As part of his training for a new manufacturing process, Lee Li had to attend classroom sessions taught by

an instructor, as well as online sessions that included video recordings and a discussion forum. What
method of training Lee has experienced?
Select one:

a.
self-directed training

b.
blended learning

c.
e-learning

d.
simulated training
Feedback
The correct answer is: blended learning

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A solid training program should begin with effective design.
Select one:
True

False
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The correct answer is 'False'.

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Question text
The HR department has the most important role in the orientation program because it is the centre of the
organization–employee interface.
Select one:
True

False
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The correct answer is 'False'.

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Person analysis involves determining what the content of the training program should be, based on a
study of the tasks or duties involved in the job.
Select one:
True

False
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The correct answer is 'False'.

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Trainees are better able to learn if they can connect the new material with things that are already familiar
to them.
Select one:
True

False
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The correct answer is 'True'.

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The primary purpose in training employees is to help them get socialized to the organization.
Select one:
True

False
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The correct answer is 'False'.

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Training methods all tend to utilize similar learning principles.
Select one:
True

False
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The correct answer is 'False'.

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Training is oriented towards broadening employees’ individual skills for future responsibility.
Select one:
True

False
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The correct answer is 'False'.

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Accounting Power Inc. is a Canadian employment agency that provides professional accounting services
to various businesses across the country. In the last couple of years, the firm has been slowly losing
clients, which is impacting its bottom line. Interviews done with some clients revealed that Accounting
Power Inc. employees are not as sharp as they used to be and, lately, there have been too many
inconsistencies and errors with their work. In the last recession, managers could not justify how the
training was adding value to the agency. These programs were not viewed as strategic imperatives and
most of them were cut.

Refer to Scenario 7.1. The combination of these four criteria-reactions, learning, behaviour, and results-
can give a total picture of the training program to help managers decide all of the following EXCEPT
which one?
Select one:

a.
what to change about the program

b.
the method by which to evaluate the program

c.
where problem areas lie

d.
whether to continue with a program
Feedback
The correct answer is: the method by which to evaluate the program
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Microsoft has created hundreds of audio and video clips that the company's sales professionals can
download on their mobile devices whenever the need arises. Which learning method is illustrated in this
case?
Select one:

a.
the simulation method

b.
just-in-time training

c.
audiovisual learning

d.
blended learning
Feedback
The correct answer is: just-in-time training

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In the design of training programs, what should instructional objectives centre on?
Select one:

a.
performance

b.
attitudes

c.
financial outcomes

d.
social outcomes
Feedback
The correct answer is: performance

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Employees in similar jobs usually have similar levels of motivation with respect to learning.
Select one:
True

False
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The correct answer is 'False'.

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The systems approach to training includes four phases: job analysis, job design, implementation, and
evaluation.
Select one:
True

False
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The correct answer is 'False'.
Question 14
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Which of the following tasks would be most conducive to whole-versus-part learning?
Select one:

a.
for a tennis professional: teaching a tennis lesson

b.
for a grocery store cashier: looking up the register code for a grocery item

c.
for a cake decorator: putting a customer's name on a birthday cake

d.
for a shoe salesperson: finding a certain pair of shoes in the stockroom
Feedback
The correct answer is: for a tennis professional: teaching a tennis lesson

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Games are becoming more popular for training purposes.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Team building is a relatively simple process.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following best describes the strategic approach to training?
Select one:

a.
It includes the process of job analysis.

b.
It is the most cost-effective approach.

c.
It is called development.

d.
It ensures that training investments have maximum impact on performance.
Feedback
The correct answer is: It ensures that training investments have maximum impact on performance.

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Which term refers to assessing the sets of skills and knowledge employees need to be successful,
particularly for decision-oriented and knowledge-intensive jobs?
Select one:

a.
individual assessment

b.
competency assessment

c.
job assessment

d.
organizational assessment
Feedback
The correct answer is: competency assessment

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In which stage in the training needs assessment are job descriptions and job specifications reviewed?
Select one:

a.
person analysis

b.
job analysis

c.
organizational analysis

d.
task analysis
Feedback
The correct answer is: task analysis

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Which of the following is the best example of an assessment of the "learning" criterion in a training
evaluation?
Select one:

a.
testing grocery store clerks on training program knowledge before and after the training program

b.
evaluating scores on training tests

c.
having trainees fill in forms that describe their learning experience and whether or not the information is
transferring to the workplace

d.
having employees fill out a training effectiveness index
Feedback
The correct answer is: testing grocery store clerks on training program knowledge before and after
the training program

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The benefits of an orientation program include lower turnover, improved morale, and facilitation of
learning.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Organization analysis, task analysis, and person analysis are all part of which phase of the strategic and
systemic approach?
Select one:

a.
the needs assessment phase

b.
the training and development phase

c.
the evaluation phase

d.
the analysis phase
Feedback
The correct answer is: the needs assessment phase

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Question text
Many organizations today measure their training in terms of its return on investment.
Select one:
True

False
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The correct answer is 'True'.

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What is the most common training delivery method for formally training employees?
Select one:

a.
on-the-job training

b.
traditional classroom instruction

c.
online instruction

d.
internship training
Feedback
The correct answer is: traditional classroom instruction

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What do we call the process of grooming an employee to take over the supervisor's job through gaining
experience in handling important functions of the job?
Select one:

a.
role modelling

b.
caretaking

c.
understudy assignment

d.
coaching
Feedback
The correct answer is: understudy assignment

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Managers should focus considerable efforts on the training topic, rather than the individual learning needs
of the trainee, to create an optimal training environment that is conducive to learning.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Question text
Which technique for training managers emphasizes handling real-life employee problems and receiving
immediate feedback?
Select one:

a.
the leaderless group

b.
behaviour modelling

c.
the case study

d.
the management game
Feedback
The correct answer is: behaviour modelling

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Behaviour modification seeks to gradually shape trainee behaviour using reinforcement.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Question text
Scenario 7.2

Blake Windows & Doors Inc. installs and repairs doors and windows for Green Park Homes. When the
firm started back in the 1980s, its operations were based only in Vancouver. Today, Blake is the main
contractor for Green Park Homes across British Columbia. Employees with Blake work long hours,
especially when new subdivisions are being built. The company now wants to increase its staff
complement to help deal with increasing demands while maintaining some work-life balance. Blake
found that employees from agencies tend to need too much hands-on training, which is costly, and if they
do have some experience it is very costly to hire them due to the specific set of skills required.

Refer to Scenario 7.2. Assume that on-the-job-training is the best option to help Blake increase its
employee base. Which of the following is NOT a drawback of on-the-job-training?
Select one:

a.
the lack of a well-structured environment

b.
hands-on experience and opportunities for trainers to build good relationships with new employees

c.
poor training skills on the part of the managers

d.
the absence of well-defined job performance criteria
Feedback
The correct answer is: hands-on experience and opportunities for trainers to build good relationships
with new employees

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The success of any training effort depends more upon the content of the program than on the teaching
skills and personal characteristics of those conducting the training.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Orientation is an ongoing process.
Select one:
True

False
Feedback
The correct answer is 'True'.

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The task analysis portion of organization analysis is shifting from emphasis on a fixed schedule of tasks
to a flexible set of competencies needed for performance.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is the most common method used for training non-managerial employees?
Select one:

a.
apprenticeships

b.
computer-based instruction

c.
classroom training

d.
on-the-job training
Feedback
The correct answer is: on-the-job training

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Role-playing consists of assuming the attitudes and behaviour of others, often a supervisor and a
subordinate.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following training methods is the most poorly implemented?
Select one:

a.
distributed learning

b.
on-the-job training

c.
classroom instruction

d.
mass learning
Feedback
The correct answer is: on-the-job training

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What is the primary reason why organizations train new employees?
Select one:

a.
to help trainees achieve personal career goals

b.
to improve the work environment

c.
to comply with federal regulations
d.
to increase their knowledge, skill, and ability level
Feedback
The correct answer is: to increase their knowledge, skill, and ability level

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Which of the following is the simplest method to evaluate a training program?
Select one:

a.
results

b.
reactions

c.
behaviour

d.
learning
Feedback
The correct answer is: reactions

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Case studies are a useful method of giving participants experience at analyzing and synthesizing facts.
Select one:
True
 False
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The correct answer is 'True'.

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Most employees prefer the freedom and flexibility of e-learning to traditional classroom training.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Internship programs benefit students, but rarely benefit employers.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Experiential learning is the same as hands-on learning.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Practising job tasks enables the trainee to forget about distinct behaviours and become proficient on the
subtleties of how they are used.
Select one:
True

False
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The correct answer is 'True'.

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Scenario 7.2

Blake Windows & Doors Inc. installs and repairs doors and windows for Green Park Homes. When the
firm started back in the 1980s, its operations were based only in Vancouver. Today, Blake is the main
contractor for Green Park Homes across British Columbia. Employees with Blake work long hours,
especially when new subdivisions are being built. The company now wants to increase its staff
complement to help deal with increasing demands while maintaining some work-life balance. Blake
found that employees from agencies tend to need too much hands-on training, which is costly, and if they
do have some experience it is very costly to hire them due to the specific set of skills required.

Refer to Scenario 7.2. If Blake adopts an apprenticeship program, which of the following is NOT true
about how trainees are developed?
Select one:

a.
It will occur through instruction and training.

b.
It will occur through an internship program.

c.
It will occur through on-the-job-training.

d.
It will occur through off-the-job-training.
Feedback
The correct answer is: It will occur through an internship program.

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Training plays a central role in strengthening the competencies that give organizations their competitive
advantage.

Select one:
True

False
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The correct answer is 'True'.

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Behavioural and process skills needed for team training need to be acquired through participative
exercises.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Accounting Power Inc. is a Canadian employment agency that provides professional accounting services
to various businesses across the country. In the last couple of years, the firm has been slowly losing
clients, which is impacting its bottom line. Interviews done with some clients revealed that Accounting
Power Inc. employees are not as sharp as they used to be and, lately, there have been too many
inconsistencies and errors with their work. In the last recession, managers could not justify how the
training was adding value to the agency. These programs were not viewed as strategic imperatives and
most of them were cut.

Refer to Scenario 7.1. If Accounting Power Inc. wanted to evaluate its training programs, what are the
four basic criteria for such an evaluation?
Select one:

a.
trainee readiness, aptitude to learn, feedback, and return on investment

b.
reactions, behaviour, feedback, and trainee readiness
c.
reactions, learning, behaviour, and results

d.
behaviour, trainee readiness, ability to learn, and attitude about learning
Feedback
The correct answer is: reactions, learning, behaviour, and results

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Although important in determining training program success, organizations conduct a needs assessment
less than half the time before initiating a training program.
Select one:
True

False
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The correct answer is 'True'.

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By increasing the anxiety of new employees, orientation efforts are more likely to be successful due to the
effort/anxiety curve.
Select one:
True

False
Feedback
The correct answer is 'False'.

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In which stage of needs assessment are issues such as technological change and globalization assessed in
training programs?
Select one:

a.
task analysis

b.
environmental analysis

c.
person analysis

d.
organization analysis
Feedback
The correct answer is: organization analysis

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The three different types of training needs analysis are organizational analysis, job knowledge analysis,
and person analysis.
Select one:
True

False
Feedback
The correct answer is 'False'.
Question 11
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What is the main difference between training and development?
Select one:

a.
Development is more narrowly focused.

b.
Development is a broader term used to describe learning processes in an organization.

c.
Development is more future-oriented and broadly focused.

d.
Training is more important than development.
Feedback
The correct answer is: Development is more future-oriented and broadly focused.

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The use of orientation checklists compels a supervisor to be more attentive to each employee.

Select one:
True

False
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The correct answer is 'True'.
Question 13
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A combination of on-the-job training, seminars, conferences, classroom instruction, and role-playing
would be a good assortment of learning methods for which group of employees?
Select one:

a.
experienced front-line staff

b.
new employees at all levels

c.
new managers

d.
interns
Feedback
The correct answer is: new managers

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What type of learning corresponds to "involve me and I will learn"?
Select one:

a.
modelling

b.
whole learning
c.
part learning

d.
experiential learning
Feedback
The correct answer is: experiential learning

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Most organizations choose and implement training programs based on their overall strategic objectives.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Modelling exemplifies how people learn by mimicking other people.

Select one:
True

False
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The correct answer is 'True'.
Question 17
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Knowledge of the subject is the most critical characteristic that determines instructor effectiveness.
Select one:
True

False
Feedback
The correct answer is 'False'.

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The distinction between simulation and simple computer-based training is blurring due to advances in
information technology.
Select one:
True

False
Feedback
The correct answer is 'True'.

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An effective onboarding program can best help with which of the following issues?
Select one:

a.
culture shock

b.
pay banding

c.
training transfer

d.
exit interviews
Feedback
The correct answer is: culture shock

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Due to its importance to planning future training initiatives, most organizations go to great lengths to
accurately evaluate training programs.
Select one:
True

False
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The correct answer is 'False'.

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What are the steps in behaviour modelling?
Select one:

a.
learning points, implementation, role-play, and feedback

b.
design, learning points, reinforcement, and feedback

c.
learning points, modelling, role-play, and feedback

d.
design, implementation, role-play, and feedback
Feedback
The correct answer is: learning points, modelling, role-play, and feedback

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Benchmarking is concerned with measuring employee retention of training materials at specific points in
time.

Select one:
True

False
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The correct answer is 'False'.

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Question text
Classroom instruction is cost-effective because it allows the maximum number of trainees to be handled
by the minimum number of instructors.
Select one:
True

False
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The correct answer is 'True'.

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In assessing the effectiveness of a training program, which of the following is the most useful information
for an HR manager to use?
Select one:

a.
how many employees signed up for it

b.
how it helped to reduce wasted materials

c.
the costs for running it

d.
the average employee reaction to it
Feedback
The correct answer is: how it helped to reduce wasted materials

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Question text
Which training method is often used to train personnel to operate aircraft, spacecraft, and other highly
technical and expensive equipment?
Select one:

a.
the vestibule method

b.
the apprenticeship method

c.
the simulation method

d.
the classroom method
Feedback
The correct answer is: the simulation method

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Trainee readiness refers to both maturity and experience factors in a trainee’s background.
Select one:
True

False
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The correct answer is 'True'.

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Question text
Omega Organization is going through a very detailed process of looking at all the tasks or duties included
in a job. It will then list all the steps performed by the employee to complete each task, and then look to
examine the skills and knowledge necessary for the job. Which process is Omega Organization
performing?
Select one:

a.
task analysis

b.
job analysis

c.
person analysis

d.
competency analysis
Feedback
The correct answer is: task analysis

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On-the-job training (OJT) is generally regarded as the most effective means of facilitating learning at the
workplace, and thus it is the best implemented.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following is a mandatory training program in Canada?
Select one:

a.
ethics training

b.
team building training

c.
sensitivity training

d.
Workplace Hazardous Materials Information System training
Feedback
The correct answer is: Workplace Hazardous Materials Information System training

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What is the process called when organizations familiarize new employees with the organization, their
jobs, and their work units?
Select one:

a.
orientation

b.
job appraisal

c.
job assessment

d.
performance appraisal
Feedback
The correct answer is: orientation

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Businesses spend more on informal instruction in training employees than they do on formal instruction.
Select one:
True

False
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The correct answer is 'True'.

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What is the main issue with organizations putting too much weight on the "reactions" aspect of training
evaluation?
Select one:

a.
Positive reaction data may not mean the training was effective.

b.
Unless the training is linked to organizational strategy, it is not informative that reactions were good.

c.
This aspect of training is not measurable.

d.
This information has to be integrated into an analysis with the other four phases of evaluation.
Feedback
The correct answer is: Positive reaction data may not mean the training was effective.

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Orientation is the formal process of familiarizing new employees with the organization, their job, and
their work unit.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Depending on the activities involved, classroom instruction is often referred to as “self-directed learning.”
Select one:
True

False
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The correct answer is 'False'.

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What are the phases of the systemic/strategic model of training?
Select one:

a.
planning, design, needs assessment, and evaluation

b.
design, needs assessment, management, and evaluation

c.
design, needs assessment, implementation, and evaluation

d.
needs assessment, design, implementation, and evaluation
Feedback
The correct answer is: needs assessment, design, implementation, and evaluation

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As part of his training, Alexandria had to assume the attitudes and behaviours of others. Which training
method is evident in this example?
Select one:

a.
blended learning

b.
role-playing

c.
case study

d.
simulation study
Feedback
The correct answer is: role-playing

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Organization B is very keen to get the most benefit out of its training budgets and efforts. Which of the
following plans is most likely to help Organization B's employees utilize their new training when they are
back at their desks?
Select one:

a.
devote a large part of the budget to vestibule training

b.
have the training mimic the actual work situation as closely as possible; train employees on how to
implement their new training even when they are faced with roadblocks

c.
have employees hand in summaries of how they have used their training in their job

d.
have employees exposed to both massed and distributed practice
Feedback
The correct answer is: have the training mimic the actual work situation as closely as possible; train
employees on how to implement their new training even when they are faced with roadblocks

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In determining training needs, which statement best describes person analysis?
Select one:

a.
It examines the external labour market for needed skills.

b.
It has shifted from a fixed sequence of tasks to a set of competencies.

c.
It helps organizations decide which employees need training.

d.
It involves self-improvement and self-directed training.
Feedback
The correct answer is: It helps organizations decide which employees need training.

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Which of the following statements best describes cross-training?
Select one:

a.
There is a need for integrated teams to make it successful.

b.
Team rewards lay the basis for its implementation.

c.
It works best with departments that are integrated.

d.
It represents a shift from assembly-line production to flexible production.
Feedback
The correct answer is: It represents a shift from assembly-line production to flexible production.
Question 20
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A competency assessment focuses on the sets of skills and knowledge employees need to be successful.
Select one:
True

False
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The correct answer is 'True'.

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“We learn best by watching” summarizes the learning principle known as “modelling.”
Select one:
True

False
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The correct answer is 'True'.

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What do some large organizations call their top leaders who are responsible for employee training?
Select one:

a.
Chief Executive Managers

b.
Head of Operations

c.
Chief Learning Officers

d.
Chief Human Development Officers
Feedback
The correct answer is: Chief Learning Officers

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Organization Z is attempting to initiate an on-the-job training program. Like many organizations, the
company is aware that it suffers from a lack of well-defined job performance criteria. Which of the
following is the best suggestion for Organization Z to overcome this problem and have a successful
program?
Select one:

a.
Use a different type of training.

b.
Wait until proper job and organizational analysis can be done before implementing the training program.

c.
Hire trainers who have been in a similar situation and have been successful.

d.
Develop realistic goals, a training schedule, and periodic evaluations.
Feedback
The correct answer is: Develop realistic goals, a training schedule, and periodic evaluations.
Question 4
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Most executives believe that formal orientation programs are effective in helping to retain and motivate
employees.
Select one:
True

False
Feedback
The correct answer is 'True'.

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At which stage in the training program development process are issues such as technological change and
globalization considered?
Select one:

a.
organization analysis

b.
task analysis

c.
job analysis

d.
individual analysis
Feedback
The correct answer is: organization analysis
Question 6
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In training programs, instructional objectives should be performance-centred.
Select one:
True

False
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The correct answer is 'True'.

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ABC Corporation measures its own services and practices against the recognized leaders in the industry
in order to identify areas for improvement. What is this process called?
Select one:

a.
modelling

b.
environmental analysis

c.
benchmarking

d.
strategic imitation
Feedback
The correct answer is: benchmarking
Question 8
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Which of the following organizations would be well-suited and likely to benefit from the implementation
of "cross-training" of teams?
Select one:

a.
an auto parts manufacturing company that has an assembly line where employees are likely to get bored

b.
a photocopy shop where there are various tasks to be performed all with one machine

c.
a robotics company that needs each employee to have specific and high level skills and training

d.
a document delivery company that has drivers and pilots who operate various trucks and aircraft
Feedback
The correct answer is: an auto parts manufacturing company that has an assembly line where
employees are likely to get bored

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Which of the following is part of a needs assessment in developing training programs?
Select one:

a.
analysis of training methods

b.
task analysis

c.
environmental analysis

d.
analysis of trainee readiness
Feedback
The correct answer is: task analysis

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Accounting Power Inc. is a Canadian employment agency that provides professional accounting services
to various businesses across the country. In the last couple of years, the firm has been slowly losing
clients, which is impacting its bottom line. Interviews done with some clients revealed that Accounting
Power Inc. employees are not as sharp as they used to be and, lately, there have been too many
inconsistencies and errors with their work. In the last recession, managers could not justify how the
training was adding value to the agency. These programs were not viewed as strategic imperatives and
most of them were cut.

Refer to Scenario 7.1. Accounting Power Inc. is losing its clients because it did not accurately do which
of the following?
Select one:

a.
evaluate participants' reactions

b.
hire the right trainers to run the programs

c.
assess the extent to which training programs improve learning and behaviour on the job and eventually
impact their performance

d.
design the right training programs to help its employees succeed
Feedback
The correct answer is: assess the extent to which training programs improve learning and behaviour
on the job and eventually impact their performance

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Scenario 7.2

Blake Windows & Doors Inc. installs and repairs doors and windows for Green Park Homes. When the
firm started back in the 1980s, its operations were based only in Vancouver. Today, Blake is the main
contractor for Green Park Homes across British Columbia. Employees with Blake work long hours,
especially when new subdivisions are being built. The company now wants to increase its staff
complement to help deal with increasing demands while maintaining some work-life balance. Blake
found that employees from agencies tend to need too much hands-on training, which is costly, and if they
do have some experience it is very costly to hire them due to the specific set of skills required.

Refer to Scenario 7.2. Which of the following is the most appropriate method for developing workers
who can effectively help Blake Windows & Doors deal with its increasing commitments while keeping
payroll and training costs down?
Select one:

a.
agency recruitment with more in-house training

b.
apprenticeship programs

c.
mentorship programs

d.
internship programs
Feedback
The correct answer is: agency recruitment with more in-house training

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Behaviour modelling appears to work in helping managers to interact with employees, introduce change,
and handle discipline.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Data such as direct and indirect labour costs and unemployment rates determine an organization’s training
needs.
Select one:
True

False
Feedback
The correct answer is 'False'.

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method would be well-suited to teach air-traffic controllers how use the radar display?
Select one:

a.
programmed instruction

b.
the simulation method

c.
on-the-job training

d.
audiovisual learning
Feedback
The correct answer is: the simulation method

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Using participant reaction to evaluate training is the best way to determine training effectiveness.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Orientation programs stress the “why” rather than the “what,” including the philosophy behind the
organization’s rules.
Select one:
True

False
Feedback
The correct answer is 'True'.

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When designers of training programs attempt to make conditions in the training program come as close as
possible to those on the job, which of the following are they attempting to improve?
Select one:

a.
readiness

b.
reactions

c.
motivation

d.
transfer
Feedback
The correct answer is: transfer

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Contrary to common thought, progressive organizations allow the supervisor to play a minor role in the
new employee orientation process, since orientation is primarily the responsibility of the HR department.
Select one:
True

False
Feedback
The correct answer is 'False'.

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What is the relationship between orientation and onboarding programs?
Select one:

a.
Onboarding is a part of orientation.

b.
Onboarding goes beyond orientation.

c.
They are the same.

d.
Orientation goes beyond onboarding.
Feedback
The correct answer is: Onboarding goes beyond orientation.

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What are the two key factors that affect the success of those who are identified to receive training?
Select one:
a.
trainee participation and trainee capacity

b.
trainee readiness and trainee capacity

c.
trainee capacity and trainee motivation

d.
trainee readiness and trainee motivation
Feedback
The correct answer is: trainee readiness and trainee motivation

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The systems approach to training involves (1) needs assessment, (2) program delivery, (3) assessment,
and (4) evaluation.
Select one:
True

False
Feedback
The correct answer is 'False'.

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In terms of training techniques, on which of the following principles does behaviour modification
operate?
Select one:

a.
A behaviour that is rewarded will be exhibited more frequently.

b.
Successful trainers modify employees' behaviours.

c.
Employees must change their behaviours to ensure organizational success.

d.
Equity and fairness are important motivators.
Feedback
The correct answer is: A behaviour that is rewarded will be exhibited more frequently.

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What is a common index used to calculate the benefits of a training program relative to its costs?
Select one:

a.
return on capital

b.
productivity index

c.
return on investment

d.
cost of living index
Feedback
The correct answer is: return on investment

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Behaviour modelling appears to work in helping managers to interact with employees, introduce change,
and handle discipline.
Select one:
True

False
Feedback
The correct answer is 'True'.

Question 5
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Case studies are a useful method of giving participants experience at analyzing and synthesizing facts.
Select one:
True

False
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The correct answer is 'True'.

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Which of the following is a mandatory training program in Canada?
Select one:
a.
team building training

b.
ethics training

c.
Workplace Hazardous Materials Information System training

d.
sensitivity training
Feedback
The correct answer is: Workplace Hazardous Materials Information System training

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In determining training needs, which statement best describes person analysis?
Select one:

a.
It helps organizations decide which employees need training.

b.
It involves self-improvement and self-directed training.

c.
It has shifted from a fixed sequence of tasks to a set of competencies.

d.
It examines the external labour market for needed skills.
Feedback
The correct answer is: It helps organizations decide which employees need training.

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Training is oriented towards broadening employees’ individual skills for future responsibility.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Training methods all tend to utilize similar learning principles.
Select one:
True

False
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The correct answer is 'False'.

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A combination of on-the-job training, seminars, conferences, classroom instruction, and role-playing
would be a good assortment of learning methods for which group of employees?
Select one:
a.
experienced front-line staff

b.
new employees at all levels

c.
interns

d.
new managers
Feedback
The correct answer is: new managers

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Which term refers to assessing the sets of skills and knowledge employees need to be successful,
particularly for decision-oriented and knowledge-intensive jobs?
Select one:

a.
competency assessment

b.
individual assessment

c.
job assessment

d.
organizational assessment
Feedback
The correct answer is: competency assessment

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Businesses spend more on informal instruction in training employees than they do on formal instruction.
Select one:
True

False
Feedback
The correct answer is 'True'.

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As part of his training, Alexandria had to assume the attitudes and behaviours of others. Which training
method is evident in this example?
Select one:

a.
case study

b.
role-playing

c.
blended learning

d.
simulation study
Feedback
The correct answer is: role-playing

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What do some large organizations call their top leaders who are responsible for employee training?
Select one:

a.
Chief Executive Managers

b.
Chief Learning Officers

c.
Head of Operations

d.
Chief Human Development Officers
Feedback
The correct answer is: Chief Learning Officers

Question 15
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Modelling exemplifies how people learn by mimicking other people.

Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following tasks would be most conducive to whole-versus-part learning?
Select one:

a.
for a shoe salesperson: finding a certain pair of shoes in the stockroom

b.
for a tennis professional: teaching a tennis lesson

c.
for a cake decorator: putting a customer's name on a birthday cake

d.
for a grocery store cashier: looking up the register code for a grocery item
Feedback
The correct answer is: for a tennis professional: teaching a tennis lesson

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By increasing the anxiety of new employees, orientation efforts are more likely to be successful due to the
effort/anxiety curve.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Orientation is an ongoing process.
Select one:
True

False
Feedback
The correct answer is 'True'.

Question 19
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A competency assessment focuses on the sets of skills and knowledge employees need to be successful.
Select one:
True

False
Feedback
The correct answer is 'True'.

Question 20
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The primary purpose in training employees is to help them get socialized to the organization.
Select one:
 True

False
Feedback
The correct answer is 'False'.

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Role-playing consists of assuming the attitudes and behaviour of others, often a supervisor and a
subordinate.
Select one:
True

False
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The correct answer is 'True'.

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Which of the following organizations would be well-suited and likely to benefit from the implementation
of "cross-training" of teams?
Select one:

a.
a document delivery company that has drivers and pilots who operate various trucks and aircraft

b.
a robotics company that needs each employee to have specific and high level skills and training

c.
a photocopy shop where there are various tasks to be performed all with one machine

d.
an auto parts manufacturing company that has an assembly line where employees are likely to get bored
Feedback
The correct answer is: an auto parts manufacturing company that has an assembly line where
employees are likely to get bored

Question 3
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Question text
Accounting Power Inc. is a Canadian employment agency that provides professional accounting services
to various businesses across the country. In the last couple of years, the firm has been slowly losing
clients, which is impacting its bottom line. Interviews done with some clients revealed that Accounting
Power Inc. employees are not as sharp as they used to be and, lately, there have been too many
inconsistencies and errors with their work. In the last recession, managers could not justify how the
training was adding value to the agency. These programs were not viewed as strategic imperatives and
most of them were cut.

Refer to Scenario 7.1. Accounting Power Inc. is losing its clients because it did not accurately do which
of the following?
Select one:

a.
assess the extent to which training programs improve learning and behaviour on the job and eventually
impact their performance

b.
evaluate participants' reactions

c.
hire the right trainers to run the programs

d.
design the right training programs to help its employees succeed
Feedback
The correct answer is: assess the extent to which training programs improve learning and behaviour
on the job and eventually impact their performance

Question 4
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Most organizations choose and implement training programs based on their overall strategic objectives.
Select one:
True

False
Feedback
The correct answer is 'False'.

Question 5
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The systems approach to training involves (1) needs assessment, (2) program delivery, (3) assessment,
and (4) evaluation.
Select one:
True

False
Feedback
The correct answer is 'False'.

Question 6
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Training plays a central role in strengthening the competencies that give organizations their competitive
advantage.

Select one:
True

False
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The correct answer is 'True'.

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What are the phases of the systemic/strategic model of training?
Select one:

a.
design, needs assessment, management, and evaluation

b.
design, needs assessment, implementation, and evaluation

c.
planning, design, needs assessment, and evaluation

d.
needs assessment, design, implementation, and evaluation
Feedback
The correct answer is: needs assessment, design, implementation, and evaluation

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Question text
What is the relationship between orientation and onboarding programs?
Select one:

a.
They are the same.

b.
Orientation goes beyond onboarding.

c.
Onboarding is a part of orientation.

d.
Onboarding goes beyond orientation.
Feedback
The correct answer is: Onboarding goes beyond orientation.

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Person analysis involves determining what the content of the training program should be, based on a
study of the tasks or duties involved in the job.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Question text
Many organizations today measure their training in terms of its return on investment.
Select one:
True

False
Feedback
The correct answer is 'True'.

Question 11
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Most executives believe that formal orientation programs are effective in helping to retain and motivate
employees.
Select one:
True

False
Feedback
The correct answer is 'True'.

Question 12
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Question text
Which of the following is part of a needs assessment in developing training programs?
Select one:

a.
task analysis

b.
analysis of trainee readiness
c.
environmental analysis

d.
analysis of training methods
Feedback
The correct answer is: task analysis

Question 13
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At which stage in the training program development process are issues such as technological change and
globalization considered?
Select one:

a.
individual analysis

b.
organization analysis

c.
task analysis

d.
job analysis
Feedback
The correct answer is: organization analysis

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Question text
Scenario 7.2

Blake Windows & Doors Inc. installs and repairs doors and windows for Green Park Homes. When the
firm started back in the 1980s, its operations were based only in Vancouver. Today, Blake is the main
contractor for Green Park Homes across British Columbia. Employees with Blake work long hours,
especially when new subdivisions are being built. The company now wants to increase its staff
complement to help deal with increasing demands while maintaining some work-life balance. Blake
found that employees from agencies tend to need too much hands-on training, which is costly, and if they
do have some experience it is very costly to hire them due to the specific set of skills required.

Refer to Scenario 7.2. Assume that on-the-job-training is the best option to help Blake increase its
employee base. Which of the following is NOT a drawback of on-the-job-training?
Select one:

a.
hands-on experience and opportunities for trainers to build good relationships with new employees

b.
poor training skills on the part of the managers

c.
the absence of well-defined job performance criteria

d.
the lack of a well-structured environment
Feedback
The correct answer is: hands-on experience and opportunities for trainers to build good relationships
with new employees

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Which of the following best describes the strategic approach to training?
Select one:

a.
It is called development.
b.
It ensures that training investments have maximum impact on performance.

c.
It is the most cost-effective approach.

d.
It includes the process of job analysis.
Feedback
The correct answer is: It ensures that training investments have maximum impact on performance.

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A solid training program should begin with effective design.
Select one:
True

False
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The correct answer is 'False'.

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Omega Organization is going through a very detailed process of looking at all the tasks or duties included
in a job. It will then list all the steps performed by the employee to complete each task, and then look to
examine the skills and knowledge necessary for the job. Which process is Omega Organization
performing?
Select one:

a.
competency analysis
b.
job analysis

c.
task analysis

d.
person analysis
Feedback
The correct answer is: task analysis

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What is the main difference between training and development?
Select one:

a.
Development is more narrowly focused.

b.
Development is a broader term used to describe learning processes in an organization.

c.
Training is more important than development.

d.
Development is more future-oriented and broadly focused.
Feedback
The correct answer is: Development is more future-oriented and broadly focused.

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The benefits of an orientation program include lower turnover, improved morale, and facilitation of
learning.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What are the steps in behaviour modelling?
Select one:

a.
learning points, implementation, role-play, and feedback

b.
design, implementation, role-play, and feedback

c.
design, learning points, reinforcement, and feedback

d.
learning points, modelling, role-play, and feedback
Feedback
The correct answer is: learning points, modelling, role-play, and feedback

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Contrast errors are most likely when raters are required to rank employees in order from the best to the
poorest.
Select one:
True

False
Feedback
The correct answer is 'True'.

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A major drawback of the essay method is that composing an essay that attempts to cover all of an
employee’s essential characteristics is very time-consuming.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Depending on the industry, managers should provide performance feedback on an annual basis.
Select one:
True

False
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The correct answer is 'False'.

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Results evaluations give employees more responsibility for outcomes and discretion over how to
accomplish them.
Select one:
True

False
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The correct answer is 'True'.

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Ineffective handling of performance evaluations may result in court cases or other legal action.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Question text
Which of the following methods require an appraiser to rate the degree to which the employee possesses a
trait or characteristic?
Select one:

a.
behaviourally anchored rating scale

b.
critical incident method

c.
forced-choice method

d.
graphic rating scale
Feedback
The correct answer is: graphic rating scale

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Jane is manager to 10 direct reports. She is currently concerned that she is perceived as a softy and so she
has decided not to give out very many high ratings on this year's performance evaluation exercise.
However, she doesn't want anyone to be fired either, so she has also decided not to give out any very low
ratings.

Refer to Scenario 8.2. How can Jane correct for this error?
Select one:

a.
by rating everyone leniently
b.
by rating the reports highly if they displayed characteristics similar to her own

c.
by rating everyone highly

d.
by collecting critical incidents
Feedback
The correct answer is: by collecting critical incidents

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A team evaluation approach is well suited for a company advocating a total-quality management
philosophy.

Select one:
True

False
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The correct answer is 'True'.

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Magee was rated higher than she deserved by her supervisor; her supervisor wanted to look good in the
eyes of her own superiors. Which of the following is illustrated in this example?
Select one:
a.
criterion deficiency

b.
criterion contamination

c.
criterion exaggeration

d.
organizational politics
Feedback
The correct answer is: organizational politics

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“Management-by-objectives” is one of the best performance evaluation approaches to use if a company’s
production system is surrounded by uncertainty and variability.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following uses critical incidents as examples at different points along the scale?
Select one:
a.
dimensional rating

b.
the behaviourally anchored rating scale

c.
the mixed-standard scale

d.
the global rating
Feedback
The correct answer is: the behaviourally anchored rating scale

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Max Weber works for ABC Corporation a sales agent. The company uses his actual sales numbers to rate
his performance. What performance evaluation method is ABC Corporation using?
Select one:

a.
outcome method

b.
results method

c.
trait method

d.
behavioural method
Feedback
The correct answer is: results method

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Which of the following is the most accurate description of the possible facets of an evaluation interview?
Select one:

a.
It should ask for a self-assessment, change the person not the behaviour, and encourage feedback.

b.
It should minimize criticism, change the person not the behaviour, and encourage feedback.

c.
It should ask for a self-assessment, invite participation, express appreciation, and minimize criticism.

d.
It should change the person not the behaviour, minimize criticism, express appreciation, and invite
participation.
Feedback
The correct answer is: It should ask for a self-assessment, invite participation, express appreciation,
and minimize criticism.

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ABC Corporation uses several raters to assess their employees' performance, after which the company
does correlation analyses on the various ratings. What is ABC Corporation trying to figure out?
Select one:

a.
whether the ratings are deficient

b.
the rewards that will be associated with good performance
c.
the reliability of the ratings

d.
the level of contamination of the ratings
Feedback
The correct answer is: the reliability of the ratings

Question 15
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The critical incident method facilitates employee feedback and development.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following are the two primary purposes of performance reviews?
Select one:

a.
administrative and developmental purposes

b.
informative and developmental purposes
c.
managerial and administrative purposes

d.
administrative and informative purposes
Feedback
The correct answer is: administrative and developmental purposes

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Measurable and quantifiable performance objectives are requirements for a successful MBO program.
Select one:
True

False
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The correct answer is 'True'.

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Criterion contamination occurs when factors outside an employee’s control influence his or her
performance.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is a developmental purpose of performance reviews?
Select one:

a.
determining transfers

b.
improving communication

c.
meeting legal requirements

d.
promoting employees
Feedback
The correct answer is: improving communication

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Feedback training for raters should include communicating effectively, diagnosing causes of performance
problems, and setting goals.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is an important weakness of 360-degree feedback?
Select one:

a.
In cases where feedback is not positive, it has been shown to increase voluntary turnover.

b.
The quality of information is not as good as other types of evaluation systems.

c.
The training can be demoralizing because it is so intense.

d.
It is hard to know what to conclude if the evaluation results in conflicting opinions.
Feedback
The correct answer is: It is hard to know what to conclude if the evaluation results in conflicting
opinions.

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In general, performance evaluation can be classified as either administrative or developmental.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Because the evaluation interview is for developmental purposes, the interviewer rather than the employee
should spend the majority of the time sharing information.
Select one:
True

False
Feedback
The correct answer is 'False'.

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The 360-degree evaluation is a multi-rater approach to performance evaluations.

Select one:
True

False
Feedback
The correct answer is 'True'.

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A self-evaluation can increase an employee’s involvement in the performance review process.
Select one:
True

False
Feedback
The correct answer is 'True'.

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One weakness of many performance evaluation programs is that supervisors are not adequately trained;
consequently, they provide little meaningful feedback to subordinates.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is a good way to start a problem-solving performance review meeting with an
employee?
Select one:

a.
Tell the employee that standards must be met.

b.
Let the employee start with a self-evaluation.
c.
Point out the employee's problem areas.

d.
Inform the employee about the compensation implications.
Feedback
The correct answer is: Let the employee start with a self-evaluation.

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Organizational politics can introduce bias into even the most fairly administered performance evaluations.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Peer evaluations are useful for ratings on dimensions such as leadership and interpersonal skills.
Select one:
True

False
Feedback
The correct answer is 'True'.

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An error of central tendency is a performance-rating error in which all employees are more or less rated
as average.
Select one:
True

False
Feedback
The correct answer is 'True'.

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With respect to performance standards, reliability refers to the stability or consistency of a standard.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Correlations can be used to measure reliability.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Reliability refers to measures that are consistent across raters and over time.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Calibration can be used to make sure managers are rating employees consistently.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Three types of evaluation interviews are tell-and-sell, tell-and-listen, and problem-solving.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Feedback is most useful when it is immediate and general in nature.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Some organizations ask managers to place a percentage of their employees in the bottom performance
category on every performance evaluation exercise, which in some cases may mean they are fired. Which
type of performance evaluation method does this exemplify?
Select one:

a.
percent method

b.
forced-distribution system

c.
forced-choice method

d.
checklist method
Feedback
The correct answer is: forced-distribution system

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The balanced scorecard approach integrates four categories: financial, customer, processes, and outcomes.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Peer evaluations should be used primarily for developmental purposes.
Select one:
 True

False
Feedback
The correct answer is 'True'.

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Which of the following has been shown to be true in court?
Select one:

a.
Organizations should have carefully defined and measurable performance standards.

b.
Descriptions of traits such as attitude and cooperation are acceptable performance standards.

c.
While performance standards should be somewhat specific, there should be room for individual
interpretation.

d.
Vague performance standards can be acceptable when clearly written.
Feedback
The correct answer is: Organizations should have carefully defined and measurable performance
standards.

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Criterion deficiency occurs when performance standards focus on a single criterion to the exclusion of
other important but less quantifiable performance dimensions.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which performance review methods usually requires raters to evaluate characteristics such as
dependability and initiative?
Select one:

a.
attitudinal methods

b.
results methods

c.
behavioural methods

d.
trait methods
Feedback
The correct answer is: trait methods

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Which of the following processes would help to improve the consistency and reliability of employee
ratings?
Select one:

a.
strategic rewards

b.
external validation

c.
calibration

d.
job evaluations
Feedback
The correct answer is: calibration

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Jay is a polite, helpful, conscientious employee who often helps his fellow auto sales representatives
make sales, and is popular with customers due to his customer service orientation. Based on his
performance evaluation, which is focused on sales, Jay is being fired because he has not sold enough cars
this month. What is the problem at the root of his poor performance review?
Select one:

a.
lack of reliability

b.
criterion contamination

c.
criterion deficiency

d.
lack of relevance
Feedback
The correct answer is: criterion deficiency
Question 5
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In most instances, one person can easily observe and evaluate an employee’s performance.

Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following is an accurate listing of the factors that affect performance?
Select one:

a.
organizational culture, motivation, and ability factors

b.
motivation, organizational culture, and leadership factors

c.
motivation, environment, and ability factors

d.
ability, job design, and motivation factors
Feedback
The correct answer is: motivation, environment, and ability factors
Question 7
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In order to keep track of employees' performance, which of the following performance review methods
would a supervisor use a log or diary for?
Select one:

a.
graphic rating scale

b.
critical incidents method

c.
forced-choice method

d.
essay method
Feedback
The correct answer is: critical incidents method

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In order to increase employee motivation levels, written performance standards should be objective but
not defined in quantifiable and measurable terms.
Select one:
True

False
Feedback
The correct answer is 'False'.
Question 9
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Which of the following is a major issue surrounding "stretch goals"?
Select one:

a.
They cause disruptive behaviours to the point that they are more costly to the organization than they are
financially advantageous.

b.
They could be considered unethical for several reasons.

c.
They demoralize the employee.

d.
They increase voluntary turnover.
Feedback
The correct answer is: They could be considered unethical for several reasons.

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Which of the following performance review methods are considered as the most subjective?
Select one:

a.
traits methods

b.
behaviourally anchored rating methods
c.
behavioural methods

d.
results methods
Feedback
The correct answer is: traits methods

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Self-assessment is useful to ensure the employee knows against what criteria he or she is evaluated, thus
eliminating surprises.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Tracy was evaluated by multiple raters in her last job, including her supervisor, customers, peers, and
clients. What performance evaluation system was most likely used in this instance?
Select one:

a.
360-degree feedback

b.
peer evaluations

c.
whole-team evaluations

d.
multiplicative feedback
Feedback
The correct answer is: 360-degree feedback

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Managers often first assume poor performance of subordinates is due to which of the following?
Select one:

a.
lack of ability

b.
pay dissatisfaction

c.
poor work life balance

d.
poor motivation
Feedback
The correct answer is: lack of ability

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Under which one of these conditions are employee self-evaluations more acceptable to management?
Select one:

a.
when the evaluations are used for legal purposes

b.
when the evaluations are used for compensation

c.
when the evaluations are used to identify developmental goals

d.
when the evaluations are used for promotions
Feedback
The correct answer is: when the evaluations are used to identify developmental goals

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Scenario 8.3

Canadian Fasteners Inc. has recently implemented a human resource (HR) system that assists with the
recruitment and selection process, as well as administering a pension and benefits program. Included with
these programs are training and development programs as well as yearly performance evaluations for both
managers and agents who are jointly responsible for bringing in new accounts and maintaining existing
ones. While these performance evaluations are done each year, managers and agents do not receive
feedback unless they are unhappy with their salary increases or bonuses. However, HR is now pushing
the need for ongoing feedback as it is a key component of its compensation process.

Refer to Scenario 8.3. According to research, which of the following is most accurate about providing
feedback?
Select one:

a.
Feedback should not be specific to a particular situation.

b.
Employees who receive no feedback from their supervisors exhibit the least amount of engagement.

c.
You should only provide positive feedback to employees.

d.
Feedback is least useful when it is immediate.
Feedback
The correct answer is: Employees who receive no feedback from their supervisors exhibit the least
amount of engagement.

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The main advantage of a BARS is that it requires minimal time and effort to develop.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Suppose the performance reviews that delivery drivers receive are partially influenced by the fact that
some drivers operate in areas where there are major traffic problems while others operate in areas with
few traffic problems. Which of the following would these performance reviews suffer from?
Select one:

a.
lack of relevance
b.
lack of reliability

c.
criterion contamination

d.
rater bias
Feedback
The correct answer is: criterion contamination

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Scenario 8.3

Canadian Fasteners Inc. has recently implemented a human resource (HR) system that assists with the
recruitment and selection process, as well as administering a pension and benefits program. Included with
these programs are training and development programs as well as yearly performance evaluations for both
managers and agents who are jointly responsible for bringing in new accounts and maintaining existing
ones. While these performance evaluations are done each year, managers and agents do not receive
feedback unless they are unhappy with their salary increases or bonuses. However, HR is now pushing
the need for ongoing feedback as it is a key component of its compensation process.

Refer to Scenario 8.3. If Canadian Fasteners were to provide ongoing performance feedback to its
employees, this would be a key step in which of the following?
Select one:

a.
performance management process

b.
strategic and managerial process

c.
promotion process

d.
compensation rating process
Feedback
The correct answer is: performance management process

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What is the problem when a performance standard focuses on one performance criterion and excludes
others that are important?
Select one:

a.
The performance standard has low criterion relevance.

b.
The performance standard is not of strategic relevance.

c.
The performance standard suffers from criterion deficiency.

d.
The performance standard suffers from criterion contamination.
Feedback
The correct answer is: The performance standard suffers from criterion deficiency.

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Performance review methods can be broadly classified in which of the following categories of
approaches?
Select one:
a.
behavioural, judgmental, and results approaches

b.
behavioural, judgmental, and results approaches

c.
trait, behavioural, and results approaches

d.
trait, behavioural, and judgmental approaches
Feedback
The correct answer is: trait, behavioural, and results approaches

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The similar-to-me error occurs when appraisers inflate the evaluations of people with whom they have
something in common.
Select one:
True

False
Feedback
The correct answer is 'True'.

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John, an average performer, was inaccurately assessed as excellent because he was compared to Alex, a
very poor performer. What type of evaluation error is evident in this example?
Select one:
a.
similar-to-me error

b.
halo error

c.
contrast error

d.
recency error
Feedback
The correct answer is: contrast error

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The similar-to-me error, like contrast, results in less-than-accurate performance ratings, but would not be
considered discriminatory.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Dividing the evaluation interview into two sessions, one for the performance review and the other for the
employee’s growth plans, is a good strategy to improve communication between the parties.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is an environmental factor that may be a source of ineffective performance?
Select one:

a.
career ambition

b.
technical skills

c.
job satisfaction

d.
rules and policies
Feedback
The correct answer is: rules and policies

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Developmental approaches to performance evaluation recognize that a manager’s purpose is to improve
job behaviours, not just evaluate past performance.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Every time Sandy makes a mistake at work, her manager writes it down in detail in her employee record.
Sandy thinks this is a form of harassment. More likely, what is the manager trying to do?
Select one:

a.
collect critical incidents

b.
evaluate her performance

c.
collect information in order to build a BARS

d.
substantiate her termination in case Sandy files a complaint
Feedback
The correct answer is: collect critical incidents

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Which of the following performance evaluation methods involves a mutual agreement of goals and
metrics between supervisor and subordinate?
Select one:

a.
productivity measures

b.
management by objectives

c.
all behavioural methods

d.
forced distribution
Feedback
The correct answer is: management by objectives

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Scenario 8.1

Med Supplies Ltd. is a manufacturer and distributor of over-the-counter medical devices such as blood
pressure monitors. Med Supplies relies heavily on its sales team to push these products to pharmacies and
medical clinics across Canada. Sales reps are paid a yearly bonus based on the team's performance,
coupled with annual performance evaluations done by managers. Over the last three years, they have been
paid bonuses based on the previous year's performance if it is similar in dollar figure despite losing shelf
space in stores or declining individual performances. The managers claim that they do not have the time
to do the evaluations, but their superiors think these evaluations are key and need to be the link between
employees' goals and the organization's objectives.

Refer to Scenario 8.1. Med Supplies should consider using team evaluations to evaluate the team as a
whole. Which of the following is true about team evaluations?
Select one:

a.
They can help break down barriers and encourage joint effort.

b.
They provide 360-degree feedback.
c.
They make it easier to separate individual contributions.

d.
They readily identify leadership and interpersonal skills.
Feedback
The correct answer is: They can help break down barriers and encourage joint effort.

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Farah, a waitress at OMG Restaurant, was appraised only on the quality of the food she delivered to the
customers. Which type of problem does this review illustrate?
Select one:

a.
criterion reliability

b.
criterion deficiency

c.
criterion contamination

d.
reliability
Feedback
The correct answer is: criterion contamination

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Question text
Which of the following appraisal systems is based on the concept that learning helps organizations
improve their internal processes and allows individuals to see how their performance ties in with the
firm?
Select one:

a.
customer-oriented approach

b.
management by objectives

c.
balanced scorecard approach

d.
360-degree evaluation
Feedback
The correct answer is: balanced scorecard approach

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A significant weakness of 360-degree evaluation is the complexity associated with combining all the
responses.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Jane is manager to 10 direct reports. She is currently concerned that she is perceived as a softy and so she
has decided not to give out very many high ratings on this year's performance evaluation exercise.
However, she doesn't want anyone to be fired either, so she has also decided not to give out any very low
ratings.

Refer to Scenario 8.2. Which of the following will Jane's ratings suffer from?
Select one:

a.
central tendency error

b.
forced distribution

c.
leniency error

d.
similar-to-self bias
Feedback
The correct answer is: central tendency error

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The HR managers at Organization M are very keen to tie all their HR practices in with organizational
strategy, and performance evaluation is no exception. They would like to make clear the link between
individual performance and organizational performance. Which of the following is the best type of
evaluation method for the HR managers at Organization M?
Select one:

a.
performance-based methods

b.
results-based methods

c.
trait-based methods

d.
behaviour-based methods
Feedback
The correct answer is: results-based methods

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Managers tend to be more open to the use of subordinate evaluations when they are used for which of the
following?
Select one:

a.
developmental purposes

b.
regulatory purposes

c.
administrative purposes

d.
promotional purposes
Feedback
The correct answer is: developmental purposes

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The best evaluation method to use depends upon the purpose of the evaluation.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Scenario 8.1

Med Supplies Ltd. is a manufacturer and distributor of over-the-counter medical devices such as blood
pressure monitors. Med Supplies relies heavily on its sales team to push these products to pharmacies and
medical clinics across Canada. Sales reps are paid a yearly bonus based on the team's performance,
coupled with annual performance evaluations done by managers. Over the last three years, they have been
paid bonuses based on the previous year's performance if it is similar in dollar figure despite losing shelf
space in stores or declining individual performances. The managers claim that they do not have the time
to do the evaluations, but their superiors think these evaluations are key and need to be the link between
employees' goals and the organization's objectives.

Refer to Scenario 8.1. The VP Sales suggests the use of peer evaluations to ensure that each member of
the team pulls his or her weight. Which of the following is NOT a reason why peer evaluations are not
frequently used?
Select one:

a.
Peer ratings are simply a popularity contest.

b.
Peers rely on stereotypes in ratings.
c.
Managers want to give up control over the evaluation process.

d.
Those receiving low ratings might retaliate against their peers.
Feedback
The correct answer is: Managers want to give up control over the evaluation process.

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The balanced scorecard approach translates broad goals into increasingly specific goals, so that
individuals can see how their performance relates to the overall performance of the firm.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Most organizations that implement 360-degree evaluation start with an exclusive focus on development.
Select one:
True

False
Feedback
The correct answer is 'True'.
Question 20
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What is a key disadvantage of behaviourally anchored rating scales?
Select one:

a.
They can only be used in the public sector.

b.
They require considerable time and effort to develop.

c.
They do not involve employee participation.

d.
They have low content validity.
Feedback
The correct answer is: They require considerable time and effort to develop.

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Why is performance review important?
Select one:

a.
because the success of the entire HR program depends on knowing how the performance of employees
compares with the goals established for them

b.
because it is key to the validation of selection procedures, which are the foundation of all HR practices
c.
because all organizations need to weed out lower-performing individuals at a rate of about 10 percent of
employees per annum

d.
because employees need to know that they are being evaluated in order to perform at an appropriate level
Feedback
The correct answer is: because the success of the entire HR program depends on knowing how the
performance of employees compares with the goals established for them

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Which of the following is an essential component of an evaluation interview?
Select one:

a.
It is a time for the supervisor to give feedback on past performance and should not be used for
developmental purposes.

b.
The supervisor must discuss changes to the employee's compensation as a result of his or her
performance.

c.
It should be held in two segments because the rater must perform the role of both evaluator and
counsellor.

d.
It should take place in one session in order to give the employee a complete view of his or her
performance.
Feedback
The correct answer is: It should be held in two segments because the rater must perform the role of
both evaluator and counsellor.

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Criterion contamination occurs when correlations between two raters of an employee are inconsistent.
Select one:
True

False
Feedback
The correct answer is 'False'.

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One of the primary strengths of results evaluations is that they are not likely to suffer from contamination
by external factors that employees cannot influence.
Select one:
True

False
Feedback
The correct answer is 'False'.

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A potential drawback of a trait-oriented performance evaluation is that it may be biased and subjective.
Select one:
 True

False
Feedback
The correct answer is 'True'.

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Which of the following is a key advantage of 360-degree feedback systems?
Select one:

a.
Raters do not have to be trained.

b.
They cannot be legally challenged.

c.
They are simple to administer.

d.
They may lessen bias and prejudice.
Feedback
The correct answer is: They may lessen bias and prejudice.

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In delivering a performance evaluation interview, Jacqui is taking a listening perspective. She wants to
stimulate growth and development by discussing the problems, needs, satisfactions, and dissatisfactions
the employee has encountered on the job. What type of performance evaluation interview is Jacqui
delivering?
Select one:

a.
tell-and-train

b.
tell-and-listen

c.
problem-solving

d.
tell-and-sell
Feedback
The correct answer is: problem-solving

Question 8
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One of the primary strengths of results evaluations is that they encourage employees to focus on long-
term performance indicators.
Select one:
True

False
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The correct answer is 'False'.

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Scenario 8.3
Canadian Fasteners Inc. has recently implemented a human resource (HR) system that assists with the
recruitment and selection process, as well as administering a pension and benefits program. Included with
these programs are training and development programs as well as yearly performance evaluations for both
managers and agents who are jointly responsible for bringing in new accounts and maintaining existing
ones. While these performance evaluations are done each year, managers and agents do not receive
feedback unless they are unhappy with their salary increases or bonuses. However, HR is now pushing
the need for ongoing feedback as it is a key component of its compensation process.

Refer to Scenario 8.3. Canadian Fasteners wants to embark on feedback sessions. Which of the following
is NOT one of the key points to address?
Select one:

a.
focus feedback on the person, not behaviour

b.
direct the feedback toward behaviour the employee can control

c.
provide timely feedback

d.
give specific examples of desirable and undesirable behaviours
Feedback
The correct answer is: focus feedback on the person, not behaviour

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What is the foundation for performance standards in the development of effective performance
management systems?
Select one:

a.
job-related requirements derived from a job analysis

b.
the knowledge and experience of HR managers
c.
feedback from customers

d.
job evaluations
Feedback
The correct answer is: job-related requirements derived from a job analysis

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How often should performance feedback be delivered?
Select one:

a.
It should be done at regular intervals-the more frequent the better.

b.
It depends on the organizational culture, industry, and supervisor's style.

c.
It should be done at least annually.

d.
It should be an ongoing, regular part of supervisor-subordinate interactions.
Feedback
The correct answer is: It should be an ongoing, regular part of supervisor-subordinate interactions.

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Of the following interview methods, which is the most proactive on the part of the interviewer?
Select one:

a.
tell-and-listen

b.
problem solving

c.
essay

d.
tell-and-sell
Feedback
The correct answer is: problem solving

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In delivering a performance evaluation interview, Manuel is attempting to convince his direct report that
she needs to be more communicative with her peers about her work. The other aspects of her performance
are excellent, so he is willing to provide incentives for her if she can improve in this aspect of her
performance. What type of performance evaluation interview is Manuel delivering?
Select one:

a.
tell-and-train

b.
problem-solving

c.
tell-and-sell

d.
tell-and-listen
Feedback
The correct answer is: tell-and-sell

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Which of the following is a reason why performance reviews fail?
Select one:

a.
Performance standards may not be clear.

b.
Managers use them for administrative purposes.

c.
The program is usually based on a job analysis rather than a competency analysis.

d.
There is too much employee input into the development of the evaluation program.
Feedback
The correct answer is: Performance standards may not be clear.

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Which performance review method captures behaviour that results in unusual success or unusual failure?
Select one:

a.
essay method

b.
mixed ratings method

c.
critical incidents method

d.
graphic ratings method
Feedback
The correct answer is: critical incidents method

Question 16
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Developmental purposes for performance evaluation include validating selection criteria and meeting
legal requirements.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following are peer evaluations best suited for?
Select one:

a.
strategic purposes

b.
budgetary purposes

c.
developmental purposes

d.
administrative purposes
Feedback
The correct answer is: developmental purposes

Question 18
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Ideally, performance evaluations should be linked to the strategic objectives of the organization.
Select one:
True

False
Feedback
The correct answer is 'True'.

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One of the disadvantages of the critical incident method is that it tends to lead to recency error.
Select one:
True

False
Feedback
The correct answer is 'False'.
Question 20
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Trait methods in performance evaluations can be biased and subjective.
Select one:
True

False
Feedback
The correct answer is 'True'.

uestion 1
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If a performance standard is found to be stable or consistent over time, it is said to be which of the
following?
Select one:

a.
reliable

b.
relevant

c.
valid

d.
steady
Feedback
The correct answer is: reliable
Question 2
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Suppose the performance reviews that salespeople receive are based solely on sales revenue to the
exclusion of other important factors. Which of the following would these performance evaluations suffer
from?
Select one:

a.
lack of criterion relevance

b.
criterion deficiency

c.
criterion contamination

d.
lack of reliability
Feedback
The correct answer is: criterion deficiency

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In developing a new performance evaluation system, Organization C made an evaluation plan, decided
who would be doing the appraising and how it would be done, and even included evaluation training.
Which one of the following is an important step that Organization C missed?
Select one:

a.
gaining support from top management, which should occur near the beginning of the process
b.
clearly communicating in advance the company's plans for employees who do not meet standards

c.
informing employees how the process would go to alleviate anxiety

d.
examining the performance standards through job analysis
Feedback
The correct answer is: examining the performance standards through job analysis

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Self-evaluations should be used primarily for developmental purposes.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What is the key purpose of performance reviews/evaluations when they are used for pay-for-performance
decisions?
Select one:

a.
signalling purpose
b.
administrative purpose

c.
developmental purpose

d.
symbolic purpose
Feedback
The correct answer is: administrative purpose

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What advantage do peer evaluations have over other types of evaluations?
Select one:

a.
Peers don't have to worry about meeting standards for distributions.

b.
Peers may have a more intimate view of the performance of fellow employees.

c.
Peers do not have a conflict of interest over honestly appraising a fellow employee.

d.
Peers know the job better than most managers do.
Feedback
The correct answer is: Peers may have a more intimate view of the performance of fellow
employees.

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Which of the following is an ability factor that may be a source of ineffective employee performance?
Select one:

a.
technical skill

b.
goals and expectations

c.
job design

d.
career ambition
Feedback
The correct answer is: technical skill

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One disadvantage of peer evaluations is that they furnish less valid information than evaluations by
superiors.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Performance is a function of ability, motivation, and environment.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Team evaluations are a collection of the individual evaluations of a work unit.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Results-oriented approaches are the most widely used, despite their subjectivity.
Select one:
 True

False
Feedback
The correct answer is 'False'.

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Under which one of these conditions are managers more open to subordinate evaluations of their
performance?
Select one:

a.
when the evaluations are used for promotions

b.
when the evaluations are used for legal decisions

c.
when the evaluations are used for compensation decisions

d.
when the evaluations are used to improve communications
Feedback
The correct answer is: when the evaluations are used to improve communications

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Trait evaluation approaches continue to be the most popular systems despite their inherent subjectivity.
Select one:
 True

False
Feedback
The correct answer is 'True'.

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Using the evaluation system for compensation decisions rather than developmental purposes may affect
how the rater evaluates the employee.

Select one:
True

False
Feedback
The correct answer is 'True'.

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A forced distribution method in rating employees’ performance is similar to a professor grading on a
curve.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Performance standards should be based on job-related requirements derived from a job analysis.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Administrative purposes for performance evaluations include documenting personnel decisions and
identifying individual training needs.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Behavioural methods are often useful for providing employees with developmental feedback.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What is a key disadvantage of behaviourally anchored rating scales?
Select one:

a.
They have low content validity.

b.
They require considerable time and effort to develop.

c.
They can only be used in the public sector.

d.
They do not involve employee participation.
Feedback
The correct answer is: They require considerable time and effort to develop.

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Which of the following is a good way to start a problem-solving performance review meeting with an
employee?
Select one:

a.
Let the employee start with a self-evaluation.

b.
Point out the employee's problem areas.

c.
Tell the employee that standards must be met.

d.
Inform the employee about the compensation implications.
Feedback
The correct answer is: Let the employee start with a self-evaluation.

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To provide compensation estimates and ranges for jobs in an organization, all jobs should be surveyed.
Select one:
True

False
Feedback
The correct answer is 'False'.

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What's a key objective of wage and salary surveys?
Select one:
a.
to help achieve external equity

b.
to help with job evaluations

c.
to help achieve gender pay equity

d.
to validate performance appraisals
Feedback
The correct answer is: to help achieve external equity

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Which of the following issues does job evaluation helps to address?
Select one:

a.
issues dealing with employees' perceptions of equity

b.
issues dealing with employees' need for pay that is equal to their financial needs

c.
issues dealing with employers' need to match the market pay

d.
issues dealing with employers' perceptions of the labour market
Feedback
The correct answer is: issues dealing with employees' perceptions of equity

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HR professionals establish predetermined wage grades as a basis for evaluating jobs in the job
classification system of job evaluation.
Select one:
True

False
Feedback
The correct answer is 'True'.

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XYZ Company wants to pay its employees based on their skills that are valued by the company. Which
of the following would it most likely use?
Select one:

a.
stock-based pay

b.
commission pay

c.
profit sharing

d.
competency-based pay
Feedback
The correct answer is: competency-based pay

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Steps within a rate range allow pay increases based on merit or seniority or a combination of the two.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Wage survey data can be obtained from government sources, trade associations, or professional groups, or
organizations can conduct their own surveys.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What is the scope of the impacts of collective bargaining agreements?
Select one:

a.
They are restricted to hourly employees only.

b.
They are restricted to both exempt and nonexempt employees.

c.
They extend beyond the segment of the labour force that is unionized.

d.
They are restricted to members of the union.
Feedback
The correct answer is: They extend beyond the segment of the labour force that is unionized.

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Job evaluation is a non-systematic, qualitative process of determining the relative worth of jobs in order
to establish a comparison with the prevailing market and regional value of a job within a job family.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Scenario 9.2
Calendars "R" Us Ltd. is a small firm that manufactures yearly calendars with a specific focus on middle
and high schools in Alberta. They started operations back in 2006 with just 12 employees, two machines,
and a small warehouse that served as an office and production and storage facilities. Today, Calendars
"R" Us has roughly 60 employees and supplies its calendars to most middle and high schools in Alberta.
When employees join they are paid based on their relationship with the owners. Given the rapid growth in
its staff complement, and the arbitrary way in which it normally compensates employees, payroll has
proven to be quite a challenge for the company as management looks to expand into other provinces.

Refer to Scenario 9.2. Setting pay levels at Calendars "R" Us can be limited by all of the following factors
EXCEPT which one?
Select one:

a.
economic condition and competition

b.
employee expectations and motivation

c.
productivity of employees

d.
profitability of the firm
Feedback
The correct answer is: employee expectations and motivation

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Wage-rate compression refers to the situation where employees perceive that there is too large a
difference between their compensation and that of colleagues in higher-rated jobs.
Select one:
True

False
Feedback
The correct answer is 'False'.
Question 12
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Which of the following is job classification often used to help determine pay for?
Select one:

a.
the company's CEO

b.
merit bonuses

c.
classified university professors' jobs

d.
government jobs
Feedback
The correct answer is: government jobs

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The point system of job evaluation permits jobs to be evaluated quantitatively based on compensable
factors.
Select one:
True

False
Feedback
The correct answer is 'True'.
Question 14
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For real wages to increase, what is necessary?
Select one:

a.
An employee must receive a lump-sum wage increase equal to the increase in the CPI.

b.
The CPI must increase at least as much as the employee's wage.

c.
An employee's wage increase must be greater than the increase in the CPI.

d.
An employee's wage must simply increase.
Feedback
The correct answer is: An employee's wage increase must be greater than the increase in the CPI.

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Labour market conditions have little impact on wage rates paid to employees.
Select one:
True

False
Feedback
The correct answer is 'False'.

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A point manual can be used to determine the external equity of a job.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Executives, administrators, and professional employees are exempt from overtime payments identified in
employment standards acts.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is an external factor that can influence the rates at which employees are paid?
Select one:

a.
collective bargaining

b.
the worth of the job

c.
the employer's ability to pay

d.
the employees' relative worth
Feedback
The correct answer is: collective bargaining

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Scenario 9.1

Denton and Denton Inc. (D&D Inc.) is a small graphic design firm that designs tray liners for various
small food chains across Canada and a major chain in the United States. D&D currently has 20 employees
who are paid hourly rates for time worked, not projects completed. These workers consider themselves
valuable, knowledge-based workers, and now that the company is expanding its client base they are not
happy with the current pay structure. Management claims that this pay structure, ranging from $20 to $65
per hour, is based on collapsing the pay ranges for four job bands.

Refer to Scenario 9.1. Given that these employees are skilled-based/knowledge workers, which of the
following is a more effective way to compensate them?
Select one:

a.
competency-based pay system

b.
piece rate pay system
c.
hourly rate based on task completed

d.
salaried employee system
Feedback
The correct answer is: competency-based pay system

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What type of jobs do companies normally use to collect wage survey data?
Select one:

a.
key jobs

b.
high-rated jobs

c.
strategic jobs

d.
low-rated jobs
Feedback
The correct answer is: key jobs

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Employees who earn pay for hourly work are referred to as salaried employees.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Expectancy theory predicts that people expect to be paid as much or more than individuals in a similar job
class.
Select one:
True

False
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The correct answer is 'False'.

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Accounting clerks, pay clerks, and junior secretaries are all classed in Grade 2 at Metroland Inc. Which of
the following should apply to all these jobs?
Select one:

a.
They should be paid at different wage rates because the worth of these jobs to the organization may differ.

b.
They should be paid similar to Grade 2 jobs at McDonald's.
c.
They should be paid within the same pay range.

d.
They should all receive the same wage rate in order to achieve equality.
Feedback
The correct answer is: They should be paid within the same pay range.

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What do job evaluations help to ensure?
Select one:

a.
internal equity

b.
individual equity

c.
comparative equity

d.
external equity
Feedback
The correct answer is: internal equity

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An advantage of published wage surveys is compatibility with the organization’s jobs.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Scenario 9.1

Denton and Denton Inc. (D&D Inc.) is a small graphic design firm that designs tray liners for various
small food chains across Canada and a major chain in the United States. D&D currently has 20 employees
who are paid hourly rates for time worked, not projects completed. These workers consider themselves
valuable, knowledge-based workers, and now that the company is expanding its client base they are not
happy with the current pay structure. Management claims that this pay structure, ranging from $20 to $65
per hour, is based on collapsing the pay ranges for four job bands.

Refer to Scenario 9.1. Which of the following is NOT a benefit of competency-based pay system?
Select one:

a.
improved staffing flexibility to meet production or service demands

b.
decreased compensation costs

c.
reduced effects of absenteeism and turnover

d.
greater productivity
Feedback
The correct answer is: decreased compensation costs

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Pay equity is achieved when the compensation of female job classes is equal to male jobs of comparable
worth.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Granting wage increases solely on the basis of the CPI helps compress pay rates within a pay structure,
thereby ensuring equity among those who receive the wage increase.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Wage-rate compression can occur when organizations grant pay adjustments to lower-rated jobs but do
not extend the adjustments up the hierarchy.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Crystal Ball Inc. is a large information technology firm with many levels of management. The company
would like to compensate its managers on factors such as knowledge and accountability. Which system
would you recommend?
Select one:

a.
the Hay profile method

b.
market pricing

c.
job classification as implemented in Microsoft

d.
work valuation
Feedback
The correct answer is: the Hay profile method

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Using the point manual, how is the relative worth of a job determined?
Select one:

a.
by the number of steps within the pay grade

b.
by benchmarking jobs contained in the point manual

c.
by the total points that have been assigned to that job

d.
through the wage mix
Feedback
The correct answer is: by the total points that have been assigned to that job

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Which of the following clauses are found in some labour agreements that periodically adjust
compensation rates to reflect increases in cost of living?
Select one:

a.
maintenance clauses

b.
guarantee clauses

c.
escalator clauses

d.
roll-up clauses
Feedback
The correct answer is: escalator clauses

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Some organizations can choose a strategy to pay higher than market wages and salaries. Which of the
following will this likely help them do?
Select one:

a.
reduce their indirect labour costs

b.
reduce their direct labour costs

c.
achieve pay equity between men and women

d.
be more selective in their employee hiring
Feedback
The correct answer is: be more selective in their employee hiring

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Real wages represent the difference between wage increases and cost-of-living increases.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Question text
Scenario 9.2

Calendars "R" Us Ltd. is a small firm that manufactures yearly calendars with a specific focus on middle
and high schools in Alberta. They started operations back in 2006 with just 12 employees, two machines,
and a small warehouse that served as an office and production and storage facilities. Today, Calendars
"R" Us has roughly 60 employees and supplies its calendars to most middle and high schools in Alberta.
When employees join they are paid based on their relationship with the owners. Given the rapid growth in
its staff complement, and the arbitrary way in which it normally compensates employees, payroll has
proven to be quite a challenge for the company as management looks to expand into other provinces.

Refer to Scenario 9.2. Which of the following is a useful and cost-effective way for Calendars ‘R" Us to
find information on wage and salary trends in similar industries?
Select one:

a.
set wages based on ability to pay only

b.
develop in-house surveys

c.
use surveys done by provincial governments and boards of trade

d.
purchase surveys done with global organizations
Feedback
The correct answer is: use surveys done by provincial governments and boards of trade

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Mohammed's compensation and benefits are calculated and paid on the basis of monthly periods. How
would you classify this employee?
Select one:

a.
directly compensated employee

b.
hourly employee

c.
piece-rated employee

d.
salaried employee
Feedback
The correct answer is: salaried employee

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The Hay profile method is used for clerical employees only.

Select one:
True

False
Feedback
The correct answer is 'False'.

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Question text
Pay levels are limited in part by profitability of the firm and market pay.
Select one:
True

False
Feedback
The correct answer is 'True'.

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When time off is given in exchange for overtime work, it must be given hour-for-hour to the number of
hours worked overtime.
Select one:
True

False
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The correct answer is 'False'.

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Strategic compensation links an organization’s compensation systems to its mission and business
objectives.
Select one:
True

False
Feedback
The correct answer is 'True'.
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Wages paid above the range maximum are called red circle rates.
Select one:
True

False
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The correct answer is 'True'.

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How would you describe "an increase in real wages"?
Select one:

a.
an increase in wages and benefits

b.
an increase in the monetary proportion of the compensation package

c.
an increase in collectively bargained wages

d.
an increase in wages over the Consumer Price Index
Feedback
The correct answer is: an increase in wages over the Consumer Price Index

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Managers will group similar jobs into a pay grade in order to help with the setting of wages for all jobs.
Select one:
True

False
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The correct answer is 'True'.

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Which term refers to the concept of equal pay for work of equal value?
Select one:

a.
comparable pay

b.
compensable factor

c.
pay equity

d.
equal pay
Feedback
The correct answer is: pay equity

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Tiffany works as an IT specialist at Nortel. She is compensated based on such skills as programming and
service to clients. It is likely that she is paid under which of the following pay plans?
Select one:

a.
a performance-based pay plan

b.
a seniority-based pay plan

c.
a competency-based pay plan

d.
a merit-based pay plan
Feedback
The correct answer is: a competency-based pay plan

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Wage compression can be avoided by granting wage increases solely on the basis of the CPI.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Broadbanding refers to collapsing many traditional salary grades into a few wide salary bands.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Strategic compensation may involve market pricing.
Select one:
True

False
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The correct answer is 'True'.

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Both Sam and Samantha work as cashiers at Modelo Hot Dogs. They do work of equal value to the firm,
yet Sam receives less pay than Samantha. Sam is not happy because he perceives the system as being
unfair to him. Which theory can you use to explain Sam's perceptions?
Select one:

a.
reverse discrimination theory

b.
expectancy theory

c.
pay equity theory

d.
equity theory
Feedback
The correct answer is: equity theory

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According to expectancy theory, which of the following is a condition that must be met for employees to
be motivated through rewards?
Select one:

a.
high instrumentality

b.
high reinforcement

c.
high motivation need

d.
high procedural justice
Feedback
The correct answer is: high instrumentality

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Which type of legislation is concerned with minimum wage rates and overtime payments?
Select one:

a.
employment equity

b.
employment standards

c.
equal pay

d.
pay equity
Feedback
The correct answer is: employment standards

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Which of the following is an example of nonfinancial compensation?
Select one:

a.
bonuses

b.
health insurance

c.
employee recognition programs
d.
incentives
Feedback
The correct answer is: employee recognition programs

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Scenario 9.1

Denton and Denton Inc. (D&D Inc.) is a small graphic design firm that designs tray liners for various
small food chains across Canada and a major chain in the United States. D&D currently has 20 employees
who are paid hourly rates for time worked, not projects completed. These workers consider themselves
valuable, knowledge-based workers, and now that the company is expanding its client base they are not
happy with the current pay structure. Management claims that this pay structure, ranging from $20 to $65
per hour, is based on collapsing the pay ranges for four job bands.

Refer to Scenario 9.1. What type of pay system is D&D Inc. currently using to compensate its
employees?
Select one:

a.
red circle rates

b.
competency-based

c.
broadbanding

d.
piece rate
Feedback
The correct answer is: broadbanding

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Broadbands are salary grades collapsed into fewer and wider salary bands.
Select one:
True

False
Feedback
The correct answer is 'True'.

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According to the textbook, what is the predominant approach to employee compensation in Canada?
Select one:

a.
pay-for-performance

b.
competency-based pay

c.
job-based pay

d.
individual contract
Feedback
The correct answer is: job-based pay

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Among the goals of strategic compensation policy are rewarding past performance, attracting new
employees, and reducing turnover.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is the simplest job evaluation system?
Select one:

a.
skilled based

b.
job classification

c.
point method

d.
job ranking
Feedback
The correct answer is: job ranking

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Which of the following is a relatively new job evaluation system?
Select one:

a.
the point system

b.
job classification system

c.
work evaluation

d.
job ranking
Feedback
The correct answer is: work evaluation

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Compensable factors include skills, effort, responsibilities, and working conditions.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following describes a job evaluation method?
Select one:

a.
a skilled-based system

b.
a comparable worth system

c.
a market evaluation system

d.
a job ranking system
Feedback
The correct answer is: a job ranking system

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Competency-based pay systems compensate employees for the different skills or knowledge they possess
rather than for the job they hold in a designated job category.
Select one:
True

False
Feedback
The correct answer is 'True'.

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In Canada, the gender pay gap is larger for women with disabilities versus when all women are
considered.

Select one:
True

False
Feedback
The correct answer is 'True'.

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What is a key implication of expectancy theory when applied to pay systems?
Select one:

a.
Rewards must be valuable for motivation to occur.

b.
Employers expect their employees to be competent.

c.
Employees expect their managers to be competent.

d.
Employees must get pay raises to cover increased living costs.
Feedback
The correct answer is: Rewards must be valuable for motivation to occur.

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The employment standards acts set minimum requirements with respect to wages, hours of work, and
overtime.
Select one:
True

False
Feedback
The correct answer is 'True'.

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ABC Corporation is a furniture firm based in Ontario that supplies its products to the federal government.
What laws would apply to ABC Corporation?
Select one:

a.
federal and provincial laws

b.
federal laws only

c.
international laws only

d.
provincial laws only
Feedback
The correct answer is: federal and provincial laws

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The jobs that are included in wage and salary surveys are referred to as “key jobs.”
Select one:
True

False
Feedback
The correct answer is 'True'.

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Using job evaluation and wage survey data jointly improves the likelihood of both internal and external
equity.
Select one:
True

False
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The correct answer is 'True'.

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When employees are paid according to the skills and knowledge they have rather than the specific jobs
they perform, they are paid according to competency-based compensation.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Wage compression may create problems related to which of the following?
Select one:

a.
gender discrimination

b.
external equity

c.
internal equity

d.
racial discrimination
Feedback
The correct answer is: internal equity

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The job classification system is commonly used by smaller employers.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Scenario 9.2

Calendars "R" Us Ltd. is a small firm that manufactures yearly calendars with a specific focus on middle
and high schools in Alberta. They started operations back in 2006 with just 12 employees, two machines,
and a small warehouse that served as an office and production and storage facilities. Today, Calendars
"R" Us has roughly 60 employees and supplies its calendars to most middle and high schools in Alberta.
When employees join they are paid based on their relationship with the owners. Given the rapid growth in
its staff complement, and the arbitrary way in which it normally compensates employees, payroll has
proven to be quite a challenge for the company as management looks to expand into other provinces.

Refer to Scenario 9.2. Calendars "R" Us jobs range from management to administrative, to clerical to
production to packing to delivering. Which of the following would be key to evaluating the worth of each
job category?
Select one:

a.
comparing each job with a competitor in the market

b.
evaluating the job based on total value delivered to the organization

c.
evaluating the job based on market price

d.
avoiding the use of job evaluation to establish wage structure
Feedback
The correct answer is: evaluating the job based on total value delivered to the organization

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To help achieve internal equity, factors such as skills, effort, responsibilities, and working conditions may
be used to assess jobs. What do we call these factors?
Select one:

a.
job classification factors

b.
factor comparisons

c.
compensable factors

d.
job specifications
Feedback
The correct answer is: compensable factors

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In developing a wage curve, what are market wage rates plotted against?
Select one:

a.
employee benefits
b.
job evaluation points

c.
employee wages and salaries

d.
the size of a firm
Feedback
The correct answer is: job evaluation points

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Which job category is considered nonexempt?
Select one:

a.
vice-president

b.
president

c.
manager

d.
clerk
Feedback
The correct answer is: clerk

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Question text
Scenario 9.2

Calendars "R" Us Ltd. is a small firm that manufactures yearly calendars with a specific focus on middle
and high schools in Alberta. They started operations back in 2006 with just 12 employees, two machines,
and a small warehouse that served as an office and production and storage facilities. Today, Calendars
"R" Us has roughly 60 employees and supplies its calendars to most middle and high schools in Alberta.
When employees join they are paid based on their relationship with the owners. Given the rapid growth in
its staff complement, and the arbitrary way in which it normally compensates employees, payroll has
proven to be quite a challenge for the company as management looks to expand into other provinces.

Refer to Scenario 9.2. Calendars "R" Us wants to develop a set of compensation policies that are
internally fair. Which of the following is helpful in making this decision?
Select one:

a.
global comparisons of pay

b.
external competition

c.
market surveys

d.
job evaluation
Feedback
The correct answer is: job evaluation

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Assume Microsoft wants to link its overall organizational strategy to its wage and benefit policies in the
strategic plan. How can the company best do this?
Select one:

a.
through adhering to Harvard University's Professor Porter model
b.
through the development of better performance standards

c.
through formalized compensation goals

d.
through following federal strategic planning legislation
Feedback
The correct answer is: through formalized compensation goals

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What do we call jobs that are selected to be included in salary surveys?
Select one:

a.
benchmark jobs

b.
equity jobs

c.
higher-pay jobs

d.
comparison jobs
Feedback
The correct answer is: benchmark jobs

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Desirée is a female receptionist employed by Trent University in Ontario. John is a male janitor with the
same employer. Both jobs are evaluated as having 500 points, yet Desiree is paid less than John. She has
decided to legally challenge the employer. Which of the following is relevant in this case?
Select one:

a.
equal pay for equal work

b.
the Peter principle

c.
equal pay for work of equal value

d.
market matching
Feedback
The correct answer is: equal pay for work of equal value

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According to the textbook, which job evaluation method is considered the most valid?
Select one:

a.
the point method

b.
the factor comparison method
c.
the classification method

d.
job ranking
Feedback
The correct answer is: the point method

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What do we call payment rates above the maximum of a pay range?
Select one:

a.
broadband rates

b.
red circle rates

c.
pay for talent

d.
unfair pay rates
Feedback
The correct answer is: red circle rates

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One theory of motivation is based on the proposition that employees would exert greater work effort if
they have reason to anticipate it (their effort) will result in a valued reward. What is this theory?
Select one:

a.
instrumentality theory

b.
internal equity theory

c.
expectancy theory

d.
equity theory
Feedback
The correct answer is: expectancy theory

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Which of the following is a firm's internal factor that can influence the rates at which employees are paid?
Select one:

a.
labour market conditions

b.
the cost of living

c.
collective bargaining

d.
the employer's strategy
Feedback
The correct answer is: the employer's strategy

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Which of the following terms is also used to describe competency-based pay?
Select one:

a.
skilled-based pay

b.
incentive pay

c.
commission pay

d.
broadband pay
Feedback
The correct answer is: skilled-based pay

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ABC Corporation uses a job evaluation system that links the value of jobs directly with the goals of the
organization. Which job evaluation system is most likely being used by ABC Corporation?
Select one:

a.
point method

b.
goal setting

c.
work evaluation

d.
goal system
Feedback
The correct answer is: work evaluation

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In geography, the water catchment area or watershed refers to the area that channels or supplies a specific
area with its water. Catchment areas divide drainage basins. In wage surveys, what is this catchment area
similar to?
Select one:

a.
the recruiting area

b.
the labour market

c.
the region

d.
the supply region
Feedback
The correct answer is: the labour market

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Job ranking is a simple method that provides a precise measure of each job’s worth.
Select one:
True

False
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The correct answer is 'False'.

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Pay equity is covered only under federal jurisdiction.
Select one:
True

False
Feedback
The correct answer is 'False'.

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When an employer operates in more than one province, it has to apply only the employment requirements
of one province of its choosing.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following is a potential problem of wage and salary surveys?
Select one:

a.
They are discriminatory.

b.
They do not capture key sectoral data.

c.
The jobs in the surveys may not match those in the organization.

d.
They exclude key administrative jobs.
Feedback
The correct answer is: The jobs in the surveys may not match those in the organization.

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In collective agreements, what are escalator clauses associated with?
Select one:

a.
job evaluations

b.
succession planning

c.
a cost of living adjustment
d.
predetermined fixed increases in pay year-over-year
Feedback
The correct answer is: a cost of living adjustment

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The use of job evaluation is widespread in the private sector but is rarely used in the public sector.
Select one:
True

False
Feedback
The correct answer is 'False'.

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A wage curve represents the relationship between the relative worth of jobs and their wage rates.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is a component of indirect compensation?
Select one:

a.
incentives

b.
benefits

c.
wages

d.
commissions
Feedback
The correct answer is: benefits

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Indirect compensation includes bonuses and commissions.
Select one:
True

False
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The correct answer is 'False'.

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The consumer price index tracks the change in price over time of a “market basket” of goods and
services.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Equal pay for work of equal value involves providing equal pay to women when they perform work
historically performed by men.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following is a potential outcome of wage-rate compression?
Select one:

a.
increased motivation

b.
lower absenteeism

c.
low employee morale

d.
decreased employee theft
Feedback
The correct answer is: low employee morale

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Competency-based pay systems represent a fundamental change in the attitude of management regarding
how work should be organized and how employees should be paid for their work efforts.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Jambrone Foods and CUPE Local 5000 have a collective agreement in place that allows for wages to be
paid at more than the minimum wage set by the Employment Standards Act. Which of the following best
describes this agreement?
Select one:

a.
It is illegal.

b.
It is legal but ill-advised.

c.
It is acceptable under the Employment Standards Act but illegal under the Canada Labour Code.

d.
It is legal.
Feedback
The correct answer is: It is legal.

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What is the key purpose of pay equity legislation?
Select one:

a.
to eliminate the gender pay gap

b.
to achieve equal pay for work of comparable value

c.
to ensure more women in top management

d.
to achieve equal pay for equal work
Feedback
The correct answer is: to achieve equal pay for work of comparable value
Question 1
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As the year 2000 approached, many organizations hired "young" and "inexperienced" information
technology (IT) specialists to help address the Y2K problem. Many of these new hires were paid high
compensation that brought them very close to the compensation earned by experienced IT specialists
working with these companies. Which of the following can such a practice lead to?
Select one:

a.
pay equity

b.
wage-rate compression

c.
wage inversion

d.
high turnover across the board
Feedback
The correct answer is: wage-rate compression

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An advantage of competency-based pay from the employee’s perspective is that there is no limit to what
they can earn by learning new skills.
Select one:
True

False
Feedback
The correct answer is 'False'.

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The expectancy theory of motivation predicts that one’s level of motivation depends on the attractiveness
of the rewards sought by employees and the probability of obtaining those rewards.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Internal factors that influence wage rates include the worth of a job, and the employer’s ability to pay.
Select one:
True

False
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The correct answer is 'True'.

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What types of jobs are usually evaluated using the Hay profile method?
Select one:

a.
sales and accounting

b.
information technology and manufacturing

c.
administrative and technical

d.
executive and managerial
Feedback
The correct answer is: executive and managerial

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Executives, administrators, and professional employees are exempt from overtime payments identified in
employment standards acts.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What do job evaluations help to ensure?
Select one:

a.
individual equity

b.
external equity

c.
internal equity

d.
comparative equity
Feedback
The correct answer is: internal equity

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Managers will group similar jobs into a pay grade in order to help with the setting of wages for all jobs.
Select one:
True

False
Feedback
The correct answer is 'True'.

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When an employer operates in more than one province, it has to apply only the employment requirements
of one province of its choosing.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which of the following clauses are found in some labour agreements that periodically adjust
compensation rates to reflect increases in cost of living?
Select one:

a.
escalator clauses

b.
guarantee clauses

c.
roll-up clauses

d.
maintenance clauses
Feedback
The correct answer is: escalator clauses

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Compensable factors include skills, effort, responsibilities, and working conditions.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Mohammed's compensation and benefits are calculated and paid on the basis of monthly periods. How
would you classify this employee?
Select one:

a.
piece-rated employee

b.
hourly employee

c.
directly compensated employee

d.
salaried employee
Feedback
The correct answer is: salaried employee

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Question text
ABC Corporation uses a job evaluation system that links the value of jobs directly with the goals of the
organization. Which job evaluation system is most likely being used by ABC Corporation?
Select one:

a.
goal setting

b.
work evaluation

c.
point method

d.
goal system
Feedback
The correct answer is: work evaluation

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Strategic compensation links an organization’s compensation systems to its mission and business
objectives.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is job classification often used to help determine pay for?
Select one:

a.
the company's CEO

b.
classified university professors' jobs

c.
government jobs

d.
merit bonuses
Feedback
The correct answer is: government jobs

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Scenario 9.1

Denton and Denton Inc. (D&D Inc.) is a small graphic design firm that designs tray liners for various
small food chains across Canada and a major chain in the United States. D&D currently has 20 employees
who are paid hourly rates for time worked, not projects completed. These workers consider themselves
valuable, knowledge-based workers, and now that the company is expanding its client base they are not
happy with the current pay structure. Management claims that this pay structure, ranging from $20 to $65
per hour, is based on collapsing the pay ranges for four job bands.

Refer to Scenario 9.1. Which of the following is NOT a benefit of competency-based pay system?
Select one:

a.
greater productivity

b.
decreased compensation costs

c.
improved staffing flexibility to meet production or service demands

d.
reduced effects of absenteeism and turnover
Feedback
The correct answer is: decreased compensation costs

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When time off is given in exchange for overtime work, it must be given hour-for-hour to the number of
hours worked overtime.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Which term refers to the concept of equal pay for work of equal value?
Select one:

a.
comparable pay

b.
compensable factor

c.
equal pay

d.
pay equity
Feedback
The correct answer is: pay equity

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Question text
Which of the following is a relatively new job evaluation system?
Select one:

a.
work evaluation

b.
job ranking

c.
the point system

d.
job classification system
Feedback
The correct answer is: work evaluation

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What is the scope of the impacts of collective bargaining agreements?
Select one:

a.
They are restricted to both exempt and nonexempt employees.

b.
They are restricted to hourly employees only.

c.
They extend beyond the segment of the labour force that is unionized.

d.
They are restricted to members of the union.
Feedback
The correct answer is: They extend beyond the segment of the labour force that is unionized.

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Malo is an engineer. Her salary range was extended to the range used for administrative employees. What
is this type of pay system?
Select one:

a.
extended range pay system

b.
a hybrid wage system

c.
a double-track wage system

d.
broadbanding
Feedback
The correct answer is: a double-track wage system

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Incentive systems for salespeople are complicated by wide differences in the types of sales jobs.
Select one:
True

False
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The correct answer is 'True'.

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Piecework pay plans permit an organization to predict its labour costs with considerable accuracy.
Select one:
True

False
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The correct answer is 'True'.

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Which of the following is a reason why merit raises may fail to achieve their intended purpose?
Select one:

a.
The performance appraisal system is deficient.

b.
The compensation system is strategic.

c.
Objective performance measures are used.

d.
Incentive rewards are linked to organizational goals.
Feedback
The correct answer is: The performance appraisal system is deficient.

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A salesperson with a sales volume of $100,000 earning a straight commission of 3 percent would receive
$3,000.
Select one:
True

False
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The correct answer is 'True'.

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Scenario 11.1

Canadian Fasteners is a Mississauga-based packing firm that packages nuts, bolts, and screws for various
Canadian furniture companies across the country. The company has been growing at a rapid rate in the
past couple of years. Previously, all HR-related functions were extremely informal or almost non-existent.
With the rising turnover, and a constant struggle to retain employees during the company's rapid growth,
Canadian Fasteners has decided to implement an HR system that not only will assist with the recruitment
and selection process, but also will help to administer a pension and benefit program. The newly
promoted HR manager is excited about the company's future and is looking forward to the new
challenges, but hopes efforts to more effectively capture and retain the right talent will be worth it, as
turnover has caused the firm to lose one of its biggest clients.

Refer to Scenario 11.1. Canadian Fasteners is a small-size firm that still needs to monitor its costs. Which
of the following would be most cost-effective for the company?
Select one:

a.
setting up its own in-house system to be administered by the new HR manager and new staff

b.
declining to provide pension and benefits to it employees

c.
hiring a full-time benefits specialist

d.
hiring a professional benefits vendor to administer the plan
Feedback
The correct answer is: hiring a professional benefits vendor to administer the plan

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Which of the following statements is most applicable to the benefits costs to employers in Canada and the
United States?
Select one:

a.
Benefits costs are both negligible in Canada and the United States.

b.
Benefits costs are higher in Canada.

c.
Benefits costs are the same in Canada and the United States.

d.
Benefits costs are higher in the United States.
Feedback
The correct answer is: Benefits costs are higher in the United States.

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In a defined-contribution pension plan, the amount an employee is to receive upon retirement is
specifically set forth.
Select one:
True

False
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The correct answer is 'False'.

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Question text
Management at ABC Inc. wants to introduce a new benefit that is not required by law. What should it do
first?
Select one:

a.
hire a consulting firm to roll it out

b.
develop an HRIS to help with its administration

c.
lobby the government to make it mandatory

d.
establish that there is a need for it
Feedback
The correct answer is: establish that there is a need for it

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Workers’ compensation insurance is based on a system of individual liability.
Select one:
True

False
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The correct answer is 'False'.

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Question text
Canada's workforce is becoming increasingly diverse. How is this having an impact on benefits
programs?
Select one:

a.
There are lower out-of-pocket costs for employees.

b.
Benefit programs are becoming more family-friendly.

c.
Benefits packages now cover part-time as well as full-time employees.

d.
Greater pension contributions are required by employers.
Feedback
The correct answer is: Benefit programs are becoming more family-friendly.

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Logan Wolverine works for RAY Vision Inc. The employer deducts money every month from Logan's
paycheque for his pension plan. RAY Vision matches this amount for his pension. What type of plan is
this?
Select one:

a.
a defined-benefit plan

b.
a defined-contribution plan

c.
a non-contributory plan

d.
a contributory plan
Feedback
The correct answer is: a contributory plan

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Once extremely popular, group life insurance for employees has steadily declined in use.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Who has the key responsibility of communicating benefits information to employees?
Select one:

a.
the government

b.
the press

c.
the benefits provider

d.
the employer
Feedback
The correct answer is: the employer

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Long-term disability plans normally provide a disabled employee with 90–100 percent of their pre-
disability income.
Select one:
True

False
Feedback
The correct answer is 'False'.

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In a defined-benefit plan, the retirement benefit is determined according to a predetermined formula.
Select one:
True

False
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The correct answer is 'True'.

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Question text
Employee benefits typically represent 40 percent of total payroll costs to employers.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Raj Vickram is receiving a pension of $3,500 per month. This figure was based on a predetermined
formula. What type of plan is this?
Select one:

a.
a defined-contribution plan

b.
a defined-benefit plan

c.
a contributory plan

d.
a non-contributory plan
Feedback
The correct answer is: a defined-benefit plan

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Which statement best describes flexible benefit plans?
Select one:

a.
They are offered to employees who then must purchase each benefit they select.

b.
They are favoured by employers because they reduce administration costs.

c.
They are offered as a bonus to executives.

d.
They allow employees to choose benefits suited to their needs.
Feedback
The correct answer is: They allow employees to choose benefits suited to their needs.

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Great Parcel Inc. has numerous office locations across Canada, including isolated areas with no access to
the Internet. What would be the most efficient way for the company to communicate a new benefit to all
its employees?
Select one:

a.
a meeting in a central location

b.
payroll inserts

c.
trips by the organization's top executive team to all the locations

d.
online modules
Feedback
The correct answer is: payroll inserts

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In most profit-sharing plans, about 50 percent of net profits are shared with employees.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Merit pay plans have been criticized because the merit increase may not be sufficient to raise the
employee’s base pay.
Select one:
True

False
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The correct answer is 'True'.

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Question text
Gainsharing is a type of team compensation.
Select one:
True

False
Feedback
The correct answer is 'True'.

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ESOPs can increase employees’ pride of ownership in the organization, providing an incentive for them
to increase productivity and help the organization prosper and grow.
Select one:
True

False
Feedback
The correct answer is 'True'.

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The idea behind the Scanlon Plan is that employees not only should offer ideas to improve productivity,
but also should be rewarded for those ideas.

Select one:
True

False
Feedback
The correct answer is 'True'.

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ESOPs have been criticized because of potential inabilities to pay back the stock of employees when they
retire.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Spot bonuses are usually provided for some employee effort that is not directly tied to an established
performance standard.
Select one:
True

False
Feedback
The correct answer is 'True'.

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The most important lesson learned from Scanlon and Improshare plans is that if management wants to
gain the cooperation of its employees in improving efficiency, they must permit the employees to become
involved psychologically as well as financially in the organization.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What's the first step in the three-step approach in deciding on team incentives?
Select one:

a.
A survey is conducted.

b.
The size of the incentive is decided.

c.
A payout formula is determined.

d.
Performance measures are decided.
Feedback
The correct answer is: Performance measures are decided.

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Stock options are rights attached to the achievement of specific organizational objectives.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Scenario 10.2

Meritas Financial Ltd. is a financial advisory firm located in downtown Toronto. Most of the firm's senior
employees (referred to as partners) are paid top dollar for bringing in huge accounts regardless of whether
these accounts bring in the appropriate amount of business to justify the incentives paid. The partners are
compensated on the net worth of the companies that sign on to use Meritas as their financial advisor. The
owner is now concerned about this pay arrangement and wants to make changes to the way he
compensates his employees. However, he is worried that with a potential reduction of salary and short-
term incentives, he might lose some of his most valuable employees and the accounts that they brought on
board.

Refer to Scenario 10.2. In implementing a new profit-sharing plan, Meritas has various options by which
payouts can be made to its employees. Which of the following is the best way for Meritas to distribute
profits?
Select one:

a.
deferred payment added to pension

b.
a combination of deferred and cash payouts
c.
bonus payments added to yearly salaries

d.
disbursements in cash paid monthly
Feedback
The correct answer is: a combination of deferred and cash payouts

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Balanced scorecards refer to the use of operational yardsticks as well as traditional financial measures as
a basis for computing executive pay.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What is the largest component (in dollars) of CEO compensation in Canada's largest firms?
Select one:

a.
stock options

b.
bonuses
c.
executive perquisites

d.
benefits
Feedback
The correct answer is: stock options

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Incentive plans can create an organizational environment of “shared commitment,” since individuals
contribute to organizational success.
Select one:
True

False
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The correct answer is 'True'.

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Incentive plans are not effective in service and government organizations because of the difficulty in
measuring productivity.
Select one:
True

False
Feedback
The correct answer is 'False'.
Question 1
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Amelia received a stellar performance appraisal in 2016 that translated to a 10 percent pay raise for 2017.
Her 2016 base pay was $50,000. Which of the following applies to 2017?
Select one:

a.
Her employer would give her a bonus of $5,000.

b.
Her pay would remain $50,000 but she would most likely get a promotion.

c.
Her starting pay would be $55,000.

d.
Her employer would add 10 percent to all her 2016 compensation components-base pay, incentives,
benefits, and perks.
Feedback
The correct answer is: Her starting pay would be $55,000.

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Straight commission plans may induce salespeople to grant price concessions.
Select one:
True

False
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The correct answer is 'True'.
Question 3
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Which of the following would promote team behaviours and a "culture of ownership" among all
employees in the organization?
Select one:

a.
bonuses

b.
employee stock ownership plans

c.
differential piece rates

d.
commissions
Feedback
The correct answer is: employee stock ownership plans

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ABC Corporation has a sales compensation plan that requires salespeople to be paid for performing
various duties not reflected in their sales volume. What type of pay plan does this exemplify?
Select one:

a.
a standard hour plan

b.
a straight salary plan

c.
a merit plan

d.
lump-sum merit pay
Feedback
The correct answer is: a straight salary plan

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The operation of a merit pay plan depends on the effectiveness of the performance appraisal system.
Select one:
True

False
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The correct answer is 'True'.

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Bob Jones was recently permanently laid off. His company, ACME Manufacturing, has issued Bob a
cheque that represents one month's pay for every year Bob worked at ACME. What does this cheque
represent?
Select one:

a.
Bob's severance pay
b.
Bob's unused vacation pay

c.
Bob's unused sick leave

d.
Bob's unused benefits
Feedback
The correct answer is: Bob's severance pay

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The Canada and Quebec Pension Plans both require employer and employee contributions.
Select one:
True

False
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The correct answer is 'True'.

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Childcare, eldercare and extended leave policies are all examples of employee services.
Select one:
True

False
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The correct answer is 'True'.
Question 9
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The declining cost of health care benefits provides Canadian organizations opportunities to reduce
employee benefit costs.
Select one:
True

False
Feedback
The correct answer is 'False'.

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James Callaghan has worked full-time for BC Metals for four years. He has learned from the HR manager
that his earned pension benefits cannot be revoked by the employer. Why is this so?
Select one:

a.
because the employer expects him to work until retirement

b.
because the benefits are vested

c.
because the benefits are defined

d.
because the union would strike if they are revoked
Feedback
The correct answer is: because the benefits are vested
Question 11
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What are two of the largest health care costs in Canada for employers?
Select one:

a.
drugs and administrative costs

b.
drug and hospital costs

c.
administrative and hospital costs

d.
administrative and infrastructure costs
Feedback
The correct answer is: drug and hospital costs

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Which of the following benefits must be provided by employers in Canada because it is legally required?
Select one:

a.
vision care

b.
out-of-country medical assistance
c.
dental benefits

d.
employment insurance
Feedback
The correct answer is: employment insurance

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Which of the following is a method to contain the costs of benefits?
Select one:

a.
eliminating benefit caps

b.
making contribution changes, such as deductibles

c.
making cuts to mandatory benefits

d.
increasing benefits coverage
Feedback
The correct answer is: making contribution changes, such as deductibles

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The government provides financial contributions for the Canada Pension Plan.
Select one:
True

False
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The correct answer is 'False'.

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Ideally, which of the following should apply to an organization's benefits system?
Select one:

a.
It should mirror that of the competition, so as to attract top applicants.

b.
It should be more than 50 percent of payroll costs, so as to be competitive.

c.
It should be restricted to mandatory benefits.

d.
It should be aligned to the overall strategy of the organization.
Feedback
The correct answer is: It should be aligned to the overall strategy of the organization.

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Health care benefits are considered “discretionary” because employers are not required by law to provide
them.
Select one:
True

False
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The correct answer is 'True'.

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In addition to paid holidays, some employers give workers additional personal use days.
Select one:
True

False
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The correct answer is 'True'.

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Employee assistance programs (EAPs) help employees mainly with relocation costs.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Employer health plans are generally restricted to medical, surgical, and hospital expenses.
Select one:
True

False
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The correct answer is 'False'.

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ABC Corporation allows employees the opportunity to try out retirement with a leave program, or
gradually reduce their work hours as they approach retirement age. What is this an example of?
Select one:

a.
CPP/QPP

b.
family-friendly benefits

c.
a preretirement program

d.
retirement leave
Feedback
The correct answer is: a preretirement program

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Financial incentives for salespeople are widely used.
Select one:
True

False
Feedback
The correct answer is 'True'.

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What is the philosophy behind the Scanlon Plan?
Select one:

a.
Rewards are shared with employees based on improved profits.

b.
Managers and employees should establish quality and quantity goals for optimum organizational
performance.

c.
Organizational profits should improve through sales efforts.

d.
Employees should offer ideas and suggestions to improve productivity and, in turn, be rewarded for their
constructive efforts.
Feedback
The correct answer is: Employees should offer ideas and suggestions to improve productivity and,
in turn, be rewarded for their constructive efforts.
Question 23
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Which of the following is a type of stock plan?
Select one:

a.
stock commission plan

b.
stock bonus plan

c.
stock incentive plan

d.
stock gainsharing plan
Feedback
The correct answer is: stock bonus plan

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Employers use stock ownership incentive plans to increase employee “ownership” in the company.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is a key factor that contributes to the success of incentive plans?
Select one:

a.
management support

b.
employee entitlements

c.
high employee expectations for pay gains

d.
undefined performance measures
Feedback
The correct answer is: management support

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As an incentive, Ahmed was offered the opportunity to buy shares of their organization's stock at a
discount price. What type of compensation is this?
Select one:

a.
stock bonus

b.
stock options
c.
share bonus

d.
stock purchase
Feedback
The correct answer is: stock purchase

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Which of the following is an advantage of piece rate pay systems?
Select one:

a.
They help to groom high performance managers.

b.
They allow employees to break down their work piece by piece.

c.
They allow for teamwork.

d.
They have a direct link to performance.
Feedback
The correct answer is: They have a direct link to performance.

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Which of the following is a key condition for the success of merit pay raises?
Select one:

a.
The amount must be fairly substantial.

b.
The raise should be awarded every two months.

c.
Employees must work in teams.

d.
The performance goals must be tough to achieve.
Feedback
The correct answer is: The amount must be fairly substantial.

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At Steelcase, an office furniture maker, employees can earn more than their base pay if they produce
more units, such as upholstering more chairs. This part of their pay is determined on units produced.
Which of the following plans is being used here?
Select one:

a.
time division plan

b.
piece rate plan

c.
standard hour plan

d.
completion pay plan
Feedback
The correct answer is: piece rate plan

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It was revealed in the press that the former CEO of a Fortune 100 firm enjoyed special use of the
company plane and a country club membership as a part of his reward package. Which of the following
best describes these benefits?
Select one:

a.
They are unusual for top executives.

b.
They are illegal, but executives usually get away without being caught.

c.
They are known as perquisites.

d.
They are known as golden parachutes.
Feedback
The correct answer is: They are known as perquisites.

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Scenario 10.1

BioMetrics Imaging Ltd. is a small Saskatoon-based firm that designs and produces one-of-a-kind
machines that are capable of capturing medical imaging similar to that of MRI machines but with a higher
percentage of accuracy. So far, the company has been able to sell various units to privately owned
medical clinics and a few hospitals in the United States. The problem currently facing BioMetrics
Imaging is finding salespeople with the appropriate experience who not only understand the equipment
but are also trustworthy and willing to work extremely hard to bring the product to the marketplace. It
takes roughly six months to convince potential clients to purchase the machines. Sales agents receive a
hefty paycheque when a unit is sold based on a percentage of the unit price, and all travel expenses are
covered. Still, the company is not able to retain its employees because the time lag between beginning to
sell machines and getting paid is too long.

Refer to Scenario 10.1. Which of the following factors is least likely to affect sales for this equipment?
Select one:

a.
the nature of the sales territory

b.
economic and seasonal fluctuations

c.
producing the machines in a timely manner

d.
sales competition and changes in demand
Feedback
The correct answer is: producing the machines in a timely manner

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Mark recently received an incentive for a special contribution not directly tied to a performance standard.
What is this incentive called?
Select one:

a.
a spot bonus

b.
a piece rate plan

c.
a commission

d.
a differential piece rate
Feedback
The correct answer is: a spot bonus

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Which of the following is an important reason why employers use piece rate systems in their
compensation strategy?
Select one:

a.
It is difficult to predict labour costs accurately.

b.
Piece rates promote team work.

c.
Piece rates are simple to compute.

d.
It helps with desired team behaviours.
Feedback
The correct answer is: Piece rates are simple to compute.

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In setting up incentive systems, what is the key consideration in establishing performance standards?
Select one:

a.
They must be set by outside consultants.
b.
They should be qualitative.

c.
They must be motivational.

d.
They should be measurable.
Feedback
The correct answer is: They should be measurable.

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Employees receive a specified payment for each unit produced under a straight piecework program.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Which of the following is the most widely used sales incentive program?
Select one:

a.
commission plus bonus
b.
straight salary

c.
combined salary and commission

d.
straight commission
Feedback
The correct answer is: combined salary and commission

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Approximately 50 percent of Canadian companies offer some form of variable pay.
Select one:
True

False
Feedback
The correct answer is 'False'.

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What is a likely external factor that would affect the incentives of sales employees?
Select one:

a.
job evaluations

b.
seasonal fluctuations in demand

c.
the organization's strategy

d.
a salesperson's intrinsic motivation
Feedback
The correct answer is: seasonal fluctuations in demand

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Why are performance measures vital in incentive plan design?
Select one:

a.
because they ensure management support

b.
because they drive profitability

c.
because they are fair and equitable

d.
because they communicate the importance of the organizational goals
Feedback
The correct answer is: because they communicate the importance of the organizational goals

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Question text
Because profit-sharing plans often fail to pay off for several years in a row, they can have limited
motivational value.
Select one:
True

False
Feedback
The correct answer is 'True'.

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Both employees and employers make contributions toward a workers’ compensation fund.
Select one:
True

False
Feedback
The correct answer is 'False'.

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Many firms outsource their cafeteria plans to a professional vendor because of the complexity of
administering the system.

Select one:
True

False
Feedback
The correct answer is 'True'.

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ABC Corporation uses the services of professional benefits vendors to administer their benefits. What is
this practice a form of?
Select one:

a.
freelancing

b.
outsourcing

c.
shared services

d.
delegation
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The correct answer is: outsourcing

Question 9
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Company-sponsored preretirement programs force employees to think about what their lives will be like
after they leave the organization.
Select one:
True

False
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The correct answer is 'True'.

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Tommy Lee is recovering from a drug addiction problem. His employer has offered him services to help
him with the recovery process. What is this service an example of?
Select one:

a.
a defined contribution plan

b.
a defined-benefit plan

c.
an outplacement service

d.
an employee assistance program
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The correct answer is: an employee assistance program

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In a non-contributory pension plan, who makes the financial contributions?
Select one:

a.
the employee only
b.
the employer and the employee

c.
the employer, the employee, and the government

d.
the employer only
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The correct answer is: the employer only

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Employee assistance programs and wellness programs cannot help organizations cut the costs of health
care benefits.
Select one:
True

False
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The correct answer is 'False'.

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From a pension perspective, what is a key issue concerning the aging of baby boomers in Canada?
Select one:

a.
Younger generations are demanding reduced pensions for those leaving the workforce.
b.
There are fewer contributions to the pension fund by younger generations and more withdrawals for
funding pensions for baby boomers.

c.
There are more demands for dental benefits.

d.
Baby boomers are leaving management, thus there is a loss to the HR managers who oversee this benefit.
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The correct answer is: There are fewer contributions to the pension fund by younger generations
and more withdrawals for funding pensions for baby boomers.

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Online benefits programs allow employees self-service freedom and availability virtually any time.
Select one:
True

False
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The correct answer is 'True'.

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In Canada, the higher the household income, the lower the retirement age.
Select one:
True
 False
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The correct answer is 'True'.

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Because of added expenses and complicated governmental rules, defined-benefit pension plans are falling
out of use.
Select one:
True

False
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The correct answer is 'True'.

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CPP and QPP have universal portability—that is, an employee has the right to claim benefit credits
wherever they are employed in Canada.
Select one:
True

False
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The correct answer is 'True'.

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Employees who resign from a position or who are terminated for cause may not be eligible to collect
employment insurance (EI).
Select one:
True

False
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The correct answer is 'True'.

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Only employees contribute to the Employment Insurance (EI) fund.
Select one:
True

False
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The correct answer is 'False'.

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Omar Morales, an older employee, is considering an early retirement package that his employer has
offered; it includes improved benefits and cash bonuses. What do we call this type of inducement?
Select one:

a.
a severance pay

b.
a golden parachute

c.
a silver handshake

d.
a platinum cushion
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The correct answer is: a silver handshake

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A straight salary plan is the most frequently used type of sales incentive plan.
Select one:
True

False
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The correct answer is 'False'.

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Enterprise incentive plans allow all organizational members to participate in the plan’s payout.
Select one:
 True

False
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The correct answer is 'True'.

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Aren received a $500 pay bonus as a result of his job performance last year; however, this extra money
was not added to his base pay. This is an example of which of the following?
Select one:

a.
percentage wage increase

b.
lump-sum merit pay

c.
group incentive plan

d.
annual merit raise
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The correct answer is: lump-sum merit pay

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When is piecework most appropriate?
Select one:
a.
when technology changes are frequent

b.
when performance measures are difficult to define

c.
when the job is fairly standardized

d.
when quality is more important than quantity
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The correct answer is: when the job is fairly standardized

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An "Owners Care" branding message would be linked to which type of compensation system?
Select one:

a.
commissions

b.
perks

c.
profit-sharing

d.
piece rates
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The correct answer is: profit-sharing

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Professional employees are difficult to develop incentive plans for only because their outputs are difficult
to measure.
Select one:
True

False
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The correct answer is 'False'.

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Piecework is inappropriate where technology changes are frequent.
Select one:
True

False
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The correct answer is 'True'.

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What is a major problem with profit-sharing plans?
Select one:
a.
There is no agreed upon procedure to determine profits.

b.
They increase the fixed costs of organizations.

c.
The profits distributed to employees can be too much.

d.
The line of sight between employee performance and organizational profits is blurred.
Feedback
The correct answer is: The line of sight between employee performance and organizational profits is
blurred.

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What is the purpose of a profit-sharing plan?
Select one:

a.
to motivate a total commitment to the organization as a whole

b.
to enable workers to share in labour cost savings

c.
to allow workers to contribute ideas and suggestions

d.
to instill commitment to the employee's immediate work group
Feedback
The correct answer is: to motivate a total commitment to the organization as a whole

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From an employer's perspective, which of the following is an advantage of merit increases on a lump-sum
basis?
Select one:

a.
They add a permanent sum to the base salary.

b.
They reflect annual adjustments in base salary.

c.
They are done in conjunction with promotions.

d.
They do not contribute to escalating base salary levels.
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The correct answer is: They do not contribute to escalating base salary levels.

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Which of the following is a key objective of enterprise incentive plans?
Select one:

a.
to reward top performers

b.
to create a "culture of ownership"

c.
to support government reward programs

d.
to limit "free ridership"
Feedback
The correct answer is: to create a "culture of ownership"

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Under a straight commission plan, compensation is based entirely on a percentage of sales.
Select one:
True

False
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The correct answer is 'True'.

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A bonus is supplemental to base wages.
Select one:
True

False
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The correct answer is 'True'.

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Differential piece rate plans guarantee employees at least a base pay.
Select one:
True

False
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The correct answer is 'False'.

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Under straight piecework, employees receive a certain rate for each unit produced.
Select one:
True

False
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The correct answer is 'True'.

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Sales incentives can be affected by external factors beyond the salesperson’s control.
Select one:
 True

False
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The correct answer is 'True'.

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Under which of the following conditions can incentive plans fail to achieve their objectives?
Select one:

a.
when the objectives are too focused

b.
when the goals are based on organizational performance

c.
when employees have little ability to affect performance standards

d.
when employees are too motivated
Feedback
The correct answer is: when employees have little ability to affect performance standards

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For incentive plans to be successful, one of the most critical requirements is that managers be willing to
grant incentives based on differences in individuals, teams, or organizational criteria.
Select one:
 True

False
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The correct answer is 'True'.

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Lana works as a salesperson at Fashion Galore. She is paid on a percentage of her sales only. What type
of pay plan is this?
Select one:

a.
straight commission plan

b.
straight ratio plan

c.
straight salary plan

d.
straight bonus plan
Feedback
The correct answer is: straight commission plan

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The level of incentives given to executives may depend on their level in the firm.
Select one:
True

False
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The correct answer is 'True'.

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It would be desirable for employers to enlist employee participation in modifying a benefits program.
Select one:
True

False
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The correct answer is 'True'.

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What is an important reason why employers need to communicate the extent and value of the benefits
they provide?
Select one:

a.
Such communication is required by the law.

b.
Employees generally underestimate the value of the benefits offered.

c.
It immediately reduces the overall costs.

d.
The HR department needs this information for its communication outlets.
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The correct answer is: Employees generally underestimate the value of the benefits offered.

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In the past two decades, more and more employees have been receiving dental care insurance as a benefit.

Select one:
True

False
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The correct answer is 'True'.

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When organizations need to reduce their workforce, “silver handshakes” are sometimes used to encourage
employees to retire before they had originally planned.
Select one:
True

False
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The correct answer is 'True'.

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Which of the following is an example of a family-friendly benefit that is increasingly being used?
Select one:

a.
defined contributions

b.
defined benefits

c.
eldercare

d.
tuition reimbursements
Feedback
The correct answer is: eldercare

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Flexible benefits plans are also known as “cafeteria” plans.
Select one:
True

False
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The correct answer is 'True'.

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The growth in health care costs can be attributed to a number of factors, including the greater need for
health care by an aging population.
Select one:
True

False
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The correct answer is 'True'.

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To reflect the social changes Canada is facing, employers are increasingly tailoring their benefits
programs to be family friendly.
Select one:
True

False
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The correct answer is 'True'.

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Many employers now offer additional health care benefits such as dental and prescription drug coverage.
Select one:
True

False
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The correct answer is 'True'.

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Susie Jones has definite preferences in terms of the benefits offered by her employer. Susie will be able to
select the benefits she values highly and avoid those she does not need or want if her employer offers
which benefit format?
Select one: