

Compensation Management Practice Exam
Course Introduction
Compensation Management is a comprehensive course that examines the strategies, structures, and processes involved in designing and administering employee compensation systems within organizations. Students will explore core concepts such as job evaluation, pay structures, salary surveys, incentive plans, benefits, and legal considerations in compensation. The course also addresses the role of compensation in attracting, motivating, and retaining talent, while aligning compensation practices with organizational goals and external market conditions. Through case studies and real-world scenarios, students will develop the analytical skills necessary to create equitable and competitive compensation programs in a dynamic business environment.
Recommended Textbook Human Resource Management 13th Edition by Gary Dessler
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Page 2

Chapter 1: Introduction to Human Resource Management
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Sample Questions
Q1) According to employer surveys,one of the primary challenges of Generation Y employees is their ________.
A)inability to use information technology
B)inadequate multi-tasking skills
C)inability to balance work and family
D)need for constant praise and recognition
Answer: D
Q2) Communicating is one of the five basic functions of the management process.
A)True
B)False
Answer: False
Q3) An HR manager who wants to analyze the costs associated with each new hire will most likely use which of the following?
A)podcasts
B)Web portal
C)data warehouse
D)public domain software
Answer: C
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Chapter 2: Equal Opportunity and the Law
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Q1) Managing diversity means maximizing diversity's potential advantages while minimizing the potential hindrances of diversity that can undermine a firm's performance.
A)True
B)False
Answer: True
Q2) One of Alexis' male co-workers has been making sexually suggestive comments to Alexis about her clothing and her appearance,which makes Alexis feel uncomfortable at work.What is the first step Alexis should take to address the problem?
A)filing a complaint with the local EEOC office
B)filing a verbal complaint with the harasser's boss
C)writing a letter to the accused
D)consulting an attorney
Answer: B
Q3) The 14th Amendment to the U.S.Constitution led to the establishment of the EEOC. A)True
B)False
Answer: False
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Chapter 3: Human Resource Management Strategy and Analysis
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Sample Questions
Q1) Which of the following questions would LEAST likely be answered by the use of workforce analytics software?
A)Which departments need improvement?
B)What hiring policies are standard in the industry?
C)How many workers will the firm need in five years?
D)Why do employees choose to leave the organization?
Answer: B
Q2) The specific human resource policies and practices used to support a firm's strategic goals are known as human resource strategies.
A)True
B)False
Answer: True
Q3) A(n)________ is a firm's method for matching its internal strengths and weaknesses with external opportunities and threats to maintain a competitive advantage.
A)strategic plan
B)situation analysis
C)SWOT analysis
D)tactical plan
Answer: A

Page 5
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Chapter 4: Job Analysis and the Talent Management Process
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Sample Questions
Q1) Observation as a job analysis data collection method is most appropriate for jobs that involve physical activities.
A)True
B)False
Q2) In a brief essay,compare and contrast job descriptions and job specifications.
Q3) How does job analysis support human resource management activities? Briefly describe one of the methods commonly used for gathering job analysis data.
Q4) Effective talent management focuses on developing employee competencies that align with strategic goals.
A)True
B)False
Q5) Experts advise the inclusion of statements such as "performs other assignments as required" in all job descriptions to ensure the flexibility of the job's duties and responsibilities.
A)True
B)False
Q6) What are the advantages and disadvantages of using interviews to collect job analysis data?
Page 6
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Chapter 5: Personnel Planning and Recruiting
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Sample Questions
Q1) Qualifications inventories can be tracked and maintained by using all of the following EXCEPT a ________.
A)ratio analysis matrix
B)personnel replacement chart
C)position replacement card
D)skills inventory software
Q2) Dixon Industries adheres to a talent management philosophy.As the HR manager at Dixon,you should most likely ________.
A)continuously monitor workforce planning issues
B)primarily use recruiters for top executive jobs
C)frequently assess the online HR Scorecard
D)regularly implement the Markov analysis
Q3) What methods are used by both small and large firms to forecast the supply of inside candidates?
Q4) When firms prove that they will use the information on job application forms as a predictor of job performance,they are allowed under EEO laws to request information regarding an applicant's age and marital status.
A)True
B)False
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Chapter 6: Employee Testing and Selection
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Sample Questions
Q1) Tests administered for hiring purposes should be both valid and reasonable if used by a firm that adheres to evidence-based human resources.
A)True
B)False
Q2) Which of the following terms refers to the consistency of scores obtained by the same person when retested with alternate forms of the same test?
A)equivalency
B)reliability
C)expectancy
D)validity
Q3) While some personality characteristics are associated with success in different types of jobs,which personality trait is most frequently associated with job performance in all jobs?
A)openness to experience
B)conscientiousness
C)extroversion
D)agreeableness
Q4) What is test validity? How are selection tests validated?
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Chapter 7: Interviewing Candidates
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Sample Questions
Q1) Which of the following traits is most likely to be assessed accurately during an interview?
A)intelligence
B)agreeableness
C)conscientiousness
D)emotional stability
Q2) Which of the following interview formats will most likely result in the highest validity?
A)structured, situational
B)unstructured, situational
C)structured, behavioral
D)unstructured, behavioral
Q3) Employers typically base decisions on false impressions and stereotypes when they fail to clarify in advance what traits and knowledge are necessary for a specific job.
A)True
B)False
Q4) The interview is the most widely used personnel selection procedure.
A)True
B)False
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Chapter 8: Training and Developing Employees
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Sample Questions
Q1) During the unfreezing stage of organizational change,managers need to establish a sense of urgency,which may be accomplished by providing employees with reports indicating that the firm faces significant problems.
A)True
B)False
Q2) Which of the following is NOT an advantage of programmed learning?
A)Training time is significantly reduced.
B)Trainees can work at their own pace.
C)Trainees benefit from a skilled coach.
D)Trainees receive immediate feedback.
Q3) Which of the following is most likely NOT one of the goals of a firm's employee orientation program?
A)making new employees feel like part of a team
B)helping new employees become socialized into the firm
C)assisting new employees in selecting the best labor union
D)teaching new employees about the firm's history and strategies
E)providing basic information to new employees to help them work
Q4) What is the purpose of employee orientation? What role does training play in employee orientation?
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Chapter 9: Performance Management and Appraisal
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Sample Questions
Q1) Which of the following is LEAST likely to cause a supervisor's performance appraisal of a subordinate to be biased?
A)purpose of the appraisal
B)location and time of the appraisal
C)personal characteristics of the subordinate
D)relationship between supervisor and subordinate
Q2) Sam supervises a team of data entry clerks at Geico.The firm's electronic performance monitoring system enables Sam to electronically monitor the amount of computerized data an employee processes each day.
A)True
B)False
Q3) Management by objectives cannot be used as a primary performance appraisal tool,but it is useful as a supplement to the graphic rating method.
A)True
B)False
Q4) Describe the four basic types of appraisal interviews.
Q5) Why is it important for a manager to appraise a subordinate's performance? How can a manager handle a subordinate who is defensive when told that his or her performance is poor?
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Chapter 10: Employee Retention, Engagement, and Careers
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Sample Questions
Q1) In a brief essay,discuss the roles and responsibilities of managers,mentors,and coaches in an employee's career development.
Q2) The best opportunity for discussing career-related issues with an employee is during the annual or semi-annual appraisal.
A)True
B)False
Q3) Based on research studies,which of the following is most likely a true statement about mentoring programs?
A)Traditional mentoring programs are more effective for male than for female employees.
B)When the mentor and protege work in different departments, mentoring is more effective.
C)Proteges have more respect for mentors who work two levels above their own rank in a firm.
D)Required mentoring relationships are more effective than informal mentoring relationships.
Q4) What is reality shock? What efforts can be taken by an employer to prevent reality shock?
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12

Chapter 11: Establishing Strategic Pay Plans
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Sample Questions
Q1) In the broadest sense,comparable worth may mean comparing jobs that are very dissimilar such as nursing to fire fighting.
A)True
B)False
Q2) Indirect payments that contribute to an employee's compensation include variable pay like commissions and bonuses.
A)True
B)False
Q3) An advantage of the job classification method is that the objective nature of the system makes it easy to write the class and grade descriptions.
A)True
B)False
Q4) What is the primary purpose of offering an executive stock options in a compensation package?
A)providing the executive with guaranteed bonuses
B)encouraging the executive to increase the firm's value
C)enabling the firm to decrease the executive's base pay
D)offering the executive long-term retirement security
Q5) In a brief essay,compare and contrast the use of pay ranges with broadbanding.
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Chapter 12: Pay for Performance and Financial Incentives
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Sample Questions
Q1) Using a straight salary to compensate salespeople is most likely ineffective because it ________.
A)discourages sales flexibility
B)lacks connection to performance
C)makes it hard to switch territories
D)depends on annual corporate profits
Q2) Employees at GameTime Software participate in a gainsharing plan.Employee bonuses are calculated by dividing payroll expenses by total sales.Game Time Software most likely uses which of the following plans?
A)Lincoln
B)Rucker
C)Improshare
D)Scanlon
Q3) Studies indicate that in order for merit pay to be most effective,it should be linked to ________.
A)company profits
B)annual base salary
C)employee overtime
D)employee performance
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Chapter 13: Benefits and Services
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Sample Questions
Q1) COBRA requires most private employers to continue to make health benefits available to terminated or retired employees and their families for a period of time,generally ________ months.
A)6
B)12
C)18
D)24
Q2) Supplemental pay benefits provide employees with time-off-with pay for jury duty,vacations,funerals,and military responsibilities.
A)True
B)False
Q3) Who contributes funds for workers' compensation benefits?
A)state governments
B)federal government
C)insurance providers
D)employers
Q4) What is sick leave? Why is sick leave problematic for many employers? What family-friendly benefits may alleviate some of these problems?
Q5) What are the three types of benefits provided by Social Security?
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Chapter 14: Ethics and Employee Rights and Discipline
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Sample Questions
Q1) What are the main characteristics of workplace bullying? How can employers and their HR departments reduce bullying incidents in the workplace?
Q2) What is an ethics code? What methods do firms use to monitor employees and ensure their compliance with ethics codes?
Q3) Which of the following supervisory actions is LEAST likely to enhance the perception of fairness?
A)dealing with unethical behavior quickly
B)conducting an objective performance appraisal
C)making more normative than nonnormative statements
D)ensuring that employees understand the reasons for a decision
Q4) Unfortunately,employers have no tools for measuring the ethics of an individual during the applicant screening process,so employers do not realize they have hired an unethical person until it is too late.
A)True
B)False
Q5) What is morality? How does an employee's morality relate to making ethical decisions in the workplace?
Q6) What can you do as an HR manager to ensure that you hire ethical employees?
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Chapter 15: Labor Relations and Collective Bargaining
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Sample Questions
Q1) Union pressure on a company's shareholders,directors,and customers is known as a corporate campaign.
A)True
B)False
Q2) Most employers decide to contest the union's right to represent their employees.
A)True
B)False
Q3) What percentage of eligible employees in a bargaining unit must sign authorization cards in order for the union to petition the NLRB for an election?
A)20
B)30
C)40
D)50
Q4) Employee programs that focus on quality and productivity are generally viewed outside of the scope of the National Labor Relations Act.
A)True
B)False
Q5) List and describe the five steps involved in planning a union drive and election.
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Chapter 16: Employee Safety and Health
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Sample Questions
Q1) Thermo is a plastic supply and custom fabrication company.Thermo serves clients in the medical,solar,and semiconductor industries by making acrylic and polycarbonate sheets,tubes,and rods.The company employs approximately 500 workers at its facility in Ohio.Safety is a top priority at Thermo,and supervisors are required to conduct daily inspections of all equipment.Recently,three workers were seriously injured by a large press used to mold plastic parts.The workers spent time in the hospital for hand injuries,and they are currently recuperating at home.As a result,top management is evaluating all aspects of safety at the facility to determine what changes need to be made. Which of the following questions is LEAST relevant to Thermo's decision to minimize unsafe acts at the facility?
A)Have Thermo managers trained employees in the use of the company's mechanical security system?
B)How are employee safety suggestions and complaints currently handled by Thermo managers?
C)How are Thermo employees rewarded or praised for adhering to safety rules and procedures?
D)What is the current level of employee involvement in designing Thermos' safety program?
Q2) What steps are involved in a basic industrial hygiene program?
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Page 18
Chapter 17: Managing Global Human Resources
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Sample Questions
Q1) In January 2009,Wal-Mart acquired a controlling interest in Chile's leading food retailer.Since then,Wal-Mart has opened the first environmentally friendly supermarket in Chile that uses energy efficient technology throughout the store.Wal-Mart is planning to open additional stores in Chile over the next five years.Wal-Mart's top executives are considering the idea of transferring U.S.managers to Chile to oversee the construction and establishment of the new stores. Which of the following questions is LEAST relevant to the decision to fill management positions in Chile with expatriates?
A)What will be the relocation and compensation costs to Wal-Mart of using expatriates?
B)What level of corporate control is needed for opening the new Wal-Mart stores?
C)What is the planned Wal-Mart marketing strategy for the new stores in Chile?
D)What is the typical attrition rate for expatriate employees at Wal-Mart?
Q2) A major challenge for international businesses is the need to adapt personnel policies and procedures to the differences among countries.
A)True
B)False
Q3) What staffing options do multinational firms have when filling positions in foreign subsidiaries?
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Page 19

Chapter 18: Managing Human Resources in Entrepreneurial
Firms
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Sample Questions
Q1) All of the following are options for small businesses looking for online training programs to improve their employees' skills EXCEPT ________.
A)National Association of Manufacturers
B)Small Business Administration
C)American Management Association
D)Equal Employment Opportunity Commission
Q2) Human resource outsourcers handle a firm's HR functions on an administrative level,so the client firm's employees are not added to the HROs payroll.
A)True
B)False
Q3) Charles Brown owns a small business with 60 employees.Currently his business does not have a retirement plan.He wants an easy method of offering retirement benefits to his employees.Which of the following would most likely be Charles' best option?
A)SIMPLE IRA plan
B)Roth IRA plan
C)stock options
D)401(k)plan
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Page 20