Question 1

A flexible benefits plan typically:

Accepted Answer

A flexible benefits plan allows employees to select the benefits they prefer from options established by the employer. This provides flexibility and customization for the employee while still allowing the employer to control the options available. Options may include things like health insurance, retirement plans, or other benefits.

Question 2

Dennis, the HR head of a company, is trying to convince the top management of the company to approve a wellness program. Which of the following, if true, would be a strong argument in favor of the program?

Accepted Answer

Employee retention is a strong argument as it directly benefits the company by reducing turnover costs and maintaining a stable workforce.

Question 3

Employee benefits can be constructively viewed as a(n):

Accepted Answer

Employee benefits can be a tool for competitive advantage as they can attract and retain talented employees, and contribute to overall job satisfaction and morale. This can give a company a competitive edge over other employers who may not offer as attractive of benefits packages.

Question 4

Which of the following best describes workers' compensation?

Accepted Answer

Workers' compensation refers to benefits provided to persons injured on the job. It is typically paid for by the employer and is designed to provide financial assistance to employees who suffer work-related injuries or illnesses.

Question 5

_____ refer to the compensation given to an executive if he or she is forced to leave an organization.

Accepted Answer

Golden parachutes refer to the compensation packages given to executives if they are forced to leave an organization, often due to a merger or takeover.

Question 6

Medicare is the health insurance program that was implemented by the government in 1965 to provide medical care primarily for:

Accepted Answer

Medicare was implemented to provide medical care for people over the age of 65. It also covers people with certain disabilities and people with end-stage renal disease. Government employees and cancer patients are not the primary target population of Medicare.

Question 7

In developed countries, _____ are far more likely to provide compulsory health plans for people, regardless of employment status.

Accepted Answer

In developed countries, governments are far more likely to provide compulsory health plans for people, regardless of employment status.

Question 8

Which of the following is a metric of sales programs in variable pay plans?

Accepted Answer

The answer of Which of the following is a metric...

Question 9

A problem with providing flexibility in benefit choice is that:

Accepted Answer

Providing flexibility in benefit choice can increase the risk of adverse selection by employees. Adverse selection occurs when employees who expect to have a greater need for a specific benefit are more likely to select that benefit, which can increase the cost for the employer. This can be a problem if the employer is trying to balance costs and provide a comprehensive benefits package for all employees.

Question 10

Cost sharing plans:

Accepted Answer

Cost sharing plans require employees to contribute a higher proportion of the costs for their health benefits, which can include deductibles, co-payments, and coinsurance. It is a way to shift some of the financial burden of healthcare costs from employers to employees. A, C, and D do not accurately describe cost sharing plans.

Question 11

Which of the following is a legally-required employee benefit that employers must provide?

Accepted Answer

Unemployment compensation is a legally-required employee benefit that employers must provide. It is a program that provides financial assistance to employees who have lost their jobs due to no fault of their own. Wellness programs, education assistance, and public-service leave are optional benefits that employers may choose to offer, but are not legally required to provide.

Question 12

_____ are special benefits-usually noncash items-for executives.

Accepted Answer

Perquisites, also known as "perks," are special benefits given to executives that are beyond their base salary or bonuses. These can include things like company cars, private jets, housing allowances, and other non-cash items. Executive salaries and base salaries are not necessarily synonymous with perks, and golden parachutes refer specifically to severance packages given to executives who are terminated or forced out of their positions, rather than ongoing benefits given to those in executive roles.

Question 13

The "clawbacks" provision in the _____ allows a company to recover any incentive-based pay that was paid out during the prior three years if it would not have been paid under restated financial statements.

Accepted Answer

The answer of The "clawbacks" provision in the _____ allows...

Question 14

A situation in which only higher-risk employees choose and use certain benefits under a flexible benefits plan provided by employers is referred to as _____.

Accepted Answer

This situation is known as adverse selection, where only employees who perceive themselves to be at higher risk are more likely to choose certain benefits offered by the employer. This can result in higher costs for the employer and may make it difficult to maintain a balanced risk pool.

Question 15

Which of the following is a metric of human resources in variable pay plans?

Accepted Answer

Employee satisfaction is a metric of human resources in variable pay plans as it measures the satisfaction and engagement of employees with their job and organization. It is a key factor in determining the success of variable pay plans in motivating and retaining employees. Revenue growth, customer satisfaction, and return on investment are metrics that measure the overall performance of the company and may not directly relate to the effectiveness of variable pay plans.

Question 16

Which of the following is an advantage of establishing employee stock ownership plans?

Accepted Answer

Employee stock ownership plans (ESOPs) provide firms with favorable tax treatment, as contributions to the ESOP are tax-deductible, and dividends paid on ESOP shares can also be tax-deductible under certain conditions.

Question 17

A vendor that provides administrative services to an organization is referred to as _____.

Accepted Answer

A third-party administrator (TPA) is a vendor or service provider that offers administrative services to an organization. These services can include payroll processing, benefits administration, and claims processing. TPAs are often used by organizations that want to outsource these administrative functions in order to save time and resources.

Question 18

Which of the following is a disadvantage of providing flexibility in benefit choice?

Accepted Answer

Offering flexibility in benefit choice may lead to employees choosing a benefits package that does not meet their needs or may be inappropriate for their situation. This can lead to dissatisfaction and a negative impact on employee retention. However, it is important to note that providing adequate education and guidance can mitigate this risk. The other options are incorrect as flexible benefits plans should not discriminate against any employees and should cover all employees, including those with higher risks.

Question 19

Which of the following statements is true of part-time employees?

Accepted Answer

Most employers do not provide extensive benefits to part-time employees, often offering limited benefits such as some paid time off.

Question 20

According to the provisions of the _____, publicly listed companies now must allow shareholders to vote on executive compensation.

Accepted Answer

The Dodd-Frank Act includes a provision that requires publicly listed companies to provide shareholders with a vote on executive compensation, known as "say on pay."

Quiz 8: Variable Pay, Executive Compensation, and Benefits