced distribution system because of its popularity among most managers and HR professionals. Answer: FALSE Explanation: The forced distribution system appears to be unpopular with many managers. These systems can undermine team work and create undesirable competition between employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 103) Opponents of forced distribution contend that the system fosters paranoia among employees and destroys company loyalty. Answer: TRUE Explanation: Critics believe the forced distribution method fosters cutthroat competition, paranoia, and general ill will, and destroys employee loyalty. Opponents of forced distribution contend that the method compels a manager to penalize a good, although not a great, employee who is part of a superstar team. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 104) The BARS method combines elements of the traditional rating scales and critical incident methods. Answer: TRUE Explanation: The behaviorally anchored rating scale (BARS) method is a performance appraisal method that combines elements of the traditional rating scales and critical incident methods; various performance levels are shown along a scale with each described in terms of an employee's specific job behavior. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 40 Copyright © 2016 Pearson Education, Inc.

105) The manager and the subordinate jointly agree on objectives for the next appraisal period in a management by objectives system. Answer: TRUE Explanation: The manager and subordinate jointly agree on objectives for the next appraisal period in a results-based system. In such a system, one objective might be, for example, to cut waste by 10 percent. At the end of the appraisal period, an evaluation focuses on how well the employee achieved this objective. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 106) Which performance appraisal method is most frequently criticized? A) rating scales B) results-based C) 360-feedback D) work standards method Answer: A Explanation: A) Performance appraisal is constantly under a barrage of criticism. The rating scales method seems to be the most vulnerable target. Yet in all fairness, many of the problems commonly mentioned are not exclusive to this method but rather, reflect improper implementation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 107) Managers at A-1 Enterprises use the rating scales method to evaluate employee performance. Ratings are based on factors such as attitude, loyalty, and personality. What is the most likely problem with this type of performance appraisal system? A) leniency B) lack of objectivity C) strictness D) central tendency Answer: B Explanation: B) A potential weakness of traditional performance appraisal methods is that they lack objectivity. In the rating scales method, for example, commonly used factors such as attitude, appearance, and personality are difficult to measure. In addition, these factors may have little to do with an employee's job performance. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 9

108) When a manager generalizes one positive performance feature or incident to all aspects of employee performance, the manager is most likely guilty of ________. A) leniency B) central tendency error C) positive halo error D) recent behavior bias Answer: C Explanation: C) A positive halo error occurs when a manager generalizes one positive performance feature or incident to all aspects of employee performance, resulting in a higher rating. Giving undeserved high ratings to an employee is referred to as leniency. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 109) The marketing manager at P&M Consulting is known for giving subordinates undeserved high ratings. Which of the following best describes this problem? A) leniency B) central tendency error C) halo error D) recent behavior bias Answer: A Explanation: A) Giving undeserved high ratings to an employee is referred to as leniency. A halo error occurs when a manager generalizes one positive performance feature or incident to all aspects of employee performance, resulting in a higher rating. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 110) The production supervisor at Elmwood Foods is known for being unduly critical of his subordinates' work performance. Which of the following best describes this problem? A) central tendency B) stereotyping C) halo error D) strictness Answer: D Explanation: D) Being unduly critical of an employee's work performance is referred to as strictness. A halo error occurs when a manager generalizes one positive performance feature or incident to all aspects of employee performance, resulting in a higher rating. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9

111) When employees are incorrectly rated near the middle of the scale, this error is referred to as ________. A) leniency B) central tendency error C) halo error D) recent behavior bias Answer: B Explanation: B) Central tendency error is an evaluation appraisal error that occurs when employees are incorrectly rated near the average or middle of a scale. This practice may be encouraged by some rating scale systems that require the evaluator to justify in writing extremely high or extremely low ratings. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 112) At Wilson Manufacturing, evaluators are required to justify in writing extremely high or extremely low performance ratings that are given to employees. Which of the following is the most likely outcome of this requirement? A) leniency or strictness B) central tendency error C) halo error D) recent behavior bias Answer: B Explanation: B) When supervisors rate all employees as average or close to average, they commit errors of central tendency. Central tendency errors are most often committed when raters are forced to justify only extreme behavior (i.e., high or low ratings) with written explanations; therefore, HR professionals should require justification for ratings at every level of the scale and not just at the extremes. With such a system, the rater may avoid possible controversy or criticism by giving only average ratings. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9

113) Positive and negative halo effects represent ________ errors. A) stereotype B) central tendency C) bias D) leniency Answer: C Explanation: C) A positive halo effect (oftentimes, referred to simply as a halo effect) or negative halo effect (also known as a horn effect) occurs when a rater generalizes an employee's good or bad behavior on one aspect of the job to all aspects of the job. Both are bias errors. Stereotyping is also a bias error, but focuses on judging an individual based on stereotypes that may be associated with group affiliation (for example, age). Central tendency and leniency errors represent particular contrast errors. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 114) What performance appraisal problem occurs when supervisors allow individual differences such as gender, race, or age to affect the ratings they give? A) central tendency error B) halo error C) recent behavior bias D) illegal discriminatory bias Answer: D Explanation: D) The problem of personal bias occurs when managers allow individual differences to affect the ratings they give. If these are factors to avoid such as gender, race, or age, not only is this problem detrimental to employee morale, but it is blatantly illegal and can result in costly litigation. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

115) Being unduly critical of an employee's work during a performance appraisal is known as ________. A) recent behavior bias B) the horn error C) encouragement D) strictness Answer: D Explanation: D) Being unduly critical of an employee's work performance is referred to as strictness. Although leniency is usually more prevalent than strictness, some managers, on their own initiative, apply an evaluation more rigorously than the company standard. This behavior may be due to a lack of understanding of various evaluation factors. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 116) A halo error occurs when a manager generalizes one negative performance feature to all aspects of employee performance. Answer: FALSE Explanation: A halo error occurs when a manager generalizes one positive performance feature or incident to all aspects of employee performance, resulting in a higher rating. The horn error is an evaluation error that occurs when a manager generalizes one negative performance feature or incident to all aspects of employee performance, resulting in a lower rating. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 117) Strictness is a common error that occurs when employees are incorrectly rated near the average or middle of the scale. Answer: FALSE Explanation: Central tendency error is an evaluation appraisal error that occurs when employees are incorrectly rated near the average or middle of a scale. Being unduly critical of an employee's work performance is referred to as strictness. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

118) The basic purpose of a performance appraisal system is to ________. A) improve performance B) support strategic planning C) provide the basis for long-range goals D) quantify employees' strengths and weaknesses Answer: A Explanation: A) The basic purpose of a performance appraisal system is to improve performance of individuals, teams, and the entire organization. The system may also serve to assist in making administrative decisions concerning pay increases, promotions, transfers, or terminations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 119) In order to be effective, a performance appraisal system should be based on ________ criteria. A) international B) trait oriented C) subjective D) job-related Answer: D Explanation: D) Job-relatedness is perhaps the most basic criterion needed in employee performance appraisals. Subjective factors, such as initiative, enthusiasm, loyalty, and cooperation may be important; however, unless clearly shown to be job-related, they should not be used. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 120) How should evaluation criteria for a performance appraisal system be determined? A) job analysis B) observation C) strategic planning D) job specification Answer: A Explanation: A) Job-relatedness is perhaps the most basic criterion needed in employee performance appraisals. The Uniform Guidelines on Employee Selection Procedures and court decisions are quite clear on this point. More specifically, evaluation criteria should be determined through job analysis. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

121) In which of the following areas would it be MOST difficult to establish highly objective work standards for the purpose of performance appraisals? A) manufacturing B) assembly C) teaching D) sales Answer: C Explanation: C) The establishment of highly objective work standards is relatively simple in many areas, such as manufacturing, assembly, and sales. For numerous other types of jobs, such as teaching, this task is more difficult. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 122) Formally documenting performance appraisal data is primarily necessary to ________. A) file federal employment reports B) protect employers from lawsuits C) help employees schedule necessary training D) allow employers time for the appeals process Answer: B Explanation: B) Formal documentation of appraisal data serves several purposes, including protection against possible legal action. Records should also include a description of employee responsibilities, expected performance results, and the role these data play in making appraisal decisions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 123) What should a supervisor do if an employee refuses to sign a performance appraisal form? A) take disciplinary action against the employee B) sign the form on the employee's behalf C) document the employee's behavior D) require the employee's signature Answer: C Explanation: C) Formal documentation of appraisal data serves several purposes, including protection against possible legal action. Employees should sign their evaluations. If the employee refuses to sign, the manager should document this behavior. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

124) Which of the following is NOT characteristic of effective performance appraisal systems? A) standardized evaluation tools B) annual employee feedback C) formal grievance process D) trained evaluators Answer: B Explanation: B) Standardized instruments, formal grievance procedures, and properly trained evaluators are key elements of effective performance appraisal systems. Communication with employees should be continuous; problems should not be allowed to pile up for six months or a year before being addressed. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 125) Withholding appraisal data from employees hinders their ________. A) long-term strategic planning B) developmental efforts C) evaluator training D) profit sharing Answer: B Explanation: B) Since improved performance is a common goal of appraisal systems, withholding appraisal results is absurd. Employees are severely handicapped in their developmental efforts if denied access to this information. A performance review allows them to detect any errors or omissions in the appraisal, or an employee may disagree with the evaluation and want to challenge it. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 126) According to the Uniform Guidelines and the court system, job-relatedness is the essential element in evaluation criteria for performance appraisals. Answer: TRUE Explanation: Job-relatedness is perhaps the most basic criterion needed in employee performance appraisals. The Uniform Guidelines on Employee Selection Procedures and court decisions are quite clear on this point. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

127) What are the characteristics of an effective appraisal system? Answer: The basic purpose of a performance appraisal system is to improve the performance of individuals, teams, and the entire organization. Although a perfect system does not exist, every system should possess certain characteristics. Job-relatedness is perhaps the most basic criterion needed in employee performance appraisals. The evaluation instrument should tie in closely to the accomplishment of organizational goals. Subordinates must also understand in advance what is expected of them. How can employees function effectively if they do not know what they are being measured against? Firms should use the same evaluation instrument for all employees in the same job category who work for the same supervisor. Supervisors should also conduct appraisals covering similar periods for these employees. A common deficiency in appraisal systems is that the evaluators seldom receive training on how to conduct effective evaluations. Unless everyone evaluating performance receives training in the art of giving and receiving feedback, the process can lead to uncertainty and conflict. Most employees have a strong need to know how well they are performing. A good appraisal system provides highly desired feedback on a continuing basis. In addition to the need for continuous communication between managers and their employees, a special time should be set for a formal discussion of an employee's performance. Because the goal of the company is improved performance sharing appraisal results aligns with the common goal of appraisal systems improving performance. Ensuring due process is vital. If the company does not have a formal grievance procedure, it should develop one to provide employees an opportunity to appeal appraisal results that they consider inaccurate or unfair. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 10 128) In which case did the federal district court judge state, "There is sufficient circumstantial evidence to indicate that age bias and age-based policies appear throughout the performance rating process to the detriment of the protected age group"? A) Massachusetts v Hunt B) Leonel v American Airlines C) Mistretta v Sandia Corporation D) Griggs v Duke Power Company Answer: C Explanation: C) Legislation requires that appraisal systems be nondiscriminatory. In the case of Mistretta v Sandia Corporation, a federal district court judge ruled against the company, stating,"There is sufficient circumstantial evidence to indicate that age bias and age-based policies appear throughout the performance rating process to the detriment of the protected age group." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

129) Which Supreme Court case supported validation requirements for performance appraisals? A) Massachusetts v Hunt B) Albemarle Paper v Moody C) California Regents v Bakke D) Griggs v Duke Power Company Answer: B Explanation: B) The Albemarle Paper v Moody case supported validation requirements for performance appraisals, as well as for selection tests. Organizations should avoid using any appraisal method that results in a disproportionately negative impact on a protected group. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 130) Performance appraisal practices should be ________. A) based on factors other than what is stated in job descriptions B) based on the most recent instances of poor performance C) based on the most recent instances of good performance D) legally defensible Answer: D Explanation: D) Employee lawsuits may result from negative evaluations. Employees often win these cases, thanks in part to the firm's own PA procedures. A review of court cases makes it clear that legally defensible PA systems should be in place. Perfect systems are not expected, and the law does not preclude supervisory discretion in the process. However, the courts normally require an absence of adverse impact on members of protected classes or validation of the process. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 131) Negligent retention may create ________ for employers that engage in this practice. A) a strong reputation B) employee empowerment C) liability D) all of the above Answer: C Explanation: C) An employer may be vulnerable to a negligent retention claim if an employee who continually receives unsatisfactory ratings in safety practices, for example, is kept on the payroll and he or she causes injury to a third party. In these instances, firms might reduce their liability if they provide substandard performers with training designed to overcome the deficiencies or terminate their employment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 50 Copyright © 2016 Pearson Education, Inc.

132) Courts are willing to tolerate imperfect performance appraisal systems as long as these systems ________. A) that do not lead to lower than usual employee turnover B) do not lead to adverse impact C) do not use norms that limit a manager's discretion D) do not cause deflated egos Answer: B Explanation: B) Perfect systems are not expected, and the law does not preclude supervisory discretion in the process. However, the courts normally require an absence of adverse impact on members of protected classes or validation of the process. It also expects a system that keeps one manager from directing or controlling a subordinate's career. There should also be a system whereby the appraisal is reviewed and approved by someone or some group in the organization. Another requirement is that the evaluator must have personal knowledge of the employee's job performance. In addition, the system uses predetermined norms that limit the manager's discretion. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 133) Employee lawsuits typically result from what type of evaluations? A) practical B) negative C) confidential D) unscheduled Answer: B Explanation: B) Employee lawsuits may result from negative evaluations. Employees often win these cases, thanks in part to the employer's own performance appraisal procedures. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

134) Which of the following is NOT a condition normally required to be a legally defensible performance appraisal system? A) a system that prevents one manager from controlling a subordinate's career B) the use of predetermined criteria that limit the manager's discretion C) the absence of adverse impact on members of protected classes D) a review of the appraisal by an EEOC representative Answer: D Explanation: D) The courts normally require these conditions for defensible PA systems: 1. Either the absence of adverse impact on members of protected classes or validation of the process; 2. a system that prevents one manager from directing or controlling a subordinate's career; 3. the appraisal systems must use predetermined criteria that limit the manager's discretion. EEOC representatives are not necessarily involved. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 135) An employee continually receives unsatisfactory ratings for safety practices and later causes injury to a third party. What is the most likely result? A) negligent hiring B) negligent retention C) negligent training D) negligent supervision Answer: B Explanation: B) An employer may also be vulnerable to a negligent retention claim if an employee who continually receives unsatisfactory ratings in safety practices, for example, is kept on the payroll and he or she causes injury to a third party. In these instances, firms might reduce their liability if they provide substandard performers with training designed to overcome the deficiencies. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 136) In Albemarle Paper v Moody and Mistretta v Sandia Corporation, the courts ruled that performance appraisal systems should not be discriminatory. Answer: TRUE Explanation: Legislation requires that appraisal systems be nondiscriminatory. In the case of Mistretta v Sandia Corporation, a federal district court judge ruled against the company, stating, "There is sufficient circumstantial evidence to indicate that age bias and age-based policies appear throughout the performance rating process to the detriment of the protected age group." The Albemarle Paper v Moody case also supported validation requirements for performance appraisals. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 52 Copyright © 2016 Pearson Education, Inc.

137) What is a consequence of ending a performance appraisal interview on a negative note? A) both the supervisor and employee may develop deflated egos B) the supervisor who conducted the interview may develop a deflated ego C) the employee whose performance was appraised may develop a deflated ego D) none of the above Answer: C Explanation: C) Ideally, employees will leave the interview with positive feelings about management, the company, the job, and themselves. If the meeting results in a deflated ego, the prospects for improved performance will be bleak. Although you cannot change past behavior, future performance is another matter. The interview should end with specific and mutually agreed-upon plans for the employee's development. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 138) According to the text, what is the Achilles' heel of the entire evaluation process? A) observing employees B) scheduling employee training C) conducting the appraisal interview D) maintaining objectivity during the process Answer: C Explanation: C) The appraisal interview is the Achilles' heel of the entire evaluation process. In fact, appraisal review sessions often create hostility and can do more harm than good to the employee-manager relationship. To minimize the possibility of hard feelings, the face-to-face meeting and the written review must have performance improvement, not criticism, as their goal. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 139) What is the LEAST likely way for a manager to improve the effectiveness of the performance appraisal interview? A) integrating the employee's self-appraisal B) providing a single source of appraisal input C) focusing on performance improvement D) emphasizing management's responsibility Answer: B Explanation: B) To minimize the possibility of hard feelings during a PA interview, the face-toface meeting and the written review must have performance improvement, not criticism, as their goal. Rating managers should emphasize their own responsibility for the employee's development. The situation improves considerably when several sources provide input, including the employee's own self-appraisal. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 53 Copyright © 2016 Pearson Education, Inc.

140) In an appraisal interview, the rating manager should never ________. A) refuse to discuss negative employee performance as a defense against a possible lawsuit B) assist the employee in setting goals C) refuse to take some responsibility for an employee's performance if the supervisor neglected to provide regular performance feedback D) take any responsibility for an employee's performance Answer: C Explanation: C) Rating managers should emphasize their own responsibility for the employee's development and commitment for support. It is essential that the rating manager should always provide job-related feedback and provide assistance with setting performance goals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 141) According to experts, managers should conduct separate interviews for discussing employee performance and employee ________. A) development B) strengths C) goals D) pay Answer: D Explanation: D) Although costs are a consideration, there is merit in conducting separate interviews for discussing: (1) employee performance and development and (2) pay. Many managers have learned that as soon as the topic of pay emerges in an interview, it tends to dominate the conversation, with performance improvement taking a back seat. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 142) All of the following are accomplished by effective managers during appraisal interviews EXCEPT ________. A) asking employees how they could improve a situation B) emphasizing the positive performance aspects C) turning the interview into a win-win situation D) criticizing actions rather than the person Answer: C Explanation: C) Effective managers minimize threats to the employee's self-esteem whenever possible. When giving criticism, managers should emphasize the positive aspects of performance; criticize actions, not the person; and ask the employee how he or she would change things to improve the situation. Also, the manager should avoid supplying all the answers and try to turn the interview into a win-win situation so that all concerned gain. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 54 Copyright © 2016 Pearson Education, Inc.

143) From the list below, pick the outcome that characterizes the conclusion of a successful appraisal interview. A) deflating the employee's ego, so he or she will be more compliant B) ending with specific, mutually agreed-upon plans for the employee's development C) introducing a fault-finding structure into the close of the interview D) making sure that the employee accepts his or her responsibility for additional training Answer: B Explanation: B) Ideally, employees will leave the interview with positive feelings about management, the company, the job, and themselves. If the meeting results in a deflated ego, the prospects for improved performance will be bleak. Although you cannot change past behavior, future performance is another matter. The interview should end with specific and mutually agreed-upon plans for the employee's development. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 144) It is important that discussions of negative employee performance focus on the deficiency, not the person. Answer: TRUE Explanation: Criticism, even if warranted, is especially difficult to give. The employee may not perceive it as being constructive. It is important that discussions of these sensitive issues focus on the deficiency, not the person. Effective managers minimize threats to the employee's selfesteem whenever possible. When giving criticism, managers should emphasize the positive aspects of performance; criticize actions, not the person; and ask the employee how he or she would change things to improve the situation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

145) Explain why the appraisal interview is the Achilles' heel of the entire evaluation process. Answer: The appraisal interview is the Achilles' heel of the entire evaluation process. In fact, appraisal review sessions often create hostility and can do more harm than good to the employeemanager relationship. To minimize the possibility of hard feelings, the face-to-face meeting and the written review must have performance improvement, not criticism, as their goal. The reviewing manager must use all the tact he or she can muster in discussing areas needing improvement. Managers should help employees understand that they are not the only ones under the gun. Rating managers should emphasize their own responsibility for the employee's development and commitment for support. The appraisal interview definitely has the potential for confrontation and undermining the goal of motivating employees. The situation improves considerably when several sources provide input, including perhaps the employee's own selfappraisal. Regardless of the system used, employees will not trust a system they do not understand. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 12 146) Discuss how to structure a successful performance appraisal interview. Answer: A successful appraisal interview should be structured in a way that allows both the supervisor and the subordinate to view it as a problem-solving rather than a fault-finding session. The manager has several purposes when planning an appraisal interview. Certainly the employee's performance should be discussed, focusing on specific accomplishments. Also, the employee should be assisted in setting goals and personal-development plans for the next appraisal period. The manager should suggest means for achieving established goals, including support from the manager and firm. For instance, a worker may receive an average rating on a factor such as quality of production. In the interview, both parties should agree to the specific improvement needed during the next appraisal period and specific actions that each should take. During performance reviews, managers might ask employees whether their current duties and roles are effective in achieving their goals. In addition to reviewing job-related performance, they might also discuss subjective topics, such as career ambitions. For example, in working on a project, perhaps an employee discovered an unrealized aptitude. This awareness could result in a new goal or serve as a springboard to an expanded role in the organization. The amount of time devoted to an appraisal interview varies considerably with company policy and the position of the evaluated employee. Although costs are a consideration, there is merit in conducting separate interviews for discussing (1) employee performance and development and (2) pay. Many managers have learned that as soon as the topic of pay emerges in an interview, it tends to dominate the conversation, with performance improvement taking a back seat. For this reason, if pay increases or bonuses are involved in the appraisal, it might be advisable to defer those discussions for one to several weeks after the appraisal interview. Difficulty: Challenging Skill: Synthesis AACSB: Application of knowledge Learning Obj.: 12

147) What role does wasta play in the effectiveness of performance appraisal in the Middle East? A) Wasta is a mandate for strict performance appraisal interviews. B) Wasta precludes women from being the subject of performance appraisal. C) Wasta places merit as a higher priority than family connections. D) Wasta places family connections as a higher priority than merit. Answer: D Explanation: D) In the Middle East there is a view called wasta, which significantly affects how business is conducted. Wasta refers to using mutual favors instead of merit to get things done. Because wasta implies reciprocity, it remains entrenched in society, and it has a major effect on HR, especially PA. Wasta affects many aspects of HR such as selection and promotions because friendship and family connections is the criteria used instead of merit. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 13 148) Which of the following is LEAST likely to be the focus of a performance appraisal at a Chinese company? A) measurable outcomes B) moral behavior C) personal obedience D) employee loyalty Answer: A Explanation: A) Chinese managers appear to define performance in terms of personal characteristics, such as loyalty and obedience, rather than outcome measurement. Chinese performance appraisals place great emphasis on moral characteristics. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 13 149) PA is an area of human resource management that has special problems when translated into different countries' cultural environments. Answer: TRUE Explanation: PA is an area of human resource management that has special problems when translated into different countries' cultural environments. The use of PA in the United States is relatively new compared to many older countries. Here, formal PA came into systematic use toward the beginning of the 20th century. However, PA in China, for example, has evolved over many centuries. Difficulty: Easy Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 13

150) What are some of the challenges associated with conducting performance appraisals in China? Answer: PA is an area of human resource management that has special problems when translated into different countries' cultural environments. The use of PA in the United States is relatively new compared to many older countries. Here, formal PA came into systematic use toward the beginning of the 20th century. However, PA in China has evolved over many centuries. As early as the third century A.D., Sin Yu, Chinese philosopher, criticized a biased rater employed by the Wei dynasty saying, "The Imperial Rater of Nine Grades seldom rates men according to their merits but always according to his likes and dislikes." Chinese managers often have a different idea about what performance is than do Western managers because Chinese companies tend to focus appraisals on different criteria. Chinese managers appear to define performance in terms of personal characteristics, such as loyalty and obedience, rather than outcome measurement. Chinese PAs place great emphasis on moral characteristics. On the other hand, Western PA seeks to help achieve organizational objectives, and this is best obtained by concentrating on individual outcomes and behaviors that are related to the attainment of those objectives. Difficulty: Challenging Skill: Critical thinking AACSB: Diverse and multicultural work environments Learning Obj.: 13

Human Resource Management, 14e (Mondy) Chapter 8 Training and Development 1) The heart of a continuous effort designed to improve employee competency and organizational performance is referred to as ________. A) succession planning B) organizational planning C) training and development D) communicating and integrating Answer: C Explanation: C) Training and development (T&D) is the heart of a continuous effort designed to improve employee competency and organizational performance. Succession planning is the process of ensuring that qualified people are being trained for top positions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) The primary purpose of training is to ________. A) modify inappropriate behaviors B) offer feedback about job performance C) provide job-related knowledge and skills D) supplement high school and college courses Answer: C Explanation: C) Training provides learners with the knowledge and skills needed for their present jobs. Showing a worker how to operate a lathe is an example of training. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 3) Showing a worker how to operate a bulldozer or an administrative assistant how to schedule appointments are examples of ________. A) training B) development C) morale improvement D) behavioral development Answer: A Explanation: A) Training provides learners with the knowledge and skills needed for their present jobs. On the other hand, development involves learning that goes beyond today's job and prepares employees to keep pace with the organization as it changes and grows. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

4) Learning that looks beyond today's job and has a more long-term focus is referred to as ________. A) training B) instruction C) development D) orientation Answer: C Explanation: C) Development involves learning that goes beyond today's job and prepares employees to keep pace with the organization as it changes and grows. Training provides learners with the knowledge and skills needed for their present jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) All of the following are most likely strategic benefits of training and development EXCEPT ________. A) increased morale B) higher retention rate C) more employee satisfaction D) improved orientation programs Answer: D Explanation: D) T&D activities have the potential to align a firm's employees with its corporate strategies. Some possible strategic benefits of T&D include employee satisfaction, improved morale, higher retention, lower turnover, improved hiring, a better bottom line, and the fact that satisfied employees produce satisfied customers. Orientation programs are less likely to be directly affected by T&D. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 6) What is the primary goal of training and development? A) improved performance B) federal compliance C) efficient orientation D) behavioral modification Answer: A Explanation: A) Improved performance, the bottom-line purpose of T&D, is a strategic goal for organizations. Legal compliance, orientation, and behavioral changes are less directly related to T&D. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

7) Chelsea Paper Products is a large manufacturer that employs nearly 800 workers. Executives at the company are interested in implementing a training and development program in order to improve employee competencies and enhance the firm's overall performance. Which of the following most likely supports the plan to establish a training and development program at Chelsea? A) Firms of similar size typically provide mentors to new employees. B) The firm has consistently had a high turnover rate in all departments. C) The firm's new CEO established a T&D program at a previous firm. D) Other firms in the paper industry are implementing T&D programs. Answer: B Explanation: B) Benefits of T&D programs include lower turnover, improved morale, and a better bottom line. In today's highly competitive business environment, undertaking a program because other firms are doing it is asking for trouble. A systematic approach to addressing bona fide needs must be undertaken. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 1 8) What is the first step in the training and development process? A) determine specific T&D needs B) establish specific T&D objectives C) select training methods D) select appropriate media Answer: A Explanation: A) Determining specific T&D needs is the first step in the process. Establishing objectives, selecting methods, implementing programs, and evaluating programs are the next steps in the T&D process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1, 2 9) Training and development (T&D) is the heart of a continuous effort designed to improve employee competency and organizational performance. Answer: TRUE Explanation: Training and development (T&D) is the heart of a continuous effort designed to improve employee competency and organizational performance. Training provides learners with the knowledge and skills needed for their present jobs. On the other hand, development involves learning that goes beyond today's job and has a more long-term focus. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

10) Development provides learners with the knowledge and skills needed for their present jobs. Answer: FALSE Explanation: Training provides learners with the knowledge and skills needed for their present jobs. On the other hand, development involves learning that goes beyond today's job and has a more long-term focus. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 11) Showing a worker how to operate a lathe or a supervisor how to schedule daily production are examples of development. Answer: FALSE Explanation: Training provides learners with the knowledge and skills needed for their present jobs, such as explaining how to use a lathe. Development involves learning that goes beyond today's job and has a more long-term focus. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 1 12) What are the steps in the training and development process? Why is implementing a training and development program frequently difficult? Answer: The first step in the T&D is to determine a firm's specific training needs. Then specific objectives need to be established. After setting the T&D objectives, management can determine the appropriate methods and the delivery system to be used. Implementing and evaluating the T&D program occurs next in the process. Naturally, management must continuously evaluate T&D to ensure its value in achieving organizational objective. Implementing training programs presents unique problems. Training implies change, which employees may vigorously resist. It may also be difficult to schedule the training around present work requirements. Unless the employee is new to the firm, he or she undoubtedly has specific full-time duties to perform. Another difficulty in implementing T&D programs is record keeping. It is important to maintain training records, including how well employees perform during training and later on the job. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

13) In a brief essay, contrast the goals of training and development with those of organization development. Answer: Training and development is the heart of a continuous effort designed to improve employee competency and organizational performance. Training provides learners with the knowledge and skills needed for their present jobs, while development involves learning that goes beyond today's job and has a more long-term focus. T&D activities have the potential to align a firm's employees with its corporate strategies. Some possible strategic benefits of T&D include employee satisfaction, improved morale, higher retention, lower turnover, improved hiring, a better bottom line, and the fact that satisfied employees produce satisfied customers. Individuals and groups receive the bulk of T&D effort. However, some firms believe that to achieve needed change, they must move the entire organization in a different direction. Efforts to achieve this are the focus of organization development, which is the planned and systematic attempt to change the organization. OD education and training strategies are designed to develop a more open, productive, and compatible workplace despite differences in personalities, culture, or technologies. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 1, 13 14) All of the following are analyses used to determine training and development needs EXCEPT a(n) ________. A) organizational analysis B) consumer analysis C) person analysis D) task analysis Answer: B Explanation: B) Organizational, person, and task analyses are conducted to determine the training and development needs of employees. Such analyses are performed as the first step in the T&D process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

15) Suzanne, an HR specialist, is assessing training and development needs at her firm by reviewing job descriptions. Which type of analysis is Suzanne most likely conducting? A) task analysis B) person analysis C) performance analysis D) organizational analysis Answer: A Explanation: A) Job descriptions are important data sources for a task analysis. Organizational analyses review the firm's strategic goals and plans. Performance appraisals are used when conducting a person analysis. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 16) Medco Pharmaceuticals uses a number of methods for accommodating differing styles to its workforce. Which of the following terms best describes Medco's training program? A) blended training B) combined training C) traditional training D) outsourced training Answer: A Explanation: A) Blended training refers to the use of multiple methods for imparting knowledge and skills to the workforce. It involves using a combination of training methods that are strategically combined to best achieve a training program's objectives. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2

17) All of the following are types of training needs assessment EXCEPT for ________. A) reaction analysis B) organizational analysis C) task analysis D) person analysis Answer: A Explanation: A) A training and development needs assessment helps companies determine whether training is necessary. It may be determined by conducting analyses on three levels, which include organization, task, and person. Organizational analysis focuses on the firm's strategic mission, goals, and corporate plans are studied, along with the results of strategic human resource planning. Task analysis focuses on the tasks required to achieve the firm's purposes. Person analysis focuses on obtaining answers to the questions: Who needs to be trained? What do they need to do differently from what they're doing today? and What kind of KSAs do employees need? Reaction refers to a metric used to evaluate training effectiveness. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 18) Organizational analysis is most closely related to ________. A) the interrelationship between positions B) a learning organization ethic C) the interrelationship between jobs D) a firm's strategic mission, goals, and corporate plans Answer: D Explanation: D) Training and development needs assessment helps companies determine whether training is necessary. It may be determined by conducting analyses on three levels, which include organization, task, and person. Organizational analysis focuses on the firm's strategic mission, goals, and corporate plans are studied, along with the results of strategic human resource planning. Task analysis focuses on the tasks required to achieve the firm's purposes. Person analysis focuses on obtaining answers to the questions: Who needs to be trained? What do they need to do differently from what they're doing today? and What kind of KSAs do employees need? Reaction analysis refers to a metric used to evaluate training effectiveness. A learning organization is a firm that recognizes the critical importance of continuous performance-related T&D and takes appropriate action. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

19) When determining specific training and development needs for individual employees, a firm will most likely conduct a task analysis with data gathered from job descriptions and performance reviews. Answer: FALSE Explanation: A person analysis is implemented to determine individual training needs, and this type of analysis is based on performance appraisals and interviews. A task analysis uses job descriptions to assess the tasks required to achieve the firm's goals and purposes. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 20) What is the T&D delivery system for online instruction? A) e-learning B) internships C) role playing D) programmed instruction Answer: A Explanation: A) E-learning is the T&D method for online instruction. It takes advantage of the speed, memory, and data-manipulation capabilities of the computer for greater flexibility of instruction. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 3 21) Increasingly, companies are partnering with highly recognized universities that offer ________. A) classroom based instruction B) massive open online courses (MOOCs) C) corporate university courses D) simulations Answer: B Explanation: B) Increasingly, companies are adopting MOOCs as an e-learning tool. Partnering with highly recognized universities that offer MOOCs could increase the value of training in a variety of ways, including through learning leading-edge information and techniques from world-famous professors and assessments by current and prospective clients that training is stateof-the art. Classroom-based instruction is not a form of e-learning. Corporate university courses are typically not offered in conjunction with college or university curricula. Simulation represents a training method that may or may not involve a partnership between companies and universities. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

22) Which of the following is NOT true as it regards on-site, instructor-led training? A) The classroom setting is easily replicated online. B) The instructor may deliver a great deal of information in a relatively short time. C) A charismatic instructor may excite the students to want to learn. D) The classroom setting allows for real-time discussion. Answer: A Explanation: A) The instructor-led method, where the instructor physically stands in front of students, continues to be effective for many types of training. One advantage of instructor-led training is that the instructor may convey a great deal of information in a relatively short time. Also, the charisma or personality that the instructor brings to class may excite the students to want to learn. The classroom setting allows for real-time discussion that is not easily replicated, even with the most advanced technology. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 23) A takeoff on e-learning is the ________ that uses a web-based platform to deliver live, instructor-led training to geographically dispersed learners. A) computer based training B) virtual instructions C) live virtual classroom D) programmed instruction Answer: C Explanation: C) A takeoff on e-learning is the live virtual classroom, often referred to as virtual instructor led, that uses a Web-based platform to deliver live, instructor-led training to geographically dispersed learners. Organizations can bring together entire teams for just an hour or two per week. They can also bring content specialists into the classroom for only the necessary time required. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 3 24) What is the primary reason that firms use e-learning? A) employee requests B) cost savings C) recruitment D) ease of use Answer: B Explanation: B) The advantages of using e-learning are numerous; however, the biggest advantage is cost savings. Although employees may prefer e-learning to other methods, low costs are the main reason firms offer online courses. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 3 9 Copyright © 2016 Pearson Education, Inc.

25) On which T&D method does the U.S. Coast Guard rely? A) cross-training B) on-the-job training C) apprenticeship training D) team coordination training Answer: D Explanation: D) Team coordination training educates team members how to orchestrate the work that they do to complete the task. All team training initiatives involve information sharing and procedures for ensuring that the work is conducted in proper order. For example, in the automobile assembly example, team members must ensure that all of the electrical wires that run across the floor are properly connected to their appropriate components (such as power window motors) before door trim is installed. Apprenticeship training is a training method that combines classroom instruction with on-the-job training. While in training, the employee earns less than the master craftsperson, who is the instructor. Cross-training educates team members about the other members' jobs so that they may perform them when a team member is absent, is assigned to another job in the company, or has left the company altogether. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 26) With the case study method of training and development, students would most likely be expected to ________. A) research the finances of firms B) twitter about hiring decisions C) interview organizational leaders D) provide computer assisted instruction Answer: A Explanation: A) The case study is a T&D method in which trainees study the information provided in the case and make decisions based on it. If an actual company is involved, the student would be expected to research the firm to gain a better appreciation of its financial condition and environment. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

27) A T&D method which permits a person to learn by copying or replicating behaviors of others to show managers how to handle various situations is called ________. A) sensitivity training B) role playing C) behavior modeling D) computer assisted instruction Answer: C Explanation: C) Behavior modeling is a T&D method that permits a person to learn by copying or replicating behaviors of others. Behavior modeling has been used to train supervisors in such tasks as conducting performance reviews, correcting unacceptable performance, delegating work, improving safety habits, handling discrimination complaints, overcoming resistance to change, orienting new employees, and mediating individuals or groups in conflict. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 28) Which of the following is a social networking learning tool associated with behavior modeling? A) role playing B) e-learning C) blogging D) spamming Answer: C Explanation: C) Social networking has been used as a learning tool involving behavior modeling. "In a corporation, micro-blogging can be a way to augment behavior modeling," says Sarah Millstein, author of the O'Reilly Radar Report. This works by having a person who excels at a task send out frequent updates about what he or she is doing. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 3

29) At ABC Manufacturing, which of the following tasks is LEAST likely to be taught through the behavior modeling method? A) conducting performance appraisal reviews B) handling discrimination complaints C) improving safety habits D) writing memos Answer: D Explanation: D) In-basket training would most likely be used to train employees how to handle memos and reports. Behavior modeling has been used to train supervisors in such tasks as conducting performance reviews, correcting unacceptable performance, delegating work, improving safety habits, and handling discrimination complaints. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 30) Employees at Maxwell Enterprises are participating in a training and development program. Participants are required to respond to specific problems they may encounter in their jobs by acting out real-world situations. Which type of T&D method is the firm most likely using? A) coaching B) job enlarging C) role playing D) job rotating Answer: C Explanation: C) Role playing is a T&D method in which participants are required to respond to specific problems they may encounter in their jobs by acting out real-world situations. Rather than hearing an instructor talk about how to handle a problem or discussing it, they learn by doing. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3

31) Ben is a supervisor at a candle manufacturing plan. Absenteeism is high and often disrupts production goals. Which T&D method would most likely be used to help Ben ensure that production goals are met? A) on-the job training B) cross-training C) apprenticeship D) team coordination training Answer: B Explanation: B) Cross-training educates team members about the other members' jobs so that they may perform them when a team member is absent, is assigned to another job in the company, or has left the company altogether. On-the-job-training (OJT) is an informal T&D method that permits an employee to learn job tasks by actually performing them. Team coordination training educates team members how to orchestrate the work that they do to complete the task such as in the previous examples. All team training initiatives involve information sharing and procedures for ensuring that the work is conducted in proper order. For example, in the automobile assembly example, team members must ensure that all of the electrical wires that run across the floor are properly connected to their appropriate components (such as power window motors) before door trim is installed. Apprenticeship training is a training method that combines classroom instruction with on-the-job training. While in training, the employee earns less than the master craftsperson, who is the instructor. Cross-training educates team members about the other members' jobs so that they may perform them when a team member is absent, is assigned to another job in the company, or has left the company altogether. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 32) Which T&D method is frequently used by restaurant chains to train servers in handling difficult situations, such as angry customers? A) role playing B) internships C) business games D) vestibule training Answer: A Explanation: A) Role playing is a T&D method in which participants are required to respond to specific problems they may encounter in their jobs by acting out real-world situations, such as handling customer complaints. Some restaurant chains use role playing to train servers how to deal with difficult situations such as a couple having an argument at the dinner table. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

33) What T&D method permits participants to assume roles such as president, controller, or marketing vice president of two or more similar hypothetical organizations and compete against each other by manipulating selected factors in a particular business situation? A) business games B) programmed instructions C) vestibule training D) on-the-job training Answer: A Explanation: A) Business games is a T&D method that permits participants to assume roles such as president, controller, or marketing vice president of two or more similar hypothetical organizations and compete against each other by manipulating selected factors in a particular business situation. Participants make decisions affecting such factors as price levels, production volumes, and inventory levels. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 34) What T&D method asks participants to manage e-mail messages, memoranda, reports, and telephone messages? A) in-basket training B) role playing C) behavior modeling D) case study Answer: A Explanation: A) In-basket training is a T&D method in which the participant is asked to establish priorities for and then handle a number of business papers, e-mails, texts, memoranda, reports, and telephone messages that would typically cross a manager's desk. This form of training has been quite beneficial to help predict performance success in management jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

35) Which informal T&D method involves transferring knowledge from an experienced worker to a new employee? A) business games B) role playing C) on-the-job training D) classroom lecture Answer: C Explanation: C) On-the-job-training is an informal T&D method that permits an employee to learn job tasks by actually performing them. The key to this training is to transfer knowledge from a highly skilled and experienced worker to a new employee, while maintaining the productivity of both workers. OJT is used to pass on critical "how to" information to the trainee. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 36) As an informal T&D method, ________ permits an employee to learn job tasks by actually performing them. A) coaching B) on-the-job training C) mentoring D) in-basket training Answer: B Explanation: B) On-the-job training (OJT) is an informal T&D method that permits an employee to learn job tasks by actually performing them. Often OJT will also have a significant impact on personal development. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 37) Which training method combines classroom instruction with on-the-job training? A) apprenticeship training B) vestibule training C) role playing D) job rotation Answer: A Explanation: A) Apprenticeship training is a training method that combines classroom instruction with on-the-job training. Such training is common with craft jobs, such as those of plumbers, carpenters, machinists, welders, fabricators, laser operators, electricians, and press brake operators. While in training, the employee earns less than the master craftsperson who is the instructor. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 15 Copyright © 2016 Pearson Education, Inc.

38) Joseph has recently been hired by a plumbing company. Which training method will most likely be used to train Joseph? A) apprenticeship training B) vestibule training C) role playing D) internship Answer: A Explanation: A) Apprenticeship training is a training method that combines classroom instruction with on-the-job training. Such training is common with craft jobs, such as those of plumbers, carpenters, machinists, welders, fabricators, laser operators, electricians, and press brake operators. While in training, the employee earns less than the master craftsperson who is the instructor. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 39) The case study is a T&D method that permits a person to learn by copying or replicating behaviors of others to show managers how to handle various situations. Answer: FALSE Explanation: Behavior modeling is a T&D method that permits a person to learn by copying or replicating behaviors of others. The case study is a T&D method in which trainees study the information provided in the case and make decisions based on it. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 40) In role playing, participants respond to specific problems they may encounter in their jobs by acting out real-world situations. Answer: TRUE Explanation: Role playing is a T&D method in which participants are required to respond to specific problems they may encounter in their jobs by acting out real-world situations. Rather than hearing an instructor talk about how to handle a problem or discussing it, they learn by doing. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

41) When participating in role playing activities for training and development purposes, employees act as top executives, compete with other groups, and manipulate factors such as price levels and production volume. Answer: FALSE Explanation: Business games is a T&D method that permits participants to assume roles such as president, controller, or marketing vice president of two or more similar hypothetical organizations and compete against each other by manipulating selected factors in a particular business situation. Participants make decisions affecting such factors as price levels, production volumes, and inventory levels. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 42) On-the-job training (OJT) is an informal approach to training that permits an employee to learn job tasks by actually performing them. Answer: TRUE Explanation: On-the-job training (OJT) is an informal T&D method that permits an employee to learn job tasks by actually performing them. The key to this training is to transfer knowledge from a highly skilled and experienced worker to a new employee, while maintaining the productivity of both workers. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 43) The key to on-the-job training is to transfer knowledge from a highly skilled and experienced worker to a new employee, while maintaining the productivity of both workers. Answer: TRUE Explanation: The key to OJT is to transfer knowledge from a highly skilled and experienced worker to a new employee, while maintaining the productivity of both workers. OJT is used to pass on critical "how to" information to the trainee. Individuals may also be more highly motivated to learn because it is clear to them that they are acquiring the knowledge needed to perform the job. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

44) In-basket training is primarily used to train administrative assistants how to use office equipment. Answer: FALSE Explanation: In-basket training is a T&D method in which the participant is asked to establish priorities for and then handle a number of business papers, e-mails, texts, memoranda, reports, and telephone messages that would typically cross a manager's desk. The messages, presented in no particular order, call for anything from urgent action to routine handling by a manager rather than an administrative assistant. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 45) E-learning is the T&D method for online instruction using technology based methods such as the Internet. Answer: TRUE Explanation: E-learning is the T&D method for online instruction using technology based methods such as the Internet. The benefits of e-learning are numerous and include decreased costs, greater convenience and flexibility, improved retention rates, and a positive environmental impact. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 46) Although apprenticeships were once used to train workers in craft jobs, advancements in technology have virtually eliminated the need for apprenticeships today. Answer: FALSE Explanation: The National Association of Manufacturers projects that by 2020 some 10 million skilled workers will be needed, and apprenticeships remain one of the most vital sources for new talent in manufacturing despite changes in technology. Such training is common with craft jobs, such as those of plumbers, carpenters, machinists, welders, fabricators, laser operators, electricians, and press brake operators. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

47) What is behavior modeling? What tools and delivery systems are available to firms that use behavior modeling for training and development purposes? Answer: Behavior modeling is a T&D method that permits a person to learn by copying or replicating behaviors of others. Behavior modeling has been used to train supervisors in such tasks as conducting performance reviews, correcting unacceptable performance, delegating work, improving safety habits, handling discrimination complaints, overcoming resistance to change, orienting new employees, and mediating individuals or groups in conflict. Social networking has been used as a learning tool involving behavior modeling. A person who excels at a task sends out frequent updates about what he or she is doing. The company might formalize the process to the extent that it would select exemplary performers to post regularly, and pick those who should follow their posts. Behavior modeling has also long been a successful training method that uses video media. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 3 48) How is role playing used as a training and development method? What particular skills can be taught through role playing? Answer: Role playing is a T&D method in which participants are required to respond to specific problems they may encounter in their jobs by acting out real-world situations. Role playing is often used to teach such skills as disciplinary action, interviewing, grievance handling, conducting performance-appraisal reviews, team problem solving, effective communication, and leadership-style analysis. It has also been used successfully to teach workers how to deal with individuals who are angry, irate, or out of control. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 3 49) Which of the following refers to a T&D delivery system provided under the umbrella of a firm? A) training cooperative B) universal training C) corporate university D) learning organization Answer: C Explanation: C) A T&D delivery system provided under the umbrella of the organization is referred to as a corporate university. The corporate T&D institution focus is on creating organizational change that involves areas such as company training, employee development, and adult learning. Learning organizations may have corporate universities, but not necessarily. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 19 Copyright © 2016 Pearson Education, Inc.

50) The example of Hamburger University was used in your text as an example of what type of T&D delivery system? A) corporate university B) community colleges C) online higher education D) vestibule system Answer: A Explanation: A) A T&D delivery system provided under the umbrella of the organization is referred to as a corporate university. Hamburger University is the corporate university offered by McDonald's. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4 51) For most firms, what is the primary reason for establishing corporate universities? A) aligning with educational institutions B) creating organizational change C) providing e-learning for expatriates D) offering degrees to employees Answer: B Explanation: B) The corporate T&D institution focus is on creating organizational change that involves areas such as company training, employee development, and adult learning. It aims to achieve its goals by conducting activities that foster individual and organizational learning and knowledge. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 52) A key element of success in online higher education is ________. A) a high score on the Graduate Record Exam B) government scholarships C) a brand new computer D) discipline Answer: D Explanation: D) Online higher education is not for everyone and the key to success is discipline. Jeff Seaman of Babson Survey Research Group said, "You need discipline. Otherwise, the 'anytime, anywhere' aspect frees you to put off the work." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

53) Historically, what has been the primary delivery system for training professional, technical, and management employees? A) community colleges B) corporate universities C) universities and colleges D) vestibule systems Answer: C Explanation: C) For decades, colleges and universities have been the primary delivery system for training professional, technical, and management employees. Many public and private colleges and universities are taking similar approaches to training and education as have the corporate universities. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 54) All of the following are characteristics of community colleges EXCEPT ________. A) offering associate-degree programs B) requiring corporate scholarships C) providing vocational training D) receiving public funding Answer: B Explanation: B) Community colleges are publicly funded higher education establishments that deliver vocational training and associate-degree programs. Some employers have discovered that community colleges can provide certain types of training better and more cost effectively than the company can. Community colleges are fairly inexpensive and do not require scholarships. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 55) Ramon is enrolled in a formal degree program that is delivered entirely through the Internet. Which term best describes Ramon's degree program? A) webinar B) simulator C) network career site D) online higher education Answer: D Explanation: D) A form of online e-learning that has increased substantially in recent years, is the use of online higher education. Online higher education, such as through the University of Phoenix, provides formal educational opportunities including degree and training programs that are delivered, either entirely or partially, via the Internet. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 4 21 Copyright © 2016 Pearson Education, Inc.

56) Janice, a supervisor in a major department store, is considering enrolling at the University of Phoenix to earn an MBA after researching other online higher education programs. Which of the following is Janice LEAST likely to experience if she enrolls at the University of Phoenix? A) variety of learning opportunities B) simplified coursework C) cost and time savings D) flexible scheduling Answer: B Explanation: B) Online higher education allows employees to attend class at lunchtime, during the day, or in the evening. It also saves employees time because it reduces their need to commute to school. It increases the range of learning opportunities for employees and increases employee satisfaction. Although online degrees were once suspected of lacking the academic rigor provided in a traditional classroom, many say that online courses are now more difficult than traditional lecture courses. Difficulty: Challenging Skill: Application AACSB: Information technology Learning Obj.: 4 57) Regarding online higher education, all of the following EXCEPT ________ are true. A) skepticism regarding the quality of online degrees is at an all-time high B) employees can attend class at lunchtime, during the day, or in the evening C) it saves employees time because they don't have to commute to school D) it increases the range of learning opportunities for employees Answer: A Explanation: A) Skepticism regarding the quality of online degrees appears to be fading. John Challenger, chief executive of outplacement firm Challenger, Gray & Christmas, agrees. "We did once have a clear line between online and brick-and-mortar degrees, but that's changing," he says. "Hiring managers are catching up." Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 4

58) Lizzie is enrolled in an online higher education program. She may take some classes online and some in a traditional university setting. In which type of program is Lizzie most likely enrolled? A) virtual instruction program B) online synchronized study C) asynchronous learning D) hybrid program Answer: D Explanation: D) Hybrid programs permit students to take some classes online and some in a traditional university setting. Online synchronized study offers students the choice of studying through an online portal system; however, the student is expected to appear for most classes on a real-time schedule. With asynchronous learning, students have a series of assignments that need to be completed in a certain time frame. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 4 59) Steve is enrolled in an online higher education program. Steve must appear for most classes on a real-time schedule, but he may study through an online portal system. In which type of program is Steve most likely enrolled? A) hybrid programs B) cyber programs C) online synchronized study D) asynchronous learning Answer: C Explanation: C) Online synchronized study offers students the choice of studying through an online portal system; however, the student is expected to appear for most classes on a real-time schedule. Hybrid programs permit students to take some classes online and some in a traditional university setting. With asynchronous learning, students have a series of assignments that need to be completed in a certain time frame. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 4

60) Traci is enrolled in an online higher education program. Traci receives a series of assignments that need to be completed in a fixed time frame. A system exists that allows Traci to communicate with her professor and classmates. Traci is most likely enrolled in a(n) ________. A) hybrid program B) asynchronous learning program C) online synchronized study program D) cyber program Answer: B Explanation: B) With asynchronous learning, students have a series of assignments that need to be completed in a certain time frame. Online synchronized study offers students the choice of studying through an online portal system; however, the student is expected to appear for most classes on a real-time schedule. Hybrid programs permit students to take some classes online and some in a traditional university setting. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 4 61) A T&D delivery system that takes place away from the production area on equipment that closely resembles equipment actually used on the job is called the ________. A) vestibule system B) role playing method C) succession planning system D) behavior modeling program Answer: A Explanation: A) Vestibule system is a T&D delivery system that takes place away from the production area on equipment that closely resembles equipment actually used on the job. For example, a group of lathes may be located in a training center where the trainees receive instruction in their use. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

62) When the vestibule delivery system is used, where does it typically take place? A) at a video media center B) on the manufacturing line C) outside of the production area D) at a university science laboratory Answer: C Explanation: C) Vestibule system is a T&D delivery system that takes place away from the production area on equipment that closely resembles equipment actually used on the job. For example, a group of lathes may be located in a training center where the trainees receive instruction in their use. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 63) What is the main advantage of using the vestibule system for training and development? A) models employee behavior B) reduces employee pressure C) builds employee teamwork skills D) allows employees scheduling flexibility Answer: B Explanation: B) A primary advantage of the vestibule system is that it removes the employee from the pressure of having to produce while learning. The emphasis is focused on learning the skills required by the job. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4 64) Which T&D delivery system utilizes devices or programs to replicate actual job demands? A) in-basket training centers B) corporate universities C) vestibule systems D) simulators Answer: D Explanation: D) Simulators are a T&D delivery system comprised of devices or programs that replicate actual job demands. A vestibule system trains workers away from the production site on equipment that closely resembles equipment actually used on the job rather than on software programs or computerized devices. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

65) A T&D delivery system provided under the umbrella of the organization is referred to as online higher education. Answer: FALSE Explanation: A T&D delivery system provided under the umbrella of the organization is referred to as a corporate university. The corporate T&D institution focus is on creating organizational change that involves areas such as company training, employee development, and adult learning. Online higher education is defined as formal educational opportunities including degree and training programs that are delivered, either entirely or partially, via the Internet. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 66) The use of a corporate university is proactive and strategic rather than reactive and tactical and can be closely aligned to corporate goals. Answer: TRUE Explanation: A corporate university is focused on creating organizational change in areas such as company training, employee development, and adult learning. It aims to achieve its goals by conducting activities that foster individual and organizational learning and knowledge. It is proactive and strategic rather than reactive and tactical and can be closely aligned to corporate goals. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 67) Interest in online higher education has sharply declined in recent years due to the lack of academic rigor associated with most programs. Answer: FALSE Explanation: A form of online e-learning that has increased substantially in recent years, is the use of online higher education. One reason for the growth of online higher education is that it allows employees to attend class at lunchtime, during the day, or in the evening. The days are gone when online degrees were suspected of lacking the academic rigor provided in a traditional classroom. Many say that online courses are more difficult than traditional lecture courses. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

68) Degree plans offered by online universities, such as the University of Phoenix, are limited to associate's degrees because of the lack of certification. Answer: FALSE Explanation: The University of Phoenix has the largest student body in North America. The university has more than 200 campuses worldwide and confers degrees in more than 100 degree programs at the bachelor's, master's, and doctoral levels. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 69) Hybrid programs permit students to take some classes online and some in a traditional university setting. Answer: TRUE Explanation: Hybrid programs permit students to take some classes online and some in a traditional university setting. Online synchronized study offers students the choice of studying through an online portal system; however, the student is expected to appear for most classes on a real-time schedule. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 70) With online asynchronized study, students have a series of assignments that need to be completed in a certain time frame. Answer: FALSE Explanation: With asynchronous learning, students have a series of assignments that need to be completed in a certain time frame. A system is available that allows students to communicate with professor and classmates. Key to succeeding in an asynchronous learning environment is that the student must be motivated to learn. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 71) The main advantage of the vestibule system is that employees can focus on learning the skills needed for the job without the pressure of having to maintain a specific production level. Answer: TRUE Explanation: Vestibule system is a T&D delivery system that takes place away from the production area on equipment that closely resembles equipment actually used on the job. A primary advantage of the vestibule system is that it removes the employee from the pressure of having to produce while learning. The emphasis is focused on learning the skills required by the job. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 27 Copyright © 2016 Pearson Education, Inc.

72) Using DVDs to train employees is uncommon because so many inexpensive and technologically advanced training delivery systems are available to businesses. Answer: FALSE Explanation: The use of video media such as DVDs, videotapes, and film clips continues to be a popular T&D delivery system. These media are especially appealing to small businesses that cannot afford more expensive training methods and are often incorporated in e-learning and instructor-led instruction. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 73) Simulators are training and delivery systems commonly used for training airline pilots. Answer: TRUE Explanation: Simulators are a T&D delivery system comprised of devices or programs that replicate actual job demands. A prime example is the use of simulators to train airline pilots; simulated crashes do not cost lives or deplete the firm's fleet of jets. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 74) The traditional lecture model of learning is the premise behind the educational success of social networking. Answer: FALSE Explanation: The premise behind the educational success of social networking is the learning approach referred to as constructivism. A constructivist learning environment differs from the traditional model. In this setting, the teacher guides the learner toward multiple learning sources, rather than acting as the sole source of knowledge. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 75) What is the purpose of a corporate university? Answer: A T&D delivery system provided under the umbrella of the organization is referred to as a corporate university. The corporate T&D institution focus is on creating organizational change that involves areas such as company training, employee development, and adult learning. It aims to achieve its goals by conducting activities that foster individual and organizational learning and knowledge. It is proactive and strategic rather than reactive and tactical and can be closely aligned to corporate goals. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 4 28 Copyright © 2016 Pearson Education, Inc.

76) Which of the following LEAST likely explains why it is difficult to implement training and development programs at many organizations? A) Managers are typically action-oriented. B) Qualified trainers are not available. C) Scheduling poses problems. D) Records are unavailable. Answer: D Explanation: D) Implementing T&D programs is often difficult because managers are typically action-oriented and feel that they are too busy for T&D. Another difficulty in program implementation is that qualified trainers must be available. It may also be difficult to schedule the training around present work requirements. Another difficulty in implementing T&D programs is record keeping. It is important to maintain training records, including how well employees perform during training and later on the job. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 77) Which of the following enables firms to measure the effectiveness of training and development programs? A) record keeping B) broadbanding C) recruiting D) onboarding Answer: A Explanation: A) It is important to maintain training records during T&D programs, including how well employees perform during training and later on the job. This information is important in terms of measuring program effectiveness and charting the employees' progress in the company. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

78) What form of training and development evaluation is a good way to obtain feedback quickly and inexpensively? A) benchmarking B) extent of learning C) participant's opinion D) behavioral change Answer: C Explanation: C) Evaluating a T&D program by asking the participants' opinions of it is an approach that provides a response and suggestions for improvements, essentially a level of customer satisfaction. Although responses are not always reliable, the method is a good way to obtain feedback and to get it quickly and inexpensively. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 79) Discuss the challenges associated with implementing training and development programs. Answer: Implementing T&D programs is often difficult. One reason is that managers are typically action-oriented and feel that they are too busy for T&D. According to one management development executive, "Most busy executives are too involved chopping down the proverbial tree to stop for the purpose of sharpening their axes." Another difficulty in program implementation is that qualified trainers must be available. In addition to possessing communication skills, the trainers must know the company's philosophy, its objectives, its formal and informal organization, and the goals of the training program. T&D requires more creativity than perhaps any other human resource function. Implementing training programs presents unique problems. Training implies change, which employees may vigorously resist. It may also be difficult to schedule the training around present work requirements. Unless the employee is new to the firm, he or she undoubtedly has specific full-time duties to perform. Another difficulty in implementing T&D programs is record keeping. It is important to maintain training records, including how well employees perform during training and later on the job. This information helps measure program effectiveness and chart the employees' progress in the company. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 5

80) Which of the following aspects of training and development is most likely measured with a pretest-posttest control group? A) changes in learner behavior B) objective accomplishment C) return on investment D) extent of learning Answer: D Explanation: D) Some organizations administer tests, such as the pretest-posttest, to determine what the participants in a T&D program have learned. Behavior changes, objectives, and returns on investment are less likely to be measured with pretests-posttests. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 81) What is the best indicator that a training and development program was worth the investment? A) effective recruiting and onboarding B) long-term behavioral change C) attentive participants D) perfect test scores Answer: B Explanation: B) The best demonstration of value occurs when learning translates into lasting behavioral change. Tests may accurately indicate what trainees learn, but they give little insight into whether the training leads participants to change their behavior. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

82) At Lone Star Construction, accident rates have been high over the last six months, so the owners are providing a training program to employees. The objective of the accident prevention program is to reduce the number and severity of accidents by 15 percent. The firm will compare accident rates before and after training in order to measure the success of the program. This is most likely an example of what level of T&D evaluation? A) sales commissions B) mission alignment C) participant's opinion D) accomplishment of T&D objectives Answer: D Explanation: D) One approach to evaluating T&D programs involves determining the extent to which T&D objectives were accomplished. Here metrics address the business's bottom line, such as productivity data, rather than numbers of training sessions completed or the satisfaction employees gained from a training session. For instance, if the objective of an accident-prevention program is to reduce the number and severity of accidents by 15 percent, comparing accident rates before and after training provides a useful metric of success. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 6 83) When they are considering investments in training programs in today's global competitive environment, business executives want to see ________. A) opinions of employees who participate in training B) the business effects of learning C) training metrics compiled by the Bureau of Statistical Research D) opinions of training experts in the blogosphere Answer: B Explanation: B) CEOs want to see training in terms that they can appreciate such as business impact, business alignment, and return on investment (ROI). In today's global competitive environment, training will not be rewarded with continued investment unless training results in improved performance that impacts the bottom line. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

84) Which T&D evaluation method involves monitoring and measuring a firm's internal processes, such as operations, and then comparing the data with information from companies that excel in those areas? A) return on investment B) benchmarking C) onboarding D) behavioral change Answer: B Explanation: B) Benchmarking is the process of monitoring and measuring a firm's internal processes, such as operations, and then comparing the data with information from companies that excel in those areas. Common benchmarking questions focus on metrics such as training costs, the ratio of training staff to employees, and whether new or more traditional delivery systems are used. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 85) Which of the following states: "Employees should receive the training and have the knowledge necessary to do their jobs"? A) Workforce Investment Act B) Job Training Partnership Act C) International Training Partnership Directive D) ISO 9001 Quality Assurance Training Standards Answer: D Explanation: D) One ISO 9001 quality assurance standard states: "Employees should receive the training and have the knowledge necessary to do their jobs." In order to comply with the standard, companies must maintain written records of their employee training to show that employees have been properly trained. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

86) According to experts, which of the following has had the most significant impact on how training is conducted? A) globalization B) outsourcing C) internships D) technology Answer: D Explanation: D) Perhaps no factor has influenced T&D more than technology. The computer, Internet, cell phones, and e-mail are dramatically affecting how training is conducted. Globalization has influenced the use of technology in training programs. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 7 87) Dan works for a U.S. accounting firm in its Singapore office. Over the weekend, Dan plans to complete one of the firm's training courses using his home computer. Which of the following most likely describes the type of training in which Dan is participating? A) dynamic training B) static training C) just-in-time training D) reinforcement training Answer: C Explanation: C) Just-in-time training is training provided anytime, anywhere in the world when it is needed. Computer technology, the Internet, and intranets have made these approaches economically feasible to a degree never before possible. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 7 88) In order to be successful, a T&D program needs ________. A) specialization and standardization B) top management support C) pre-recorded lectures D) input from local colleges and universities Answer: B Explanation: B) For T&D programs to be successful, top management support is required; without it, a T&D program will not succeed. The most effective way to achieve success is for executives to provide the needed resources to support the T&D effort. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 7

89) Which of the following is a primary reason for the problem in finding qualified people for manufacturing jobs? A) The skills of reading, writing, and arithmetic are still sufficient. B) There are few opportunities for learning in-demand technical skills. C) Outsourcing has caused a generation of young people to doubt the long-term future in manufacturing jobs. D) Today's companies are not interested in hiring workers with technical skills. Answer: C Explanation: C) Part of the problem in finding qualified people for manufacturing jobs is that there is a generation of young people for which manufacturing has not been an attractive job prospect because they have seen many jobs outsourced and they question the long-term future in these jobs. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 7 90) All of the following are likely outcomes of team building EXCEPT ________. A) improving employee morale B) providing survey feedback C) increasing profitability D) retaining employees Answer: B Explanation: B) Effective team building can be the most efficient way to boost morale, company profitability, and employee retention. Team building and survey feedback are two different organization development methods, but team building does not necessarily provide feedback. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 91) For T&D programs to be successful, top management support is required. Answer: TRUE Explanation: For T&D programs to be successful, top management support is required; without it, a T&D program will not succeed. The most effective way to achieve success is for executives to provide the needed resources to support the T&D effort. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

92) Rapidly changing technology plays a significant role in how training and development programs are delivered to employees. Answer: TRUE Explanation: Perhaps no factor has influenced T&D more than technology. The Internet, computers, smartphones, text messaging, and e-mail have dramatically affected how training is conducted. Informal instructional delivery methods such as blogs, wikis, and social networks are being used. Even Facebook, LinkedIn, and Twitter can assist in training. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 93) Just-in-time training is training provided anytime, anywhere in the world when it is needed. Answer: TRUE Explanation: Just-in-time training (on-demand training) is training provided anytime, anywhere in the world when it is needed. Computer technology, the Internet, intranets, smartphones, and similar devices have made these approaches economically feasible to a degree never before possible. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

94) What impact has technology had on training and development programs? Answer: Change is occurring at an amazing speed, with knowledge doubling every year. Perhaps no factor has influenced T&D more than technology. As technology becomes capable of handling more and more tasks, employers combine jobs and confer broader responsibilities on remaining workers. For example, the technology of advanced automated manufacturing, such as that in the automobile industry, is today doing the jobs of other employees, including the laborer, the materials handler, the operator-assembler, and the maintenance person. In fact, it is now commonplace for a single employee to perform all of those tasks in a position called "manufacturing technician." The expanding range of tasks and responsibilities in almost all jobs demand higher levels of reading, writing, and problem solving skills. Employees must possess higher levels of reading skills than before because they must now be able to read the operating and troubleshooting manuals (when problems arise) of automated manufacturing equipment that is based on computer technology. Previously, the design of manufacturing equipment was relatively simple and easy to operate, based on simple mechanical principles such as pulleys. Technological innovation also has fostered increased autonomy and team-oriented work places, which also demand different job-related skills than employees once needed. For example, the manufacturing technician's job mentioned previously, is generally more autonomous than its predecessor. Thus, technicians must be able to manage themselves and their time. Employers now rely on working teams' technical and interpersonal skills to drive efficiency and to improve quality. Today's consumers often expect customized products and applications, which require that employees possess sufficient technical skill to tailor products and services to customers' needs, as well as the interpersonal skills necessary to determine client needs and customer service. Difficulty: Challenging Skill: Application AACSB: Analytical thinking Learning Obj.: 7 95) What is the initial T&D effort for employees that strive to inform new employees about the company, the job, and the workgroup? A) role playing B) case study C) orientation D) videoconferencing Answer: C Explanation: C) Orientation is the initial T&D effort for new employees that inform them about the company, the job, and the work group. A good orientation program is quite important because first impressions are often the most lasting. In fact, new employees usually decide whether or not to stay at a company within their first six months of employment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

96) Shelley has been hired as a marketing specialist at a large, international firm. On Shelley's first day of work, she attends an orientation session. Which of the following is LEAST likely to be addressed during Shelley's orientation program? A) organizational structure B) company policies and rules C) compensation and reward system D) daily and weekly task requirements Answer: D Explanation: D) Orientation is the initial T&D effort for new employees that inform them about the company, the job, and the work group. Organizational structure, corporate policies, and compensation are common topics during orientation. An employee's specific tasks would be addressed during training rather than orientation. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 8 97) What is the primary purpose of including a socialization program during orientation? A) explaining employee benefits options B) reducing anxiety of new employees C) providing management training D) initiating team projects Answer: B Explanation: B) To reduce the anxiety that new employees may experience, the firm should take steps to integrate them into the informal organization through socialization programs. Some organizations have found that employees subjected to socialization programs, including the topics of politics and career management, perform better than those who have not undergone such training. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 98) All of the following are reasons for the use of peers during orientation EXCEPT for their ________. A) accessibility B) empathy C) experience D) benchmarking Answer: D Explanation: D) Peers tend to be more accessible and empathic than managers, and they have organizational experience and technical expertise as well. Benchmarking involves monitoring and comparing a firm's processes, which is irrelevant to orientation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 38 Copyright © 2016 Pearson Education, Inc.

99) Which of the following is NOT an HR company-wide training initiative on HR-related matters? A) accounting practice audits B) equal employment opportunity compliance C) onboarding D) diversity Answer: A Explanation: A) HR is responsible for many company-wide training initiatives on HR-related matters. Among these initiatives are orientation (onboarding), ethics, compliance (equal employment opportunity, Occupational Safety and Health), and diversity. Accounting practice audits focus on evaluating the integrity of a firm's accounting practices, and such audits are conducted by external firms that specialize in business accounting practices. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 100) Effective employee onboarding efforts that span several weeks rather than a day or two are most like ________. A) apprenticeship training B) classroom instruction C) just-in-time training D) learning organization Answer: C Explanation: C) Although orientation can occupy a new employee's first few days on the job, some firms believe that learning is more effective if spread out over time. Some firms are sensitive to information overload and make information available to employees on an as-needed basis. For example, a new supervisor may eventually have the responsibility for evaluating his or her subordinates. But knowledge of how to do this may not be needed for six months. A training segment on performance evaluation may be placed on the Internet or a firm's intranet and be available when the need arises. This approach is consistent with just-in-time training. Apprenticeships are collaborative efforts between companies and colleges or universities, and often focus on training individuals in the skilled trades (for example, carpentry). In a learning organization employees are rewarded for learning and are provided enriched jobs, promotions, and compensation. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

101) During orientation, employees typically learn about the firm and how their job fits into the firm's organizational structure and goals. Answer: TRUE Explanation: Orientation is the initial T&D effort for new employees that inform them about the company, the job, and the work group. At an early point in time, it is helpful for the new employee to know how his or her job fits into the firm's organizational structure and goals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 102) In a brief essay, discuss the importance of orientation and mentoring for new employees. Answer: Orientation is the initial T&D effort for new employees that inform them about the company, the job, and the work group. A good orientation program is quite important because first impressions are often the most lasting. In fact, new employees usually decide whether or not to stay at a company within their first six months of employment. Orientation programs give organizations an opportunity to get the relationship off to a good start. Mentoring is an approach to advising, coaching, and nurturing, for creating a practical relationship to enhance individual career, personal, and professional growth and development. Mentors may be anywhere in the organization or even in another firm. Mentoring focuses on skills to develop protégés to perform to their highest potential, leading to career advancement. Mentors have the potential to help mentees discover their strengths and weaknesses, formulate a career path, set goals, manage stress, and balance work and personal obligations. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 8, 12 103) A ________ is a flexible line of movement through which a person may travel during his or her work life. A) career path B) series of ups and downs C) work-life balancing act D) journey of discovery Answer: A Explanation: A) A career path is a flexible line of movement through which a person may travel during his or her work life. From a worker's perspective, following a career path may involve weaving from company to company and from position to position as he or she obtains greater knowledge and experience. Difficulty: Moderate Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 9

104) The network career path is a method of career progression that ________. A) contains both a vertical sequence of jobs and a series of horizontal opportunities B) allows for rectilinear moves in pursuit of new challenges C) allows technically trained employees to be rewarded without moving into management D) moves workers to a lower level of duties and responsibilities Answer: A Explanation: A) The network career path contains both a vertical sequence of jobs and a series of horizontal opportunities. This path recognizes the interchangeability of experience at certain levels and the need to broaden experience at one level before promotion to a higher level. Often, this approach provides more realistic opportunities for employee development in an organization than does the traditional career path. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 105) The ________ recognizes that technical specialists can and should be allowed to contribute their expertise to a company without having to become managers. A) alternative career path B) technical choice C) dual-career path D) self-actualization track Answer: C Explanation: C) Training and development (T&D) is the heart of a continuous effort designed to improve employee competency and organizational performance. Training provides learners with the knowledge and skills needed for their present jobs. On the other hand, development involves learning that goes beyond today's job and has a more long-term focus. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 106) Career planning is a general course that a person chooses to pursue throughout his or her working life. Answer: FALSE Explanation: A career is a general course that a person chooses to pursue throughout his or her working life. Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

107) The lateral skill path allows for lateral moves within the firm, taken to permit an employee to become revitalized and find new challenges. Answer: TRUE Explanation: The lateral skill path allows for lateral moves within the firm, taken to permit an employee to become revitalized and find new challenges. Neither pay nor promotion may be involved, but by learning a different job, an employee can increase his or her value to the organization and also become rejuvenated and reenergized. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 108) Which formal career planning assessment tool assesses four preferences for how an individual would behave in different situations? A) Career Key survey B) likes/dislikes survey C) job satisfaction survey D) Myers-Briggs Type Indicator Answer: D Explanation: D) Perhaps the most well-known example of a formal career planning approach is the Myers-Briggs Type Indicator. This assessment tool contains dozens of questions that elicit an individual's preferences for how they would behave in different situations. The MBTI describes the following four preferences: Energy, information gathering, decision making, and lifestyle. The Career Key is a formal assessment tool similar to the MBTI, except that it measures six preferences. A likes/dislikes survey is an informal method. Job satisfaction is not a career planning approach. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 109) As an ongoing process, ________ requires an individual to set career goals and identify the means to achieve them. A) life-long learning B) career planning C) behavioral modeling D) just-in-time training Answer: B Explanation: B) Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Individuals in today's job market must truly manage their careers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

110) A strengths/weakness balance sheet survey is an example of a formal career planning assessment tool. Answer: FALSE Explanation: Some useful self-assessment tools include a strength/weakness balance sheet and a likes and dislikes survey. However, any reasonable approach that assists self-understanding is helpful, which include a strength/weakness balance sheet and a likes/dislikes survey. Formal assessment refers to the use of established external approaches to facilitate evaluation of an issue at hand. Testing tools to identify career interests based on values and personality represent one approach to formal assessment. Although individuals may complete these tests on their own and read the report that is generated based on their responses, it often makes sense to work with a career counselor who can answer questions and make further recommendations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 111) What is a career? What is career planning? Answer: A career is a general course that a person chooses to pursue throughout his or her working life. Historically, a career was a sequence of work-related positions an individual occupied during a lifetime, although not always with the same company. However, today there are few relatively static jobs. Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Individuals in today's job market must truly manage their careers. Career planning should not concentrate only on advancement opportunities, since the present work environment has reduced many of these opportunities. At some point, career planning should focus on achieving successes that do not necessarily entail promotions. Historically, it was thought that career planning was logical, linear, and indeed, planned. Today, a new job assignment often is thought of as being paid to learn a new task and increase your experience level in case you must leave your job. Because of the many changes that are occurring, career planning is essential for survival for individuals and organizations. Individuals should have a strategy or plan for unexpected career events that begins while they are still employed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10, 11

112) Manager and employee self-service provide managers with the ________ to assist employees. A) training budget B) online ability C) online learning objectives D) online training evaluation tools Answer: B Explanation: B) Manager and employee self-service have proven to be useful in career development. Many companies are providing managers with the online ability to assist employees in planning their career paths and developing required competencies. Through employee self-service, employees are provided with the ability to update performance goals online and to enroll in training courses. Difficulty: Easy Skill: Concept AACSB: Information technology Learning Obj.: 11 113) Employees view career development opportunities as more important than ________. A) indirect financial compensation B) employee benefits C) pay D) work-life balance Answer: C Explanation: C) Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Beverly Kaye, coauthor of Love 'Em or Lose 'Em: Getting Good People to Stay, studied the top 20 reasons employees remain with their company and discovered that career development opportunities was number one on the list. It was even more important than receiving greater pay. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

114) As a formal approach used by an organization, ________ ensures that people with the proper qualifications and experiences are available when needed. A) career planning B) workforce stabilization C) career development D) organizational development Answer: C Explanation: C) Just-in-time training (on-demand training) is training provided anytime, anywhere in the world when it is needed. Computer technology, the Internet, intranets, smartphones, and similar devices have made these approaches economically feasible to a degree never before possible. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 115) What concept consists of all learning experiences resulting in an upgrading of skills and knowledge required in current and future managerial positions? A) reinforcement development B) management development C) organizational development D) behavioral development Answer: B Explanation: B) Management development consists of all learning experiences provided by an organization resulting in upgrading skills and knowledge required in current and future managerial. In today's rapidly changing business environment, it is extremely important to provide development opportunities for a firm's management group. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

116) As managers reach higher levels in the organization, it is not so much their ________ skills that that they need, but their ________ skills and their business knowledge. A) interpersonal; technical B) communication; financial C) organizational; observation D) technical; interpersonal Answer: D Explanation: D) In higher levels of the organization, managers need to hone their interpersonal skills and business knowledge more than their technical skills. A firm's future lies largely in the hands of its managers. Therefore, it is imperative that managers keep up with the latest developments in their respective fields and, at the same time, manage an ever-changing workforce operating in a dynamic environment. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 117) According to recent studies, all of the following are skills that top leaders in organizations need to improve EXCEPT ________. A) developing strategic plans B) encouraging individuality C) motivating employees D) thinking creatively Answer: B Explanation: B) A recent study found that almost 70 percent of companies believe that senior executives need to improve their leadership skills. More than half of companies reported their top leaders needing to also improve their strategic planning skills. Several other skills that leaders need are encouraging teamwork, motivating people, and creativity. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

118) Which of the following is an approach to advising, coaching, and nurturing, for creating a practical relationship to enhance individual career, personal, and professional growth and development? A) succession planning B) strategic planning C) mentoring D) training Answer: C Explanation: C) Mentoring is an approach to advising, coaching, and nurturing, for creating a practical relationship to enhance individual career, personal, and professional growth and development. Mentors may be anywhere in the organization or even in another firm. For years, mentoring has repeatedly been shown to be the most important factor influencing careers. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 119) Which of the following has historically been the most significant factor to influence careers? A) mentoring B) coaching C) training D) recruiting Answer: A Explanation: A) For years, mentoring has repeatedly been shown to be the most important factor influencing careers. Most Fortune 500 companies have a mentoring program. Mentors equip protégés to learn for themselves by sharing experiences, asking demanding questions, challenging decision-making and expanding problem-solving skills. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

120) Many mentees use ________ to keep in touch with their mentors via e-mail, Facebook, and Twitter. A) proctoring B) e-mentoring C) virtual classrooms D) closed-loop communication Answer: B Explanation: B) E-mentoring, or open mentoring, is being used more and more today as opposed to face-to-face interaction with positive results. Many keep in touch with their mentors via email, Facebook, and Twitter, but they may get together for lunch if they happen to be in the same location. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 121) What development method is often considered a responsibility of the immediate boss and provides assistance much like a mentor? A) coaching B) vestibule training C) development D) behavior modeling Answer: A Explanation: A) Coaching is often considered a responsibility of the immediate boss, who provides assistance, much like a mentor, but the primary focus is about performance. Coaching involves helping workers see why they have been selected to perform the task or why they have been selected for the team. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

122) Some believe that having a ________ is essential to make it to the top, and the lack of one may explain the difficulty women and minorities have encountered with the glass ceiling. A) coach B) mentor C) development program D) succession training program Answer: B Explanation: B) Because women and minorities are not equally represented at the firm's top levels, they may be left without a mentor. Studies show that women who are mentored, particularly by other women, are more likely to enhance and expand career skills, advance in their careers, receive higher salaries, and enjoy their work more. Women want and need to have advantages provided by mentors to effectively use their talents and realize their potential, not only for their personal benefit but to assist their firms. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 12 123) Gaming Laboratories periodically assigns coaches to its employees. The firm most likely provides coaches to enhance ________. A) long-term planning B) team building skills C) task performance D) career growth Answer: C Explanation: C) Coaching is often considered a responsibility of the immediate boss, who provides assistance, much like a mentor, but the primary focus is about performance. Coaching involves helping workers see why they have been selected to perform the task or why they have been selected for the team. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

124) A process in which older workers learn from younger workers is known as reverse ________. A) coaching B) development C) training D) mentoring Answer: D Explanation: D) Reverse mentoring is a process in which older employees learn from younger ones. There are people in organizations who are approaching retirement who do not want to retire, and who have tremendous knowledge that should not go to waste. There are young people who know things others do not know and who are anxious to expand their horizons. The existence of these two diverse, but potentially mutually helpful, populations has led to reverse mentoring. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 125) Jason has worked for Allstate Insurance as an IT specialist since graduating from college two years ago. George is an upper level manager who has worked for Allstate for twenty years. Jason and George have been paired so that George can learn more about social networking and text messaging from Jason. Which of the following best describes this program? A) job sharing B) strategic planning C) reverse mentoring D) succession planning Answer: C Explanation: C) Reverse mentoring is a process in which older employees learn from younger ones. There are people in organizations who are approaching retirement who do not want to retire, and who have tremendous knowledge that should not go to waste. There are young people who know things others do not know and who are anxious to expand their horizons. The existence of these two diverse, but potentially mutually helpful, populations has led to reverse mentoring. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 12

126) Firms most likely implement reverse mentoring programs to ________. A) discourage the retirement of experienced managers B) provide job rotation opportunities for minorities C) help older employees learn from younger ones D) address federal hiring requirements Answer: C Explanation: C) Reverse mentoring is a process in which older employees learn from younger ones. Firms use such programs to help them understand the changing needs of the younger generation. Reverse mentoring helps executives remain current in vision and strategy. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 12 127) Improving performance is the primary focus of mentoring. Answer: FALSE Explanation: Mentoring is an approach to advising, coaching, and nurturing for creating a practical relationship to enhance individual career, personal, and professional growth and development. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 128) Mentoring is an approach to advising, coaching, and nurturing, for creating a practical relationship to enhance individual career, personal, and professional growth and development. Answer: TRUE Explanation: Mentoring is an approach to advising, coaching, and nurturing, for creating a practical relationship to enhance individual career, personal, and professional growth and development. Mentors may be anywhere in the organization or even in another firm. For years, mentoring has repeatedly been shown to be the most important factor influencing careers. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 129) Since e-mentoring fails to yield positive outcomes, most firms choose to continue using the traditional mentoring techniques. Answer: FALSE Explanation: E-mentoring is being used more often as opposed to face-to-face interaction and is yielding positive outcomes. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 12

130) Reverse mentoring is a process in which the older employees learn from the younger ones. Answer: TRUE Explanation: Reverse mentoring is a process in which older employees learn from younger ones, primarily in the area of technology. Numerous firms have implemented reverse mentoring programs so that the two populations can share knowledge. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 131) The planned and systematic attempt to change the organization, typically to a more behavioral environment is referred to as ________. A) management development B) vestibule system training C) organization development D) on-demand training Answer: C Explanation: C) Organization development involves planned and systematic attempts to change the organization, typically to a more behavioral environment. OD education and training strategies are designed to develop a more open, productive, and compatible workplace despite differences in personalities, culture, or technologies. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 132) Organization development is primarily a planned and systematic attempt to ________. A) strengthen industry standards B) change the corporate culture C) diversify management D) train new recruits Answer: B Explanation: B) Organization development involves planned and systematic attempts to change the organization and the corporate culture. OD education and training strategies are designed to develop a more open, productive, and compatible workplace despite differences in personalities, culture, or technologies. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

133) Organization development is implemented to change which of the following? A) individual employees B) an entire company C) a single department D) quality circles Answer: B Explanation: B) Organization development applies to an entire system, such as a company or a plant. Organization development is a major means of achieving change in the corporate culture. Team building and quality circles may be used in organization development, but the main focus is changing an entire firm. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 134) Which of the following is NOT an organization development intervention? A) quality circles B) survey feedback C) team building D) job enlargement Answer: D Explanation: D) Numerous OD interventions are available, such as survey feedback, a technique often combined with other interventions; quality circles; team building; and sensitivity training. Job enlargement helps develop individual workers rather than an organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 135) Collecting data from an organization unit through the use of questionnaires and interviews is known as ________. A) team building B) quality circles C) job enrichment D) survey feedback Answer: D Explanation: D) The organization development method of basing change efforts on the systematic collection and measurement of subordinate's attitudes through anonymous questionnaires is survey feedback. It enables management teams to help organizations create working environments that lead to better working relationships, greater productivity, and increased profitability. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

136) Groups of employees who voluntarily meet regularly with their supervisors to identify production problems and recommend solutions are referred to as ________. A) free agents B) quality circles C) niche sites D) work groups Answer: B Explanation: B) Quality circles are groups of employees who voluntarily meet regularly with their supervisors to discuss their problems, investigate causes, recommend solutions, and take corrective action when authorized to do so. The team's recommendations are presented to higherlevel management for review, and the approved actions are implemented with employee participation. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 137) Which term refers to a conscious effort to develop effective workgroups throughout the organization? A) benchmarking B) behavior modeling C) succession planning D) team building Answer: D Explanation: D) Team building is a conscious effort to develop effective work groups and cooperative skills throughout the organization. It helps members diagnose group processes and devise solutions to problems. Effective team building can be the most efficient way to boost morale, employee retention, and company profitability. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

138) Horton Consulting is considering investing in a video conferencing system. How would the firm primarily benefit from such a system? A) saving time and money traveling to meetings B) eliminating the need for costly software upgrades C) minimizing the time it takes to train employees D) providing variety to employees through job rotation Answer: A Explanation: A) Team building is a conscious effort to develop effective work groups and cooperative skills throughout the organization. It helps members diagnose group processes and devise solutions to problems. Job descriptions, production needs, and employee training methods are less relevant to the decision to use team building exercises. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 13 139) Organizational development consists of all learning experiences provided by an organization resulting in an upgrading of skills and knowledge required in current and future managerial positions. Answer: FALSE Explanation: Organization development is the planned and systematic attempt to change the organization, typically to a more behavioral environment. Management development consists of all learning experiences provided by an organization resulting in upgrading skills and knowledge required in current and future managerial positions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 140) Quality circles are groups of employees who voluntarily meet regularly with their supervisors to discuss their problems, investigate causes, recommend solutions, and take corrective action when authorized to do so. Answer: TRUE Explanation: Quality circles are groups of employees who voluntarily meet regularly with their supervisors to discuss their problems, investigate causes, recommend solutions, and take corrective action when authorized to do so. The team's recommendations are presented to higherlevel management for review, and the approved actions are implemented with employee participation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

141) Orientation is the organization development method of basing change efforts on the systematic collection and measurement of subordinate's attitudes through anonymous questionnaires. Answer: FALSE Explanation: Survey feedback is the organization development method of basing change efforts on the systematic collection and measurement of subordinate's attitudes through anonymous questionnaires. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 13 142) Team building is a conscious effort to develop effective work groups and cooperative skills throughout the organization. Answer: TRUE Explanation: Team building is a conscious effort to develop effective work groups and cooperative skills throughout the organization. It helps members diagnose group processes and devise solutions to problems. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 143) Firms that recognize the critical importance of continuous performance-related training and development and take appropriate action are known as ________ organizations. A) international B) profitable C) strategic D) learning Answer: D Explanation: D) A learning organization is a firm that recognizes the critical importance of continuous performance-related T&D and takes appropriate action. A learning organization has three basic characteristics: 1) it provides a supportive learning environment, 2) it provides specific learning processes and practices, and 3) the leadership behavior in the organization supports and reinforces learning. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 14

144) Which of the following is LEAST likely to characterize a learning organization? A) providing a supportive learning environment B) offering specific learning processes and practices C) supporting and reinforcing learning through leadership D) requiring frequent examinations to ensure quick and accurate learning Answer: D Explanation: D) A learning organization has three basic characteristics: 1) it provides a supportive learning environment, 2) it provides specific learning processes and practices, and 3) the leadership behavior in the organization supports and reinforces learning. Although occasional exams may be necessary, quick learning is not. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 145) Firms listed in the "100 Best Companies to Work for in America" typically emphasize ________. A) training and development B) stock options C) bonuses and benefits D) piecework Answer: A Explanation: A) In the competition to become listed in the "100 Best Companies to Work for in America," learning and growth opportunities were a high priority. On nearly every survey, training and development ranks in the top three benefits that employees want from their employers, and they search for firms that will give them the tools to advance in their profession. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 146) Although training and development has been shown to improve employee morale and job satisfaction, training and development has no effect on recruitment. Answer: FALSE Explanation: Being recognized as a company that encourages its employees to continue to grow and learn can be a major asset in recruiting. Organizations with a reputation for having a culture of being a learning leader tend to attract more and better-qualified employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14

147) Learning organizations reward employees with enriching jobs, promotions, and compensation, and they typically attract high-quality workers who seek training and development programs. Answer: TRUE Explanation: In a learning organization employees are rewarded for learning and are provided enriched jobs, promotions, and compensation. Organizations with a reputation for having a culture of being a learning leader tend to attract more and better-qualified employees. On nearly every survey, training and development ranks in the top three benefits that employees want from their employers, and they search for firms that will give them the tools to advance in their profession. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 148) Why is the apprenticeship training model prevalent in some European countries such as Germany? A) because European countries mandate the use of the apprenticeship model B) because of the collaborative efforts between schools and industry C) because there is little collaboration between businesses and schools D) all of the above Answer: B Explanation: B) The apprenticeship training model is prevalent in some European countries such as Germany, and it is successful there for a number of reasons because of the collaborative efforts between schools and industry. According to Wilfried Porth who is in charge of HR and labor relations at Daimler, "You need a school system which supports it. We have this tradition in Germany of being loyal to the company. We also have a technology focus here in Germany. For that, you need very skilled people." In addition, Professor Hagen Kramer of Karlsruhe University of Applied Sciences states "The apprentices must be given structured training by their employer, alongside the general and vocational education they receive. It all ensures Germany has enough labour to do the jobs." Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 15

149) In terms of learning, some researchers maintain that the Chinese believe in constant change and the importance of the relationships between things whereas Westerners embrace a more deterministic world that is rule-based. Answer: TRUE Explanation: In terms of learning, some researchers maintain that the Chinese believe in constant change and the importance of the relationships between things whereas Westerners embrace a more deterministic world that is rule-based Language and cultural differences play an important role in whether training initiatives are successful. For example, we have learned from our students that there isn't always a direct translation of concepts between the English and Chinese languages, which makes field-specific training challenging. Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 15 150) Describe two important global challenges that training and development professionals face. Answer: It is important to recognize that broadening training practice to the world stage presents additional issues. For instance, some countries distinguish themselves from others through the widespread use of specific training models. For example, the apprenticeship training model is prevalent in some European countries such as Germany, and it is successful there for a number of reasons because of the collaborative efforts between schools and industry. According to Wilfried Porth who is in charge of HR and labor relations at Daimler, "You need a school system which supports it. We have this tradition in Germany of being loyal to the company. We also have a technology focus here in Germany. For that, you need very skilled people." In addition, Professor Hagen Kramer of Karlsruhe University of Applied Sciences states "The apprentices must be given structure training by their employer, alongside the general and vocational education they receive. It all ensures Germany has enough labour to do the jobs." Language and cultural differences play an important role in whether training initiatives are successful. For example, we have learned from our students that there isn't always a direct translation of concepts between the English and Chinese languages, which makes field specific training challenging. In terms of learning, some researchers maintain that the Chinese believe in constant change and the importance of the relationships between things whereas Westerners embrace a more deterministic world that is rule-based. For effective training, HR professionals must take the time to learn about the cultural differences and to consult experts who can help create training programs that will enable trainees to learn what the company requires them to learn. Difficulty: Challenging Skill: Critical thinking AACSB: Diverse and multicultural work environments Learning Obj.: 15

Human Resource Management, 14e (Mondy) Chapter 9 Direct Financial Compensation (Core Compensation) 1) Which term refers to the total of all rewards provided to employees in return for their services? A) benefits B) commissions C) bonuses D) compensation Answer: D Explanation: D) Compensation is the total of all rewards provided to employees in return for their services. Direct financial compensation consists of the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) Which of the following is an example of indirect financial compensation (employee benefits)? A) sales commission B) psychological welfare C) paid vacation D) hourly wage Answer: C Explanation: C) Direct financial compensation consists of the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Indirect financial compensation (employee benefits) consists of all financial rewards that are not included in direct financial compensation. This form of compensation includes a wide variety of rewards normally received indirectly by the employee such as paid vacation and medical care. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

3) As a pediatric nurse, Cary experiences a significant amount of job satisfaction, which is considered ________. A) nonfinancial compensation B) indirect compensation C) organizational fit D) personal equity Answer: A Explanation: A) Nonfinancial compensation consists of the satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works. This aspect of nonfinancial compensation involves both psychological and physical factors within the firm's working environment. Difficulty: Moderate Skill: Concept AACSB: Reflective thinking Learning Obj.: 1 4) What form of compensation consists of the satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works? A) nonfinancial compensation B) direct financial compensation C) indirect financial compensation D) total internal compensation Answer: A Explanation: A) Nonfinancial compensation consists of the satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works. This aspect of nonfinancial compensation involves both psychological and physical factors within the firm's working environment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

5) On average, companies spent $31.57 per hour worked per employee in December 2013. Of this total, how much did they spend on wages and benefits, respectively? A) $28.63 and $9.80, respectively per employee per hour worked B) $21.77 and $9.80, respectively per employee per hour worked C) $120.93 and $99.21, respectively, per employee per day worked D) $7.25 and $4.56, respectively, per employee per hour worked Answer: B Explanation: B) Managers tend to view financial compensation as both an expense and an asset. It is an expense in the sense that it reflects the cost of labor. For example, on average, companies spent $31.57 per hour worked per employee in December 2013. Of this total, companies spent $21.77 on wages and $9.80 on all employee benefits. The costs of labor continually rise. For example, the cost of wages rose, on average, 1.9 percent between December 2012 and December 2013. The increase in the cost of benefits was greater, equaling 2.2 percent. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 1 6) Wages, salaries, bonuses, and commissions are referred to as ________. A) financial benefits B) direct financial compensation C) indirect financial compensation D) discretionary workplace benefits Answer: B Explanation: B) The Walsh-Healy Act of 1936 requires companies with federal supply contracts exceeding $10,000 to pay prevailing wages as determined by the Secretary of Labor. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1, 2 7) Compensation is the total of all rewards provided to employees in return for their services. Answer: TRUE Explanation: Compensation is the total of all rewards provided employees in return for their services. Direct financial compensation consists of the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Indirect financial compensation (benefits) consists of all financial rewards that are not included in direct financial compensation. Nonfinancial compensation consists of the satisfaction that a person receives from the job itself or from the psychological or physical environment in which the person works. The overall purposes of providing compensation are to attract, retain, and motivate employees. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

8) Direct financial compensation consists of the pay that a person receives in the form of wages, salaries, commissions, and health benefits. Answer: FALSE Explanation: Direct financial compensation consists of the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Indirect financial compensation (benefits) consists of all financial rewards that are not included in direct financial compensation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 9) Indirect financial compensation consists of all financial rewards that are not included in direct compensation, such as commissions and spot bonuses. Answer: TRUE Explanation: Indirect financial compensation (benefits) consists of all financial rewards that are not included in direct financial compensation. Direct financial compensation consists of the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 10) Nonfinancial compensation consists of the satisfaction that a person receives from the psychological environment in which the person works. Answer: TRUE Explanation: Nonfinancial compensation consists of the satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works. This aspect of nonfinancial compensation involves both psychological and physical factors within the firm's working environment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

11) What is compensation? Define direct financial, indirect financial and nonfinancial compensation. Answer: Compensation is the total of all rewards provided to employees in return for their services. Direct financial compensation (core compensation) consists of the pay that a person receives in the form of wages, salaries, commissions, and bonuses. Indirect financial compensation (employee benefits) consists of all financial rewards that are not included in direct financial compensation. This form of compensation includes a wide variety of rewards normally received indirectly by the employee such as paid vacation and medical care. Nonfinancial compensation consists of the satisfaction that a person receives from the job itself or from the psychological or physical environment in which the person works. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 12) Which term refers to the face value of pay? A) direct compensation B) nominal compensation C) real compensation D) market-competitive pay Answer: B Explanation: B) Cost-of-living adjustments (COLAs) represent periodic base pay increases that are founded on changes in prices as recorded by the consumer price index (CPI). In recent years, the typical COLA equaled approximately 2-3 percent annually. COLAs enable workers to maintain their purchasing power and standard of living by adjusting base pay for inflation. Real hourly compensation measures the purchasing power of a dollar, whereas nominal hourly compensation is the face value of a dollar. Increases in the costs of goods and services cause nominal pay to be less than real pay. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

13) If a person is to maintain a previous level of nominal wages, then a pay increase must be roughly equivalent to the ________. A) cost of living increase B) industry average C) national average D) market rate Answer: A Explanation: A) Although not a problem in recent years, the logic for using cost of living as a pay determinant is both simple and sound: when prices rise over time and pay does not, real pay is actually lowered. A pay increase must be roughly equivalent to the increased cost of living if a person is to maintain his or her previous level of real wages. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 14) How can the General Schedule best be described? A) performance-based pay B) seniority-based pay C) person-focused pay D) state government pay system Answer: B Explanation: B) We can look to the U.S. federal government for an example of a comprehensive seniority pay program that is known as the General Schedule. Figure 9-2 displays this arrangement. The General Schedule classifies federal government jobs into 15 classifications (GS-1 through GS-15) based on such factors as skill, education, and experience levels. Employees are eligible for 10 within-grade step pay increases. At present, it takes employees 18 years to progress from Step 1 to Step 10. Employees spend one year each in Steps 1 through 3, two years each in Steps 4-6, and three years each in Steps 7-9. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

15) An escalator clause in a labor agreement that automatically increases wages as the U.S. Bureau of Labor Statistics' Consumer Price Index rises is known as a ________. A) BARS B) COPE C) COLA D) POS Answer: C Explanation: C) When a union emphasizes cost of living, it may pressure management into including a cost-of-living allowance. A cost-of-living allowance (COLA) is an escalator clause in the labor agreement that automatically increases wages as the U.S. Bureau of Labor Statistics Consumer Price Index rises. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 16) Todd, a financial analyst, was recently hired by Maxwell Enterprises. After one year with the firm, Todd will be eligible to receive a pay increase added to his base pay that is based on his performance level. Which term best describes this type of compensation? A) commission B) merit pay C) piecework D) spot bonus Answer: B Explanation: B) Merit pay is a pay increase added to employees' base pay based on their level of performance. Piecework is an incentive pay plan in which employees are paid for each unit they produce. Spot bonuses are relatively small monetary gifts provided to employees for outstanding work or effort during a reasonably short period of time. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2

17) Which type of compensation increases an employee's base pay and contributes to cost control over time?? A) merit pay B) incentive pay C) person-focused pay D) seniority-based pay Answer: B Explanation: B) Incentive pay rewards employees for partially or completely attaining a predetermined work objective. Incentive or variable pay is defined as compensation–other than base wages or salaries–that fluctuates according to employees' attainment of some standard, such as a pre-established formula, individual or group goals, or company earnings. Much like seniority and merit pay approaches, incentive pay augments employees' base pay, but incentive pay appears as one-time payments. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 18) What is a limitation of profit sharing plans? A) profit sharing plans are excessively costly B) employees have a difficult time understanding their particular contributions to company profits C) profit sharing adds recurring increases to base pay year over year D) profit sharing plans create unhealthy competition between employees Answer: B Explanation: B) A basic problem with a profit-sharing plan stems from the recipients' seldom knowing precisely how they helped generate the profits, beyond just doing their jobs. HR professionals refer to this as a line-of-sight problem. And, if employees continue to receive a payment, they will come to expect it and depend on it. If they do not know what they have done to deserve it, they may view it as an entitlement program and the intended ownership attitude may not materialize. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

19) Which term refers to a one-time annual financial award based on productivity? A) bonus B) merit award C) skill-based pay D) competency-based pay Answer: A Explanation: A) Companies are increasingly placing a higher percentage of their compensation budget in merit bonuses, which is a one-time annual financial award, based on productivity that is not added to base pay. This approach better enables companies to control the cost of direct compensation by not adding pay increases to base pay on a permanent basis, which is the case for seniority and merit pay. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 20) Ellen received a one-time bonus of $500 from her employer as a reward for her significant contribution on a project. Which of the following did Ellen most likely receive? A) a performance incentive B) an experience bonus C) a premium payment D) a spot bonus Answer: D Explanation: D) Spot bonuses are relatively small monetary gifts provided to employees for outstanding work or effort during a reasonably short period of time. If an employee's performance has been exceptional, the employer may reward the worker with a one-time bonus of as low as $50 and $100 or $500 and perhaps $5,000 shortly after the noteworthy actions. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2

21) Claudia works as a seamstress at a clothing company. She receives $10 for each pair of pants she sews. What type of pay plan is Claudia's employer most likely using? A) variable pay B) piecework C) lump sum pay D) skill-based pay Answer: B Explanation: B) Piecework is an incentive pay plan in which employees are paid for each unit they produce. Claudia is paid $10 a unit, so if she produces 10 units a day, Claudia will earn $100. Piecework is an incentive pay plan in which employees are paid for each unit they produce. For example, if a worker is paid $8 a unit and produces 10 units a day, the worker earns $80. Sometimes a guaranteed base is included in a piece-rate plan, meaning that a worker would receive this base amount no matter what the output. Historically, piecework is especially prevalent in the production/operations area. Requirements for the plan include developing output standards for the job and being able to measure the output of a single employee. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2 22) John works at a company that uses a variety of heavy machines. John knows how to operate three of the machines, and if he learns how to use another one, his pay will increase. Which type of compensation plan is most likely used by John's employer? A) variable pay B) invariable pay C) lump sum pay D) skill-based pay Answer: D Explanation: D) Skill-based pay is a system that compensates employees for their job-related skills and knowledge, rather than his or her present job. The system assumes that employees who know more are more valuable to the firm and, therefore, they deserve a reward for their efforts in acquiring new skills. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2

23) Which performance-based pay system assumes that employees who know more are more valuable to the firm and deserve to be rewarded for their efforts in acquiring new skills? A) variable pay B) merit pay C) lump sum pay D) skill-based pay Answer: D Explanation: D) Skill-based pay is a system that compensates employees for their job-related skills and knowledge, rather than his or her present job. The system assumes that employees who know more are more valuable to the firm and, therefore, they deserve a reward for their efforts in acquiring new skills. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 24) Anna, a marketing manager, frequently takes development and training courses to learn new skills. Anna is financially rewarded by her employer each time she acquires a new capability. What type of compensation plan is most likely used by Anna's employer? A) variable pay B) skill-based pay C) lump sum pay D) competency-based pay Answer: D Explanation: D) Competency-based pay plans generally reward employees for acquiring jobrelated competencies, knowledge, or skills rather than for demonstrating successful job performance. Competency-based pay often refers to two basic types of person-focused pay programs: pay-for-knowledge and skill-based pay. These programs sometimes incorporate a combination of both types of person-focused pay systems, which reward employees for successfully acquiring new job-related knowledge or skills. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 2

25) Labor unions tend to favor ________ as the basis for compensation changes. A) performance B) experience C) seniority D) skill Answer: C Explanation: C) Although management generally prefers performance as the primary basis for compensation changes, unions tend to favor seniority. Many union leaders consider performance evaluation systems to be too subjective, permitting management to reward favorite employees arbitrarily. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 26) The rationale for adopting seniority pay plans is described by which theory? A) job-based theory B) pay-for-performance theory C) human capital theory D) equity theory Answer: C Explanation: C) These pay plans assume that employees become more valuable to companies with time and that valued employees will leave if they do not have a clear idea that their salaries will progress over time. This rationale comes from human capital theory, which states that employees' knowledge and skills generate productive capital known as human capital. Employees can develop such knowledge and skills from formal education and training, including on-the-job experience. Over time, employees presumably refine existing skills or acquire new ones that enable them to work more productively. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

27) Which of the following is a disadvantage associated with team-based pay? A) Exemplary performers become disgruntled and quit. B) Performance standards are difficult to develop. C) Output is difficult to categorize and assess. D) Members lack the time to assist others. Answer: A Explanation: A) Team incentives have both advantages and disadvantages. On the positive side, firms find it easier to develop performance standards for groups than for individuals, the output of a team is more likely to reflect a complete product or service, and employees may be more inclined to assist others and work collaboratively. A potential disadvantage for team incentives relates to exemplary performers who perceive that they contribute more than other employees in the group then become disgruntled and leave. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 28) A compensation plan that results in the distribution of a predetermined percentage of the firm's profits to employees is referred to as ________. A) team sharing B) piecework C) profit sharing D) broadbanding Answer: C Explanation: C) Profit sharing is a compensation plan that results in the distribution of a predetermined percentage of the firm's profits to employees. Many firms use this type of plan to integrate the employees' interests with those of the company. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

29) Which type of profit sharing plan provides payment to employees in cash or stock as soon as profits have been determined? A) deferred plan B) current plan C) performance plan D) gainsharing plan Answer: B Explanation: B) Current plans provide payment to employees in cash or stock as soon as profits have been determined. Deferred plans involve placing company contributions in an irrevocable trust, credited to individual employees' accounts. The funds are normally invested in securities and become available to the employee (or his or her survivors) at retirement, termination, or death. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 30) Which type of profit sharing plan places company contributions in an irrevocable trust and credits individual employees' accounts? A) deferred plan B) current plan C) stock plan D) defined plan Answer: A Explanation: A) Deferred plans involve placing company contributions in an irrevocable trust, credited to individual employees' accounts. The funds are normally invested in securities and become available to the employee (or his or her survivors) at retirement, termination, or death. Current plans provide payment to employees in cash or stock as soon as profits have been determined. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

31) Vesting on a graduated basis has a tendency to ________. A) discourage participation B) improve recruiting C) increase hiring D) reduce turnover Answer: D Explanation: D) Vesting determines the amount of profit an employee owns in his or her account. A gradual approach to vesting encourages employees to remain with the firm, thereby reducing turnover. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 32) Which of the following is an incentive pay plan designed to bind employees to the firm's performance by providing payment based on improved company performance or other outcomes such as attaining cost-efficiency? A) deferred B) job sharing C) compression D) gainsharing Answer: D Explanation: D) Gainsharing plans are designed to bind employees to the firm's productivity and provide an incentive payment based on improved company performance. Gainsharing programs, such as the Scanlon, Rucker, and Improshare plans, are the most popular companywide plans that have been adopted by U.S. corporations. The goal of gainsharing is to focus on improving cost-efficiency, reducing costs, improving throughput, and improving profitability. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

33) Which of the following is a gainsharing plan that provides a financial reward to employees for labor cost savings resulting from their suggestions? A) deferred plan B) Scanlon plan C) current plan D) Rucker plan Answer: B Explanation: B) The Scanlon plan provides a financial reward to employees for savings in labor costs resulting from their suggestions. Employee-management committees evaluate these suggestions. Participants in these plans calculate savings as a ratio of payroll costs to the sales value of what that payroll produces. If the company is able to reduce payroll costs through increased operating efficiency, it shares the savings with its employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 34) What gainsharing plan embodies management-labor cooperation, collaborative problemsolving, teamwork, trust, open-book management and servant leadership? A) deferred plan B) Scanlon plan C) Roth plan D) current plan Answer: B Explanation: B) Scanlon plans are not only financial incentive systems, but also systems for participative management. The Scanlon plan embodies management/labor cooperation, collaborative problem solving, teamwork, trust, open-book management, and servant leadership. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 35) Individuals performing in professional jobs are compensated initially for their ________. A) productivity B) goal achievement C) knowledge D) extensive experience Answer: C Explanation: C) A professional employee performs work requiring advanced knowledge in a field of learning, normally acquired through a prolonged course of specialized instruction. Examples of exempt professionals often employed in industry include scientists, engineers, and accountants. Their pay, initially, is for the knowledge they bring to the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 16 Copyright © 2016 Pearson Education, Inc.

36) The objective of ________ is to improve productivity by rewarding those who best assist in achieving this goal. A) performance-based pay B) cost-of-living allowances C) skill-based pay D) salary compression Answer: A Explanation: A) The objective of performance-based pay is to improve productivity by rewarding those who best assist in achieving this goal. It is based on the assumption that given the proper incentives, most employees will work harder and smarter. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 37) PetFair, a national chain of pet supply stores, employs nearly 1,000 workers. In the past two years, the firm's market share has dropped and employee turnover has increased. The vice president of human resources at PetFair suggests implementing a new compensation policy to improve the firm's performance and retain quality workers. Currently, PetFair employees receive compensation primarily based on years with the firm and job level. Which of the following, if true, best supports the argument that PetFair should implement a competency-based pay system? A) PetFair uses the classification method to price management jobs. B) PetFair sales representatives earn straight commissions. C) PetFair managers experience variable work assignments. D) PetFair offers a profit-sharing plan to top executives. Answer: C Explanation: C) Competency-based pay is a type of skill-based pay plan for professional and managerial employees. The disappearance of the traditional job provides the primary rationale for this change. If managers at PetFair have variable and unstable work assignments, with roles that cannot be assigned a valid pay rate in traditional job evaluation plans, then a competencybased pay system is appropriate. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

38) PetFair, a national chain of pet supply stores, employs nearly 1,000 workers. In the past two years, the firm's market share has dropped and employee turnover has increased. The vice president of human resources at PetFair suggests implementing a new compensation policy to improve the firm's performance and retain quality workers. Currently, PetFair employees receive compensation primarily based on years with the firm and job level. Which of the following, if true, best supports the idea of offering a Scanlon plan to employees at PetFair? A) The environment at PetFair lacks teamwork, trust, and collaboration among employees. B) Perquisites for key executives at PetFair were eliminated during the 2008 recession. C) PetFair uses broadbanding to price jobs at all levels of the organization. D) The Hay plan is already utilized successfully at PetFair. Answer: A Explanation: A) The Scanlon plan provides a financial reward to employees for savings in labor costs resulting from their suggestions. The Scanlon plan embodies management/labor cooperation, collaborative problem solving, teamwork, trust, gainsharing, open-book management, and servant leadership, so offering the Scanlon plan may improve the PetFair environment. Perks and broadbanding are less relevant to the issue of the Scanlon plan. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 39) Cost-of-living allowances are becoming increasingly popular in nonunion settings. Answer: FALSE Explanation: Cost-of-living adjustments (COLAs) are relatively rare outside unionized settings. COLAs are most common among workers represented by unions because one of the main goals of unionization is to protect the standard of living of its membership. When a union emphasizes cost of living, it may try to pressure management into including a COLA, which rarely is found outside unionized employment settings. Provisions for COLAs are contained in an escalator clause in the labor agreement that automatically increases wages as the U.S. Bureau of Labor Statistics' cost-of-living index (Consumer Price Index) rises. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 40) Nominal compensation and real compensation are never equal. Answer: FALSE Explanation: Real hourly compensation measures the purchasing power of a dollar, whereas nominal hourly compensation is the face value of a dollar. When awarded, and for a short time afterward, nominal pay and real pay will be equal because increases in the cost-of-living, which erodes nominal pay, occur over longer periods of time. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

41) According to research, merit pay, which is similar to an annual bonus, is highly successful in motivating employee performance and improving compensation satisfaction. Answer: FALSE Explanation: Merit pay is a pay increase added to employees' base pay based on their level of performance. Past studies by compensation professionals have determined that merit pay is marginally successful in influencing pay satisfaction and performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 42) Merit pay is a one-time financial award based on productivity. Answer: FALSE Explanation: Merit pay is a pay increase added to employees' base pay based on their level of performance. A bonus and incentive payments are one-time annual financial awards based on productivity and not added to base pay. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 43) Merit payments are relatively small gifts given to employees for outstanding work or effort during a brief period of time. Answer: FALSE Explanation: Spot bonuses are relatively small monetary gifts provided to employees for outstanding work or effort during a reasonably short period of time. Merit pay is a pay increase added to employees' base pay based on their level of performance. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 44) Piecework is an incentive pay plan where employees are paid for each unit they produce. Answer: TRUE Explanation: Piecework is an incentive pay plan in which employees are paid for each unit they produce. Piecework is especially prevalent in the production/operations area. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

45) Competency-based pay plans are increasingly common as employees shift from traditional jobs to variable work assignments. Answer: TRUE Explanation: Competency-based pay is a compensation plan that rewards employees for the capabilities they attain. The disappearance of the traditional job provides the primary rationale for the shift towards this system. Today, employees are said to have variable and unstable work assignments, with roles that cannot be assigned a valid pay rate in traditional job evaluation plans. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 46) Seniority is the length of time an employee has been associated with the company, division, department, or job. Answer: TRUE Explanation: Seniority is the length of time an employee has been associated with the company, division, department, or job. Although management generally prefers performance as the primary basis for compensation changes, unions tend to favor seniority. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 47) Profit sharing is a compensation plan that helps HR managers with recruiting and retaining employees. Answer: TRUE Explanation: Profit sharing is a compensation plan that results in the distribution of a predetermined percentage of the firm's profits to employees. Profit-sharing plans can aid in recruiting, motivating, and retaining employees, which usually enhances productivity. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 48) In general gainsharing plans are intended to link employees to organizational productivity by focusing on cost-efficiency. Answer: TRUE Explanation: Gainsharing plans are designed to bind employees to the firm's productivity and provide an incentive payment based on improved company performance. The goal of gainsharing is to focus on improving cost-efficiency, reducing costs, improving throughput, and improving profitability. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 20 Copyright © 2016 Pearson Education, Inc.

49) The Scanlon plan provides a financial reward to employees for savings in labor costs that result from their suggestions and serves as a type of participative management program. Answer: TRUE Explanation: The Scanlon plan provides a financial reward to employees for savings in labor costs resulting from their suggestions. Scanlon plans are not only financial incentive systems, but also systems for participative management. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 50) Compare and discuss skill-based and competency-based systems of pay. Answer: Skill-based pay is a system that compensates employees for their job-related skills and knowledge, rather than how well he or she performs on the present job. Essentially, job descriptions, job evaluation plans, and job-based salary surveys are replaced by skill profiles, skill evaluation plans, and skill-based salary surveys. The system assumes that employees who know more are more valuable to the firm and, therefore, they deserve a reward for their efforts in acquiring new skills. When employees obtain additional job-relevant skills, both individuals and the departments they serve benefit. Competency-based pay is a compensation plan that rewards employees for the capabilities they attain. It is a type of skill-based pay plan for professional and managerial employees. Today, there are many alternatives to choose from-core, organizational, behavioral, and technical competencies. The disappearance of the traditional job provides the primary rationale for this change. Today, employees often have variable and unstable work assignments, with roles that cannot be assigned a valid pay rate through traditional job evaluation plans. Often, considerable time must be spent determining the specific competencies needed for the different jobs. Blocks of competencies are then priced, and management must invest considerable time in developing, implementing, and continuing such a system. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 51) What is a profit-sharing plan? Identify and discuss the three basic profit-sharing plans. Answer: Profit sharing is a compensation plan that results in the distribution of a predetermined percentage of the firm's profits to employees. Many firms use this type of plan to integrate the employees' interests with those of the company. There are several variations of profit-sharing plans, but three basic kinds of plans used today are current profit sharing, deferred profit sharing, and combination plans. Current plans provide payment to employees in cash or stock as soon as profits have been determined. Deferred plans involve placing company contributions in an irrevocable trust, credited to individual employees' accounts. The funds are normally invested in securities and become available to the employee (or his or her survivors) at retirement, termination, or death. Combination plans permit employees to receive payment of part of their share of profits on a current basis, while deferring payment of part of their share. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 21 Copyright © 2016 Pearson Education, Inc.

52) What are the advantages and disadvantages of team-based pay? Answer: Team-based pay is determined by how well the team performs in the accomplishment of the job. Team incentives have both advantages and disadvantages. On the positive side, firms find it easier to develop performance standards for groups than for individuals. For one thing, there are fewer standards to determine. Also, the output of a team is more likely to reflect a complete product or service. Another advantage is that employees may be more inclined to assist others and work collaboratively if the organization bases rewards on the team's output. When teams perform highly, it is the interaction among team members, not the members themselves, that creates the high performance. If a team member is asked who was responsible for the high performance of the team, he or she would likely say "We were" and mean it. A potential disadvantage for team incentives relates to exemplary performers. If individuals in this category perceive that they contribute more than other employees in the group, they may become disgruntled and leave. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 53) In most cases, which of the following is NOT a contextual influence on direct financial compensation? A) labor unions B) indirect financial compensation C) labor market D) legislation Answer: B Explanation: B) Historically, the labor market, labor unions, the economy, interindustry wage differentials, and legislation all are contextual influences on an direct financial compensation. These factors continue to play an important role, while indirect financial compensation status is less relevant. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 54) What is the most important standard for determining pay? A) pay leaders B) market rates C) geographic areas D) organizational levels Answer: B Explanation: B) Paying the lowest wage possible does not necessarily save money and may be quite expensive in the long run because employees may likely leave when they are able to find higher pay elsewhere. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 22 Copyright © 2016 Pearson Education, Inc.

55) When the United Auto Workers negotiate with GM and Ford for higher wages, which legislation supports the union's right to engage in collective bargaining? A) Title VII of the Civil Rights Act B) Equal Pay Act C) Davis-Bacon Act D) National Labor Relations Act Answer: D Explanation: D) The National Labor Relations Act (also known as the Wagner Act) declared legislative support, on a broad scale, for the right of employees to organize and engage in collective bargaining. Unions normally prefer to determine compensation through the process of collective bargaining, which describes the negotiations between the labor union that represents employee interests and company management. The Davis-Bacon Act of 1931 was the first national law to deal with minimum wages. Title VII makes it illegal to discriminate on the basis of race, color, religion, sex, and national origin in all employment-related decisions (hiring, compensation, etc.). In general, the Equal Pay Act prohibits paying women less than men when performing equal work. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 56) The following describes the possible effect of wages in union settings on wages in nonunion settings. A) market match policy B) mimicking effect C) spillover effect D) pay following effect Answer: C Explanation: C) Unions' gains also influenced nonunion companies' compensation practices. Many nonunion companies offered similar compensation to their employees. This phenomenon is known as a spillover effect because management of nonunion firms generally offered somewhat higher wages and benefits to reduce the chance that employees would seek union representation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

57) Which Act was the first national law to deal with minimum wages? A) Davis-Bacon Act B) Railway Labor Act C) Norris-LaGuardia Act D) Fair Labor Standards Act Answer: A Explanation: A) The Davis-Bacon Act of 1931 was the first national law to deal with minimum wages. It mandates a prevailing wage for all federally financed or assisted construction projects exceeding $2,000. The Secretary of Labor sets the prevailing wage at the union wage, regardless of what the average wage is in the affected locality. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 58) Which Act requires federal construction contractors with projects valued in excess of $2,000 to pay at least the prevailing wages in the area? A) Railway Labor Act B) Davis-Bacon Act C) Norris-LaGuardia Act D) Fair Labor Standards Act Answer: B Explanation: B) The Davis-Bacon Act of 1931 mandates a prevailing wage for all federally financed or assisted construction projects exceeding $2,000. The Secretary of Labor sets the prevailing wage at the union wage, regardless of what the average wage is in the affected locality. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 59) Which Act requires companies with federal supply contracts exceeding $10,000 to pay prevailing wages? A) Davis-Bacon Act B) Walsh-Healy Act C) Norris-LaGuardia Act D) Fair Labor Standards Act Answer: B Explanation: B) The Walsh-Healy Act of 1936 requires companies with federal supply contracts exceeding $10,000 to pay prevailing wages as determined by the Secretary of Labor. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

60) Which Act establishes a minimum wage, requires overtime pay and record keeping, and provides standards for child labor? A) Davis-Bacon Act B) Walsh-Healy C) Norris-LaGuardia Act D) Fair Labor Standards Act (FLSA) Answer: D Explanation: D) The FLSA attempts to eliminate low wages by setting a minimum wage, and to make long hours expensive by requiring a higher pay rate, overtime, for excessive hours. It also requires record keeping, and provides standards for child labor. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 61) The Fair Labor Standards Act (as amended) provides for all of the following EXCEPT ________. A) minimum wage B) overtime pay C) age discrimination D) child labor standards Answer: C Explanation: C) The FLSA attempts to eliminate low wages by setting a minimum wage, and to make long hours expensive by requiring a higher pay rate, overtime, for excessive hours. It also requires record keeping, and provides standards for child labor. However, it does not address age discrimination. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 62) Which federal law established standards for child labor? A) Social Security Act B) Walsh-Healey Act C) Fair Labor Standards Act D) Labor Management Relations Act Answer: C Explanation: C) The FLSA attempts to eliminate low wages by setting a minimum wage, and to make long hours expensive by requiring a higher pay rate, overtime, for excessive hours. It also requires record keeping, and provides standards for child labor. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

63) Overtime pay is not legally required for ________. A) nonexempt employees B) exempt employees C) blue-collar workers D) salaried employees Answer: B Explanation: B) Although the FLSA covers most organizations and employees, certain classes of employees are specifically exempt from overtime provisions. Exempt employees are categorized as executive, administrative, professional, or outside salespersons. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 64) A senior statistician would probably be categorized as what type of employee under the Fair Labor Standards Act? A) administrative B) executive C) professional D) outside salesperson Answer: C Explanation: C) A professional employee, such as a senior statistician, performs work requiring advanced knowledge in a field of learning, normally acquired through a prolonged course of specialized instruction. An executive employee is essentially a manager with broad authority over subordinates. An administrative employee, although not a manager, occupies an important staff position in an organization and might have a title such as account executive or market researcher. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 4 65) Which of the following would NOT be an exempt employee under the Fair Labor Standards Act? A) production manager B) machine operator C) senior statistician D) outside salesperson Answer: B Explanation: B) Exempt employees are categorized as executive, administrative, professional, or outside salespersons. A machine operator would be nonexempt. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 4

66) Which of the following is NOT an exception for paying women less than men for performing equal work? A) seniority-based pay B) merit-based pay C) any factor other than the sex of an employee D) any factor, including the sex of an employee Answer: D Explanation: D) The Equal Pay Act of 1963 is based on a simple principle: Men and women should receive equal pay for performing equal work. The Equal Pay Act of 1963 pertains explicitly to jobs of equal worth. Companies assign pay rates to jobs according to the skill, effort, responsibility, and working conditions required. Pay differentials for equal work are not always illegal. Pay differentials between men and women who are performing equal work are acceptable only when made on a seniority system, merit system, incentive system, or on any factor other than sex. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 67) Pay for similar jobs do not vary across different labor markets. Answer: FALSE Explanation: Indeed, there is variation across different labor markets. For example, the cost-ofliving is higher in large, urban communities and the competition for the best employees is higher in large, urban areas where there are more companies competing for the best. It behooves HR professionals to consider these and other differences because the market rate is an important guide in determining pay. Many employees view it as the standard for judging the fairness of their firm's compensation practices. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 68) Interindustry differentials can be attributed to a number of factors, including the industry's product market, the degree of capital intensity, the profitability of the industry, unionization, and gender mix of the workforce. Answer: TRUE Explanation: Any one of these factors alone or in combination with other factors explain interindustry pay differentials. For example, companies that operate in product markets in which there is relatively little competition from other companies tend to pay higher wages because these companies exhibit substantial profits. This phenomenon can be attributed to such factors as higher barriers to entry into the product market and an insignificant influence of foreign competition. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 27 Copyright © 2016 Pearson Education, Inc.

69) Unions' gains often influence nonunion companies' compensation practices. Many nonunion companies offered similar compensation to their employees. Answer: TRUE Explanation: Many nonunion companies offered similar compensation to their employees. This is the case because the management of many nonunion firms generally offer somewhat higher wages and benefits to reduce the chance that employees would seek union representation Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 70) Factors that must be taken into account when building compensation systems include the labor market, labor unions, interindustry wage differentials, the economy, and legislation. Answer: TRUE Explanation: HR professionals do not build the compensation system in a vacuum. There are many contextual influences that must be taken into account. Among the most prominent considerations are the labor market, labor unions, the economy, interindustry wage differentials, and legislation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 71) The Walsh-Healy Act was the first national law to mandate a minimum wage. Answer: FALSE Explanation: The Davis-Bacon Act of 1931 was the first national law to deal with minimum wages. The Walsh-Healy Act of 1936 requires companies with federal supply contracts exceeding $10,000 to pay prevailing wages. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 72) One of the primary purposes of the Fair Labor Standards Act of 1938 was to eliminate substandard wages and to prevent children from excessive work hours. Answer: TRUE Explanation: The purpose of the FLSA is to establish minimum labor standards on a national basis and to eliminate low wages and long working hours. The FLSA attempts to eliminate low wages by setting a minimum wage, and to make long hours expensive by requiring a higher pay rate, overtime, for excessive hours. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

73) Nonexempt employees are categorized as executive, administrative, professional employees, and outside salespersons. Answer: FALSE Explanation: Exempt employees are categorized as executive, administrative, professional, or outside salespersons. These classes of workers are exempt from overtime provisions. All other employees are classified as nonexempt. The exempt/nonexempt distinction was established in the Fair Labor Standards Act. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 74) There are many contextual influences that must be taken into account when designing and implementing direct financial compensation plans, and one of them is interindustry wage or compensation differentials. Briefly, state the implications of these differentials for establishing competitive compensation programs. Then, explain the factors that contribute to the existence of interindustry wage differentials. Answer: In competitive labor markets, companies attempt to attract and retain the best individuals for employment partly by offering lucrative wage and benefits packages. Indeed, there are differences in wages across industries. These differences are known as interindustry wage or compensation differentials. Interindustry differentials can be attributed to a number of factors, including the industry's product market, the degree of capital intensity, the profitability of the industry, unionization, and gender mix of the workforce. Companies that operate in product markets in which there is relatively little competition from other companies tend to pay higher wages because these companies exhibit substantial profits. This phenomenon can be attributed to such factors as higher barriers to entry into the product market and an insignificant influence of foreign competition. Government regulation and extremely expensive equipment represent entry barriers in such industries as in mining. Capital intensity also explains pay differentials between industries. The amount of average pay varies with the degree of capital intensity. On average, capital-intensive industries such as construction pay more than industries that are less capital intensive such as retail. Capital-intensive businesses require highly capable employees who have the aptitude to learn how to use complex technology. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

75) What form of pay equity exists when employees are paid according to the differences in job characteristics within the company? A) internal B) employee C) external D) team Answer: A Explanation: A) Internally consistent job structures formally recognize differences in job characteristics that enable compensation managers to set pay accordingly. HR professionals use job evaluation systematically to recognize differences in the relative worth among a set of jobs and to establish pay differentials accordingly. When done properly, job evaluation helps to eliminate internal pay inequities that exist because of illogical pay structures. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 76) As an HR manager, what tool would you most likely use to determine if internal equity exists at your firm? A) job analysis B) job evaluation C) compensation survey D) behavioral methods study Answer: B Explanation: B) Job evaluation is a primary means for determining internal equity. Compensation surveys help organizations determine the extent to which external equity is present. Job analysis is a tool to help managers describe the scope of job duties and worker requirements such as education. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 5

77) Which of the following job evaluation techniques is placed in the non quantitative type? A) point method B) ranking method C) job description method D) factor comparison method Answer: B Explanation: B) The four traditional job evaluation methods are the ranking, classification, factor comparison, and point. There are innumerable versions of these methods, and a firm may choose one and modify it to fit its particular purposes. The ranking and classification methods are nonquantitative, whereas the factor comparison and point methods are quantitative approaches. The ranking method is the simplest of the four job evaluation methods. In the ranking method, the raters examine the description of each job being evaluated and arrange the jobs in order according to their value to the company. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 78) Management relies on all of the following to help determine the relative worth of a job, EXCEPT ________. A) job analysis B) job enumeration C) job descriptions D) job evaluation Answer: B Explanation: B) Before an organization can determine the relative difficulty or value of its jobs, it must first define their content. Normally, it first does job analysis. The primary by-product of job analysis is the job description. Job descriptions serve many different purposes, including data for evaluating jobs. They are essential to all job evaluation methods that depend heavily on their accuracy and clarity for success. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 79) What is the primary by-product of job analysis? A) human resource planning B) job evaluation C) equity analysis D) job description Answer: D Explanation: D) The primary by-product of job analysis is the job description, a written document that describes job duties or functions and responsibilities. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 31 Copyright © 2016 Pearson Education, Inc.

80) What is the process that determines the relative value of one job in relation to another? A) job specification B) job description C) job evaluation D) job analysis Answer: C Explanation: C) Job evaluation is a process that determines the relative value of one job in relation to another. Job analysis is the systematic process of determining the skills and knowledge required for performing jobs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 81) The primary purpose of job evaluation is to ________. A) prepare job descriptions B) eliminate internal pay inequities C) lay the groundwork for job analysis D) price jobs within a geographic area Answer: B Explanation: B) Job evaluation determines the value of the job to the company. The primary purpose of job evaluation is to eliminate internal pay inequities that exist because of illogical pay structures. Job descriptions are essential to all job evaluation methods. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 82) What is the LEAST likely reason that a firm would use job evaluation? A) eliminating pay inequities B) identifying the organization's job structure C) estimating the average market pay rate D) developing a hierarchy of job value for creating a pay structure Answer: C Explanation: C) Many firms continue to use job evaluation to identify the organization's job structure; to eliminate pay inequities and bring order to the relationships among jobs, and to develop a hierarchy of job value for creating a pay structure. It is less likely that job evaluation would be used for determining the average wages in an industry. Compensation surveys provide information about average wages in an industry. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 5

83) Irene, an HR manager, needs to use a quantitative job evaluation method. Which two methods would meet Irene's needs? A) point and ranking B) ranking and classification C) point and factor comparison D) factor comparison and classification Answer: C Explanation: C) The four traditional job evaluation methods are the ranking, classification, factor comparison, and point method. The ranking and classification methods are non quantitative, whereas the factor comparison and point methods are quantitative approaches. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 84) Omar works in the HR department at a large manufacturing firm. Omar needs a simple method for conducting a job evaluation. Which method would be most appropriate for Omar? A) factor comparison B) classification C) ranking D) point method Answer: C Explanation: C) The ranking method is the simplest of the four job evaluation methods. In the job evaluation ranking method, the raters examine the description of each job being evaluated and arrange the jobs in order according to their value to the company. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 85) Which job evaluation method involves defining a number of grades to describe a group of jobs? A) ranking B) classification C) factor comparison D) point Answer: B Explanation: B) The classification method involves defining a number of classes or grades to describe a group of jobs. In the job evaluation ranking method, the raters examine the description of each job being evaluated and arrange the jobs in order according to their value to the company. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

86) In which job evaluation method do evaluators make decisions based on five universal elements? A) ranking B) classification C) factor comparison D) paired-comparison Answer: C Explanation: C) The factor comparison method of job evaluation assumes that there are five universal factors consisting of mental requirements, skills, physical requirements, responsibilities, and working conditions. The evaluator makes decisions on these factors independently. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 87) How many universal job factors are there with the factor comparison job evaluation method? A) 3 B) 5 C) 7 D) 9 Answer: B Explanation: B) The factor comparison method of job evaluation assumes that there are five universal factors consisting of mental requirements, skills, physical requirements, responsibilities, and working conditions. The evaluator makes decisions on these factors independently. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 88) Which of the following is NOT one of the universal job factors of the factor comparison method? A) working conditions B) abstract thinking skills C) physical requirements D) responsibilities Answer: B Explanation: B) The factor comparison method of job evaluation assumes that there are five universal factors consisting of mental requirements, skills, physical requirements, responsibilities, and working conditions. Abstract thinking skills are not a specific category with this method. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 34 Copyright © 2016 Pearson Education, Inc.

89) Eric, an HR manager, is using a job evaluation method in which he assigns numerical values to specific job factors before calculating the sum of the values. Which method is Eric most likely using? A) factor comparison B) classification C) ranking D) point method Answer: D Explanation: D) In the point method, raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job's relative worth. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 90) Historically, some variation of which job evaluation plan has been the most popular option? A) ranking B) classification C) factor comparison D) point method Answer: D Explanation: D) Historically, some variation of the point plan has been the most popular option. In the point method, raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job's relative worth. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 91) Nicole, an HR professional, needs to develop a job evaluation for a data analyst position at her firm. Nicole's manager wants a quantitative job evaluation that will be useful for a long time. Which method would be most appropriate? A) point B) profile C) classification D) ranking Answer: A Explanation: A) In the point method, raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job's relative worth. Historically, a redeeming feature of the method has been that, once developed, the plan was useful over a long time. Ranking and classification methods are nonquantitative. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 35 Copyright © 2016 Pearson Education, Inc.

92) As the HR manager at a new firm, Kelly is responsible for the process of job evaluation. Kelly has completed a job evaluation for each position at the firm. What will most likely be the direct result of Kelly's work? A) job structure B) financial equity C) job alignment D) organizational fit Answer: A Explanation: A) The process of job evaluation results in a job hierarchy. It might reveal, for example, that the job of senior accountant is more valuable than the job of machinist, which, in turn, is more valuable than the job of receptionist. At this point, you know the relative value of these jobs to the company, but not their absolute value. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 93) In the ________ of job evaluation, raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job's relative worth. A) point method B) factor comparison method C) classification method D) chart profile method Answer: A Explanation: A) In the point method, raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job's relative worth. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 94) Job evaluation is a process that determines the relative value of one job in relation to another. Answer: TRUE Explanation: Job evaluation is a process that determines the relative value of one job in relation to another. Basically, it determines the value of the job to the company. The primary purpose of job evaluation is to eliminate internal pay inequities that exist because of illogical pay structures. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

95) The classification method of job evaluation is the simplest job evaluation method and requires comparing a job description with a class description. Answer: FALSE Explanation: The classification method involves defining a number of classes or grades to describe a group of jobs. In evaluating jobs by this method, the raters compare the job description with the class description. However, the ranking method is the simplest of the four job evaluation methods - ranking, classification, factor comparison, and point method. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 96) In the ranking method of job evaluation, raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job's relative worth. Answer: FALSE Explanation: In the job evaluation ranking method, the raters examine the description of each job being evaluated and arrange the jobs in order according to their value to the company. In the point method, raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job's relative worth. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 97) In a brief essay, describe job evaluation and job pricing. Answer: Job evaluation is a process that determines the relative value of one job in relation to another. This process determines the value of the job to the company. The primary purpose of job evaluation is to eliminate internal pay inequities that exist because of illogical pay structures. The process of job evaluation results in a job hierarchy. It might reveal, for example, that the job of senior accountant is more valuable than the job of machinist, which, in turn, is more valuable than the job of receptionist. At this point, you know the relative value of these jobs to the company, but not their absolute value. Job pricing results in placing a dollar value on a job's worth. It takes place after evaluation of a job and the relative value of each job in the organization has been determined. HR professionals often rely on compensation surveys to obtain pay rates in companies with which they compete. Then, they often use pay grades and pay ranges in the job-pricing process. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

98) Which of the following is a compensation policy choice? A) nominal pay B) commissions C) real pay D) pay mix Answer: D Explanation: D) A compensation policy refers to choices that compensation professionals make to promote competitive advantage. Broadly, policy choices are made about pay level and pay mix. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 99) Which of the following provides general guidelines for making compensation decisions? A) pay leaders B) market rates C) compensation policies D) compensation packages Answer: C Explanation: C) A compensation policy provides general guidelines for making compensation decisions. Broadly, policy choices are made about pay level and pay mix. Pay level compensation policies determine whether the company will be a pay leader, be a pay follower, or strive for an average position in the labor market. Pay level policies have the greatest impact on attracting and retaining employees. Pay mix policies refer to the combination of direct and indirect financial compensation and employee benefits components (see Figure 9-1) that make up an employee's compensation package. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 100) Organizations that pay higher wages and salaries than competing firms use a ________. A) indirect financial compensation policy B) going rate followers C) pay followers D) market lead policy Answer: D Explanation: D) Companies that pursue a market lead policy are organizations that pay higher wages and salaries than competing firms. Using this strategy, they feel that they will be able to attract high-quality, productive employees and thus achieve lower per-unit labor costs. Higherpaying firms usually attract more highly qualified applicants than lower-paying companies in the same labor market. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 38 Copyright © 2016 Pearson Education, Inc.

101) Benson Enterprises pays lower salaries than its competitors in order to control labor costs, especially when the firm's financial condition is weak. Which type of compensation policy is most likely in place at Benson Enterprises? A) conservative pay policy B) market lag policy C) economical pay policy D) individual rate Answer: B Explanation: B) Companies that choose to pay below the market rate (market lag policy) because of poor financial conditions or because they are hiring employees whose skills and expected impact on the company's success are relatively lower than employees whose skills and expected impact are much greater. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 6 102) The average or typical pay that most employers provide for a similar job in a particular area or industry is known as the ________ rate. A) pay follower B) pay leader C) market D) wage Answer: C Explanation: C) The market (going) rate is the average pay that most employers provide for a similar job in a particular area or industry. Many organizations have a policy that calls for paying the market rate. In such firms, management believes that it can employ qualified people and yet remain competitive. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

103) Firms which pay below the average labor market price for jobs will most likely have ________. A) higher productivity levels B) higher turnover rates C) lower unit labor costs D) fewer grievances Answer: B Explanation: B) Paying the lowest wage possible does not necessarily save money and may be quite expensive in the long run because employees may likely leave when they are able to find higher pay elsewhere. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 104) Which of the following is an example of a pay mix policy? A) less emphasis on both pay and employee benefits and more emphasis on non-financial compensation B) more emphasis on pay equity between men and women C) more emphasis on incentive pay than base pay D) less emphasis on attaining market pay leadership Answer: C Explanation: C) Pay mix compensation policies refer to the combination of direct and indirect financial compensation and employee benefits components (see Figure 9-1) that make up an employee's compensation package. Emphasizing one type of direct or indirect compensation is an example of a pay mix. Pay policy mix may be expressed in dollars (or other currency as relevant) or as a percentage of total dollars allocated for an employee's total compensation. Nonfinancial compensation is not a part of the pay mix. Pay equity and pay leadership are mainly focused on pay level. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

105) When determining pay mix, it generally does not make sense to consider guidelines for jobs within a particular structure (for example, managerial, administrative, or sales). Answer: FALSE Explanation: Indeed,HR professionals should consider setting pay mix based on job structure because of the common job content and worker requirements of jobs within a particular structure. For example, in a technology company, a greater portion of incentive compensation might be allocated to engineers than to administrative staff. Engineers possess crucial skills relating to the company's ability to find innovative applications of technology, and bonus incentives throughout the year may promote innovation initiatives. On the other hand, the administrative staff, though important to the company, may not play as important a role in determining the company's profitability or objectives. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 106) Compensation policy choices pertain to pay level and compliance with legislation. Answer: FALSE Explanation: A compensation policy refers to choices that compensation professionals make to promote competitive advantage. Broadly, policy choices are made about pay level and pay mix. Pay level compensation policies determine whether the company will be a pay leader, be a pay follower, or strive for an average position in the labor market. Pay level policies have the greatest impact on attracting and retaining employees. Pay mix policies refer to the combination of direct and indirect financial compensation and employee benefits components (see Figure 9-1) that make up an employee's compensation package. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 107) Companies that implement a market lead pay policy usually attract more highly qualified applicants than lower paying firms in the same labor market. Answer: TRUE Explanation: Companies that pursue a market lead policy are organizations that pay higher wages and salaries than competing firms. Using this strategy, they feel that they will be able to attract high-quality, productive employees and thus achieve lower per-unit labor costs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

108) The market lag policy is one of three pay mix policy choices. Answer: FALSE Explanation: Market lag is one of the three pay level compensation policy choices. Pay level compensation policies determine whether the company will be a pay leader, be a pay follower, or strive for an average position in the labor market. Pay mix policies refer to the combination of direct and indirect financial compensation and employee benefits components that make up an employee's compensation package. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 109) As an HR manager, what tool would you most likely use to determine the compensation of employees found in competitor firms? A) job analyses B) job evaluations C) labor statistic reports D) compensation surveys Answer: D Explanation: D) Compensation surveys involve the collection and subsequent analysis of competitors' compensation data. Compensation surveys traditionally focused on competitors' wage and salary practices. Employee benefits have more recently also become a target of surveys because benefits are a key element of market-competitive pay systems. Compensation surveys are important because they enable compensation professionals to obtain realistic views of competitors' pay practices. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 110) Placing a dollar value on a job's worth is called ________. A) job analysis B) job enlarging C) job evaluation D) job pricing Answer: D Explanation: D) Job pricing results in placing a dollar value on a job's worth. It takes place after evaluation of a job and the relative value of each job in the organization has been determined. Firms often use pay grades and pay ranges in the job-pricing process. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

111) Which term refers to a grouping of similar jobs to simplify job pricing? A) job analysis B) pay range C) pay grade D) job pricing Answer: C Explanation: C) A pay grade is the grouping of similar jobs to simplify pricing jobs. A pay range includes a minimum and maximum pay rate with enough variance between the two to allow for a significant pay difference. Firms often use pay grades and pay ranges in the jobpricing process. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 112) Which tool is frequently used by managers to determine the appropriate number of pay grades for a company? A) bar graphs B) pie charts C) flow charts D) scatter diagrams Answer: D Explanation: D) Plotting jobs on a scatter diagram is often useful to managers in determining the appropriate number of pay grades for a company. When this tool is used, a certain point spread determines the width of the pay grade. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 113) In determining pay grades, each dot on a scatter diagram represents ________. A) one job B) one worker C) a job cluster D) a department Answer: A Explanation: A) Plotting jobs on a scatter diagram is often useful to managers in determining the appropriate number of pay grades for a company. Each dot on the scatter diagram represents one job. The location of the dot reflects the job's relationship to pay and evaluated points, which reflect its worth. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

114) The fitting of plotted points to create a smooth progression between pay grades is known as a ________. A) job cluster B) wage curve C) wage range D) pay range Answer: B Explanation: B) A wage curve is the fitting of plotted points to create a smooth progression between pay grades. A pay range includes a minimum and maximum pay rate with enough variance between the two to allow for a significant pay difference. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 115) What includes a minimum and maximum pay rate with enough variance between the two to allow for a significant pay difference? A) job cluster B) pay curve C) job rank D) pay range Answer: D Explanation: D) A pay range includes a minimum and maximum pay rate with enough variance between the two to allow for a significant pay difference. A pay curve is the fitting of plotted points to create a smooth progression between pay grades. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 116) Pay differentials need to be greater to be meaningful, especially ________. A) at lower job levels B) at higher job levels C) during periods of recession D) during periods of inflation Answer: B Explanation: B) The rate ranges established should be large enough to provide an incentive to do a better job. At higher levels, pay differentials may need to be greater to be meaningful. For example, a $200-per-month salary increase means more to an employee earning $2,000 per month (a 10 percent increase) than to an employee earning $5,000 per month (a 4 percent increase). Assuming an inflation rate of 4 percent, the latter employee's real pay would remain unchanged. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 44 Copyright © 2016 Pearson Education, Inc.

117) What is a technique that collapses many pay grades into a few wide bands to improve organizational effectiveness? A) job banding B) job clustering C) downsizing D) broadbanding Answer: D Explanation: D) Broadbanding is a technique that collapses many pay grades (salary grades) into a few wide bands to improve organizational effectiveness. Organizational downsizing and restructuring of jobs have created broader job descriptions, with the result that employees perform more diverse tasks than they previously did. Broadbanding creates the basis for a simpler compensation system that de-emphasizes structure and control and places greater importance on judgment and flexible decision making. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 118) What creates the basis for a simpler compensation system that de-emphasizes structure and places greater importance on flexible decision making? A) organic structures B) broadbanding C) gainsharing D) clustering Answer: B Explanation: B) Broadbanding is a technique that collapses many pay grades (salary grades) into a few wide bands to improve organizational effectiveness. Broadbanding creates the basis for a simpler compensation system that de-emphasizes structure and control, and places greater importance on judgment and flexible decision making. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

119) Ryan, an HR manager at a publishing firm, may begin broadbanding jobs. Which of the following is NOT a benefit of broadbanding? A) focusing on vertical promotional options B) simplifying the firm's compensation system C) encouraging employees to develop laterally D) adding flexibility to the firm's compensation system Answer: A Explanation: A) Broadbanding creates the basis for a simpler compensation system that deemphasizes structure and control and places greater importance on judgment and flexible decision making. Broadbanding may add flexibility to the compensation system, promote lateral development of employees and direct attention away from vertical promotional opportunities. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 120) As an HR manager at an electronics firm, you learn that the position of Technician I at your firm is underpaid. What would be the best way to handle this situation? A) notify the affected workers and their union representatives B) immediately increase the pay for workers in that job to at least the minimum pay level C) give workers in that job a bonus at the end of the year D) wait until the next broadbanding opportunity Answer: B Explanation: B) Good management practice would be to correct this inequity as rapidly as possible by placing the job in the proper pay grade and increasing the pay of those in that job. Waiting too long could be a problem if the employees find out before the pay is corrected. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 121) As an HR manager, you learn that an employee is being overpaid. What would be the best way to handle this situation? A) promote the employee, if qualified, to a job in a higher pay grade B) bring the job rate and employee into line with a pay cut C) freeze the rate until cost-of-living increases bring it into line D) redesign the job by quantifying it with the factor comparison method Answer: A Explanation: A) An ideal solution to the problem of an overpaid job is to promote the employee to a job in a higher pay grade. Another possibility would be to bring the job rate and employee pay into line through a pay cut, but this is generally not a good management practice. Somewhere in between these two possible solutions is a third: to freeze the rate until across-theboard pay increases bring the job into line. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 46 Copyright © 2016 Pearson Education, Inc.

122) Entry-level engineers at A-1 Manufacturing are paid as much as engineers who have been with the firm for five years. Which of the following best describes the situation at A-1? A) single-rate pay system B) competency-based pay C) union representation D) salary compression Answer: D Explanation: D) Salary compression occurs when less experienced employees are paid as much as or more than employees who have been with the organization a long time as a result of a gradual increase in starting salaries and limited salary adjustment for long-term employees. Salary compression continues to be a major challenge for compensation managers. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 123) Firms use compensation surveys to determine pay structures. Answer: TRUE Explanation: Compensation surveys involve the collection and subsequent analysis of competitors' compensation data. Compensation surveys traditionally focused on competitors' wage and salary practices. Employee benefits have more recently also become a target of surveys because benefits are a key element of market-competitive pay systems. Compensation surveys are important because they enable compensation professionals to obtain realistic views of competitors' pay practices. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 124) Pay grades and pay ranges are frequently used in the job-pricing process. Answer: TRUE Explanation: Job pricing results in placing a dollar value on a job's worth. It takes place after evaluation of a job and the relative value of each job in the organization has been determined. Firms often use pay grades and pay ranges in the job-pricing process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

125) A pay grade is the grouping of similar jobs to simplify pricing jobs. Answer: TRUE Explanation: A pay grade is the grouping of similar jobs to simplify pricing jobs. In following this approach, you avoid a false suggestion of preciseness. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 126) Firms typically prefer single pay rates rather than pay ranges because of the simplicity and preciseness the system offers. Answer: FALSE Explanation: Pay ranges are generally preferred over single pay rates because they allow a firm to compensate employees according to performance and length of service. A pay range includes a minimum and maximum pay rate with enough variance between the two to allow for a significant pay difference. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 127) Job pricing is represented by a wage curve that represents a smooth progression between pay grades. Answer: FALSE Explanation: Job pricing results in placing a dollar value on a job's worth. It takes place after evaluation of a job and the relative value of each job in the organization has been determined. Firms often use pay grades and pay ranges in the job-pricing process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 128) During the recession of 2008/2010, salary compression was not a problem for HR managers because of pay cuts and layoffs. Answer: FALSE Explanation: Salary compression continued to be a major challenge for compensation managers even in a recession when pay cuts and freezes were the focus of the daily news. As workers discover inequities in their pay, resentment and lower productivity may follow with the employees ultimately leaving the company when the economy improves. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

129) What is salary compression? How can firms overcome the problem of salary compression? Answer: Salary compression occurs when less experienced employees are paid as much as or more than employees who have been with the organization a long time due to a gradual increase in starting salaries and limited salary adjustment for long-term employees. As workers discover inequities in their pay, resentment and lower productivity may follow with the employees ultimately leaving the company when the economy improves. The solution to salary compression is simple; unfortunately, the solution usually requires money, which is limited for most organizations. A company may build in compression funding to any annual budget increases. Another way to remedy salary compression is to focus a primary portion of raises to your best employees and not waste compensation on across the board adjustments. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 130) What is a compensation survey? How do organizations benefit from using compensation surveys? Answer: A compensation survey is a means of obtaining data regarding what other firms are paying for specific jobs or job classes within a given labor market. Virtually all compensation professionals use compensation surveys either directly or indirectly. Organizations use surveys for two basic reasons: to identify their relative position with respect to the chosen competition in the labor market, and to provide input in developing a budget and compensation structure. External equity exists when a firm's employees receive pay comparable to workers who perform similar jobs in other firms. Ideally, compensation will be evenhanded to all parties concerned and employees will perceive it as such. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 131) By design, which employee group may not be awarded a salary for the work he or she performs? A) contingent workers B) sales professionals C) laborers D) administrative employees Answer: B Explanation: B) There are a variety of compensation plans from which companies may choose for sales professionals. Some combine salary and commission. A plan that does not include a salary component is straight commission, in which the person's pay is totally determined as a percentage of sales. If the salesperson makes no sales, the individual receives no pay. On the other hand, highly productive sales representatives can earn a great deal of money under this plan. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 49 Copyright © 2016 Pearson Education, Inc.

132) In which method of sales compensation do salespersons receive a fixed salary regardless of their sales levels? A) straight commission B) variable pay C) straight salary D) spot bonus Answer: C Explanation: C) The straight salary approach is one extreme in sales compensation. In this method, salespersons receive a fixed salary regardless of their sales levels. Organizations use straight salary primarily to emphasize product support after the sale. At the other extreme is straight commission, in which the person's pay is totally determined as a percentage of sales. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 133) When continued service after the sale is essential, a firm will most likely compensate sales representatives with ________. A) bonus only B) straight salary C) straight commission D) bonus plus commission Answer: B Explanation: B) The straight salary approach is one extreme in sales compensation. In this method, salespersons receive a fixed salary regardless of their sales levels. Organizations use straight salary primarily to emphasize continued product service after the sale. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 134) In which method of sales compensation is a salesperson's pay totally determined as a percentage of sales? A) straight commission B) part salary C) straight salary D) straight bonus Answer: A Explanation: A) With straight commission, the person's pay is totally determined as a percentage of sales. Under this approach, it is possible for a salesperson not to earn anything if she/he fails to sell products or services. In the straight salary approach, salespersons receive a fixed salary regardless of their sales levels. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 50 Copyright © 2016 Pearson Education, Inc.

135) Which of the following is a problem inherent in compensating contingent workers? A) external equity B) more costly to employ contingent workers C) internal equity D) all of the above Answer: C Explanation: C) An inherent compensation problem relates to internal equity. You may have two employees working side by side, one a contingent worker and the other a regular employee, performing the same or near identical tasks, and one makes more money than the other. In most cases, contingents earn less pay and are far less likely to receive health or retirement benefits than their permanent counterparts. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 136) Which of the following is true about the percentage of access contingent workers have to benefits compared to workers who are not classified as contingent workers? A) a smaller percentage of full-time workers have access to employee benefits than part-time workers B) a smaller percentage of part-time workers have access to employee benefits than full-time workers C) both groups have approximately equal access D) this relationship is unimportant to companies Answer: B Explanation: B) In March 2013, 74 percent of full-time workers were offered participation in a health insurance plan whereas only 24 percent of part-time workers were offered the same. Similarly, 74 percent of full-time workers had access to retirement plans whereas this was the case for only 37 percent of part-time workers. Because employee benefits are a part of an employee's total compensation package, this differences may cause feelings of inequity when employees from both groups who are performing the same jobs are compensated differently. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

137) Contingent workers and noncontingent (regular) workers are paid approximately the same amount for performing equal work because of Fair Labor Standards Act requirements. Answer: FALSE Explanation: An inherent compensation problem regarding contingent worker compensation relates to internal equity. You may have two employees working side by side, one a contingent worker and the other a regular employee, performing the same or near identical tasks, and one makes more money than the other. In most cases, contingents earn less pay and are far less likely to receive health or retirement benefits than their permanent counterparts. The Fair Labor Standards Act does not include provisions that requires equal pay for contingent and noncontingent workers. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 138) Fewer part-time workers receive employee benefits than full-time workers. Answer: TRUE Explanation: In March 2013, 74 percent of full-time workers were offered participation in a health insurance plan whereas only 24 percent of part-time workers were offered the same. Similarly, 74 percent of full-time workers had access to retirement plans whereas this was the case for only 37 percent of part-time workers. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 139) Current trends in executive pay involve linking compensation with ________. A) multi-year contract packages B) deferred stock options C) performance results D) seniority systems Answer: C Explanation: C) The business and regulatory environment has changed and many organizations are rethinking executive compensation practices, including pay, bonuses, and severance pay. Performance assessment and accountability are the leading trends, and many executive salaries are now linked to performance results. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

140) Which of the following is the main reason companies include deferred compensation in executive compensation packages? A) aligning the interests of the executive with the company shareholders over the long term B) aligning the interests of the executive with the company shareholders over the short term C) mainly for increasing the total compensation of executives D) mainly to avoid scrutiny from the Securities and Exchange Commission. Answer: A Explanation: A) Deferred compensation is supposed to create a sense of ownership, aligning the interests of the executive with those of the owners or shareholders of the company over the long term. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 141) In most cases, a firm prefers to link the salary growth of its highest level managers to market rates and ________. A) cost of living increases B) public compensation policies C) overall corporate performance D) contingent worker compensation Answer: C Explanation: C) The executive package depends on the magnitude of the responsibility, risk, and effort shouldered by the chief executive. Organizations typically prefer to relate salary growth for the highest-level managers to market rates and overall corporate performance, including the firm's market value. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 142) What incentive plan allows executives to buy a specified amount of stock in the future at or below the current market price? A) stock option B) indexed stock option C) open-end stock option D) closed-end stock option Answer: A Explanation: A) Stock option plans give the executive the option to buy a specified amount of stock in the future at or below the current market price. The stock option is a long-term incentive designed to integrate the interests of management with those of the organization. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

143) Special benefits provided by a firm to a small group of key executives are known as ________. A) incentive bonuses B) golden parachutes C) stock options D) perquisites Answer: D Explanation: D) Perquisites (perks) are any special benefits provided by a firm to a small group of key executives and designed to give the executives "something extra." A golden parachute contract is a perquisite that protects executives in the event that another company acquires their firm or if the executive is forced to leave the firm for other reasons. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 144) An executive perquisite that protects executives in the event that the executive is forced to leave the firm is known as a ________. A) golden parachute contract B) stock option plan C) Scanlon plan D) spot bonus Answer: A Explanation: A) A golden parachute contract is a perquisite that protects executives in the event that another company acquires their firm or if the executive is forced to leave the firm for other reasons. At times, golden parachute contracts have been abused but such contracts appear to be lessening. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 145) The ________ of the Dodd-Frank Act gives shareholders an advisory vote on executive pay. A) cap-and-trade proviso B) clawback policy C) say-on-pay provision D) golden parachute clause Answer: C Explanation: C) The provision for say on pay gives shareholders in all but the smallest companies an advisory vote on executive pay. This is something that governance advocates have long wanted. Those who support the concept of say on pay believe that the vote will cause greater accountability on executive pay decisions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 54 Copyright © 2016 Pearson Education, Inc.

146) Bonuses and performance-based pay have become popular for executive compensation packages because the U.S. tax laws do not allow firms to deduct more than $500,000 of an executive's salary. Answer: FALSE Explanation: The U.S. tax law does not allow companies to deduct more than $1 million of an executive's salary; therefore, most firms keep it below that amount. It is because of the million dollar deduction maximum that bonuses and performance-based pay have become popular. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 147) A golden parachute contract is a perquisite that protects executives in the event that another company acquires their firm. Answer: TRUE Explanation: A golden parachute contract is a perquisite that protects executives in the event that another company acquires their firm or if the executive is forced to leave the firm for other reasons. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 148) Clawback contract provisions are required for companies to recover any incentive compensation paid to top executives that was based on inaccurate financial data. Answer: TRUE Explanation: The Dodd-Frank Act requires companies to develop clawback policies to recover compensation later deemed excessive. The clawback is a procedure included in an executive's employment contract that allows the company to recover payments made through performancebased incentives under certain circumstances. It requires executives to return incentive pay if the results on which it was granted are later adjusted downward for any reason. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

149) How does executive compensation differ in the U.S. and Europe? Why do you think this difference exists? Answer: The pay gap between the most affluent executives and the average worker in the U.S. remains wide. CEOs have averaged about 351 times the annual pay of typical U.S. workers. By contrast, the ratio is 22 in Britain. Whereas people in the United States derive great status from high pay, nations in large parts of Europe shun conspicuous wealth. Governance of executive pay varies from country to country, but there is a definite increase in shareholder influence on executive pay issues from Europe to North America to Asia Pacific and beyond. This trend will likely continue. Shareholders in Europe have been the leaders of the push. Executives at French firms face binding shareholder votes on certain aspects of their pay packages, including share options and retirement packages. Another proposal in France requires that severance payments be conditional on performance–a practice essentially unheard of in the past. Also, European governments are trying to exert more direct influence over executive pay as well. Legislators in the Netherlands want to limit nonperformance-based compensation by imposing an additional tax on salary and severance payments. Starting in 2003, public companies in the United Kingdom were required to give shareholders an advisory up-or-down vote on executive pay packages. Although the say-on-pay vote is nonbinding, advocates believe that it has increased the discussion between companies and large investors, which resulted in an improved alignment between pay and performance. As an example, share option plans, which were criticized for rewarding short-term share price volatility over long-term value creation, have been largely replaced with performance-contingent stock. Investors in the Netherlands, Sweden, Norway, and Switzerland can cast a binding vote on executive pay. In addition, Switzerland's law, passed in 2013, prohibits awarding signing bonuses or termination bonuses. Severe fines will be levied on companies that violate the new rules. Across Europe, companies are making efforts to improve executive pay disclosure. It is quite likely these trends will continue in the wake of the recent recession. Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 10

150) Describe in a brief essay what say-on-pay policies and clawback policies are. Why do corporations implement these policies? Answer: For many years executive compensation practices in U.S. companies has created much debate on the public stage, regarding whether CEOs is truly based on performance and the fairness of CEO pay relative to pay of other employees. The provision for say on pay gives shareholders in all but the smallest companies an advisory vote on executive pay. This is something that governance advocates have long wanted. Those who support the concept of say on pay believe that the vote will cause greater accountability on executive pay decisions. The Dodd-Frank Act requires 5,000 companies to hold nonbinding shareholder say-on-pay votes at least every three years. Companies must also hold shareholder votes on the frequency of say on pay with the option of one, two, or three years, or to abstain. Frequency votes are required to be held every three years. A clawback policy allows the company to recover compensation if a later review indicates that payments were not calculated accurately or performance goals were not met. The Dodd-Frank Act requires companies to develop clawback policies to recover compensation later deemed excessive. The clawback is a procedure included in an executive's employment contract that allows the company to recover payments made through performancebased incentives under certain circumstances. It requires executives to return incentive pay if the results on which it was granted are later adjusted downward for any reason. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

Human Resource Management, 14e (Mondy) Chapter 10 Indirect Financial Compensation (Employee Benefits) 1) All financial rewards that are NOT included in direct financial compensation are known as ________. A) bonuses B) wages C) commissions D) employee benefits Answer: D Explanation: D) Indirect financial compensations (benefits) include all financial rewards not included in direct financial compensation. Health insurance and life insurance are examples of indirect financial compensation. Bonuses, wages, and commissions are direct financial compensation. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) In general, why do employees receive benefits from their employer? A) organizational membership B) employee productivity C) corporate performance D) level of education Answer: A Explanation: A) As a rule, employees receive benefits because of their membership in the organization. Benefits are typically unrelated to employee productivity, corporate performance, or employee education. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 3) Which of the following is an advantage of voluntary benefits? A) always less costly for small businesses B) typically linked to worker productivity C) usually nontaxable to the employee D) always government sponsored Answer: C Explanation: C) Voluntary benefits have two distinct advantages: (1) it is generally nontaxable to the employee and (2) the cost of some benefits may be much less for large groups of employees than for individuals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 1 Copyright © 2016 Pearson Education, Inc.

4) According to the U.S. Bureau of Labor Statistics, indirect financial compensation accounts for approximately ________ of employers' total compensation costs. A) 10% B) 30% C) 50% D) 70% Answer: B Explanation: B) They typically account for about 30 percent of a firm's financial compensation costs. In December 2013, employers spent, on average, $9.80 per hour worked for each employee to provide benefits. The most expensive benefit was health insurance, which cost $2.70 per hour worked for each employee. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) Benefits are valuable for all of the following reasons EXCEPT ________. A) improving job satisfaction B) recruiting new employees C) retaining current employees D) improving worker productivity Answer: D Explanation: D) Benefits are typically unrelated to employee productivity, although they may be valuable in recruiting and retaining employees, they do not generally serve as motivation for improved performance. According to a recent SHRM survey, benefits are the second most important driver of job satisfaction. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 6) In most cases, the costs of voluntary benefits are paid by ________. A) government agencies B) state governments C) employees D) employers Answer: C Explanation: C) Voluntary benefits are usually 100 percent paid by the employee, but the employer typically pays the administrative cost. Often a hybrid situation exists in which employers pay a portion of the benefit and the employee pays for additional services. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

7) Legally required benefits currently include all of the following EXCEPT ________. A) Social Security B) workers' compensation C) unemployment insurance D) paid time off for holidays Answer: D Explanation: D) As the name indicates, legally required benefits are mandated by law. Legislation mandates some benefits, and employers provide other discretionary and voluntary benefits. Discretionary benefits are benefit payments made as a result of unilateral management decisions in nonunion firms and from labor-management negotiations in unionized firms. Voluntary benefits, on the other hand, are usually 100 percent paid by the employee, but the employer typically pays the administrative cost. Voluntary benefits have two distinct advantages: (1) they are generally nontaxable to the employee and (2) the cost may be much less for large groups of employees than for individuals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 8) Benefit payments made as a result of unilateral management decisions in nonunion firms, and from labor-management negotiations in unionized firms are known as ________. A) flexible spending benefits B) direct financial compensation C) discretionary benefits D) workers' compensation Answer: C Explanation: C) Discretionary benefits are benefit payments made as a result of unilateral management decisions in nonunion firms and from labor-management negotiations in unionized firms. Major categories of discretionary benefits include payment for time not worked, health care, life insurance, retirement plans, employee stock option plans, and employee services. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 9) What are the two components of nonfinancial compensation? A) job and salary B) job and job environment C) salary and job environment D) premium pay and job schedule Answer: B Explanation: B) The components of nonfinancial compensation consist of the job itself and the job environment. Salary and premium pay are financial compensations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 3 Copyright © 2016 Pearson Education, Inc.

10) Steve is employed as an accounts manager at an advertising agency. Steve has been offered a similar position at another firm for an equivalent salary and benefits package. When making his decision, Steve should focus primarily on nonfinancial compensation factors. Which of the following questions is LEAST relevant to Steve's decision to remain at his current job? A) Is the job meaningful and challenging? B) Is the employee stock option plan risky? C) Is there a possibility for increased responsibility? D) Is there an opportunity for growth and achievement? Answer: B Explanation: B) A stock option plan is a type of financial compensation, so it is less relevant to nonfinancial compensation factors. Steve needs to consider whether his current job is challenging and whether it will allow him to advance and grow. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 1 11) Which of the following is a job environment factor that is part of a total compensation package? A) sound policies B) working conditions C) congenial co-workers D) all of the above Answer: D Explanation: D) Policies, working conditions, and co-workers are elements of the job environment that serve as nonfinancial compensation factors. For a job to be satisfactory, the physical environment, practices, and people need to be satisfactory as well. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

12) What type of indirect financial compensation is the most expensive for most businesses? A) life insurance B) health care insurance C) retirement programs D) unemployment compensation Answer: B Explanation: B) Health care represents the most expensive item in the area of indirect financial compensation. Employee benefits typically account for about 30 percent of a firm's financial compensation costs. In December 2013, employers spent, on average, $9.80 per hour worked for each employee to provide benefits. The most expensive benefit was health insurance, which cost $2.70 per hour worked for each employee. Life insurance, retirement plans, and unemployment compensation are less costly types of indirect financial compensation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1, 4 13) Surveys indicate that benefits and job security are the most important factors in job satisfaction. Answer: TRUE Explanation: According to a recent SHRM survey, benefits are the second most important driver of job satisfaction, coming in just behind job security. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 14) As a rule, employees receive benefits because of their productivity in an organization. Answer: FALSE Explanation: As a rule, employees receive benefits because of their membership in the organization. Benefits are typically unrelated to employee productivity; therefore, although they may be valuable in recruiting and retaining employees, they do not generally serve as motivation for improved performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

15) Benefits do not generally serve as motivation for improved performance. Answer: TRUE Explanation: As a rule, employees receive benefits because of their membership in the organization. Benefits are typically unrelated to employee productivity; therefore, although they may be valuable in recruiting and retaining employees, they do not generally serve as motivation for improved performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 16) What is indirect financial compensation? What are the three types of indirect financial compensation provided by most employers? Give examples of each type to illustrate your answer. Answer: Indirect financial compensations (benefits) include all financial rewards not included in direct financial compensation. Legislation mandates some benefits, such as Social Security, unemployment insurance, and workers' compensation. Discretionary benefits are benefit payments made as a result of unilateral management decisions in nonunion firms and from labormanagement negotiations in unionized firms. Major categories of discretionary benefits include payment for time not worked, health care, life insurance, retirement plans, employee stock option plans, and employee services. Voluntary benefits, on the other hand, are usually 100 percent paid by the employee but the employer typically pays the administrative cost. The most common voluntary products provided include term life insurance, vision insurance, long-term care insurance, long-term disability insurance, accident insurance, and dental insurance. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 1 17) Mandated benefits currently account for about what percentage of total compensation costs? A) 10% B) 35% C) 50% D) 65% Answer: A Explanation: A) Employers provide most benefits, but the law requires others. These legally required benefits currently account for about 10 percent of total compensation costs. They include Social Security, unemployment insurance, and workers' compensation. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

18) What Act created a system of retirement benefits? A) Family and Medical Leave Act B) Fair Labor Standards Act C) Social Security Act D) Pension Protection Act Answer: C Explanation: C) The Social Security Act of 1935 created a system of retirement benefits. It also established the Social Security Administration. Subsequent amendments to the Act added other forms of protection, such as disability insurance, survivors' benefits, and Medicare. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 19) Thomas is a copy machine technician for State Office Systems. He was involved in a serious car accident while making a service call for his employer, and he cannot return to work for 8 weeks. Which of the following would most likely provide Thomas with income while he is incapacitated? A) life insurance B) worker's compensation C) direct financial compensation D) unemployment insurance Answer: B Explanation: B) Workers' compensation provides a degree of financial protection for employees who incur expenses resulting from job-related accidents or illnesses. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 20) Which of the following protects employees against an earnings loss when they are totally incapacitated? A) unemployment insurance B) disability insurance C) paid time off D) sabbaticals Answer: B Explanation: B) Disability insurance protects employees against loss of earnings resulting from total incapacity. Unemployment insurance provides monetary payments to workers whose jobs have been terminated. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

21) Margaret's husband, who worked as an accountant, recently died from a heart attack while on vacation. Which of the following would most likely be provided to Margaret? A) survivors' benefits B) life insurance C) unemployment compensation D) supplemental Medicaid payments Answer: A Explanation: A) Survivors' benefits are provided to certain members of an employee's family when the employee dies. Life insurance is a discretionary benefit. Unemployment insurance provides workers whose jobs have been terminated through no fault of their own. Medicaid payments provide health insurance for low-income individuals. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 2 22) Which of the following would most likely be eligible for Medicare? A) Alex, a 35-year-old unemployed mechanic B) Brenda, a 42-year-old school teacher C) Charles, a 66-year-old retired realtor D) Debra, a 21-year-old college student Answer: C Explanation: C) Medicare provides hospital and medical insurance protection for individuals 65 years of age and older and for those who have become disabled. Therefore, Charles would most likely be eligible, while the others would not. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 23) Which of the following provides hospital and medical insurance protection for individuals who are 65 years of age or older? A) Medicare B) HMO C) Medicaid D) PPO Answer: A Explanation: A) Medicare provides hospital and medical insurance protection for individuals 65 years of age and older and for those who have become disabled. HMOs and PPOs are managed health care plans provided by employers. Medicaid provides assistance to low-income individuals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

24) Which of the following laws requires that employers and employees pay equally for Social Security retirement benefits? A) Federal Unemployment Tax Act B) Federal Insurance Contribution Act C) Pension Protection Act D) Employee Retirement Income Security Act Answer: B Explanation: B) The Federal Insurance Contribution Act (FICA) requires that employees and employers pay a portion of the cost of OASDI and Medicare coverage. Both the employer and employee each pay 6.2 percent of an employee's pay for the Social Security portion and 1.45 percent for Medicare. These amounts are deducted from an employee's paycheck and usually appear as FICA and Medicare (or HI for hospital insurance). Self-employed individuals pay the entire amount (15.3 percent). The Federal Unemployment Tax Act applies to the requirement that employers contribute to the Social Security unemployment insurance program on behalf of their employees. The Pension Protection Act and Employee Retirement Income Security Act apply to discretionary retirement programs such as 401(k) plans and pension plans. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 25) What is a significant issue facing the Social Security program? A) outsourcing of jobs B) retiring baby-boomers C) growing unemployment rate D) rising workers' compensation costs Answer: B Explanation: B) The Social Security program currently is running a surplus, but the retirement of the 77-million-member baby-boom generation is looming. Unless Congress makes changes by 2033, the program will have used up its surplus and will no longer be able to pay full benefits. Outsourcing, unemployment, and workers' compensation are less relevant to Social Security. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

26) What will be the retirement age in 2027 to receive Social Security retirement benefits? A) 65 B) 66 C) 67 D) 68 Answer: C Explanation: C) The retirement age today is 66 for receiving Social Security retirement benefits. The age for receiving full Social Security benefits (that is, retirement age) has been increased slowly until it reaches 67 in 2022. These changes will not affect Medicare, with full eligibility under this program holding at age 65. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 27) Jackie's employer is downsizing to reduce expenses, and Jackie has been informed that she will be laid off. What is the maximum number of weeks that Jackie can receive unemployment compensation? A) 13 B) 26 C) 52 D) 62 Answer: B Explanation: B) Unemployment insurance provides workers whose jobs have been terminated through no fault of their own, monetary payments for up to 26 weeks or until they find a new job. The intent of unemployment payments is to provide an unemployed worker time to find a new job equivalent to the one lost without suffering financial distress. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 28) Which of the following pays for unemployment insurance? A) state and local governments B) employer and employee C) employee only D) employer only Answer: D Explanation: D) A payroll tax paid solely by employers funds the unemployment compensation program under the Federal Unemployment Tax Act (FUTA). Unemployment insurance is based on both federal and state statutes and, although the federal government provides guidelines, the programs are administered by the states and therefore benefits vary by state. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 10 Copyright © 2016 Pearson Education, Inc.

29) Which of the following is the LEAST likely purpose of unemployment insurance payments? A) giving workers time to find equivalent jobs B) minimizing the number of workers needing permanent income support from the government C) continuing worker health benefits to prevent financial distress D) sustaining consumer spending during difficult economic times Answer: C Explanation: C) The intent of unemployment payments is to provide an unemployed worker time to find a new job equivalent to the one lost without suffering financial distress. Without this benefit, workers might have to take jobs for which they are overqualified or end up on welfare. Unemployment compensation also serves to sustain consumer spending during periods of economic adjustment. COBRA extends healthcare coverage to unemployed workers, not unemployment insurance. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 30) Jack, a construction worker, slipped and fell at a job site. As a result, Jack injured his knee and needs physical therapy and medical care. Jack's medical expenses would most likely be covered by ________. A) workers' compensation insurance B) unemployment insurance C) life insurance D) Medicaid Answer: A Explanation: A) Workers' compensation benefits provide a degree of financial protection for employees who incur expenses resulting from job-related accidents or illnesses. Unemployment insurance, life insurance, and Medicaid would not cover Jack's expenses for a work-related injury. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 31) Workers' compensation insurance pays for medical expenses related to ________. A) pre-existing conditions B) pregnancy complications C) off-duty accidents D) job-related illnesses Answer: D Explanation: D) Workers' compensation benefits provide a degree of financial protection for employees who incur expenses resulting from job-related accidents or illnesses. Workers' compensation would not likely cover pre-existing conditions unless they were job-related. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 11 Copyright © 2016 Pearson Education, Inc.

32) Legally required benefits represents a form of ________. A) social insurance B) Social Security C) workers' compensation D) paid time-off Answer: A Explanation: A) Legally required benefits historically provided a form of social insurance. Prompted largely by the rapid growth of industrialization in the United States in the early 19th and 20th centuries and the Great Depression of the 1930s, initial social insurance programs were designed to minimize the possibility that individuals who became unemployed or severely injured while working would become destitute. In addition, social insurance programs aimed to stabilize the well-being of dependent family members of injured or unemployed individuals. Furthermore, early social insurance programs were designed to enable retirees to maintain subsistence income levels. These intents of legally required benefits remain intact today. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 33) Employers pay the Federal Unemployment Tax at a rate of 6.2 percent on the first ________ each employee earns. A) $1,000 B) $5,000 C) $7,000 D) $10,000 Answer: C Explanation: C) Employers pay the Federal Unemployment Tax at a rate of 6.2 percent on the first $7,000 each employee earns. If they pay it on time, the percent is offset by 5.8 percent so the actual rate is .8 percent. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 34) The Social Security Act of 1935 created a system of retirement benefits. Answer: TRUE Explanation: The Social Security Act of 1935 created a system of retirement benefits. It also established the Social Security Administration. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

35) Disability insurance, survivors' benefits, Medicare, and unemployment insurance are provided by and administered by the Social Security Administration. Answer: FALSE Explanation: The Social Security Administration oversees disability insurance, survivors' benefits, and Medicare. Unemployment insurance is based on both federal and state statutes and, although the federal government provides guidelines, the programs are administered by the states rather than the SSA. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 36) Unemployment insurance provides workers whose jobs have been terminated through no fault of their own, monetary payments for up to 26 weeks. Answer: TRUE Explanation: Unemployment insurance provides workers whose jobs have been terminated through no fault of their own monetary payments for up to 26 weeks or until they find a new job. The intent of unemployment payments is to provide an unemployed worker time to find a new job equivalent to the one lost without suffering financial distress. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 37) Individual states administer both unemployment insurance and workers' compensation benefits. Answer: TRUE Explanation: As with unemployment compensation, the various states administer individual programs, with oversight from the U.S. Department of Labor. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

38) Legally required benefits became more popular in the 1940s and 1950s. Answer: FALSE Explanation: Legally required benefits historically provided a form of social insurance. Prompted largely by the rapid growth of industrialization in the United States in the early 19th and 20th centuries and the Great Depression of the 1930s, initial social insurance programs were designed to minimize the possibility that individuals who became unemployed or severely injured while working would become destitute. In addition, social insurance programs aimed to stabilize the well-being of dependent family members of injured or unemployed individuals. Furthermore, early social insurance programs were designed to enable retirees to maintain subsistence income levels. These intents of legally required benefits remain intact today. Discretionary benefits took hold during the 1940s and 1950s because the government imposed a wage freeze, but did not place restrictions on employee benefits. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 39) In a short essay, describe the reasons the U.S. government established particular legally required benefits. Answer: The U.S. government established programs to protect individuals from catastrophic events such as disability and unemployment. Legally required benefits are protection programs that attempt to promote worker safety and health, maintain family income streams, and assist families in crisis. The cost of legally required benefits to employers is quite high. As of September 2012, U.S. companies spent an average of $5,000 per employee annually to provide legally required benefits. Human resources (HR) staffs and compensation professionals in particular must follow a variety of laws as they develop and implement programs. Legally required benefits historically provided a form of social insurance. Prompted largely by the rapid growth of industrialization in the United States in the early 19th and 20th centuries and the Great Depression of the 1930s, initial social insurance programs were designed to minimize the possibility that individuals who became unemployed or severely injured while working would become destitute. In addition, social insurance programs aimed to stabilize the well-being of dependent family members of injured or unemployed individuals. Furthermore, early social insurance programs were designed to enable retirees to maintain subsistence income levels. These intents of legally required benefits remain intact today. The most substantial legally required benefits include various kinds of Social Security benefits, unemployment insurance, and workers' compensation. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 2

40) Which term refers to a benefit plan established by employers that allows employees to deposit a certain portion of their pre-tax salary into an account to be used for eligible expenses? A) cash balance plans B) health savings account C) flexible spending account D) defined health benefit account Answer: C Explanation: C) A flexible spending account (FSA) is a health benefit plan established by employers that allows employees to deposit a certain portion of their salary into an account (before paying income taxes) to be used for eligible expenses. Health savings accounts (HSA) are tax-free health spending and savings accounts available to individuals and families who have qualified high-deductible health insurance policies as determined by IRS regulations. Cash balance plans and defined benefit plans are two types of retirement plans. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 41) Most discretionary benefits plans originated at the turn of the 20th century. Answer: FALSE Explanation: Most discretionary benefits originated in the 1940s and 1950s. During both World War II and the Korean War, the federal government mandated that companies not increase employees' wages or salaries, but it did not place restrictions on companies' employee benefits expenditures. Companies invested in expanding their offerings of discretionary benefits as an alternate to pay hikes as a motivational tool to enhance worker productivity. Legally required benefits emerged in the early part of the 20th century to address various social problems such as the effects of the Great Depression. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

42) In a brief essay, discuss some of the reasons why companies choose to offer employee benefits. Answer: Most discretionary benefits originated in the 1940s and 1950s. During both World War II and the Korean War, the federal government mandated that companies not increase employees' wages or salaries, but it did not place restrictions on companies' employee benefits expenditures. Companies invested in expanding their offerings of discretionary benefits as an alternate to pay hikes as a motivational tool to enhance worker productivity. Separate from the benevolence of employers, employee unions directly contributed to the increase in employee welfare practices through the National Labor Relations Act (NLRA) of 1935, which legitimized bargaining for employee benefits. Union workers tend to participate more in benefits plans than do nonunion employees (92 percent versus 72 percent). Unions also indirectly contributed to the rise in benefits offerings because nonunion companies often fashion their employment practices after union companies as an approach to minimize the chance that their employees will seek union representation and may offer their employees benefits that are comparable to the benefits received by employees in union settings. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 3 43) With consumer-driven health plans, it is common to increase the insurance ________. A) premium B) deductible C) term D) coverage Answer: B Explanation: B) Consumer-driven health care refers to the objective of helping companies maintain control over costs while also enabling employees to make greater choices about health care. This approach may enable employers to lower the cost of insurance premiums by selecting plans with higher employee deductibles. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

44) Consumer-driven health savings accounts help employees defray the cost of ________. A) lower deductibles B) higher deductibles C) lower copayments D) coinsurance at any level Answer: B Explanation: B) The most popular consumer-driven approaches are health savings accounts, health reimbursement accounts, and flexible spending accounts. These accounts provide employees with resources to pay for medical and related expenses not covered by higher deductible insurance plans at substantially lower costs to employers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 45) All of the following are examples of specialized health-related insurance plans EXCEPT ________. A) dental insurance B) vision insurance C) managed care insurance D) mental health insurance Answer: C Explanation: C) Employers often use separate insurance plans to provide specific kinds of benefits and are often referred to as specialized insurance plans. We will focus on dental plans, vision plans, prescription drug plans, and mental health and substance abuse plans because of the rampant inflation in prescription drug costs and the increased recognition that mental health disorders may hinder worker productivity. Managed care refers to a general approach to the manner in which health care is provided. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 46) Health care benefits represent the most expensive cost in the area of indirect financial compensation. Which of the following is NOT a factor that has combined to create this situation? A) shrinking population B) growing demand for medical care C) inefficient administrative processes D) increasingly expensive medical technology Answer: A Explanation: A) A number of factors have combined to create the high cost of health care: an aging population; a growing demand for medical care; increasingly expensive medical technology; and inefficient administrative processes. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 17 Copyright © 2016 Pearson Education, Inc.

47) Julie has health insurance through her employer. The managed-care health organization used by Julie's employer covers all services for a fixed fee. However, Julie may only use the doctors and health facilities chosen by the managed-care health organization. Julie is most likely a member of a(n) ________. A) point-of-service B) health maintenance organization C) preferred provider organization D) exclusive provider organization Answer: B Explanation: B) HMOs cover all services for a fixed fee but exercise control over which doctors and health facilities a member may use. PPOs provide incentives for members using services within the system, but out-of-network providers may be used at higher costs. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4 48) If David uses an in-network provider of his employer's managed-care health organization, then he pays lower fees than if he uses an out-of-network provider. David is most likely a member of a(n) ________. A) HMO B) POS C) PPO D) FSA Answer: C Explanation: C) Preferred provider organizations (PPOs) are managed-care health organizations in which incentives are provided to members to use services within the system; out-of-network providers may be used at greater cost. HMOs cover all services for a fixed fee but exercise control over which doctors and health facilities a member may use. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4

49) Flexible spending accounts and health savings accounts are examples of ________. A) consumer-driven health care plans B) legally required health benefits C) major medical benefits D) fee-for-service plans Answer: A Explanation: A) Consumer-driven health care plans give each employee a set amount of money annually with which to purchase health care coverage which involves high-deductible insurance coverage combined with a tax-advantaged account like a flexible spending account or health savings account. They are a good way for employers to provide the same caliber of benefits to their employees while also reducing premiums and involving employees in the cost of coverage. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 50) Which of the following is a tax-free health spending and savings account available to individuals and families with qualified high-deductible health insurance policies? A) defined benefit plan B) flexible spending account C) health savings account D) cash balance plan Answer: C Explanation: C) Health savings accounts (HSA) are tax-free health spending and savings accounts available to individuals and families who have qualified high-deductible health insurance policies as determined by IRS regulations. HSAs are an important tool in the search to change consumers' health care spending behaviors and better manage health costs. It gives individuals a stake in managing their own health care dollars. A flexible spending account (FSA) is a health benefit plan established by employers that allows employees to deposit a certain portion of their salary into an account (before paying income taxes) to be used for eligible expenses. Defined benefit plans and cash balance plans are two types of retirement plans. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

51) A ________ plan pay benefits to employees on a reimbursement basis. A) preferred provider organization B) managed care C) fee-for-service D) health maintenance organization Answer: C Explanation: C) Fee-for-service plans provide protection against health care expenses in the form of a cash benefit paid to the insured or directly to the health care provider after the employee has received health care services. These plans pay benefits on a reimbursement basis. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 52) Educational assistance, subsidized cafeterias, and relocation benefits are examples of ________. A) mandatory benefits B) employee services C) severance pay D) premium pay Answer: B Explanation: B) Organizations offer a variety of benefits that can be termed "employee services." These benefits encompass a number of areas, including child care, educational assistance, food services/subsidized cafeterias, scholarships for dependents, and relocation benefits. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 53) Jeff lost his job in November 2015. According to COBRA, Jeff may keep his employer's health care coverage until ________. A) December 2015 B) May 2018 C) November 2016 D) May 2017 Answer: D Explanation: D) Under COBRA, individuals may keep their coverage, as well as coverage for their spouses and dependents, for up to 18 months after their employment ceases. The individual, however, must pay for this health insurance, and it is expensive. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 4

54) Coinsurance refers to the amount a person has to pay for medical services before the health plan begins to pay benefits. Answer: FALSE Explanation: Coinsurance refers to the percentage of covered expenses paid by the insured. Most indemnity plans stipulate 20 percent coinsurance. This means that the plan will pay 80 percent of covered expenses, whereas the policyholder is responsible for the difference, in this case 20 percent. Coinsurance amounts vary according to the type of expense. Insurance plans most commonly apply no coinsurance for diagnostic testing and 20 percent for other medical services. The deductible refers to the amount a person has to pay for medical services before the health plan begins to pay benefits. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 55) The aging population and inefficient administrative processes have been factors in the rising cost of health care. Answer: TRUE Explanation: A number of factors have combined to create the high cost of health care including an aging population, a growing demand for medical care, increasingly expensive medical technology, and inefficient administrative processes. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 56) Health maintenance organizations cover all services for a fixed fee but control is exercised over which doctors and health facilities a member may use. Answer: TRUE Explanation: Health maintenance organizations (HMOs) cover all services for a fixed fee but exercise control over which doctors and health facilities a member may use. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 57) With a health savings account, an employee can set aside an unlimited amount of pretax funds to pay for medical expenses. Answer: FALSE Explanation: HSAs let workers put up to $6,550 a year in a pretax account that they can tap for medical expenses. Individuals deposit money on a pretax basis to pay for doctor visits, prescriptions, and other expenses, as well as to save for future medical expenses and build savings long-term. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 21 Copyright © 2016 Pearson Education, Inc.

58) A major disadvantage of an FSA is that generally employees forfeit any amounts left unspent in the accounts at year end. Answer: TRUE Explanation: Indeed, a major disadvantage of an FSA is that generally employees forfeit any amounts left unspent in the accounts at year end. Health reimbursement accounts and health savings accounts permit carrying over of unused amounts from year to year. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 59) Money deposited into FSAs can be rolled over into the next year, while HSA funds left over at the end of the year are forfeited. Answer: FALSE Explanation: A disadvantage of an FSA is that generally, employees forfeit any amounts left unspent in the accounts at year-end. However, any amount in an HSA left over at the end of the year may be used to pay medical expenses in future years. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 60) An emerging class of health insurance programs is based on consumer-driven health care, where employees play a greater role in decisions on their health care, have better access to information to make informed decisions, and share more in the costs. Answer: TRUE Explanation: An emerging class of health insurance programs is based on consumer-driven health care, where employees play a greater role in decisions on their health care, have better access to information to make informed decisions, and share more in the costs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

61) Coinsurance of 20 percent means that the insurance plan will pay 20 percent of the covered expenses while the insured will pay 80 percent. Answer: FALSE Explanation: Coinsurance refers to the percentage of covered expenses paid by the insured. Most indemnity plans stipulate 20 percent coinsurance. This means that the plan will pay 80 percent of covered expenses, whereas the policyholder is responsible for the difference, in this case 20 percent. Coinsurance amounts vary according to the type of expense. Insurance plans most commonly apply no coinsurance for diagnostic testing and 20 percent for other medical services. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 62) Health maintenance organizations (HMOs) offer prepaid services, whereas fee-for-service plans operate on a reimbursement basis. Answer: TRUE Explanation: HMOs offer prepaid services, whereas fee-for-service plans operate on a reimbursement basis. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 63) Most firms that offer food services hope to enhance employee morale and increase worker productivity. Answer: TRUE Explanation: Firms that supply food services or subsidized cafeterias hope to increase productivity, minimize wasted time, enhance employee morale, and develop a healthier workforce. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

64) What is a consumer-driven health care plan? How do they benefit employers? Answer: Consumer-driven health care refers to the objective of helping companies maintain control over costs while also enabling employees to make greater choices about health care. This approach may enable employers to lower the cost of insurance premiums by selecting plans with higher employee deductibles. Membership in these plans has increased steadily since 2005 to 15.5 million in 2013 with an annual growth rate of approximately 15 percent. They are a good way for employers to provide the same caliber of benefits to their employees while also reducing premiums and involving employees in the cost of coverage. Patients who pay for health care services using pre-tax funds are not subject to the same lengthy, burdensome payments cycle. Consumer-driven plans give each employee a set amount of money annually with which to purchase health care coverage which involves high-deductible insurance coverage combined with a tax-advantaged account like a flexible saving account (FSA) or health saving account (HRA). These accounts provide employees with resources to pay for medical and related expenses not covered by higher deductible insurance plans at substantially lower costs to employers. They are a good way for employers to provide the same caliber of benefits to their employees while also reducing premiums and involving employees in the cost of coverage. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 65) Which law set the criteria for distinguishing between qualified and nonqualified plans? A) Social Security Act B) Employee Retirement Income Security Act C) Pension Protection Act D) Retirement Parity Act Answer: B Explanation: B) Tax incentives encourage companies to offer pension programs. Some of the Employee Retirement Income Security Act (ERISA) of 1974 provisions set the minimum standards required to "qualify" pension plans for favorable tax treatment. Failure to meet any of the minimum standard provisions "disqualifies" pension plans for favorable tax treatment. Pension plans that meet these minimum standards are known as qualified plans. Nonqualified plans refer to pension plans that do not meet at least one of the minimum standard provisions; typically, highly paid employees benefit from participation in nonqualified plans. The Social Security Act provides for a variety of benefits that include retirement, survivor, disability, medical, and unemployment insurance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

66) Retirement plans that qualify for preferential tax treatment are referred to as ________. A) tax exempt plans B) qualified plans C) tax efficient plans D) nonqualified plans Answer: B Explanation: B) Tax incentives encourage companies to offer pension programs. Some of the Employee Retirement Income Security Act (ERISA) of 1974 provisions set the minimum standards required to "qualify" pension plans for favorable tax treatment (qualified plans). Failure to meet any of the minimum standard provisions "disqualifies" pension plans for favorable tax treatment (nonqualified plans). Pension plans that meet these minimum standards are known as qualified plans. Nonqualified plans refer to pension plans that do not meet at least one of the minimum standard provisions; typically, highly paid employees benefit from participation in nonqualified plans. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 67) Which type of plan balances the risk an employee takes while saving for retirement? A) defined benefit plan B) cash balance plan C) pension equity plan D) defined contribution plan Answer: B Explanation: B) A cash balance plan is a plan with elements of both defined benefit and defined contribution plans. During the recent recession, many 401(k) accounts took a beating. As a result, many employers felt having employees assume 100 percent of the risks was too much. A middle ground was found using a cash balance plan in connection with a defined contribution plan. When used as a stand-alone plan, a cash balance plan provides all of the benefits that would otherwise be available under a standard defined benefit plan. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

68) What type of retirement plan provides the participant with a fixed benefit upon retirement? A) defined contribution B) deferred contribution C) defined benefit D) deferred balance Answer: C Explanation: C) A defined benefit plan is a formal retirement plan that provides the participant with a fixed benefit on retirement. Although defined benefit formulas vary, they are typically based on the participant's final years' average salary and years of service. A defined contribution plan is a retirement plan that requires specific contributions by an employer to a retirement or savings fund established for the employee. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 69) Leroy has a formal retirement plan based on his final years' average salary and years of service at Royce Pharmaceuticals. Which type of plan does Leroy most likely have? A) defined contribution B) defined benefit C) cash balance D) 401(k) Answer: B Explanation: B) A defined benefit plan is a formal retirement plan that provides the participant with a fixed benefit upon retirement. Although defined benefit formulas vary, they are typically based on the participant's final years' average salary and years of service. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5 70) Maura's retirement plan requires her employer to make specific contributions to a retirement fund established for Maura. Which type of plan does Maura most likely have? A) defined contribution plan B) deferred contribution plan C) defined benefit plan D) deferred salary plan Answer: A Explanation: A) A defined contribution plan is a retirement plan that requires specific contributions by an employer to a retirement or savings fund established for the employee. A defined benefit plan is a formal retirement plan that provides the participant with a fixed benefit upon retirement. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 5 26 Copyright © 2016 Pearson Education, Inc.

71) A defined contribution plan in which employees may defer income up to a maximum amount allowed is a ________. A) stock option plan B) cash balance plan C) hybrid plan D) 401(k) plan Answer: D Explanation: D) A 401(k) plan is a defined contribution plan in which employees may defer income up to a maximum amount allowed. A cash balance plan is a hybrid plan with elements of both defined benefit and defined contribution plans. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 72) What type of retirement plan has elements of both defined benefit plans and defined contribution plans? A) 401(k) plan B) 403(b) plan C) benefit plan D) cash balance plan Answer: D Explanation: D) A cash balance plan is a hybrid plan with elements of both defined benefit and defined contribution plans. A 401(k) plan is a defined contribution plan in which employees may defer income up to a maximum amount allowed. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 73) A defined benefit plan is a formal retirement plan that provides the participant with a fixed benefit upon retirement. Answer: TRUE Explanation: A defined benefit plan is a formal retirement plan that provides the participant with a fixed benefit upon retirement. Although defined benefit formulas vary, they are typically based on the participant's final years' average salary and years of service. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

74) A defined contribution plan requires specific contributions by an employer to an employee's retirement or savings fund. Answer: TRUE Explanation: A defined contribution plan is a retirement plan that requires specific contributions by an employer to a retirement or savings fund established for the employee. The majority of Fortune 100 companies now offer new salaried employees only a defined contribution plan. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 75) A 401(k) plan is a defined benefit plan in which employees may defer income up to a maximum amount allowed. Answer: FALSE Explanation: A 401(k) plan is a defined contribution plan in which employees may defer income up to a maximum amount allowed. A defined benefit plan is a formal retirement plan that provides the participant with a fixed benefit upon retirement. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 76) The 2007/2009 recession caused 401(k) balances to fall sharply and firms to reduce or eliminate 401(k) matching plans. Answer: TRUE Explanation: The recent recession was not kind to 401(k) accounts. Some firms reduced or eliminated their matches to accounts. As the economy improved, employers began reinstating their matching contributions, usually at the same level, but sometimes higher or lower than the original match. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 77) A cash balance plan is a hybrid retirement fund with elements of both defined benefit and defined contribution plans. Answer: TRUE Explanation: For some organizations, a hybrid fund may be the desired approach to retirement plans. A cash balance plan is a plan with elements of both defined benefit and defined contribution plans. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

78) Tax incentives encourage companies to offer pension programs. Answer: TRUE Explanation: Tax incentives encourage companies to offer pension programs. Some of the Employee Retirement Income Security Act (ERISA) provisions set the minimum standards required to "qualify" pension plans for favorable tax treatment. Failure to meet any of the minimum standard provisions "disqualifies" pension plans for favorable tax treatment. Pension plans that meet these minimum standards are known as qualified plans. Nonqualified plans refer to pension plans that do not meet at least one of the minimum standard provisions; typically, highly paid employees benefit from participation in nonqualified plans. The current tax treatment of qualified plans continues to provide incentives both for employers to establish plans and for employees to participate in them. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 79) Discuss the basis for distinguishing between qualified plans and nonqualified plans. Be sure to provide definitions of each. Answer: Tax incentives encourage companies to offer pension programs. Some of the Employee Retirement Income Security Act (ERISA) of 1974 provisions set the minimum standards required to "qualify" pension plans for favorable tax treatment. Failure to meet any of the minimum standard provisions "disqualifies" pension plans for favorable tax treatment. Pension plans that meet these minimum standards are known as qualified plans. Nonqualified plans refer to pension plans that do not meet at least one of the minimum standard provisions; typically, highly paid employees benefit from participation in nonqualified plans. The current tax treatment of qualified plans continues to provide incentives both for employers to establish plans and for employees to participate in them. In general, a contribution to a qualified plan is deductible in computing the employer's or employee's taxes based on who made the contribution. Employees pay taxes only on the amount they withdraw from the plan each year. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

80) ________ provides protection to employees' beneficiaries only during a limited period. A) Term life insurance B) Universal life insurance C) Whole life insurance D) Social Security survivor's insurance Answer: A Explanation: A) Term life insurance provides protection to employees' beneficiaries only during a limited period based on a specified number of years subject to a maximum age. After that, the insurance automatically expires. Whole life insurance pays an amount to the designated beneficiaries of the deceased employee, but unlike term life policies, whole life plans do not terminate until payment is made to the beneficiaries. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 81) What type of insurance is a benefit commonly provided to protect an employee's family in the event of the employee's death? A) long-term care B) utilization care C) group life insurance D) disability insurance Answer: C Explanation: C) Group life insurance is a benefit provided to protect the employee's family in the event of his or her death. Although the cost of group life insurance is relatively low, some plans call for the employee to pay part of the premium. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 82) Some companies choose to offer disability insurance in addition to the mandated workers' compensation insurance. Answer: TRUE Explanation: Workers' compensation protects employees from job-related accidents and illnesses. Some firms, however, provide additional protection that is more comprehensive. When the short-term plan runs out, a firm's long-term plan may become active; such a plan may provide 50 to 70 percent of an employee's pretax pay. Long-term disability provides a monthly benefit to employees who as a result of illness or injury are unable to work for an extended period Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

83) Workers in which of the following countries take the fewest number of vacation days? A) Italy B) Brazil C) Canada D) United States Answer: D Explanation: D) As compared with other countries, the average 13 days Americans take annually is small. According to the Center for Economic and Policy Research, many countries, excluding the United States, have laws that provide for annual paid vacation. For example, the French take 30 days, British take 28 days, Italians take 20 days, the Japanese take 10 days, and Canadians take 10 days. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 84) In most firms, vacation time varies by ________. A) performance appraisal results B) organizational rank C) education level D) personal needs Answer: B Explanation: B) Vacation time may vary with organizational rank. Top earning managers typically receive more vacation days than entry level workers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 85) Which term refers to a certain number of days each year that employees can use for any purpose? A) sabbatical B) paid vacation C) paid time off banks D) medical leave Answer: C Explanation: C) Paid time off (PTO) banks refer to a certain number of days off provided each year that employees can use for any purpose. With a PTO plan, all the reasons for time off–sick, vacation, and personal days. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

86) Carson Enterprises is considering the idea of replacing personal leave and vacation time with paid time off. Which of the following best supports this decision? A) Employees at Carson express satisfaction with the firm's current PPO. B) Last minute absences are a significant problem among Carson employees. C) Retirement plans held by Carson employees suffered during the recession. D) Carson employees are given the opportunity to telecommute when needed. Answer: B Explanation: B) With a PTO plan, all the reasons for time off–sick, vacation, and personal days. Such plans can have numerous benefits including simpler administration, earlier advance notice of time-off needs, and fewer last-minute absences. PTOs are less relevant to health care plans, retirement plans, or telecommuting. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 87) Which term refers to temporary leaves of absence from an organization, usually at reduced pay? A) personal leave B) medical leave C) paid time off D) sabbatical Answer: D Explanation: D) Sabbaticals are temporary leaves of absence from an organization, usually at reduced pay. Often sabbaticals help to reduce turnover and keep workers from burning out, hopefully returning revitalized and more committed to their work. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 88) Carson Enterprises is considering the idea of adding sabbaticals to its discretionary benefits plan. Which of the following best supports this decision? A) Numerous employees at Carson have elderly parents who need medical attention. B) The health and safety record at Carson has been problematic in recent years. C) Many experienced employees at Carson have quit because of burnout. D) The majority of Carson employees have small children in daycare. Answer: C Explanation: C) Sabbaticals are temporary leaves of absence from an organization, usually at reduced pay. Often sabbaticals help to reduce turnover and keep workers from burning out, hopefully returning revitalized and more committed to their work. If the firm has high turnover, sabbaticals may help. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 7 32 Copyright © 2016 Pearson Education, Inc.

89) A results-only work environment allows employees to ________. A) take a specified number of days off each year for any purpose B) work whenever and wherever they wish, as long as they complete projects on time C) take temporary leaves of absence from work, usually at reduced pay D) take time off to volunteer for worthy causes in their communities Answer: B Explanation: B) A results-only work environment allows employees to work whenever and wherever they wish, as long as they complete projects on time. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 7 90) Which of the following is NOT a typical paid time-off benefit? A) leave to seek employment elsewhere B) bereavement leave C) rest breaks D) military leave Answer: A Explanation: A) Some companies routinely permit employees to take off during work hours to handle personal affairs without taking vacation time. When a worker is called for jury duty, some organizations continue to pay their salary; others pay the difference between jury pay and their salary. When the National Guard or military reserve are called to duty, as has been the case in Afghanistan and Iraq, some companies pay their employees a portion of their salary while on active duty. Further, during an election, many companies permit employees voting time. Still other firms permit bereavement time for the death of a close relative. Finally, there is the payment for time not worked while at the company such as rest periods, coffee breaks, lunch periods, cleanup time, and travel time. The Fair Labor Standards Act does not require employers to give workers a rest break, and only 9 states require it to be given. In these states, usually the break mandated is 10 minutes for every four hours worked. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 91) A growing number of companies are replacing sick leave and vacation time with paid time off banks to simplify administration. Answer: TRUE Explanation: In lieu of sick leave, vacation time, and a personal day or two, a growing number of companies are providing paid time off (PTO) banks, a certain number of days off provided each year that employees can use for any purpose. There are numerous possible benefits for PTO banks, including simpler administration, fewer carry-over issues, high employee satisfaction, and fewer creative excuses for time off. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 33 Copyright © 2016 Pearson Education, Inc.

92) Sabbaticals are temporary leaves of absence from an organization, usually at a reduced amount of pay. Answer: TRUE Explanation: Sabbaticals are temporary leaves of absence from an organization, usually at reduced pay. Although sabbaticals have been used for years in the academic community, they have only recently entered the private sector. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 93) According to the Fair Labor Standards Act, firms are required to give employees a 10 minute rest break every four hours. Answer: FALSE Explanation: The Fair Labor Standards Act does not require employers to give workers a rest break, and only 9 states require it to be given. Usually the break mandated is 10 minutes for every four hours worked. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 94) What are the advantages and disadvantages of offering sabbaticals to employees? Answer: Sabbaticals are temporary leaves of absence from an organization, usually at reduced pay. Although sabbaticals have been used for years in the academic community, they have only recently entered the private sector. Often sabbaticals help to reduce turnover and keep workers from burning out, hopefully returning revitalized and more committed to their work. Sabbaticals are not without its challenges. Overachievers may experience difficulty in letting go of their work and worry about their job if they are gone for extended periods. Then there is the problem of scheduling who will take up the slack while the person on sabbatical is gone. But, most organizations using sabbaticals have discovered that the benefits outweigh the challenges. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 7

95) Curt has been offered a position with Premium Processing. As part of its benefits package, the firm offers child care, educational assistance, and relocation benefits. Which term best describes the benefits offered by Premium Processing? A) voluntary benefits B) cash balance plans C) employee services D) disability protection Answer: C Explanation: C) Organizations offer a variety of benefits that can be termed "employee services." These benefits encompass a number of areas, including child care, educational assistance, food services/subsidized cafeterias, scholarships for dependents, and relocation benefits. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 8 96) Michael works as an engineer in Arizona, but he has been offered a better position with RayCo, a firm in Minnesota. RayCo will ship the family's belongings to Minnesota and will provide Michael and his family with temporary housing for three months. Which of the following best describes the type of compensation offered by RayCo? A) flexible spending B) relocation benefits C) voluntary benefits D) premium pay Answer: B Explanation: B) Relocation benefits are company-paid shipments of household goods and temporary living expenses, covering all or a portion of the real estate costs associated with buying a new home and selling the previously occupied home. Relocation packages vary, but most companies will pay for household moving and packing expenses and temporary living expenses for up to six months until the home sells. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 8

97) Which term refers to company-paid shipments of household goods and temporary living expenses? A) unemployment compensation B) relocation benefits C) premium payments D) disability benefits Answer: B Explanation: B) Relocation benefits are company-paid shipments of household goods and temporary living expenses, covering all or a portion of the real estate costs associated with buying a new home and selling the previously occupied home. Relocation packages vary, but most companies will pay for household moving and packing expenses and temporary living expenses for up to six months until the home sells. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 98) Company child care arrangements have been linked to reduced absenteeism and enhanced retention and recruiting. Answer: TRUE Explanation: Company child-care arrangements tend to reduce absenteeism, protect employee productivity, enhance retention and recruiting, promote the advancement of women, and make the firm an employer of choice. According to the National Conference of State Legislatures, an estimated 80 percent of employees miss work due to unexpected child-care coverage issues. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 99) Internal Revenue Service regulations allow for educational assistance benefits to be nontaxable up to $10,000 per year. Answer: FALSE Explanation: Educational assistance plans can go a long way in improving employee retention. Internal Revenue Service regulations allow for educational assistance benefits to be nontaxable up to $5,250 per year. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

100) Discuss the U.S. Supreme Court's ruling regarding the status of the Defense of Marriage Act. Answer: Some states have legalized such marriages. Thus far, the District of Columbia and 19 states–California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico (eight counties), New York, Oregon, Pennsylvania, Vermont, , Rhode Island, and Washington –had laws permitting same-sex marriage. In June 2013, the U.S. Supreme Court ruled that Section 3 of the Defense of Marriage Act is unconstitutional. Specifically, the Court's ruling applies to the part of the law, which had previously denied federal benefits to gay and lesbian couples in states where such unions are permitted. The ruling means that same-sex couples lawfully married in their state can receive the same federal benefits as heterosexual couples, such as possible tax advantages by filing jointly, benefits for veterans' spouses, and inheritance-tax exemptions. The U.S. Supreme Court maintained that Section 3 violates the U.S. Constitution's guarantee of equal protection under the law and treated marriage between same-sex individuals as less worthy than marriage between heterosexual couples. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 8 101) Which of the following is NOT a discretionary benefit? A) sabbaticals B) health benefits C) paid vacations D) overtime payments Answer: D Explanation: D) Discretionary benefits are benefit payments made as a result of unilateral management decisions in nonunion firms and from labor-management negotiations in unionized firms. Sabbaticals, health benefits, and paid vacations are discretionary benefits, but overtime payments are required for nonexempt employees under the Fair Labor Standards Act. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

102) Eliot receives overtime compensation when he works on Sundays and holidays in his job as a warehouse manager. Which of the following does Eliot most likely receive? A) supplemental wages B) voluntary benefits C) premium pay D) spot bonuses Answer: C Explanation: C) Premium pay is compensation paid to employees for working long periods of time or working under dangerous or undesirable conditions. Some firms voluntarily pay overtime for hours worked beyond eight in a given day and pay double time, or even more, for work on Sundays and holidays. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 103) Rodrigo is employed as a window washer for multiple skyscrapers in Chicago. Rodrigo receives additional pay for working under extremely dangerous conditions. Rodrigo most likely earns ________. A) supplemental pay B) overtime pay C) premier pay D) hazard pay Answer: D Explanation: D) Additional pay provided to employees who work under extremely dangerous conditions is called hazard pay. Window washers of skyscrapers and military pilots often receive hazard pay for their precarious working conditions. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 104) Sara works from midnight until 8:00 a.m. as a technician at a manufacturing facility and earns an extra $3.00 per hour for the inconvenience. Which of the following does Sara most likely receive? A) supplemental wage pay B) shift differential pay C) overtime pay D) hazard pay Answer: B Explanation: B) Sara receives shift differential pay for the inconvenience of working undesirable hours. This type of pay may be provided as additional compensation per hour and is used extensively in the health care practitioners and technical occupations. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 38 Copyright © 2016 Pearson Education, Inc.

105) Additional money paid to an employee for the inconvenience of working undesirable hours is known as ________. A) overtime pay B) base pay C) hazard pay D) shift differential pay Answer: D Explanation: D) Shift differential pay is for the inconvenience of working undesirable hours. This type of pay may be provided as additional compensation per hour and is used extensively in the health care practitioners and technical occupations. Additional pay provided to employees who work under extremely dangerous conditions is called hazard pay. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 9 106) Hazard pay and shift differential pay are types of ________. A) customized benefits B) overtime pay C) voluntary benefits D) premium pay Answer: D Explanation: D) Premium pay is compensation paid to employees for working long periods of time or working under dangerous or undesirable conditions. Additional pay provided to employees who work under extremely dangerous conditions is called hazard pay. Shift differential pay is for the inconvenience of working undesirable hours. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 107) Additional pay provided to employees who work under extremely dangerous conditions is called hazard pay. Answer: TRUE Explanation: Additional pay provided to employees who work under extremely dangerous conditions is called hazard pay. A window washer for skyscrapers in New York City might receive extra compensation because of the precarious working conditions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

108) A shift from discretionary benefits to ________ contributes to a company's cost savings. A) flexible spending accounts B) consumer-driven plans C) voluntary benefits D) flexible benefits Answer: C Explanation: C) Many firms are moving away from discretionary benefits where the cost is shouldered totally or partially by the company to voluntary benefits. Voluntary benefits are 100 percent paid by the employee but the employer typically pays the administrative cost. Employees gain because their premiums typically reflect group discounts and thus are lower than the employees could obtain on their own. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 109) Through her employer, Jillian is able to purchase vision and dental insurance at a reduced rate. Jillian's employer pays any administrative fees. Jillian's employer most likely offers ________. A) voluntary benefits B) customized benefits C) health savings accounts D) flexible spending accounts Answer: A Explanation: A) As firms search for ways to reduce costs, many organizations are moving to voluntary benefits which are 100 percent paid by the employee but the employer typically pays the administrative cost. Common voluntary benefits include vision insurance, dental insurance, and long-term care insurance. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 10

110) Which law allows companies to automatically enroll workers in a defined contribution plan? A) Employee Retirement Income Security Act B) Fair Labor Standards Act C) Pension Protection Act D) Pension Recovery Act Answer: C Explanation: C) The Pension Protection Act enables companies to enroll their employees automatically in defined contribution plans and provides greater access to professional advice about investing for retirement. In addition, this act requires that companies give multiple investment options to allow employees to select how much risk they are willing to bear. As an aside, risky investments usually have the potential for substantial gains or losses in value. The Fair Labor Standards Act focuses on issues related to overtime pay, child labor, and minimum wage. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 111) What is one of the concerns expressed about individuals who smoke cigarettes or other nicotine products? A) employees who smoke consume more health care resources, thus, raising costs of insurance B) employees who smoke are more distracted from their work C) employees who smoke create a noxious work environment D) employees who smoke are more likely not to complete work assignments on a timely basis Answer: A Explanation: A) Employees who smoke consume more health care resources, experience greater absenteeism, and tend to be less productive while at work. Evidence shows that smokers are more likely to require health care than nonsmokers. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 11

112) Which law gives employees the opportunity to temporarily continue their health insurance coverage if they are terminated from their job? A) Health Insurance Portability and Accountability Act B) Consolidated Omnibus Budget Reconciliation Act C) Americans with Disabilities Act D) Rehabilitation Act Answer: B Explanation: B) The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 was enacted to give employees the opportunity to temporarily continue their coverage, which they would otherwise lose because of termination, layoff, or other changes in employment status. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 provides protection for Americans who move from one job to another, who are self-employed, or who have preexisting medical conditions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 113) Which law provides protection for workers who are self-employed or move from one job to another? A) Health Insurance Portability and Accountability Act B) Consolidated Omnibus Budget Reconciliation Act C) Americans with Disabilities Act D) Rehabilitation Act Answer: A Explanation: A) The Health Insurance Portability and Accountability Act (HIPAA) of 1996 provides protection for Americans who move from one job to another, who are self-employed, or who have preexisting medical conditions. The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 was enacted to give employees the opportunity to temporarily continue their coverage, which they would otherwise lose because of termination, layoff, or other changes in employment status. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

114) Anne, who has a preexisting medical condition, recently changed jobs. Which legislation was passed to protect individuals such as Anne? A) Patient Protection and Affordable Care Act B) Family and Medical Leave Act C) Health Insurance Portability and Accountability Act D) Consolidated Omnibus Budget Reconciliation Act Answer: C Explanation: C) The Health Insurance Portability and Accountability Act (HIPAA) of 1996 provides protection for Americans who move from one job to another, who are self-employed, or who have preexisting medical conditions. The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 was enacted to give employees the opportunity to temporarily continue their coverage, which they would otherwise lose because of termination, layoff, or other changes in employment status. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 11 115) The primary reason for enacting ERISA was to ________. A) force insurance companies to accept workers with preexisting medical conditions B) extend long-term healthcare coverage to unemployed individuals C) require employers to create employee retirement plans D) strengthen current and future retirement programs Answer: D Explanation: D) The Employee Retirement Income Security Act (ERISA) of 1974 strengthens existing and future retirement programs. Mismanagement of retirement funds was the primary spur for this legislation. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 116) The intent of which Act is to ensure that when employees retire, they receive deserved pensions? A) Health Insurance Portability and Accountability Act B) Consolidated Omnibus Budget Reconciliation Act C) Older Workers Benefit Protection Act D) Employee Retirement Income Security Act Answer: D Explanation: D) The Employee Retirement Income Security Act (ERISA) of 1974 strengthens existing and future retirement programs. Mismanagement of retirement funds was the primary spur for this legislation that intends to protect employee pensions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 43 Copyright © 2016 Pearson Education, Inc.

117) Which Act is a 1990 amendment to the Age Discrimination in Employment Act? A) Health Insurance Portability and Accountability Act B) Consolidated Omnibus Budget Reconciliation Act C) Older Workers Benefit Protection Act D) Employee Retirement Income Security Act Answer: C Explanation: C) The Older Workers Benefit Protection Act of 1990 (OWBPA), an amendment to the Age Discrimination in Employment Act, prohibits discrimination in the administration of benefits on the basis of age. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 118) For what reason does the Consolidated Omnibus Budget Reconciliation Act (COBRA) permit a 2 percent mark-up on the cost of continuing health insurance coverage? A) generating additional tax revenue for the government B) offsetting the cost of continuing health insurance coverage for low income individuals C) boosting company profits D) administering COBRA Answer: D Explanation: D) Companies are permitted to charge Consolidated Omnibus Reconciliation Act (COBRA) beneficiaries a premium for continuation coverage of up to 102 percent of the cost of the coverage to the plan. The 2 percent markup reflects a charge for administering COBRA. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 119) Which of the following employers must comply with the Family and Medical Leave Act? A) Rand Automotive, 24 employees B) Compton Electronics, 47 employees C) McKnight Publishing, 82 employees D) all of the above Answer: C Explanation: C) The Family and Medical Leave Act (FMLA) of 1993 applies to private employers with 50 or more employees and to all governmental employers regardless of number. Therefore, only McKnight Publishing would be required to comply with FMLA guidelines. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 11

120) Which Act provides employees up to 12 weeks a year of unpaid leave in specified situations? A) Social Security Act B) Family and Medical Leave Act C) Fair Labor Standards Act D) Patient Protection and Affordable Care Act Answer: B Explanation: B) The Family and Medical Leave Act (FMLA) of 1993 applies to private employers with 50 or more employees and to all governmental employers regardless of number. The FMLA provides employees up to 12 weeks a year of unpaid leave in specified situations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 121) Which Act contains a variety of provisions designed to strengthen the funding rules for defined benefit pension plans? A) Older Workers Benefit Protection Act B) Civil Rights Act of 1964 C) Pension Protection Act D) Rehabilitation Act Answer: C Explanation: C) The Pension Protection Act (PPA) of 2006 contains a variety of provisions designed to strengthen the funding rules for defined benefit pension plans. The bill seeks to ensure that employers make greater contributions to their pension funds. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 122) All of the following are true about the Patient Protection and Affordable Care Act of 2010 EXCEPT that ________. A) individuals cannot be denied health insurance because of a pre-existing condition B) insurance companies cannot cancel a policy if the insured becomes sick C) individuals who do not purchase health insurance will be fined D) children over 21 cannot remain on their parents' policy Answer: D Explanation: D) According to the Patient Protection and Affordable Care Act of 2010, individuals must purchase health insurance or risk being fined; children can stay on their parents' policy until they are 26 years old; insurance companies cannot cancel a policy if the insured gets sick; and a person cannot be denied insurance simply because they have a pre-existing health condition. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 45 Copyright © 2016 Pearson Education, Inc.

123) The Family and Medical Leave Act apply to private employers with 25 or more employees and to all governmental employers regardless of number. Answer: FALSE Explanation: The Family and Medical Leave Act (FMLA) of 1993 applies to private employers with 50 or more employees and to all governmental employers regardless of number. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 124) COBRA gives employees the opportunity to temporarily continue their health insurance coverage after a termination or layoff. Answer: TRUE Explanation: The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 was enacted to give employees the opportunity to temporarily continue their coverage, which they would otherwise lose because of termination, layoff, or other changes in employment status. The Act applies to employers with 20 or more employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 125) The Health Insurance Portability and Accountability Act includes a regulation designed to protect the privacy of personal health information. Answer: TRUE Explanation: The Health Insurance Portability and Accountability Act (HIPAA) of 1996 provides protection for Americans who move from one job to another, who are self-employed, or who have preexisting medical conditions. As an element of HIPAA, there is now a regulation designed to protect the privacy of personal health information. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 126) The Employee Retirement Income Security Act requires employers to create and fund employee retirement plans and sets vesting standards. Answer: FALSE Explanation: ERISA does not force employers to create employee retirement plans. It does set standards in the areas of participation, vesting of benefits, and funding for existing and new plans. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

127) How has federal legislation affected the benefits employees receive? Provide specific examples of laws and their effects in your response. Answer: Employers provide most benefits, but the law requires others. Legally required benefits include Social Security, unemployment insurance, and workers' compensation. The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 was enacted to give employees the opportunity to temporarily continue their coverage, which they would otherwise lose because of termination, layoff, or other changes in employment status. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 provides protection for Americans who move from one job to another, who are self-employed, or who have preexisting medical conditions. The Employee Retirement Income Security Act (ERISA) of 1974 strengthens existing and future retirement programs. The Older Workers Benefit Protection Act of 1990 (OWBPA) prohibits discrimination in the administration of benefits on the basis of age, but also permits early retirement incentive plans as long as they are voluntary. The Family and Medical Leave Act (FMLA) provides employees up to 12 weeks a year of unpaid leave in specified situations. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 11 128) Discuss how the Pension Protection Act strengthened employer-sponsored retirement plans? Answer: The Pension Protection Act is designed to strengthen protections for employees' company-sponsored retirement plans in at least two ways. First, this law should strengthen the financial condition of the Pension Benefit Guaranty Corporation (PBGC) by requiring that private sector companies that underfund their defined benefit plans pay substantially higher premiums to insure retirement benefits. The PBGC is a government agency that insures that employees owed benefits under private-sector employer defined benefit pensions receive those benefits in the event that a company terminates its plan. Second, the Pension Protection Act makes it easier for employees to participate in such employer-sponsored defined contribution plans as 401(k) plans. Millions of workers who are eligible to participate in their employers' defined contribution plans do not contribute to them. There are a variety of reasons why employees choose not to participate; however, a prominent reason is that most individuals feel they do not have sufficient knowledge about how to choose investment options (e.g., a high-risk mutual fund versus a fixed-rate annuity) that will help them earn sufficient money for retirement. In addition, once employees make the decision to participate in these plans and have been making regular contributions, they are not likely to stop. With these issues in mind, the Pension Protection Act enables companies to enroll their employees automatically in defined contribution plans and provides greater access to professional advice about investing for retirement. In addition, this act requires that companies give multiple investment options to allow employees to select how much risk they are willing to bear. Some companies previously limited investment opportunities to company stock, which exposes employees to substantial investment risk. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 11 129) Which of the following permits employees to make yearly selections to largely determine 47 Copyright © 2016 Pearson Education, Inc.

their compensation package by choosing between taxable cash and numerous benefits? A) employee stock option plans B) customized benefit plans C) health savings accounts D) flexible spending plans Answer: B Explanation: B) Customized benefit plans permit employees to make yearly selections to largely determine their benefit package by choosing between taxable cash and numerous benefits. Customized plans permit flexibility in allowing each employee to determine the compensation components that best satisfy his or her particular needs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 130) With a heterogeneous workforce, employers are having to be more flexible. How are employers using customized benefits plans and flextime to meet the needs of today's employees? Answer: Customized benefit plans permit employees to make yearly selections to largely determine their benefit package by choosing between taxable cash and numerous benefits. With four generations of workers now in a workplace, customization and flexibility become very important in developing a benefits package that meets the needs of everyone. Workers have considerable latitude in determining how much they will take in the form of salary, life insurance, pension contributions, and other benefits. Customized plans permit flexibility in allowing each employee to determine the compensation components that best satisfy his or her particular needs. Flextime is the practice of permitting employees to choose their own working hours, within certain limitations. Flexible hours are highly valued in today's society, and a flexible work schedule gives employers an edge in recruiting new employees and retaining highly qualified ones. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 12, 15

131) When a U.S. multinational company is designing a global customized benefits package, it should assume all of the following EXCEPT ________. A) standardized benefits programs for all employees will achieve key benefits objectives B) it is essential to determine a global corporate benefits strategy and determine what the company's identity should be C) the culture of each country will have a major impact on the benefits workers desire D) U.S. insurance plan designs will not be universally applicable in all countries Answer: A Explanation: A) Global companies must recognize that a standardized benefits program for all employees may be impractical and unsuccessful in achieving key benefits objectives. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 132) U.S. multinationals have discovered that U.S. insurance plan designs were not universally acceptable in other countries because of differences in ________. A) the demographic characteristics of workers B) labor and tax regulations C) health care standards D) political ideology Answer: B Explanation: B) U.S. multinationals have discovered that U.S. insurance plan designs were not universally acceptable in other countries. This is caused by labor and tax regulations, which strongly influence employee expectations. For instance, U.S. group life insurance plans deliver lump-sum death benefits, but such benefits are not tax-favored in the Netherlands, where employees expect survivorship annuities to spouses and children in the event of death in service. U.S. firms also place a high priority on health care benefits, whereas many European countries have government-sponsored health care arrangements that differ in design in each country. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

133) Which law requires that firms communicate information about their benefit programs to employees? A) Older Workers Benefit Protection Act B) Patient Protection and Affordable Care Act C) Pension Protection Act D) Employee Retirement Income Security Act Answer: D Explanation: D) Employee Retirement Income Security Act (ERISA) provides still another reason for communicating information about a firm's benefits program. This act requires organizations with a pension or profit-sharing plan to provide employees with specific data at specified times. The act further mandates that the information be presented in a manner that is easy to understand. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 14 134) Which law specifically requires that firms communicate information about health plan offerings to employees? A) Older Workers Benefit Protection Act B) Patient Protection and Affordable Care Act C) Pension Protection Act D) Employee Retirement Income Security Act Answer: B Explanation: B) Under the Patient Protection and Affordable Care Act, employers must provide a benefits summary and coverage explanation to all applicants and enrollees at the time of initial enrollment in a health care plan and at the annual enrollment, in addition to the summary plan description required by Employee Retirement Income Security Act. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 135) Which of the following best defines Two in a Box? A) providing two banking services to key customers B) requiring applicants to interview with two managers C) giving two executives the same job and responsibilities D) requiring two employees to work overtime and weekends Answer: C Explanation: C) Some companies are giving two executives the same responsibilities and the same title and letting them decide how the work is to be divided (Two in a Box). Unlike job sharing, it is a full-time job for both executives and has some risk for the employer. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 50 Copyright © 2016 Pearson Education, Inc.

136) All of the following are used by firms to assist employees with achieving a work-life balance EXCEPT ________. A) job sharing B) telecommuting C) job enlarging D) compressed workweeks Answer: C Explanation: C) For employers, creating a balanced work-life environment can be a key strategic factor in attracting and retaining the most talented employees, so many firms offer flextime, a compressed workweek, job sharing, and telecommuting. Job enlarging involves increasing an employee's tasks, so it does not increase a worker's time flexibility. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 137) Max, a newspaper photographer, is allowed to choose his own working hours, within certain limitations. Which of the following is most likely offered by Max's employer? A) telecommuting B) job sharing C) part-time work D) flextime Answer: D Explanation: D) Flextime is the practice of permitting employees to choose their own working hours, within certain limitations. In job sharing, two part-time people split the duties of one job in some agreed-upon manner and are paid according to their contributions. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 15 138) In a flextime system, core time is when ________. A) employees may vary their schedules B) employees must report to meetings C) all employees must be present D) all employees change shifts Answer: C Explanation: C) In a flextime system, employees typically work the same number of hours per day as they would on a standard schedule. However, they work these hours within what is called a bandwidth, which is the maximum length of the workday. Core time is that part of the day when all employees must be present. Flexible time is the period within which employees may vary their schedules. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 51 Copyright © 2016 Pearson Education, Inc.

139) An employee who works four 10-hour days is most likely working under which of the following arrangements? A) flextime B) telecommuting C) compressed work week D) executive job sharing plan Answer: C Explanation: C) The compressed work week is an arrangement of work hours that permits employees to fulfill their work obligation in fewer days than the typical five-day, eight-hour-aday, work week. A common compressed work week is four 10-hour days. In a flextime system, employees typically work the same number of hours per day as they would on a standard schedule. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 140) Which of the following most likely attracts people who want to work fewer than forty hours per week? A) flextime B) job sharing C) telecommuting D) compressed work week Answer: B Explanation: B) Job sharing is an approach to work that is attractive to people who want to work fewer than 40 hours per week. In job sharing, two part-time people split the duties of one job in some agreed-upon manner and are paid according to their contributions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 141) If two part-time people split the duties of one job and are paid according to their contributions then they are most likely participating in ________. A) succession planning B) flexible sharing C) telecommuting D) job sharing Answer: D Explanation: D) In job sharing, two part-time people split the duties of one job in some agreedupon manner and are paid according to their contributions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

142) A work arrangement whereby employees are able to remain at home and perform their work using computers that connect them with their offices is referred to as ________. A) gainsharing B) broadbanding C) job sharing D) telecommuting Answer: D Explanation: D) Telecommuting is a work arrangement whereby employees are able to remain at home (or otherwise away from the office) and perform their work using computers and other electronic devices that connect them with their offices. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 143) Which of the following jobs is most appropriate for telecommuting? A) machine operator B) college professor C) computer programmer D) sales representative Answer: C Explanation: C) Telecommuters generally are information workers. They accomplish jobs that require, for example, analysis, research, writing, budgeting, data entry, or computer programming. Teleworkers also include illustrators, loan executives, architects, attorneys, and publishers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 144) Which of the following is most likely an advantage of allowing employees to telecommute? A) decreased cost of health insurance coverage B) improved manager-employee relationships C) decreased need for office space D) improved team building Answer: C Explanation: C) One advantage of telecommuting is that it eliminates the need for office space. However, telecommuting may weaken the ties between employees and their firms and between employees and their co-workers. Telecommuting has little effect on health benefits. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

145) Which of the following scenarios is most likely the result of the recent recession? A) many baby boomers are using part-time work as a way to ease into retirement B) many people are working part-time because they have not been able to find full-time jobs C) part-time work is attractive to Millennials who are seeking a better work-life balance D) part-time work is allowing educated professionals to address both job and personal needs Answer: B Explanation: B) The recent recession caused many workers to take part-time jobs because they could not find full-time ones. In August 2013, the underemployed rate was 13.7 percent. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 146) Which of the following is the LEAST likely advantage to firms that offer part-time employment? A) reduced nonfinancial compensation B) improved work-life balance C) reduced worker turnover D) improved productivity Answer: A Explanation: A) Firms that offer part-time employment are meeting the demands of workers who want a better work-life balance. Companies that offer part-time employment show increased rates of productivity and less employee turnover than other companies. Although financial compensation would decrease, nonfinancial compensation is less likely to change. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 147) Flextime is the practice of permitting employees to choose their own working hours, within certain limitations. Answer: TRUE Explanation: Flextime is the practice of permitting employees to choose their own working hours, within certain limitations. With flextime, workers usually work the same number of hours per day as with a standard schedule. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

148) Employees on a compressed work week split the duties of one job and work less than forty hours a week. Answer: FALSE Explanation: The compressed work week is an arrangement of work hours that permits employees to fulfill their work obligation in fewer days than the typical five-day, eight-hour-aday, work week. In job sharing, two part-time people split the duties of one job in some agreedon manner and are paid according to their contributions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 149) Telecommuting is limited to information workers because jobs in the fields of banking and architecture require employees to work in a corporate office. Answer: FALSE Explanation: Telecommuters generally are information workers. They accomplish jobs that require, for example, analysis, research, writing, budgeting, data entry, or computer programming. Teleworkers also include illustrators, loan executives, architects, attorneys, and publishers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 150) Firms that offer part-time employment opportunities are shown to benefit from improved worker productivity and reduced employee turnover. Answer: TRUE Explanation: Companies that offer part-time employment show increased rates of productivity and less employee turnover than other companies. Part-time employment adds many highly qualified individuals to the labor market by permitting employees to address both job and personal needs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

Human Resource Management, 14e (Mondy) Chapter 11 Labor Unions and Collective Bargaining 1) Which of the following factors necessitated the need for labor unions? A) decline in welfare benefits B) Great Depression C) rise of the service industry D) rise in family owned businesses Answer: B Explanation: B) The industrialization of the U.S. economy, when business owners sought out efficiency while sacrificing the welfare of workers, and the economic devastation during the Great Depression, placed workers at a disadvantage. Workers were subject to poor pay, unsafe working conditions, and virtually no job security. During the Great Depression, scores of businesses failed and most workers became chronically unemployed, giving management even greater power because many workers would accept substandard employment terms as an alternative to unemployment. Some workers banded together to negotiate better terms of employment, but employers were not willing to listen because collective action could jeopardize employers' control over the terms of employment. Still, employees experienced poor working conditions, substandard wage rates, and excessive work hours. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 1 2) Another term for factory owners is ________. A) executive management B) efficiency experts C) HR managers D) capitalists Answer: D Explanation: D) Factory owners, also referred to as capitalists, sought profits; profits refer to the money that capitalists enjoy after deducting the costs of doing business (for example, raw materials, employee wages). Highly efficient workforces were therefore an essential part to the capitalist's profit motive. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

3) Which of the following prohibits employers and unions from entering into agreements requiring union membership as a condition of employment? A) right-to-work laws B) fair labor agreements C) union shop contracts D) employment-at-will laws Answer: A Explanation: A) Right-to-work laws prohibit management and unions from entering into agreements requiring union membership as a condition of employment. These laws are state statutes or constitutional provisions that ban the practice of requiring union membership or financial support as a condition of employment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 4) Factory owners sought out the expertise of mechanical engineers to work with unions to balance the satisfaction of workers with efficiency goals. Answer: FALSE Explanation: Factory owners sought out the expertise of mechanical engineers to promote efficient production systems and productive workers. The work of these engineers defined the scientific management movement. Ultimately, scientific management practices contributed to labor cost reductions by replacing inefficient production methods with efficient production methods. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) Major reasons employees join unions include all of the following EXCEPT ________. A) dissatisfaction with management B) need for avenues of leadership C) desire for a social outlet D) pressure from managers Answer: D Explanation: D) Being unhappy with management, aspiring to a leadership role, and wanting a social outlet are main reasons that employees join unions. Managers typically do not want employees to join unions so they would not pressure them to do so. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

6) When employees become highly dissatisfied in their jobs, unions ________. A) recommend that employees who are dissatisfied express their concerns to management B) recommend that all employees express their concerns to management C) recommend that employees consider the advantages of union membership as a means of solving the sources of dissatisfaction D) recommend that dissatisfied employees inform management of their intentions to join a union Answer: C Explanation: C) Every job holds the potential for real dissatisfaction. Each individual has a boiling point that can cause him or her to consider a union as a solution to actual or perceived problems. Union organizers look for arbitrary or unfair management decisions and then emphasize the advantages of union membership as a means of solving these problems. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 7) Job security and fair compensation are common reasons that individuals join unions. Answer: TRUE Explanation: Individuals join unions for many different reasons, which tend to change over time, and may involve job, personal, social, or political considerations. Job security and compensation are two of the many common reasons for unionization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 8) Historically, young workers have been more concerned with job security than older workers. Answer: FALSE Explanation: Historically, young employees have been less concerned with job security than older workers. Young employees seem to think, "If I lose this job, I can always get another." But if they witness management consistently terminating older workers to make room for younger, lower paid employees, they may begin to think differently about job security. If the firm does not provide its employees with a sense of job security, workers may turn to a union. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

9) Discuss three factors that contribute to an employee's decision to join a union. Answer: Compensation and Employee Benefits: Employees want their compensation to be fair and equitable. Wages are important because they provide both the necessities and standard of life. If employees are dissatisfied with their wages, they may look to a union for assistance in improving their standard of living. An important psychological aspect of compensation involves the amount of pay an individual receives in relation to that of other workers performing similar work (employee equity). If an employee perceives that management has shown favoritism by paying someone else more to perform the same or a lower-level job, the employee will likely become dissatisfied. Union members know precisely the basis of their pay and how it compares with that of others. Employees who are covered under a collective bargaining agreement enjoy higher wages and are more likely to participate in a variety of employee benefit programs. Job Security: Historically, young employees have been less concerned with job security than older workers. Young employees seem to think, "If I lose this job, I can always get another." But if they witness management consistently terminating older workers to make room for younger, lower-paid employees, they may begin to think differently about job security. If the firm does not provide its employees with a sense of job security, workers may turn to a union. Attitude of Management: People like to feel that they are important. They do not like to be considered a commodity that can be bought and sold. Employees do not like to be subjected to arbitrary actions by management. In some firms, management is insensitive to the needs of its employees. In such situations, employees may perceive that they have little or no influence in job-related matters. Workers who feel that they are not really part of the organization are prime targets for unionization. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 2 10) Why do workers join unions? What is the basic structure of a union? Answer: Individuals join unions for many different reasons, which tend to change over time, and may involve job, personal, social, or political considerations. Compensation, dissatisfaction with management, leadership opportunities, and forced unionization are some of the many reasons. The labor movement has developed a multilevel organizational structure. The basic element in the structure of the American labor movement is the local union (or, the local). To the individual union member, it is the most important level in the structure of organized labor. The most powerful level in the union structure is the national union. As stated previously, most locals are affiliated with national unions. A national union is composed of local unions, which it charters. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 2, 3

11) What is the basic element in the structure of the American labor movement? A) craft union B) industrial union C) national union D) local union Answer: D Explanation: D) The basic element in the structure of the American labor movement is the local union (or, the local). There are two basic kinds of local unions: craft and industrial. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 12) What union is typically composed of members of a particular trade or skill in a specific locality? A) specialty B) craft C) trade D) industrial Answer: B Explanation: B) A craft union, such as the Carpenters and Joiners union, is typically composed of members of a particular trade or skill in a specific locality. An industrial union generally consists of all the workers in a particular plant or group of plants. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 13) The United Auto Workers is an example of which type of union? A) industrial B) craft C) local D) service Answer: A Explanation: A) An industrial union generally consists of all the workers in a particular plant or group of plants. The type of work they do and the level of skill they possess are not a condition for membership in the union. An example of an industrial union is the United Auto Workers. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 3

14) Unions consisting of all the workers in a particular plant or group of plants are ________. A) craft B) commercial C) industrial D) global Answer: C Explanation: C) An industrial union generally consists of all the workers in a particular plant or group of plants. The type of work they do and the level of skill they possess are not a condition for membership in the union. A craft union, such as the Carpenters and Joiners union, is typically composed of members of a particular trade or skill in a specific locality. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 15) The local union is primarily responsible for ________. A) actively lobbying at national and state levels B) publishing the union newspaper C) administering the collective bargaining agreement D) engaging in collective bargaining at the national level Answer: C Explanation: C) The basic element in the structure of the U.S. labor movement is the local union (or, the local). To the individual union member, the local is the most important level in the structure of organized labor. Through the local, individuals deal with the employer on a day-today basis. A local union may fill a social role in the lives of its members, sponsoring dances, festivals, and other functions. It may be the focal point of the political organization and activity of its members. The local union's functions are many and varied. Administering the collective bargaining agreement and representing workers in handling grievances are two very important activities. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 16) What is the most powerful level in the union structure? A) industrial union B) commercial union C) national union D) craft union Answer: C Explanation: C) The most powerful level in the union structure is the national union. As stated previously, most locals are affiliated with national unions. A national union is composed of local unions, which it charters. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 6 Copyright © 2016 Pearson Education, Inc.

17) Which of the following is the parent organization of local unions? A) industrial union B) commercial union C) national union D) craft union Answer: C Explanation: C) A national union is composed of local unions, which it charters. As such, it is the parent organization to local unions. A craft union is typically composed of members of a particular trade or skill in a specific locality. An industrial union generally consists of all the workers in a particular plant or group of plants. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 18) Which of the following holds membership in the national union? A) managers B) local unions C) individual workers D) craft union officers Answer: B Explanation: B) The local union, not the individual worker, holds membership in the national union. Each local union provides financial support to the national union based on its membership size. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 19) What is the largest and fastest growing national union in the United States? A) United Auto Workers B) United Steel Workers C) Service Employees International D) International Brotherhood of Teamsters Answer: C Explanation: C) The Service Employees International Union (SEIU) is the largest and fastestgrowing national union in North America, with 2.2 million members in the United States, Canada, and Puerto Rico. The International Brotherhood of Teamsters has about 1.4 million members. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

20) Which of the following is the central trade union federation in the U.S.? A) Service Employees International Union B) International Brotherhood of Teamsters C) Change to Win Coalition D) AFL-CIO Answer: D Explanation: D) The AFL-CIO is the central trade union federation in the United States. It is a loosely knit organization of national unions that has little formal power or control. The member national unions remain completely autonomous and decide their own policies and programs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 21) The AFL-CIO's major activities include all of the following EXCEPT ________. A) improving the image of organized labor B) resolving disputes between local unions C) engaging in collective bargaining D) policing internal affairs of member unions Answer: C Explanation: C) The AFL-CIO represents the interests of labor and its member national unions at the highest level. The federation does not engage in collective bargaining. However, it does focus on improving the image of organized labor and lobbying on behalf of labor interests. Also, politically educating constituencies is crucial, as is resolving disputes between national unions, and policing internal affairs of member unions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 22) Which of the following is a union federation consisting of several unions that broke from the AFL-CIO? A) United We Stand Coalition B) United Farm Workers C) International Teamsters D) Change to Win Coalition Answer: D Explanation: D) The Change to Win Coalition is a union federation consisting of unions that broke from the AFL-CIO and formally launched a rival labor federation representing 6 million workers from seven labor unions. The mission of the Change to Win Coalition is "to unite the 50 million American workers who work in industries that cannot be outsourced or shipped overseas into strong unions that can win them a place in the American middle class-where their jobs provide good wages, decent working conditions and a voice on the job." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 8 Copyright © 2016 Pearson Education, Inc.

23) The basic element in the structure of the American labor movement is the national union. Answer: FALSE Explanation: The labor movement has developed a multilevel organizational structure. This complex of organizations ranges from local unions to the two principal federations-the AFL-CIO and the Change to Win Coalition. The basic element in the structure of the American labor movement is the local union (or, the local). Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 24) Craft unions are local unions, while industrial unions are national unions. Answer: FALSE Explanation: There are two basic kinds of local unions: craft and industrial. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 25) A craft union is typically composed of members of a particular trade or skill in a specific locality who go through apprenticeship-training programs. Answer: TRUE Explanation: A craft union, such as the Carpenters and Joiners union, is typically composed of members of a particular trade or skill in a specific locality. Members usually acquire their job skills through apprenticeship-training programs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 26) A craft union generally consists of all the workers in a particular plant or group of plants. Answer: FALSE Explanation: An industrial union generally consists of all the workers in a particular plant or group of plants. A craft union, such as the Carpenters and Joiners union, is typically composed of members of a particular trade or skill in a specific locality. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

27) National unions, such as SEIU and the Teamsters, are the most powerful level in the union structure. Answer: TRUE Explanation: The most powerful level in the union structure is the national union. Most locals are affiliated with national unions. A national union is composed of local unions, which it charters. SEIU and the International Brotherhood of Teamsters are national unions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 28) Local unions are not affiliated with national unions; each works independently of the other. Answer: FALSE Explanation: The most powerful level in the union structure is the national union. Most locals are affiliated with national unions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 29) The International Brotherhood of Teamsters is the largest and fastest growing national union in North America. Answer: FALSE Explanation: The Service Employees International Union (SEIU) is the largest and fastestgrowing national union in North America, with 2.2 million members in the United States, Canada, and Puerto Rico. The International Brotherhood of Teamsters has about 1.4 million members. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 30) The Change to Win Coalition broke away from the AFL-CIO and serves as a rival organization. Answer: TRUE Explanation: The Change to Win Coalition is a union federation consisting of unions that broke from the AFL-CIO and formally launched a rival labor federation representing about 6 million workers in 2005. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

31) Right-to-work laws prohibit management and unions from entering into agreements requiring union membership as a condition of employment. Answer: TRUE Explanation: Right-to-work laws prohibit management and unions from entering into agreements requiring union membership as a condition of employment. These laws are state statutes or constitutional provisions that ban the practice of requiring union membership or financial support as a condition of employment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 32) Union's use of intimidation tactics has promoted a rise in unionization. Answer: FALSE Explanation: Over time, legislation outlawed unions' use of intimidation, after which the prevalence of unions began to decline. In decades past, unions often intimidated workers to become members even if they did not care to do so. Unions used such tactics to boost their membership, thus, their power to negotiate with employers over terms of employment. Quite simply, it is more difficult to ignore the voices of many rather than the few. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 33) What is the status of labor unions in the U.S.? Answer: In 2013, 7.2 million public-sector employees belonged to a union, compared with 7.3 million union workers in the private sector. Public-sector workers had a union membership rate of 35.3 percent-more than five times higher than that of the private-sector workers rate of 6.7 percent. Unionization has been steadily in decline for decades. Private-sector industries with high unionization rates included utilities (27.1 percent) and construction (14.0 percent), whereas low unionization rates occurred in agriculture and related industries (1.2 percent) and in financial activities (2.6 percent). Clearly, the statistics show a noteworthy decline in unionization. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 4

34) Briefly summarize the five reasons that have contributed to the trend in declining unionization. Answer: First, in decades past, unions often intimidated workers to become members even if they did not care to do so. Unions used such tactics to boost their membership, thus, their power to negotiate with employers over terms of employment. Quite simply, it is more difficult to ignore the voices of many rather than the few. Over time, legislation outlawed unions' use of intimidation, after which the prevalence of unions began to decline. Second, historically, unions provided a voice to protect the rights of disadvantaged groups, including women, older workers, and racial minorities. However, starting in the 1960s, antidiscrimination laws such as Title VII of the Civil Rights Act instituted protections. The array of legislation lessened the role of unions. Third, globalization of business is believed to have contributed substantially to the decline in unionization in a variety of ways. For example, higher quality automobile imports than U.S. automobile manufacturers required greater investments quality control and workforce flexibility, which unions tend to resist. Globalization through offshoring activities threatens unionization, which is the migration of all or a significant part of the development, maintenance, and delivery of services to a company located in another country. Fourth, large companies such as Boeing, which have highly unionized workforces, are establishing new facilities in states where unionization rates are low. Fifth, unionization is substantially higher in the public or government sector than in the private sector. Still, public sector unionization is being challenged throughout the country. Traditionally, there was much less resistance to unionize in the public sector than in the private sector. But the tide is changing. For example, Wisconsin Governor Scott Walker signed a law in 2011 that eliminated most union rights for government workers. Difficulty: Challenging Skill: Synthesis AACSB: Reflective thinking Learning Obj.: 4 35) What are right-to-work laws? How do these laws relate to union security? Answer: Right-to-work laws prohibit management and unions from entering into agreements requiring union membership as a condition of employment. These laws are state statutes or constitutional provisions that ban the practice of requiring union membership or financial support as a condition of employment. They establish the legal right of employees to decide for themselves whether or not to join or financially support a union. Twenty-three states, located primarily in the South and West, have adopted such laws, which are a continuing source of irritation between labor and management. The union shop is generally legal in the United States, except in states that have right-to-work laws. The agency shop is outlawed in most states that have right-to-work laws. Employees who are members of the union at the time the labor agreement is signed or who later voluntarily join, must continue their memberships until the termination of the agreement, as a condition of employment. This form of recognition is also prohibited in most states that have right-to-work laws. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 4, 8

36) What was one of the major outcomes of the labor strike that happened at Honda Motor Company factories in China? A) Honda awarded workers a 24 percent pay increase. B) Honda terminated the employment of those employees who chose to strike. C) Honda shut its operations in China. D) Honda granted employees extra paid time off. Answer: A Explanation: A) A succession of strikes occurred at several factories in Guangdong and China's coastal regions. The strike that received the most attention happened at Honda Motor Company factories in several Guangdong cities. Workers demanded higher wages and better working conditions. Honda gave in, providing a 24 percent pay increase, which prompted work stoppages at several other facilities. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 37) Unionized machinists who perform essential jobs at a boat manufacturing plant decide to strike for higher wages. As a result, the plant is forced to shut down until an agreement can be reached. The labor union is most likely using a strategy of ________. A) union salting B) pulling the union through C) public awareness campaigns D) strategically located union members Answer: D Explanation: D) The importance of the jobs held by union members significantly affects union power. In this case, an entire plant has to shut down when unionized machinists performing critical jobs decide to strike. Thus, a few strategically located union members have exerted a disproportionate amount of power. Union salting is the process of training union organizers to apply for jobs at a company and, once hired, working to unionize employees. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 5

38) What is a union tactic called that puts pressure on the end user of a company's product in order to have a successful organizing attempt? A) flooding the community B) pulling the union through C) political involvement D) building public awareness Answer: B Explanation: B) One union tactic that has worked effectively at times is to put pressure on the end user of a company's product in order to have a successful organizing attempt, which is a strategy known as pulling the union through. Flooding the community is the process of the union inundating communities with organizers to target a particular business in an organizing attempt. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 39) Which of the following is the political arm of the AFL-CIO? A) ACTION B) COPE C) NLRB D) PATCO Answer: B Explanation: B) The political arm of the AFL-CIO is the Committee on Political Education (COPE). Founded in 1955, its purpose is to support politicians who are friendly to the cause of organized labor. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 40) A restaurant worker labor union is training union organizers to apply for jobs at fast food restaurants in the Chicago area. Once hired, the union organizers will actively work to unionize employees at the restaurant. This strategy is best described as ________. A) broadbanding B) union salting C) flooding the community D) raising public awareness Answer: B Explanation: B) Union salting is the process of training union organizers to apply for jobs at a company and, once hired, working to unionize employees. Although traditionally used by bluecollar labor unions within the construction and building industries, it is a strategy labor unions are also using in other sectors, such as the hotel and restaurant industries. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 5 14 Copyright © 2016 Pearson Education, Inc.

41) The process of the union inundating communities with organizers to target a particular business is known as ________. A) building corporate labor campaigns B) flooding the community C) organizing funds D) union salting Answer: B Explanation: B) Flooding the community is the process of the union inundating communities with organizers to target a particular business in an organizing attempt. With their flooding campaigns, unions typically choose companies in which nonunionized employees have asked for help in organizing. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 42) As a union growth strategy, what is the term which involves labor maneuvers which do not coincide with a strike or organizing campaign to pressure an employer for better wages, benefits, and the like? A) union salting B) political involvement C) public awareness campaigns D) flooding communities with organizers Answer: C Explanation: C) Public awareness campaigns involve labor maneuvers that do not coincide with a strike or an organizing campaign to pressure an employer for better wages, benefits, and the like. Increasingly, these campaigns are used as an alternative to strikes because more employers are willing to replace their striking employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

43) What is an organizing approach used by labor where employees sign a card of support if they want unionization, and if 50 percent of the work force plus one worker sign a card, the union considers it a victory? A) union salting B) card check C) public awareness campaign D) flooding the community Answer: B Explanation: B) The card check is an organizing approach by labor in which employees sign a nonsecret card of support if they want unionization, and if 50 percent of the workforce plus one worker sign a card, the union is formed. It permits workers to decide in a nonsecret election their union status. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 44) The purpose of the Committee on Political Education (COPE) is to support politicians who favor organized labor. Answer: TRUE Explanation: The political arm of the AFL-CIO is the Committee on Political Education (COPE). Founded in 1955, its purpose is to support politicians who are friendly to the cause of organized labor. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 45) Union salting is the process of unions inundating communities with organizers to boycott a particular business. Answer: FALSE Explanation: Union salting is the process of training union organizers to apply for jobs at a company and, once hired, working to unionize employees. Although traditionally used by bluecollar labor unions within the construction and building industries, it is a strategy labor unions are also using in other sectors, such as the hotel and restaurant industries. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

46) Public awareness campaigns involve labor maneuvers that coincide with a strike to pressure an employer for better wages and benefits. Answer: FALSE Explanation: Public awareness campaigns involve labor maneuvers that do not coincide with a strike or an organizing campaign to pressure an employer for better wages, benefits, and the like. Increasingly, these campaigns are used as an alternative to strikes because more employers are willing to replace their striking employees. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 47) Public awareness campaigns by labor unions are increasingly being used in lieu of strikes. Answer: TRUE Explanation: Public awareness campaigns involve labor maneuvers that do not coincide with a strike or an organizing campaign to pressure an employer for better wages, benefits, and the like. Increasingly, these campaigns are used as an alternative to strikes because more employers are willing to replace their striking employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 48) The lowest union membership rate exists among workers between the ages of 16 and 24, which is why labor unions are attempting to recruit younger workers. Answer: TRUE Explanation: A major strategy now being pursued by union organizers is to recruit younger workers and it may be coming at the right time since the lowest union membership rate is occurring among those ages 16 to 24 (4.4 percent). Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 49) When organizing through the card check method, a collection of signed cards from 30 percent of the workforce will establish a union. Answer: FALSE Explanation: The card check is an organizing approach by labor in which employees sign a nonsecret card of support if they want unionization, and if 50 percent of the workforce plus one worker sign a card, the union is formed. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

50) Card checks are expedited ways of polling workers on union representation without initiating a secret-ballot election. Answer: TRUE Explanation: The card check is an organizing approach by labor in which employees sign a nonsecret card of support if they want unionization, and if 50 percent of the workforce plus one worker sign a card, the union is formed. It permits workers to decide in a non-secret election their union status. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 51) In how many states is it legal for an employer to agree with the union that a new employee must join the union after a certain period of time or be terminated? A) 19 B) 26 C) 44 D) 50 Answer: B Explanation: B) In the 26 states without right-to-work laws, it is legal for an employer to agree with the union that a new employee must join the union after a certain period of time (generally 30 days) or be terminated. This is referred to as a "union shop agreement." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 52) According to a "union shop agreement," management and unions cannot enter into agreements requiring union membership as a condition of employment. Answer: FALSE Explanation: In the 26 states without right-to-work laws, it is legal for an employer to agree with the union that a new employee must join the union after a certain period of time (generally 30 days) or be terminated. This is referred to as a "union-shop agreement." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

53) In the 10 states without right-to-work laws, it is legal for an employer to agree with the union that a new employee must join the union after a certain period of time or be terminated. Answer: FALSE Explanation: In the 26 states without right-to-work laws, it is legal for an employer to agree with the union that a new employee must join the union after a certain period of time (generally 30 days) or be terminated. This is referred to as a "union shop agreement." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 54) Most right-to-work states are located in the North and East. Answer: FALSE Explanation: Right-to-work laws prohibit management and unions from entering into agreements requiring union membership as a condition of employment. Twenty-three states, located primarily in the South and West, have adopted such laws, which are a continuing source of irritation between labor and management. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 55) What effect has the Taft-Hartley Act had on collective bargaining and labor negotiation? Answer: The Taft-Hartley Act made the closed shop illegal. Because of provisions in the TaftHartley Act, each union member must voluntarily sign a statement authorizing this deduction. Dues checkoff is important to the union because it eliminates much of the expense, time, and hassle of collecting dues from each member every pay period or once a month. The principal organization involved in mediation efforts, other than some state and local agencies, is the Federal Mediation and Conciliation Service (FMCS). In 1947, the Taft-Hartley Act established the FMCS as an independent agency. Either one or both parties involved in negotiations can seek the assistance of the FMCS, or the agency can offer its help if it feels that the situation warrants it. Federal law requires that the party wishing to change a contract must give notice of this intention to the other party 60 days prior to the expiration of a contract. If no agreement has been reached 30 days prior to the expiration date, the FMCS must be notified. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 6, 10

56) What is the primary law governing the relationship of companies and unions? A) National Labor Relations Act B) Norris-LaGuardia Act C) Landrum-Griffin Act D) Sherman Act Answer: A Explanation: A) The primary law governing the relationship of companies and unions is the National Labor Relations Act, as amended. Collective bargaining is one of the key parts of the Act. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 57) A group of employees recognized by an employer as appropriate for representation by a labor organization for purposes of collective bargaining is (are) called a ________. A) representative group B) bargaining unit C) closed shop D) trade union Answer: B Explanation: B) A bargaining unit consists of a group of employees, not necessarily union members, recognized by an employer or certified by an administrative agency as appropriate for representation by a labor organization for purposes of collective bargaining. A unit may cover the employees in one plant of an employer, or it may cover employees in two or more plants of the same employer. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 58) Frank and two other machinists want to form a bargaining unit at Nelson Manufacturing. What is the first step Frank and his co-workers need to take? A) collecting authorization card signatures B) campaigning for election C) petitioning for election D) becoming certified Answer: A Explanation: A) A prerequisite to becoming a recognized bargaining unit is to determine whether there is sufficient interest on the part of employees to justify the unit. Evidence of this interest is expressed when at least 30 percent of the employees in a work group sign an authorization card. After this step, there would be a petition for election. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 20 Copyright © 2016 Pearson Education, Inc.

59) An authorization card indicates that an employee wants ________. A) personal representation by a labor attorney B) additional benefits included in a contract C) exclusion from labor union bargaining terms D) union representation in collective bargaining Answer: D Explanation: D) The authorization card is a document indicating that an employee wants to be represented by a labor organization in collective bargaining. Most union organizers will not proceed unless at least 50 percent of the workers in the group sign cards. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 60) Most union organizers will NOT continue their organizing efforts unless at least ________ percent of the workers in the workgroup sign authorization cards. A) 30 B) 50 C) 70 D) 100 Answer: B Explanation: B) A prerequisite to becoming a recognized bargaining unit is to determine whether there is sufficient interest on the part of employees to justify the unit. Evidence of this interest is expressed when at least 30 percent of the employees in a work group sign an authorization card. However, most union organizers will not proceed unless at least 50 percent of the workers in the group sign cards. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 61) In conducting a legal campaign to discourage employees from voting for the union, management would most likely ________. A) tell workers the benefits of remaining union-free B) threaten workers with loss of their jobs to influence the votes C) incite racial or religious prejudice by making inflammatory campaign appeals D) make speeches to assembled employees on company time within 24 hours before an election Answer: A Explanation: A) Managers who share the benefits of remaining union-free are within their legal rights. However, threatening workers, inciting racial prejudice, or making speeches during business hours would be interfering with employees' freedom of choice, and such actions could make election results invalid. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 21 Copyright © 2016 Pearson Education, Inc.

62) Which of the following is LEAST likely to lead to the NLRB declaring an election campaign invalid? A) A union threatens loss of jobs or benefits to influence employees' votes or union activities. B) An employer misstates campaign facts when the other party does not have a chance to reply. C) A union incites religious prejudice with inflammatory campaign appeals. D) An employer discusses with workers the negative aspects of unionization. Answer: D Explanation: D) Managers who share the benefits of remaining union-free are within their legal rights. Threatening workers, misstating facts without giving the other side a chance to respond, and inciting religious prejudice would be interfering with employees' freedom of choice, and such actions could make election results invalid. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 7 63) Which of the following is NOT one of the four major bargaining structures? A) one company dealing with a single union B) several companies dealing with a single union C) several unions dealing with a single company D) one bargaining unit dealing with several unions Answer: D Explanation: D) The bargaining structure can affect the conduct of collective bargaining. The four major structures are: one company dealing with a single union, several companies dealing with a single union, several unions dealing with a single company, and several companies dealing with several unions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 64) Most contract bargaining is carried out under what type of structure? A) one company dealing with a single union B) several companies dealing with a single union C) several unions dealing with a single company D) several companies dealing with several unions Answer: A Explanation: A) The four major structures are: one company dealing with a single union, several companies dealing with a single union, several unions dealing with a single company, and several companies dealing with several unions. Most contract bargaining occurs between one company and a single union. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

65) A bargaining unit consists of a group of union employees who have been recognized by an employer as appropriate representatives to participate in the arbitration of a labor agreement. Answer: FALSE Explanation: A bargaining unit consists of a group of employees, not necessarily union members, recognized by an employer or certified by an administrative agency as appropriate for representation by a labor organization for purposes of collective bargaining. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 66) Evidence of interest in becoming a bargaining unit is expressed when at least 10 percent of the employees in a workgroup sign an authorization card. Answer: FALSE Explanation: A prerequisite to becoming a recognized bargaining unit is to determine whether there is sufficient interest on the part of employees to justify the unit. Evidence of this interest is expressed when at least 30 percent of the employees in a work group sign an authorization card. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 67) The authorization card is a document indicating that an employee wants to be represented by a labor organization in collective bargaining. Answer: TRUE Explanation: The authorization card is a document indicating that an employee wants to be represented by a labor organization in collective bargaining. Most union organizers will not proceed unless at least 50 percent of the workers in the group sign cards. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 68) Most union organizers will not proceed unless at least 50 percent of the workers in the group sign authorization cards. Answer: TRUE Explanation: A prerequisite to becoming a recognized bargaining unit is to determine whether there is sufficient interest on the part of employees to justify the unit. Evidence of this interest is expressed when at least 30 percent of the employees in a work group sign an authorization card. However, most union organizers will not proceed unless at least 50 percent of the workers in the group sign cards. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

69) In a brief essay, discuss the concepts of a bargaining unit and decertification. Answer: A bargaining unit consists of a group of employees, not necessarily union members, recognized by an employer or certified by an administrative agency as appropriate for representation by a labor organization for purposes of collective bargaining. A unit may cover the employees in one plant of an employer, or it may cover employees in two or more plants of the same employer. Until 1947, once a union was certified, it was certified forever. However, the Taft-Hartley Act made it possible for employees to decertify a union. Decertification is the reverse of the process that employees must follow to be recognized as an official bargaining unit. It results in a union losing its right to act as the exclusive bargaining representative of a group of employees. As union membership has declined, the need for decertification elections has also diminished. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 7, 12 70) Which of the following is the most fundamental to union and management relations in the United States? A) minimum wage B) legislative rulings C) controlling political party D) collective bargaining process Answer: D Explanation: D) The collective bargaining process is fundamental to union and management relations in the United States. Wage rates, legislative rulings, and the majority political party are less relevant. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 71) What is the duration of a typical labor/management agreement? A) one year B) two years C) three years D) four years Answer: C Explanation: C) Complex issues face labor and management today; therefore, negotiating teams must carefully prepare for the bargaining sessions. Because the length of a typical labor agreement is three years, negotiators should develop a contract that is successful both now and in the future. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

72) What is the first step in the collective bargaining process? A) ratifying an agreement B) preparing for negotiations C) negotiating an agreement D) choosing a bargaining unit Answer: B Explanation: B) The first step in the collective bargaining process is preparing for negotiations by determining the issues to be negotiated. The next steps include negotiating the agreement, overcoming any breakdowns, and ratifying an agreement. The bargaining unit would have been determined prior to collective bargaining. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 73) A machinists union and an employer are involved in collective bargaining. The bargaining issues have already been determined. What is the most likely next step in the process? A) ratifying an agreement B) preparing for negotiations C) negotiating an agreement D) overcoming breakdowns Answer: C Explanation: C) The first step in the collective bargaining process is preparing for negotiations by determining the issues to be negotiated. The next step is to negotiate an agreement, which is followed by overcoming any breakdowns and ratifying an agreement. Difficulty: Easy Skill: Concept AACSB: Application of knowledge Learning Obj.: 8 74) Before negotiating an agreement, it is most important that both negotiators understand which of the following? A) recruitment techniques of the firm B) structure and context of the organization C) requirements of each position at the firm D) organizational hierarchy at the company Answer: B Explanation: B) Prior to meeting at the bargaining table, the negotiators should thoroughly know the culture, climate, history, present economic state, and wage and benefits structure of both the organization and similar organizations. Recruiting, job requirements, and organizational hierarchy are less relevant in the negotiation process. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

75) Bargaining issues can be divided into three categories. Which of the following is NOT one of those categories? A) mandatory B) concession C) permissive D) prohibited Answer: B Explanation: B) Bargaining issues can be divided into three categories: mandatory, permissive, and prohibited. Concession is not one of the categories. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 76) Mandatory bargaining issues are those which ________. A) fall within the definition of wages, hours, and other terms and conditions of employment B) may be raised, but neither side may insist that they bargained over C) are outlawed, such as the closed shop D) involve company goals and strategies Answer: A Explanation: A) Mandatory bargaining issues fall within the definition of wages, hours, and other terms and conditions of employment. Permissive bargaining issues may be raised, but neither side may insist that they be bargained over. Prohibited bargaining issues, such as the issue of the closed shop, are statutorily outlawed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 77) What type of bargaining issues may be raised, but neither side may insist that the issues be bargained over? A) prohibited B) arbitrary C) mandatory D) permissive Answer: D Explanation: D) Permissive bargaining issues may be raised, but neither side may insist that they be bargained over. Prohibited bargaining issues, such as the issue of the closed shop, are statutorily outlawed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

78) A firm's refusal to bargain on which of the following issues would most likely result in a charge of unfair labor practices? A) hourly wages B) child care benefits C) retiree health benefits D) job recruiting techniques Answer: A Explanation: A) Mandatory bargaining issues fall within the definition of wages, hours, and other terms and conditions of employment, and a refusal to bargain in these areas is grounds for an unfair labor practice charge. Child care benefits, retiree health benefits, and recruiting methods are permissive bargaining issues that can be raised but do not have to be bargained over. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 8 79) Tom works at a company that has a closed shop arrangement. In which industry does Tom most likely work? A) steel B) aerospace C) construction D) mining Answer: C Explanation: C) The Taft-Hartley Act made the closed shop illegal. However, the Act was modified 12 years later by the Landrum-Griffin Act to permit a closed shop in the construction industry. This is the only exception allowed. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 8 80) Which of the following made the closed shop illegal? A) Norris-LaGuardia Act B) Wagner Act C) Sherman Act D) Taft-Hartley Act Answer: D Explanation: D) The Taft-Hartley Act made the closed shop illegal. However, the Act was modified 12 years later by the Landrum-Griffin Act to permit a closed shop in the construction industry. This is the only exception allowed. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

81) Which of the following acts permitted a closed shop in the construction industry? A) National Labor Relations Act B) Norris-LaGuardia Act C) Landrum-Griffin Act D) Taft-Hartley Act Answer: C Explanation: C) The Taft-Hartley Act made the closed shop illegal. However, the Act was modified 12 years later by the Landrum-Griffin Act to permit a closed shop in the construction industry. This is the only exception allowed. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 82) Which section of the labor agreement usually appears at the beginning? A) compensation B) recognition C) management rights D) union security Answer: B Explanation: B) The recognition section usually appears at the beginning of the labor agreement. Its purpose is to identify the union that is recognized as the bargaining representative and to describe the bargaining unit-that is, the employees for whom the union speaks. Compensation, management rights, and union security are addressed later in the labor agreement. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 83) Which section of the labor agreement identifies the union that is recognized as the bargaining representative and describes the bargaining unit? A) grievance procedure B) union security C) compensation D) recognition Answer: D Explanation: D) The recognition section usually appears at the beginning of the labor agreement. Its purpose is to identify the union that is recognized as the bargaining representative and to describe the bargaining unit-that is, the employees for whom the union speaks. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

84) Which of the following is LEAST likely to appear in a management rights section of a labor agreement? A) power to discipline for cause B) freedom to select company objectives C) power to determine union security D) freedom to determine how to use the firm's material assets Answer: C Explanation: C) When included, management rights generally involve three areas: 1. Freedom to select the business objectives of the company. 2. Freedom to determine the uses to which the material assets of the enterprise will be devoted. 3. Power to take disciplinary action for cause. Union security would not be addressed in the management rights section. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 85) Which of the following is usually one of the first items negotiated in a collective bargaining agreement? A) management rights B) recognition C) union security D) compensation Answer: C Explanation: C) Union security is typically one of the first items negotiated in a collective bargaining agreement. The objective of union security provisions is to ensure that the union continues to exist and perform its functions. A strong union security provision makes it easier for the union to enroll and retain members. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 86) What is the main purpose of union security provisions in a collective bargaining agreement? A) addressing compensation issues that are usually problematic B) ensuring that the union continues to perform its functions C) identifying the union's bargaining representatives D) establishing management's rights in negotiations Answer: B Explanation: B) Union security is typically one of the first items negotiated in a collective bargaining agreement. The objective of union security provisions is to ensure that the union continues to exist and perform its functions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

87) At Benson Enterprises, union membership is a prerequisite for employment. Which type of union security is most likely in place at Benson Enterprises? A) closed shop B) agency shop C) union shop D) open shop Answer: A Explanation: A) A closed shop is an arrangement whereby union membership is a prerequisite for employment. A union shop arrangement requires that all employees become members of the union after a specified period of employment. Difficulty: Easy Skill: Concept AACSB: Application of knowledge Learning Obj.: 8 88) At Coffman Manufacturing, all employees are required to become members of the union after 60 days of employment. Which type of union security most likely exists at Coffman Manufacturing? A) closed shop B) union shop C) agency shop D) open shop Answer: B Explanation: B) A union shop arrangement requires that all employees become members of the union after a specified period of employment. A closed shop is an arrangement whereby union membership is a prerequisite for employment. Difficulty: Easy Skill: Concept AACSB: Application of knowledge Learning Obj.: 8

89) At H&R Enterprises, employees are not required to join the union. However, nonunion members of the bargaining unit must pay a service charge to the union. Which type of union security is most likely in place at H&R Enterprises? A) union shop B) agency shop C) closed shop D) open shop Answer: B Explanation: B) An agency shop provision does not require employees to join the union; however, the labor agreement requires that, as a condition of employment, each nonunion member of the bargaining unit pay the union the equivalent of membership dues as a kind of tax, or service charge, in return for the union acting as the bargaining agent. A union shop arrangement requires that all employees become members of the union after a specified period of employment. Difficulty: Easy Skill: Concept AACSB: Application of knowledge Learning Obj.: 8 90) Joe and Pete have both been employed as electricians at Top Notch Manufacturing for two years. Joe belongs to a union and pays dues. Pete neither belongs to a union nor pays union dues. Which of the following most likely describes the union arrangement at Top Notch Manufacturing? A) closed shop B) agency shop C) open shop D) union shop Answer: C Explanation: C) Under the open shop arrangement, no employee is required to join or contribute to the union financially. A union shop arrangement requires that all employees become members of the union after a specified period of employment. Difficulty: Easy Skill: Concept AACSB: Application of knowledge Learning Obj.: 8

91) Under which of the following arrangements is an employee not required to join or financially contribute to a union? A) closed shop B) agency shop C) union shop D) open shop Answer: D Explanation: D) An open shop describes the absence of union security, rather than its presence. The open shop, strictly defined, is employment on equal terms to union members and nonmembers alike. Under this arrangement, no employee is required to join or contribute to the union financially. The other forms of security require workers to either join the union or pay dues to the union. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 92) In which section of the labor agreement would a checkoff of dues provision be included? A) recognition B) union security C) employee security D) management rights Answer: B Explanation: B) Dues checkoff is a type of union security. Under the checkoff of dues provision, the company agrees to withhold union dues from members' paychecks and to forward the money directly to the union. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 93) When the dues checkoff is in effect, management agrees to ________. A) pay dues for members who cannot afford them B) send a portion of members' dues to charities C) forward members' dues to the union D) audit union members' dues Answer: C Explanation: C) Under the checkoff of dues provision, the company agrees to withhold union dues from members' paychecks and to forward the money directly to the union. Dues checkoff is important to the union because it eliminates much of the expense, time, and hassle of collecting dues from each member every pay period or once a month. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

94) Davis Manufacturing deducts union dues from members' paychecks and forwards the money to the union. Which of the following is most likely included in the labor agreement? A) maintenance of membership B) permissive bargaining C) collective bargaining D) dues checkoff Answer: D Explanation: D) Under the checkoff of dues provision, the company agrees to withhold union dues from members' paychecks and to forward the money directly to the union. Dues checkoff is important to the union because it eliminates much of the expense, time, and hassle of collecting dues from each member every pay period or once a month. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 8 95) Which law requires each union member to voluntarily sign a statement authorizing a deduction when the dues checkoff is used? A) Landrum-Griffin Act B) Norris-LaGuardia Act C) Taft-Hartley Act D) Sherman Act Answer: C Explanation: C) Under the checkoff of dues provision, the company agrees to withhold union dues from members' paychecks and to forward the money directly to the union. Because of provisions in the Taft-Hartley Act, each union member must voluntarily sign a statement authorizing this deduction. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 96) An escalator clause in a labor agreement ________. A) guarantees annual wage increases B) widens the scope of the contract C) compensates for cost of living increases D) protects management's authority Answer: C Explanation: C) The base rates to be paid each year of the contract for each job are included in the compensation section of the labor agreement. At times, unions are able to obtain a cost-ofliving allowance (COLA), or escalator clause, in the contract in order to protect the purchasing power of employees' earnings. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 33 Copyright © 2016 Pearson Education, Inc.

97) Which of the following is NOT likely to be included in the compensation section of a labor agreement? A) vacation B) premium pay C) family care D) dues checkoff Answer: D Explanation: D) Dues checkoff is included in the union security section of a labor agreement. Vacation, premium pay, and family care are elements of the compensation section. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 98) The amount of vacation an employee may take is usually stated in the ________ section of the labor agreement. A) union security B) compensation C) employee security D) recognition Answer: B Explanation: B) Vacation, premium pay, and family care are elements of the compensation section. The employee security section of the labor agreement establishes the procedures that cover job security for individual employees. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 99) A formal, systematic process that permits employees to express complaints without jeopardizing their jobs is known as a(n) ________. A) grievance procedure B) union security C) employee security D) management Answer: A Explanation: A) A grievance can be broadly defined as an employee's dissatisfaction or feeling of personal injustice relating to his or her employment. A grievance procedure is a formal, systematic process that permits employees to express complaints without jeopardizing their jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

100) Which term refers to an employee's dissatisfaction or feeling of personal injustice relating to his or her employment? A) arbitration B) ratification C) severance D) grievance Answer: D Explanation: D) A grievance can be broadly defined as an employee's dissatisfaction or feeling of personal injustice relating to his or her employment. A grievance procedure is a formal, systematic process that permits employees to express complaints without jeopardizing their jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 101) Which section of the labor agreement contains seniority provisions? A) grievance procedure B) union security C) employee security D) management rights Answer: C Explanation: C) This section of the labor agreement establishes the procedures that cover job security for individual employees. Seniority is a key topic related to employee security. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 102) Seniority may be granted to employees on the basis of all of the following EXCEPT ________. A) department B) division C) job D) age Answer: D Explanation: D) Seniority is the length of time an employee has been associated with the company, division, department, or job. Seniority may be determined company-wide, by division, by department, or by job. It would be illegal to use age as the basis for promotions or lay-off decisions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

103) In labor agreements, seniority is an important issue because it ________. A) addresses family and child-care problems B) establishes the process for filing grievances C) provides the basis of promotion decisions D) determines the need for retirement plans Answer: C Explanation: C) Agreement on seniority is important because the person with the most seniority, as defined in the labor agreement, is typically the last to be laid off and the first to be recalled. The seniority system also provides a basis for promotion decisions. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 104) An agency shop arrangement requires that all employees become members of the union after a specified period of employment. Answer: FALSE Explanation: An agency shop provision does not require employees to join the union; however, the labor agreement requires that, as a condition of employment, each nonunion member of the bargaining unit pay the union the equivalent of membership dues as a kind of tax, or service charge, in return for the union acting as the bargaining agent. A union shop arrangement requires that all employees become members of the union after a specified period of employment (the legal minimum is 30 days) or after a union shop provision has been negotiated. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 105) Under the checkoff of dues provision, the company agrees to withhold union dues from members' paychecks and to forward the money directly to the union. Answer: TRUE Explanation: Under the checkoff of dues provision, the company agrees to withhold union dues from members' paychecks and to forward the money directly to the union. Because of provisions in the Taft-Hartley Act, each union member must voluntarily sign a statement authorizing this deduction. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

106) What is collective bargaining? What is involved in the collective bargaining process? Answer: Collective bargaining is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party; such obligation does not compel either party to agree to a proposal or require the making of a concession. The first step in the collective bargaining process is preparing for negotiations. This step is often extensive and ongoing for both union and management. After the issues to be negotiated have been determined, the two sides confer to reach a mutually acceptable contract. Although breakdowns in negotiations can occur, both labor and management have at their disposal tools and arguments that can be used to convince the other side to accept their views. Eventually, however, management and the union usually reach an agreement that defines the rules for the duration of the contract. The next step is for the union membership to ratify the agreement. There is a feedback loop from "Administration of the Agreement" to "Preparing for Negotiation." Collective bargaining is a continuous and dynamic process, and preparing for the next round of negotiations often begins the moment a contract is ratified. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 107) During negotiation preparations, which of the following is typically the best choice for gathering information regarding union members' attitudes? A) executives B) union stewards C) business managers D) local union presidents Answer: B Explanation: B) The union must continuously gather information regarding membership needs to isolate areas of dissatisfaction. The union steward is normally in the best position to collect such data because they are usually elected by their peers. The union steward constantly funnels information up through the union's chain of command, where the data are compiled and analyzed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

108) Martin Engineering is a large corporation that is preparing for collective bargaining negotiations with the machinists' union. Which of the following is LEAST likely to be on the bargaining team for Martin Engineering? A) HR manager B) production manager C) union officer D) labor attorney Answer: C Explanation: C) The makeup of the management team usually depends on the type of organization and its size, and with larger firms, HR managers, managers of principal operating divisions, and labor attorneys will most likely participate. Union officers would be on the other side of the table. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 109) At the local level, the bargaining committee will normally include ________. A) elected rank-and-file members B) industrial relations representatives C) stewards from the national union D) AFL-CIO representatives Answer: A Explanation: A) The responsibility for conducting negotiations for the union is usually entrusted to union officers. At the local level, rank-and-file members who are elected specifically for this purpose will normally supplement the bargaining committee. It is less likely that national level union stewards and AFL-CIO representatives would be on the bargaining committee. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 110) Where do the two negotiating teams usually meet? A) company premises B) local union hall C) neutral location D) federal courtroom Answer: C Explanation: C) The two negotiating teams usually meet at an agreed-on neutral site, such as a hotel. Meeting at the company or at a union hall would probably not lead to acceptable results. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

111) Which of the following is typically LEAST useful during the negotiating phase of collective bargaining? A) give-and-take attitude B) neutral meeting location C) clear communication D) media involvement Answer: D Explanation: D) The term negotiating suggests a certain amount of give-and-take, the purpose of which is to lower the other side's expectations. Negotiations should be conducted in the privacy of a neutral location, not in the news media. It is equally important for union and management negotiators to strive to develop and maintain clear and open lines of communication. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 112) During the first round of negotiations with Olsen Automotive, the machinists union demands that management raise the wages of all employees by 15%. The union does not expect management to agree to this demand initially. Which term best describes the demand made by the union? A) beachhead B) arbitrary C) secondary D) tactical Answer: A Explanation: A) Demands for benefits that the union does not expect to receive when they are first made are known as beachhead demands. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 113) Neither the union nor management cares whether the other side loses face during the negotiation process. Answer: FALSE Explanation: Even though one party in the negotiating process may appear to possess the greater power, negotiators often take care to keep the other side from losing face. They recognize that the balance of power may switch rapidly. By the time the next round of negotiations occurs, the pendulum may be swinging back in favor of the other side. Even when management appears to have the upper hand, it may make minor concessions that will allow the labor leader to claim gains for the union. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 114) When preparing for negotiations, the union relies on the union steward to provide 39 Copyright © 2016 Pearson Education, Inc.

information about members' attitudes. Answer: TRUE Explanation: The union steward is normally in the best position to collect such data. Because they are usually elected by their peers, stewards should be well informed regarding union members' attitudes. The union steward constantly funnels information up through the union's chain of command, where the data are compiled and analyzed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 115) Beachhead demands are ones that the union anticipates receiving from management during initial negotiations. Answer: FALSE Explanation: Each side usually does not expect to obtain all the demands presented in its first proposal. Labor can lose a demand and continue to bring it up in the future. Demands for benefits that the union does not expect to receive when they are first made are known as beachhead demands. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 116) What is the process called when a neutral third party enters and attempts to resolve a labor dispute when a bargaining impasse has occurred? A) delegation B) interest arbitration C) mediation D) rights arbitration Answer: C Explanation: C) In mediation, a neutral third party enters the negotiations and attempts to facilitate a resolution to a labor dispute when a bargaining impasse has occurred. In arbitration, a dispute is submitted to an impartial third party for a binding decision; an arbitrator basically acts as a judge and jury. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

117) Which law established the Federal Mediation and Conciliation Service (FMCS)? A) Taft-Hartley Act B) Davis-Bacon Act C) Landrum-Griffin Act D) Norris-LaGuardia Act Answer: A Explanation: A) The principal organization involved in mediation efforts, other than some state and local agencies, is the Federal Mediation and Conciliation Service (FMCS). In 1947, the TaftHartley Act established the FMCS as an independent agency. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 118) Carlson Machines and the local labor union have a contract dispute over wages. The two sides have agreed to submit the dispute to an impartial third party for a binding decision. Which of the following will most likely serve as the judge and jury in this situation? A) arbitrator B) mediator C) HR manager D) union steward Answer: A Explanation: A) In arbitration, a dispute is submitted to an impartial third party for a binding decision; an arbitrator basically acts as a judge and jury. A mediator has no power to force a settlement but can help in the search for solutions, make recommendations, and work to open blocked channels of communication. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 119) The unionized machinists at Larson Aeronautics have refused to work and have halted production as a result of a breakdown in negotiations. Which of the following terms best describes the actions of the machinists? A) boycott B) strike C) beachhead D) lockout Answer: B Explanation: B) When union members refuse to work in order to exert pressure on management in negotiations, their action is referred to as a strike. A boycott involves an agreement by union members to refuse to use or buy the firm's products. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 41 Copyright © 2016 Pearson Education, Inc.

120) Ben is a member of the electricians' union, which is currently striking against Rawlings Manufacturing. However, Ben does not support the strike and does not want to participate, so he is continuing to work at Rawlings. As a result, Ben could be fined as high as ________ percent of his wages. A) 25 B) 50 C) 75 D) 100 Answer: D Explanation: D) Virtually every national union's constitution contains a clause requiring the members to support and participate in a strike if one is called. If a union member fails to comply with this requirement, he or she can be fined as high as 100 percent of wages for as long as union pickets remain. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 121) A boycott involves an agreement by union members to ________. A) stay off the job indefinitely B) refuse to use or buy the firm's products C) refuse to use or buy competing firms' products D) persuade third parties to refuse to use or buy the firm's products Answer: B Explanation: B) A boycott involves an agreement by union members to refuse to use or buy the firm's products. The practice of a union attempting to encourage third parties (such as suppliers and customers) to stop doing business with the company is known as a secondary boycott. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 122) Boycotts are especially effective when the firm has ________. A) low inventory B) high inventory C) low brand recognition D) high brand recognition Answer: D Explanation: D) A boycott exerts economic pressure on management, and the effect often lasts much longer than that of a strike. This approach is especially effective when the products are sold at retail outlets and are easily identifiable by brand name. Inventory is less relevant. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

123) During negotiation breakdowns between the steelworkers' union and Capital Aeronautics, the union encouraged suppliers and customers to stop doing business with the firm. Which type of strategy was the union most likely implementing? A) strike B) boycott C) lockout D) secondary boycott Answer: D Explanation: D) The practice of a union attempting to encourage third parties (such as suppliers and customers) to stop doing business with the company is known as a secondary boycott. A boycott involves an agreement by union members to refuse to use or buy the firm's products. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 124) Peterson Manufacturing and the local steelworkers' union are having a negotiation breakdown. Peterson's management is keeping employees out of the workplace and running the operation with temporary replacements. Which type of strategy is most likely being used to overcome the negotiation breakdown? A) boycott B) lockout C) layoff D) strike Answer: B Explanation: B) In a lockout, management keeps employees out of the workplace and runs the operation with management personnel and/or replacements. A boycott involves an agreement by union members to refuse to use or buy the firm's products. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10

125) A lockout is particularly effective in all of the following cases EXCEPT when the ________. A) union is weak B) union treasury is low C) business relies on global sales D) business has excessive inventories Answer: C Explanation: C) A lockout is particularly effective when management is dealing with a weak union, when the union treasury is depleted, and when the business has excessive inventories. The lockout is also used to inform the union that management is serious regarding certain bargaining issues. Global sales are less relevant. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 126) Continuation of plant operations during a strike using management and nonunion personnel is most effective when the ________. A) union is boycotting and picketing B) union is not attempting a boycott C) business is a federal contractor D) business is not labor intensive Answer: D Explanation: D) The type of industry involved has considerable effect on the impact of continuing plant operations with nonunion personnel. If the firm is not labor-intensive and if maintenance demands are not high this practice may be quite effective. Whether or not the union is boycotting and striking is less relevant. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 127) In mediation, a dispute is submitted to an impartial third party for a binding decision from a mediator who serves as a formal judge. Answer: FALSE Explanation: In mediation, a neutral third party enters the negotiations and attempts to facilitate a resolution to a labor dispute when a bargaining impasse has occurred. A mediator basically acts like a facilitator. In arbitration, a dispute is submitted to an impartial third party for a binding decision; an arbitrator basically acts as a judge and jury. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

128) Interest arbitration is commonly used in the private sector to settle wage disputes between employers and unions. Answer: FALSE Explanation: Interest arbitration involves disputes over the terms of proposed collective bargaining agreements. In the private sector, the use of interest arbitration as an alternative for impasse resolution has not been a common practice. Unions and employers rarely agree to submit the basic terms of a contract (such as wages, hours, and working conditions) to a neutral party for disposition. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 129) The most effective time to implement a strike is when demand for an employer's product is expanding. Answer: TRUE Explanation: The timing of a strike is important in determining its effectiveness. An excellent time is when business is thriving and the demand for the firm's goods or services is expanding. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 130) A lockout is an effective union strategy, especially when a business has low inventory. Answer: FALSE Explanation: In a lockout, management keeps employees out of the workplace and runs the operation with management personnel and/or replacements. A lockout is a management strategy for dealing with unions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

131) What types of third-party interventions are available when negotiations between unions and employers break down? Answer: At times negotiations break down, even though both labor and management may sincerely want to arrive at an equitable contract settlement. Several means of removing roadblocks may be used in order to get negotiations moving again. In mediation, a neutral third party enters the negotiations and attempts to facilitate a resolution to a labor dispute when a bargaining impasse has occurred. A mediator basically acts like a facilitator. The objective of mediation is to persuade the parties to resume negotiations and reach a settlement. In arbitration, a dispute is submitted to an impartial third party for a binding decision; an arbitrator basically acts as a judge and jury. There are two principal types of union management disputes: rights disputes and interest disputes. Disputes over the interpretation and application of the various provisions of an existing contract are submitted to rights arbitration. The other type of arbitration, interest arbitration, involves disputes over the terms of proposed collective bargaining agreements. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 10 132) What is a lockout? How is a lockout used in labor negotiations? Answer: There are times when management believes that it must exert extreme pressure to get the union to back away from a demand. The lockout and operating of the firm by placing management and nonunion workers in the striking workers' jobs are the primary means that management may use to overcome breakdowns in negotiations. Management may use the lockout to encourage unions to come back to the bargaining table. In a lockout, management keeps employees out of the workplace and runs the operation with management personnel and/or replacements. Unable to work, the employees do not get paid; the fear of a lockout may bring labor back to the bargaining table. A lockout is particularly effective when management is dealing with a weak union, when the union treasury is depleted, or when the business has excessive inventories. The lockout is also used to inform the union that management is serious regarding certain bargaining issues. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 10

133) Which of the following is the final product of the collective bargaining process? A) employment contract B) labor agreement C) mediation contract D) arbitration guidelines Answer: B Explanation: B) The document that emerges from the collective bargaining process is known as a "labor agreement" or "contract." It regulates the relationship between employer and employees for a specified period of time. It is still an essential but difficult task because each agreement is unique, and there is no standard or universal model. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 134) What document regulates the relationship between employer and employees for a specified period of time? A) labor agreement B) employment contract C) mediation guidelines D) arbitration agreement Answer: A Explanation: A) The document that emerges from the collective bargaining process is known as a "labor agreement" or "contract." It regulates the relationship between employer and employees for a specified period of time. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 135) If union members should reject the proposed labor agreement, ________. A) the labor contract is void B) the union's status is in jeopardy C) it is a clear sign of management victory D) a new round of negotiations must begin Answer: D Explanation: D) Until a majority of members voting in a ratification election approve it, the proposed agreement is not final. At times, union members reject the proposal and a new round of negotiations must begin. Many of these rejections might not occur if union negotiators were better informed about members' desires. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

136) Public sector workers had a union membership rate of ________, while private sector workers had a union membership rate of ________. A) 35.3 percent; 6.7 percent B) 15 percent; 10 percent C) 10 percent; 25 percent D) 5 percent; 20 percent Answer: A Explanation: A) The latest figures from the Labor Department's Bureau of Labor Statistics showed that the percentage of wage and salary workers who were members of a union was 11.3 percent. The number of wage and salary workers belonging to unions is at approximately 14.5 million. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers. The unionization rate and the number of employees who are protected by unions is declining steadily. In 2013, 7.2 million public-sector employees belonged to a union, compared with 7.3 million union workers in the private sector. Public-sector workers had a union membership rate of 35.3 percent-more than five times higher than that of the private-sector workers rate of 6.7 percent. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 137) HR managers typically play important roles in daily administration of a labor contract by resolving grievances and providing advice on disciplinary issues. Answer: TRUE Explanation: The human resource manager or industrial relations manager plays a key role in the day-to-day administration of the contract. He or she gives advice on matters of discipline, works to resolve grievances, and helps first-line supervisors establish good working relationships within the terms of the agreement. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

138) Todd, a manager at Dexter Manufacturing, has received a grievance filed by a group of his subordinates who are union members. Which of the following most likely indicates that filing a grievance is appropriate in this situation? A) Dexter has recently downsized its workforce and outsourced many jobs overseas to save money. B) The employees assert that Dexter failed to provide them with adequate personal protection equipment. C) Each of the Dexter employees has recently received a warning for participating in unsafe acts while on the job. D) The employees argue that the local union should not have used an arbitrator during contract negotiations with Dexter. Answer: B Explanation: B) A grievance procedure is a formal, systematic process that permits employees to express complaints without jeopardizing their jobs. A grievance procedure is usually restricted to violations of the terms and conditions of the labor agreement. There are other conditions that may give rise to a grievance, including violations of health and safety standards, such as failing to provide adequate PPE. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 12 139) Todd, a manager at Dexter Manufacturing, has received a grievance filed by a group of his subordinates who are union members. Which of the following most likely indicates that a multistep grievance procedure has been initiated appropriately? A) The employees collect petition signatures and present the document to Todd. B) The employees contact the labor union arbitrator, who then sends an e-mail to Todd. C) The employees send a memo to the union steward, Todd, and vice president of Dexter. D) The employees orally present the grievance in the presence of Todd and the union steward. Answer: D Explanation: D) The multistep grievance procedure is the most common way to handle grievances. In the first step, the employee usually presents the grievance orally and informally to the immediate supervisor in the presence of the union steward. This step offers the greatest potential for improved labor relations, and a large majority of grievances are settled here. Arbitrators and top executives would not likely become involved in the first step of the process. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 12

140) Todd, a manager at Dexter Manufacturing, received a grievance filed by a group of his subordinates who are union members. Which of the following most likely indicates that the grievance could NOT be settled informally? A) A signed copy of the grievance is discussed during a meeting between the HR manager and union officials. B) The employees and their union steward discuss the grievance with Todd in his office. C) Todd gathers his subordinates for an open discussion about their concerns. D) The employees decide to withdraw their grievance. Answer: A Explanation: A) In the first step of the multistep grievance procedure, the employee usually presents the grievance orally and informally to the immediate supervisor in the presence of the union steward. If Todd, the union steward, and the employees were able to work the problem out at this point, then the grievance would be resolved informally. If the grievance remains unresolved, the next step involves a meeting between the plant manager or human resource manager and higher union officials. Prior to this meeting, the grievance is written out, dated, and signed by the employee and the union steward. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 12 141) Todd, a manager at Dexter Manufacturing, received a grievance filed by a group of his subordinates who are union members. Unable to settle the grievance, both sides agree to enter into arbitration. Which of the following questions is LEAST relevant for the arbitrator to ask when establishing the fairness of management's actions? A) What is the past record of the grievants? B) Has there been lax enforcement of the rule? C) What are the right-to-work guidelines involved? D) Were the grievants knowledgeable about the rules? Answer: C Explanation: C) When evaluating the fairness of management actions, an arbitrator will most likely assess the record of the grievants, rule enforcement, and the grievants' knowledge. Rightto-work is not an issue that is relevant in this situation. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 12

142) Which of the following made it possible to decertify a union? A) Taft-Hartley Act B) Norris-LaGuardia Act C) Landrum-Griffin Act D) Executive Order 10988 Answer: A Explanation: A) Until 1947, once a union was certified, it was certified forever. However, the Taft-Hartley Act made it possible for employees to decertify a union. Decertification is the reverse of the process that employees must follow to be recognized as an official bargaining unit. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 143) When a union loses its right to act as the exclusive bargaining representative of a group of employees, the process is referred to as ________. A) decertification B) deauthorization C) interest arbitration D) rights arbitration Answer: A Explanation: A) Decertification is the reverse of the process that employees must follow to be recognized as an official bargaining unit. It results in a union losing its right to act as the exclusive bargaining representative of a group of employees. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 144) Which of the following is a requirement for filing a decertification petition? A) At least 50% of the bargaining unit members must petition for an election. B) Signatures on the petition must be publicized to ensure authenticity. C) The petition must be submitted 60 to 90 days before the current contract expires. D) Union members must submit their dues on or before the date of the contract's renewal. Answer: C Explanation: C) The rules established by the NLRB spell out the conditions for filing a decertification petition. At least 30 percent of the bargaining unit members must petition for an election. Petitioners' names are supposed to remain confidential. The petition must be submitted between 60 and 90 days prior to the expiration of the current contract. When all these conditions have been met, the NLRB regional director will schedule a decertification election by secret ballot. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

145) The Federal Mediation and Conciliation Services established the process for union decertification. Answer: FALSE Explanation: The rules established by the NLRB spell out the conditions for filing a decertification petition; it is essentially the reverse of obtaining union recognition. At least 30 percent of the bargaining unit members must petition for an election. As might be expected, this task by itself may be difficult because union supporters are likely to strongly oppose the move. Few employees know about decertification and fewer still know how to start the process. Also, although the petitioners' names are supposed to remain confidential, many union members are fearful that their signatures on the petition will be discovered. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 146) Which of the following established the basic framework for collective bargaining in federal government agencies? A) Executive Order 13494 B) Executive Order 10988 C) Taft-Hartley Act D) Title VII of the Civil Service Reform Act Answer: B Explanation: B) Executive Order 10988 established the basic framework for collective bargaining in federal government agencies. Title VII of the Civil Service Reform Act of 1978 regulates most of the labor management relations in the federal service. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 147) Which Act established the Federal Labor Relations Authority? A) Norris-LaGuardia Act B) Taft-Hartley Act C) Civil Service Reform Act D) Landrum-Griffin Act Answer: C Explanation: C) Title VII of the Civil Service Reform Act of 1978 regulates most of the labor management relations in the federal service. It establishes the Federal Labor Relations Authority (FLRA), which is modeled after the National Labor Relations Board. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 14

148) Why has collective bargaining for federal unions traditionally been quite different from private sector bargaining? A) mandated pension plans B) non-negotiable wages C) two-tier wage system D) required arbitration Answer: B Explanation: B) Collective bargaining for federal unions has traditionally been quite different from private sector bargaining because wages were off the table. Title V of the U.S. Code, the law that dictates rules for federal employees, did not allow bargaining over wage issues, except for the U.S. Postal Service. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 149) The sole labor union in China is the All-China Federation of Trade Unions. Answer: TRUE Explanation: The All-China Federation of Trade Unions (ACFTU) is China's only governmentrecognized union. Compared to the United States with many labor unions, there is a single union in China largely because of the difference between the country's political systems (Communism in China and Democracy in the United States). Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 150) As in the United States, only employees pay union dues in China. Answer: FALSE Explanation: Under the People's Republic of China (PRC) Trade Union Law, the employer, not employees, contributes union dues. The pressure to unionize through the collection of union dues is likely to continue with the support of ACFTU. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

Human Resource Management, 14e (Mondy) Chapter 12 Internal Employee Relations 1) Which of the following is NOT an exception to the at-will doctrine? A) implied contract B) favoritism C) violations of public policy D) implied covenant of good faith Answer: B Explanation: B) Favoritism is not considered to be relevant to the at-will doctrine. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) Implied contracts can be formed through an employer's representation of ________. A) continued employment in writing or through oral statements B) fair selection process C) fair performance appraisal D) fair compensation Answer: A Explanation: A) Written statements made in employment handbooks that specify continued employment based on continued satisfactory job performance are an example of an implied contract. A manager or supervisor who makes similar oral statements to employees is also an example of an implied contract. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 3) Which term refers to an unwritten contract that is created when an employee agrees to work for an employer but no agreement exists as to how long the parties expect the employment to last? A) temporary assignment B) contract employment C) employment at will D) right-to-work law Answer: C Explanation: C) Employment at will is a legal doctrine that specifies that employment may be terminated by either the employer or employee for any reason. "The employment-at-will doctrine avows that, when an employee does not have a written employment contract and the term of employment is of definite duration, the employer can terminate the employee for good cause, bad cause, or no cause at all.". Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1, 12 1 Copyright © 2016 Pearson Education, Inc.

4) The status of most workers in an organization is permanently fixed. Answer: FALSE Explanation: The status of most workers is not permanently fixed in an organization. Employees constantly move upward, laterally, downward, and out of the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 5) Why is it important for a firm to focus on internal employee relations? How does employment at will relate to a firm's internal employee relations? Answer: The status of most workers is not permanently fixed in an organization. Employees constantly move upward, laterally, downward, and out of the organization. To ensure that workers with the proper skills and experience are available at all levels, constant and concerted efforts are required to maintain good internal employee relations. Internal employee relations comprise the human resource management activities associated with the movement of employees within the organization. Employment at will is an unwritten contract created when an employee agrees to work for an employer but no agreement exists as to how long the parties expect the employment to last. Notwithstanding various employment standards to avoid that are based on laws, court decisions, and executive orders, approximately two of every three U.S. workers depend almost entirely on the continued goodwill of their employer. Individuals falling into this category are known as "at-will employees." Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 1 6) The state of employee self-control and orderly conduct that indicates the extent of genuine teamwork within an organization is referred to as ________. A) ethics B) discipline C) punishment D) internal employee relations Answer: B Explanation: B) Discipline is the state of employee self-control and orderly conduct that indicates the extent of genuine teamwork within an organization. A necessary but often trying aspect of internal employee relations is the application of disciplinary action. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

7) Discipline refers to the ________. A) punishment provided by an organization B) conditions which exist only in the military C) threat of punishment made by managers D) state of employee self-control present in an organization Answer: D Explanation: D) Discipline is the state of employee self-control and orderly conduct that indicates the extent of genuine teamwork within an organization. A necessary but often trying aspect of internal employee relations is the application of disciplinary action. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 8) What involves invoking a penalty against an employee who fails to meet established standards? A) metrics B) probation C) disciplinary action D) internal employee relations Answer: C Explanation: C) A necessary but often trying aspect of internal employee relations is the application of disciplinary action. Disciplinary action invokes a penalty against an employee who fails to meet established standards. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 9) The most effective disciplinary action addresses the employee's ________. A) attitude B) behavior C) personality D) conscience Answer: B Explanation: B) Effective disciplinary action addresses the employee's wrongful behavior, not the employee as a person. Incorrectly administered disciplinary action is destructive to both the employee and the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

10) Disciplinary action is the state of employee self-control and orderly conduct and indicates the extent of genuine teamwork within an organization. Answer: FALSE Explanation: Discipline is the state of employee self-control and orderly conduct that indicates the extent of genuine teamwork within an organization. Disciplinary action invokes a penalty against an employee who fails to meet established standards. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 11) Effective disciplinary action addresses the employee's wrongful behavior, not the employee as a person. Answer: TRUE Explanation: Effective disciplinary action addresses the employee's wrongful behavior, not the employee as a person. Incorrectly administered disciplinary action is destructive to both the employee and the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 12) Why are discipline and disciplinary action essential at any organization? What methods do firms use to ensure a disciplined workforce? Answer: Discipline is the state of employee self-control and orderly conduct that indicates the extent of genuine teamwork within an organization. A necessary but often trying aspect of internal employee relations is the application of disciplinary action. Disciplinary action invokes a penalty against an employee who fails to meet established standards. Even though disciplinary action may be tense, unpleasant and fraught with conflict, at times it must be done. Because one person's actions can affect others in a work group, the proper application of disciplinary action fosters acceptable behavior by other group members. Several approaches to the administration of disciplinary action have been developed. Three of the most important concepts are the hot stove rule, progressive disciplinary action, and disciplinary action without punishment. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 2, 3

13) The disciplinary action process deals largely with ________. A) rule infractions B) industry standards C) strategic planning D) procedural misunderstandings Answer: A Explanation: A) The disciplinary action process deals largely with infractions of rules. Notice in Figure 12-1 that rules are established to better facilitate the accomplishment of organizational goals. Rules are specific guides to behavior on the job. The dos and don'ts associated with accomplishing tasks may be highly inflexible. For example, a company may forbid the use of tobacco products anywhere on company property. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 14) What are specific guides to behavior on the job? A) rules B) ethics C) morals D) standards Answer: A Explanation: A) The disciplinary action process deals largely with infractions of rules. Rules are established to better facilitate the accomplishment of organizational goals and are specific guides to behavior on the job. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 15) In the disciplinary action process, what must occur immediately after management establishes rules? A) observe performance B) set organizational goals C) compare performance with rules D) communicate rules to employees Answer: D Explanation: D) After management has established rules, it must communicate these rules to employees. All employees must know the standards in order to be disciplined persons. Individuals cannot obey a rule if they do not know it exists. Observing performance and comparing performance with rules occurs later in the process, while setting organizational goals is the first step of the disciplinary action process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 5 Copyright © 2016 Pearson Education, Inc.

16) The primary purpose of disciplinary action is to ________. A) chastise employees for breaking rules B) prevent unionized employees from striking C) alter behavior that hinders organizational goals D) initiate useful discussion and feedback from managers Answer: C Explanation: C) The purpose of disciplinary action is to alter behavior that can have a negative impact on achievement of organizational objectives, not to chastise the violator. Thus, the intent of disciplinary action should be to ensure that the recipient sees disciplinary action as a learning process rather than as something that inflicts pain. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 17) The word discipline comes from the word disciple, and when translated from Latin, what does it mean? A) "to punish" B) "to control" C) "to teach" D) "to restrain" Answer: C Explanation: C) The word discipline comes from the word disciple, and when translated from Latin, it means to teach. Thus, the intent of disciplinary action should be to ensure that the recipient sees disciplinary action as a learning process rather than as something that inflicts pain. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 18) In order to be most effective, disciplinary action should be a ________ process. A) learning B) subjective C) negative D) painful Answer: A Explanation: A) The purpose of disciplinary action is to alter behavior that can have a negative impact on achievement of organizational objectives, not to chastise the violator. Thus, the intent of disciplinary action should be to ensure that the recipient sees disciplinary action as a learning process rather than as something that inflicts pain. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

19) Parker Pharmaceuticals is a corporation that employs over 400 workers. As the firm continues to grow, the need for discipline among employees has become more critical. The HR department and top executives are planning to revamp the disciplinary action process that is currently in place at Parker. Which of the following most likely undermines a decision to use the hot stove rule approach to discipline? A) Parker supervisors desire flexibility in any disciplinary system. B) Some Parker employees belong to labor unions while other do not. C) The Parker ombudsperson handles most grievance procedures. D) Most disciplinary issues at Parker are related to insubordination. Answer: A Explanation: A) If the circumstances surrounding all disciplinary action were the same, there would be no problem with the hot stove approach. However, situations are often quite different, and many variables may be present in each disciplinary action case. Supervisors often find that they cannot be completely consistent and impersonal in taking disciplinary action and they need a certain degree of flexibility, which is not an aspect of the hot stove approach. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 20) Parker Pharmaceuticals is a corporation that employs over 400 workers. As the firm continues to grow, the need for discipline among employees has become more critical. The HR department and top executives are planning to revamp the disciplinary action process that is currently in place at Parker. Which of the following best supports a decision to use the progressive disciplinary action approach? A) Major violations and terminations rarely occur at Parker. B) Parker wants an informal procedure for disciplining employees. C) Managers at Parker have been inconsistent with disciplining employees. D) Chronic tardiness is the primary disciplinary issue among Parker employees. Answer: C Explanation: C) The goal of progressive disciplinary action is to formally communicate problem issues to employees in a direct and timely manner so that they can improve their performance. The manager follows the same procedure for each level of offense in the progressive disciplinary process, which ensures consistency. It is less relevant that terminations are rare or that tardiness is the main problem at the firm. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

21) Parker Pharmaceuticals is a corporation that employs over 400 workers. As the firm continues to grow, the need for discipline among employees has become more critical. The HR department and top executives are planning to revamp the disciplinary action process that is currently in place at Parker. Which of the following questions is LEAST relevant to selecting a new disciplinary action process for Parker? A) Are managers applying discipline consistently and fairly? B) Are managers able to apply discipline impersonally to all employees? C) Does Parker want to use punishment or encouragement to create discipline? D) Does Parker have similar discipline problems as other pharmaceutical firms? Answer: D Explanation: D) Consistency and fairness are important to consider with discipline. If managers are not being consistent and impersonal then perhaps the progressive disciplinary approach would be best. Whether the firm wants to use punishment or not is another consideration. The disciplinary problems at other firms are less relevant to the decision. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 22) The disciplinary action process is relatively static. Answer: FALSE Explanation: The disciplinary action process is dynamic and ongoing. Because one person's actions can affect others in a work group, the proper application of disciplinary action fosters acceptable behavior by other group members. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 23) The disciplinary action process deals largely with infractions of rules. Answer: TRUE Explanation: The disciplinary action process deals largely with infractions of rules. Rules are established to better facilitate the accomplishment of organizational goals. Rules are specific guides to behavior on the job. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

24) After management has established rules, it must communicate these rules to employees. Answer: TRUE Explanation: After management has established rules, it must communicate these rules to employees. All employees must know the standards in order to be disciplined persons. Individuals cannot obey a rule if they do not know it exists. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 25) Feedback is an important aspect of the disciplinary action process. Answer: TRUE Explanation: The disciplinary action process includes feedback from the point of taking appropriate disciplinary action to communicating rules to employees. When disciplinary action is taken, all employees should realize that certain behaviors are unacceptable and should not be repeated. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 26) If the circumstances surrounding all disciplinary action situations were the same, the hot stove approach would be effective at all times. Answer: TRUE Explanation: If the circumstances surrounding all disciplinary action were the same, there would be no problem with this approach. However, situations are often quite different, and many variables may be present in each disciplinary action case. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 27) According to the hot stove rule, disciplinary action should ________. A) occur immediately and without warning B) consider extended circumstances C) provide consistent punishment D) include personal comments Answer: C Explanation: C) Disciplinary action should be consistent in that everyone who performs the same act will be punished accordingly. Disciplinary action should occur immediately but with advance warning and should be impersonal. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

28) According to the hot stove rule, disciplinary action should most likely occur immediately, so that the individual will ________. A) receive appropriate training opportunities B) have time to contact an HR manager C) share the experience with co-workers D) understand the reason for it Answer: D Explanation: D) If disciplinary action is to be taken, it must occur immediately so that the individual will understand the reason for it. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 29) Which of the following is a drawback to the hot stove approach? A) lacks timeliness B) too impersonal C) lacks flexibility D) too subjective Answer: C Explanation: C) If the circumstances surrounding all disciplinary action were the same, there would be no problem with the hot stove approach. However, situations are often quite different, and many variables may be present in each disciplinary action case. Supervisors often find that they cannot be completely consistent and impersonal in taking disciplinary action and they need a certain degree of flexibility. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 30) What disciplinary action approach is intended to ensure that the minimum penalty appropriate to the offense is imposed? A) hot stove approach B) performance discipline method C) progressive disciplinary action D) disciplinary action without punishment Answer: C Explanation: C) Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. The process of giving a worker time off with pay to think about whether he or she wants to follow the rules and continue working for the company is called disciplinary action without punishment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

31) The progressive disciplinary action model was developed in the 1930s in response to the ________. A) Railway Labor Act B) Davis-Bacon Act C) Walsh-Healey Act D) National Labor Relations Act Answer: D Explanation: D) Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. The progressive disciplinary model was developed in response to the National Labor Relations Act. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 32) The goal of ________ is to formally communicate problem issues to employees in a direct and timely manner so that they can improve their performance. A) progressive disciplinary action B) performance appraisals C) succession planning D) broadbanding Answer: A Explanation: A) Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. The goal of progressive disciplinary action is to formally communicate problem issues to employees in a direct and timely manner so that they can improve their performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 33) In which of the following does the manager ask a series of questions in sequence to determine the best disciplinary action? A) hot stove approach B) progressive disciplinary action C) disciplinary questionnaire approach D) disciplinary action without punishment approach Answer: B Explanation: B) The progressive disciplinary approach involves answering a series of questions about the severity of the offense. The manager must ask these questions, in sequence, to determine the proper disciplinary action. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

34) Which of the following is NOT a question that would likely be asked when a manager uses progressive disciplinary action? A) Does this violation warrant more than a written warning? B) Does this violation warrant more than an oral warning? C) Does this violation warrant disciplinary action? D) Does this violation warrant termination? Answer: D Explanation: D) According to the progressive disciplinary action approach, the manager would ask if the violation deserved a written warning, an oral warning, and/or disciplinary action. Termination may be a result of the process, but the manager would not specifically ask that question. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 4 35) Mike, a manager at a distribution center, has learned that one of his subordinates assaulted a co-worker. Mike uses the progressive disciplinary action approach when dealing with employee violations. Which of the following punishments will the subordinate most likely receive? A) oral warning B) written warning C) suspension D) termination Answer: D Explanation: D) With the progressive disciplinary action approach, warnings and suspensions typically occur prior to termination. However, major violations, such as assaulting another worker, may justify immediate termination of the employee. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 4

36) Maria is chronically tardy to work. In response, Maria's manager has given Maria time off with pay to think about whether she wants to follow the rules and continue working for the company. Which disciplinary method is Maria's manager most likely using? A) progressive disciplinary action B) hot stove approach C) disciplinary action without punishment D) punitive disciplinary action Answer: C Explanation: C) The process of giving a worker time off with pay to think about whether he or she wants to follow the rules and continue working for the company is called disciplinary action without punishment. The approach is to throw out formal punitive disciplinary action policies for situations such as chronic tardiness in favor of affirming procedures that make employees want to take personal responsibility for their actions and be models for the corporate mission. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4 37) Which of the following terms refers to a process in which a worker is given time off with pay to consider whether he or she wants to follow the rules and continue working for the company? A) disciplinary action without punishment B) progressive disciplinary action C) punitive discipline method D) hot stove approach Answer: A Explanation: A) The process of giving a worker time off with pay to think about whether he or she wants to follow the rules and continue working for the company is called disciplinary action without punishment. The approach is to throw out formal punitive disciplinary action policies for situations such as chronic tardiness in favor of affirming procedures that make employees want to take personal responsibility for their actions and be models for the corporate mission. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

38) Consider the following situation: When an employee violates a rule, the manager issues an oral reminder. Repetition brings a written reminder, and the third violation results in the worker having to take one, two, or three days off (with pay) to think about the situation. During the first two steps, the manager tries to encourage the employee to solve the problem. If the third step is taken, upon the worker's return, the worker and the supervisor meet to agree that the employee will not violate a rule again or the employee will leave the firm. What form of disciplinary action is being taken? A) disciplinary action without punishment B) hot stove approach C) progressive disciplinary action D) progressive discipline Answer: A Explanation: A) The process of giving a worker time off with pay to think about whether he or she wants to follow the rules and continue working for the company is called disciplinary action without punishment. The approach involves issuing oral reminders, written reminders, and discussions between the manager and employee. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 4 39) Renee was recently hired at Emerson Enterprises. During employee orientation, Renee was told that repeated violations of different rules will be viewed in the same way as several violations of the same rule. What type of disciplinary method is most likely used at Emerson? A) progressive discipline B) hot stove approach C) disciplinary action without punishment D) progressive disciplinary action Answer: C Explanation: C) When disciplinary action without punishment is used, it is especially important that all rules be explicitly stated in writing. At the time of orientation, new workers should be told that repeated violations of different rules will be viewed in the same way as several violations of the same rule. This approach keeps workers from taking undue advantage of the process. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 4

40) Which of the following is LEAST likely to help a firm protect itself against suits claiming discriminatory disciplinary actions? A) basing decisions solely on performance B) disciplining in the presence of co-workers C) training managers how to avoid bias claims D) developing written policies barring unfair treatment Answer: B Explanation: B) One of the best ways for a company to protect itself against suits claiming discrimination or harassment is to ensure that it has proper, written policies barring unfair treatment of its staff, and a system for ensuring that the policies are followed. Disciplinary actions should be fully documented, and managers should be trained in how to avoid bias claims. Also, although discrimination laws prohibit employers from making employment decisions based on an employee's membership in a protected class, basing decisions solely on performance helps prevent violation of these laws. Discipline should be handled privately to avoid embarrassment. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 41) Disciplinary action should never be administered ________. A) at the beginning of a shift B) immediately before a lunch break C) in the presence of others D) immediately after the violation occurs Answer: C Explanation: C) Taking disciplinary action against a worker in the presence of others may embarrass the individual and actually defeat the purpose of the action. Even when they are wrong, employees resent disciplinary action administered in public. By disciplining employees in private, supervisors prevent them from losing face with their peers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 42) Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. Answer: TRUE Explanation: Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. The goal of progressive disciplinary action is to formally communicate problem issues to employees in a direct and timely manner so that they can improve their performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 15 Copyright © 2016 Pearson Education, Inc.

43) The progressive disciplinary action model was developed in response to the National Labor Relations Act of 1935. Answer: TRUE Explanation: Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. The progressive disciplinary model was developed in response to the National Labor Relations Act. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 44) The goal of progressive disciplinary action is to formally communicate problem issues to employees in a direct and timely manner so that they can improve their performance. Answer: TRUE Explanation: Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. The goal of progressive disciplinary action is to formally communicate problem issues to employees in a direct and timely manner so that they can improve their performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 45) The process of giving a worker time off with pay to think about whether he or she wants to follow the rules and continue working for the company is called disciplinary action without punishment. Answer: TRUE Explanation: The process of giving a worker time off with pay to think about whether he or she wants to follow the rules and continue working for the company is called disciplinary action without punishment. The approach is to throw out formal punitive disciplinary action policies for situations such as chronic tardiness or a bad attitude in favor of affirming procedures that make employees want to take personal responsibility for their actions and be models for the corporate mission. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

46) The progressive discipline approach focuses on eliminating punitive disciplinary policies and encouraging employees to take personal responsibility for their actions. Answer: FALSE Explanation: The process of giving a worker time off with pay to think about whether he or she wants to follow the rules and continue working for the company is called disciplinary action without punishment. The approach is to throw out formal punitive disciplinary action policies for situations such as chronic tardiness or a bad attitude in favor of affirming procedures that make employees want to take personal responsibility for their actions and be models for the corporate mission. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 47) Disciplinary action without punishment is most effective when all rules are explicitly stated in writing. Answer: TRUE Explanation: When disciplinary action without punishment is used, it is especially important that all rules be explicitly stated in writing. At the time of orientation, new workers should be told that repeated violations of different rules will be viewed in the same way as several violations of the same rule. This approach keeps workers from taking undue advantage of the process. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 48) Documenting disciplinary actions is essential to protecting a firm's interests. Answer: TRUE Explanation: One of the best ways for a company to protect itself against suits claiming discrimination or harassment is to ensure that it has proper, written policies barring unfair treatment of its staff, and a system for ensuring that the policies are followed. Disciplinary actions should be fully documented, and managers should be trained in how to avoid bias claims. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

49) Taking disciplinary action against a worker in the presence of others is essential to providing the necessary legal documentation. Answer: FALSE Explanation: Taking disciplinary action against a worker in the presence of others may embarrass the individual and actually defeat the purpose of the action. Written documentation is necessary but witnesses are not. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 50) How would a manager use the progressive disciplinary action approach? How would the use of this approach prevent employees from being surprised if they are terminated? Answer: Progressive disciplinary action is intended to ensure that the minimum penalty appropriate to the offense is imposed. The goal of progressive disciplinary action is to formally communicate problem issues to employees in a direct and timely manner so that they can improve their performance. Its use involves answering a series of questions about the severity of the offense. The manager must ask these questions, in sequence, to determine the proper disciplinary action. Termination is the most severe penalty that an organization can impose on an employee; therefore, it should be the most carefully considered form of disciplinary action. When the decision is made to fire a worker, the employee should not really be surprised at the decision since he or she should have been given explicit warnings and counseling prior to being fired. The worker should have been advised of specific steps he or she needed to take to keep the job. Support should have been provided to show what needed to be done. The worker also should have been given a reasonable period of time to comply with the supervisor's expectations. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 4

51) What are the consequences of the hot stove rule? When is the hot stove rule ineffective? Answer: According to the hot stove rule, disciplinary action should have the following consequences, which are analogous to touching a hot stove: 1. Burns immediately. If disciplinary action is to be taken, it must occur immediately so that the individual will understand the reason for it. 2. Provides warning. It is also extremely important to provide advance warning that punishment will follow unacceptable behavior. As individuals move closer to a hot stove, its heat warns them that they will be burned if they touch it; therefore, they have the opportunity to avoid the burn if they so choose. 3. Gives consistent punishment. Disciplinary action should also be consistent in that everyone who performs the same act will be punished accordingly. As with a hot stove, each person who touches it with the same degree of pressure and for the same period of time is burned to the same extent. 4. Burns impersonally. Disciplinary action should be impersonal. The hot stove burns anyone who touches it, without favoritism. If the circumstances surrounding all disciplinary action were the same, there would be no problem with this approach. However, situations are often quite different, and many variables may be present in each disciplinary action case. Supervisors often find that they cannot be completely consistent and impersonal in taking disciplinary action and they need a certain degree of flexibility. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 52) How can firms protect themselves against employment lawsuits when disciplining employees? Answer: Occasionally, there may be suits involving members of protected groups who claim that the disciplinary action was taken against them because they are members of a protected group. One of the best ways for a company to protect itself against suits claiming discrimination or harassment is to ensure that it has proper, written policies barring unfair treatment of its staff, and a system for ensuring that the policies are followed. Disciplinary actions should be fully documented, and managers should be trained in how to avoid bias claims. Also, although discrimination laws prohibit employers from making employment decisions based on an employee's membership in a protected class, basing decisions solely on performance helps prevent violation of these laws. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 5

53) What is the most severe penalty an organization can give to an employee? A) suspension B) transfer C) termination D) demotion Answer: C Explanation: C) Termination is the most severe penalty that an organization can impose on an employee; therefore, it should be the most carefully considered form of disciplinary action. Suspensions, transfers, and demotions are less severe since the worker remains employed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 54) As an HR manager, you may be required to fire employees. According to experts, what is the best time for you to fire an employee? A) Monday morning B) Monday afternoon C) Friday morning D) Friday afternoon Answer: B Explanation: B) Experts suggest that firings should be on Mondays because it lets the dismissed workers start looking for a job right away. Further, firing a worker at the end of the day leaves little chance for discussion among the remaining staff that may interrupt the workplace. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 55) Nora, a line manager at an electronics firm, needs to fire one of her subordinates for repeatedly failing to report to work. The subordinate previously received both oral and written warnings about the violation. Which of the following would most likely help the termination process proceed smoothly? A) Nora answers questions about the decision. B) Nora and the subordinate gather in her office. C) Nora gives the subordinate the final paycheck. D) Nora meets with the subordinate privately. Answer: C Explanation: C) Managers should avoid discussing the termination decision and should simply have the final paycheck available. Managers should use a conference room for privacy, but a witness should be at the meeting in case of problems. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 6

56) Companies possess the burden of establishing just cause in a(n) ________. A) severance pay agreement B) exit interview C) employment contract D) interpersonal employment-at-will document Answer: C Explanation: C) Just cause is a standard for determining whether to terminate an employee and the standard is based on whether an employee violated company policy or work rules and the severity of the violation. Employers that embrace the at-will doctrine are not compelled to justify a termination decision. However, in an employment contract, just cause separates the basis for termination from that of a mass layoff because of economic reasons or exercise of at-will rights by requiring a reason for termination. In union settings, most collective bargaining agreements require just cause for discipline and discharge. If a union files a grievance over the termination of a union member, the employer typically has the burden to show just cause existed for the termination during a labor arbitration hearing. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 57) Which of the following is NOT one of the tests to determine whether the just-cause standard has been met? A) Did the company give to the employee forewarning or foreknowledge of the possible or probable disciplinary consequences of the employee's conduct? B) Did the company, before administering discipline to an employee, make an effort to discover whether the employee did, in fact, violate or disobey a rule or order of management? C) Did the company check references before hiring the employee whose performance is in question? D) Was the degree of discipline administered by the company in a particular case reasonably related to (a) the seriousness of his employee's proven offense and (b) the record of the employee in his service with the company? Answer: C Explanation: C) In 1972, Professor Carroll R. Daugherty, who served as a labor arbitrator, put forth seven tests to help future arbitrators decide whether employee termination or other adverse actions in union settings, such as demotion, met just-cause standards. Although established for use by arbitrators, the questions provide useful guidance for management whose companies have just-cause employment provisions. Prior to making a decision to terminate an employee, management can review whether the just-cause standard will likely be upheld if the termination is subsequently challenged by the former employee. None of the seven tests pertain to employer decisions in the hiring decision. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

58) Compensation designed to assist laid-off employees as they search for new employment is known as ________. A) COBRA B) premium pay C) severance pay D) workers' compensation Answer: C Explanation: C) Severance pay is compensation designed to assist laid-off employees as they search for new employment. Unemployed workers may be eligible for extended health benefits through COBRA, but they are required to pay for it. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 59) What is the primary reason that firms provide severance pay to employees who are involuntarily terminated? A) ensuring that current employees remain with the firm B) preventing terminated employees from suing the firm C) complying with federal laws that require severance pay D) expressing concern and support for terminated employees Answer: B Explanation: B) A major reason employers offer severance today is that the departing worker must waive all rights to sue the company. Mass layoffs in particular put companies at risk for age discrimination suits because cutbacks often target higher-paid workers, who tend to be older. From the employee's viewpoint, severance is paid so that they will not sue the organization. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 60) According to experts, firing employees on Mondays is best because it allows them to begin searching for a job immediately. Answer: TRUE Explanation: Experts suggest that firings should be on Mondays because it lets the dismissed workers start looking for a job right away. Further, firing a worker at the end of the day leaves little chance for discussion among the remaining staff that may interrupt the workplace. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

61) The termination procedure is usually the most well defined for ________. A) executives B) managers C) hourly workers D) union workers Answer: D Explanation: D) If the firm is unionized, the termination procedure is typically well defined in the labor-management agreement. When the firm is union-free, workers can generally be terminated more easily since the worker is most likely an at-will employee. In most union-free organizations, violations justifying termination are often included in the firm's employee handbook. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 62) In organizations of any size, management should ________. A) use outside consultants for termination procedures B) explain what actions warrant termination C) avoid terminating union workers D) handle terminations formally Answer: B Explanation: B) In smaller organizations, the termination process is informal with the first-line supervisor telling workers what actions warrant termination. However, regardless of the size of the organization, management should inform employees of the actions that warrant termination. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 63) Who is usually responsible for hiring and firing the CEO? A) stockholders B) top management C) board of directors D) executive search firms Answer: C Explanation: C) Unlike workers at lower level positions, CEOs do not have to worry about their positions being eliminated. Their main concern is pleasing the board of directors, because hiring and firing the CEO is a board's main responsibility. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

64) Which of the following is the LEAST likely reason for firing a top-level executive? A) economic downturn B) reorganization C) marketing image D) productivity decline Answer: C Explanation: C) A recession, the reorganization of the firm, and a decline in productivity are common reasons that boards fire top executives. Although differing philosophies in management may lead to a firing, marketing image is a less likely reason. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 65) What is the most common reason that a CEO is terminated? A) stock and bond markets fluctuate B) board of directors lacks confidence C) consumers have different philosophy D) law enforcement discovers insider trading Answer: B Explanation: B) Often the reason for terminating a CEO is because the board of directors lost confidence in him or her. Tenure has become increasingly shaky for new CEOs, as the turnover in the Fortune 1000 companies is high. Economic downturns and philosophical differences between the CEO and the Board are other reasons. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 66) Which group is typically the most vulnerable to termination? A) unskilled operatives B) high level executives C) lower level managers D) unionized employees Answer: C Explanation: C) Typically, the most vulnerable and perhaps the most neglected groups of employees with regard to termination have been middle and lower-level managers and professionals. Employees in these jobs may lack the political clout that a terminated executive has. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

67) Which of the following is most likely a negative outcome of downsizing? A) loss of corporate culture B) outsourcing of technical jobs C) elimination of senior positions D) less work for remaining employees Answer: A Explanation: A) Institutional memory or corporate culture is lost during downsizing. Outsourcing jobs is not a likely outcome of downsizing. In unionized firms, senior level workers remain. Workers who remain after downsizing are often faced with the realization of having to do additional work rather than less work. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 68) Firing employees is typically easier to do at unionized firms than at union-free firms. Answer: FALSE Explanation: When the firm is union-free, workers can generally be terminated more easily since the worker is most likely an at-will employee. If the firm is unionized, the termination procedure is typically well defined in the labor-management agreement. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 69) In most cases, terminated CEOs are able to go through the same formal appeal procedure as terminated non-managerial employees. Answer: FALSE Explanation: Executives usually have no formal appeal procedure. The reasons for termination may not be as clear as those for lower-level employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 70) The EEOC requires employers to give employees 60 days' notice before initiating a mass layoff. Answer: FALSE Explanation: The WARN Act requires covered employers to give 60 days' advance notice before a plant closing or mass layoff that will affect a substantial number of workers. Covered employers generally include those with at least 100 full-time employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

71) What are the common reasons that CEOs and other top executives are fired? Answer: Often the reason for terminating a CEO is because the board of directors lost confidence in him or her. The reasons for termination may not be as clear as those for lowerlevel employees. Some of the reasons include the following: 1. Economic downturns. At times, business conditions may force a reduction in the number of executives. 2. Reorganization/downsizing. In order to improve efficiency or as a result of merging with another company, a firm may reorganize or downsize, resulting in the elimination of some executive positions. 3. Philosophical differences. A difference in philosophy of conducting business may develop between an executive and the Board. In order to maintain consistency in management philosophy, the executive may be replaced. 4. Decline in productivity. The executive may have been capable of performing satisfactorily in the past but, for various reasons, can no longer perform the job as required. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 72) How do employers benefit from outplacement and offboarding? Answer: In outplacement, laid-off employees are given assistance in finding employment elsewhere. Through outplacement, the firm tries to soften the impact of displacement. There is a strong correlation between how a company treats departing employees and its ability to attract and retain top talent now and in the future, particularly when the economy rebounds. This proactive response will also likely have a positive influence on those who remain with the company after downsizing. More employers are offering outplacement help to preserve their employer brand and reputation. Offboarding involves exit interviews, removing access to company property, and other services involved in a former worker leaving the company. Teresa Grote, practice director of composite solutions for Ascendum, an information technology company, said, "I think that in our highly litigious society today, making sure that you go through proper offboarding is probably equally, if not more, important than proper onboarding." There are numerous risks in the termination process and it is important to establish a fair and uniform process as employees leave the company. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 7, 9, 11

73) Which term refers to the process of moving a worker to a lower level of duties and responsibilities with a reduction in pay? A) transfer B) discipline C) demotion D) outplacement Answer: C Explanation: C) Demotion is the process of moving a worker to a lower level of duties and responsibilities, which typically involves a reduction in pay. In outplacement, laid-off employees are given assistance in finding employment elsewhere. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 74) Parson Enterprises is a unionized organization. An employee at Parson would most likely learn how demotions are handled by ________. A) reviewing the firm's mission statement B) contacting the local EEOC office C) attending a training program D) reading the labor-management agreement Answer: D Explanation: D) The handling of demotions in a unionized organization is usually spelled out clearly in the labor-management agreement. Should a decision be made to demote a worker for unsatisfactory performance, the union should be notified of this intent and given the specific reasons for the demotion. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 8 75) Dixon Enterprises is a unionized organization. An employee at Dixon would most likely learn how demotions and layoffs are handled by ________. A) reviewing the firm's corporate history B) contacting an outside consultant C) attending an orientation session D) reading the labor agreement Answer: D Explanation: D) The handling of demotions and layoffs in a unionized organization should be spelled out clearly in the labor-management agreement. Should a decision be made to demote a worker for unsatisfactory performance, the union should be notified of this intent and given the specific reasons for the demotion. When a firm is unionized, the layoff procedures are also usually stated clearly in the labor-management agreement. Difficulty: Challenging Skill: Synthesis AACSB: Application of knowledge Learning Obj.: 8 27 Copyright © 2016 Pearson Education, Inc.

76) To the employer, which of the following is a disadvantage of demoting an employee? A) the demoted employee may find the demotion to be more devastating than termination B) the demoted employee may become bitter C) the demoted employee avoids unemployment D) none of the above Answer: B Explanation: B) It is often easier to demote than to terminate an employee. In addition, demotion is often less devastating to the employee. For the organization, however, the opposite may be true if the demotion creates lingering ill will and an embittered employee. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 77) Demotion involves moving a worker to a lower level of duties and responsibilities. Answer: TRUE Explanation: Demotion is the process of moving a worker to a lower level of duties and responsibilities, which typically involves a reduction in pay. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 78) Which term suggests a one-time change in the organization and the number of people employed? A) demoting B) downsizing C) bankrupting D) outplacing Answer: B Explanation: B) Downsizing, also known as restructuring or rightsizing, is essentially the reverse of a company growing; it suggests a one-time change in the organization and the number of people employed. Typically, both the organizational structure and the number of people in the organization shrink for the purpose of improving organizational performance. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

79) What is the primary purpose of downsizing? A) hiring new employees B) meeting EEOC requirements C) changing the corporate philosophy D) improving organizational performance Answer: D Explanation: D) Downsizing, also known as restructuring or rightsizing, is essentially the reverse of a company growing; it suggests a one-time change in the organization and the number of people employed. Typically, both the organizational structure and the number of people in the organization shrink for the purpose of improving organizational performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 80) According to research, when a firm delays downsizing as long as possible, the firm will most likely ________. A) recover more quickly when the economy improves B) implement a formal grievance procedure C) force senior employees into retirement D) file for bankruptcy within one year Answer: A Explanation: A) One big lesson from research on downsizing is that when organizations resist or delay layoffs as long as possible, they tend to bounce back faster when the upturn hits. This happens, in part, because these organizations save on recruiting and training costs when the demand for their people returns, and by keeping their experienced workforce around, they can move more effectively than their competitors that are scrambling to hire and train new employees with the right skills. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

81) Lisa, an HR manager, has been informed that her employer will be downsizing. Lisa's responsibility is to help the company prepare for downsizing by determining which workers should be laid off. All of the following are important for Lisa to do EXCEPT ________. A) targeting older workers who earn high salaries to save the firm money B) ensuring that protected workers are not disproportionately affected C) utilizing objective, job-related criteria to make layoff decisions D) preparing to deal with COBRA and ERISA requirements Answer: A Explanation: A) If older workers with higher salaries than their younger counterparts become targets for cost cutting measures, age discrimination claims may occur. It is important to analyze the breakdown of downsized workers to ensure that all protected groups of workers are not disproportionately affected. It is equally imperative that an employer use objective, job-related criteria to decide which positions will be affected. Also, the downsizing organization should be prepared to deal with government requirements such as COBRA and ERISA. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 82) When a unionized firm is downsizing, what is the most likely basis for layoffs? A) potential B) seniority C) compensation D) education level Answer: B Explanation: B) Seniority usually is the basis for layoffs, with the least senior employees laid off first. Potential, salary, and education are less important factors in unionized firms. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

83) Louden Manufacturing, a unionized firm, is in the process of downsizing. Mark is employed as a senior-level engineer at the firm, and his position has been eliminated. Mark's manager has indicated that Mark has the right to force a lower-level engineer out of a position. Which term best describes this activity? A) bumping B) rightsizing C) restructuring D) gainsharing Answer: A Explanation: A) Most labor agreements have a clearly spelled-out bumping procedure. When senior-level positions are eliminated, the people occupying them have the right to bump workers from lower-level positions, assuming that they have the proper qualifications for the lower-level job. Rightsizing and restructuring are synonyms for downsizing. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 84) Jackie is an HR manager at a union-free firm that is in the process of downsizing. As Jackie helps determine which employees will be laid off, what will she most likely give the greatest consideration? A) organizational needs B) industry specifications C) compensation level D) seniority Answer: A Explanation: A) In union-free firms, productivity and the needs of the organization are typically key considerations. Seniority is the most significant factor in unionized firms. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 85) Research on downsizing has shown that when organizations ________, they tend to bounce back faster when the upturn hits. A) resist or delay layoffs as long as possible B) begin the layoff process as soon as possible C) use an incremental approach to downsizing D) lay off the entire workforce Answer: A Explanation: A) One big lesson from research on downsizing is that when organizations resist or delay layoffs as long as possible, they tend to bounce back faster when the upturn hits. This is especially true in organizations with skilled workers. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 31 Copyright © 2016 Pearson Education, Inc.

86) According to the WARN Act, covered employers are required to give ________ days advance notice before a mass layoff. A) 30 B) 60 C) 90 D) 120 Answer: B Explanation: B) The WARN Act requires covered employers to give 60 days' advance notice before a plant closing or mass layoff that will affect a substantial number of workers. Covered employers generally include those with at least 100 full-time employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 87) Which of the following would most likely be considered a covered employer under the WARN Act? A) Barton Consulting, 55 full-time employees B) Haley Publishing, 85 full-time employees C) Tyro Aluminum, 145 full-time employees D) all of the above Answer: C Explanation: C) The WARN Act requires covered employers to give 60 days' advance notice before a plant closing or mass layoff that will affect at least 100 full-time employees. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 88) Which term refers to a procedure whereby laid-off employees are given assistance in finding employment elsewhere? A) mediation B) outplacement C) arbitration D) development Answer: B Explanation: B) As a result of downsizing, some organizations are assisting laid-off employees in locating jobs. The use of outplacement began at the executive level, but it has also been used at other organizational levels. In outplacement, laid-off employees are given assistance in finding employment elsewhere. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

89) As a result of downsizing, Heather has lost her job. Heather's employer is helping Heather find a job elsewhere. Which of the following best describes what this employer is providing? A) outplacement B) development C) outsourcing D) contracting Answer: A Explanation: A) As a result of downsizing, some organizations are assisting laid-off employees in locating jobs. The use of outplacement began at the executive level, but it has also been used at other organizational levels. In outplacement, laid-off employees are given assistance in finding employment elsewhere. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 90) Kelly, an HR manager, is employed by a firm that is downsizing. Kelly's employer wants the HR department to provide outplacement services to laid-off employees. Which of the following is LEAST likely to be an outplacement activity? A) paying expenses for interviews B) paying federal income taxes C) providing job-search and interview techniques D) discussing wage and salary negotiations Answer: B Explanation: B) Some of the services provided by outplacement include a discussion of pension options, Social Security benefits, expenses for interviews, and wage/salary negotiations. Usually, career guidance is provided on how to conduct a self-appraisal, seek employment, and take interviews. Outplacement is less likely to involve paying income taxes. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 9 91) How do employers benefit from providing outplacement services? A) minimizing the need for severance pay B) lowering unemployment insurance costs C) complying with the WARN Act D) improving employee good will Answer: D Explanation: D) More employers are offering outplacement help to preserve their employer brand and increase good will with just-released employees by offering to help them find alternative work. Outplacement does not necessarily relate to severance pay, and it is not required under the WARN Act. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 33 Copyright © 2016 Pearson Education, Inc.

92) Downsizing and termination are synonymous terms. Answer: FALSE Explanation: Downsizing is not the same as termination but the results for workers involved is the same; they no longer have a job. Downsizing is essentially the reverse of a company growing; it suggests a one-time change in the organization and the number of people employed. Termination is the most severe penalty that an organization can impose on an employee. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 93) In most cases, terminations at unionized firms are based on performance and merit. Answer: FALSE Explanation: When the firm is unionized, the layoff procedures are usually stated clearly in the labor-management agreement. Seniority usually is the basis for layoffs, with the least senior employees laid off first. In non-union firms, terminations are typically based on performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 94) The term "ghost work" refers to the additional work required of employees who remain after an organization downsizes. Answer: TRUE Explanation: Workers who remain after downsizing are also faced with the realization of having to do additional work (some call it "ghost work"). In a CareerBuilder survey, 47 percent of workers reported they have taken on more responsibility because of a layoff within their organization and 37 percent said they are handling the work of two people. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 95) Outplacement helps employers preserve their reputation while softening the impact of displacement. Answer: TRUE Explanation: Outplacement will also likely have a positive influence on those who remain with the company after downsizing. More employers are offering outplacement help to preserve their employer brand and reputation. Through outplacement, the firm tries to soften the impact of displacement. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

96) Employers are required by law to provide severance pay to employees who have been involuntarily terminated. Answer: FALSE Explanation: Severance pay is compensation designed to assist laid-off employees as they search for new employment. Although no federal law requires U.S. companies to pay severance, a recent study found that although over half of organizations gave severance pay to all departing employees, 17.7 percent made payments to selected groups only. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 97) Which of the following is a complaint officer with access to top management who hears employee complaints, investigates, and recommends appropriate action? A) line manager B) HR manager C) ombudsperson D) union steward Answer: C Explanation: C) An ombudsperson is a complaint officer who has access to top management and who hears employee complaints, investigates, and recommends appropriate action. Employers use ombudspersons in their organizations to help defuse problems before they become lawsuits or scandals. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 98) Johnson Enterprises is recruiting candidates to fill the new position of ombudsperson. Johnson is most likely adding this position to ________. A) handle internal problems before they become lawsuits B) negotiate with local and national labor unions C) monitor the firm's retention and turnover rates D) assist HR with compensation decisions Answer: A Explanation: A) An ombudsperson is a complaint officer who has access to top management and who hears employee complaints, investigates, and recommends appropriate action. Employers use ombudspersons in their organizations to help defuse problems before they become lawsuits or scandals. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 10

99) Naomi, a data analyst at a consulting firm, has an abusive manager. To which of the following should Naomi most likely turn for confidential, informal advice? A) mediator B) attorney C) arbitrator D) ombudsperson Answer: D Explanation: D) Ombudspersons are impartial, neutral counselors who can give employees confidential advice about problems such as abusive managers. Ombudspersons are used so that all workers may seek informal, confidential assistance to work through problems without losing control over how their concerns will be addressed. Mediators, attorneys, and arbitrators would involve more formal involvement. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 100) Miles, a software designer, received a performance review that he feels is incorrect. Miles would like to discuss his concerns with an impartial individual at his firm. What are the best two individuals for Miles to contact in this situation? A) mediator and ombudsperson B) HR manager and arbitrator C) ombudsperson and HR manager D) arbitrator and union steward Answer: C Explanation: C) Ombudspersons are impartial, neutral counselors who can give employees confidential advice about problems such as abusive managers. Ombudsperson serve as impartial individuals at a firm in addition to HR representatives. Mediators, arbitrators, and union stewards are used during formal grievances. Difficulty: Challenging Skill: Concept AACSB: Application of knowledge Learning Obj.: 10

101) A procedure whereby the employee and the company agree ahead of time that any problems will be addressed by agreed-upon means is known as ________. A) progressive disciplinary action B) scheduled grievance procedure C) alternative dispute resolution D) neutral arbitration Answer: C Explanation: C) As the number of employment-related lawsuits increases, companies have looked for ways to protect themselves against the costs and uncertainties of the judicial system. Alternative dispute resolution (ADR) is a procedure whereby the employee and the company agree ahead of time that any problems will be addressed by agreed-upon means. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 102) Which of the following is NOT a method used in alternative dispute resolution? A) arbitration B) mediation C) mini-trials D) work sampling Answer: D Explanation: D) Alternative dispute resolution is a procedure whereby the employee and the company agree ahead of time that any problems will be addressed by agreed-upon means. Some of these include arbitration, mediation, mini-trials, and ombudspersons. Work sampling is a selection tool. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 103) Devon Manufacturing wants to avoid the time and cost associated with employment-related lawsuits. Which of the following would most likely be the best choice for Devon in resolving conflicts with employees? A) collective bargaining B) progressive disciplinary action C) alternative dispute resolution D) mandatory bargaining Answer: C Explanation: C) The idea behind ADR is to resolve conflicts between employer and employee through means less costly and contentious than litigation. A successful program can save a company thousands of dollars in legal costs and hundreds of hours in managers' time. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 37 Copyright © 2016 Pearson Education, Inc.

104) Which of the following would be a case where alternative dispute resolution would be used? A) racial discrimination B) age discrimination C) unfair firings D) all of the above Answer: D Explanation: D) ADR cases run the gamut from racial, gender, and age discrimination to unfair firings. The idea behind ADR is to resolve conflicts between employer and employee through means less costly and contentious than litigation. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 105) Which form of alternative dispute resolution is the preferred method for most people? A) arbitration B) mediation C) mini-trial D) ombudspersons Answer: B Explanation: B) Alternative dispute resolution (ADR) is a procedure whereby the employee and the company agree ahead of time that any problems will be addressed by agreed-upon means. Some of these include arbitration, mediation, mini-trials, and ombudspersons. Mediation is the preferred method for most people. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 106) Unifed Enterprises has implemented an alternative dispute resolution program to resolve conflicts between the firm and its employees. Which of the following is NOT one of the advantages associated with alternative dispute resolution? A) jury trial B) low cost C) efficient D) private Answer: A Explanation: A) The idea behind ADR is to resolve conflicts between employer and employee through means less costly and contentious than litigation. Compared to litigation, ADR processes are less adversarial, faster and more efficient, relatively lower in cost, and private. Juries are not involved with ADR. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 10 38 Copyright © 2016 Pearson Education, Inc.

107) According to research, when two parties agree to participate in mediation, approximately ________ of the cases are settled. A) 35% B) 55% C) 75% D) 96% Answer: D Explanation: D) When parties agree to mediate, they are able to reach a settlement in 96 percent of the cases. Compared to litigation, ADR processes are less adversarial, faster and more efficient, relatively lower in cost, and private. Juries are not involved with ADR. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 108) In which Supreme Court decision was it made clear that ADR applied to the vast majority of employees and was available to employers seeking to enforce compulsory arbitration agreements? A) Weingarten v IBM B) Circuit City v Adams C) General Electric v Noe D) Daily News L.P. v Newspaper & Mail Deliverers' of New York and Vicinity Answer: B Explanation: B) The Supreme Court rendered an opinion in Circuit City v Adams that greatly enhanced an employer's ability to enforce compulsory alternative dispute resolution agreements. The Court held that the ADR was valid and enforceable and made clear that ADR applied to the vast majority of employees and was available to employers seeking to enforce compulsory arbitration agreements. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 109) An ombudsperson listens to employee complaints and recommends appropriate action in an attempt to defuse internal problems. Answer: TRUE Explanation: An ombudsperson is a complaint officer who has access to top management and who hears employee complaints, investigates, and recommends appropriate action. Employers use ombudspersons in their organizations to help defuse problems before they become lawsuits or scandals. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

110) Ombudspersons are neutral counselors who can give employees confidential advice about problems like abusive managers. Answer: TRUE Explanation: Ombudspersons are impartial, neutral counselors who can give employees confidential advice about problems ranging from abusive managers to allegations of illegal corporate activity. The ombudsperson is typically independent of line management and reports near or at the top of the organization. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 111) Arbitration is a procedure whereby the employee and the company agree ahead of time that any problems will be addressed by an agreed-upon means. Answer: FALSE Explanation: Alternative dispute resolution (ADR) is a procedure whereby the employee and the company agree ahead of time that any problems will be addressed by agreed-upon means. Some of the ADR methods may include arbitration, mediation, mini-trials, and ombudspersons. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 112) Alternative dispute resolution is less adversarial than litigation, but it tends to be more costly. Answer: FALSE Explanation: The idea behind ADR is to resolve conflicts between employer and employee through means less costly and contentious than litigation. A successful program can save a company thousands of dollars in legal costs and hundreds of hours in managers' time. Compared to litigation, ADR processes are less adversarial, faster and more efficient, relatively lower in cost, and private. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10

113) The key to successful worker retention is to ________. A) conduct performance appraisals B) focus on top performers and determine their risk of leaving C) follow a take-it-or-leave it strategy with employees D) minimize the risks and rewards of challenging assignments Answer: B Explanation: B) The key to successful retention is to focus on top performers and determine their risk of leaving. Likely, these workers are already being recruited and they probably know their value in the job market. There will always be opportunities elsewhere for a firm's best employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 114) Within reason, which is considered to be a "healthy" activity for employers? A) absenteeism B) hiring more employees than is necessary at the time C) hiring lesser qualified employees to control the costs of compensation D) turnover Answer: D Explanation: D) A certain amount of turnover is healthy for an organization and is often necessary to afford employees the opportunity to fulfill career objectives. When turnover becomes excessive, however, the firm must do something to slow it. The most qualified employees are often the ones who resign because they are more mobile. On the other hand, marginally qualified workers never seem to leave. If excessive numbers of a firm's highly qualified and competent workers are leaving, a way must be found to reverse the trend. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 115) Which of the following is NOT an activity included in internal employee relations? A) promotion B) transfer C) demotion D) selection Answer: D Explanation: D) Internal employee relations comprise the human resource management activities associated with the movement of employees within the organization. Some topics related to internal employee relations include terminations, demotions, downsizing, transfers, promotions, and resignations. Selection occurs in the hiring process, so it is not an aspect of internal employee relations. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 41 Copyright © 2016 Pearson Education, Inc.

116) Which of the following statements is FALSE regarding resignations in the workplace? A) The most qualified employees are often the ones who resign because they are more mobile. B) When turnover is excessive, the firm must do something to slow it. C) If a firm commits to making its environment a good place to work, workers will not leave. D) A certain amount of turnover is healthy for a typical organization. Answer: C Explanation: C) Even when an organization is totally committed to making its environment a good place to work, some workers will still resign. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 117) Which term refers to a lateral movement of a worker within an organization? A) demotion B) termination C) promotion D) transfer Answer: D Explanation: D) The lateral movement of a worker within an organization is called a transfer. A promotion is the movement of a person to a higher-level position in the organization, while a demotion is the movement of a person to a lower-level position. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 118) Through what means may personality clashes between two valued employees be effectively handled? A) promotions B) transfers C) demotions D) layoffs Answer: B Explanation: B) Transfers are an effective means of dealing with personality clashes. Some people just cannot get along with one another. Because each of the individuals may be a valued employee, a transfer may be an appropriate solution to the problem. Promotions, demotions, and layoffs would be less appropriate. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

119) Employees are primarily transferred for all of the following reasons EXCEPT to ________. A) deal with personality clashes B) unclog promotional channels C) meet new organization needs D) reward outstanding performance Answer: D Explanation: D) Transfers serve several purposes. First, firms often find it necessary to reorganize. A second reason for transfers is to make positions available in the primary promotion channels. Transfers may also be an effective means of dealing with personality clashes. Promotions rather than transfers are used to reward performance. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 120) The movement of a person to a higher-level position in the organization is referred to as a ________. A) promotion B) transfer C) demotion D) termination Answer: A Explanation: A) A promotion is the movement of a person to a higher-level position in the organization, while a demotion is the movement of a person to a lower-level position. The lateral movement of a worker within an organization is called a transfer. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 121) Which of the following is a method of revealing the real reasons employees leave their jobs? A) qualitative evaluation B) performance appraisal C) selection interview D) exit interview Answer: D Explanation: D) An exit interview is a means of revealing the real reasons employees leave their jobs; it is conducted before an employee departs the company and provides information on how to correct the causes of discontent and reduce turnover. They provide a company with a valuable source of objective feedback. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

122) What is the most common reason individuals provide when resigning from a firm? A) unsatisfactory compensation B) few promotion opportunities C) disagreement with supervisor D) discriminatory company policies Answer: A Explanation: A) Although employees will cite pay as the reason they quit their jobs, 60 to 80 percent of the time, research indicates that only 12 to 15 percent of employees leave for this reason alone. Advancement opportunities, management difficulties, and policies may also be responsible, but these reasons are rarely cited. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 123) According to research cited in the text, what was the primary reason that top-performing women resigned from their jobs? A) wanting more time with family B) desiring additional compensation C) lacking development options D) failing to fit in with a company Answer: D Explanation: D) A consulting firm was hired to discover why top-performing women were quitting in high numbers, saying in their exit interviews that they wanted to spend more time with their kids. But the employers later learned that these women had returned to work, some starting their own firms and working longer hours. In anonymous interviews, the women who had quit explained the problem. Most said they'd left their jobs because "they could not see a future for themselves there." The "more-time-with kids" story was just a cover to maintain good relations with their former bosses. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

124) Why do firms most likely outsource exit interviews? A) promoting corporate goodwill B) ensuring honest responses C) saving time and cost D) quantifying results Answer: B Explanation: B) A third party may be used because employees may not be willing to air their problems with their former bosses. Outsourcing the exit interviews may be beneficial because employers believe that the person who is leaving will be more honest when he or she is not speaking to a company employee. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 125) All of the following are most likely identified during exit interviews EXCEPT ________. A) management weaknesses B) appropriate corrective action C) effective disciplinary procedures D) training and development needs Answer: C Explanation: C) Over time, properly conducted exit interviews can provide considerable insight into why employees leave. Patterns are often identified that uncover weaknesses in the firm's management system. Knowledge of the problem permits corrective action to be taken. Also, the exit interview helps to identify training and development needs and identify areas in which changes need to be made. Discipline is less likely to be addressed since resignations are voluntary. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

126) Which of the following is sent to former employees several weeks after they leave the organization to determine the real resignation reason? A) attitude survey B) grievance form C) work sample test D) postexit questionnaire Answer: D Explanation: D) A postexit questionnaire is sent to former employees several weeks after they leave the organization to determine the real reason they left. Attitude surveys seek input from employees to determine their feelings about topics such as the work they perform, their supervisor, their work environment, flexibility in the workplace, opportunities for advancement, training and development opportunities, and the firm's compensation system. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 127) What is an advantage of postexit questionnaires? A) two-way communication B) in-depth probing opportunities C) employee feels free to respond openly D) good rapport between employee and supervisor Answer: C Explanation: C) A postexit questionnaire is sent to former employees several weeks after they leave the organization to determine the real reason they left. Since the individual is no longer with the firm he or she may respond more freely to the questions. However, a weakness is that the interviewer is not present to interpret and probe for more information. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

128) What instrument seeks input from employees to determine their feelings about topics such as flexibility in the workplace, opportunities for advancement, training and development opportunities, and the firm's compensation system? A) productivity survey B) attitude survey C) selection test D) market analysis Answer: B Explanation: B) Attitude surveys seek input from employees to determine their feelings about topics such as the work they perform, their supervisor, their work environment, flexibility in the workplace, opportunities for advancement, training and development opportunities, and the firm's compensation system. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 129) What is the primary goal of distributing attitude surveys? A) enhancing employee morale B) improving management practices C) implementing compensation changes D) preparing for employee resignations Answer: B Explanation: B) Attitude surveys seek input from employees to determine their feelings about topics such as the work they perform, their supervisor, their work environment, flexibility in the workplace, opportunities for advancement, training and development opportunities, and the firm's compensation system. Attitude surveys have the potential to improve management practices. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 130) Which of the following is LEAST likely to be a topic addressed during offboarding? A) training programs B) company property C) health insurance D) retirement plans Answer: A Explanation: A) Offboarding involves exit interviews, removing access to company property, and other services involved in a former worker leaving the company. Topics such as the worker's 401(k) and COBRA need to be addressed. Training is a less likely topic during termination procedures. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 47 Copyright © 2016 Pearson Education, Inc.

131) Why is phased retirement beneficial to firms? A) outsourcing costs are significantly reduced B) flexible spending accounts assist older workers C) health care benefits are replaced by Medicare D) retained workers share experience with new hires Answer: D Explanation: D) A benefit of phased retirement is that it permits a company to reduce labor costs without hurting morale. It also lets an organization hold on to its experienced workers so they can share their knowledge with a less experienced workforce. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 132) Which Act permits limited phased retirement by allowing in-service pension plan withdrawals to begin at age 62 rather than 65? A) Pension Protection Act B) Older Workers Benefit Protection Act C) Employee Retirement Income Security Act D) Consolidated Omnibus Budget Reconciliation Act Answer: A Explanation: A) The Pension Protection Act of 2006 permits limited phased retirement by allowing in-service pension plan withdrawals to begin at age 62 rather than 65. A benefit of phased retirement is that it permits a company to reduce labor costs without hurting morale. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 133) External employee relations comprise the human resource management activities associated with the movement of employees within the organization. Answer: FALSE Explanation: Internal employee relations comprise the human resource management activities associated with the movement of employees within the organization. Some topics related to internal employee relations include terminations, demotions, downsizing, transfers, promotions, and resignations. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

134) The purpose of an exit interview is to alter behavior that can have a negative impact on achievement of organizational objectives. Answer: FALSE Explanation: The purpose of disciplinary action is to alter behavior that can have a negative impact on achievement of organizational objectives, not to chastise the violator. Exit interviews collect information from employees who are resigning. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 135) Transfers are increasingly necessary for managers who need to learn new skills before attaining promotions. Answer: TRUE Explanation: Because of a limited number of management levels, it is becoming necessary for managers to have a wide variety of experiences before achieving a promotion. Individuals who desire upward mobility often explore possible lateral moves so that they can learn new skills. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 136) Many organizations use exit interviews to reduce employee turnover. Answer: TRUE Explanation: An exit interview is a means of revealing the real reasons employees leave their jobs; it is conducted before an employee departs the company and provides information on how to correct the causes of discontent and reduce turnover. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 137) Phased retirement allows employees to transition from full-time work to retirement in steps rather than all at one time. Answer: TRUE Explanation: Phased retirement as an arrangement that allows people to move from fulltime work to retirement in steps. Retirement is treated as a phased process rather than a sudden event marked by a sentimental speech and a gold watch. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

138) What is the difference between a demotion and a promotion? What factors should managers consider when demoting and promoting employees? Answer: Demotion is the process of moving a worker to a lower level of duties and responsibilities, which typically involves a reduction in pay. A promotion is the movement of a person to a higher-level position in the organization. Emotions may run high when an individual is demoted. The demoted person may suffer loss of respect from peers and feel betrayed, embarrassed, angry, and disappointed. The employee's productivity may also decrease further. For these reasons, demotion should be used very cautiously. An individual who receives a promotion normally receives additional financial rewards and the ego boost associated with achievement and accomplishment. Most employees feel good about being promoted. But for every individual who gains a promotion, there are probably others who were not selected. If these individuals wanted the promotion badly enough or their favorite candidate was overlooked, they may slack off or even resign. If the consensus of employees directly involved is that the wrong person was promoted, considerable resentment may result. Promotion and demotion decisions should not discriminate against employees because of age, race, religion, national origin, color, sex, pregnancy, or disability. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 11 139) What is phased retirement? How does phased retirement benefit both employees and employers? Answer: Phased retirement is any arrangement that allows people to move from full-time work to retirement in steps. A benefit of phased retirement is that it permits a company to reduce labor costs without hurting morale. It also lets an organization hold on to its experienced workers so they can share their knowledge with a less experienced workforce. A recent study found that retirees who transition from full-time work into a temporary or part-time job experience fewer major diseases and are able to function better day-to-day than people who stop working altogether. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

140) Approximately ________ U.S. workers depend almost entirely on the continued goodwill of their employer. A) two out of every three B) one out of every two C) two out of every five D) four out of every ten Answer: A Explanation: A) Notwithstanding various employment standards to avoid that are based on laws, court decisions, and executive orders, approximately two of every three U.S. workers depend almost entirely on the continued goodwill of their employer. Individuals falling into this category are known as "at-will employees." Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 141) What may be a consequence of laws on labor unions and employment in Western Europe that make it difficult to terminate employees? A) succession planning becomes less relevant B) employee compensation decreases C) companies may choose to hire many employees D) companies may be reluctant to hire many employees Answer: D Explanation: D) When it comes to discharging a worker who is not performing, it is much harder to do in Europe than in North America and other parts of the world. In fact, Europe may have the most employee-friendly laws. Even though they face global competition, unions in several European countries have resisted changing their laws and removing government protections. In many Western European countries, laws on labor unions and employment make it difficult to lay off employees. Laws make it hard to fire workers, so companies are reluctant to hire. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

142) Which of the following is an exception made by courts regarding the employment-at-will doctrine? A) prohibiting termination on the grounds of public policy B) permitting claims based on good faith and fair dealing C) permitting employees to bring claims based on statements made in employment handbooks D) all of the above Answer: C Explanation: C) The courts have made certain exceptions to the employment-at-will doctrine. One of these is permitting employees to bring claims based on statements made in employment handbooks, which create an implied employment contract. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 143) During a job interview, John, an HR manager, tells an applicant, "You can expect to hold this job as long as you want." John's statement could be considered a(n) ________ and grounds for a lawsuit. A) ethical breach B) fundamental breach C) contractual agreement D) responsibility agreement Answer: C Explanation: C) Telling a person during a job interview that he or she can expect to hold the job as long as they want could be considered a contractual agreement and grounds for a lawsuit. A person should not be employed without a signed acknowledgment of the employment-at-will disclaimer. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 12

144) Peterson Productions wants to protect itself from wrongful discharge litigation, so the firm has eliminated from its job application any statements that suggest ________. A) background investigations B) permanent employment C) union membership D) merit performance Answer: B Explanation: B) Employers can do certain things to help protect themselves against litigation for wrongful discharge based on a breach of implied employment contract. Statements in documents such as employment applications and policy manuals that suggest job security or permanent employment should be avoided if employers want to minimize charges of wrongful discharge. Difficulty: Moderate Skill: Concept AACSB: Application of knowledge Learning Obj.: 12 145) In approximately two of every three U.S. jobs, the worker's continued employment depends almost entirely on the continued goodwill of his or her employer. Answer: TRUE Explanation: Notwithstanding various employment standards to avoid that are based on laws, court decisions, and executive orders, approximately two of every three U.S. workers depend almost entirely on the continued goodwill of their employer. Individuals falling into this category are known as "at-will employees." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 146) Employment at will is a written contract established immediately after an employee accepts a position at a firm. Answer: FALSE Explanation: Employment at will is an unwritten contract created when an employee agrees to work for an employer but no agreement exists as to how long the parties expect the employment to last. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

147) The courts have used ethical considerations to make certain exceptions to the doctrine of atwill-employment. Answer: FALSE Explanation: Some experts contend that even though an employer has a legal right to terminate an employee at will, ethical boundaries should be recognized. However, no law says these ethical considerations have to be followed. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 148) The courts have made no exceptions to the employment-at-will doctrine. Answer: FALSE Explanation: The courts have made certain exceptions to the employment-at-will doctrine. One of these includes permitting employees to bring claims based on representations made in employment handbooks. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 149) Multinational corporations often use standardized policies for disciplining international employees. Answer: FALSE Explanation: Because of the differences in how governments view disciplinary action in the global environment, it is very difficult for a global company to establish a standardized policy on disciplinary action. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12

150) Define employment at will. Are there legal exceptions to the employment-at-will doctrine? How can employers protect themselves from wrongful discharge lawsuits? Answer: Employment at will is an unwritten contract created when an employee agrees to work for an employer but no agreement exists as to how long the parties expect the employment to last. Essentially at-will employees can quit any time they want and a company can terminate an at-will employee for no reason. The courts have made certain exceptions to the employment-at-will doctrine. One of these includes permitting employees to bring claims based on representations made in employment handbooks. Employers can do certain things to help protect against litigation for wrongful discharge based on a breach of implied employment contract. Statements in documents such as employment applications and policy manuals that suggest job security or permanent employment should be avoided if employers want to minimize charges of wrongful discharge. Telling a person during a job interview that he or she can expect to hold the job as long as they want could be considered a contractual agreement and grounds for a lawsuit. A person should not be employed without a signed acknowledgment of the at-will disclaimer. In addition, the policy manual should have it clearly stated in bold, larger-than-normal print, so it is very clear to the employee that this is an at-will relationship. Other guidelines that may assist organizations in avoiding wrongful termination suits include clearly defining the worker's duties, providing good feedback on a regular basis, and conducting realistic performance appraisals on a regular basis. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 21

Human Resource Management, 14e (Mondy) Chapter 13 Employee Safety, Health, and Wellness 1) What involves protecting employees from injuries caused by work-related accidents? A) safety B) health C) wellness D) morale Answer: A Explanation: A) Safety involves protecting employees from injuries caused by work-related accidents. Included within the umbrella definition of safety are factors related to repetitive stress injuries and workplace and domestic violence. Health refers to employees' freedom from physical or emotional illness. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 2) What term refers to employees' freedom from physical or emotional illness? A) safety B) health C) prevention D) morale Answer: B Explanation: B) Health refers to employees' freedom from physical or emotional illness. Safety involves protecting employees from injuries caused by work-related accidents. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 3) In regards to OSHA, health involves protecting employees from injuries caused by workrelated accidents. Answer: FALSE Explanation: Safety involves protecting employees from injuries caused by work-related accidents. Health refers to employees' freedom from physical or emotional illness. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

4) What agency enforces the Occupational Safety and Health Act? A) Office of Federal Contract Compliance Programs B) National Safety Administration C) Occupational Safety and Health Administration D) Equal Employment Opportunity Commission Answer: C Explanation: C) The Occupational Safety and Health Act of 1970 created the Occupational Safety and Health Administration (OSHA). OSHA aims to ensure worker safety and health in the United States by working with employers and employees to create better working environments. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 5) Which of the following was created to ensure worker safety and health? A) ADEA B) FLSA C) OSHA D) EEOC Answer: C Explanation: C) The Occupational Safety and Health Act of 1970 created the Occupational Safety and Health Administration (OSHA). OSHA aims to ensure worker safety and health in the United States by working with employers and employees to create better working environments. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 6) In order to prove that an employer has violated the general duty clause, OSHA must prove all of the following exist EXCEPT that ________. A) the hazard was likely to cause minor injuries B) a condition in the workplace presented a hazard C) a feasible means existed to reduce the hazard D) the employer or its industry recognized the hazard Answer: A Explanation: A) In order to prove a violation of the general duty clause, OSHA has to demonstrate: 1) That a condition or activity in the workplace presented a hazard; 2) That the employer or its industry recognized this hazard; 3) That the hazard was likely to cause death or serious physical harm; and 4) That a feasible and effective means existed to eliminate or materially reduce the hazard. Minor hazards would not necessarily warrant a general duty clause violation. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

7) Since its inception, OSHA has helped to cut workplace fatalities by approximately how much? A) 10 percent B) 30 percent C) 60 percent D) 90 percent Answer: C Explanation: C) Since its beginning in 1970, OSHA has helped to cut workplace fatalities by more than 60 percent and occupational injury and illness by 40 percent. At the same time, U.S. employment has more than doubled from 56 million workers at 3.5 million work sites to more than 125 million workers. The agency has helped standardize reasonable worker protections. Rules defining confined spaces, machine guards, or hard hat zones have allowed many plant managers and site supervisors to think more about productivity, not accidents. The most frequently mentioned hazard that OSHA addresses has to do with missing or inadequate fall protection. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 8) Since its inception, OSHA has helped to cut occupational injury and illness rates by how much? A) 10% B) 40% C) 80% D) 100% Answer: B Explanation: B) Since its inception, OSHA has helped to cut workplace fatalities by more than 60 percent and occupational injury and illness by 40 percent. At the same time, U.S. employment has more than doubled from 56 million workers at 3.5 million worksites to 147 million workers at 7.2 million sites. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 9) Approximately, how many inspectors does OSHA have? A) 500 B) 2,200 C) 2,700 D) 22,000 Answer: B Explanation: B) OSHA employs approximately 2,200 inspectors. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 3 Copyright © 2016 Pearson Education, Inc.

10) ABC Manufacturing received one citation for a serious hazard. What is the maximum penalty for this violation? A) $13,000 B) $11,000 C) $9,000 D) $7,000 Answer: D Explanation: D) A serious hazard citation has a maximum penalty of $7,000. A willful citation might have a maximum amount of $70,000 per violation. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 11) If 10 employees were exposed to one hazard that the employer intentionally did not eliminate, what would be the maximum penalty? A) $400,000 B) $500,000 C) $600,000 D) $700,000 Answer: D Explanation: D) A willful citation might have a maximum amount of $70,000 per violation. Calculated instance by instance, if 10 employees were exposed to one hazard the employer intentionally did not eliminate, the penalty amount would immediately jump to $700,000. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 2 12) Thompson Manufacturing has been designated a recalcitrant employer by OSHA. As a result, Thompson will most likely ________. A) receive a stern warning B) close its facilities immediately C) experience numerous inspections D) downsize its staff and hire contractors Answer: C Explanation: C) OSHA implemented the Severe Violator Enforcement Program that will increase inspections at worksites where "recalcitrant employers" have repeatedly violated safety regulations and endangered workers. The firm would likely already have received citations, but closing the facility and downsizing are less likely to occur. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 2

13) Which of the following firms recently received the largest fine in OSHA's history? A) BP B) GM C) Exxon D) Toyota Answer: A Explanation: A) BP Products North America Inc. received the largest fine in OSHA's history for its failure to correct hazards faced by employees at its Texas City refinery. However, this record will likely be broken due to the death and destruction caused by the oil well explosion and the resulting damage to the Gulf Coast in 2010. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 14) According to your textbook, all of the following EXCEPT ________ are included within the umbrella definition of safety. A) musculoskeletal disorders B) stress injuries C) natural disasters D) workplace and domestic violence Answer: C Explanation: C) Safety involves protecting employees from injuries caused by work-related accidents. Included within the umbrella definition of safety are factors related to musculoskeletal disorders, stress injuries, and workplace and domestic violence. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 15) In pursuit of its mission, OSHA promotes and ensures ________. A) corporate wellness programs B) employee assistance programs C) workplace safety and health D) global healthcare Answer: C Explanation: C) The mission of OSHA is to promote and ensure workplace safety and health and to reduce workplace fatalities, injuries, and illnesses. OSHA is committed to ensuring-so far as possible-that every working person in the nation has a safe and healthful working environment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

16) Which OSHA clause requires employers to provide a workplace free from recognizable hazards that are causing, or likely to cause, death or serious harm to the employee? A) specific duty B) general duty C) negligent retention D) negligent hiring Answer: B Explanation: B) Perhaps many of the previously discussed forms of workplace violence could have been prevented if managers had paid more attention to potential problem employees. Under OSHA's general duty clause, employers are required to furnish, to each employee, a place of employment that is free from recognizable hazards that are causing, or likely to cause, death or serious harm to the employee. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 17) The primary purpose of OSHA is to impose fines on companies that exhibit a high incidence of accidents. Answer: FALSE Explanation: The purpose of OSHA is to ensure worker safety and health in the United States by working with employers and employees to create better working environments. The act requires employers to provide employees a safe and healthy place to work and this responsibility extends to providing safe employees. The courts have reasoned that a dangerous worker is comparable to a defective machine. Imposing fines is within the scope of OSHA's work, but it is not the primary purpose. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 18) The Occupational Safety and Health Act requires employers to provide employees a safe and healthy place to work, and which responsibility extends to providing "safe" employees. Answer: TRUE Explanation: The Act requires employers to provide employees a safe and healthy place to work and this responsibility extends to providing safe employees. The courts have reasoned that a dangerous worker is comparable to a defective machine. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

19) The Occupational Safety and Health Act of 1970 created the Occupational Safety and Health Administration (OSHA), which attempts to ensure worker safety. Answer: TRUE Explanation: The Occupational Safety and Health Act of 1970 created the Occupational Safety and Health Administration (OSHA). OSHA aims to ensure worker safety and health in the United States by working with employers and employees to create better working environments. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 20) Although OSHA has helped to significantly reduce the number of workplace fatalities, the number of workers contracting occupational illnesses has remained the same. Answer: FALSE Explanation: Since its beginning in 1970, OSHA has helped to cut workplace fatalities by more than 60 percent and occupational injury and illness by 40 percent. At the same time, U.S. employment has more than doubled from 56 million workers at 3.5 million work sites to more than 125 million workers. The agency has helped standardize reasonable worker protections. Rules defining confined spaces, machine guards, or hard hat zones have allowed many plant managers and site supervisors to think more about productivity, not accidents. The most frequently mentioned hazard that OSHA addresses has to do with missing or inadequate fall protection. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 21) OSHA can issue warnings, but it does not have the power to issue fines. Answer: FALSE Explanation: Even though OSHA would like a successful partnership relationship to exist, at times penalties must be given. Financial penalties serve as reminders to industry of the benefits of maintaining safe and healthy working conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

22) The Severe Violator Enforcement Program focuses on employers that have repeatedly violated safety regulations. Answer: TRUE Explanation: In 2010, OSHA implemented the Severe Violator Enforcement Program that will increase inspections at worksites where "recalcitrant employers" have repeatedly violated safety regulations and endangered workers. It also requires a mandatory follow-up inspection to make sure the required changes were made. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 23) OSHA has authorized stricter enforcement measures for manufacturers and other employers that repeatedly violate health and safety standards. Answer: TRUE Explanation: In 2010, OSHA implemented the Severe Violator Enforcement Program that will increase inspections at worksites where "recalcitrant employers" have repeatedly violated safety regulations and endangered workers. It also requires a mandatory follow-up inspection to make sure the required changes were made. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 24) Small businesses are exempt from complying with the Occupational Safety and Health Act. Answer: FALSE Explanation: Under the provisions of OSHA, employers must provide a workplace free from recognized hazards that are causing, or are likely to cause, death or serious physical harm to employees regardless of the size of a business. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 25) In order to establish and maintain a safety program, a company must limit its focus to unsafe working conditions. Answer: FALSE Explanation: Safety programs may accomplish their purposes in two primary ways: one focusing on unsafe employee actions and the other on unsafe working conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

26) Worker safety affects recruitment, retention, and benefits. Answer: TRUE Explanation: Every phase of human resource management is involved with safety. For instance, the firm may have difficulty in recruitment if it gains a reputation for being an unsafe place to work. Firms will see an increase in compensation costs when they must pay a premium to attract and retain qualified applicants. Maintaining a stable workforce may become very difficult if employees perceive their workplace as hazardous. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 27) Musculoskeletal disorders (MSDs) are conditions that affect the body's muscles, joints, tendons, ligaments, and nerves. Answer: TRUE Explanation: Musculoskeletal disorders (MSDs) are conditions that affect the body's muscles, joints, tendons, ligaments, and nerves. Work-related MSDs, including tendonitis, carpal tunnel syndrome (CTS), and back pain, cost U.S. companies $61.2 billion annually just to cover lost productivity. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 28) Under OSHA's general duty clause, employers are required to conduct background investigations and drug tests on each employee to ensure workplace safety. Answer: FALSE Explanation: Under OSHA's general duty clause, employers are required to furnish, to each employee, a place of employment that is free from recognizable hazards that are causing, or likely to cause, death or serious harm to the employee. Firms do not necessarily have to conduct drug testing. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

29) Within the Department of Labor, OSHA enforces ________ for workplace safety, the environment, consumer products, the financial system, and other areas. A) pension benefit guaranties B) equal employment opportunity statutes C) whistleblower protection provisions D) financial disclosure requirements Answer: C Explanation: C) OSHA is charged with more than just enforcing health and safety matters. Within the Department of Labor, OSHA enforces the whistleblower protection provisions of 21 statutes, covering not just workplace safety but also the environment, consumer products, the financial system, and other areas. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 30) A portion the Sarbanes-Oxley Act makes it illegal to fire or otherwise discriminate against a corporate officer for trying to report possible accounting irregularities to higher corporate officials or enforcement agencies. The ________ administers that portion of Sarbanes-Oxley. A) Department of Homeland Security B) Internal Revenue Service C) U.S. Department of Labor D) Securities and Exchange Commission Answer: C Explanation: C) The U.S. Department of Labor administers the portion of the Sarbanes-Oxley Act that makes it illegal to fire or otherwise discriminate against a corporate officer for trying to report possible accounting irregularities to higher corporate officials or enforcement agencies. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 31) The Securities and Exchange Commission is responsible for upholding the whistleblower provision of the Sarbanes-Oxley Act. Answer: FALSE Explanation: The Sarbanes-Oxley Act has a provision that makes it illegal to fire or otherwise discriminate against a corporate officer for trying to report possible accounting irregularities to higher corporate officials or enforcement agencies. The U.S. Department of Labor administers this portion of the Sarbanes-Oxley Act, not the U.S. Securities and Exchange Commission. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

32) OSHA provides free on-site consultation for ________. A) small businesses that have evidence of significant safety problems B) small businesses C) large businesses D) none of the above Answer: B Explanation: B) OSHA has an on-site consultation service that provides small businesses with free advice from trained state government staff. The service is completely separate from any enforcement programs that the OSHA operates and is entirely confidential. Sessions identify and uncover potential workplace hazards and are intended to help small business owners improve their workplace safety and health systems. Small businesses that participate can qualify for a one-year exemption from routine OSHA inspections. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 33) Individuals who are not prone to violence are more likely to be ________. A) recovering from substance abuse B) married with children C) outwardly focused D) highly educated Answer: C Explanation: C) The profiles of individuals not prone to violence tend to have certain things in common. The most important markers for these people include no substance abuse (one of the highest correlating factors); being outwardly focused; having outside interests and friendships rather than being mainly self-involved; and having a good work history. Being married and educated do not necessarily indicate a person will not be violent. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

34) Kelly is extremely stressed about work, and her productivity is declining. What is the best way for Kelly to manage her stress? A) exercising regularly B) starting a diet plan C) working on the weekend D) requesting new assignments Answer: A Explanation: A) One of the most effective means of dealing with stress is physical exercise. Stress results in chemical changes in the body, and exercise provides a means of returning the body to its normal state. Although good diet is beneficial, Kelly may not need to lose weight. Working more or requesting more work would most likely increase Kelly's stress. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 4 35) What is the top leading cause of workplaces injuries and their associated costs? A) overexertion B) truck accidents C) repetitive motion D) struck against object Answer: A Explanation: A) The leading cause of workplace injuries and their associated costs are overexertion (e.g., lifting, carrying, pushing, pulling, etc.). The significant financial costs are often passed along to the consumer in the form of higher prices. Thus, job-related deaths and injuries affect everyone, directly or indirectly. Safety risks can be significant for employers. In addition to workers' compensation costs, OSHA can levy major fines. Indirect costs related to turnover and lost productivity add to the expense. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 36) The leading cause of workplace injuries was overexertion, such as lifting, carrying, pushing, and pulling. Answer: TRUE Explanation: The leading cause of workplace injuries and their associated costs are overexertion (e.g., lifting, carrying, pushing, pulling, etc.). The significant financial costs are often passed along to the consumer in the form of higher prices. Thus, job-related deaths and injuries affect everyone, directly or indirectly. Safety risks can be significant for employers. In addition to workers' compensation costs, OSHA can levy major fines. Indirect costs related to turnover and lost productivity add to the expense. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 12 Copyright © 2016 Pearson Education, Inc.

37) Why is it economically beneficial to maintain workplaces that are safe, healthy, and drugfree? Answer: Job-related deaths and injuries of all types extract a high toll not only in terms of human misery, but also in economic loss. According to a recent Liberty Mutual Workplace Safety Index, the most disabling workplace injuries and illnesses cost U.S. businesses $53 billion in direct workers' compensation costs, an average of more than $1 billion per week. The significant financial costs are often passed along to the consumer in the form of higher prices. Thus, job-related deaths and injuries affect everyone, directly or indirectly. Safety risks can be significant for employers. In addition to workers' compensation costs, OSHA can levy major fines. Indirect costs related to turnover and lost productivity add to the expense. Substance abuse involves the use of illegal substances or the misuse of controlled substances such as alcohol and drugs. Substance abusers have higher rates of absenteeism and employee turnover, creating management problems for their employers. Research indicates that between 10 and 20 percent of the nation's workers who die on the job, test positive for alcohol or drugs. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 5, 13 38) Which of the following is an essential element of a corporate safety program? A) a culture of fear and reprisal to penalize safety violators B) a corporate culture where employees are involved and engaged C) a laissez-faire attitude from the top management team D) a top-down approach to implementing safety in the workplace Answer: B Explanation: B) The first approach in a safety program is to create a psychological environment and employee attitudes that promote safety. A corporate culture needs to exist where employees are involved and engaged and have the opportunity to provide input on changes to their workplace. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

39) Comprehensive safety programs should primarily focus on unsafe working conditions and on unsafe ________. A) employee actions B) equipment C) management policies D) products Answer: A Explanation: A) Every employer needs to have a comprehensive safety program in place regardless of the degree of danger involved. Safety programs may accomplish their purposes in two primary ways: one focusing on unsafe employee actions and the other on unsafe working conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 40) An employee with which of the following qualities would most likely have fewer work injuries? A) high productivity rate B) extensive education C) lengthy work experience D) extensive job knowledge Answer: C Explanation: C) Training and orientation of new employees emphasizing safety is especially important. The early months of employment are often critical because work injuries decrease with length of service. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 6 41) According to OSHA, who is primarily responsible for employee safety? A) employee B) OSHA C) employer D) co-workers Answer: C Explanation: C) Although every individual in a firm should be encouraged to come up with solutions to potential safety problems, the firm's managers must take the lead. Management's unique role is clear, since OSHA places primary responsibility for employee safety on the employer. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

42) Foley Foods is a mid-size food processing facility that has had a significant increase in business lately. The firm needs to hire additional workers and develop a second shift to meet productivity needs. The HR manager at Foley Foods recommends implementing a safety program. Which of the following best supports the implementation of a safety program? A) At the end of each year, high performing employees at Foley Foods are given bonuses. B) As a government contractor, Foley Foods must have an employee assistance program. C) Workers' compensation costs increased significantly in the last year at Foley Foods. D) Foley Foods' main competitor recently received an OSHA penalty and citation. Answer: C Explanation: C) Workers' compensation insurance premiums are based on the employer's history of insurance claims. The potential for savings related to employee safety provides a degree of incentive to establish formal safety programs. Compensation, EAPs, and competitors' safety problems are less relevant to the issue. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 6 43) Foley Foods is a mid-size food processing facility that has had a significant increase in business lately. The firm needs to hire additional workers and develop a second shift to meet productivity needs. The HR manager at Foley Foods recommends implementing a safety program. Which of the following suggests that a safety program would be beneficial to Foley Foods? A) Foley Foods recently became a smoke-free workplace. B) Foley Foods will be hiring new workers for the night shift. C) Employees at Foley Foods use simulators during training programs. D) Managers at Foley Foods will soon be conducting performance appraisals. Answer: B Explanation: B) Training and orientation of new employees emphasizing safety is especially important. The early months of employment are often critical because work injuries decrease with length of service. If Foley is hiring new workers for the night shift, safety is a primary issue. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 6

44) Foley Foods is a mid-size food processing facility that has had a significant increase in business lately. The firm needs to hire additional workers and develop a second shift to meet productivity needs. The HR manager at Foley Foods recommends implementing a safety program. Which of the following most likely undermines the need for a safety program? A) Foley Foods has a high employee turnover rate. B) All machines at Foley Foods are equipped with safety interlocks. C) Foley Foods' workers' compensation costs are the highest in the industry. D) Employees at Foley Foods have the option of wearing safety goggles and other PPE. Answer: B Explanation: B) Safety devices on machines help protect employees, so if all machines are equipped, then a safety program may not be needed. A high turnover rate means the firm has many inexperienced workers who lack the skills to stay safe. Workers' compensation claims and optional personal protective equipment are indicators that the firm needs a safety program. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 6 45) Foley Foods is a mid-size food processing facility that has had a significant increase in business lately. The firm needs to hire additional workers and develop a second shift to meet productivity needs. The HR manager at Foley Foods recommends implementing a safety program. Which of the following questions is LEAST relevant to this decision? A) How many OSHA citations has Foley Foods received? B) What engineering controls are used at Foley Foods? C) What is the annual accident rate at Foley Foods? D) How does Foley Foods recruit safety engineers? Answer: D Explanation: D) OSHA citations and the annual accident rate are both indicators of the safety at Foley. Engineering controls prevent accidents, so the question is relevant. Safety engineers are important in coordinating a safety program, but how they are recruited is less relevant to the issue. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 6

46) Which of the following is a multi-step process designed to study and analyze a task and then break down that task into steps that provide a means of eliminating associated dangers? A) job analysis B) job hazard analysis C) workplace analysis D) hazard analysis Answer: B Explanation: B) Job hazard analysis (JHA) is a multistep process designed to study and analyze a task or job and then break down that task into steps that provide a means of eliminating associated hazards. It is an effective and useful tool to isolate and address safety issues and risks. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 47) What results in a detailed written procedure for safely completing many tasks within a plant? A) job analysis B) workplace analysis C) job hazard analysis D) quantified hazard analysis Answer: C Explanation: C) JHA can have a major impact on safety performance. It results in a detailed written procedure for safely completing many tasks within a plant. A successful JHA program features several key components: management support, supervisor and employee training, written program, and management oversight. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 48) Which of the following is NOT a component of a successful JHA program? A) management support B) employee training C) government enforcement D) management oversight Answer: C Explanation: C) A successful JHA program features several key components: management support, supervisor and employee training, written program, and management oversight. Government enforcement is not an element of a successful JHA program. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

49) What law requires businesses to communicate more openly about the hazards associated with the materials they use and produce and the wastes they generate? A) Occupational Communication in Safety and Health Act B) Safe Communication in Health Act C) Occupational Safety and Health Act D) Superfund Amendments Reauthorization Act Answer: D Explanation: D) SARA requires businesses to communicate more openly about the hazards associated with the materials they use and produce and the wastes they generate. Although SARA has been around since 1986, some firms do not yet have a satisfactory program for it in place. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 50) One of the primary tasks of a firm's safety director is to ________. A) request safety inspections B) prepare OSHA reports C) provide safety training D) act as a line manager Answer: C Explanation: C) In many companies, one staff member coordinates the overall safety program. Titles such as safety engineer and safety director are common. One of the safety engineer's primary tasks is to provide safety training for company employees. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 51) Which department within a corporation is most likely responsible for anticipating losses associated with safety factors? A) employee relations B) risk management C) health and safety D) human resources Answer: B Explanation: B) Some major corporations have risk management departments that anticipate losses associated with safety factors and prepare legal defenses in the event of lawsuits. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

52) According to a Liberty Mutual Workplace Safety Index, workplace illnesses and injuries cost U.S. firms $53 billion in workers' compensation costs. Answer: TRUE Explanation: According to a Liberty Mutual Workplace Safety Index, workplace illnesses and injuries cost U.S. firms $53 billion in workers' compensation costs, an average of more than $1 billion per week. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 53) When the employer provides necessary safety equipment, OSHA places primary responsibility for employee safety on the employee. Answer: FALSE Explanation: Although every individual in a firm should be encouraged to come up with solutions to potential safety problems, the firm's managers must take the lead. Management's unique role is clear, since OSHA places primary responsibility for employee safety on the employer even when the employee makes poor choices. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 54) Job hazard analysis is a multi-step process designed to study a task for the purpose of isolating and addressing safety issues. Answer: TRUE Explanation: Job hazard analysis (JHA) is a multistep process designed to study and analyze a task or job and then break down that task into steps that provide a means of eliminating associated hazards. It is an effective and useful tool to isolate and address safety issues and risks. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 55) The EEOC requires businesses to communicate more openly about the hazards associated with the materials they use and produce and the wastes they generate. Answer: FALSE Explanation: The Superfund Amendments Reauthorization Act (SARA) requires businesses to communicate more openly about the hazards associated with the materials they use and produce and the wastes they generate. Although SARA has been around since 1986, some firms do not yet have a satisfactory program for it in place. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

56) When evaluating the effectiveness of a safety program, OSHA primarily focuses on the frequency of injuries at a firm. Answer: TRUE Explanation: Perhaps the best indicator of a successful safety program is a reduction in the injury frequency rate. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 57) What has been the effect on both employers and employees of the Occupational Safety and Health Act of 1970 and the Superfund Amendments Reauthorization Act? Answer: The Occupational Safety and Health Act of 1970 created the Occupational Safety and Health Administration (OSHA). OSHA aims to ensure worker safety and health in the United States by working with employers and employees to create better working environments. The Act requires employers to provide employees a safe and healthy place to work and this responsibility extends to providing safe employees. SARA requires businesses to communicate more openly about the hazards associated with the materials they use and produce and the wastes they generate. The hazard communication standard often leads the list of OSHA violations, since the top category for OSHA citations is for no written hazard communication program. Dealing with this standard appears to be relatively simple and inexpensive, except when organizations ignore its provisions. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 6 58) As an HR professional, what arguments could you provide to convince top management to support the establishment of a safety program? Answer: Top management has a number of reasons to support a safety program. The lost productivity of a single injured worker is not the only factor to consider. Every phase of human resource management is involved. For instance, the firm may have difficulty in recruitment if it gains a reputation for being an unsafe place to work. Employee relations erode if workers believe that management does not care enough about them to provide a safe workplace. Firms will see an increase in compensation costs when they must pay a premium to attract and retain qualified applicants. Maintaining a stable workforce may become very difficult if employees perceive their workplace as hazardous. Since the enactment of the Occupational Safety and Health Act, a willful and repeated violation of its provisions may result in serious penalties for the employer. A safe work environment is not only in the best interests of the firm but is the right thing to do. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 6

59) Which term refers to conditions that affect the body's muscles, joints, tendons, ligaments, and nerves? A) repetition syndrome B) stress trauma injuries C) flexible ligament injuries D) musculoskeletal disorders Answer: D Explanation: D) Musculoskeletal disorders (MSDs) are conditions that affect the body's muscles, joints, tendons, ligaments, and nerves. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 60) Musculoskeletal disorders cost companies approximately ________ annually. A) $26.5 billion B) $50.6 billion C) $61.2 billion D) $75.1 billion Answer: C Explanation: C) Work-related musculoskeletal disorders (MSDs), including tendonitis, carpal tunnel syndrome, and back pain, cost U.S. companies $61.2 billion annually just to cover lost productivity. According to the U.S. Bureau of Labor Statistics, nearly 400,000 MSD cases accounted for 34 percent of all injury and illness cases in 2012. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 61) Which of the following is caused by pressure on the median nerve that occurs as a result of a narrowing of the passageway that houses the nerve? A) carpal isometrics B) carpal tunnel syndrome C) ergotism syndrome D) isometrics syndrome Answer: B Explanation: B) A serious repetitive stress injury is carpal tunnel syndrome (CTS), caused by pressure on the median nerve that occurs as a result of a narrowing of the passageway that houses the nerve. People who have CTS may experience pain, numbness, or tingling in the hands or wrist, a weak grip, the tendency to drop objects, sensitivity to cold, and in later stages, muscle deterioration, especially in the thumb. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7

62) Individuals in which of the following jobs are LEAST likely to develop carpal tunnel syndrome? A) assembly line workers B) illustrators C) teachers D) carpenters Answer: C Explanation: C) CTS tends to develop in people who use their hands and wrists repeatedly in the same way. Illustrators, carpenters, assembly-line workers, and people whose jobs involve work on personal computers are the ones most commonly affected. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 7 63) Which of the following is most likely to reduce the risk of developing carpal tunnel syndrome? A) resting the hand and wrist in a neutral position B) performing similar activities regularly each day C) positioning computer monitors above eye level D) keeping keyboards below elbow level Answer: A Explanation: A) The severity of CTS can be reduced by resting the hand in a neutral position. Employees should avoid performing the exact activities that cause the syndrome. Managers can ensure that computer monitors are positioned at eye level and keyboards at elbow level. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 64) Tanya is a data entry specialist who spends most of her day at a computer workstation. She has recently experienced a weak grip, wrist numbness, and sensitivity to cold. Which of the following recommendations is LEAST likely to benefit Tanya? A) placing the monitor at eye level B) taking periodic exercise breaks C) alternating tasks during the day D) adjusting her chair height Answer: A Explanation: A) The severity of CTS can be reduced by taking breaks, alternating tasks, and adjusting the chair height. Monitors should be positioned at eye level to avoid neck strain. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 7

65) People who use their hands and wrists repeatedly in the same way tend to develop carpal tunnel syndrome. Answer: TRUE Explanation: CTS tends to develop in people who use their hands and wrists repeatedly in the same way. Illustrators, carpenters, assembly-line workers, and people whose jobs involve work on personal computers are the ones most commonly affected. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 66) The severity of carpal tunnel syndrome can be reduced with an ergonomic work environment. Answer: TRUE Explanation: Ergonomics is a method for handling repetitive stress injuries, such as CTS. Ergonomics involves designing the workplace so that workers can perform without pain. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 67) What are musculoskeletal disorders (MSDs)? How can ergonomics benefit a workforce with a high number of employees affected by MSDs? Answer: Musculoskeletal disorders (MSDs) are conditions that affect the body's muscles, joints, tendons, ligaments, and nerves. Work-related MSDs, including tendonitis, carpal tunnel syndrome, and back pain, cost U.S. companies $61.2 billion annually just to cover lost productivity. According to the U.S. Bureau of Labor Statistics, nearly 400,000 MSD cases accounted for 34 percent of all injury and illness cases in 2012. The median days away from work was 12 days. The highest incidence rate occurred for laborer and freight, stock, and material movers. Back problems accounted for 41.2 percent of total MSDs. Ergonomics is the process of designing the workplace to support the capabilities of people and job/task demands. Through ergonomics, the goal is to fit the machine and work environment to the person, rather than require the person to make the adjustment. Ergonomics includes all attempts to structure work conditions so that they maximize energy conservation, promote good posture, and allow workers to function without pain or impairment. Failure to address ergonomics issues results in fatigue, poor performance, and repetitive stress injuries. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 7, 8

68) The study of human interaction with tasks, equipment, tools and the physical environment is known as ________. A) HR metrics B) biomechanics C) ergonomics D) isometrics Answer: C Explanation: C) A specific approach to dealing with health problems such as repetitive stress injuries and enhancing performance is ergonomics. Ergonomics is the process of designing the workplace to support the capabilities of people and job/task demands. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 69) In what approach is it the goal to fit the machine and work environment to the person, rather than require the person to make the adjustment? A) biomechanics B) ergonomics C) HR metrics D) isometrics Answer: B Explanation: B) Ergonomics is the process of designing the workplace to support the capabilities of people and job/task demands. Through ergonomics, the goal is to fit the machine and work environment to the person, rather than require the person to make the adjustment. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 70) Which of the following best describes the primary purpose of ergonomics? A) encouraging ethical work behavior B) monitoring worker productivity C) promoting good posture D) studying fatigue issues Answer: C Explanation: C) Ergonomics includes all attempts to structure work conditions so that they maximize energy conservation, promote good posture, and allow workers to function without pain or impairment. Failure to address ergonomics issues results in fatigue, poor performance, and repetitive stress injuries. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

71) According to research, which of the following most likely occurs from using ergonomics? A) improved workplace security B) lowered selection costs C) improved recruitment D) lowered injury rate Answer: D Explanation: D) Firms have discovered that improving the work environment boosts morale, lowers injury rates, and yields a positive return on investment. Ergonomics does not relate to workplace safety, recruitment, or selection. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 72) Elway Transportation provides delivery services to businesses and individuals. Elway drivers frequently complain of back injuries, fatigue, and driving discomfort. Which of the following would most likely benefit Elway Transportation? A) ergonomics B) gainsharing C) broadbanding D) HR metrics Answer: A Explanation: A) Ergonomics is the process of designing the workplace to support the capabilities of people and job/task demands. Firms have discovered that using ergonomics lowers injury rates and prevents stress and discomfort. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 8 73) The goal of ergonomics is to enable the worker to adjust to the machines, tasks, and environments in the workplace. Answer: FALSE Explanation: Through ergonomics, the goal is to fit the machine and work environment to the person, rather than require the person to make the adjustment. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

74) Which term refers to physical assault, verbal abuse, or hostility directed toward employees at work? A) misdemeanor B) negligent hiring C) sexual harassment D) workplace violence Answer: D Explanation: D) OSHA defines workplace violence as physical assault, threatening behavior, verbal abuse, hostility, or harassment directed toward employees at work or on duty. ASIS International, an organization for security professionals, found that workplace violence affects more than 2 million workers each year. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 75) What is the second leading cause of death in the workplace after auto accidents? A) falls B) assaults C) explosions D) homicides Answer: D Explanation: D) According to the U.S. Bureau of Labor Statistics, violence accounted for 17 percent of all workplace injuries in 2012, and 767 people were killed. Sadly, homicide is the second-leading cause of death on the job–second only to motor vehicle crashes. Regardless of who commits the crime, there is the horror of random workplace violence. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 76) Which of the following workers most likely faces the greatest danger from workplace violence? A) Terry, an administrative assistant at a law firm B) Robert, a night-shift convenience store clerk C) John, a foreman at a construction company D) Holly, an inner-city high school teacher Answer: B Explanation: B) Employees at gas stations and liquor stores, taxi drivers, police officers, and convenience store managers working night shifts face the greatest danger from workplace violence. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

77) ABC Manufacturing employs a man who frequently exhibits aggressive behavior towards both co-workers and customers. Managers at ABC realize that the employee has a potential for violence, yet they continue to keep him on the payroll. If the employee harms a co-worker, then ABC Manufacturing could be held liable for ________. A) hazardous employment B) negligent retention C) civil disturbance D) negligent hiring Answer: B Explanation: B) Negligent retention is the liability an employer may incur when a company keeps persons on the payroll whose records indicate a strong potential for wrongdoing and fails to take steps to defuse a possibly violent situation. If an employer ignores warning signs leading up to a violent incident, it could be held legally liable. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 78) Which term refers to the liability an employer may incur when a firm keeps individuals on the payroll whose records indicate a strong potential for wrongdoing? A) faulty metrics B) negligent hiring C) erroneous selection D) negligent retention Answer: D Explanation: D) Negligent retention is the liability an employer may incur when a company keeps persons on the payroll whose records indicate a strong potential for wrongdoing and fails to take steps to defuse a possibly violent situation. If an employer ignores warning signs leading up to a violent incident, it could be held legally liable. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

79) Which of the following would be the best method for an employer trying to minimize violent acts and avoid lawsuits? A) implement policies that ban employees from owning weapons B) require employees to submit to weapons searches each day C) establish policies that encourage employees to report suspicious activities D) employ a full-time psychologist to test employees regularly Answer: C Explanation: C) Setting policies that encourage workers to report suspicious or violent activities is the best manner for minimizing workplace violence. Employees have the right to own weapons, although a policy to ban them on company property would be acceptable. Daily weapons searches and a full-time psychologist would be time consuming and costly. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 80) Ryan, an HR manager at a computer firm, has been asked to develop policies for preventing workplace violence. Which of the following policies would most likely be LEAST beneficial? A) banning weapons on company property B) requiring workers to be searched daily C) providing receptionists with panic buttons D) encouraging workers to report violent acts Answer: B Explanation: B) Banning weapons at work, giving receptionists panic buttons to alert security, and encouraging employees to report suspicious behavior are effective policies. Although suspicious employees should be searched, daily searches of all employees would be costly and time consuming. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 81) An employer incurs the liability of ________ when it fails to conduct a reasonable investigation of an applicant's background, and then assigns a potentially dangerous person to a position in which he or she can inflict harm. A) negligent hiring B) negligent retention C) negligent investigation D) negligent assignation Answer: A Explanation: A) Negligent hiring is the liability an employer incurs when it fails to conduct a reasonable investigation of an applicant's background, and then assigns a potentially dangerous person to a position in which he or she can inflict harm. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 28 Copyright © 2016 Pearson Education, Inc.

82) All of the following are areas that an employer is financially affected by domestic violence EXCEPT ________. A) absenteeism B) productivity C) selection D) turnover Answer: C Explanation: C) Domestic violence can have an impact on firms' bottom lines, costing about $5.8 billion each year in absenteeism, lower productivity, and turnover. Employee selection is less likely to be affected by domestic violence. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 83) What Act was passed to help prevent domestic violence and provide shelter and related assistance for victims? A) Family Violence Prevention and Services Act B) Violence Against Women Act C) DOJ Reauthorization Act D) Workplace Violence Act Answer: A Explanation: A) In 1984, the Family Violence Prevention and Services Act was passed to help prevent domestic violence and provide shelter and related assistance for victims. The Violence Against Women Act was passed in 1994, creating new federal criminal laws and establishing additional grant programs within the Department of Health and Human Services and the Department of Justice. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 84) How many states have laws that allow people who leave jobs because of domestic violence to become eligible for unemployment benefits? A) 10 B) 29 C) 37 D) 50 Answer: B Explanation: B) At least 29 states, plus the District of Columbia, have laws that allow people who leave jobs because of domestic violence to become eligible for unemployment benefits. Also, some states such as Florida, California, Colorado, Hawaii, Illinois, Kansas, and Maine give domestic violence victims the right to take time off. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 29 Copyright © 2016 Pearson Education, Inc.

85) What state has a law that permits employees to take up to three days leave from work in any 12-month period for a variety of activities connected with domestic violence issues? A) Florida B) California C) Michigan D) Louisiana Answer: A Explanation: A) Some states such as Florida, California, Colorado, Hawaii, Illinois, Kansas, and Maine give domestic violence victims the right to take time off. Florida law permits employees to take up to three days leave from work in any 12-month period for a variety of activities connected with domestic violence issues. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 86) According to the National Institute for Occupational Safety and Health, bullying tends to occur in all of the following situations EXCEPT ________. A) lower litigation costs B) reduced productivity C) poor organizational climate D) higher absenteeism and turnover Answer: A Explanation: A) According to a study by the National Institute for Occupational Safety and Health, bullying tends to occur when there is a lack of trust of management, a poor organizational climate, higher absenteeism and turnover rates, reduced productivity, and higher litigation costs. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 9 87) The definition of workplace violence has been expanded to include ________, which includes acts of continual hostile conduct that deliberately hurt another person. A) workplace bullying B) harmful hazing C) hateful linguistics D) wrongful overtures Answer: A Explanation: A) The definition of workplace violence has been expanded to include bullying. Workplace bullying includes acts of continual hostile conduct that deliberately hurt another person emotionally, verbally, or physically. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 30 Copyright © 2016 Pearson Education, Inc.

88) Experts use the term ________ to separate workplace bullying from actions taken against workers who are protected under federal and state statutes. A) indirect harassment B) gratuitous harassment C) neutral harassment D) status-blind harassment Answer: D Explanation: D) Experts use the term status-blind harassment to separate workplace bullying from workers protected under federal and state statutes. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 89) According to a recent survey, the most common type of workplace bullying by women is ________. A) psychological deflection B) physical intimidation C) social hostility D) indirect harassment Answer: C Explanation: C) Some researchers make the case that a definition of bullying should include social hostility, which includes gossiping or social rejection. According to one survey, this is the most common type of bullying committed by women. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 90) Which of the following is LEAST likely to be a component for developing a drug- and alcohol-free workplace program? A) establishing a drug- and alcohol-free policy B) providing education and training courses C) implementing a drug-testing program D) developing a corporate mission statement Answer: D Explanation: D) Corporate mission statements are less relevant to a drug-free workplace program. Firms should establish a zero-tolerance policy, educate workers, and start a drugtesting program. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

91) According to OSHA, workplace violence refers to any physical assault, threatening behavior, verbal abuse, hostility, or harassment directed toward employees at work or on duty. Answer: TRUE Explanation: OSHA defines workplace violence as physical assault, threatening behavior, verbal abuse, hostility, or harassment directed toward employees at work or on duty. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 92) OSHA's definition of workplace violence does not include verbal abuse. Answer: FALSE Explanation: OSHA defines workplace violence as physical assault, threatening behavior, verbal abuse, hostility, or harassment directed toward employees at work or on duty. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 93) Negligent hiring is the liability an employer may incur when a company keeps persons on the payroll whose records indicate a strong potential for wrongdoing and fails to take steps to defuse a possibly violent situation. Answer: FALSE Explanation: Negligent retention is the liability an employer may incur when a company keeps persons on the payroll whose records indicate a strong potential for wrongdoing and fails to take steps to defuse a possibly violent situation. If an employer ignores warning signs leading up to a violent incident, it could be held legally liable. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 94) While convenience stores experience significant incidents of violence, other workplaces, such as hospitals, are considered safe from such problems. Answer: FALSE Explanation: No workplace is immune from violence. Hospital managers overwhelmingly say the biggest threat that emergency room workers face is patient violence. Most hospitals now have security guards stationed in their emergency rooms, particularly at times such as Saturday nights, when violence seems to escalate. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

95) Negligent retention may occur when a company keeps persons on the payroll whose records indicate a strong potential for wrongdoing. Answer: TRUE Explanation: Negligent retention is the liability an employer may incur when a company keeps persons on the payroll whose records indicate a strong potential for wrongdoing and fails to take steps to defuse a possibly violent situation. If an employer ignores warning signs leading up to a violent incident, it could be held legally liable. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 96) Although domestic violence affects employees psychologically, employers rarely experience any consequences of employees' abusive relationships. Answer: FALSE Explanation: Spillover from domestic violence is a threat to both women and their companies because after an abusive relationship is over, one of the easiest places to find them is at their workplace. Domestic violence can have an impact on firms' bottom lines, costing about $5.8 billion each year in absenteeism, lower productivity, and turnover. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 97) Research shows that women are responsible for more than 40 percent of workplace bullying. Answer: TRUE Explanation: Some researchers make the case that a definition of bullying should include social hostility, which includes gossiping or social rejection. According to one survey, this is the most common type of bullying committed by women, who are responsible for more than 40 percent of workplace bullying. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 98) What legal consequences are a possibility for employers with workplace violence issues? Answer: Civil lawsuits claiming negligent hiring or negligent retention are a constant threat to employers. Negligent hiring is the liability an employer incurs when it fails to conduct a reasonable investigation of an applicant's background, and then assigns a potentially dangerous person to a position in which he or she can inflict harm. Negligent retention is the liability an employer may incur when a company keeps persons on the payroll whose records indicate a strong potential for wrongdoing and fails to take steps to defuse a possibly violent situation. If an employer ignores warning signs leading up to a violent incident, it could be held legally liable. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 9 33 Copyright © 2016 Pearson Education, Inc.

99) Wellness programs help employees to ________. A) find alternative employment B) deal with the symptoms of stress C) deal with threats of workplace violence D) help workers ignore stressful situations Answer: B Explanation: B) Wellness programs are designed to promote the mental and physical well-being of employees and family members. Oftentimes, employers create employee assistance programs as a structure within which to offer wellness initiatives. Employee assistance programs help employees cope with personal problems that may impair their personal lives or job performance. Examples of such problems include alcohol or drug abuse, domestic violence, the emotional impact of AIDS and other diseases, clinical depression, and eating disorders. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 100) All of the following EXCEPT ________ are driving the growth in corporate wellness programs. A) the potential to lower health-related costs B) federal healthcare reform C) the design of employer-sponsored healthcare benefits D) demand for wellness programs from employees Answer: D Explanation: D) Wellness programs are proliferating, as more employers understand the impact employee health has on performance. Employers that start wellness programs help lower healthrelated costs and increase employee productivity. Further program growth is being prompted by the shift toward wellness and prevention in the design of employer-sponsored health care benefits and by federal health care reform legislation. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 10

101) The traditional view that health is dependent on ________ and is simply the absence of disease is changing. A) safety B) exercise C) medical care D) healthy eating Answer: C Explanation: C) The traditional view that health is dependent on medical care and is the absence of disease is changing. Today, it is clear that optimal well-being is often achieved through environmental safety, organizational changes, and healthy lifestyles. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 102) What are the top two causes of death in the world? A) obesity and heart disease B) stroke and heart disease C) arthritis and respiratory diseases D) cancer and stroke Answer: B Explanation: B) Today, heart disease and stroke are the top two killers worldwide. Chronic obstructive pulmonary disease and lung cancer are also growing threats to life. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 103) Numerous employees at McLaren Manufacturing have chronic lifestyle diseases, such as obesity, alcohol abuse, and smoking. Which of the following should most likely be implemented by McLaren? A) occupational safety program B) succession planning program C) organizational fit program D) corporate wellness program Answer: D Explanation: D) Chronic lifestyle diseases are much more prevalent today than ever before. These are diseases related to smoking, excessive stress, lack of exercise, obesity, and alcohol and drug abuse. Increased recognition of this has prompted employers to become actively involved with their employees' health and to establish wellness programs. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 10

104) The National Auto Group is going to develop a wellness program. What is the first step in the process? A) conducting a health-risk assessment of employees B) developing incentives for employee participation C) establishing an on-site health clinic D) requiring substance abuse tests Answer: A Explanation: A) In developing a wellness program, firms should first conduct a health-risk assessment (HRA) by surveying their employees to determine which workers could benefit from lifestyle change. Then, the firm would develop incentives to encourage employees to participate in the program. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 10 105) Employers increasingly are adopting social networking to strengthen the success of their wellness programs. Answer: TRUE Explanation: Employers increasingly are adopting social networking to strengthen the success of their wellness programs. In his research, Dr. Nicholas Christakis of the Harvard Medical School found that good health is pervasive. When someone loses weight or quits smoking, their friends and family are more likely to also do so. He said, "The implication of this research is that interventions can leverage this phenomenon to purposefully spread healthy behaviors." Social networking brings employees together and works to increase peer support. Social networking also generates participation rates higher than any traditional form of wellness initiative. Using social network tools such as Twitter and Facebook, employees can tell others how well they are doing with regard to quitting smoking or losing weight. Social isolation can contribute to feelings of stress and it may cause employees to feel alienated. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 106) Wellness programs operate on the assumption that health, which depends on medical care, is the absence of disease. Answer: FALSE Explanation: The traditional view that health is dependent on medical care and is the absence of disease is changing. Today, it is clear that optimal well-being is often achieved through environmental safety, organizational changes, and healthier lifestyles. Companies that deploy wellness programs and take the approach of building an overall culture of health have a stronger commitment to those values. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 36 Copyright © 2016 Pearson Education, Inc.

107) Positive return on investment is a primary factor in the growth of wellness programs in the workplace. Answer: TRUE Explanation: Wellness programs are becoming more widespread as more employers become conscious of the impact employee health has on performance. Employers that start wellness programs not only help lower health-related costs, but also find that employees are more engaged and productive at work. A recent study found that medical costs fall by about $3.27 for every dollar spent on wellness programs, and that the costs of absenteeism declined by $2.73 for every dollar spent. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 10 108) Why do firms offer wellness programs and employee assistance programs? Answer: Wellness programs are becoming more widespread as more employers become conscious of the impact employee health has on performance. Despite the recession of 2007/09, more employers created and expanded wellness programs. The traditional view that health is dependent on medical care and is the absence of disease is changing. Today, it is clear that optimal well-being is often achieved through environmental safety, organizational changes, and healthy lifestyles. There is growing evidence that in addition to containing direct medical costs, effective health programs boost productivity, reduce absenteeism, lower turnover and recruiting costs, and improve morale. The Drug-Free Workplace Act requires federal employees and employees of firms under government contract to have access to employee assistance program services. An employee assistance program (EAP) is a comprehensive approach that many organizations have taken to deal with numerous problem areas such as burnout, alcohol and drug abuse, and other emotional disturbances. The recession of 2008/2010 caused some EAPs to move beyond mental health to serve recession-induced employee issues such as financial and legal challenges. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 10, 14

109) Under excessive stress, a person's dominant trait may become more obvious, which, in the case of a positive person is likely to be ________. A) poor time management skills B) erratic behavior C) hyperactivity D) absenteeism Answer: C Explanation: C) Under excessive stress, a person's dominant trait may become even more obvious. For example, if the individual is a private person, he or she withdraws from colleagues; if the person is upbeat, he or she becomes hyperactive. Ideally, stress should be dealt with before this occurs. To do so, managers must be aware of potential sources of stress. These sources exist both within and outside the organization. Regardless of its origin, stress possesses devastating potential. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 110) The body's nonspecific reaction to any demand made on it is referred to as ________. A) burnout B) stress C) carpel tunnel syndrome D) substance abuse Answer: B Explanation: B) Stress is the body's nonspecific reaction to any demand made on it. It affects people in different ways and is therefore a highly individualized condition. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 111) Melanie, a sales representative at a pharmaceutical firm, periodically experiences mild stress associated with her job. Which of the following is the most likely result of this stress? A) improved productivity B) poor work attendance C) decreased job performance D) increased depression Answer: A Explanation: A) Mild stress actually improves productivity, and it can be helpful in developing creative ideas. More severe stress leads to absenteeism, poor work performance, and depression. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 11

112) Which of the following accounts for the rise in workplace stress? A) increased workloads B) corporate scandals C) economic conditions D) all of the above Answer: D Explanation: D) A study found that one-third of Americans are living with extreme stress, and 48 percent believe their stress has increased over the past five years. Several factors account for this rise, including increased workloads, terrorism, corporate scandals, and economic conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 113) Poor attendance, excessive use of alcohol, poor performance on the job, and overall poor health are common results of ________. A) burnout B) stress C) heart failure D) arteriosclerosis Answer: B Explanation: B) Stress can result in poor attendance, excessive use of alcohol or other drugs, poor job performance, or even overall poor health. There is increasing evidence indicating that severe, prolonged stress is related to the diseases that are the leading causes of death–including cardiovascular disease, depression, immune system disorders, alcoholism, and drug addiction– plus the everyday headaches, back spasms, overeating, and other annoying ailments the body has developed in response to stress. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 114) Which of the following is highest on the list of changeable health risks that contribute to health-care costs? A) smoking B) stress C) obesity D) depression Answer: B Explanation: B) Stress tops the list of changeable health risks that contribute to health care costs, ahead of other top risks such as current and past tobacco use, obesity, lack of exercise, high blood-glucose levels, depression, and high blood pressure. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 39 Copyright © 2016 Pearson Education, Inc.

115) The common factor that tends to exist in the most stressful jobs is ________. A) high degree of flexibility B) lack of control over work C) high degree of monotony D) lack of training opportunities Answer: B Explanation: B) The common factor among stressful jobs is lack of employee control over work. Workers in such jobs may feel that they are trapped, treated more like machines than people. Workers who have more control over their jobs, such as college professors and master craftpersons, hold some of the less stressful jobs. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 116) An individual in which of the following jobs is most likely the LEAST stressed? A) administrative assistant B) machine operator C) college professor D) office manager Answer: C Explanation: C) Workers who have more control over their jobs, such as college professors and master craftpersons, hold some of the less stressful jobs. Administrative assistants, machine operators, and office managers deal with high levels of stress. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 11 117) Raj, a software designer, has been frequently absent from work lately. In addition, his quality of work has declined as well as his ability to manage tasks in a timely manner. These symptoms are most likely indicative of ________. A) unsafe work conditions B) occupational illness C) social anxiety D) stress Answer: D Explanation: D) Telling signs of stress may include a reduction in the quantity and quality of work, frequent short periods of absence, increased alcohol consumption, poor time keeping, or becoming tearful or withdrawn. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 11

118) George, a project manager at a publishing firm, is experiencing many stress-related symptoms. Which of the following is the best advice an HR manager could give George? A) Focus on making work a priority. B) Recognize your own limitations. C) Keep your problems to yourself. D) Handle work issues immediately. Answer: B Explanation: B) Probably among the most stressful conditions you can encounter is being placed in a situation where your limitations and inability to cope become quickly evident, so George should realize his own limitations to reduce stress. Balancing work and life, sharing problems, and scheduling work can all relieve stress. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 11 119) According to the American Institute of Stress, employee burnout costs the U.S. economy about ________ annually. A) $200 million B) $500 million C) $700 million D) $300 million Answer: D Explanation: D) Burnout's price tag is high: it results in reduced productivity, higher turnover, and generally lousy performance. According to the American Institute of Stress, employee burnout costs the U.S. economy about $300 million annually. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 120) Burnout can be dealt with in all of the following ways EXCEPT ________. A) seeking additional on-the-job interests B) setting realistic expectations C) workload reduction D) using relaxation techniques in the workplace Answer: A Explanation: A) Some means of dealing with burnout include keeping expectations realistic, reducing workload, finding means to relax at work, and developing and maintaining interests outside work. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 11

121) ________ is the most common factor leading to the decision to check out temporarily. A) Stress B) Burnout C) Heart failure D) Arteriosclerosis Answer: B Explanation: B) Individuals who experience burnout often experience emotional exhaustion and lose interest in work. When this occurs, they may lose their motivation to perform. Burnout is the most common factor leading to the decision to check out temporarily. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 122) Ellen, a manager at a marketing firm, noticed that one of her subordinates, who is usually good-natured, has been moody, irritable, and disorganized lately. The subordinate has refused Ellen's suggestions to take a few personal days. Such symptoms are most likely an indication that the subordinate is experiencing ________. A) depression B) burnout C) insomnia D) occupational disease Answer: B Explanation: B) Although some employees try to hide their problems, shifts in their behavior may indicate dissatisfaction. They may start procrastinating and become increasingly disorganized. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 11 123) One of the most dangerous aspects of burnout is that it ________. A) spreads rapidly among co-workers B) affects most top executives C) cannot be treated D) causes strokes Answer: A Explanation: A) The dangerous part of burnout is that it is contagious. A highly cynical and pessimistic burnout victim can quickly transform an entire group into burnouts. Burnout can affect anyone, but it is treatable and not fatal. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

124) Stress is the body's nonspecific reaction to any demand made on it. Answer: TRUE Explanation: Stress is the body's nonspecific reaction to any demand made on it. It affects people in different ways and is therefore a highly individualized condition. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 125) While obesity and high blood pressure can be corrected, stress is a health problem that cannot be relieved as long as an individual holds a job. Answer: FALSE Explanation: Stress tops the list of changeable health risks that contribute to health care costs, ahead of other top risks such as current and past tobacco use, obesity, lack of exercise, high blood-glucose levels, depression, and high blood pressure. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 126) Higher level supervisory positions, such as office manager, are considered highly stressful, while lower level positions, such as secretary, are not. Answer: FALSE Explanation: Supervisors, managers, secretaries, and machine operators are all listed as highly stressful jobs. These jobs typically involve work overload and little flexibility. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 127) Burnout causes individuals to lose a sense of the basic purpose and fulfillment of their work and results in exhaustion. Answer: TRUE Explanation: Individuals who experience burnout often experience emotional exhaustion and lose interest in work. When this occurs, they may lose their motivation to perform. Burnout is the most common factor leading to the decision to check out temporarily. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11

128) Burnout and stress are synonymous terms for employee exhaustion and disillusionment. Answer: FALSE Explanation: Burnout differs from stress in that it causes people who have previously been highly committed to their work to become disillusioned and lose interest and motivation. Burnout is often associated with a midlife or midcareer crisis, but it can happen at different times to different people. Stress is the body's nonspecific reaction to any demand made on it. It affects people in different ways and therefore is highly individualized. Certain events may be quite stressful to one person but not to another. Moreover, the effect of stress is not always negative. For example, mild stress actually improves productivity, and it can be helpful in developing creative ideas. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 11 129) Define burnout and discuss its warning signs. How can burnout be prevented? Answer: Burnout, while rarely fatal, is an incapacitating condition in which individuals lose a sense of the basic purpose and fulfillment of their work. Individuals become exhausted either physically or mentally or both when burnout occurs. Seemingly the body or the mind can no longer handle the overwhelmingly high demands placed on it. Burnout is often associated with a midlife or midcareer crisis, but it can happen at different times to different people. When this occurs, they may lose their motivation to perform. When burnout occurs, individuals seem to lose their enthusiasm for their job. Burnout is frequently associated with people whose jobs require them to work closely with others under stressful and tension-filled conditions. However, any employee may experience burnout, and no one is exempt. The dangerous part of burnout is that it is contagious. A highly cynical and pessimistic burnout victim can quickly transform an entire group into burnouts. Virtual teams that exist over the long term (more than a year) often run a strong risk of declining performance due to team burnout. It is very important that the problem be dealt with quickly. Some means of dealing with burnout include keeping expectations realistic, reducing workload, finding ways to relax at work, and developing and maintaining interests outside work. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 11

130) In a brief essay, discuss the relationship between alcohol abuse and stress. As an HR professional, why is it important to recognize the warning signs of both? Answer: Alcoholism is a medical disease characterized by uncontrolled and compulsive drinking that interferes with normal living patterns. The National Council on Alcoholism & Drug Dependence (NCADD) reports that 40 percent of workplace fatalities and 47 percent of workplace injuries are related to alcohol consumption. Stress plays an important role in a person becoming an alcoholic. As a person starts to drink excessively, the drinking itself produces greater stress. A vicious cycle is created as this increased stress is dealt with by more drinking. Early signs of alcohol abuse are especially difficult to identify. Often the symptoms are nothing more than an increasing number of days absent from work. Stress is the body's nonspecific reaction to any demand made on it. It affects people in different ways and is therefore a highly individualized condition. Stress can be as disruptive to an individual as any accident. It can result in poor attendance, excessive use of alcohol or other drugs, poor job performance, or even overall poor health. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 11, 13 131) What is the most commonly offered in-house corporate wellness program? A) physical fitness program B) healthy eating program C) substance abuse program D) stress management program Answer: A Explanation: A) Physical fitness appears to be critical to career success and employers should be involved in promoting it. The most commonly offered in-house corporate wellness programs involve efforts to promote exercise and fitness. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 132) Which of the following is the LEAST likely result of a corporate physical fitness program? A) reduced training costs B) reduced absenteeism C) lower accident rates D) lower health costs Answer: A Explanation: A) Company-sponsored fitness programs often reduce absenteeism, accidents, and sick pay. There is increasing evidence that if employees stick to company fitness programs, they will experience better health, and the firm will have lower health costs. Training costs are less likely to be affected. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 45 Copyright © 2016 Pearson Education, Inc.

133) Physical fitness programs are the most commonly offered wellness program provided by employers. Answer: TRUE Explanation: Physical fitness appears to be critical to career success and employers should be involved in promoting it. The most commonly offered in-house corporate wellness programs involve efforts to promote exercise and fitness. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 12 134) Why are managers interested in corporate wellness programs that promote exercise and fitness? Answer: The most commonly offered in-house corporate wellness programs involve efforts to promote exercise and fitness. To understand the interest in such programs, consider the results of physical inactivity: obesity, hypertension, heart disease, diabetes, anxiety, depression, and certain types of cancer. From management's viewpoint, physical fitness programs make a lot of sense. Loss of productivity resulting from coronary disease alone costs U.S. businesses billions of dollars annually. Company-sponsored fitness programs often reduce absenteeism, accidents, and sick pay. There is increasing evidence that if employees stick to company fitness programs, they will experience better health, and the firm will have lower health costs. Difficulty: Moderate Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 12 135) The use of illegal drugs or the misuse of alcohol is best known as ________. A) alcoholism B) burnout C) substance abuse D) personality disorder Answer: C Explanation: C) Substance abuse involves the use of illegal substances or the misuse of controlled substances such as alcohol and drugs. Alcoholism is a medical disease characterized by uncontrolled and compulsive drinking that interferes with normal living patterns. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

136) Alcoholism is currently defined as a ________. A) hereditary problem that cannot be medically treated B) stress-related condition characterized by social drinking C) psychological problem that causes frequent binge drinking D) medical disease characterized by uncontrolled and compulsive drinking Answer: D Explanation: D) Although our society attaches a stigma to alcoholism, in 1956, the American Medical Association described it as a treatable disease. Alcoholism is a medical disease characterized by uncontrolled and compulsive drinking that interferes with normal living patterns. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 137) According to the Substance Abuse and Mental Health Services Administration, drug-using employees are more than ________ times as likely to be involved in workplace accidents and ________ times as likely to file workers' compensation claims. A) 10; 15 B) 2.5; 3 C) 3.6; 5 D) 5.5; 7 Answer: C Explanation: C) According to the Substance Abuse and Mental Health Services Administration, drug-using employees are 3.6 times as likely to be involved in workplace accidents and five times as likely to file workers' compensation claims. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 138) What law requires some federal contractors and all federal grantees to agree that they will provide drug-free workplaces as a condition of receiving a contract or grant from a federal agency? A) Rehabilitation Act B) Drug-Free Workplace Act C) Americans with Disabilities Act D) Fair Labor Standards Act Answer: B Explanation: B) The Drug-Free Workplace Act of 1988 requires some federal contractors and all federal grantees to agree that they will provide drug-free workplaces as a condition of receiving a contract or grant from a federal agency. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 47 Copyright © 2016 Pearson Education, Inc.

139) Nelson Computers is going to establish a substance-abuse-free workplace. What is the first step that should be taken in the process? A) establishing a drug- and alcohol-free policy B) educating and training workers C) educating and training supervisors D) conducting random drug tests Answer: A Explanation: A) The first step is to establish a drug- and alcohol-free policy. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 13 140) Which type of drug testing is considered the most reliable by most experts? A) urine B) blood C) hair D) oral fluid Answer: B Explanation: B) Urine, blood, oral fluids, or hair samples are possible drug testing methods, with most employers relying on urine testing. However, the majority regard blood tests as the forensic benchmark against which to compare others. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 141) According to experts, what form of drug testing detects drug use up to three months after drug consumption? A) hair B) blood C) urine D) oral fluid Answer: A Explanation: A) Although urine and blood testing can detect only current drug use, advocates of hair sample analysis claim it can detect drug use from 3 days to 90 days after drug consumption. This would prohibit an applicant from beating the test by short-term abstinence. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

142) What form of drug testing can be done immediately in the workplace and is effective in cases of reasonable suspicion? A) hair B) blood C) oral fluid D) urine Answer: C Explanation: C) Oral fluid testing is especially well-suited to cases of reasonable suspicion and post-accident testing. Oral fluid is a great deterrent because it can be done immediately in the workplace and it does not give an individual an opportunity to adulterate or substitute a urine specimen. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 143) Which law requires certain organizations to provide employee assistance programs? A) Fair Labor Standards Act B) Americans with Disabilities Act C) Drug-Free Workplace Act D) Rehabilitation Act Answer: C Explanation: C) An employee assistance program (EAP) is a comprehensive approach that many organizations have taken to deal with numerous problem areas such as burnout, alcohol and drug abuse, and other emotional disturbances. The Drug-Free Workplace Act also requires federal employees and employees of firms under government contract to have access to employee assistance program services. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13 144) Substance abuse is an HR concern because substance abusers have high rates of absenteeism and turnover. Answer: TRUE Explanation: Substance abuse involves the use of illegal substances or the misuse of controlled substances such as alcohol and drugs. About 14 million people who are employed either fulltime or part-time abuse alcohol or drugs. These workers use more sick days and are late more often. They remain in jobs for shorter lengths of time, and their health care costs are twice that of other employees Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 13

145) As an HR professional, what process would you follow to establish a substance-abuse-free workplace? Answer: The first step is to establish a drug- and alcohol-free policy. The second step is to provide education and training for supervisors and workers. At a minimum, supervisor training should include a review of the drug-free workplace policy, the supervisor's specific responsibilities in implementing the policy, and ways to recognize and deal with employees who have job performance problems that could be related to alcohol and drug use. Employees should also be educated as to the purpose and ramifications of the drug- and alcohol-free environment. The purpose of this training is to familiarize employees with the drug-free workplace program and provide general awareness education about the dangers of alcohol and drug abuse. The third step in establishing a substance-abuse-free workplace is to implement a drug-testing program. A drug-free workplace program should balance the rights of employees and the rights of employers, balance the need to know and rights to privacy, balance detection and rehabilitation, and balance the respect for employees and the safety of all. The final step in obtaining a substance-abuse-free workplace is the creation of an employee assistance program. An employee assistance program (EAP) is a comprehensive approach that many organizations have taken to deal with numerous problem areas such as burnout, alcohol and drug abuse, and other emotional disturbances. Difficulty: Challenging Skill: Critical thinking AACSB: Analytical thinking Learning Obj.: 13, 14 146) What was the initial focus of traditional EAPs? A) providing legal assistance B) providing day care and elder care C) providing mental health resources D) providing physical fitness facilities Answer: C Explanation: C) EAPs have traditionally focused first on mental health, including substanceabuse counseling. Today, companies are aware that the advantages of an EAP extend well beyond assistance for alcohol or drug-related problems. Many have expanded to include financial and legal advice, referrals for day care and elder care, and a host of other services, including assistance with marital or family difficulties, job performance problems, stress, and grief. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 14

147) What is a significant challenge that supervisors face with regard to employee assistance programs (EAPs)? A) a lack of top management support B) a lack of willingness to allow employees to take time off from work to seek help C) workers who need assistance choose not to use the company's EAP D) cost of implementation Answer: C Explanation: C) A primary concern with an EAP is getting employees to use the program. Some employees perceive that there is a stigma attached to needing help. Supervisors must receive training designed to provide specialized interpersonal skills for recognizing troubled employees and encouraging them to use the firm's EAP. Addicted employees are often experts at denial and deception, and they can fool even experienced counselors. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 14 148) Which of the following is a comprehensive approach used by firms to deal with numerous problem areas such as burnout, alcohol and drug abuse, and other emotional disturbances? A) stress reduction program B) health and wellness program C) substance abuse program D) employee assistance program Answer: D Explanation: D) An employee assistance program (EAP) is a comprehensive approach that many organizations have taken to deal with numerous problem areas such as burnout, alcohol and drug abuse, and other emotional disturbances. The Drug-Free Workplace Act also requires federal employees and employees of firms under government contract to have access to employee assistance program services. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 14

149) Why are U.S.-based global operations safer and healthier than host-country operations? A) illiteracy B) employers often fail to provide bilingual safety information C) employees' views about safety vary from country to country D) safety regulations vary from country to country, if they exist at all Answer: D Explanation: D) U.S.-based global operations are often safer and healthier than host-country operations, but frequently not as safe as similar operations in the United States. Safety and health laws and regulations, which we discuss later, often vary greatly from country to country. Such laws can range from virtually nonexistent to as stringent as those in the United States. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15 150) Why is health care coverage tailored to a specific region an increasingly popular benefit for expatriates? A) American insurance carriers refuse to provide coverage in risky markets. B) The rising cost of health insurance has forced firms to use cheaper options. C) American healthcare legislation conflicts with foreign insurance firms. D) Healthcare systems in emerging markets vary in cost and quality. Answer: D Explanation: D) Although expats are usually covered by group international health plans, there is a trend to offer coverage tailored for specific destinations. As international markets develop, the need has grown for coverage that is more appropriate for the market expats are working in. European healthcare systems vary in cost and quality, and a lot can depend on the exact location of the expat within a country. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 15

Human Resource Management, 14e (Mondy) Chapter 14 Global Human Resource Management 1) Dailey Enterprises is a mid-sized business that is considering expanding its operations globally. Which of the following is LEAST likely to occur as a result of Dailey globalizing? A) improved selection process B) some protection against domestic business cycles C) increased competitiveness D) increased profitability Answer: A Explanation: A) There are a number of benefits for the small- to mid-sized business going global. First, of course, is that having a global customer base provides some protection against domestic business cycles. Companies that tend to export tend to be more profitable, better organized and more competitive than are companies that are exclusively domestically focused. The selection process will not necessarily improve. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 1 2) Research shows that ________ of the total amount of consumers worldwide resides in the United States. A) 15 percent B) 5 percent C) 10 percent D) 20 percent Answer: B Explanation: B) Only 5 percent of the total amount of consumers worldwide resides in the United States. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

3) Jenny's Jewelry is a small firm that sells its products abroad, either directly or indirectly, by retaining foreign agents and distributors. Jenny's Jewelry is most likely involved in ________. A) foreign investing B) exporting C) licensing D) franchising Answer: B Explanation: B) Exporting entails selling abroad, either directly or indirectly, by retaining foreign agents and distributors. Foreign investing, licensing, and franchising are other methods for firms globalizing. Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 1 4) Hartford Toys is a small business that wants to enter the global market. What is the most common way for small businesses such as Hartford Toys to enter the global market? A) foreign investing B) licensing C) exporting D) franchising Answer: C Explanation: C) Exporting entails selling abroad, either directly or indirectly, by retaining foreign agents and distributors. It is a way that many small businesses enter the global market. Licensing is usually limited to manufacturers. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 1 5) Modern Mosaics, an American firm, has granted a Chinese firm the right to use the Modern Mosaics manufacturing processes for a specific period of time. Modern Mosaics is most likely involved in ________. A) foreign investing B) exporting C) licensing D) franchising Answer: C Explanation: C) Licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Franchising is an option whereby the parent company grants another firm the right to do business in a prescribed manner. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 1 2 Copyright © 2016 Pearson Education, Inc.

6) An arrangement whereby the parent company grants another firm the right to do business in a prescribed manner is referred to as ________. A) foreign investing B) exporting C) licensing D) franchising Answer: D Explanation: D) Franchising is an option whereby the parent company grants another firm the right to do business in a prescribed manner. Licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 7) Which of the following would most likely globalize through licensing? A) fast food restaurant B) telemarketing firm C) luxury hotel chain D) electronics manufacturer Answer: D Explanation: D) Licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Licensing is usually limited to manufacturers. Franchising is popular with service firms, such as restaurants and hotels. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 1 8) Franchising would most likely be used to globalize by a ________. A) fast food restaurant B) commercial bank C) health insurance firm D) toy manufacturer Answer: A Explanation: A) Franchising is popular with service firms, such as restaurants and hotels. Licensing is usually limited to manufacturers. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 1

9) Which of the following is based in one country (the parent or home country) and produces goods or provides services in one or more foreign countries (host countries)? A) global investment corporation B) multinational corporation C) foreign exporter D) franchise Answer: B Explanation: B) A multinational corporation (MNC) is a firm that is based in one country (the parent or home country) and produces goods or provides services in one or more foreign countries (host countries). A multinational corporation directs manufacturing and marketing operations in several countries; these operations are coordinated by a parent company, usually based in the firm's home country. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 10) PEC Enterprises is based in the U.S. and produces plastic cooking utensils at plants in Taiwan and India. All operations are coordinated from the firm's U.S. headquarters. PEC Enterprises is most likely a(n) ________. A) franchiser B) export/import firm C) transnational corporation D) multinational corporation Answer: D Explanation: D) A multinational corporation (MNC) is a firm that is based in one country (the parent or home country) and produces goods or provides services in one or more foreign countries (host countries). A transnational corporation moves work to the places with the talent to handle the job and the time to do it at the right cost. PEC has headquarters only in the U.S. so it is most likely an MNC. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 1

11) What type of firm directs manufacturing and marketing operations in several countries, and these operations are coordinated by a parent company, usually based in the firm's home country? A) global investment B) foreign corporation C) multinational corporation D) international corporation Answer: C Explanation: C) A multinational corporation (MNC) is a firm that is based in one country (the parent or home country) and produces goods or provides services in one or more foreign countries (host countries). A multinational corporation directs manufacturing and marketing operations in several countries; these operations are coordinated by a parent company, usually based in the firm's home country. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 12) Wilson Enterprises has corporate units in a number of countries that are integrated to operate as one organization worldwide. Wilson Enterprises is most likely a(n) ________. A) global corporation B) multinational corporation C) foreign corporation D) international corporation Answer: A Explanation: A) Global corporations have corporate units in a number of countries that are integrated to operate as one organization worldwide. A multinational corporation (MNC) is a firm that is based in one country (the parent or home country) and produces goods or provides services in one or more foreign countries (host countries). Difficulty: Easy Skill: Application AACSB: Application of knowledge Learning Obj.: 1

13) Which of the following sells similar products throughout the world with components that are made in different countries? A) foreign corporation B) multinational corporation C) international corporation D) global corporation Answer: D Explanation: D) Global corporations sell essentially the same products throughout the world with components that may be made and/or designed in different countries. Expectations are that as the world becomes more globally open, the globalization of corporations will become much more commonplace. A multinational corporation directs manufacturing and marketing operations in several countries; these operations are coordinated by a parent company, usually based in the firm's home country. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 14) Procter & Gamble is best categorized as a ________ corporation. A) foreign-based B) multinational C) global D) national Answer: C Explanation: C) Not many years ago, Procter & Gamble was primarily a U.S. business investing heavily in food brands. Now it is a truly global corporation with more than 300 brands in more than 180 countries crossing the Americas, Europe, the Middle East and Africa, and Asia. P&G shifted from an MNC to a GC. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 1 15) Licensing entails selling abroad, either directly or indirectly, by retaining foreign agents and distributors. It is a way that many small businesses enter the global market. Answer: FALSE Explanation: Exporting entails selling abroad, either directly or indirectly, by retaining foreign agents and distributors. It is a way that many small businesses enter the global market. Licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

16) Exporting is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Answer: FALSE Explanation: Licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Exporting entails selling abroad, either directly or indirectly, by retaining foreign agents and distributors. It is a way that many small businesses enter the global market. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 17) Licensing is typically used by manufacturing firms that want to globalize. Answer: TRUE Explanation: Licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Licensing is usually limited to manufacturers. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 18) A multinational corporation is based in one country and produces goods or provides services in one or more foreign countries. Answer: TRUE Explanation: A multinational corporation (MNC) is a firm that is based in one country (the parent or home country) and produces goods or provides services in one or more foreign countries (host countries). A multinational corporation directs manufacturing and marketing operations in several countries; these operations are coordinated by a parent company, usually based in the firm's home country. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

19) An organization that has corporate units in a number of countries that are integrated to operate as one organization worldwide is a multinational corporation. Answer: FALSE Explanation: A multinational corporation (MNC) is a firm that is based in one country (the parent or home country) and produces goods or provides services in one or more foreign countries (host countries). Many firms have evolved beyond being multinational to becoming global corporations (GCs), an organization that has corporate units in a number of countries that are integrated to operate as one organization worldwide. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 20) Franchising is an option whereby the parent company grants another firm the right to do business in a prescribed manner. Answer: TRUE Explanation: Franchising is an option whereby the parent company grants another firm the right to do business in a prescribed manner. For example, Subway shops must follow marketing procedures established by the headquarters. Franchising arrangements involve integration of operations with trademark usage. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 1 21) Identify and define the three ways in which companies can enter global markets without making substantial investments. Answer: Most companies initially become global without making substantial investments in foreign countries by exporting, licensing, or franchising. Exporting entails selling abroad, either directly or indirectly, by retaining foreign agents and distributors. It is a way that many small businesses enter the global market. Licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. Licensing is usually limited to manufacturers. Franchising is an option whereby the parent company grants another firm the right to do business in a prescribed manner. The growth of franchising in the world is phenomenal. Franchisees must follow stricter operational guidelines than do licensees. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 1

22) What is a global corporation? Explain the staffing approach commonly used by global corporations. Answer: Many firms have evolved beyond being multinational to becoming global corporations, an organization that has corporate units in a number of countries that are integrated to operate as one organization worldwide. The global corporation operates as if the entire world were one entity. Global corporations sell essentially the same products throughout the world with components that may be made and/or designed in different countries. Expectations are that as the world becomes more globally open, the globalization of corporations will become much more commonplace. Geocentric staffing is a staffing approach that uses a worldwide integrated business strategy. The firm attempts to always hire the best person available for a position, regardless of where that individual comes from. The geocentric staffing model is most likely to be adopted and used by truly global firms. Usually, the corporate human resource function in geocentric companies is the most complicated, since every aspect of HR must be dealt with in the global environment. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 1, 4 23) Companies that engage in the global economy place even greater emphasis on ________. A) foreign language skills B) talent mobility C) strategic HRM D) benefits Answer: C Explanation: C) Companies that engage in the global economy place even greater emphasis on strategic HR. Individuals dealing with global human resource matters face a multitude of challenges beyond that of their domestic counterparts. Before upper management decides on a global move, it is vitally important that the critical nature of human resource issues be considered. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2

24) Companies' considerations that range from cultural to political barriers to demographic considerations in the workforce and international aspects such as compensation describe ________. A) international global executive compensation B) global human resource management C) global employment laws D) global employment relations Answer: B Explanation: B) HR matters face a multitude of challenges beyond that of their domestic counterparts. These considerations range from cultural to political barriers to demographic considerations in the workforce and international aspects such as compensation. Before upper management decides on a global move, it is vitally important that the critical nature of HR issues be considered. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 25) The functional areas in global human resource management are unlike those in domestic human resource management because of cultural and economic differences around the world. Answer: FALSE Explanation: The functional areas associated with effective global human resource management are similar to the ones they experience domestically. Although the five functions are the same, the manner in which they are implemented may differ. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 26) Discuss the role of strategic human resource management in global business. Answer: The world is experiencing an increasing global workforce, as well as the human resource problems and opportunities associated with that workforce. Individuals dealing with global human resource matters face a multitude of challenges beyond that of their domestic counterparts. These considerations range from cultural to political barriers to international aspects such as compensation. Before upper management decides on a global move, it is vitally important that the critical nature of human resource issues be considered. Companies that engage in the global economy place even greater emphasis on strategic HR. The functional areas associated with effective global human resource management are similar to the ones they experience domestically. Although the six functions are the same, global external environmental factors may significantly affect the manner in which they are implemented. Similar to domestic human resources, these functions are not separate and distinct; instead, they are highly interrelated. Therefore, sound global human resource management practices are required for successful performance in each area. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 2 10 Copyright © 2016 Pearson Education, Inc.

27) The U.S. economy is based on the idea of ________. A) capitalism B) communism C) democracy D) republicanism Answer: A Explanation: A) The U.S. economy is based on the idea of capitalism. Under capitalism, the government does not possess ownership of all land, businesses, or natural resources. This economic system relies on market forces in which supply and demand for products, services, and labor determine monetary value. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 28) Which of the following statements is true about the role of international sales for small and medium-sized businesses? A) international sales are not easily facilitated through e-commerce B) international sales have become a vital and growing part of the market for small to mediumsized businesses C) international sales require a change in a country's legal system D) international sales have become a vital and growing part of the market exclusively for large businesses. Answer: B Explanation: B) International sales have become a vital and growing part of the market for small to medium-sized businesses. A recent study found that nearly a quarter of U.S. small firms receive some sales from overseas, and another 6 percent is expected to join their ranks for a combined total of approximately one million small to medium-sized business owners who engage in international sales in the near future. Globalization, the Internet, and e-commerce have made it easier than ever for small businesses to reach the 95 percent of consumers that do not live in the United States. Exporting gives small businesses the opportunities to tap into new markets, increase sales, generate economies of scale, and improve inventory management, as well as help maintain U.S. competitiveness and create jobs. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

29) What is the foundation for the political systems in the United States and China, respectively? A) socialism, communism B) democracy, socialism C) democracy, communism D) republican, democrat Answer: C Explanation: C) The United States political system is based on democracy. Democratic governments are formed by participation of all eligible citizens through voting directly on issues (for example, election of the U.S. president) or indirectly through elected representatives (for example, members of Congress and the Senate). China's political system is based on communism. Communism is set on the principle of community ownership. That is, all property, businesses, and natural resources are community owned, but these items are controlled by the single political party (Communist Party). Also, in communist societies, the government provides basic necessities based on need. In principle, citizens elect individuals to serve in the Communist Party, but that is rarely the case. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 30) Which of the following is NOT a factor that sets the stage for global HR practice? A) country's economic structure B) political system C) age of the company D) characteristics of the labor force Answer: C Explanation: C) HR practice in the United States is influenced by many factors that we have highlighted at various points throughout the previous chapters. These factors include country political and economic structure, the legal system, national cultural norms, and characteristics of the labor force. When practicing HR within any one country, these factors are relatively constant. For example, the United States has many worker protections such as antidiscrimination laws. Global HR practitioners require, at minimum, an appreciation of the variation in these five factors to understand how to best structure and implement the six HR functions Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

31) Which of the following BRIC countries has the highest female labor-force participation rate? A) Brazil B) China C) India D) Russia Answer: B Explanation: B) China has the highest female labor-force participation rate of all BRIC nations, with 75 percent of women ages 15 to 65 in the workforce. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 32) Shelby Enterprises is a global corporation that has a fully functioning HR department in each of its foreign subsidiaries. Host-country nationals are employed throughout the firm. Which staffing approach is most likely used by Shelby? A) biocentric B) geocentric C) polycentric D) ethnocentric Answer: C Explanation: C) When host-country nationals are used throughout the organization, from top to bottom, it is referred to as polycentric staffing. Organizations that use this approach will usually have a fully functioning human resource department in each foreign subsidiary responsible for managing all local human resource issues. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 3 33) In which country can prospective employers ask job applicants to report personal characteristics such as age and marital status? A) United States B) India C) United Kingdom D) all of the above Answer: B Explanation: B) In India, it is legal for an advertisement for an Indian airline flight attendant to read: "18-27 years old, different height minimums for males and females, status unmarried, unblemished complexion and good eyesight." Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

34) All of the following are national/cultural values EXCEPT ________. A) job satisfaction B) masculinity/feminity C) accomplishing indulgence/restraint D) individualism/collectivism Answer: A Explanation: A) National culture is steeped in a country's history, and we can describe it based on a society's social traditions, political and economic philosophy, and legal system. More recently, researchers and practitioners have tried to understand how cultural values influence workplace practices. We often rely on six categories to describe national culture. These include power distance, individualism/collectivism, masculine/feminine, uncertainty avoidance, pragmatism/normative, and indulgence/restraint. Job satisfaction is an individual attitude, not a country-level value. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 35) Which of the following statement best describes a masculine culture in modern times? A) Masculine cultures place high value on achievement, material award, and assertiveness. B) Masculine cultures emphasize quality of life and assertiveness C) Maintaining impersonal relationships to promote group productivity. D) Masculine cultures emphasize taking on new experiences and seeking material reward. Answer: A Explanation: A) Masculine cultures place high value on achievement, material award, and assertiveness. Feminine cultures espouse cooperation, modesty, and quality of life. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

36) China's labor force consists of a multitude of older workers for the following reason: ________. A) communism favors taking care of younger citizens by having parents and grand parents employed B) economic growth has led employers to favor workers with greater experience C) it is more common for Chinese citizens to stay in school longer than citizens of other countries D) Chinese government's one-child policy has left a substantial gap in younger generations Answer: D Explanation: D) China's work force is aging dramatically, much like in the United States. However, the Chinese government's one-child policy has left a substantial gap in younger generations; thus, a shrinking labor pool. For decades, the Chinese government imposed a policy in which couples were allowed to have up to one child. Recently, the government has begun to relax this policy by allowing some couples to have as many as two children. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 37) In which country has economic growth been affected by the widespread return of unskilled factory workers from large cities to rural farming locations? A) United States B) Germany C) China D) India Answer: D Explanation: D) Economic growth in India has been affected by the widespread return of unskilled factory workers from large cities to rural farming locations. Low wages, high costs, and significant rates of inflation have made it difficult for those individuals to meet basic financial obligations. Government policies that provide substantial subsidies to residents create an attractive alternative. Factories struggle to maintain or expand production given the impracticalities of city life. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

38) Female employment in the United Arab Emirates is negatively influenced because ________. A) a single woman is not permitted to drive B) a woman's desire to stay at home to raise children is stronger than her desire to work outside the home C) a single woman cannot board a plane or stay in a hotel unless a male relative is willing to accompany her D) it is frowned upon when a woman places aging parents in a nursing home Answer: C Explanation: C) The role of gender plays a significant role in influencing employment. The global assignment of women and members of racial and ethnic minorities can involve cultural and legal issues. Regrettably, female talent is underused in emerging countries. This may be partly explained by family-related constraints and pressures, as well as work-related issues that combine to force women to either settle for dead-end jobs or leave the workforce. For example, in Saudi Arabia, women are not permitted to drive. In China, there is a social stigma attached to women who use professional help or who place their parents in assisted-living facilities. Often global careers are affected when a worker decides to return to China to take care of her family. In the United Arab Emirates, a single woman cannot board a plane or stay in a hotel unless a male relative is willing to accompany her. In many emerging markets, workplace bias seems to escalate for young mothers. In India, a woman returning from a global assignment often is given less-challenging roles or projects or receives lower performance ratings. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 39) Data protection laws in ________ conflict directly with the Sarbanes-Oxley Act. A) the United Kingdom B) Canada C) France D) Mexico Answer: C Explanation: C) Legal and political forces are unique to each country and sometimes the laws of one contradict those of another. For instance, the French authorities acknowledge that their data protection laws are in direct conflict with the U.S. Sarbanes-Oxley Act, but they insist that multinationals comply with French law. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3

40) In principle, China's citizens do not elect individuals to serve in the Communist Party. Answer: TRUE Explanation: China's political system is based on communism. Communism is set on the principle of community ownership. That is, all property, businesses, and natural resources are community owned, but these items are controlled by the single political party (Communist Party). Also, in communist societies, the government provides basic necessities based on need. In principle, citizens elect individuals to serve in the Communist Party, but that is rarely the case. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 3 41) In Brazil, women are rapidly moving into the ranks of management. Answer: TRUE Explanation: In 2009, women accounted for about 40 percent of the Brazilian labor force, but held 45 percent of managerial jobs and 30 percent of executive positions. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 3 42) Describe how legal factors influence the conduct of business globally? Answer: The growing complexity of legal compliance in the global environment is one of the most important trends affecting global business. Managers working for global businesses contend with a growing tide of employment legislation that cuts across national boundaries. Legal and political forces are unique to each country, and sometimes the laws of one contradict those of another. For instance, the French authorities acknowledge that their data-protection laws are in direct conflict with the U.S. Sarbanes-Oxley Act, but they insist that multinationals comply with French law. Further, the nature and stability of political and legal systems vary across the globe. U.S. firms enjoy relatively stable legal and political systems, and the same is true in many of the developed countries. In other nations, however, the legal and political systems are much less stable. Some governments are subject to coups, dictatorial rule, and corruption, which can substantially alter both the business and legal environments. Legal systems can also become unstable, with contracts suddenly becoming unenforceable because of internal politics. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 3

43) China and the United States are significant players on the global stage. Many differences between the countries influence how they operate. Compare and contrast the political systems of both countries. Answer: China's political system is based on communism. Communism is set on the principle of community ownership. That is, all property, businesses, and natural resources are community owned, but these items are controlled by the single political party (Communist Party). Also, in communist societies, the government provides basic necessities based on need. In principle, citizens elect individuals to serve in the Communist Party, but that is rarely the case. In recent decades, China's economy has become more diverse. While maintaining communist control, economic growth has been fueled by market forces and capitalism. As a result, a growing segment of the population has gained considerable wealth and is adopting similar lifestyles as in the United States; that is, based on income and wealth. Still, one of the key challenges for the government has been to sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the workforce. The U.S. economy is based on the idea of capitalism. Under capitalism, the government does not possess ownership of all land, businesses, or natural resources. This economic system relies on market forces in which supply and demand for products, services, and labor determine monetary value. For example, in Chapter 9, we discussed how supply and demand influences pay rates. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 3 44) It is important for global firms to consider cultural differences when implementing e-learning programs. Culture is a complex phenomenon. Define national culture and the following three national cultures: power distance, individualism/collectivism, and masculine/feminine. Answer: Cultural values pertain to the norms for behaviors and beliefs. National culture is steeped in a country's history, and we can describe it based on a society's social traditions, political and economic philosophy, and legal system. Power distance describes the extent to which power is unequally distributed. High power distance cultures reinforce hierarchical control, and members generally do not expect justification for the actions taken by those in power. Low power distance cultures embrace greater equality and justification for actions, particularly where actions create a disadvantage to an individual or group. Germany is well known for a culture that rates low in power distance, whereas the United Arab Emirates is culture that strongly captures a high power distance orientation. Individualism refers to the extent to which an individual focuses on his or her own welfare relative to others. Collectivism describes a concern for the welfare of the larger group such as family, coworkers, or other groups. The United States and Canada are highly individualistic cultures, whereas Chile, China, and Mexico value collectivistic norms. Masculine cultures place high value on achievement, material award, and assertiveness. Feminine cultures espouse cooperation, modesty, and quality of life. Japan is an example of a highly masculine culture, whereas Norway and Finland embody the values of a feminine culture. Difficulty: Challenging Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 3 18 Copyright © 2016 Pearson Education, Inc.

45) Which two global staffing approaches are most similar? A) regiocentric staffing and polycentric staffing B) regiocentric staffing and ethnocentric staffing C) regiocentric staffing and allocentric staffing D) ethnocentric staffing and polycentric staffing Answer: A Explanation: A) With ethnocentric staffing, companies primarily hire expatriates to staff higher-level foreign positions. When HCNs are used throughout the organization, from top to bottom, it is referred to as polycentric staffing. Regiocentric staffing is similar to the polycentric approach, but regional groups of subsidiaries reflecting the organization's strategy and structure work as a unit. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 46) Which of the following is NOT a type of global staff member? A) expatriate B) contingent worker C) third-country national D) host-country national Answer: B Explanation: B) Global staff members may be selected from among three different types: expatriates, host-country nationals, and third-country nationals. Contingent workers may or may not be global, but they are not one of the main categories of global staff members. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 47) An employee who is not a citizen of the country in which the firm is located, but is a citizen of the country in which the organization is headquartered is referred to as a(n) ________. A) host-country national B) third-country national C) expatriate D) operant Answer: C Explanation: C) An expatriate is an employee who is not a citizen of the country in which the firm operations are located, but is a citizen of the country in which the organization is headquartered. A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. A third-country national (TCN) is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 19 Copyright © 2016 Pearson Education, Inc.

48) The U.S. expatriate population has grown rapidly in recent years because of the large numbers being sent to ________. A) Russia and Italy B) China and India C) France and Mexico D) China and Taiwan Answer: B Explanation: B) An expatriate is an employee who is not a citizen of the country in which the firm operations are located, but is a citizen of the country in which the organization is headquartered. The U.S. expat population has grown rapidly largely because of the large numbers of workers who are being sent to China and India. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 49) Murphy Enterprises recently acquired a controlling interest in Mexico's leading clothing retailer. Murphy plans to open additional retail stores in the next three years. Some of Murphy's top executives advocate the idea of transferring U.S. managers to Mexico to oversee the construction and opening of the new stores. Another group of Murphy executives believe that host-country nationals should manage the project. Which of the following best supports a decision to fill management positions with expatriates? A) Murphy needs to ensure that Mexico operations are closely linked to headquarters. B) Most Murphy expatriates resign within one year of their return to the United States. C) Murphy wants to develop close community relationships in Mexico. D) Employees hired by Murphy are provided extensive training. Answer: A Explanation: A) Generally, expatriates are used to ensure that foreign operations are linked effectively with parent corporations. If repatriated employees are resigning quickly, it would most likely be a mistake and a waste of money to fill positions with expatriates. Hiring locals would make more progress with building community ties than bringing in American managers. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4

50) Murphy Enterprises recently acquired a controlling interest in Mexico's leading clothing retailer. Murphy plans to open additional retail stores in the next three years. Some of Murphy's top executives advocate the idea of transferring U.S. managers to Mexico to oversee the construction and opening of the new stores. Another group of Murphy executives believe that host-country nationals should manage the project. Which of the following questions is LEAST relevant to the decision to fill management positions in Mexico with expatriates or host-country nationals? A) What are Murphy's anticipated relocation costs for using expatriates? B) What degree of corporate control does Murphy want in Mexico? C) What is the global safety and health record for Murphy? D) What is the attrition rate for Murphy's expatriates? Answer: C Explanation: C) Relocation costs, corporate control, and expatriate turnover rates are important to the decision to use expatriates or locals in management positions. Health and safety issues are less relevant to the decision. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4 51) Murphy Enterprises recently acquired a controlling interest in Mexico's leading clothing retailer. Murphy plans to open additional retail stores in the next three years. Some of Murphy's top executives advocate the idea of transferring U.S. managers to Mexico to oversee the construction and opening of the new stores. Another group of Murphy executives believe that host-country nationals should manage the project. Which of the following best supports a decision to fill management positions in Mexico with host-country nationals? A) Murphy's marketing department created a new advertising campaign for the Mexican audience. B) Murphy's HR department is translating the firm's e-learning programs from English to Spanish. C) Murphy plans to direct operations in Mexico from the firm's U.S. headquarters. D) Murphy is establishing a fully functioning HR department in Mexico. Answer: D Explanation: D) Organizations that use the polycentric approach and primarily hire host-country nationals will usually have a fully functioning human resource department in each foreign subsidiary responsible for managing all local human resource issues. Corporate human resource managers focus primarily on coordinating relevant activities with their counterparts in each foreign operation. Marketing plans and e-learning are less relevant to the decision. If the firm wants to control operations from headquarters then expatriates would be better than locals. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4

52) Murphy Enterprises recently acquired a controlling interest in Mexico's leading clothing retailer. Murphy plans to open additional retail stores in the next three years. Some of Murphy's top executives advocate the idea of transferring U.S. managers to Mexico to oversee the construction and opening of the new stores. Another group of Murphy executives believe that host-country nationals should manage the project. Which of the following best supports the decision to use a polycentric staffing approach? A) Murphy's HR department has been unable to locate qualified Mexican managers. B) Murphy wants to establish that the corporation is fully committed to Mexico. C) HR managers at Murphy rely on selection tests to find competent workers. D) Most Murphy managers have international work or travel experience. Answer: B Explanation: B) With a polycentric approach, most employees are host-country nationals. Employing host-country nationals helps to clearly establish that the company is making a commitment to the host country and not just setting up a foreign operation. Being unable to find local managers suggests that an ethnocentric approach would be better than a polycentric approach. If most Murphy managers have international experience, then perhaps ethnocentric staffing would be effective. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 4 53) Jorge, a Mexican citizen, works for Ford Motor Company at the firm's factory near Mexico City. Jorge would most likely be categorized as a(n) ________. A) host-country national B) third-country national C) expatriate D) operant Answer: A Explanation: A) A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. A third-country national (TCN) is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. An expatriate is an employee who is not a citizen of the country in which the firm operations are located, but is a citizen of the country in which the organization is headquartered. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4

54) Most foreign operations of North American MNCs are primarily staffed by ________. A) host-country nationals B) third-country nationals C) contingent workers D) expatriates Answer: A Explanation: A) Normally, the bulk of employees in international offices will be host-country nationals. In most industries, host-country nationals comprise more than 98 percent of the workforce in the foreign operations of North American and Western European multinational companies. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 55) Which of the following is most likely a host-country national? A) a U.S. citizen working for a Japanese company in the United States B) a Japanese citizen working for a Japanese company in the United States C) an Italian citizen working for a French company in Germany D) an Indian citizen working for an Indian company in Singapore Answer: A Explanation: A) A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. An American working for a Japanese firm based in the U.S. is a host-country national. A third-country national (TCN) is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4 56) In most cases, the majority of employees in international offices are ________. A) foreigners B) third-country nationals C) expatriates D) host-country nationals Answer: D Explanation: D) A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. Normally, the bulk of employees in international offices will be host-country nationals. Not only are companies staffed by locals less expensive, but they also offer advantages from a cultural and business standpoint. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

57) Which of the following is most likely associated with hiring host-country nationals? A) repatriation B) lower costs C) cultural problems D) required relocation Answer: B Explanation: B) A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. Not only are companies staffed by locals less expensive, but they also offer advantages from a cultural and business standpoint. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 58) Sarita, a Spanish citizen, is employed at a Samsung facility in Texas. Samsung is a South Korean firm. Sarita would most likely be categorized as a(n) ________. A) expatriate B) third-country national C) home-country national D) host-country national Answer: B Explanation: B) A third-country national (TCN) is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4 59) Which of the following is an example of a third-country national? A) a U.S. citizen working for a Japanese company in the United States B) a Japanese citizen working for a Japanese company in the United States C) an Italian citizen working for a French company in Germany D) an Indian citizen working for an Indian company in Singapore Answer: C Explanation: C) A third-country national (TCN) is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. An Italian employed by a French company that is located in Germany is a third-country national. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 4

60) Which of the following is NOT an approach to global staffing? A) polycentric B) biocentric C) regiocentric D) ethnocentric Answer: B Explanation: B) Using the three basic types of global staff, there are four major approaches to global staffing: ethnocentric, polycentric, regiocentric, and geocentric staffing. These reflect how the organization develops its human resource policies and the preferred types of employees for different positions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 61) Which staffing strategy assumes that home-office perspectives and issues should take precedence over local perspectives and issues? A) polycentric B) ethnocentric C) regiocentric D) geocentric Answer: B Explanation: B) With ethnocentric staffing, companies primarily hire expatriates to staff higherlevel foreign positions. This strategy assumes that home-office perspectives and issues should take precedence over local perspectives and issues and that expatriates will be more effective in representing the views of the home office. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 62) All of the following are primary HR concerns associated with ethnocentric staffing EXCEPT ________. A) handling repatriation issues B) selecting experienced local managers C) developing global compensation packages D) training managers for foreign assignments Answer: B Explanation: B) With the ethnocentric staffing approach, the corporate human resources department is primarily concerned with selecting and training managers for foreign assignments, developing appropriate compensation packages, and handling adjustment issues when managers return home. Local managers are less likely to run foreign offices with this staffing approach. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 25 Copyright © 2016 Pearson Education, Inc.

63) With which staffing strategy do companies primarily hire expatriates to staff higher-level foreign positions? A) polycentric B) geocentric C) regiocentric D) ethnocentric Answer: D Explanation: D) With ethnocentric staffing, companies primarily hire expatriates to staff higherlevel foreign positions. This strategy assumes that home-office perspectives and issues should take precedence over local perspectives and issues and that expatriates will be more effective in representing the views of the home office. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 64) Monique is a manager at a firm based in Chicago. She has recently been selected to manage the firm's Singapore office along with three other managers from the Chicago office. The firm hopes that the American managers will effectively represent the views of the home office and will link the Singapore office to the Chicago office. Which type of staffing approach is most likely being used by Monique's employer? A) polycentric B) regiocentric C) ethnocentric D) geocentric Answer: C Explanation: C) With ethnocentric staffing, companies primarily hire expatriates to staff higherlevel foreign positions. This strategy assumes that home-office perspectives and issues should take precedence over local perspectives and issues and that expatriates will be more effective in representing the views of the home office. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

65) When host-country nationals are used throughout the organization, from top to bottom, what staffing approach is being used? A) polycentric B) geocentric C) regiocentric D) ethnocentric Answer: A Explanation: A) When host-country nationals are used throughout the organization, from top to bottom, it is referred to as polycentric staffing. With ethnocentric staffing, companies primarily hire expatriates to staff higher-level foreign positions. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 66) Which staffing model assumes that host-country nationals are better equipped to deal with local market conditions? A) ethnocentric B) regiocentric C) polycentric D) geocentric Answer: C Explanation: C) When host-country nationals are used throughout the organization, from top to bottom, it is referred to as polycentric staffing. The use of the polycentric staffing model is based on the assumption that host-country nationals are better equipped to deal with local market conditions. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 67) Tyler is a corporate HR manager at a global corporation that uses the polycentric staffing approach. Which of the following most likely describes the focus of Tyler's job? A) handling adjustment issues when home-country nationals return from assignment B) coordinating relevant activities with their counterparts in each foreign operation C) developing appropriate expatriate compensation packages D) selecting and training managers for foreign assignments Answer: B Explanation: B) With polycentric staffing, corporate human resource managers focus primarily on coordinating relevant activities with their counterparts in each foreign operation. With ethnocentric staffing, the corporate human resources department is primarily concerned with selecting and training managers for foreign assignments, developing appropriate compensation packages, and handling adjustment issues when managers return home. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 4 27 Copyright © 2016 Pearson Education, Inc.

68) Firms that use a polycentric staffing approach will most likely employ ________ for positions at foreign facilities. A) expatriates B) contingent workers C) third-country nationals D) host-country nationals Answer: D Explanation: D) When host-country nationals are used throughout the organization, from top to bottom, it is referred to as polycentric staffing. The use of the polycentric staffing model is based on the assumption that host-country nationals are better equipped to deal with local market conditions than expatriates or third-country nationals. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 69) With the ________ staffing approach, regional groups of subsidiaries reflecting the organization's strategy and structure work as a unit. A) geocentric B) polycentric C) regiocentric D) ethnocentric Answer: C Explanation: C) Regiocentric staffing is similar to the polycentric approach, but regional groups of subsidiaries reflecting the organization's strategy and structure work as a unit. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 70) Which of the following is NOT a characteristic of the regiocentric staffing approach? A) Each region develops a common set of employment practices. B) Promotions from the region to headquarters rarely occur. C) Each region actively recruits third-country nationals. D) Some autonomy exists in regional decision making. Answer: C Explanation: C) Regiocentric staffing is similar to the polycentric approach, but regional groups of subsidiaries reflecting the organization's strategy and structure work as a unit. There is some degree of autonomy in regional decision making, and promotions are possible within the region but rare from the region to headquarters. Each region develops a common set of employment practices. Regiocentric staffing focuses on hiring host-country nationals rather than third-country nationals. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 28 Copyright © 2016 Pearson Education, Inc.

71) With which staffing approach does each region develop a common set of employment practices? A) ethnocentric B) polycentric C) geocentric D) regiocentric Answer: D Explanation: D) Each region develops a common set of employment practices with the regiocentric approach. With the polycentric staffing approach, corporate human resource managers focus primarily on coordinating relevant activities with their counterparts in each foreign operation. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 72) Which staffing approach uses a worldwide-integrated business strategy? A) ethnocentric B) polycentric C) geocentric D) regiocentric Answer: C Explanation: C) Geocentric staffing is a staffing approach that uses a worldwide integrated business strategy. Regiocentric staffing is similar to the polycentric approach, but regional groups of subsidiaries reflecting the organization's strategy and structure work as a unit. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 73) With which staffing approach does the firm always attempt to hire the best person available for a position, regardless of where that individual comes from? A) geocentric B) polycentric C) regiocentric D) ethnocentric Answer: A Explanation: A) Geocentric staffing is a staffing approach that uses a worldwide integrated business strategy. The firm attempts to always hire the best person available for a position, regardless of where that individual comes from. The geocentric staffing model is most likely to be adopted and used by truly global firms. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 29 Copyright © 2016 Pearson Education, Inc.

74) Which staffing model is most likely to be adopted and used by truly global firms? A) ethnocentric B) polycentric C) regiocentric D) geocentric Answer: D Explanation: D) Geocentric staffing is a staffing approach that uses a worldwide integrated business strategy. The firm attempts to always hire the best person available for a position, regardless of where that individual comes from. The geocentric staffing model is most likely to be adopted and used by truly global firms. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 75) In which staffing approach would the corporate HR function typically be the most complicated? A) ethnocentric B) polycentric C) geocentric D) regiocentric Answer: C Explanation: C) Geocentric staffing is a staffing approach that uses a worldwide integrated business strategy. The firm attempts to always hire the best person available for a position, regardless of where that individual comes from. The geocentric staffing model is most likely to be adopted and used by truly global firms. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 76) Which of the following is NOT one of the stages in the expatriate selection process? A) supervisor recommendation B) candidate pool creation C) technical skills assessment D) self-selection Answer: A Explanation: A) Expatriates are often selected from those already within the organization and the process involves four distinct stages: self-selection, creating a candidate pool, technical skills assessment, and making a mutual decision. Although a candidate's supervisor would provide valuable input, a supervisor recommendation is not one of the stages in the expatriate selection process. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 30 Copyright © 2016 Pearson Education, Inc.

77) Which of the following occurs in the first stage of the expatriate selection process? A) creating a candidate pool from a database B) conducting personal and family assessments C) determining technical and managerial skills D) conducting a thorough background investigation Answer: B Explanation: B) In stage one, self-selection, candidates determine whether they are right for a global assignment, whether their spouses and children are interested in relocating internationally, and whether this is the best time for a move. Creating a candidate pool, assessing skills, and investigating backgrounds occur later in the process. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 78) Which of the following is LEAST likely to be an expatriate selection criterion? A) cultural adaptability B) interpersonal skills C) technical competence D) foreign language degree Answer: D Explanation: D) Expatriate selection criteria should include cultural adaptability, strong communication skills, technical competence, professional or operational expertise, global experience, country-specific experience, interpersonal skills, language skills, family flexibility, and country- or region-specific considerations. Although foreign language skills are helpful, having a degree is not necessary. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 79) With regard to background investigation, which country prohibits criminal checks of its citizens? A) Mexico B) Japan C) Canada D) United Kingdom Answer: B Explanation: B) Each country has its own laws, customs, and procedures for background screenings. For instance, Japanese law covers a person working at the Tokyo office of a U.S.based company and includes privacy statutes that prohibit criminal checks on Japanese citizens. In the U.K., third-parties are not allowed to have access to criminal records, so specific agencies have to handle background checks. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 31 Copyright © 2016 Pearson Education, Inc.

80) A background investigation of a potential employee would most likely take up to 40 days in which country? A) United States B) United Kingdom C) Japan D) Canada Answer: B Explanation: B) In the United Kingdom, the job applicant and the recruiting organization must sign and submit a formal request to a specific agency responsible for handling criminal records. It can take up to 40 business days to get information back. Background checks in the U.S. and Canada typically occur more quickly, and Japan does not allow background checks. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 81) A host-country national is an employee who is not a citizen of the country in which the firm's operation (or subsidiary) is located, but is a citizen of the country in which the organization is headquartered. Answer: FALSE Explanation: An expatriate is an employee who is not a citizen of the country in which the firm operations are located, but is a citizen of the country in which the organization is headquartered. A host-country national is an employee who is a citizen of the country where the subsidiary is located. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 82) A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. Answer: TRUE Explanation: An expatriate is an employee who is not a citizen of the country in which the firm operations are located, but is a citizen of the country in which the organization is headquartered. A host-country national is an employee who is a citizen of the country where the subsidiary is located. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

83) Normally, the bulk of employees in international offices will be expatriates because they are less costly and more reliable than locals. Answer: FALSE Explanation: Normally, the bulk of employees in international offices will be host-country nationals. Not only are companies staffed by locals less expensive, but they also offer advantages from a cultural and business standpoint. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 84) In most cases, global firms employ host-country nationals with the long-term goal of turning over control to local management. Answer: TRUE Explanation: In most industries, host-country nationals comprise more than 98 percent of the workforce in the foreign operations of North American and Western European multinational companies. Hiring local people and operating the company like local companies whenever possible is good business. The ultimate goal of most foreign operations is to turn over control to local management. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 85) A host-country national is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. Answer: FALSE Explanation: A third-country national (TCN) is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. A host-country national (HCN) is an employee who is a citizen of the country where the subsidiary is located. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 86) An example of a third-country national would be an Italian citizen working for a French company in Germany. Answer: TRUE Explanation: A third-country national (TCN) is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. An example would be an Italian citizen working for a French company in Germany. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

87) With polycentric staffing, companies primarily hire expatriates to staff higher-level foreign positions. Answer: FALSE Explanation: With ethnocentric staffing, companies primarily hire expatriates to staff higherlevel foreign positions. When host-country nationals are used throughout the organization, from top to bottom, it is referred to as polycentric staffing. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 88) During the self-selection phase, expatriate candidates must consider whether their spouses and children are interested in relocating internationally. Answer: TRUE Explanation: When candidates are selected for expatriate assignments, spouses, partners, and entire families also need to be "selected." Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 89) With geocentric staffing, employers try to hire the best regional person for a position. Answer: FALSE Explanation: Geocentric staffing is a staffing approach that uses a worldwide integrated business strategy. The firm attempts to always hire the best person available for a position, regardless of where that individual comes from. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 90) The best employees for global assignments typically have strong communication skills, cultural adaptability, and technical competence. Answer: TRUE Explanation: Expatriate selection criteria should include cultural adaptability, strong communication skills, technical competence, global experience, country-specific experience, interpersonal skills, and language skills. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4

91) Japanese law prohibits criminal checks on Japanese citizens except when they are employed by U.S.-based firms. Answer: FALSE Explanation: Each country has its own laws, customs, and procedures for background screenings. For instance, Japanese law covers a person working at the Tokyo office of a U.S.based company and includes privacy statutes that prohibit criminal checks on Japanese citizens. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 92) One survey found that 55 percent of employees facing dual-career issues are less likely to put themselves forward as a candidate for a global assignment. Answer: TRUE Explanation: One survey found that 55 percent of employees facing dual-career issues are less likely to put themselves forward as a candidate for a global assignment. When candidates are selected for expatriate assignments, spouses, partners, and entire families also need to be "selected." Basically, candidates must decide whether to go to the next step in the selection process. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 4 93) Why would a global firm primarily staff foreign positions with expatriates? How can a global firm prepare employees and their families for international assignments? Answer: Filling foreign positions with expatriates assumes that home-office perspectives and issues should take precedence over local perspectives and issues and that expatriates will be more effective in representing the views of the home office. Generally, expatriates are used to ensure that foreign operations are linked effectively with parent corporations. Pre-move orientation and training of expatriate employees and their families are essential before the global assignment begins. The pre-move orientation needs to be aggressively undertaken so that the expatriate understands cultural dos and don'ts and is immersed in the language. Many organizations have established a formal buddy system to alleviate the stress new expatriates and their families normally endure, to reduce the time it takes for expatriates to operate at peak productivity. Buddies often inform expatriates of host-office norms and politics, invite them into their homes, introduce them to friends and networks, and help bolster their credibility in the office. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 4, 5

94) What are expatriates? Why is compensating expatriates a challenge for global firms? Answer: An expatriate is an employee who is not a citizen of the country in which the firm operations are located, but is a citizen of the country in which the organization is headquartered. Expatriate compensation provides exceptional challenges compared to home-country employment, such as developing packages that are reasonably cost-effective while still attractive and motivating. For expatriate managers and professionals, the situation is more complex than simply paying at or slightly above local host-country compensation rates. The largest expatriate costs historically has included overall remuneration, housing, cost-of-living allowances, and physical relocation. In the past few years, additional challenges have hit companies as they have attempted to go global. First, the devaluation of the U.S. dollar has had a major impact on expat compensation. Also, there have been changes to the U.S. tax code that affect expatriate lifestyle. These challenges come at a time when global business is expanding. Meeting these challenges will affect how effectively the United States competes in the global market. Difficulty: Challenging Skill: Synthesis AACSB: Analytical thinking Learning Obj.: 4, 6 95) Companies spend upwards of ________ to ________ times of an expatriate's base salary. A) three, four B) one-half, three-quarters C) four, five D) two, three Answer: D Explanation: D) International businesses spend upwards of two to three times of an expatriate's base salary. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 96) Often, ________ is the weak link in global human resource management. A) reciprocation B) expropriation C) repatriation D) expatriation Answer: C Explanation: C) Orientation and training are also necessary prior to repatriation, which is the process of bringing expatriates home. Repatriation is often the weak link in global human resource management. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

97) During the pre-move orientation and training phase, providing the expatriate with ________ would be insufficient. A) immersion in the language B) a cultural "dummies" guide and a basic phrasebook C) an understanding of cultural dos and don'ts D) continuing employee development Answer: C Explanation: C) The pre-move orientation needs to ensure that the expatriate understands cultural dos and don'ts and is immersed in the language. Obviously, giving an expatriate a cultural "dummies" guide and a basic phrasebook for speaking the language is not enough. Continuing employee development, in which the employee's global skills are fitted into career planning and corporate development programs, makes the eventual transition to the host home country less disruptive. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 5 98) Which of the following is LEAST likely to be a component of the ideal expatriate preparation and development program? A) pre-move orientation B) continual development C) repatriation training D) availability forecasting Answer: D Explanation: D) Pre-move orientation, continual development, and repatriation training are elements of ideal expatriate development programs. Availability forecasting is an aspect of HR planning rather than global staffing. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 99) The development process for expatriate employees should start ________. A) on an as-needed basis B) after they have begun the global assignment C) as soon as they have been selected D) during the recruitment process Answer: C Explanation: C) The development process should start as soon as workers are selected; definitely before they begin the global assignment. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

100) Language, culture, and history are addressed during which stage of expatriate preparation and development? A) pre-move orientation B) repatriation orientation C) continual development D) repatriation training Answer: A Explanation: A) Language, culture, history, and local customs are topics covered prior to departure during pre-move orientation and training. Continual development addresses career planning and skills, while repatriation training and development focuses on transitioning employees back to the U.S. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 101) Which of the following topics would most likely be addressed during the continual development stage of expatriate preparation and development? A) language skills B) local customs and traditions C) home-country development D) home-country living conditions Answer: C Explanation: C) Home-country development is addressed during the continual development phase of expatriation. Language, customs, and living conditions are covered prior to departure. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 102) Why have many global organizations established a formal buddy system for expatriates and their families? A) provide them with technological assistance B) reduce the stress of moving overseas C) help them repatriate to the U.S. D) give them temporary housing Answer: B Explanation: B) Many organizations have established a formal buddy system to alleviate the stress new expatriates and their families normally endure, to reduce the time it takes for expatriates to operate at peak productivity. Buddies often inform expatriates of host-office norms and politics, invite them into their homes, introduce them to friends and networks, and help bolster their credibility in the office. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 38 Copyright © 2016 Pearson Education, Inc.

103) The process of bringing expatriates home is referred to as ________. A) repatriation B) global e-learning C) strategic training D) succession planning Answer: A Explanation: A) Orientation and training are also necessary prior to repatriation, which is the process of bringing expatriates home. Globalization has created a special need for e-learning and companies are embracing it to train the global workforce. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 104) The ________ helps to alleviate the stress new expatriates and their families normally endure. A) cohort system B) buddy system C) expatriation system D) none of the above Answer: B Explanation: B) Many organizations have established a formal buddy system to alleviate the stress new expatriates and their families normally endure and to reduce the time it takes for expatriates to operate at peak productivity. Buddies often inform expatriates of host-office norms and politics, invite them into their homes, introduce them to friends and networks, and help bolster their credibility in the office. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 105) Which of the following best explains why expatriates leave their firms within one year of completing an international assignment? A) discord among family and friends B) desire to spend more time overseas C) inadequate financial compensation D) inability to utilize skills learned abroad Answer: D Explanation: D) Reasons given for leaving include they were not being properly prepared to return to their work and were not able to use skills they learned abroad. Employers should make every effort to find a place in the organization that will use the expatriate's experience gained during the assignment. Also, the returning expatriate should be given a job with at least the same degree of responsibility and authority. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 39 Copyright © 2016 Pearson Education, Inc.

106) Mary has been on assignment in Japan for one year, and she will soon be returning to work at her firm's Dallas headquarters. Which of the following would most likely improve Mary's repatriation experience? A) career planning discussions B) polycentric staffing options C) e-learning opportunities D) workforce reorganizations Answer: A Explanation: A) To counter the challenges of repatriation, firms need to have a formal in-house repatriation program in place. A dialogue regarding expectations and career planning upon return will help to manage expectations. Difficulty: Challenging Skill: Application AACSB: Application of knowledge Learning Obj.: 5 107) All of the following are characteristics of an effective in-house repatriation program EXCEPT ________. A) recognition of the employee's overseas contribution B) clarification of the employee's position at the firm C) reorganization of the employee's work environment D) utilization of the employee's new international skills Answer: C Explanation: C) To counter the challenges of repatriation, firms need to have a formal in-house repatriation program in place. Acknowledgment and recognition of the significant overseas contribution is a courtesy to the returning employee. A dialogue regarding expectations and career planning upon return will help to manage expectations. Employees also benefit from using the skills they learned overseas. Creating an unfamiliar environment for the employee could be problematic. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

108) Shannon, an HR professional, has been given the task of implementing a global e-learning program at her firm. Employees located in the firm's offices and factories around the world will use the e-learning program for training purposes. Which of the following is most important for Shannon to consider as she establishes the program? A) virtual teams B) global safety C) cultural differences D) global compensation Answer: C Explanation: C) The most obvious challenge for any global e-learning implementation is failure to recognize the impact of cultural differences on the programs' success. Failing to perform a culture analysis or to recognize cultural differences can seriously damage a global organization's success. Virtual teams, safety, and compensation are less relevant. Difficulty: Moderate Skill: Application AACSB: Diverse and multicultural work environments Learning Obj.: 5 109) According to research, approximately ________ of employees of global corporations said that English is "required" or "important" in their jobs. A) 30% B) 50% C) 70% D) 91% Answer: D Explanation: D) Research shows that 91 percent of employees of global corporations said that English is "required" or "important" in their jobs, and that the need is increasing dramatically. Eighty-nine percent of employees said they are more likely to climb the corporate ladder if they can communicate in English. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 5

110) E-mail and bulletin boards are generally best for tasks that ________. A) require little collaboration, such as information sharing B) require thorough decision-making processes C) require complex problem-solving skills D) require thoughtful, extensive feedback Answer: A Explanation: A) Face-to-face communication is best for providing feedback. E-mail and bulletin boards are generally best for tasks that require little collaboration, such as information sharing. When teams need to solve complex problems or make decisions, technology such as videoconferencing can be an asset. Difficulty: Challenging Skill: Application AACSB: Information technology Learning Obj.: 5 111) Matt has a weekly meeting with other engineers who are located at different sites and regions around the world, yet none of the employees travel to the meetings. Matt most likely belongs to a(n) ________. A) expatriate community B) orientation group C) virtual team D) franchise Answer: C Explanation: C) With virtual teams, team members do not have to meet face-to-face to be effective, thereby eliminating "dead time" caused by traveling. These teams operate across boundaries of time and geography and have become a necessity of everyday working life. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 5 112) According to Chad Thompson, senior consultant at Aon Hewitt, the best virtual workers share all of the following characteristics EXCEPT ________. A) avoiding collaborative relationships B) preferring routine job responsibilities C) preferring to work alone D) thriving on interdependent working relationships Answer: C Explanation: C) Chad Thompson believes that the best virtual workers are those who thrive on interdependent working relationships. He also believes that employees who do not mind or who like ambiguity in their job responsibilities and who have strong communication skills also tend to succeed in virtual work environments. Workers who are "lone wolves" usually do not function well in a virtual team because they do not collaborate well. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 42 Copyright © 2016 Pearson Education, Inc.

113) What is the key to keeping virtual teams working effectively together? A) work sampling methods B) strategic planning C) communication D) efficiency Answer: C Explanation: C) Communication is the key to keeping teams working effectively together. Some of the difficulties that virtual teams confront regard communication that lacks personal connection. Difficulty: Moderate Skill: Concept AACSB: Information technology Learning Obj.: 5 114) What is becoming the world language? A) English B) French C) Spanish D) Russian Answer: A Explanation: A) Since English is becoming the world language, those for whom English is a second language may be at a disadvantage. Many Asians are concerned with saving face if they do not understand something. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 115) For the most successful outcome, training and orientation for expatriates and their families should begin as soon as they arrive in their new foreign home. Answer: FALSE Explanation: The development process should start as soon as workers are selected–definitely before they begin the global assignment. Organizations are recognizing that expatriate employees and their families face special situations and pressure that training and development activities must prepare them to deal with. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5

116) The most successful expatriate programs provide orientation before and after the international assignment and continual development opportunities during the assignment. Answer: TRUE Explanation: The ideal expatriate preparation and development program includes pre-move orientation and training, continual development, and repatriation orientation and training. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 117) Relocation is the process of bringing expatriates home. Answer: FALSE Explanation: Orientation and training are also necessary prior to repatriation, which is the process of bringing expatriates home. Relocation is the process of moving an employee to another state or country. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 118) Experts recommend giving returning expatriates jobs with less responsibility than their international assignments to help ease the repatriation process. Answer: FALSE Explanation: Upon an expat's return from an international assignment, employers should make every effort to find a place in the organization that will use the experience gained during the assignment. Also, the returning expat should be given a job with at least the same degree of responsibility and authority, but not less. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 5 119) Many companies offer training courses only in English, which may explain why most employees at global firms indicate that English is important for their careers. Answer: TRUE Explanation: According to research, 91% of employees of global corporations said that English is "required" or "important" in their jobs, and that the need is increasing dramatically. Many companies offer courses only in English or in English and one other language, usually Spanish. Difficulty: Moderate Skill: Concept AACSB: Diverse and multicultural work environments Learning Obj.: 5

120) Why do so many returning expatriates experience dissatisfaction upon repatriation? How can firms correct this problem? Answer: Repatriation is the process of bringing expatriates home. Repatriation is often the weak link in global HR management. Returning expatriates have not always had a pleasant experience. Even though a company may spend considerable money in sending managers overseas, too many returning managers report dissatisfaction with the process. Many companies do not specify in advance how the international experience will fit into an employee's career progression. In fact, numerous expatriates were not even guaranteed a job on their return. Further, expatriates often come home to a company that has undergone significant change from such events as mergers, acquisitions, reorganizations, and workforce contraction or expansion, which can create an unfamiliar environment. International businesses spend upward of two to three times of an expatriate's base salary only to have 16 percent resign within two years of their return. Reasons given for leaving include they were not being properly prepared to return to their work and were not able to use skills they learned abroad. Employers should make every effort to find a place in the organization that will use the expatriate's experience gained during the assignment. Also, the returning expatriate should be given a job with at least the same degree of responsibility and authority. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 5 121) The compensation for host-country nationals is normally ________ the prevailing wage rates in the area. A) much more than B) slightly above C) the same as D) lower than Answer: B Explanation: B) Globally, the question of what constitutes a fair day's pay is not as complicated as it is in the United States; normally, it is slightly above the prevailing wage rates in the area. The same is often true of benefits and nonfinancial rewards. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

122) Which of the following is LEAST likely to be considered when a company is establishing global compensation packages for host-country nationals? A) local laws B) living costs C) tax policies D) U.S. pay rates Answer: D Explanation: D) Variations in laws, living costs, tax policies, and other factors all must be considered when a company is establishing global compensation packages. Host-country nationals are typically paid based on the prevailing wage rate rather than based on U.S. wages. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 123) As an HR manager for an MNC, Eliot needs to establish appropriate compensation practices in each country. Which of the following is a factor that Eliot should most likely consider? A) education requirements B) available technologies C) standard working hours D) recruitment techniques Answer: C Explanation: C) The company will want to create a precise picture of employment and working conditions in order to establish appropriate practices in each country. Some of the factors that should be considered include: minimum wage requirements, which often differ from country to country and even from city to city within a country; working-time information such as annual holidays, vacation time and pay, paid personal days, standard weekly working hours, probation periods, and overtime restrictions and payments; and hiring and termination rules and regulations covering severance practices. Education requirements, technologies, and recruitment methods are less important than typical working hours in the region. Difficulty: Moderate Skill: Application AACSB: Diverse and multicultural work environments Learning Obj.: 6

124) According to the text, when compensating host-country nationals in Puerto Rico, a firm would most likely need to ________. A) pay a Christmas bonus B) contribute to a 401(k) plan C) provide disability insurance D) offer a significant life insurance policy Answer: A Explanation: A) Variations in laws, living costs, tax policies, and other factors all must be considered when a company is establishing global compensation packages. For example, Puerto Rico has laws requiring the paying of severance pay and a Christmas bonus. Pension plans and life insurance are more important in other countries according to the text. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 125) In Italy, what is the most likely result of giving a sales incentive to a team's top sales professional? A) motivating team members to work harder B) creating a competition against the recipient C) discouraging the recipient from working hard D) attracting high quality employees to the team Answer: C Explanation: C) In Italy, where teamwork is more valued than individual initiative, sales incentives for top sales professionals working in small teams can be demotivational. The recipient of a large award may feel awkward when receiving larger than a fair share of the reward pie. Difficulty: Moderate Skill: Application AACSB: Application of knowledge Learning Obj.: 6

126) Which of the following has been a recent problem associated with expatriate compensation? A) devaluation of the U.S. dollar B) expansion of Chinese firms C) relocation expenses D) NAFTA changes Answer: A Explanation: A) In the past few years, additional challenges have hit companies as they have attempted to go global. First, the devaluation of the U.S. dollar has had a major impact on expatriate compensation. Also, there have been changes to the U.S. tax code that affect expatriate lifestyle. These challenges come at a time when global business is expanding. Meeting these challenges will affect how effectively the United States competes in the global market. In the past, expatriates regularly received a premium for taking an overseas assignment. Today, overseas jobs with rich expatriate packages are becoming less prevalent. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 127) Historically, the largest expatriate costs have included all of the following EXCEPT ________. A) housing B) physical relocation C) lifestyle training D) cost-of-living allowances Answer: C Explanation: C) The largest expatriate costs historically have included overall remuneration, housing, cost-of-living allowances, and physical relocation. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 128) The ________ approach protects the standard of living of expatriate employees. A) balance sheet B) tax equalization C) human capital valuation D) operating expense Answer: A Explanation: A) The balance sheet approach provides expatriates the standard of living they normally enjoy in the United States or the expatriate's home country. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

129) It is relatively easy for virtual team members to build trust. Answer: FALSE Explanation: Without face-to-face communication, team members often do not feel as connected or committed to the team. The virtual work environment does not provide opportunities to build trust that come from close proximity. Although meeting face-to-face requires time and expense, virtual teams that invest in one or two such meetings per year perform better overall than those that do not. Difficulty: Moderate Skill: Application AACSB: Information technology Learning Obj.: 6 130) In most cases, compensation for host-country nationals tends to be twice the prevailing wage rate in the area. Answer: FALSE Explanation: Globally, the question of what constitutes a fair day's pay is not as complicated as it is in the United States; normally, it is slightly above the prevailing wage rates in the area. The same is often true of benefits and nonfinancial rewards. Firms hire locals to save money in many cases. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 131) The communist system in China rewarded additional pay to hard workers, and modern global firms find that Chinese workers who are paid by the hour work extra hard. Answer: FALSE Explanation: In mainland China, workers who are paid by the hour often do not work hard. Under the communist system, working harder than anyone else did not result in additional pay. Therefore, there was no reason to do so. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 132) Changes to the U.S. tax code do not affect expatriates, whose compensation depends solely on host-country wage standards. Answer: FALSE Explanation: Changes to the U.S. tax code affect expatriate lifestyles. For expatriate managers and professionals, compensation is more complex than simply paying at or slightly above local host-country compensation rates. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

133) Companies rely exclusively on publications such as the U.S. Department of State Indexes of Living Costs Abroad to determine allowances for expatriate employees. Answer: FALSE Explanation: Employees receive allowances whenever the costs in the foreign country exceed the costs in the United States. Expense categories include housing and utilities, goods and services, discretionary income, and taxes. Allowance amounts vary according to the lifestyle enjoyed in the United States. Companies can obtain pertinent information about costs for foreign countries from at least three information sources. First, they can rely on expatriates who have spent considerable time on assignment, or foreign government contacts. Second, private consulting companies (e.g., Towers Watson) or research companies (e.g., Bureau of National Affairs) can conduct custom surveys. Third, most U.S. companies consult the U.S. Department of State Indexes of Living Costs Abroad, Quarters Allowances, and Hardship Differentials, which is published quarterly by the U.S. Department of State. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 134) In today's marketplace, expatriates from the U.S.A. typically are paid generous premiums for taking overseas assignments. Answer: FALSE Explanation: In the past, expats regularly received a premium for taking an overseas assignment. Today, overseas jobs with rich expat packages are becoming less prevalent. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6 135) The balance sheet approach ensures that all expatriates receive equal training, compensation, and support following the completion of their assignment. Answer: FALSE Explanation: The balance sheet approach applies exclusively to compensation. Most companies ensure that expatriates' compensation accounts for additional costs that may be associated with moving to and living in another country. The balance sheet approach provides expatriates the standard of living they normally enjoy in the United States or the expatriate's home country. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 6

136) According to international health and safety experts, what is one of the most important trends among successful MNCs? A) using a single safety management system for all global operations B) offering safety and health training through e-learning software C) handling safety and health emergencies with virtual teams D) using regionally based safety and health procedures Answer: A Explanation: A) Health and safety professionals with international experience say one of the most important trends sweeping through successful multinational companies is the shift to a single safety management system that applies to all their operations throughout the world. Taking a global approach to safety and health not only avoids problems, but it also opens up a wealth of opportunities to improve performance. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 137) CIGNA corporation's use of an ________ helps employees cope with the challenges associated with international assignments. A) exit safety program B) employee assistance program (EAP) C) alternative job assignment D) all of the above Answer: B Explanation: B) The EAP allows CIGNA International participants to access a multilingual support and counseling network. Employees and their dependents can receive assistance through telephone or personal visits for a wide range of behavioral health and work-life concerns. The program is designed to help employees better manage stress and anxiety, depression, and substance abuse, as well as to help them to lead healthy lifestyles. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 138) Experts say that taking a global approach to safety opens up a wealth of opportunities to improve performance. Answer: TRUE Explanation: Health and safety professionals with international experience say one of the most important trends sweeping through successful multinational companies is the shift to a single safety management system that applies to all their operations throughout the world. Experts emphasize that taking a global approach to safety and health is not only about avoiding problems, it also opens up a wealth of opportunities to improve performance. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 51 Copyright © 2016 Pearson Education, Inc.

139) In many cases, private companies handle the evacuation and care of injured employees working in global facilities. Answer: TRUE Explanation: Often, evacuation and care of injured employees is done through private companies. Medical emergencies are frightening under any circumstances, but when an employee becomes sick or injured abroad, it can be a traumatic experience. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 7 140) Which of the following terms refers to requiring firms to have union or worker representatives on their boards of directors? A) collective bargaining B) employment-at-will C) codetermination D) labor relations Answer: C Explanation: C) Codetermination, which requires firms to have union or worker representatives on their boards of directors, is very common in European countries. Even though they face global competition, unions in several European countries have resisted changing their laws and removing government protections. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 141) In which country would codetermination most likely be an issue? A) Brazil B) India C) Germany D) South Korea Answer: C Explanation: C) Codetermination, which requires firms to have union or worker representatives on their boards of directors, is very common in European countries. Global firms in Germany would likely have to consider codetermination. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

142) Which of the following countries prohibits collective bargaining for textile workers? A) Canada B) Chile C) Sweden D) United States Answer: B Explanation: B) In some South American countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited. And unions are generally allowed only in companies of 25 workers or more. This practice has encouraged businesses to split into small companies to avoid collective bargaining, leaving workers on their own. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 143) In which country does a company have little flexibility to fashion wages that fit their needs? A) Canada B) United States C) India D) Germany Answer: D Explanation: D) Wage bargaining remains centralized, and companies have little flexibility to fashion contracts that fit their needs. High payroll taxes raise labor costs, and their laws mandating cumbersome layoff procedures increase the cost of the product. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 144) Global competition has forced all European Union labor organizations and lawmakers to revoke codetermination laws. Answer: FALSE Explanation: Codetermination, which requires firms to have union or worker representatives on their boards of directors, is very common in European countries. Even though they face global competition, unions in several European countries have resisted changing their laws and removing government protections. Laws make it hard to fire workers, so companies are reluctant to hire. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

145) Chilean textile unions are allowed to participate in collective bargaining, but miner and carpenter unions are prohibited from the activity. Answer: FALSE Explanation: In some South American countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited. And unions are generally allowed only in companies of 25 workers or more. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 146) In Chile, unions are generally allowed only in companies of 15 workers or more. Answer: FALSE Explanation: In some South American countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited. And unions are generally allowed only in companies of 25 workers or more. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 8 147) Data protection laws in the U.S. and France are similar, which eases compliance issues for U.S.-based MNCs operating in France. Answer: FALSE Explanation: Legal and political forces are unique to each country, and sometimes, the laws of one contradict those of another. For instance, the French authorities acknowledge that their data protection laws are in direct conflict with the U.S. Sarbanes-Oxley Act, but they insist that multinationals comply with French law. Difficulty: Challenging Skill: Concept AACSB: Analytical thinking Learning Obj.: 8

148) The Small Business Administration (SBA) offers ________ of 12 months or less that provide a line of credit for suppliers, inventory, or production of goods. A) global business grants B) international trade loans C) export working capital loans D) export express loans Answer: C Explanation: C) Export Working Capital Loans are short-term loans of 12 months or less. These loans provide a line of credit for suppliers, inventory, or production of goods. As a result of the Small Business Jobs Act, the SBA guarantee on these loans is 90 percent, with the maximum size of the loan being $5 million. Difficulty: Easy Skill: Concept AACSB: Analytical thinking Learning Obj.: 9 149) The United States has a goal of doubling exports in five years. Answer: TRUE Explanation: The United States has a goal of doubling exports in five years, from $1.57 trillion in 2009 to $3.14 trillion in 2014. This growth is projected to create two million new jobs. To achieve this goal, the Small Business Administration (SBA) has programs available to help small businesses expand into exporting. Difficulty: Moderate Skill: Concept AACSB: Analytical thinking Learning Obj.: 9

150) Discuss two factors that influence the effectiveness of performance appraisal practices throughout the world. Answer: The two factors are information asymmetry and cultural values. Information asymmetry refers to a difference in the quality and amount of information available to two or more individuals or groups. For example, let's assume that a company's headquarters in the United States instructed an employee to increase the staffing of its factory in New Delhi, India, by 10 percent in 2014. The headquarters will adopt this goal as a performance criterion come time to conduct the expatriate's performance appraisal. At the end of the year, the staffing increased by only 4 percent, which leads the company headquarters to judge the expatriate's performance as negative. The expatriate has learned from immersion in his job that illiteracy or substandard pay relative to the cost of living contributed dramatically to the result. However, the corporate headquarters does not have intimate knowledge of local conditions in New Delhi and simply attributed the outcome to an ineffective expatriate. Cultural norms influence the adoption of performance appraisal practices. In China and Japan, performance feedback is uncommon because the normative practice of "saving face" is well-ingrained in those cultures. Giving negative performance feedback would cast the employee in a negative light. There is some evidence to suggest that performance appraisal practices performed by companies within high power distance cultures rely on the manager or supervisor as the single source of judgment. Where power distance is lower, it is not unusual for companies to solicit performance information from multiple sources. In individualistic cultures, performance appraisal seeks to differentiate employees based on performance. In contrast, performance appraisals in collectivist cultures generally do not focus on individual performance because negative performance information could hurt the solidarity of group members. Difficulty: Challenging Skill: Critical thinking AACSB: Reflective thinking Learning Obj.: 9