Chapter 3 Traditional Bases for Pay: Seniority and Merit
1) Which of the following is based on the human capital theory?
A) seniority pay system
B) BOS
C) merit pay system
D) BARS
Answer: A
Difficulty: Easy
Type: Concept
Learning Obj: 1
2) The collective bargaining system was established by passage of which federal Act?
A) National Labor Regulations Act
B) National Labor Relations Act
C) Union Labor Regulations Act
D) Union Labor Relations Act
Answer: B
Difficulty: Moderate
Type: Concept
Learning Obj: 1
3) This term is defined as added pay for employees who have reached the maximum of a pay grade and who are unlikely to move into higher grades.
A) longevity pay
B) merit pay
C) seniority-based pay
D) incentive pay
Answer: A
Difficulty: Moderate
Type: Concept
Learning Obj: 1
4) Which of the following is an advantage of seniority pay systems?
A) they reward exemplary performance
B) they encourage employees to continue to increase their skillsets
C) they help to promote product quality
D) they reward employees on an objective basis
Answer: D
Difficulty: Difficult
Type: Critical Thinking
Learning Obj: 1
5) In 2011, employees were expected to earn average merit increases of what percent?
A) 1.3%
B) 2.9%
C) 5.2%
D) 8.3%
Answer: B
Difficulty: Moderate
Type: Concept
Learning Obj: 3
6) Which pay system is most widely used in America today?
A) skill based pay
B) longevity pay
C) merit pay
D) seniority pay
Answer: C
Difficulty: Moderate
Type: Concept
Learning Obj: 3
7) Which two factors should compensation professionals consider before endorsing the use of merit pay systems?
A) supervisor's rating bias & stock price
B) job design & supervisor's rating bias
C) job analysis & stock price
D) commitment from top management & job design
Answer: D
Difficulty: Difficult
Type: Concept
Learning Obj: 3
8) This term refers to the minimum pay increase that employees view as a significant change in their