Question 1

Which of the following is a discretionary benefit?
A) unemployment insurance
B) disability insurance
C) FMLA leaves
D) Social Security

Accepted Answer

Disability insurance is discretionary and not required by federal or state laws. Employers are required to participate in Social Security and unemployment insurance and allow leaves associated with the Family and Medical Leave Act.

Question 2

Which gainsharing plan involves employees working on a guaranteed piecework basis?
A) current profit-sharing
B) deferred profit-sharing
C) Lincoln incentive system
D) earnings-at-risk pay plan

Accepted Answer

The basic difference among these plans is the formula employers use to determine employee bonuses. In one version of the Lincoln incentive system, first instituted at the Lincoln Electric Company of Ohio, employees work on a guaranteed piecework basis. The company distributes total annual profits (less taxes, 6% dividends to stockholders, and a reserve) each year among employees based on their merit rating.

Question 3

Gainsharing plans involve putting some portion of an employee's weekly pay at risk for the opportunity to earn incentives if the employee meets or exceeds his or her goals.

Accepted Answer

Gainsharing plans are incentive plans that engage 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. In an earnings-at-risk pay plan, employees agree to put some portion of their normal pay (say, 6%) at risk if they do not meet their goals, in return for the possibility of obtaining a much larger bonus (say, 12%) if they exceed their goals.

Question 4

Elizabeth works at an auto firm,which recently shut down for five weeks to change machinery.However,during the shutdown,Elizabeth was able to maintain her standard of living because of the firm's ________.
A) supplemental unemployment benefits
B) workers' compensation insurance
C) supplemental health benefits
D) disability insurance

Accepted Answer

Supplemental unemployment benefits are cash payments that supplement the employee's unemployment compensation, to help the person maintain his or her standard of living while out of work. They generally cover three contingencies: layoffs, reduced workweeks, and facility relocations.

Question 5

________ 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

Accepted Answer

Preferred provider organizations (PPOs) let employees select providers who agree to provide price discounts and submit to certain utilization controls, such as the number of diagnostic tests that can be ordered. The HMO is a medical organization consisting of numerous specialists operating out of a community-based health care center.

Question 6

Upon being hired as a marketing representative at Argo Pharmaceuticals,Shelly agreed to forego 10% of her normal pay if she failed to meet performance goals.In return,Shelly will receive a 10% bonus if she meets her goals and 13% if she exceeds her goals.In what type of plan does Shelly most likely participate?
A) earnings-at-risk pay plan
B) variable risk sharing plan
C) at-risk gainsharing plan
D) risk-reward stock plan

Accepted Answer

In an earnings-at-risk pay plan employees agree to put some portion (say, 10%) of their normal pay at risk (forego it) if they don't meet their goals, in return for possibly obtaining a much larger bonus if they exceed their goals.

Question 7

What is a stock option? What are some of the problems associated with rewarding managers with stock options?

Accepted Answer

The answer of What is a stock option? What are...

Question 8

Eric has worked full-time for a large manufacturing company for over 3 years.Eric and his wife have recently adopted a baby,and Eric wants to take time off from work to care for the child.Which of the following laws most likely applies to Eric's situation?
A) Pregnancy Discrimination Act
B) Family and Medical Leave Act
C) Title VII of the Civil Rights Act
D) Newborn Mother's Protection Act

Accepted Answer

Private employers of 50 or more employees must provide eligible employees (women or men) up to 12 weeks of unpaid leave for their own serious illness, the birth or adoption of a child, or the care of a seriously ill child, spouse, or parent.

Question 9

Keith works as a construction foreman,and he is viewed as a reliable,competent employee.Keith was recently injured in a car accident while on vacation,and his injuries are so severe that he will not be able to return to work.Which of the following would most likely provide Keith with benefits?
A) supplemental unemployment benefits
B) workers' compensation insurance
C) unemployment insurance
D) group life insurance

Accepted Answer

Unemployment insurance provides benefits if a person is unable to work through no fault of his or her own. Workers' compensation is for on-the-job injuries, and supplemental unemployment benefits provide a guaranteed annual income when certain industries are forced to shut down temporarily.

Question 10

An earnings-at-risk pay plan bases employee pay and bonuses on ________.
A) maximizing organizational performance
B) generating additional long-term sales
C) engaging in strategic objectives
D) achieving departmental goals

Accepted Answer

In an earnings-at-risk pay plan employees agree to put some portion (say, 10%) of their normal pay at risk (forego it) if they don't meet their goals, in return for possibly obtaining a much larger bonus if they exceed their goals. For example, put part of the employees' pay "at risk" by replacing 10% of each worker's wages with a 10% bonus if the company meets its goals plus an additional 3% bonus if it exceeds these goals.

Question 11

An employer's unemployment tax rate depends on the employer's ________.
A) total payroll costs
B) policy on retirements
C) supplemental pay benefits
D) rate of employee terminations

Accepted Answer

Unemployment insurance (or compensation) laws provide benefits if a person is unable to work through no fault of his or her own. The benefits derive from a tax on employers that can range from 0.1% to 5% of taxable payroll in most states. An employer's unemployment tax rate reflects its rate of employee terminations.

Question 12

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

Accepted Answer

Benefits-indirect financial and nonfinancial payments employees receive for continuing their employment with the company-are an important part of just about everyone's compensation. They include things like health and life insurance, pensions, time off with pay, and child care assistance.

Question 13

Health insurance,life insurance,pensions,and child care assistance are best categorized as ________.
A) compensation
B) incentives
C) benefits
D) rewards

Accepted Answer

Benefits are indirect financial and nonfinancial payments employees receive for continuing their employment with the company. They include things like health and life insurance, pensions, time off with pay, and child care assistance.

Question 14

Which of the following terms refers to benefits for time not worked such as unemployment insurance,vacation and holiday pay,and sick pay?
A) supplemental pay benefits
B) employee assistance
C) financial incentives
D) merit pay

Accepted Answer

Pay for time not worked-also called supplemental pay benefits-is the most costly benefit. Common time-off-with-pay periods include holidays, vacations, jury duty, funeral leave, military duty, personal days, sick leave, sabbatical leave, maternity leave, and unemployment insurance payments for laid-off or terminated employees.

Question 15

What are the advantages of employee stock ownership plans?

Accepted Answer

The answer of What are the advantages of employee stock...

Question 16

Which of the following is the LEAST relevant characteristic of an effective incentive plan?
A) Incentives are based on industry standards.
B) Rewards are attractive to targeted employees.
C) Incentives are linked to effort and performance.
D) Goals are specific, achievable, and challenging.

Accepted Answer

For incentive plans to be effective, there should be a clear link between effort and performance, and between performance and reward, and the reward must be attractive to the employee. The employee or employees must have specific challenging goals, and employees must have the skills and training to do the job. Industry standards are less relevant.

Question 17

According to the Comprehensive Omnibus Budget Reconciliation Act,how long are most employers required to make health benefits available to terminated or retired employees?
A) 6 months
B) 12 months
C) 18 months
D) 24 months

Accepted Answer

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires most private employers to make available to terminated or retired employees and their families continued health benefits for a period of time, generally 18 months. If the former employee chooses to continue these benefits, he or she must pay for them, as well as a small fee for administrative costs.

Question 18

Which of the following benefits is required by federal or state law?
A) disability insurance
B) workers' compensation
C) paid time off
D) pensions

Accepted Answer

Federal law requires that employers provide workers' compensation, but disability insurance, personal leave, health insurance, and pensions are optional for employers.

Question 19

Broad-based stock option plans are intended to ________.
A) motivate all employees at a firm
B) encourage management retention
C) monitor the decisions of executives
D) distribute earnings to boards of directors

Accepted Answer

Some companies offer "broad-based stock option plans" in which all or most employees can participate. The basic thinking is that sharing ownership in the company with employees makes motivational and practical sense.

Question 20

Enterprise incentive management software is used by managers to ________.
A) motivate employees to meet and exceed departmental goals
B) quantify correlations between pay and performance
C) select and develop mission-critical employees
D) monitor training and development needs

Accepted Answer

Many employers use enterprise incentive management software to correlate compensation with performance. With such software, a manager can conduct "what-if" analyses and reports and do trend analyses for performance data.

Quiz 11: Pay for Performance and Employee Benefits

Which of the following is a discretionary benefit?

Which gainsharing plan involves employees working on a guaranteed piecework basis?

Gainsharing plans involve putting some portion of an employee's weekly pay at risk for the opportunity to earn incentives if the employee meets or exceeds his or her goals.

Elizabeth works at an auto firm,which recently shut down for five weeks to change machinery.However,during the shutdown,Elizabeth was able to maintain her standard of living because of the firm's ________.

________ 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.

What is a stock option? What are some of the problems associated with rewarding managers with stock options?

Eric has worked full-time for a large manufacturing company for over 3 years.Eric and his wife have recently adopted a baby,and Eric wants to take time off from work to care for the child.Which of the following laws most likely applies to Eric's situation?

Keith works as a construction foreman,and he is viewed as a reliable,competent employee.Keith was recently injured in a car accident while on vacation,and his injuries are so severe that he will not be able to return to work.Which of the following would most likely provide Keith with benefits?

An earnings-at-risk pay plan bases employee pay and bonuses on ________.

An employer's unemployment tax rate depends on the employer's ________.

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

Health insurance,life insurance,pensions,and child care assistance are best categorized as ________.

Which of the following terms refers to benefits for time not worked such as unemployment insurance,vacation and holiday pay,and sick pay?

What are the advantages of employee stock ownership plans?

Which of the following is the LEAST relevant characteristic of an effective incentive plan?

According to the Comprehensive Omnibus Budget Reconciliation Act,how long are most employers required to make health benefits available to terminated or retired employees?

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

Broad-based stock option plans are intended to ________.

Enterprise incentive management software is used by managers to ________.