1. An employee at Clearwater Electronics has contacted the HR department about her salary. She had been told that a recent hire with the same job and skill set was offered $1,000 more per year than she was. She wanted to know if the rumor was true and, if so, what the company was going to do to about the situation. After reviewing both jobs, it was determined that the employee should be given a pay raise to match that of the recent hire plus another 25 cents per hour. The employee was appeased, but the situation was messy and awkward. Given this example, why is it important that Clearwater Electronics have internal equity in its compensation system?

   • Internal equity contributes to a company culture of fairness, and employees are more likely to feel valued and less likely to claim discrimination.
   • Internal equity allows a company to compare their salaries to those of competing organizations.
   • Internal equity allows the company to balance two factorsthe cost of workers and the rapidly moving job market.
   • Internal equity allows for a company to pay different wages depending on the seniority of its employees.
2. Bookmark question for later

   The HR director at Clearwater Electronics has been asked to advise the board on a proposal to implement a variable compensation plan for top executives in each department. The CFO wants the HR director to explain how the plan will encourage productivity in top management positions. Which statement best explains why a variable compensation plan would help increase performance?

   • The incentives will only be paid if the company does well, so the managers will be motivated to meet their goals.
   • The incentives will allow for the interests of management to be aligned with the interests of shareholders.
   • The incentives will encourage a healthy competition among the top executives.
   • The incentives will recognize employees who focus on well-chosen goals.
3. Bookmark question for later

   The HR department at Clearwater Electronics received a report of a work-related injury on the production line that resulted in the employee missing several days of work. Supposedly, the employee hurt his back while lifting a box of components. However, another employee reported that the employee was not really hurt and just wanted some days off. It is the responsibility of the HR department to process workers compensation claims and make sure the claim is not fraudulent. Which statement gives the best reason for HR to ensure that the claim is legitimate?

   • Fraudulent workers compensation claims can lead to higher insurance premiums and penalties, so it is important for HR to protect the company and avoid costly mistakes.
   • Fraudulent workers compensation claims lead to companies misclassifying employees in order to avoid paying premiums for them.
   • Fraudulent workers compensation claims allow employees to take advantage of the system and say injuries and illnesses resulted from work while they actually happened elsewhere.
   • Fraudulent workers compensation claims can lead companies to lie about injuries and illnesses in order to avoid paying higher insurance premiums.
4. Bookmark question for later

   Clearwater Electronics has experienced tremendous growth recently, and the sales office projects there to be a 70 percent increase in product demand. Normally Clearwater runs two shifts (day and swing) Monday through Friday, but now additional shifts have been added to the weekend in order to meet the current demand. Employees have reported the additional workload is causing them stress, and there has been an increase in absenteeism, accidents, and product errors. To respond proactively to the issue, the HR department is making sure employees have clear job expectations, understand health and safety measures, and know about the companys wellness and employee assistance programs. Additionally, the company is looking at ways to decrease the work overload, including adding another shift (graveyards) or hiring temporary workers. Which of the following statements best explains why it is important for the company to reduce the stress their employees experience on the job?

   • Lack of stress management in the workplace creates an environment where employees at all levels feel they are not working to the best of their abilities.
   • Lack of stress management in the workplace contributes to illness, absence, turnover, and underperformance, all of which reduce productivity.
   • Lack of stress management in the workplace creates an atmosphere of mistrust.
   • Lack of stress management in the workplace makes employees feel less valued and less in control.
5. Bookmark question for later

   An argument broke out between a manager and one of his employees; HR was asked to investigate. After interviewing both the employee and the manager, the HR director overheard the employee saying, I wish this were the olden days. Id take this argument out in the street and solve it without anyones help. Because Clearwater Electronics has a zero-tolerance policy for workplace violence, with prominent signage in a number of visible locations in the plant, the employee was immediately terminated. Why did this incident of workplace violence occur?

   • The incident happened due to a lack of legal authority to enforce workplace violence policies.
   • The incident occurred due to ineffective monitoring of the workplace environment by HR.
   • The incident stemmed from ineffective problem-solving on the part of the employee.
   • The incident came from the manager imposing an unsolvable problem on the employee.
6. • Understanding reactions to change will help the HR director show employees that they should be grateful for their employment during an economic downturn.
   • Knowing how employees will react will help inform the HR director which employees would be likely candidates for layoffs should the need arise.
   • Being proactive about perceived barriers to change will allow the HR director to be prepared to respond to questions and concerns.
   • The research done for the needs analysis will allow the HR director to analyze feedback and help protect the company from possible litigation.