Deck 6: Compensation and Benefits

Question 1

Broadbanding is a pay level model in which all jobs in a particular category are assigned a specific pay category.

Answer 1

True

Question 2

401(k) plans are popular as they do not require a vesting period before the employer will match the funds contributed.

Answer 2

False

Question 3

If employees are being paid fairly, they will not compare their own pay to that of others in the organization.

Answer 3

False

Question 4

A spot bonus is a planned bonus given to an employee for meeting a certain objective.

Question 5

The Equal Pay Act of 1963 set a minimum wage for jobs, overtime laws, and child labor laws.

Question 6

The absence of unions can lead to mandated pay scales.

Question 7

Pay systems can be used to reward individual or team performance and encourage employees to work at their own peak performance.

Question 8

When average salaries are targeted at the average salary levels of employees in comparable positions in our various labor markets, the market compensation policy is being used.

Question 9

Merit base is normally an annual pay increase tied to performance.

Question 10

A company may use a market plus philosophy because the industry's cutting-edge nature requires the best employees.

Question 11

When employees look at higher level jobs, lower level jobs, and years with the organization to make their decision on pay equity, they are evaluating the internal pay equity.

Question 12

The withdrawal of funds from workers' paychecks to pay for retirement benefits is called income tax.

Question 13

In a paired comparison, individual jobs are compared with one comparable job to determine the relative importance of one over the other.

Question 14

Preferred provider organization is a health-care plan that allows employees to see a physician outside the network.

Question 15

Leadership abilities are an example of compensable factors.

Question 16

Stock options involve the employee being given stock as reward for performance.

Question 17

When choosing a compensation management system, future capabilities refers to the ability of the chosen technology to match the changing needs.

Question 18

A compensation package can include pay, health-care benefits, and other benefits such as 401(k) plans.

Question 19

The delayering and banding process was evolved to reduce the pay levels in a hierarchy.

Question 20

An exempt employee is usually an hourly employee.

Question 21

Which of the following is an internal pay factor?

A) Inflation
B) Cost of living
C) Type of industry
D) Unemployment rates
E) Current economic state

Question 22

Which of the following is true with regard to pay grading?

A) Once the levels are developed, each job is assigned the same pay grade.
B) When employees receive minimal raises, they move to a higher pay grade.
C) This method is most appropriate when an organization seeks to hire the best talent.
D) The system ensures fairness and leaves little room for discrimination in pay.
E) Everyone performing the same job is not rewarded equally in this system.

Question 23

_____ is a type of job evaluation that focuses on three factors called know-how, problem solving, and accountability.

A) Job classification system
B) Point-factor system
C) Job ranking system
D) Hay profile method
E) Paired comparison method

Question 24

Which of the following pay level models cuts down the number of pay levels, thus enabling a broader range of pay and more flexibility within each level?

A) Variable pay system
B) Management fit model
C) Delayering and banding process
D) Going rate model
E) Pay grading system

Question 25

Which of the following is a pay factor that can lead to mandated pay scales?

A) Inflation
B) Cost of living
C) Type of industry
D) Presence of unions
E) Current economic state

Question 26

The _____ type of pay level model gives maximum flexibility for supervisors to pay what they think their subordinates should earn.

A) management fit
B) broadbanding
C) going rate
D) pay grading
E) delayering and banding

Question 27

A type of job evaluation system which determines the value of a specific job by calculating its compensable factors is the _____.

A) Hay profile method
B) job ranking system
C) paired comparison
D) job classification system
E) point-factor system

Question 28

Which of the following pay level models is appropriate for a company if market pressures or labor supply-and-demand pressures greatly impact the company?

A) Broadbanding
B) Delayering and banding
C) Pay grading system
D) Management fit model
E) Going rate model

Question 29

Under the _____ system, salary levels are based on an employee's traits or characteristics.

A) skill-based pay
B) variable pay
C) pay grading
D) competency-based
E) broadbanding

Question 30

_____ is a type of job evaluation method in which individual jobs are evaluated in relation to every other job, based on a ranking system, and an overall score is given for each job, determining the highest-valued job to the lowest-valued job.

A) Paired comparison method
B) Job ranking system
C) Point-factor system
D) Job classification system
E) Hay profile method

Question 31

_____ is defined as the process of determining the relative worth of jobs to determine pay structure.

A) Job design
B) Job specification
C) Job enlargement
D) Job enrichment
E) Job evaluation

Question 32

Which of the following is a job evaluation system in which every job is categorized based on the knowledge and skills required for the job, years of experience, and amount of authority for a particular job?

A) Job ranking system
B) Paired comparison method
C) Job classification system
D) Point-factor system
E) Hay profile method

Question 33

Following a _____ is to pay the going rate for a particular job, within a particular market based on research and salary studies.

A) management fit policy
B) market compensation policy
C) competency-based policy
D) broadbanding policy
E) skill-based policy

Question 34

The equity theory states that:

A) people will put in only as much work as they expect to receive in rewards.
B) people will evaluate their own satisfaction with their compensation/inputs by comparing it to others' compensation/inputs.
C) if high performance is followed by a reward, high performance is likely to happen in the future.
D) people will perform well only when their job-related skills are acknowledged and rewarded amply.
E) people are highly motivated to work in the absence of the pressure caused by variable pay systems.

Question 35

_____ is a type of job evaluation method in which job titles are listed and arranged in order of importance to the organization.

A) Point-factor system
B) Hay profile method
C) Job ranking system
D) Paired comparison method
E) Job classification system

Question 36

A _____ determines the going rate and supplements it with a percentage of that rate.

A) skill-based system
B) competency-based system
C) market plus philosophy
D) market minus philosophy
E) management fit model

Question 37

The process of setting the pay scale for specific jobs or types of jobs is called _____.

A) pay grading
B) delayering
C) variable pay system
D) management fit
E) going rate model

Question 38

When a pay system links the attainment of certain goals or achievements directly to the employee's pay, a _____ is being used.

A) going rate model
B) competency-based system
C) management fit model
D) skill-based pay system
E) variable pay system

Question 39

A _____ pays a particular percentage less than the market.

A) skill-based system
B) market plus philosophy
C) competency-based system
D) management fit model
E) market minus philosophy

Question 40

Which of the following is the step that succeeds the recruitment and selection process in HRM?

A) Determination of compensation and benefits
B) Determination of strategic goals and plans
C) Development of retention plans for employees
D) Career development and succession planning
E) Determination of human resource needs

Question 41

_____ are given for meeting certain performance standards, such as meeting sales targets.

A) Health benefits
B) Incentives
C) 401(k) plans
D) Fringe benefits
E) Tax exemptions

Question 42

_____ provides income to individuals should they be injured or need long-term or short-term care resulting from an illness.

A) Disability insurance
B) Health-care plans
C) 401(k) plans
D) Pension plans
E) Medical insurance

Question 43

A strategy used by global companies is to develop a _____ compensation system, which means one pay system for all employees, regardless of where they live.

A) localized
B) secondary
C) centralized
D) comparable
E) domestic

Question 44

The minimum pay an employee receives is called _____.

A) merit pay
B) equal pay
C) unemployment compensation
D) overtime pay
E) base pay

Question 45

Which of the following legal provisions requires employers to withdraw funds from workers' paychecks to pay for retirement benefits?

A) Social Security Act of 1935
B) Health Insurance Portability and Accountability Act (HIPAA)
C) Federal Employees Compensation Act (FECA)
D) Fair Labor Standards Act (FLSA)
E) Equal Pay Act of 1963

Question 46

Which of the following represents a supplementation of pay for employees in response to the yearly rise in inflationary rates?

A) Merit pay
B) Medical insurance plans
C) Cost of living annual increases
D) Spot bonus plans
E) Profit-sharing plans

Question 47

Which of the following legal provisions requires companies to allow employees to extend their group health-care coverage for up to thirty-six months?

A) Social Security Act of 1935
B) Consolidated Omnibus Budget Reconciliation Act (COBRA)
C) Health Insurance Portability and Accountability Act (HIPAA)
D) Employee Retirement Income Security Act (ERISA)
E) Federal Employees Compensation Act (FECA)

Question 48

In a(n) _____ system, employees are paid based on the number of items that are produced.

A) piecework
B) hourly wage
C) competency-based
D) stock options
E) skill-based

Question 49

_____ states that people should be given similar pay if they are performing the same type of job.

A) Expectancy theory
B) Going rate model
C) Management fit model
D) Reinforcement theory
E) Comparable worth

Question 50

Which of the following is a feature of a fee-for-service health-care plan?

A) There may be a limited number of physicians and specialists for the employee to see.
B) The prior approval from the primary care physician is required before seeing specialists.
C) There is an out-of-pocket expense for the employee when he/she goes outside the plan to visit a doctor.
D) People are required to pay for medical expenses out of pocket and later reimburse them.
E) All medical facilities obtained will usually require a copayment by the employee.

Question 51

The _____ theory states that employees will put in as much work as they expect to receive.

A) equity
B) comparable worth
C) equal pay
D) reinforcement
E) expectancy

Question 52

Which of the following legal provisions limits the ability of an employer to deny or exclude someone for coverage because of a preexisting condition?

A) Social Security Act of 1935
B) Fair Labor Standards Act (FLSA)
C) Federal Unemployment Tax Act (FUTA)
D) Employee Retirement Income Security Act (ERISA)
E) Health Insurance Portability and Accountability Act (HIPAA)

Question 53

_____ is a program that links pay to how well the employee performs within the job, and it is normally tied to performance appraisals.

A) Pension plan
B) Base pay
C) Health-care program
D) Merit pay
E) 401(k) plan

Question 54

Sick leave, paid vacation time, health club memberships, daycare services, etc. make up the _____ that employees are given.

A) health benefits
B) 401(k) plans
C) fringe benefits
D) salary
E) commission plans

Question 55

Which of the following legal provisions provides for payments to workers who have been laid off?

A) Consolidated Omnibus Budget Reconciliation Act (COBRA)
B) Federal Employees Compensation Act (FECA)
C) Federal Unemployment Tax Act (FUTA)
D) Fair Labor Standards Act (FLSA)
E) Equal Pay Act of 1963

Question 56

A _____ is one in which the employee receives no base pay and entire pay is based on meeting sales goals.

A) profit-sharing plan
B) spot bonus
C) stock option
D) straight commission plan
E) stock ownership plan

Question 57

The _____ theory states that if high performance is followed by some reward, then it is more likely that the desired behavior will occur in the future.

A) reinforcement
B) equity
C) expectancy
D) comparable worth
E) equal pay

Question 58

Which of the following statements is true?

A) Salary is inclusive of compensation for overtime work.
B) Hourly wage and piecework system are forms of incentives.
C) Pay is the hourly, weekly, or monthly salary an employee earns.
D) Total pay is divided into pay and incentives.
E) Fringe benefits, health benefits, and 401(k) plans are a part of one's salary.

Question 59

Which of the following differentiates between stock options and employee stock ownership plans?

A) Stock options are a part of the salary received, while employee stock ownership plans are a form of the other compensations.
B) Stock options allow employees to buy stock at a fixed price, while employee stock ownership plans involve giving stock as reward for performance.
C) Stock options have a short-term validity, while employee stock ownership plans are applicable in the longer run.
D) Stock options are available to employees only, while employee stock ownership plans are given to outsiders too.
E) Stock options are provided on a team basis, while employee stock ownerships are offered at the divisional level.

Question 60

Which of the following legal provisions established a minimum wage for jobs and other conditions for pay?

A) Equal Pay Act of 1963
B) Federal Unemployment Tax Act (FUTA)
C) Social Security Act of 1935
D) Fair Labor Standards Act (FLSA)
E) Federal Employees Compensation Act (FECA)

Question 61

What is the market compensation policy? What are its two types?

Question 62

The process of setting the pay scale for specific jobs is called _____.

Question 63

Which of the following is an example of a paid vacation?

A) New Year's Day
B) Thanksgiving
C) Sabbatical
D) Christmas
E) Independence Day

Question 64

Differentiate between skill-based and competency-based pay systems.

Question 65

_____ is a US government agency created by the Employee Retirement Income Security Act (ERISA) to protect people from losing the benefits due to them at the end of their career.

A) Equal Employment Opportunity Commission
B) Pension Benefit Guaranty Corporation
C) Occupational Safety and Health Administration
D) Employees' Compensation Appeals Board
E) Bureau of International Labor Affairs

Question 66

A _____ has a set dollar amount that employees will receive at the end of their careers at the organization.

A) straight commission plan
B) profit-sharing plan
C) spot bonus plan
D) stock option plan
E) pension plan

Question 67

What are some of the pay decision considerations that must be kept in mind?

Question 68

What is job evaluation? Explain any two methods of conducting a job evaluation.

Question 69

The _____ states that if high performance is followed by some reward, then it is more likely that the desired behavior will occur in the future.

Question 70

In the context of 401(k) plans, the time period before the employer will match the employee funds contributed is called the _____ period.

A) matching
B) security
C) guaranty
D) sharing
E) vesting

Question 71

Describe the pay grading model along with its advantages and disadvantages.

Question 72

What is disability insurance?

Question 73

A _____ is a job evaluation system that determines the value of a job by calculating the total points assigned to compensable factors.

Question 74

A _____ is a compensation policy that determines the going rate and adds a percentage to the market rate, so pay is higher than the market.

Question 75

A _____ can include salary, bonuses, health-care plans, and a variety of other types of compensation.

Question 76

What is the role of the Pension Benefit Guaranty Corporation?

Question 77

What are the implications of the equity theory in HR?

Question 78

Describe commissions as one form of incentives.

Question 79

What are the goals of a compensation plan?

Question 80

Which of the following is true with regard to 401(k) plans?

A) If an employee leaves the job, his/her 401(k) plan expires.
B) These plans give all employees a minimum level of benefits and a set amount to spend on flexible benefits, such as additional healthcare or vacation time.
C) A 401(k) plan is a plan set up by the organization in which employees directly deposit money from their paycheck.
D) Employee Retirement Income Security Act (ERISA) makes it mandatory for employers to offer a pension or 401(k) plan.
E) These plans are freely available and do not create an additional administrative cost for the company.