Deck 2: The Psychology and Economics of Employee Benefits

Question 1

Violations of psychological contracts are basically the same as unmet expectations.(Psychological Contract Violation)

Answer 1

False

Question 2

Employee benefits need to be considered as economic exchange between employer and employee rather than social exchange relationship.(How Employee Benefits Constitute Social Exchange)

Answer 2

False

Question 3

Being able to spread the administrative costs to larger groups of employees,to reduce the health insurance cost per employee,is referred to as what? (Cost Advantage)

A)Insurance pooling
B)Economies of scale
C)Economies of scope
D)Administrative underwriting

Answer 3

B

Question 4

Which of the following is not closely associated with the nature of transactional psychological contracts? (Psychological Contracts)

A)Economic and extrinsic focus
B)Close-ended,specific
C)Narrow scope
D)Long term relationship

Question 5

In insurance terms,what does adverse selection refer to? (Cost Advantage)

A)When employees choose an insurance plan they don't like,but are stuck with it for a year
B)When insurance companies use medical underwriting to choose who to insure
C)When employees are forced to choose between what they think are two inferior insurance programs
D)The tendency of an insurance pool to disproportionately attract "bad risk" employees and discourage "good risk" employees

Question 6

Why does health insurance become less expensive when the size of the insurance group increases? (Cost Advantage)

A)Administrative costs are lower,more employees are contributing co-payments,the threat of high-risk individuals driving out low-risk ones is less
B)Insurance is less risky to provide,the threat of high-risk individuals driving out low-risk ones is less,administrative costs are lower
C)More employees are contributing co-payments,insurance is less risky to provide,administrative costs are lower
D)Insurance is less risky to provide,more employees are contributing co-payments,the threat of high-risk individuals driving out low-risk ones is less

Question 7

Which of the following employee benefits is more relevant for relational psychological contracts? (Psychological Contracts)

A)Legally required benefits
B)Promotions
C)Life insurance
D)Accommodation and enhancement benefits

Question 8

The degree to which an increase in benefit costs is passed along to employees in the form of lower cash wages generally does NOT depend on which of the following factors? (Who Pays for Benefits?)

A)The cash value employees place on the benefits
B)The degree to which employers will increase or decrease their hiring when the market compensation level decreases or increases
C)Whether the benefit cost increases for all employers in a market or for a particular employer
D)Whether or not the employee is a manager

Question 9

What is medical underwriting? (Cost Advantage)

A)A process where employers have to verify the medical history of their employees
B)A process where the employer has to pay the difference for insuring high-risk employees
C)A process where employees provide their past medical history to insurers
D)A process where one insurance company combines with another to insure a company

Question 10

In 2013,which age group had the highest average total medical expenditures? (Cost Advantage)

A)Adults aged 65 an older
B)Adults aged 45-64
C)Adults aged 18-44
D)Children aged 5-17

Question 11

Which of the following can be avoided by using experience ratings? (Cost Advantage)

A)Adverse selection
B)Medical underwriting
C)Economies of sales
D)Insurance pooling

Question 12

Which of the following employee benefit might fulfill both transactional and relational expectations of employees? (Psychological Contracts)

A)Life insurance
B)Retirement
C)Legally required benefits
D)Accommodation and enhancement benefits

Question 13

What are the two basic causes for psychological contract violations? (Psychological Contract Violation)

A)Distributive and procedural justice
B)Reneging and incongruence
C)Changing composition of the workforce and the economic challenges
D)Legal and industrial environments

Question 14

Psychological contracts do not develop and change over time.(Psychological Contracts)

Question 15

What are the three main reasons that employers offer discretionary benefits? (The Economics of Employee Benefits: Why Do Employees Offer Benefits?)

A)Employers have a cost advantage,the benefits help in recruiting and retaining workers and the company gets tax incentives to offer them
B)It's required to by law,the company gets tax incentives to offer them,employers have a cost advantage
C)The company gets tax incentives to offer them,the benefits help in recruiting and retaining workers,it's required to by law
D)The benefits help in recruiting and retaining workers,employers have a cost advantage,it's required to by law

Question 16

What is an insurance pool? (Cost Advantage)

A)Insurance companies that join together to underwrite a self-funded insurance policy
B)Employers who join together to insurance all their employees under one policy
C)People who join together to by a group insurance policy
D)Insurance companies that join together to issue one large-group insurance policy

Question 17

Prime-age workers are in what age group? (Who Pays for Benefits?)

A)25 - 60
B)40 - 65
C)30 - 54
D)35 - 65

Question 18

Legally required benefits would form a part of employees' transactional expectation.(Psychological Contracts)

Question 19

Retirement plans is a good example of benefits that fulfill both transactional and
relational expectations.(Psychological Contracts)

Question 20

Violations of psychological contracts are likely to be more intense than unmet expectations because of feelings of betrayal and the onset of mistrust.(Psychological Contract Violation)

Question 21

Briefly discuss how workforce demographic changes can influence the employment relationship.(Workforce Changes and the Employment Relationship)

Question 22

Briefly discuss how employee benefits aid in recruiting certain types of workers.(Recruiting Certain Types of Workers)

Question 23

Discuss the issue of who pays for employee benefits.(Who Pays for Benefits?)

Question 24

Explain the concept of justice in a work setting and briefly describe the four types of justice perceptions.(Justice and Perceived Organizational Support)

Question 25

Discuss what psychological contracts mean in employee benefit practices and how psychological contract develop.(Psychological Contracts)