Managing Comp exam 3

In an attempt to reduce the employee benefits cost to the company, GrindStop Corp. restricts the number of visits to the dentists covered in the dental plan to two per year for each employee. Which of the following cost-containment strategies is being used by GrindStop?

Benefit limitations

Which of the following theories states that people choose the behavior that leads to the most satisfactory exchange?

Expectancy theory

________ is employees' beliefs that higher job performance will be rewarded by the organization.

Instrumentality

DrenchFort Corp. is a small company that pays high wages. As its wages are high, it does not provide any benefits. Recently, it has noticed that its employee turnover has increased, so it decides to provide benefits to retain employees. Which of the following benefits is most likely to reduce turnover?

Medical coverage

Which of the following statements is true of workers' compensation benefits?

States vary in the size of the payout for claims.

________ have indirect pay-performance links and require employees to put up money to exercise grants.

Stock options plans

A person with low self-esteem is likely to seek

a large, decentralized organization with little pay for performance.

The Employee Retirement Income Security Act (1974) requires employers to mandatorily offer some form of pension.

false

The Family Medical Leave Act (1993) mandates a minimum of 20 weeks of leave for all workers at companies that employ less than 10 people.

false

The practice of administrative cost-containment practice primarily focuses on providing accommodations for employees to return to work after illness or disability.

false

Company X pays for performance. Allan, an employee of the company, is not in favor of this reward system and, therefore, leaves Company X in search of another company with different rules for getting rewards. This is an example of the:

sorting effect.

One of the best strategies for determining external equity is to conduct a benefit survey.

true

If you had repair work done on your car, the shop most likely used ________ to pay the mechanic.

a standard hour plan

Trumbrella Corp. is a pharmaceutical company. One of its employees reports that he has suffered an on-the-job injury caused by the slippery factory floor that resulted in severe damage to his backbone. When Trumbrella initiates its claims processing, it should first:

determine whether the accident actually happened.

Standard hour plans are better for nonrepetitive jobs requiring numerous skills for completion.

true

Vesting refers to 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.

true

________ requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action.

A Bedeaux plan

________ are defined benefit plans that look like a defined contribution plan.

Cash balance plans

Which of the following is a benefit under Social Security?

Lump-sum death payments

________ is a nonpermanent (variable) payment (bonus or lump sum) form of variable pay granted to employee as function of some (typically primarily subjective) assessment of individual employee performance.

Merit bonus

Which of the following statements is true of merit pay?

Merit programs are commonly designed to pay different amounts depending on the level of performance.

Which of the following statements is true of a pay-for-performance (PFP) plan?

Of the pay components, only base pay and across-the-board increases do not fit the PFP category.

________ relieve an employer's liability when a preemployment injury combines with a work-related injury to produce a disability greater than that caused by the latter alone.

Second-injury funds

________ is the value employees attach to the organization rewards received for job performance.

Valence

A benefit plan that allocates a set dollar amount to employees and allows them to select benefits is called a ________ plan.

a flexible benefit

Paying a dime for every bottle collected and turned to a collection center is an example of:

a straight piecework system.

According to the ________ theory of motivation, employees prefer certain or fixed income flows, such as wage or salary, to variable income flows, such as performance-based pay.

agency

The motivation triangle includes

culture

All of the following are advantages of flexible benefits EXCEPT:

decreased administrative expenses.

All employee benefits provided by employers are taxable.

false

Employees are the sole contributors to their cash balance plans.

false

Gain-sharing plans do not use a historical standard to set productivity standards since environmental conditions can change quickly.

false

Jim was a full-time student for four years, but he could not find a job after graduating. Jim is eligible to collect unemployment insurance.

false

Medicare is not a part of Social Security.

false

Scanlon plans are designed to lower labor costs by lowering the level of a firm's activity.

false

The free-rider problem is common in firms using individual incentive plans.

false

An employer experiencing high turnover and seeking to reduce pension costs is likely to prefer:

full vesting after three years.

When a company moves from an individual incentive plan to a group incentive plan, the company is most likely to experience

higher turnover among high performers.

Grabhouse, Inc. is experiencing an increase in the turnover rates of its top employees. Upon consulting with its managers for the reasons for this increase, Grabhouse finds that employees are uneasy about the current pay mix as it involves too many risky elements. In order to make its pay mix less risky, Grabhouse needs to:

increase the base pay component of its pay mix.

The typical employee can recall ________ percent of the benefits he or she receives.

less than 15

When employee performance is easily measured and the organization's performance is fairly stable over time, the most effective type of compensation is to offer

monetary rewards with large incentives.

The biggest cost-containment strategy in recent years is the movement to:

outsourcing.

A fast and efficient worker would earn more money under the Rowan plan than under the Halsey 50-50 plan.

true

A problem with incentive pay plans is workers may end up focusing exclusively on behaviors that are rewarded.

true

All incentive plans share an established standard against which worker performance is compared to determine the magnitude of the incentive pay.

true

Employees increasingly are expected to bear a share of the risks that businesses have solely born in the past.

true

Employees working under individual incentive plans tend to resist the introduction of new technology.

true

Evidence suggests that skill-based pay may not increase productivity.

true

In 2021, the total Social Security Tax on earnings is 7.65 percent, which is paid by both employees and employers for a total of 15.3 percent.

true

Individual incentives yield higher productivity gains than group incentives.

true

Life insurance is one of the benefits heavily affected by movement to a flexible benefit program.

true

Most employers prefer defined contribution pension plans to defined benefit plans.

true

Steve has a small company with 12 employees. One of his employees, Larry, has been laid off because his work has been outsourced. Larry had health coverage through Steve's company and wants to continue that coverage. According to the Consolidated Omnibus Budget Reconciliation Act, how long can Larry continue his coverage through Steve's company after being laid off?

0 months

Approximately ________ percent of private sector employees have access to paid life insurance.

56

Which of the following is an individual incentive plan?

A straight piecework system

Jennifer is hurt at work while driving a forklift. Her employer claims that she was injured as a result of her careless driving and is therefore not eligible for workers' compensation. What will be the outcome of the employer's challenge to her worker's compensation claim?

She will likely receive workers' compensation benefits.

Which of the following requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship?

The Patient Protection and Affordable Care Act (2010)

Which of the following companies uses probationary periods as a cost-containment measure?

DLG Corp., which excludes its new recruits from benefit coverage until they complete a year

When an organization's performance has frequent highs and lows, but individual performance is fairly stable and performance measures are clear, the most effective compensation mix is to offer

a large base pay and low incentive pay.

A possible avenue to improve employer return on investment in benefits is to provide employees with greater choice in the benefits they receive.

true