Chapter 12—Total Rewards and Compensation
27. McDonald’s global rewards program has resulted in lower managerial and employee turnover. In this type of total rewards system why would turnover decline? a.
All employees benefit from higher pay, and are less likely to quit. b.
Employees receive equal bonuses based on growth in McDonald’s profits, and this fair treatment makes employees less likely to quit. c.
The increased in employee competition from varying reward levels based on performance encourages high performers to stay. d.
Higher performers receive higher incentives than lower performers, so high performers would be less likely to quit.
28. Compensation is one of the organization’s largest expenditures. Compensation philosophies and systems vary from one organization to the next. Why is that? a.
There is no “one right way” to compensate employees. Many systems will work equally well in any organization. b.
Different organizations have different organizational objectives and strategies. c.
Legal requirements mandate different types of compensation systems depending on the organization’s industry. d.
Organizations depend heavily on consultants to design their compensation systems, and each consulting firm has its own system.
The goal in giving pay increases to average performers should be a.
to align their pay with the labor market.
on retaining and rewarding them.
on encouraging them to leave the organization.
on achieving a compra-ratio of 100.
A true cost-of-living raise
must be implemented both in times of inflation and deflation. b.
must be tied to economic indicators.
is the same thing as an automatic increase.
is the same thing as a merit raise.
As a young employee who consistently meets (but does not exceed) performance expectations, which type of pay increase system would most likely be to your personal financial benefit considering that you expect to stay with the...
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