Compensation Midterm (Ch. 5-8, 12, 13, 17)

What are the goals of the Employee Retirement Income Security Act (ERISA)?

-To protect the interest of approximately 100 million active participants -To stimulate the growth of pension systems in which employers are not required to offer a pension plan

How many quarters of coverage will insure any worker for life?

Forty quarters

The Maintenance Act of 1973 (effect of legislation of employee benefits)

Mandated employers to provide alternative health coverage options to employees

Workers' compensation (types of govt that mandates this employee benefit)

State

Which of the following bars wage discrimination on the basis of gender if workers perform equal work in the same firm?

The Equal Pay Act of 1963

Medicaid (national health insurance plans)

This insurance plan covers the poor.

For organizations using a skill-competency-based pay system or generic job descriptions, the best approach for pricing jobs is A) benchmark conversion. B) the low-high approach. C) survey leveling. D) the benchmark job approach.

B) the low-high approach.

Which of the following is an advantage of the skill-based structure? A) Continuous learning flexibility B) Lateral movement C) Pay based on value of work performed D) Cost control via certification

A) Continuous learning flexibility

Which of the following statements is true regarding broad bands? A) They foster cross-functional growth. B) They remove limits on total salary budgets. C) They support recognition via titles or career progression. D) They increase the hierarchical nature of organizations.

A) They foster cross-functional growth.

Which of the following is NOT true of the usage of multiple plans versus single job evaluation plans? A) Employers rarely evaluate all jobs in an organization at one time. B) Many employers design different evaluation plans for different types of work. C) Typically, a related group of jobs is used for evaluation. D) A single universal plan is acceptable to employees if the work covered is highly diverse.

D) A single universal plan is acceptable to employees if the work covered is highly diverse.

In the context of the Equal Pay Act of 1963, which of the following criteria are affirmative defenses?

-Quality or quantity of production -Some factor other than sex -Seniority -Merit or quality of performance

________ is a crucial factor that affects the perception of fairness of a skill-based plan. A) The number of weights and factor degrees B) The extent of alignment with an organization's strategy C) The number of compensable factors D) The design of the certification process

D) The design of the certification process

Druk, Inc. is a consulting firm with 10 employees. Each new client generates $10,000 in revenue. If the company hires another employee who brings in five new clients and all other factors of production are constant, which of the following statements is true? A) Druk needs to pay $50,000 as wage to the 11th employee to break even. B) Druk will break even if it hires a 12th employee for a wage of $50,000. C) Druk needs to pay $10,000 as wage to the 11th employee to break even. D) Druk will break even if it hires a 13th employee for a wage of $10,000.

A) Druk needs to pay $50,000 as wage to the 11th employee to break even.

Which of the following is NOT true of the relationship between employer size and its ability to pay? A) Talented individuals have a lower marginal value in a larger organization. B) Talented people prefer to work in larger organizations. C) The influence of talented people leads to more profits. D) Talented people can influence more people and decisions.

A) Talented individuals have a lower marginal value in a larger organization.

________ is an example of a bourse. A) The stated starting wage of a job in an ad B) The total compensation for a top athlete C) The price of a product on Amazon D) The price of a box of cereal at a grocery store

B) The total compensation for a top athlete

The final major decision in setting externally competitive pay and designing the corresponding pay structures is to A) interpret survey results and construct the market line. B) design grades and ranges or bands. C) construct a pay policy line that reflects external pay policy. D) select relevant market competitors.

B) design grades and ranges or bands.

According to Frito-Lay's list of competencies for managerial work, the behavior of modeling, teaching, and coaching company values is linked to the ________ competency dimension. A) leveraging technical and business systems B) doing it the right way C) leading for results D) building workforce effectiveness

B) doing it the right way

In the context of unequal pay for equal work, which of the following are included in factors other than sex?

-Shift differentials -Other reasons of "business necessity" -Differences based on ability, training, or experience -Temporary assignments -Bona fide training programs

What are the benefits that are given to employees under workers' compensation?

-Survivor death benefits -Medical care required to treat job-related injuries or illnesses

Which of the following represent government interests in compensation decisions?

-Whether systems for determining pay are fair -Safety nets for employees who are unable to work and for those who are unemployed -Protection of workers

What are the major provisions of the Fair Labor Standards Act of 1938 (FLSA)?

-minimum wage -hours of work -child labor

In the context of employee benefits, which of the following is a true statement about a Consumer-driven or High Deductible health care plan?

An employee pays all health care costs up to a pre-determined amount.

Which of the following are steps involved in establishing a comparable-worth plan?

-A single "gender neutral" point job evaluation plan for all jobs within a unit should be adopted. -Percentages of male and female employees in each job group should be identified.

What are the conditions for qualifying for the benefits of Social Security?

-A worker must work in covered employment. -A worker must earn a specified amount of money for each quarter-year of coverage.

Which of the following are features of a flexible employee benefit plan?

-Employees are allowed to directly identify the benefits of greatest value to them. -Benefit managers are capable of controlling benefit costs by constraining the dollars employees have to spend.

What are the primary sources of the pay gaps among both black and Hispanic men and women?

-Level of schooling -Work-related experience

Which of the following categories of benefits fall under Social Security?

-Old age or disability benefits -Lump-sum death payments -Benefits for dependents of retired or disabled workers -Benefits for surviving family members of a deceased worker

Which of the following cost control strategies for health care are considered to be less extreme?

-Point-of-service plans -Consumer-directed health care plans -Health Maintenance Organizations -Preferred Provider Organizations

The Pension Protection Act of 2006 defines pension plans less than _____ as 'at risk' plans.

70% funded

Skill-based plans tend to work best in organizations using a(n) ________ strategy. A) laissez-faire B) cost-cutter C) defender D) innovator

B) cost-cutter

Aging market data to a point halfway through a plan year is called A) matching. B) updating. C) lead/lag. D) leveling.

C) lead/lag.

Which of the following methods of financing employee benefit plans is typically preferred by organizations?

Contributory

The regulatory environment does not constrain the decisions of a compensation manager.

False

The Fair Labor Standards Act of 1938 (effect of legislation of employee benefits)

Introduced time-and-a-half overtime pay

Which of the following is true of the Employee Retirement Income Security Act (ERISA)?

It does not require that employers offer a pension plan.

Which of the following is a feature of an individual retirement account (IRA)?

It is used to store wealth accumulated in other retirement vehicles.

Employers pay insurance premiums to the _____ in order to protect employees from the potential risks of an organization going bankrupt or failing to meet its vested pension commitments.

Pension Benefit Guaranty Corporation

What do most organizations consider when evaluating the adequacy of employee benefits?

The financial liability of employees with and without a particular benefit

Identify a true statement about the cost effectiveness of employee benefits.

The majority of employee benefits are not taxable.

Noncontributory (methods of financing employee benefit plans)

Total costs are paid by employers.

The majority (1.4 million) of those earning minimum wage or less are in service occupations, mostly food service, where tips supplement hourly wages for many workers.

True

To discourage turnover, most companies make life insurance forfeitable when employees depart from the company.

True (Since most life insurance premiums are paid entirely by the employer.)

Which of the following examines pay received by women and minorities for the jobs they perform?

Valuation discrimination

The Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted by Congress in 1985 so that current and former employees and their spouses and dependents can avail _____.

a temporary extension of group health insurance when coverage is lost due to qualifying events

The 1993 Family and Medical Leave Act applies to _____.

all employers having 50 or more employees

An employer adopts new employee benefits offered by a competitor without careful consideration, just because the employer needs to avoid hard feelings. This is termed a _____.

bandwagon effect

For workers to be covered by unemployment insurance, they must satisfy the state requirements for wages earned or time worked during a specific time period referred to as ____ ____

base period

To be most effective, an employee benefit manual should _____.

be followed by repetition of the message in multiple media such as newsletters and social media

In the context of the impact of legislation on employee benefits, discrimination legislation states that _____.

benefits must be administered in a manner that avoids differentiating against protected groups

Flexible employee benefit plans are also known as _____.

cafeteria-style benefit plans

When an employee asserts that a specific event, such as disability, hospitalization, unemployment, has occurred and demands that the employer fulfill a promise of payment, ____ ____ arises.

claims processing

The money to pay for Social Security benefits comes from _____.

contributions made by employees

____ ____ applies different standards to different employees.

disparate treatment

The Department of Labor recognizes _____, mental or physical, as the degree of exertion actually expended in the performance of a job.

effort

____ ____ are that part of the total compensation package, other than pay for time worked, provided to employees in whole or in part by employer payments.

employee benefits

A(n) ____ ____ ____ (ESOP) plan is a defined contribution plan in which a company makes a tax-deductible contribution of stock shares or cash to a trust.

employee stock ownership (plan)

It is important to note that for every dollar that an employee pays as his or her share of social security, there is a matching amount paid by the _____.

employer

In most states, unemployment insurance is financed by _____.

employers

Enforced by the Office of Federal Contracts Compliance Programs (OFCCP), Department of Labor, ____ ____ ____ bars discrimination on the basis of race, color, religion, sex, or national origin.

executive order 11246

The Wage and Hour Division of the Department of Labor specifies stringent norms that must be satisfied in order for jobs to be ____ from minimum-wage and overtime provisions.

exempt

The extra amount of unemployment compensation paid by a company depends on its ____ ____

experience rating

The unemployment benefits of an unemployed worker are paid for by the _____.

firm or firms most recently employing that currently unemployed worker

Health care delivery through _____ enable employees to choose any health care provider.

indemnity plans

The term "reverse discrimination" is disliked by many people because they believe that _____.

it is still discrimination even if the group penalized is white males

A group of positions with similar duties and responsibilities that require similar qualifications, are filled by similar recruiting procedures, and are paid under the same pay schedule is known as a ____ ____

job group

As part of a health promotion initiative, StatexPro, a business analytics company, provides a special annual travel allowance up to $500 to employees who cycle to work on a daily basis. StatexPro's initiative is an example of a cost control strategy for health care that _____.

links incentives to healthy behavior

Life insurance coverage would typically be a group term insurance policy with a face value of _____.

one to two times an employee's annual salary

A good compensation manager should make decisions about outlays by considering that employee benefit costs are _____.

only one part of a total package of compensation costs

In the process of auditing employee benefits for cost containment opportunities, employers _____.

outsource benefits and administration

An employee pays all health care costs up to some pre-determined rate in a Consumer-driven or High Deductible health care plan. After that amount, the employee _____.

pays a rate of 10-35 percent of any additional medical services

In the context of the impact of legislation on employee benefits, the tax reforms of 1982 and 1986 _____.

permitted individual retirement accounts (IRAs) for eligible employees and established 401(k) programs

A ____-____-____ plan merges the benefits of Health Maintenance Organizations and Preferred Provider Organizations and allows individuals to select which plan to avail treatment from at the time that services are required.

point-of-service

The first step in a cost-centered approach to employee benefits requires _____.

policy decisions on the level of benefit expenditures acceptable both in the short and the long runs

____ ____ ____ determine pay for work done to produce goods and services contracted by the federal government.

prevailing wage laws

____-____ ____ offers a proportion of one's salary (about 60% on average) for temporary disability due to sickness or injury.

short-term disability

The dental equivalent of Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) is the ____ ____ ____

standard delivery system

The lack of representation of women in executive and director level positions in organizations is sometimes referred to as _____.

the "Glass Ceiling" effect

Profit-sharing plans can be considered defined contribution plans if _____.

the distribution of profits to employees is delayed until retirement

The Occupational Safety and Health Administration specifies _____.

the number of breaks that must be provided in an eight-hour workday

Employee benefits slowly became a costly entitlement of the American workforce because _____.

they were taken on faith without hard data about payoffs

The Pension Protection Act of 2006 was meant to safeguard the retirement income of employees and to _____.

transfer some responsibility for retirement savings from the employer to the employee

Who among the following is examining the validity of a job evaluation? A) Keira, who is measuring the degree to which the job evaluation plan matches an agreed-upon pay structure for benchmark jobs B) Laila, who is measuring the effectiveness of a formal appeals process C) Keith, who is surveying employee attitudes about the job evaluation plan D)Rita, who is requesting the management for a reanalysis and a reevaluation of the required skills as she feels her job has been evaluated incorrectly

A) Keira, who is measuring the degree to which the job evaluation plan matches an agreed-upon pay structure for benchmark jobs

Which of the following is linked to high pay levels? A) Higher training time B) Increased absenteeism C) Reduced vacancy rates D) Poorly performing employees

C) Reduced vacancy rates

Unemployment insurance and social security (types of govt that mandates this employee benefit)

Federal

Identify a true statement about a flexible employee benefit plan.

It allots employees a fixed amount of money and allows them to spend that amount in the purchase of benefit options.

The Patient Protection and Affordable Care Act of 2010 (effect that statutes have on employee benefits)

Requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship

Which of the following relieves an employer's liability in the event that a wound caused before employment combines with a wound caused during work to result in a disability greater than that caused by the latter alone?

Second-injury funds

Which of the following states that time spent on activities before beginning the "principal activity" is usually not compensable?

The Portal-to-Portal Act

Who pays for the majority of legal insurance premiums?

The employee

Before 1930, who was responsible for health care coverage in the United States?

The family

Administrative cost containment (the most prevalent practices that employers follow to audit their benefit options for cost containment opportunities)

The practice of controlling costs using policies such as seeking competitive bids for program delivery

Coordination of benefits (meanings of cost control strategies for health care)

This ensures no double payment when coverage exists under the employee's plan and a spouse's plan.

Medicare (national health insurance plans)

This insurance plan covers the elderly.

Benefits that are willingly provided by employers to an employee's unmarried partner are known as ____ ____ ____

domestic partner benefits

Which of the following factors have reduced the break-even point at which it pays employers to schedule longer hours and pay the overtime premium, rather than hire, train, and pay benefits for more employees?

-A workforce with improved skills and increased training costs per employee -Increased benefits costs

What are the types of pay discrimination recognized by the law?

-Access discrimination -Valuation discrimination

Many of the employee benefits that exist today were provided at employer initiative. Why did employers implement savings and profit-sharing plans?

-To improve job performance -To provide greater security for worker retirement years

According to the 1993 Family and Medical Leave Act, all eligible employees are entitled to _____ of unpaid leave for stated family or medical reasons.

12 weeks per year

According to the Fair Labor Standards Act of 1938, overtime provision requires payment at one-and-a-half times the standard for working more than _____.

40 hours per week

Which of the following affirmative defenses for unequal pay for equal work has brought about the greatest number of court cases?

A factor other than sex

Which of the following is the minimum wage for work done on covered government projects or purchases?

A government-defined prevailing wage

Which of the following is an assumption held by the labor supply model about the behavior of potential employees? A) Job seekers are unaware of job openings. B) Job seekers do not face barriers to mobility. C) The number of job seekers is low. D) Job seekers often lie on their résumés.

B) Job seekers do not face barriers to mobility.

Which of the following statements is true of pay level? A) The higher the pay level relative to what competitors pay, the lower the relative costs to provide similar products or services. B) Pay level is directly proportional to labor costs. C) Pay level is the same across all organizations for the same job. D) Pay level is independent of the number of employees in an organization.

B) Pay level is directly proportional to labor costs.

The exchange value of a job is its A) internal market value. B) content value. C) external market value. D) performance value.

C) external market value.

Which of the following statements is true of a job evaluation plan? A) it is always carried out separately for major domains of work B) it provides the impetus to increase job levels and titles C) it is developed using benchmark jobs and then applied to nonbenchmark jobs D) it excludes the pay decisions made by a company

C) it is developed using benchmark jobs and then applied to nonbenchmark jobs

When compensable factor importance weights are inferred using statistical methods, it is called: A) regression analysis. B) committee a priori judgment approach. C) policy capturing. D) factor analysis.

C) policy capturing.

Which of the following is a disadvantage of the point method? A) It does not communicate what is valued. B) It does not allow for comparisons. C) It can leave too much room for manipulation. D) It can become bureaucratic and rule-bound.

D) It can become bureaucratic and rule-bound.

Identify a statement that represents the evidence that employee benefits are cost-justified.

Employee benefits are known for helping in the retention of workers.

Identify a true statement about flexibility in cafeteria-style employee benefit plans.

Employees have great flexibility in choosing the benefit options of greatest value to them.

Employee financed (methods of financing employee benefit plans)

Employees pay total costs for some benefits.

Which of the following is true of the role of government in employment relationships?

General economic growth/demand and business activity can be influenced through government monetary policy.

Which of the following is a true statement about an employee benefit handbook that communicates employee benefits?

It consists of a description of all benefits, including coverage levels and eligibility requirements.

What is the purpose of the Pension Benefit Guaranty Corporation (PBGC)?

It guarantees payment of vested benefits to employees formerly covered by terminated pension plans.

Identify a true statement about employee benefit costs over a 20-year period between 1955 and 1975.

It increased at a rate almost four times larger than employee wages or the consumer price index.

Identify a true statement about workers' compensation.

It is a form of no-fault insurance.

The Consolidated Omnibus Budget Employees Reconciliation Act (COBRA) of 1984 (effect that statutes have on employee benefits)

Makes employees who resign or are laid off through no fault of their own eligible to continue receiving health coverage under the employer's plan at a cost borne by the employees

The Family Medical Leave Act of 1993 (effect that statutes have on employee benefits)

Mandates 12 weeks of time off for all workers at companies that employ 50 or more people

How do some employers get around the overtime requirement?

They categorize employees as executives.

Which of the following is an advantage of flexible employee benefit plans?

They help firms meet the changing needs of a changing workforce.

Identify a true statement about employee benefit costs between 1955 and 1975.

They increased at a rate almost four times greater than employee wages.

How do companies use defined benefit plans to cut cost?

They purchase annuities with insurance companies.

Coinsurance rates (meanings of cost control strategies for health care)

This refers to premium payments being shared by the company and employee.

_____ of the Civil Rights Act of 1964 bars discrimination on the basis of sex, race, color, religion, or national origin in any employment condition, including hiring, firing, promotion, transfer, compensation, and admission to training programs.

Title VII

Living wage laws have narrower coverage than minimum wage laws.

True (they cover only city (or state) employees and/or employers that do business with the city (i.e., contractors and subcontractors). Sometimes they cover only base wages, but more frequently they require health insurance, vacations, sick pay, job security, and provide incentives to unionize.)

During World War II and the Korean War, the climate fostered by wage and price controls provided a perfect opportunity for unions to flex the muscles they had gained under the _____.

Wagner Act of 1935

Lorenzo and Sophia, an unmarried couple, have been living together for over four years. Lorenzo's employer, a major investment bank, has been providing certain benefits to Sophia. In this scenario, the benefits received by Sophia are called _____.

domestic partner benefits

Johanna, an accountant at an auditing firm, consults a doctor about a preexisting inflammatory condition of the skin. After the consultation, the doctor prescribes medication and instructs Johanna to follow the treatment regimen. The doctor also makes Johanna sign a HIPAA (Health Insurance Portability and Accountability Act) document. The HIPAA document is most likely to benefit Johanna by _____.

prohibiting discrimination against Johanna on the basis of her health-related status

The length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan is referred to as ____

vesting

Which of the following are true of alternative work arrangements?

-Alternative work arrangements reduce direct labor costs. -Alternative work arrangements allow employers to easily expand and contract the labor force in response to fluctuation in sales.

What are the factors that need to be included in the employee benefits planning process?

-Integration of benefits with other compensation components -Strategies for ensuring adequacy of benefits -Plans to ensure external competitiveness

In the context of the Equal Pay Act of 1963, which of the following criteria are AFFIRMATIVE DEFENSES?

-Seniority -Merit or quality of performance -Quality or quantity of production -Some factor other than sex

KayDen Corp., a small organization with 15 employees, conducts job evaluation using the least expensive method for the first time. In this case, KayDen is most likely to have used the A) ranking method. B) classification method. C) Hay plan. D) point method.

A) ranking method.

Which of the following is a way to improve employer return on investment in employee benefits?

Allowing employees to choose the benefits they receive by introducing a flexible benefits package

Employers continue to hire until the marginal revenue of the last hire equals his or her wage rate. This is based on the first labor market theory assumption that: A) markets are competitive. B) workers are homogeneous and interchangeable. C) employers seek to maximize profits. D) pay rates reflect all costs of employment.

C) employers seek to maximize profits.

TreeWind, Inc. is a bookstore that uses skill and responsibility as its compensable factors. It assigns 20 percent weight to responsibility and 80 percent weight to skill. If the responsibility factor gets a score of 60 after multiplying the subfactors with their corresponding weights and if the skill factor has two subfactors that are rated as 4 and 5, what is the total weightage given to the job? A) 120 B) 40 C) 990 D) 420

D) 420

Pay ranges for office and production work commonly range between A) 15 and 30 percent. B) 40 and 60 percent. C) 30 and 40 percent. D) 5 and 15 percent.

D) 5 and 15 percent.

Affordable Care Act (national health insurance plans)

This insurance plan targets the uninsured.

Which of the following can be used as a tax-favored retirement savings plan?

An individual retirement account

Probationary periods (the most prevalent practices that employers follow to audit their benefit options for cost containment opportunities)

The practice of excluding new employees from employee benefit coverage until some term of employment is finished

Which of the following is an example of a quoted-price market? A) Streetcash, a website that allows buyers to negotiate product prices with sellers B) Gramspot, a website where cars are auctioned by sellers for charity C) Nile, a website that allows sellers to sell their products for a fixed price D) Vidwom, a website that allows buyers to bid for items sold by other users

C) Nile, a website that allows sellers to sell their products for a fixed price

Contributory (methods of financing employee benefit plans)

Employers and employees share the total costs.

Historically, organizations have provided equal employee benefits for both part-time workers and full-time workers.

False (Every organization has a variety of employees with different employment statuses. Historically, companies have provided far fewer benefits for part-time workers than for full-time workers.)

Heather, a law school graduate, applies for job at one of the leading corporate law firms in her hometown. In the interview, she is asked whether she has any intentions of getting married and having children in the near future. Male candidates applying for the same position are not asked these questions. In the context of discrimination under Title VII of the CIvil Rights Act of 1964, this scenario illustrates the concept of ____ ____

disparate treatment

How does a good compensation manager consider employee benefit costs?

As part of a total package of compensation costs

In the point method, the second step in designing a plan is to: A) determine the compensable factors. B) prepare a job evaluation manual. C) scale the factors. D) conduct job analysis.

A) determine the compensable factors.

Which of the following is an advantage of skill-based pay plans? A) They are viewed more favorably by courts than any other type of pay plans. B) They are less expensive than job-based plans. C) They guarantee a low rate of employee turnover. D) They aid in deploying workers in a way that better matches the work flow.

D) They aid in deploying workers in a way that better matches the work flow.

Identify the law that covers all employees of companies involved in interstate commerce or in the production of goods for interstate commerce.

The Fair Labor Standards Act of 1938

____ ____ provides a minimum wage tailored to living costs in an area.

living wage

What are the disadvantages of flexible employee benefit plans?

-They are subject to the nondiscrimination requirements in Section 125 of the Internal Revenue Code. -They increase administrative burdens and expenses.

Gramhold, Inc., a pharmaceutical company, reduces its ten salary grades to just three broad bands. Which of the following statements is most likely to be true in this case? A) Gramhold will experience more career moves within bands than career moves between bands. B) Gramhold will face difficulty in defining job responsibilities broadly with the new structure. C) Gramhold will offer recognition via titles rather than through cross-functional experience and lateral progression. D) Gramhold will find that the new structure hinders cross-functional growth.

A) Gramhold will experience more career moves within bands than career moves between bands.

Workers are covered by unemployment insurance regardless of whether they are unemployed through faults of their own.

False (must be determined to be unemployed through no fault of their own)

The Employee Retirement Income Security Act of 1974 (effect of legislation of employee benefits)

Set up the Pension Benefit Guaranty Corporation

Which of the following firms is using a cost control strategy to reduce health care costs by linking incentives to healthy behaviors?

The Fitness Quo, a fitness center that charges employees $500 more in health premiums if they fail to attend their biannual health checkups

Which of the following is an assumption of the demographic approach to determine employee preferences?

There are meaningful differences between groups in terms of benefit preferences.

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is designed to _____.

minimize an employer's ability to deny coverage for a preexisting condition

Which of the following can be attributed to the relatively modest increase in dental care costs?

-An excess supply of dentists -Stringent cost control strategies

Identify the ways in which employers can reduce the costs associated with unemployment insurance.

-By auditing compliance of terminated employees with unemployment insurance (UI) requirements -By auditing pre-layoff behavior of employees -By having a well-designed human resource planning system

How can a compensation manager ensure that compensation practices conform to judicial interpretation?

-By joining professional associations -By constantly reviewing compensation practices and their results

Identify the ways in which employers can increase the effectiveness of employee benefits.

-By planning, designing, and administrating benefits in a better way -By educating and creating awareness among employees about benefits

The federal government loosened wage and price controls during World War II and the Korean War.

False (During both World War II and the Korean War, the federal government instituted strict wage and price controls. The compliance agency charged with enforcing these controls was relatively lenient in permitting reasonable increases in benefits.)

Benefit limitations (the most prevalent practices that employers follow to audit their benefit options for cost containment opportunities)

The practice of limiting disability income payments to some maximum percentage of income

Copay (the most prevalent practices that employers follow to audit their benefit options for cost containment opportunities)

The practice of requiring employees to pay a fixed or percentage amount for employee benefit coverage

What is the biggest concern for individuals who receive health insurance under the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

The relatively brief qualifying period

The use of alternative work arrangements offers a way to meet rapidly changing economic conditions.

True (it reduces direct workforce costs (because there are no legally required benefits for non-employees and other benefits may not be offered) and permits easier expansion and contraction of the workforce in response to expansion and contraction of production/services (sales).)

____-____ legislation is meant to provide an income floor for workers in society's least productive jobs.

minimum-wage

According to the cost-centered approach to employee benefit programs, if a benefit forecast implies future cost containment may be difficult, the benefit should be given to employees only on a cost-sharing basis.

True (Management determines what percentage of cost it can afford to bear within budget projections, and the option is offered to employees on a cost-sharing basis, with projected increases in both employer and employee costs communicated openly.)

DSTDB Corporation, a digital marketing agency, establishes a new system to calculate salaries based on skill and proficiency level, years of experience, market value, and merit. Based on this new system, the agency grants salary hikes to 45 female employees whose salaries were less than the amount computed by the new system. However, the agency refuses to grant salary hikes to 63 male employees whose salaries were also less than the amount computed by the new system. In this scenario, DSTDB Corporation is in violation of the Equal Pay Act. This violation is an example of _____.

Reverse discrimination

Which of the following jobs would most likely fall into a fuzzy market? A) The position of vice president of a marketing firm that was filled by a marketing manager with 15 years of experience in the marketing field B) The position of sound engineer that was filled by a graduate with a degree in audio engineering C) The position of senior director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience D) The position of English professor that was filled by a Ph.D. holder in English language and literature with five years of teaching experience

C) The position of senior director of Future Vision Services that was filled by a software engineer with e-commerce, marketing, and theater experience

Identify a true statement about the role of employee benefits in attraction, retention, and motivation.

Retention is increased by benefits.

Which of the following are cost control strategies for health care that involve changes in the design or the administration of health insurance policies?

-Deductibles -Using intranet technology to allow employees access to online benefit information -Auditing of hospital charges for accuracy -Defining maximum payout schedules

In the context of vesting, which of the following conditions are included in the Economic Growth and Tax Relief Reconciliation Act of 2001?

-Full vesting after three years -20 percent vesting after two years and 20 percent each year thereafter

In the context of benefit administration issues, what are the major questions that arise in setting up an employee benefit package?

-How much choice should employees have from a range of benefits? -Who should be benefited or protected? -Are the selected benefits legally defensible? -How should benefits be financed?

Identify the examples of employee benefits.

-Life insurance -Workers' compensation

Which of the following are private sources of disability income?

-Long-term disability plans -Salary continuation plans

Identify the legal services provided by most legal insurance plans.

-Real estate matters -Traffic violations -Wills -Divorce

Lisa is a manager at Trell, Inc. When she hires her employees, she focuses on finding the right job for the right person. Which of the following pay plans is her employer most likely using? A) A job-based pay plan B) An aptitude-based pay plan C) A skill-based pay plan D) A competency-based pay plan

A) A job-based pay plan

Who among the following is most likely to be working for a company that uses a competency-based pay plan? A) Carlos, who focuses on obtaining certifications in her field to get a pay increase B) Julia, who focuses on getting promoted to get a pay increase C) Faiza, a manager who focuses on choosing the employees best suited for job roles D) Juan, a manager who focuses on controlling costs through budgets and work assignments

A) Carlos, who focuses on obtaining certifications in her field to get a pay increase

The reliability of job evaluation techniques is measured by: A) determining if different evaluators produce the same results. B) asking the question "What does the evaluation measure?" C) determining hit rates. D) surveying employee attitudes about the evaluation.

A) determining if different evaluators produce the same results.

Which of the following is a disadvantage of the ranking method of job evaluation? A) it fails to tell employees what is important about their jobs B) it is initially more expensive than other job evaluation methods C) it is difficult to explain to employees D) it consumes more time than other job evaluation methods

A) it fails to tell employees what is important about their jobs

The estimates of competitors' pay rates will be incorrect and the pay level and pay mix inappropriately established if: A) markets are incorrectly defined. B) the marginal revenue generated is low. C) employees demand for an increase in wages. D) the cost for procuring labor is high.

A) markets are incorrectly defined.

A study of 400 compensation specialists revealed that: A) job evaluation data had a larger effect on pay decisions than market data. B) market data had a substantially larger effect on pay decisions than job evaluation data. C) current pay data had a larger effect on pay decisions than market data. D) job titles had a larger effect on pay decisions than job evaluation data.

B) market data had a substantially larger effect on pay decisions than job evaluation data.

The first major decision in setting externally competitive pay and designing the corresponding pay structures is to A) construct a pay policy line that reflects external pay policy. B) specify the employer's competitive pay policy. C) conduct a job evaluation. D) select relevant market competitors.

B) specify the employer's competitive pay policy.

Which of the following is a way in which employers can control spiraling employee benefit costs?

By adopting a broad, cost-centered approach to benefits

Which of the following is true of weighted mean as a statistical measure to analyze survey data? A) It tells how similar or dissimilar market rates are from each other. B) It is frequently used to set pay ranges or zones. C) It captures the size of supply and demand in a market. D) It minimizes distortion caused by outliers.

C) It captures the size of supply and demand in a market.

Which of the following is true of the marginal revenue product model? A) It fails to tell managers how many people to hire. B) It helps separate the contributions of labor from those of other resources. C) It oversimplifies business conditions in the real world. D) It explains differences in workers' responses to offers.

C) It oversimplifies business conditions in the real world.

Which of the following is a characteristic of benchmark jobs? A) They have unstable pay differentials. B) They are unique to specific employers. C) They employ a reasonable proportion of the workforce. D) Their contents are obscure and change over time.

C) They employ a reasonable proportion of the workforce.

Most studies report that when different people rank-order jobs, the correlations are between: A) .55 and .66. B) .15 and .36. C) .35 and .46. D) .85 and .96.

D) .85 and .96.

Which of the following is an example of a company that uses broad banding? A) A company that has an unlimited total salary budget B) A company that pays all its employees the same salary C) A company that has pay guidelines and controls designed right into the pay system D) A company in which there are more lateral movements with no pay adjustment than promotions

D) A company in which there are more lateral movements with no pay adjustment than promotions

Which of the following is a difference between ranges and bands? A) Ranges give managers "freedom to manage" pay, whereas bands give managers "freedom with guidelines." B) Ranges eliminate layers of managerial job, whereas bands emphasize the importance of several layers of managerial jobs. C) Ranges are used by companies with global operations, whereas bands are used by companies with domestic operations. D) Ranges offer recognition via titles or career progression, whereas bands offer cross-functional experience and lateral progression.

D) Ranges offer recognition via titles or career progression, whereas bands offer cross-functional experience and lateral progression.

MXB, Inc. is a carwash service provider. It orders the jobs in the company on the basis of the least important job to the most important job. In this case, MXB is most likely using the: A) paired-comparison method. B) point method. C) classification method. D) alternation-ranking method.

D) alternation-ranking method.

Employees in a multiskill system earn pay increases: A) by increasing their productivity. B) based on job assignments. C) based on job content. D) by acquiring new knowledge.

D) by acquiring new knowledge.

Identify an assumption of the demographic approach that is used to gauge employee preferences.

Demographic groups can be recognized for which benefit preferences are fairly consistent across members of the group.

Identify a true statement about the cost-centered approach to employee benefit programs.

It requires benefit administrators to decide the cost commitments for an existing benefit package.

How do Consumer Driven Health Plans and High Deductible Plans help cut health care costs?

They shift much of the burden of purchasing health care over to employees.

Any civil case in which parties indicated their intent to sue on behalf of themselves as well as others not specifically named in the suit at some point prior to the final resolution of the matter is called a(n) ____ ____ ____

class action lawsuit

A ____ ____ ____ directs an employer to provide a particular amount of retirement pension, which is represented as either a fixed dollar or a percentage-of-earnings amount that increases with the seniority of the employee in the organization.

defined benefit plan

Ryan, an employee of an organization, claims that he had an on-the-job hand injury. Sara is the organization's claims processor. Arrange the steps Sara should take as part of claims processing in the correct order of occurrence.

1. Sara should find out whether the act claimed by Ryan has, in fact, occurred. 2. Sara should decide whether Ryan is eligible for the employee benefit if his assertion is true. 3. Sara should calculate the payment level of the employee benefit

Rank the steps involved in filing affirmative action plans in the correct order.

1. utilization analysis compares a contractor's workforce to the available external workforce 2. goals and timetables are developed for achieving affirmative action 3. action steps are developed for achieving goals and timetables

Which of the following is an example of a bourse market? A) Hardknox, a hardware store that sells all its products at 10 percent above the maximum retail price B) Neurofort, a website that sells surgical equipment in bulk at fixed prices C) Flatcake, a website that allows buyers to negotiate prices with the sellers of handmade goods D) Needlefarm, a store that sells premium furniture at discounted rates

C) Flatcake, a website that allows buyers to negotiate prices with the sellers of handmade goods

Asai uses a skill-based plan that establishes single flat rates for each skill level. Mark performs better than Steve even though Steve has more seniority. Which of the following statements is most likely to be true in this scenario? A) Steve will be given more incentives than Mark. B) Steve will be paid more than Mark as he has more seniority. C) Mark will be paid more than Steve as his performance is better. D) Both Mark and Steve will be paid the same amount.

D) Both Mark and Steve will be paid the same amount.

If Company A raises its pay rate by one dollar per hour to hire additional workers and competitors immediately match the increase, what will be the most likely result? A) Competitors of Company A will lose employees to Company A. B) Company A will hire higher quality workers. C) Company A will hire the needed workers at a higher wage rate. D) The labor costs for Company A will increase, but it will be unable to hire additional workers.

D) The labor costs for Company A will increase, but it will be unable to hire additional workers.

Class action lawsuits associated with equal employment opportunity/discrimination can be very costly to employers.

True (because they can include large numbers of potential plaintiffs (employees, former employees, potential employees))

Identify the law that bars discrimination on the basis of age and the law that bars discrimination on the basis of disability.

-The 1967 Age Discrimination in Employment Act -The 1990 Americans with Disabilities Act

The final step in designing a point plan involves A) developing online software support. B) scaling the factors. C) selecting compensable factors. D) communicating the plan and training users.

A) developing online software support.

A small lawn care company has two mowers and four employees. If it hires another employee and the factors of production remain the same, how will the productivity of the fifth employee compare to that of the current four employees? A) There is not enough information to determine productivity. B) The productivity will remain the same. C) The productivity will increase. D) The productivity will reduce.

D) The productivity will reduce.

A camper is an employee who ________ in a skill-based pay system. A) moves too quickly from job to job B) is a jack-of-all-trades C) tops out D) does not want to rotate jobs

D) does not want to rotate jobs

Identify a statute that affects most employee benefits, pension administration, and various sections of the Internal Revenue Code.

Employee Retirement Income Security Act (ERISA)

Working a night shift constitutes disparate working conditions.

False (Time of day (e.g., working a night shift) does not constitute dissimilar working conditions. However, if a differential for working at night is paid, it must be separated from the base wage for the job.)

A true statement about the cost effectiveness of employee benefits is that _____.

group-based employee benefits can be obtained at a lower rate than individual-based benefits

An employer adopts new employee benefits offered by a competitor without careful consideration, just because the employer needs to avoid hard feelings. This is seen particularly among employers who _____.

have strong commitments to having a totally or partially nonunion work force