3P Compensation Part 1

Base wage reflects both the value of the work and individual employee skills and experience. (TRUE/FALSE)

• TRUE

• FALSE

An accountant receives a yearly salary of $72,000.  Find his monthly salary.

• 1600.00

• $864,000.00

• $5800.00

• $6000.00

What is an incentive?

• Overtime pay

• Additional compensation for a job performance

• A piece-rate

• A retirement program

The primary reason compensation is important to managers is because

• employees regard it as a reward

• it is a larger cost than benefits

• it influences employee behavior

• stock holders dislike high compensation costs

Which form of pay is likely to be least expensive for employers?

• Base pay

• Merit pay

• Cost-of-living adjustments

• Incentive

Commissions are an example of incentives. (TRUE/FALSE)

• TRUE

• FALSE

Which of the following is the largest component in an executive pay package?

• base pay

• merit pay

• perks

• stock options

Compensation policy choices affecting pay level are most closely associated with _____.

• internal alignment

• management

• external competitiveness

• contributions

Choices among pay for performance, flat rate pay and profit sharing are examples of _____ policy decisions.

• management

• internal alignment

• employee contributions

• efficiency

If an objective is to increase customer satisfaction, then incentive programs and merit pay might be used to pay for performance. (TRUE/FALSE)

• TRUE

• FALSE