Deck 10: Compensation: Base Pay and Fringe Benefits

Question 1

The Equal Pay Act (EPA)of 1963 sets minimum wage,overtime pay requirements,and rules governing child labor.

Answer 1

False

Question 2

The Consolidated Omnibus Budget Reconciliation Act and the Family and Medical Leave Act both address an employees' right to maintain their health care benefits.

Answer 2

True

Question 3

FLSA's overtime provisions establish that employers pay workers at least 0.5 times their regular hourly rate for all work in excess of 45 hours in any workweek.

Answer 3

False

Question 4

The use of broadbanding is suited to situation where the compensation system should support team based pay plans.

Question 5

The term pay refers to all forms of financial returns and tangible benefits that employees receive as part of an employment relationship.

Question 6

The job title should be the determinative factor when deciding whether jobs are substantially equal.

Question 7

Team pay plans are based on the assumption that professional competence increases with training and longevity.

Question 8

The most common traditional pay structure involves grouping similar jobs into pay grades and assigning a salary range,with a minimum,midpoint,and maximum.

Question 9

Salary survey is the principal tool for establishing market pricing approach.

Question 10

Where an employee is subject to both the state (or city)and federal minimum wage laws,the employee is entitled to the lower of the two minimum wages.

Question 11

Managers should execute a compensation strategy that is in line with the organizations long-term strategy and as a consequence there is no need to consider the firms ability to pay.

Question 12

Know-how,problem solving,and accountability are the three major factors within the Hay plan.The impact of the job on end results is one of the sub factors of know-how.

Question 13

Cash compensation is the direct pay provided by employers for work performed.

Question 14

Uniform allowances and merit increases are examples of fringe compensation.

Question 15

Broadbanding allows managers to make very precise differentiations in pay through the large number of pay grades.

Question 16

Broadbanding can increase worker productivity and product quality,while decreasing absenteeism,turnover,and accident rates.

Question 17

According to equity theory,pay satisfaction is a function of the comparisons of an individual's input-outcome ratio with his or her perceptions about the input-outcome ratios of referent others.

Question 18

Pay rates provide increased flexibility that enables managers to consider particular job-related characteristics of individual employees or job candidates.

Question 19

In a point-factor plan,a job's relative worth is the sum of the numerical values for each degree within each factor.

Question 20

In the tax protection approach,firms withhold taxes based on the home-country tax obligation and pay all taxes in the host country.

Question 21

Which of the following are elements of cash compensation?

A)Base pay and pay contingent on performance
B)Legally required programs and discretionary programs
C)Base pay and discretionary programs
D)Discretionary programs and pay contingent on performance
E)base programs and legal contingency

Question 22

Which of the following law has a provision that workers employed in construction industry must be paid at the prevailing local pay rate when working on government contracts?

A)Fair Labor Standards Act (FLSA)of 1938
B)Equal Pay Act (EPA)of 1963
C)Davis-Bacon Act of 1931
D)Walsh-Healey Act of 1936
E)Services Contract Act of 1965

Question 23

Know-how,problem solving,and accountability are the three major factors within the Hay plan.Which of the following is a sub factor of know-how?

A)Freedom to act
B)The thinking environment in which problems are solved
C)Interpersonal skills
D)Magnitude
E)The impact of the job on end results

Question 24

Which of the following law amended the FLSA to include a prohibition against pay differentials based on gender?

A)Minimum Wage Law of 1938
B)Equal Pay Act (EPA)of 1963
C)Davis-Bacon Act of 1931
D)Walsh-Healey Act of 1936
E)Services Contract Act of 1965

Question 25

The __________ pension plan guarantees a specific payment based on a percentage of pre-retirement income.

A)accumulation
B)defined contribution
C)defined benefit
D)profit sharing
E)401K

Question 26

Determining a fair rate of pay for expatriates is complicated by issues such as exchange rates fluctuations.

Question 27

__________ means a company's pay practices are similar to the practices of other organizations competing for the same talent.

A)Externally equitable
B)Internally equitable
C)Market pricing
D)Benchmarking
E)Relevant salary market

Question 28

Which of the following is true about the point-factor plan?

A)Point-factor plans rank jobs in an organization purely based on a comparison of one against another.
B)The point-factor approach does not break jobs down into component parts and assigns point values for various characteristics.
C)Point-factor plans are inexpensive to design.
D)Point-factor plans tend to have a high level of integrity.
E)Difficult for organization to trace, analyze, and document differences among jobs.

Question 29

__________ involves comparing a specific position to the generic descriptors and deciding which level fits best.

A)Job ranking
B)Job analysis
C)Point-factor plans
D)Job classification
E)Job description

Question 30

When communicating benefits information to employees it is best to focus on general information that is relevant to all employees rather than focus on individual customized reports that explain the employee's coverages and costs.

Question 31

Foreign service premiums are provided with the intention to offer an incentive to take an expatriate assignment.

Question 32

A group of jobs having the same basic nature of work but requiring different levels of skill,effort,responsibility or working conditions are known as __________.

A)job classification
B)job family
C)job broadbanding
D)job evaluation
E)job hierarchy

Question 33

The defined benefit plans purchase insurance with the __________,which insures pension moneys in the event that the company goes bankrupt.

A)EEOC
B)DC
C)PBGC
D)FLSA
E)COBRA

Question 34

Which of the following are three major factors of the Hay plan?

A)Know-how, problem solving, accountability.
B)Problem solving, job rank, accountability.
C)Know-how, interpersonal skills, problem solving.
D)Physical demands, interpersonal skills, working conditions.
E)Education, experience, interpersonal skills.

Question 35

A loan clerk evaluating his/her pay relative to that of a teller within the company is an example of __________.

A)internal equity
B)external equity
C)pay equity
D)worth equity
E)wage equity

Question 36

Which of the following is an example of job family?

A)Secretary, receptionist, assembler
B)Word processor, receptionist, administrative assistant
C)Scientist, engineer, doctor
D)Lawyer, doctor, engineer
E)Psychologist, teacher, doctor

Question 37

You have just been hired into a job and you find that you are being paid at the max of the range for the grade.You hope to have a long career with this company and are hoping for a promotion within the year.Your reaction should be:

A) Glee, because they are showing how much they truly value you.
B)Anxiety, because you have no room for financial growth in this position.
C)Happiness, because you are making more than the guy hired after you.
D) Frustration, because of external equity factors.
E)Start looking for another job because you are being undervalued.

Question 38

When considering the compensation package of an expatriate moving to a location where housing costs are substantially lower than the home country,management should consider providing a housing allowance.

Question 39

When considering what level of benefits to provide to an expatriate,tax implications need to be considered.

Question 40

Which law focuses on three main areas: minimum wage,overtime pay,and child labor rules.

A)Fair Labor Standards Act (FLSA)of 1938
B)Equal Pay Act (EPA)of 1963
C)Davis-Bacon Act of 1931
D)Walsh-Healey Act of 1936
E)Services Contract Act of 1965

Question 41

Define and explain the differences between external and internal equity.What is a basic technique used to ensure each?

Question 42

List all the criteria that must be met to qualify for the executive employee exemption.

Question 43

The __________ program provides for medical expenses and pay in cases where the illness or injury is work related.

A)employee welfare
B)social security
C)workers' compensation insurance
D)unemployment compensation insurance
E)employee services

Question 44

Under the __________ program,eligible individuals are covered by a comprehensive program of retirement,survivor,disability,and health benefits.

A)employee welfare
B)social security
C)long-term capital accumulation
D)time-off plans
E)employee services

Question 45

Reasons why a company could see and increase in the cost of their unemployment insurance include?

A)Aggressively fighting unjustified claims for unemployment
B)Establishing an effective performance management system
C)Ensure that terminations are based on employee misconduct
D)Making a decision to have a mass layoff of 58% of the workforce
E)All of the above

Question 46

Explain the few ways in which reward systems can influence a company's success (or failure).

Question 47

All of the following are benefit programs that are federally mandated with the exception of:

A)Social Security
B)Vacation
C)Workers compensation
D)Unemployment compensation
E)All of the above, there are no exceptions

Question 48

What aspect of pay equity do wage and salary surveys help monitor?

A)Internal equity
B)Internal fairness
C)Individual equity
D)External utility
E)External equity

Question 49

Describe how you would use job evaluation to create internal equity.What are the pros and cons of using different job evaluation systems?

Question 50

All of the following are forms of direct compensation except?

A)Base salary
B)Dental benefits
C)Vacation
D)401K
E)Defined contribution pension

Question 51

Explain the demerits of the traditional approach to pay.

Question 52

A computer consulting company wants to determine the market rate for jobs within the organization.Discuss the steps the company should go through and the relevant factors that should be considered.

Question 53

The __________ policy requires a pay structure that is based on an internal assessment of job worth.

A)pay equity
B)supplement
C)compensation
D)minimum wage
E)labor

Question 54

List a few criteria's that will help an organization choose the type and the depth of the compensation analysis.

Question 55

Which of the following is not a component of compensation for international assignments?

A)Base salary
B)Foreign service premiums
C)Allowances
D)Benefits
E)Pay for performance

Question 56

In order to qualify for the executive employee exemption,the employee must be compensated on a salary basis at a rate not less than __________ per week.

A)$454
B)$545
C)$554
D)$544
E)$455

Question 57

What is comparable worth? How is it different from equal pay as defined by the Equal Pay Act?

Question 58

You have a business in south Florida.The minimum wage under the FLSA is $7.50/hour.Florida has set its minimum wage at $8.00/hour.You are required to pay your secretary:

A)Base pay of $7.50 plus benefits
B)Market rate regardless of if it is lower than either minimum standard
C)Base pay of $8.00/hour and minimum of $7.50/hour in medical benefits
D)Premium pay of $7.50/hour
E)Base pay of $8.00/hour

Question 59

What are the objectives of an effective compensation system?

Question 60

What are the different ways in which an organization structures its base salary program?