Question 31. In terms of procedural justice, the process of determ

31. In terms of procedural justice, the process of determining base pay, allocating pay increases, and measuring performance all must be seen by employees as

a. fair.

b. equal.

c. logical.

d. open.

32. Amanda is upset because she makes the same amount of money Carl does, although Amanda has 18 clients and Carl has only 11 clients. Amanda is making a judgment about

a. extrinsic justice.

b. intrinsic justice.

c. internal equity.

d. external equity.

33. Typical compensation appeals procedures require the employee to discuss the problem first with a. the organizational ombuds.

b. the EEOC.

c. the HR department.

d. his/her supervisor.

34. What is a likely outcome when an organization’s compensation is viewed by employees and outsiders as lacking external equity?

a. lower than average turnover

b. employees discussing their pay with other employees

c. little effect on employee morale, because internal equity is most important to employees

d. difficulty recruiting qualified and high-demand employees

35. Organizations that have specific policies about where they wish to position themselves in the labor market use a/an ____ strategy.

a. industry

b. quartile

c. benchmarking

d. labor market

36. Abundance Nurseries needs large numbers of unskilled employees every spring and summer to plant, maintain, and harvest the flower fields. Abundance is located in an area where there is a large supply of unskilled workers, and it has few problems recruiting workers as needed. It would be reasonable for Abundance Nurseries to position its pay for these workers in the ____ -quartile of the labor market.

a. first

b. second

c. third

d. fourth

37. A third-quartile approach is a compensation strategy

a. in which the company pays higher wages than its competitors do.

b. to pay below the average in the labor market.

c. where one-third of the competitors in the labor market pay higher wages than what the company does.

d. in which the company pays the median of what its competitors pay.

38. A company that structures its compensation system so that half of its competitors pay their employees more than it does and half of its competitors pay less than it does is using a ____ the market strategy.

a. lag

b. meet

c. lead

d. follow

39. Larry has decided to go back to his hometown of Mellonburg and set up an architectural design business. Mellonburg is a depressed farming community of 351 residents. It is 20 miles from the nearest restaurant, 70 miles from the nearest Starbucks coffee shop, and the local schools are the worst in the state. The winters are severe, the summers are oppressive. Few single people live there, and the social and cultural life is negligible. In order to attract good quality architects, Larry will probably

a. need to ignore the market compensation for architects and pay employees on an entitlement basis.

b. be able to lag the market significantly in pay because of the low cost of living.

c. have pay somewhat more than the market because of the unappealing location.

d. have to pay as much as if he were hiring top quality architects in the most expensive cost-of-living area, such as New York City.

40. Paul is a single-parent. He received consistently high performance appraisals from his employer, until the company was wiped out by Hurricane Katrina. Now, Paul is looking for a new job away from the Gulf Coast. As the recruiter at MilqueMaid Chocolate, you are very interested in Paul. But, your firm has a lag-the-market compensation strategy. You know that Paul has had an offer from a firm that has a meet-the-market strategy. Your best way to lure Paul to MilqueMaid is to

a. point out MilqueMaid’s broad-based performance incentive programs.

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