Question 1

Why are employee benefits significant to both employers and employees? What should an employer consider when developing a benefits mix?

Accepted Answer

The answer of Why are employee benefits significant to both...

Question 2

Melanie is determining what benefits mix will work best for Bob's Building Corp. Which of the following questions is LEAST relevant to Melanie during this process?
A)What are the firm's objectives?
B)What benefits are legally required?
C)What benefits do competitors offer?
D)What are the characteristics of the workforce?

Accepted Answer

While it is important to understand what benefits are legally required, it is not as relevant to the process of determining the best benefits for Bob's Building Corp as understanding the firm's objectives, competitors' offerings, and the characteristics of the workforce.

Question 3

Employee contributions to a qualified retirement plan are usually tax-deferred until the employee retires.

Accepted Answer

Employee contributions to a qualified retirement plan, such as a 401(k), are typically tax-deferred, meaning they are not taxed in the year they are contributed but will be taxed when withdrawn in retirement.

Question 4

Employers are legally required to provide health insurance to employees.

Accepted Answer

There is no federal law that requires employers to provide health insurance to employees. However, certain employers with 50 or more full-time employees may face a penalty if they do not offer affordable health insurance that meets certain requirements under the Affordable Care Act (ACA). Some states also have their own laws requiring employers to provide health insurance, but it varies by state.

Question 5

Sam was born in 1963. What is the earliest age that Sam can retire to receive full Social Security benefits?
A)65
B)66
C)67
D)68

Accepted Answer

The answer of Sam was born in 1963. What is...

Question 6

Additional Case 12.1
The HR Director of The Camera Center is leading the executive team through a review of the company's benefits plan. He begins by explaining how the firm funds the benefits plan. After a few questions on that matter, he moves on to clarify what they must offer by law and what benefits the firm would like to provide.
A highly entrepreneurial, performance-driven company, The Camera Center provides an excellent profit-sharing plan and one of the best retirement packages in the industry. The firm commits a high portion of compensation funds to the benefits plan. The workforce tends to be college-educated, young professionals who are just starting their families.
The CEO wants the total benefits plan reviewed and repackaged, if necessary, to align it with The Camera Center's business culture and strategy. He also wants to contain costs as much as possible and simplify benefits
administration.
-Refer to Additional Case 12.1. This company's benefits mix:
A)matches the firm's culture and objectives.
B)is almost the opposite of what the firm needs.
C)would be better if it included variable pay as well.
D)violates federal law because the firm doesn't offer health care.

Accepted Answer

The answer of Additional Case 12.1
The HR Director of The...

Question 7

The ________ is the complete package of benefits that a company offers its employees.

Accepted Answer

The answer of The ________ is the complete package of...

Question 8

Social Security does NOT include which of the following?
A)Retirement income
B)Disability income
C)Workers' compensation
D)Survivors' benefits

Accepted Answer

Social Security does not include workers' compensation benefits. Workers' compensation is a separate insurance program that provides benefits for employees who are injured or become ill as a result of their job. Social Security, on the other hand, provides retirement, disability, and survivors' benefits to eligible individuals and their families.

Question 9

The standard Social Security tax is applied to earnings up to $106,800. Over this amount, employees are taxed at a rate of ________ on all additional earnings.
A)1.45%
B)3.2%
C)5.65%
D)7.4%

Accepted Answer

The standard Social Security tax is applied only up to a certain earnings limit. Above this limit, only Medicare tax at a rate of 1.45% continues to apply to all additional earnings, without a cap.

Question 10

A company that focuses on providing job security and long-term employment is likely to devote a small portion of its compensation dollars to benefits.

Accepted Answer

A company that prioritizes job security and long-term employment is more likely to invest in employee benefits to attract and retain talent, as benefits can demonstrate a commitment to employee well-being and job satisfaction.

Question 11

Jessica recently had outpatient surgery. Her insurance plan requires a deductible of $500. This means that the insurance company will pay 100% of the first $500, but after that will only pay a percentage of the bill.

Accepted Answer

A deductible is the amount the insured must pay out of pocket before the insurance company starts to pay its share of the costs. So, if Jessica's deductible is $500, she must pay the first $500 of her medical expenses before her insurance begins to cover the costs.

Question 12

A standardized benefits package is most likely best for a:
A)new company with a highly diverse workforce.
B)firm that employs a homogeneous workforce.
C)firm that wants to provide employees with choices.
D)new company that wants to decentralize benefits.

Accepted Answer

A standardized benefits package is typically best for a firm that employs a homogeneous workforce because they have similar needs and preferences. In contrast, a highly diverse workforce may need more flexibility and choice in their benefits packages. Decentralizing benefits may also require more customization and may not be feasible for a new company. Providing choices is not necessarily incompatible with a standardized package, but it may require additional options within that package.

Question 13

The benefits mix for a company should be governed by its compensation strategy, its objectives, and the makeup of its workforce.

Accepted Answer

The benefits mix should align with the overall compensation strategy and objectives of the company, as well as consider the specific needs and preferences of its workforce.

Question 14

The cost of employee benefits has risen to nearly 50% of an employer's payroll costs.

Accepted Answer

The answer of The cost of employee benefits has risen...

Question 15

To design a successful benefits strategy, employers should most likely consider:
A)two areas: benefits amount and the flexibility of benefits.
B)two areas: benefits mix and the flexibility of benefits.
C)three areas: benefits mix, the flexibility of benefits, and the benefits amount.
D)four areas: benefits mix, the flexibility of benefits, the benefits amount, and benefits communication.

Accepted Answer

The answer of To design a successful benefits strategy, employers...

Question 16

Crescent Control Systems focuses on providing job security and long-term employment opportunities for its employees. Which of the following would most likely support Crescent's strategy?
A)Applying most compensation dollars towards productivity rewards
B)Using a large portion of its compensation budget for benefits
C)Providing workers' compensation coverage to all employees
D)Offering employees variable pay and family leave

Accepted Answer

Providing a large portion of the compensation budget towards benefits such as health insurance and retirement benefits can increase employee loyalty and make them more likely to stay with the company long-term, thus supporting Crescent's strategy of job security and long-term employment opportunities.

Question 17

On average, medical benefits and payments for time not worked consume about the same amount of each benefit dollar.

Accepted Answer

Medical benefits and payments for time not worked generally cost about the same amount per dollar spent on them.

Question 18

________ is a government program that provides income for retirees, the disabled, and survivors of deceased workers, and health care for the aged through the Medicare program.

Accepted Answer

The answer of ________ is a government program that provides...

Question 19

The benefits amount corresponds to which direct compensation decision?
A)Individual-based pay versus job-based pay
B)Fixed versus variable pay
C)Monetary versus nonmonetary rewards
D)Open versus secret pay

Accepted Answer

The benefits amount corresponds to the decision of fixed versus variable pay. Benefits are typically considered a form of fixed pay, as they are provided to employees regardless of their performance or productivity. Variable pay, on the other hand, is typically tied to performance or productivity and can fluctuate based on individual or organizational performance.

Question 20

A benefits program that allows employees to select the benefits they need most from a menu of choices is referred to as a(n)________.

Accepted Answer

The answer of A benefits program that allows employees to...

Quiz 12: Designing and Administering Benefits

Why are employee benefits significant to both employers and employees? What should an employer consider when developing a benefits mix?

Melanie is determining what benefits mix will work best for Bob's Building Corp. Which of the following questions is LEAST relevant to Melanie during this process?

Employee contributions to a qualified retirement plan are usually tax-deferred until the employee retires.

Employers are legally required to provide health insurance to employees.

Sam was born in 1963. What is the earliest age that Sam can retire to receive full Social Security benefits?

The ________ is the complete package of benefits that a company offers its employees.

Social Security does NOT include which of the following?

The standard Social Security tax is applied to earnings up to $106,800. Over this amount, employees are taxed at a rate of ________ on all additional earnings.

A company that focuses on providing job security and long-term employment is likely to devote a small portion of its compensation dollars to benefits.

Jessica recently had outpatient surgery. Her insurance plan requires a deductible of $500. This means that the insurance company will pay 100% of the first $500, but after that will only pay a percentage of the bill.

A standardized benefits package is most likely best for a:

The benefits mix for a company should be governed by its compensation strategy, its objectives, and the makeup of its workforce.

The cost of employee benefits has risen to nearly 50% of an employer's payroll costs.

To design a successful benefits strategy, employers should most likely consider:

Crescent Control Systems focuses on providing job security and long-term employment opportunities for its employees. Which of the following would most likely support Crescent's strategy?

On average, medical benefits and payments for time not worked consume about the same amount of each benefit dollar.

________ is a government program that provides income for retirees, the disabled, and survivors of deceased workers, and health care for the aged through the Medicare program.

The benefits amount corresponds to which direct compensation decision?

A benefits program that allows employees to select the benefits they need most from a menu of choices is referred to as a(n)________.