Strategic Compensation, 7e (Martocchio)

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

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

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

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

5) In 2011, employees were expected to earn average merit increases of what percent?
A)13%
B)2.9%
C)5.2%
D) 8.3%
Answer: B

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

7) Which two factors should compensation professionals consider before endorsing the use of

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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

8) This term refers to the minimum pay increase that employees view as a significant change in
their compensation amount.
A) halo effect increase
B) minimal pay incident
C) just-meaningful pay increase
D) satisfactory compensation payment
Answer: C

9) If an employee is rated as outstanding on her leadership ability she was probably rated using
which appraisal system?
A) trait system
B) goal-oriented system
C) comparison system
D) behavioral system
Answer: A

10) XYZ Company ranks its employees from the best performer to the poorest performer and the
employee with the best performance receives the highest ranking. What type of performance
appraisal method is used by this company?
A) comparison system
B) trait system
C) behavioral system
D) goal-oriented system
Answer: A

11) There are 15 animal keepers working for the XYZ Company. Their supervisor is required to
rate the performance of these workers based on the following criteria: 30% of the animal keepers
will be rated as below-average, 40% of the animal keepers will be rated as average, and 30% of
the animal keepers will be rated as above average. What type of performance appraisal is used?
A) paired comparison
B) forced distribution
C) critical incident technique
D) behavioral observation scale
Answer: B

12) Which evaluation system requires that supervisors compare each employee to every other
employee, identifying the better performer in each pair?
A) forced distribution
B) hierarchical
C) paired comparison

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D) the critical incident technique
Answer: C

13) This type of behavioral performance appraisal system requires the review of past
performance behaviors and outcomes in order to identify them as either successful or
unsuccessful.
A) management by objectives (MBO)
B) behavioral observation scales (BOS)
C) behaviorally anchored rating scales (BARS)
D) critical incident technique (CIT)
Answer: D

14) This performance appraisal system is based on employees and supervisors identifying on-
the-job behaviors and behavioral outcomes that distinguish successful from unsuccessful
performances.
A) behaviorally anchored rating scales
B) critical incident technique
C) behavioral observation scales
D) forced distribution system
Answer: B

15) Among the various performance appraisal techniques, this appraisal system is the most
defensible in court because it is based on actual observable job performance behaviors.
A) behaviorally-anchored rating scales
B) 360 degree performance appraisals
C) paired comparison
D) forced distribution
Answer: A

16) Which performance appraisal system displays illustrations only of positive behaviors shown
by an employee in various job dimensions?
A) behaviorally-anchored rating scales (BARS)
B) behavioral observation scales (BOS)
C) management by objectives (MBO)
D) critical incident technique (CIT)
Answer: B

17) Management by objective is part of which type of performance appraisal system?

A) goal-oriented system
B) trait system
C) behavioral observation scale
D) behaviorally-anchored rating scale
Answer: A

18) Who determines the particular objectives in a management by objectives (MBO) appraisal
system?
A) the employees

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B) the supervisors
C) both the employees and supervisors
D) the board of directors
Answer: C

19) Which performance appraisal tool is most often used with managers and professional
employees?
A) trait systems
B) management by objectives
C) comparison systems
D) behavioral systems
Answer: B

20) Jack works at an auto dealer as a sales professional. At the beginning of every year, he and
his supervisor determine objectives for Jack together, which are tied to corporate objectives. One
of the objectives is related to the customer satisfaction. Jack always remains in contact with
customers to whom he sold cars even after six months following the sale. His performance
appraisal partially depends on the customer satisfaction survey results. What kind of
performance appraisal method does this auto dealer use for Jack?
A) trait systems
B) comparison systems
C) behavioral systems
D) goal-oriented systems
Answer: D

21) XYZ Movers, a professional relocation company, has 3-person teams for their moving
services. The company asks customers to complete a satisfaction survey regarding their recent
move. For an employee's performance appraisal, customer satisfaction surveys are also
considered in addition to his/her supervisor and team member ratings. Which of the following
best describes this situation?
A) paired comparisons
B) positive halo effect
C) 360-degree performance appraisals
D) first-impression effect
Answer: C

22) This term refers to a difference between the output of a human judgment process and that of
an objective, accurate assessment. This difference could be due to bias, prejudice, or other
subjective, extraneous influences.
A) content validity
B) rating error
C) the performance appraisal process
D) a first-impression effect
Answer: B

23) The halo effect and similar-to-me effects are considered examples of which type of rating
error?

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A) trait system errors
B) contrast errors
C) illegal discrimination errors
D) bias errors
Answer: D

24) A manager expects high levels of performance from a newly hired employee, Ashley, as she
graduated from a prestigious Ivy League university. A year later, the manager rates Ashley's job
performance higher than her actual performance due to his initial belief. What kind of rater error
was made by the manager?
A) negative halo effect
B) first-impression-effect
C) positive halo effect
D) contrast errors
Answer: B

25) This occurs when a rater generalizes good performance behavior in one aspect of the job to
all aspects of the job.
A) similar-to-me effect
B) first-impression effect
C) positive halo effect
D) negative halo effect
Answer: C

26) This type of performance rater's error occurs when the rater generalizes bad behavior on one
aspect of the employee's job performance to the employee's over-all performance.
A) negative impression errors
B) negative leniency error
C) error of strictness
D) negative halo effect
Answer: D

27) A manager in a company gives higher performance appraisal rating to employees whose
children attend the same elementary school as his/her children than employees without any
children. What kind of rater error was made by the manager?
A) negative halo effect
B) first-impression effect
C) similar-to-me effect
D) contrast errors
Answer: C

28) This type of appraisal error takes place when managers rate employee's performance more
highly than they should compared with objective criteria.
A) errors of strictness
B) errors of central tendency
C) errors of leniency
D) contrast errors

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Answer: C

29) With these errors, supervisors tend to rate employees' performances lower than they would
be if compared against objective criteria.
A) critical errors
B) leniency errors
C) strictness errors
D) contrast errors
Answer: C

30) Which performance appraisal error reflects the tendency to rate every employee at the low
end of the rating scale, regardless of actual performance?
A) error of central tendency
B) contrast errors
C) negative halo error
D) errors of strictness
Answer: D

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