Deck 7: Compensating Employees

Question 1

Which of the following is categorized as an indirect payment portion of employee compensation?

A) wages
B) salaries
C) employer-paid insurance
D) bonuses

Answer 1

C

Question 2

Which of the following is true for employers who use independent contractors?

A) Fair Labor Standards Act regulations do not apply
B) Social Security taxes are higher than for regular employees
C) State income taxes are charged at a higher rate
D) Social Security taxes are charged at a higher rate

Answer 2

A

Question 3

Under which condition is it acceptable for employees of the opposite sex to receive different pay for doing roughly equivalent work?

A) when the difference exists despite equal skills
B) when the difference exists despite similar responsibility
C) when the difference exists because of a merit system
D) it is never acceptable

Answer 3

C

Question 4

Which compensation-related law contains minimum wage, maximum hours, overtime pay, equal pay, and child labor provisions?

A) Davis-Bacon Act
B) Fair Wages Act
C) Civil Rights Act
D) Fair Labor Standards Act

Question 5

According to the Family and Medical Leave Act, eligible employees can take up to ________ weeks of unpaid, job-protected leave for the birth of a child or for the care of a child, spouse, or parent.

A) two
B) four
C) six
D) twelve

Question 6

The Fair Labor Standards Act covers workers employed in ________.

A) manufacturing
B) retailing
C) service industries
D) All of the above.

Question 7

According to the Family and Medical Leave Act, eligible employees can take unpaid, job-protected leave for the ________.

A) care of a child
B) birth of a child
C) care of a parent
D) All of the above.

Question 8

The ________ prohibits discriminating against employees who are 40 years of age and older in all aspects of employment, including compensation.

A) Fair Labor Standards Act
B) Civil Rights Act
C) Equal Pay Act
D) Age Discrimination in Employment Act

Question 9

Which of the following professions is considered "nonexempt" from provisions of the Fair Labor Standards Act?

A) attorney
B) physician
C) management trainee
D) general manager

Question 10

Which law makes it illegal to discriminate against any individual with respect to compensation because of race, color, religion, sex, or national origin?

A) Fair Labor Standards Act
B) Civil Rights Act
C) Employer Retirement Income Security Act
D) Davis-Bacon Act

Question 11

Direct financial payments include all of the following except:

A) wages.
B) insurance.
C) salaries.
D) incentives.

Question 12

According to the Fair Labor Standards Act, if a worker covered by the act works more than 40 hours, he or she will receive overtime pay at a rate of ________ of normal pay for any hours worked over 40 in a workweek.

A) 50%
B) 100%
C) 125%
D) 150%

Question 13

Which of the following factors affects the design of any pay plan?

A) legal
B) union
C) equity
D) All of the above.

Question 14

Jack worked 6 hours of overtime this week but has decided to take time off instead of overtime pay. How many hours will Jack get off?

A) 3 hours
B) 6 hours
C) 9 hours
D) 12 hours

Question 15

Which of the following is addressed by the Fair Labor Standards Act?

A) minimum wage
B) maximum hours
C) child labor
D) All of the above.

Question 16

All of the following occupations are exempt from the overtime provisions stated in the Fair Labor Standards Act except:

A) physicians.
B) dentists.
C) management trainees.
D) teachers.

Question 17

Jill works as a cashier at a grocery store. She earns $8 an hour (or $320 for a 40-hour week). Last week, she worked 44 hours. Given standard requirements from the FLSA, what did she earn last week?

A) $320
B) $336
C) $344
D) $368

Question 18

Which of the following occupations must adhere to overtime and minimum pay provisions stated in the Fair Labor Standards Act?

A) paralegals
B) pharmacists
C) attorneys
D) department heads

Question 19

________ refers to all forms of pay or rewards going to employees and arising from their employment.

A) Reimbursement
B) Employee compensation
C) Salary
D) Benefits

Question 20

The ________ states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work.

A) American Disabilities Act
B) Civil Rights Act
C) Employer Retirement Income Security Act
D) Equal Pay Act

Question 21

Unions negotiate all of the following pay-related issues except:

A) wage rates
B) income security
C) unpaid leave to care for an immediate family member
D) time off with pay

Question 22

The ________ allows a firm to borrow against employee stock held in trust.

A) Fair Labor Standards Act
B) Civil Rights Act
C) Employer Retirement Income Security Act
D) National Labor Relations Act

Question 23

The point method of job evaluation entails ________.

A) identifying several compensable factors, each having several degrees, and the degree to which each of these factors is present in the job
B) ranking each job relative to all other jobs based on some overall factor
C) using raters to categorize jobs into groups
D) deciding which jobs have more of the chosen compensable factors

Question 24

When using the job classification method of job evaluation, raters categorize jobs into groups of similar jobs called ________.

A) classes
B) grades
C) sections
D) cohorts

Question 25

Which job evaluation method is a quantitative technique involving the identification of several compensable factors and the degree to which each of these factors is present in the job?

A) ranking method
B) point method
C) factor comparison
D) job classification method

Question 26

Factors that establish how the jobs compare to one another and set the pay for each job are called ________ factors.

A) compensable
B) job evaluation
C) ranking
D) analysis

Question 27

Which of the following is typically included in compensation packages for a company's top executives?

A) short-term and long-term incentives
B) perks
C) executive benefits
D) All of the above.

Question 28

A ________ is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

A) pay group
B) benchmark
C) pay grade
D) class

Question 29

Internal equity refers to ________.

A) how a job's pay rate in one company compares the job's pay rate in other companies
B) how fair the job's pay rate is, when compared to other jobs within the same company
C) the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance
D) the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay

Question 30

The ________ shows the pay rates currently paid for jobs in each pay grade, relative to the points or rankings assigned to each job or grade by the job evaluation.

A) pay group
B) pay grade
C) class
D) wage curve

Question 31

Jack is a sales manager and he recently learned that human resource managers with similar responsibilities and spans of control earn more than he does. Jack is concerned with the ________ form of equity.

A) external
B) internal
C) distributive
D) individual

Question 32

Which form of equity refers to how fair a job's pay rate is, when compared to other jobs within the same company?

A) external
B) internal
C) distributive
D) individual

Question 33

What is the purpose of the wage curve?

A) to show the relationship between the value of the job as determined by one of the job evaluation methods and the current average pay rates for your grades
B) to equate jobs of approximately equal difficulty or importance as established by job evaluation
C) to assign pay rates to pay grades
D) to choose benchmark jobs within each pay grade

Question 34

Which of the following is not one of the compensable factors emphasized in the Equal Pay Act?

A) skills
B) effort
C) accountability
D) responsibility

Question 35

When using the job classification method of job evaluation, raters categorize jobs into groups of jobs that are similar in difficulty but not in context called ________.

A) classes
B) grades
C) sections
D) cohorts

Question 36

Jason is an information systems technician in a town in North Carolina with a population of 100,000. He earns $35,000/year. He recently found out that a nearby town with a similar population pays people in the same position $40,000/year. Jason is concerned with the ________ form of equity.

A) distributive
B) procedural
C) internal
D) external

Question 37

External equity refers to ________.

A) how a job's pay rate in one company compares the job's pay rate in other companies
B) how fair the job's pay rate is, when compared to other jobs within the same company
C) the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance
D) the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay

Question 38

Which form of equity refers to how a job's pay rate in one company compares to the job's pay rate in other companies?

A) external
B) internal
C) distributive
D) procedural

Question 39

________ is a formal and systematic comparison of jobs to determine the worth of one job relative to another.

A) Job analysis
B) Job evaluation
C) Benchmark analysis
D) Job ranking

Question 40

Historically, the main issue in collective bargaining is ________.

A) time off with pay
B) wage rates
C) income security
D) health care benefits

Question 41

Approximately what percentage of employers offer some health insurance coverage?

A) 25%
B) 40%
C) 60%
D) 99%

Question 42

How does merit pay differ from a bonus?

A) Merit pay becomes part of an employee's base pay, but a bonus does not.
B) A bonus becomes part of an employee's base pay, but merit pay does not.
C) Merit pay is linked to individual performance, while a bonus is not.
D) A bonus is linked to individual performance, while merit pay is linked to company performance

Question 43

Companywide plans in which a corporation contributes shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm's stock for employees are called ________.

A) cash plans
B) Jefferson incentive systems
C) deferred profit-sharing plans
D) employee stock ownership plans

Question 44

The Scanlon plan includes all of the following features except:

A) improving productivity.
B) an emphasis on individual achievement.
C) sharing.
D) financial gains.

Question 45

Which of the following is true of recognition programs?

A) They have a positive impact on performance.
B) They are expensive to administer.
C) They reduce extrinsic motivation.
D) Both A and B.

Question 46

Which profit-sharing plan provides tax advantages for the employer at fair market value?

A) cash plan
B) Jefferson incentive system
C) deferred profit-sharing plan
D) ESOP

Question 47

Gainsharing is an incentive plan that ________.

A) uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement
B) engages many or all employees in a common effort to achieve a company's productivity objectives with any resulting cost-savings gains shared among employees and the company
C) contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm's stock for employees
D) involves the firm simply distributing a percentage of profits as profit shares to employees at regular intervals

Question 48

Which plan uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement?

A) cash plan
B) Jefferson incentive system
C) deferred profit-sharing plan
D) employee stock ownership plan

Question 49

________ means collapsing salary grades and ranges into just a few wide levels or bands, each of which contains a relatively wide range of jobs and salary levels.

A) Comparable worth
B) Strategic compensation
C) Broadbanding
D) Job grading

Question 50

A company using competency-based pay compensates for all of the following except an employee's ________.

A) range of skills
B) job title
C) depth of knowledge
D) type of skills

Question 51

All of the following are advantages of team incentives except that:

A) team planning is reinforced.
B) worker's pay may not be proportional to his or her efforts.
C) jealousy is reduced.
D) collaboration is encouraged.

Question 52

The indirect financial and nonfinancial payments employees receive for continuing employment with the company are called ________.

A) reimbursement
B) employee compensation
C) salary
D) benefits

Question 53

According to the Sarbanes-Oxley Act of 2002, if a company must restate financial statements due to material noncompliance with a financial reporting requirement, the act requires that the CEO ________.

A) repay any bonuses received during the 12 months prior to the issuance of the financial statements in question
B) make a public apology to stock holders
C) resign from the position of CEO
D) All of the above.

Question 54

Supplemental executive retirement plans and supplemental life insurance are classified as ________ in executive compensation packages.

A) base pay
B) short-term incentives
C) long-term incentives
D) executive benefits

Question 55

A(n) ________ plan is an incentive plan that engages many or all employees in a common effort to achieve a company's productivity objectives with any resulting cost-savings gains shared among employees and the company.

A) Scanlon
B) Lincoln incentive
C) Gainsharing
D) ESOP

Question 56

What type of pay plan is being used when workers are paid a sum for each unit they produce?

A) base pay
B) competency-based pay
C) job-based pay
D) piecework

Question 57

________ is any salary increase the firm awards to an individual employee based on his or her individual performance.

A) Merit pay
B) Variable pay
C) Competency-based pay
D) Piecework

Question 58

Which incentive plan is based on a philosophy that managers and employees must cooperate together?

A) cash plan
B) Scanlon plan
C) deferred profit-sharing plan
D) employee stock ownership plan

Question 59

What type of profit-sharing plan involves the awarded shares of stock as part of the incentive plan?

A) cash plan
B) Lincoln incentive system
C) Jefferson incentive system
D) ESOP

Question 60

Nonfinancial payments like health and life insurance, pensions, time off with pay, and child care facilities are examples of ________.

A) variable pay
B) competency-based incentives
C) benefits
D) salary

Question 61

Which regulation covers pension plans and requires employers to have written plan documents that establish terms such as eligibility and participation?

A) Employee Retirement Income Security Act (ERISA)
B) Economic Growth and Tax Relief Conciliation Act
C) Newborn Mother's Protection Act
D) Health Insurance Portability and Accountability Act

Question 62

The Pregnancy Discrimination Act ________.

A) requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any employee not able to work, with respect to all benefits, including sick leave and disability benefits, health and medical insurance
B) covers pension plans and requires employers to have written plan documents that establish terms such as eligibility and participation
C) prohibits an employer's health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively-determined minimum stay
D) sets minimum requirements for protecting individuals' health-care data accessibility and confidentiality

Question 63

The ________ requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any employee not able to work, with respect to all benefits, including sick leave and disability benefits, health and medical insurance.

A) Family and Medical Leave Act
B) Pregnancy Discrimination Act
C) Comprehensive Omnibus Budget Reconciliation Act
D) American Disabilities Act

Question 64

Which of the following is false regarding the application of the Family and Medical Leave Act?

A) Up to 12 weeks must be granted in a twelve-month period.
B) To be eligible, an employee must have worked for the employer for at least twelve months.
C) No advance notice is necessary.
D) To be eligible, an employee must have worked for a minimum of 1250 hours in the past twelve months.

Question 65

Which of the following benefits could be awarded as workers' compensation?

A) cash benefit
B) medical services
C) time off with pay
D) Both A and B.

Question 66

The Family and Medical Leave Act ________.

A) provides guidelines regarding what rates of return employers should use in computing their pension plan values
B) ensures that an employer must grant an employee up to 12 weeks of leave in a twelve-month period for the birth or care of a newborn child, placement of a child for adoption, to care for a spouse, child, or parent with a serious health condition, or to care for the employee's own serious health condition
C) prohibits an employer's health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively-determined minimum stay
D) sets minimum requirements for protecting individuals' health-care data accessibility and confidentiality

Question 67

Which of the following benefits is required by federal or state law?

A) disability insurance
B) workers' compensation
C) paid time off for vacations and holidays
D) pensions

Question 68

Which regulation listed below requires that most private employers continue to make health benefits available to terminated or retired employees and their families for a period of time?

A) Family and Medical Leave Act
B) Pregnancy Discrimination Act
C) Comprehensive Omnibus Budget Reconciliation Act
D) Health Insurance Portability and Accountability Act

Question 69

The goal of ________ is to provide sure, prompt income and medical benefits to work-related accident victims or their dependents, regardless of fault.

A) severance pay
B) sick leave
C) workers' compensation
D) the Health Insurance Portability and Accountability Act

Question 70

Which health benefit listed below is offered by almost all employers?

A) mental health insurance
B) chiropractic insurance
C) medical care insurance
D) wellness program

Question 71

The full retirement age according to Social Security for individuals born in 1960 or later is ________.

A) 62
B) 65
C) 67
D) 70

Question 72

How many weeks may an employee take as unpaid leave under the Family and Medical Leave Act?

A) two
B) four
C) six
D) twelve

Question 73

Holidays, vacations, jury duty, funeral leave, military duty, personal days, sick leave, sabbatical leave, and maternity leave are classified as ________ benefits.

A) supplemental pay
B) insurance
C) services
D) premium

Question 74

A(n) ________ is a medical organization consisting of specialists operating out of a community-based health care center that provides routine medical services to employees who pay a nominal fee.

A) PPO
B) HMO
C) DMO
D) hospital

Question 75

________ are groups of health care providers that contract with employers, insurance companies, or third-party payers to provide medical care services at a reduced fee.

A) PPOs
B) HMOs
C) DMOs
D) Hospitals

Question 76

Which regulation ensures that an employer must grant an employee up to 12 weeks of leave in a twelve-month period for the birth or care of a newborn child, placement of a child for adoption, to care for a spouse, child, or parent with a serious health condition, or to care for the employee's own serious health condition?

A) Family and Medical Leave Act
B) Economic Growth and Tax Relief Conciliation Act
C) Job Creation and Worker Assistance Act
D) Newborn Mother's Protection Act
E) Health Insurance Portability and Accountability Act

Question 77

The Comprehensive Omnibus Budget Reconciliation Act requires most private employers to continue to make health benefits available to terminated or retired employees and their families for a period of time, generally ________.

A) 6 months
B) 12 months
C) 18 months
D) 24 months

Question 78

Who contributes funds to workers' compensation benefits?

A) each state
B) federal government
C) employers
D) All of the above.

Question 79

________ provides benefits if a person is unable to work through no fault of his or her own.

A) Supplemental pay benefits
B) Unemployment insurance
C) Retirement
D) Health insurance

Question 80

Which of the following conditions must be met for an injured employee to earn workers' compensation from his or her employer?

A) The injury must have occurred while the employee was on the job.
B) The employee suffered the injury through no fault of his or her own.
C) The employee must have worked for a minimum of 1250 hours during the past twelve consecutive months.
D) All of the above.