HRM701 Chapter 11 Practice Test
Which of the following statements does NOT describe workers' compensation?
All employers pay the same premium rate to be eligible for workers' compensation.
1. What considerations should an organization make in implementing an effective benefits program?
Benefits are an established and integral part of the total compensation package. In order to have a sound benefits program, there are certain basic considerations. It is essential that a program be based on specific objectives that are compatible with the organization's philosophy and policies, as well as affordable. Through committees and surveys, a benefits package can be developed to meet employees' needs. Through the use of flexible benefit plans, employees are able to choose those benefits that are best suited to their individual needs. An important factor in how employees view the program is the full communication of benefits information through meetings, printed materials, and annual personalized statements of benefits.
Bob Jones has just been permanently laid off from his present position. His company, ACME Manufacturing, has issued Bob a cheque that represents one month's pay for every year Bob worked at ACME. What is this cheque?
Bob's severance pay
How are child-care programs and elder-care programs similar?
Both types of programs typically offer on-site care facilities.
Which of the following is a key reason why employers need to communicate the extent and value of the benefits they provide?
Employees generally underestimate the value of the benefits offered.
Canada has experienced a growth in the proportion of part-time workers (versus full-time) over the past decade. Which of the following is a key reason for this growth?
Employers tend to save on compensation costs as many part-time workers do not receive voluntary benefits
A primary objective of most benefits programs is to increase turnover. :T/F
F
At the present time, employers are required to provide pension plans to all full-time employees. :T/F
F
Benefit packages of any kind still help employers attract and retain quality employees. :T/F
F
Both employees and employers make contributions toward a workers' compensation fund. :T/F
F
Canadian employees may retire at age 45 and begin drawing a reduced pension from CPP/QPP and other sources such as RRSPs. :T/F
F
Employee assistance programs (EAPs) help employees mainly with relocation costs. :T/F
F
Employee assistance programs and wellness programs cannot help organizations cut the costs of health care benefits. :T/F
F
Employer health plans are generally restricted to medical, surgical, and hospital expenses. :T/F
F
In a defined contribution pension plan, the amount an employee is to receive upon retirement is specifically set forth. :T/F
F
It is primarily the responsibility of the employee to remain informed about the benefits he or she receives. :T/F
F
Legally -required benefits amount to 50 percent of the benefits packages that Canadian employers provide. :T/F
F
Long-term disability plans normally provide a disabled employee with 90-100 percent of their pre-disability income. :T/F
F
Once extremely popular, group life insurance for employees has steadily declined in use. :T/F
F
Only employees contribute to the Employment Insurance (EI) fund. :T/F
F
Since provincial health care benefits cover basic health care services, very few employers offer supplementary health benefits. :T/F
F
The Conference Board of Canada has concluded that it is not possible to contain the cost of employee benefit programs. :T/F
F
The declining cost of health care benefits provides Canadian organizations opportunities to reduce employee benefit costs. :T/F
F
With contributory pension plans, contributions are made jointly by employers and the government. :T/F
F
Workers' compensation insurance is based on a system of individual liability. :T/F
F
Compare and contrast the risks to the employee in regard to defined-contribution and defined-benefit pension plans.
In a defined benefit pension plan, retiring employees are guaranteed a particular payment level (i.e., the retirement benefit is "defined"). However, in a defined contribution pension plan, the only guarantee to employees is that the employer will contribute a set dollar amount on their behalf to the pension plan (i.e., the contribution is "defined"). While the pension benefits under a defined benefit plan are fixed, the pension benefits of the defined contribution plan vary according to the success of the plan's investments (i.e., superior investment decisions will yield greater pension payments than mediocre or poor decisions). Under the defined benefit plan, retiree risk is largely limited to whether the fund is properly funded and whatever effects inflation will have on their fixed pension cheques. Under the defined contribution plan, retiree risk is associated with the general risks and rewards of investments, the quality of investment advice, and the risks commonly associated with the defined benefit plans.
Omar Morales, an older employee, is considering an early retirement package that his employer has offered; it includes improved benefits and cash bonuses. Which of the following applies to this inducement?
It is called a silver handshake.
Ideally, which of the following should apply to an organization's benefits system?
It should be aligned to the overall strategy of the organization.
Employer-sponsored employee assistance programs (EAPs) are created to help workers overcome hurdles in their personal lives. Which of the following employees is the most likely to receive help under a typical EAP?
John Jones, who needs assistance to overcome a chemical dependency problem.
Which of the following statements does NOT describe management concerns about benefits?
Management is concerned with promoting a shift from a self-responsibility to entitlement mindset.
Explain the concept of family-friendly benefits. Name and discuss at least five of these benefits employers offer their employees.
Many organizations are seeking to create a family-friendly organizational environment that allows employees to balance work and personal needs. There are a wide variety of family-friendly benefits that organizations may offer. To help workers cope with a wide variety of problems that interfere with the way they perform their jobs, organizations have developed employee assistance programs. These programs provide diagnosis, counselling, and referral for advice or treatment when necessary for problems related to alcohol or drug abuse, emotional difficulties, and financial or family difficulties. Usually the organization covers—in part or totally—costs of tuition, books, and related fees. The increased employment of employees with dependent children and/or elder-care responsibilities has created an unprecedented demand for child-care and elder-care arrangements. In response, many organizations provide financial assistance and on-site child-care centres and support for elder-care. In addition, many organizations are implementing employee-accumulated leave days for dependent care and extended leave policies for child- and/or elder-care. In addition, organizations may also offer access to legal services, financial planning, housing and moving expenses, transportation pooling, credit unions, recreational and social services, and work-at-home arrangements/telecommuting to offer savings to employees and reduce stress.
"Payment for time not worked" includes statutory holiday pay, time off for bereavement, military duty, vacation pay, jury duty, rest periods, coffee breaks, and maternity leave (which usually involves some form of salary continuance). :T/F
T
Approximately one-third of Canadians have elder-care responsibilities. :T/F
T
Because of added expenses and complicated governmental rules, defined benefit pension plans are falling out of use. :T/F
T
Benefits programs should be based on specific objectives in line with the organization's strategic compensation plan. :T/F
T
CPP and QPP have universal portability—that is, an employee has the right to claim benefit credits wherever they are employed in Canada. :T/F
T
Canadian organizations are expected to continue to implement a wider variety of employee benefits and services. :T/F
T
Child-care, elder-care and extended leave policies are all examples of employee services. :T/F
T
Company-sponsored pre-retirement programs force employees to think about what their lives will be like after they leave the organization. :T/F
T
Employee benefits are a form of indirect compensation. :T/F
T
Employee benefits typically represent 40 percent of total payroll costs to employers.:T/F
T
Employees who resign from a position or who are terminated for cause may not be eligible to collect employment insurance (EI). :T/F
T
Employment insurance benefits are available for illness, injury, maternity, parental, and adoption leave. :T/F
T
Flexible benefits plans are also known as "cafeteria" plans. :T/F
T
Health care benefits are considered "discretionary" because employers are not required by law to provide them. :T/F
T
In Canada, the higher the household income, the lower the retirement age. :T/F
T
In a defined benefit plan, the retirement benefit is determined according to a pre-determined formula. :T/F
T
In addition to paid holidays, some employers give workers additional personal use days. :T/F
T
In the past two decades, more and more employees have been receiving dental care insurance as a benefit. :T/F
T
It would be desirable for employers to enlist employee participation in modifying a benefits program. :T/F
T
Many employers now offer additional health care benefits such as dental and prescription drug coverage. :T/F
T
Many employers provide unneeded and unwanted types of medical benefits to their employees. :T/F
T
Many firms outsource their cafeteria plans to a professional vendor because of the complexity of administering the system. :T/F
T
Most of the pension plans in privately held organizations are contributory. :T/F
T
Once employees have two years of service, they are considered, in terms of their pension fund, fully vested and locked-in. :T/F
T
Online benefits programs allow employees self-service freedom and availability virtually any time. :T/F
T
People who have been resident in a Canadian province for three months are eligible to receive health care benefits. :T/F
T
Severance pay is a one-time payment to employees who have been terminated. :T/F
T
Some benefits are now considered rights to which employees are entitled, rather than a gift of the employer:T/F
T
The Canada and Quebec Pension Plans both require employer and employee contributions. :T/F
T
The growth in health care costs can be attributed to a number of factors, including the greater need for health care by an aging population. :T/F
T
To reflect the social changes Canada is facing, employers are increasingly tailoring their benefits programs to be family-friendly. :T/F
T
When organizations need to reduce their workforce, "silver handshakes" are sometimes used to encourage employees to retire before they had originally planned. :T/F
T
Describe some of the ways employers have been trying to contain health care benefit costs.
The cost of health care programs has become the major concern in the area of employee benefits. Several approaches can be used to contain health care costs, including reduction in coverage, increased coordination of benefits, and increased deductibles. Employee assistance programs (EAPs) and wellness programs can also help cut the costs of health care benefits.
In Canada, registered retirement savings plans (RRSPs) have grown significantly over the past few years. Which of the following is a key reason for this growth?
The funds accumulate tax-free until they are withdrawn.
From a pension perspective, which of the following is a key issue concerning the aging of baby boomers in Canada?
There are fewer contributions to the pension fund by younger generations and more withdrawals for funding pensions for baby boomers, thus putting the fund at risk of depletion.
Which of the following best describes flexible benefit plans?
They allow employees to choose benefits suited to their needs
Which of the following is NOT a way that recessions and financial crises affect benefit programs?
They lead to increased benefits from charities.
Which of the following is NOT a potential advantage of family-friendly benefits?
They provide higher base pay, which helps with family budgets.
Bob Jindal works for RAY Vision Inc. The employer deducts money every month from his paycheque for his pension plan. RAY Vision matches this amount for his pension. What type of plan is this?
a contributory plan
Stella Vickram will receive a pension of $2,500 per month if she continues to work with ABC Media until she retires. She is now 45 years old. What type of plan is this?
a defined benefit plan
Susie Jones has definite preferences in terms of the benefits offered by her employer. Susie will be able to select the benefits she values highly and avoid those she does not need or want if her employer offers which benefit format?
a flexible benefits plan
Polaroid allows employees the opportunity to try out retirement with a leave program, or gradually reduce their work hours as they approach retirement age. This is an example of which of the following?
a pre retirement program
What does vesting guarantee?
accrued pension benefits at retirement age
Most pension plans are now viewed as providing deferred income that employees accumulate during their working life and that belongs to them after a specified number of years of service. Which of the following is this view based on?
an earnings philosophy
Which of the following usually increases the costs of benefits?
an increase in base pay
James Callaghan has worked full-time for BC Metals for four years. He has learned from the HR manager that his earned pension benefits cannot be revoked by the employer. Why is this so?
because the benefits are vested
How has the diverse workforce impacted benefits programs?
by requiring benefit programs to consider family-friendly options
Which of the following types of pension plan, with fixed payouts, is falling out of use?
defined benefit plan
Which of the following is a fast, convenient, and interactive way employees can learn about or change their benefits?
employee self-service (ESS) systems
Management at ABC Inc. wants to introduce a new benefit that is not required by law. Which of the following should it do first?
establish that there is a need for it
Which of the following is NOT an example of family-friendly benefits?
increased over time requirments
Which of the following is NOT a benefit of family-friendly programs?
increasing the risk of unionizations
Tommy Lee remembers his grandfather telling him how working in the coal mines was a tough job and that if you left the employer before retirement age, you did not get your pension. Which of the following applies to this type of pension?
it is based on reward philosophy
Which of the following is NOT a common reason why employees take early retirement?
job satisfaction
The Meat Shop, one of Canada's best employers according to a recent survey, is considering ways to contain its rising benefits costs. Which of the following is NOT a wise option?
making cuts to mandatory benefits
Which of the following do employers often use to obtain employee input regarding benefits packages?
opinion surveys
Many organizations use the services of professional benefits vendors to administer their benefits. What is this is a form of?
outsourcing
A key issue in the 2009 Toronto municipal workers' strike related to the use of banked sick days. Accumulation of sick days is generally regarded in the literature as which of the following?
pay for time not worked
Holiday pay, sick leave, and vacation pay are examples of which of the following?
payment for time not worked
Great Parcel Inc. has numerous office locations across Canada, including isolated areas with no access to the Internet. Which of the following would be the most efficient way to communicate a new benefit to all its employees?
payroll inserts
Which of the following would NOT be considered a primary objective of most benefits programs?
reducing turnover
Bob Sankar, an accountant at ABM Media Inc., earns below market compensation but continues to work with the organization because of its excellent retirement benefits. In this instance, which benefits objective is most relevant?
retention
Legally required employee benefits amount to 12 percent of the benefits packages that Canadian employers provide. Which one of the following benefits is not required?
retirement savings
Which of the following is NOT a benefit provided under CPP/QPP?
sick leave benefits
The collective bargaining agreement between ACME Inc. and the union CUPA 1003 Local requires the employer to provide a limited vision care package. Workers are demanding more. Who will determine any new package?
the employer and the union
Which of the following is NOT necessary for an organization to consider when developing its benefits program?
the globalization of benefits
The growth in health care costs can be attributed to a number of factors. Which of the following is NOT one of those factors?
the mandatory retirement age
A large portion of an organization's total payroll is devoted to employee benefits and this figure has risen over the past few decades. Which of the following has NOT contributed to this increasing cost?
the use of online, interactive benefits programs
Which of the following is based on the theory that work-related accidents and illnesses should be considered as a cost of doing business and that employees should not bear the costs of their treatment?
workers compensation insurance