Deck 10: Indirect Financial Compensation Benefits and Nonfinancial Compensation

Question 1

All financial rewards that are NOT included in direct financial compensation are known as ________.

A) bonuses
B) wages
C) commissions
D) benefits

Answer 1

D
Explanation: D) Indirect financial compensations (benefits) include all financial rewards not included in direct financial compensation. Health insurance and life insurance are examples of indirect financial compensation. Bonuses, wages, and commissions are direct financial compensation.

Question 2

Which of the following is an advantage of voluntary benefits?

A) always less costly for small businesses
B) typically linked to worker productivity
C) usually nontaxable to the employee
D) always government sponsored

Answer 2

C
Explanation: C) Indirect financial compensation has two distinct advantages: (1) it is generally nontaxable to the employee and (2) the cost of some benefits may be much less for large groups of employees than for individuals.

Question 3

Executives who participate in two in a box most likely benefit from the increased ________.

A) ability to balance work and life
B) ownership in the organization
C) opportunity to travel overseas
D) reliance on new technology

Answer 3

A
Explanation: A) Two in a box refers to the corporate strategy of giving two executives the same responsibilities and the same title and letting them decide how the work is to be divided. Executives benefit because they have more schedule flexibility, which helps them balance work and family. The executives can share the responsibility of going to meetings and traveling overseas.

Question 4

Everything an employee perceives to be of value resulting from the employment relationship is best known as ________.

A) global perks
B) total rewards
C) whole wages
D) fringe benefits

Question 5

Legally required benefits currently include all of the following EXCEPT ________.

A) Social Security
B) workers' compensation
C) unemployment insurance
D) health insurance coverage

Question 6

According to the U.S. Bureau of Labor Statistics, indirect financial compensation accounts for approximately ________ of employers' total compensation costs.

A) 10%
B) 30%
C) 50%
D) 70%

Question 7

What Act created a system of retirement benefits?

A) Family and Medical Leave Act
B) Fair Labor Standards Act
C) Social Security Act
D) Equal Pay Act

Question 8

In general, why do employees receive benefits from their employer?

A) organizational membership
B) employee productivity
C) corporate performance
D) level of education

Question 9

Mandated benefits currently account for about what percentage of total compensation costs?

A) 10%
B) 35%
C) 50%
D) 65%

Question 10

WorldatWork is a professional organization focused on the issue of ________.

A) career development
B) compensation
C) HR planning
D) offshoring

Question 11

Benefits are valuable for all of the following reasons EXCEPT ________.

A) improving job satisfaction
B) recruiting new employees
C) retaining current employees
D) improving worker productivity

Question 12

Which of the following best defines Two in a Box?

A) providing two banking services to key customers
B) requiring applicants to interview with two managers
C) giving two executives the same job and responsibilities
D) requiring two employees to work overtime and weekends

Question 13

Thomas is a copy machine technician for State Office Systems. He was involved in a serious car accident while making a service call for his employer, and he cannot return to work for 8 weeks. Which of the following would most likely provide Thomas with income while he is incapacitated?

A) life insurance
B) worker's compensation
C) direct financial compensation
D) unemployment compensation

Question 14

Which of the following would most likely be eligible for Medicare?

A) Alex, a 35-year-old unemployed mechanic
B) Brenda, a 42-year-old school teacher
C) Charles, a 66-year-old retired realtor
D) Debra, a 21-year-old college student

Question 15

When a U.S. multinational company is designing a global customized benefits package, it should assume all of the following EXCEPT ________.

A) standardized benefits programs for all employees will achieve key benefits objectives
B) it is essential to determine a global corporate benefits strategy and determine what the company's identity should be
C) the culture of each country will have a major impact on the benefits workers desire
D) U.S. insurance plan designs will not be universally applicable in all countries

Question 16

What Act requires employers to share equally with employees the cost of old age, survivors, and disability insurance?

A) Fair Labor Standards Act
B) Family and Medical Leave Act
C) Social Security Act
D) Benefits and Security Act

Question 17

When an employee dies, which of the following would most likely be paid to the employee's family?

A) disability insurance
B) survivors' benefits
C) unemployment insurance
D) discretionary benefits

Question 18

Which of the following protects employees against an earnings loss when they are totally incapacitated?

A) unemployment insurance
B) disability insurance
C) paid time off
D) sabbaticals

Question 19

Margaret's husband, who worked as an accountant, recently died from a heart attack while on vacation. Which of the following would most likely be provided to Margaret?

A) survivors' benefits
B) discretionary benefits
C) unemployment compensation
D) supplemental Medicaid payments

Question 20

In most cases, the costs of voluntary benefits are paid by ________.

A) government agencies
B) state governments
C) employees
D) employers

Question 21

What type of indirect financial compensation is the most expensive for most businesses?

A) life insurance
B) health care insurance
C) retirement programs
D) unemployment compensation

Question 22

The current retirement age is ________.

A) 65
B) 66
C) 67
D) 68

Question 23

Jackie's employer is downsizing to reduce expenses, and Jackie has been informed that she will be laid off. What is the maximum number of weeks that Jackie can receive unemployment compensation?

A) 13
B) 26
C) 39
D) 52

Question 24

Which term refers to a certain number of days each year that employees can use for any purpose?

A) sabbatical
B) paid vacation
C) paid time off
D) medical leave

Question 25

Benefit payments made as a result of unilateral management decisions in nonunion firms and from labor-management negotiations in unionized firms are known as ________.

A) flexible spending benefits
B) direct financial compensation
C) discretionary benefits
D) workers' compensation

Question 26

Which of the following is the LEAST likely purpose of unemployment insurance payments?

A) giving workers time to find equivalent jobs
B) minimizing the number of workers needing welfare
C) continuing worker health benefits to prevent financial distress
D) sustaining consumer spending during difficult economic times

Question 27

Which term refers to temporary leaves of absence from an organization, usually at reduced pay?

A) personal leave
B) medical leave
C) paid time off
D) sabbatical

Question 28

Workers in which of the following countries take the fewest number of vacation days?

A) Italy
B) Brazil
C) Canada
D) United States

Question 29

Carson Enterprises is considering the idea of replacing personal leave and vacation time with paid time off. Which of the following best supports this decision?

A) Employees at Carson express satisfaction with the firm's current PPO.
B) Last minute absences are a significant problem among Carson employees.
C) Retirement plans held by Carson employees suffered during the recession.
D) Carson employees are given the opportunity to telecommute when needed.

Question 30

Which of the following pays for Social Security?

A) state and local government
B) employer and employee
C) employer only
D) employee only

Question 31

What will be the retirement age in 2027?

A) 65
B) 66
C) 67
D) 68

Question 32

Carson Enterprises is considering the idea of adding sabbaticals to its discretionary benefits plan. Which of the following best supports this decision?

A) Numerous employees at Carson have elderly parents who need medical attention.
B) The health and safety record at Carson has been problematic in recent years.
C) Many experienced employees at Carson have quit because of burnout.
D) The majority of Carson employees have small children in daycare.

Question 33

Which of the following provides hospital and medical insurance protection for individuals who are 65 years of age or older?

A) Medicare
B) HMO
C) Medicaid
D) PPO

Question 34

Workers' compensation insurance pays for medical expenses related to ________.

A) pre-existing conditions
B) pregnancy complications
C) off-duty accidents
D) job-related illnesses

Question 35

What is a significant issue facing the Social Security program?

A) outsourcing of jobs
B) retiring baby-boomers
C) growing unemployment rate
D) rising workers' compensation costs

Question 36

In most firms, vacation time varies by ________.

A) performance appraisal results
B) organizational rank
C) education level
D) personal needs

Question 37

Which of the following is NOT a discretionary benefit?

A) sabbaticals
B) health benefits
C) paid vacations
D) overtime payments

Question 38

Jack, a construction worker, slipped and fell at a job site. As a result, Jack injured his knee and needs physical therapy and medical care. Jack's medical expenses would most likely be covered by ________.

A) workers' compensation insurance
B) unemployment insurance
C) life insurance
D) Medicaid

Question 39

Which of the following pays for unemployment insurance?

A) state and local governments
B) employer and employee
C) employee only
D) employer only

Question 40

Which of the following is LEAST likely to be an advantage of providing paid time off to employees?

A) simpler administration
B) more job sharing options
C) higher employee satisfaction
D) fewer last minute absences

Question 41

Julie has health insurance through her employer. The managed-care health organization used by Julie's employer covers all services for a fixed fee. However, Julie may only use the doctors and health facilities chosen by the managed-care health organization. Julie is most likely a member of a(n) ________.

A) point-of-service
B) health maintenance organization
C) preferred provider organization
D) exclusive provider organization

Question 42

Which of the following covers extraordinary expenses that result from long-term or serious health problems?

A) medical reduction plans
B) alternative exploration
C) major medical benefits
D) utilization review

Question 43

Sharon's employer offers a defined contribution plan. The firm contributes stock shares to a trust in hopes of aligning employee interests with the interest of the firm. Sharon is most likely invested in a(n) ________.

A) employee stock option plan
B) defined contribution plan
C) defined benefit plan
D) cash balance plan

Question 44

Flexible spending accounts and health savings accounts are examples of ________.

A) consumer-driven health care plans
B) legally required health benefits
C) major medical benefits
D) point of service plans

Question 45

Health care benefits represent the most expensive cost in the area of indirect financial compensation. Which of the following is NOT a factor that has combined to create this situation?

A) shrinking population
B) growing demand for medical care
C) inefficient administrative processes
D) increasingly expensive medical technology

Question 46

A defined contribution plan in which employees may defer income up to a maximum amount allowed is a ________.

A) stock option plan
B) cash balance plan
C) hybrid plan
D) 401(k) plan

Question 47

Howard Paper Company, which employs 1,200 workers, is planning to establish a worksite medical clinic at its manufacturing facility. Which of the following best supports this decision?

A) Most Howard employees prefer the firm's PPO plan to the HMO option.
B) Few Howard employees understand how to utilize flexible spending accounts.
C) Vaccinations and minor injuries account for most weekday doctor visits by Howard employees.
D) OSHA investigations reveal that Howard requires most employees to wear protective equipment.

Question 48

What managed-care health organization offers a smaller PPO provider network and usually provides little, if any, benefits when an out-of-network provider is used?

A) point-of-service
B) health maintenance organization
C) preferred provider organization
D) exclusive provider organization

Question 49

What type of insurance is a benefit commonly provided to protect an employee's family in the event of the employee's death?

A) long-term care
B) utilization care
C) group life insurance
D) disability insurance

Question 50

Which term refers to a benefit plan established by employers that allows employees to deposit a certain portion of their pre-tax salary into an account to be used for eligible expenses?

A) provider account
B) health savings account
C) flexible spending account
D) defined health benefit account

Question 51

Which of the following is a tax-free health spending and savings account available to individuals and families with qualified high-deductible health insurance policies?

A) defined health benefit plan
B) flexible spending account
C) health savings account
D) cash balance plan

Question 52

Stephanie, who belongs to a managed-care health organization, is experiencing knee pain and needs to see a specialist. Stephanie must first visit a primary care physician and receive a referral to see a knee specialist. Stephanie has access to out-of-network health care if necessary. Stephanie is most likely a member of a(n) ________.

A) health maintenance organization
B) exclusive provider organization
C) preferred provider organization
D) point-of-service

Question 53

Maura's retirement plan requires her employer to make specific contributions to a retirement fund established for Maura. Which type of plan does Maura most likely have?

A) defined contribution plan
B) deferred contribution plan
C) defined benefit plan
D) deferred salary plan

Question 54

The Patient Protection and Affordable Care Act of 2010 placed a limit of ________ on flexible spending accounts.

A) $500
B) $2,500
C) $4,500
D) $7,500

Question 55

What type of retirement plan has elements of both defined benefit plans and defined contribution plans?

A) 401(k) plan
B) 403(b) plan
C) benefit plan
D) cash balance plan

Question 56

A results-only work environment allows employees to ________.

A) take a specified number of days off each year for any purpose
B) work whenever and wherever they wish, as long as they complete projects on time
C) take temporary leaves of absence from work, usually at reduced pay
D) take time off to volunteer for worthy causes in their communities

Question 57

A defined contribution plan in which a firm contributes stock shares to a trust is known as a(n) ________.

A) shift differential
B) voluntary benefits
C) employee stock option plan
D) employee relocation benefits

Question 58

What type of retirement plan provides the participant with a fixed benefit upon retirement?

A) defined contribution
B) deferred contribution
C) defined benefit
D) deferred balance

Question 59

Leroy has a formal retirement plan based on his final years' average salary and years of service at Royce Pharmaceuticals. Which type of plan does Leroy most likely have?

A) defined contribution
B) defined benefit
C) cash balance
D) 401(k)

Question 60

If David uses an in-network provider of his employer's managed-care health organization, then he pays lower fees than if he uses an out-of-network provider. David is most likely a member of a(n) ________.

A) HMO
B) POS
C) PPO
D) FSA

Question 61

Curt has been offered a position with Premium Processing. As part of its benefits package, the firm offers child care, educational assistance, and relocation benefits. Which term best describes the benefits offered by Premium Processing?

A) voluntary benefits
B) cash balance plans
C) employee services
D) disability protection

Question 62

Through her employer, Jillian is able to purchase vision and dental insurance at a reduced rate. Jillian's employer pays any administrative fees. Jillian's employer most likely offers ________.

A) voluntary benefits
B) customized benefits
C) health savings accounts
D) flexible spending accounts

Question 63

Michael works as an engineer in Arizona, but he has been offered a better position with RayCo, a firm in Minnesota. RayCo will ship the family's belongings to Minnesota and will provide Michael and his family with temporary housing for three months. Which of the following best describes the type of compensation offered by RayCo?

A) flexible spending
B) relocation benefits
C) voluntary benefits
D) premium pay

Question 64

Jeff lost his job in November 2010. According to COBRA, Jeff may keep his employer's health care coverage until ________.

A) December 2010
B) May 2011
C) November 2011
D) May 2012

Question 65

Eliot receives overtime compensation when he works on Sundays and holidays in his job as a warehouse manager. Which of the following does Eliot most likely receive?

A) supplemental wages
B) voluntary benefits
C) premium pay
D) spot bonuses

Question 66

Which of the following permits employees to make yearly selections to largely determine their compensation package by choosing between taxable cash and numerous benefits?

A) employee stock option plans
B) customized benefit plans
C) health savings accounts
D) flexible spending plans

Question 67

Which term refers to company-paid shipments of household goods and temporary living expenses?

A) unemployment compensation
B) relocation benefits
C) premium payments
D) disability benefits

Question 68

Which Act is a 1990 amendment to the ADEA and extends its coverage to all employee benefits?

A) Health Insurance Portability and Accountability Act
B) Consolidated Omnibus Budget Reconciliation Act
C) Older Workers Benefit Protection Act
D) Employee Retirement Income Security Act

Question 69

Which law gives employees the opportunity to temporarily continue their health insurance coverage if they are terminated from their job?

A) Health Insurance Portability and Accountability Act
B) Consolidated Omnibus Budget Reconciliation Act
C) Americans with Disabilities Act
D) Rehabilitation Act

Question 70

Sara works from midnight until 8:00 a.m. as a technician at a manufacturing facility and earns an extra $3.00 per hour for the inconvenience. Which of the following does Sara most likely receive?

A) supplemental wage pay
B) shift differential pay
C) overtime pay
D) hazard pay

Question 71

Hazard pay and shift differential pay are types of ________.

A) customized benefits
B) overtime pay
C) voluntary benefits
D) premium pay

Question 72

Rodrigo is employed as a window washer for multiple skyscrapers in Chicago. Rodrigo receives additional pay for working under extremely dangerous conditions. Rodrigo most likely earns ________.

A) supplemental pay
B) overtime pay
C) premier pay
D) hazard pay

Question 73

The primary reason for enacting ERISA was to ________.

A) force insurance companies to accept workers with preexisting medical conditions
B) extend long-term healthcare coverage to unemployed individuals
C) require employers to create employee retirement plans
D) strengthen current and future retirement programs

Question 74

Additional money paid to an employee for the inconvenience of working undesirable hours is known as ________.

A) overtime pay
B) base pay
C) hazard pay
D) shift differential pay

Question 75

Anne, who has a preexisting medical condition, recently changed jobs. Which legislation was passed to protect individuals such as Anne?

A) Patient Protection and Affordable Care Act
B) Family and Medical Leave Act
C) Health Insurance Portability and Accountability Act
D) Consolidated Omnibus Budget Reconciliation Act

Question 76

Educational assistance, subsidized cafeterias, and relocation benefits are examples of ________.

A) mandatory benefits
B) employee services
C) severance pay
D) premium pay

Question 77

Which law provides protection for workers who are self-employed or move from one job to another?

A) Health Insurance Portability and Accountability Act
B) Consolidated Omnibus Budget Reconciliation Act
C) Americans with Disabilities Act
D) Rehabilitation Act

Question 78

The intent of which Act is to ensure that when employees retire, they receive deserved pensions?

A) Health Insurance Portability and Accountability Act
B) Consolidated Omnibus Budget Reconciliation Act
C) Older Workers Benefit Protection Act
D) Employee Retirement Income Security Act

Question 79

Which of the following employers must comply with the Family and Medical Leave Act?

A) Rand Automotive, 24 employees
B) Compton Electronics, 47 employees
C) McKnight Publishing, 82 employees
D) all of the above

Question 80

Which law prohibits discrimination in the administration of benefits on the basis of age, but also permits early retirement incentive plans as long as they are voluntary?

A) Rehabilitation Act
B) Civil Rights Act of 1964
C) Age Discrimination Act
D) Older Workers Benefit Protection Act