3330 exam 4 (ch 11&12)
Starting in 2018, earnings over the amount of _____ are not subject to Social Security tax.
$128,400
Richard earns $20 an hour and works a 40-hour week. He receives a 3 percent lump-sum increase (LSI) as his total yearly pay increase. Richard's base pay for the next year will be:
$20 per hour.
A(n) _____ allows for a percentage of an employee's pay to be withheld and invested in a tax-deferred account.
401(k) plan
_____ rewards individuals for the capabilities they demonstrate and acquire.
Competency-based pay
Which of the following benefits is voluntary?
Dental care
Which of the following provisions of the Patient Protection and Affordable Care Act (PPACA) is NOT true?
It requires companies with 25 or more employees who work 35 hours a week or more to provide health care coverage or pay a penalty.
Which of the following is a legally required benefit?
Medicare
Which of the following statements regarding minimum wage is NOT accurate?
Minimum wage is automatically adjusted to inflation and the cost-of-living index.
Which of the following is the most widely used individual incentive?
Sales incentives
Which of the following statements is true of executive compensation packages?
They are frequently determined by the governing board of directors.
Which of the following statements regarding cost-of-living adjustments (COLA) raises is true?
They are given to all employees to compensate for inflation and rising prices.
In the context of the administrative responsibilities related to compensation, which of the following statements is true of managers?
They are often the first point of contact for employees with questions about pay fairness.
Which of the following statements is true of benefits?
They are tangible indirect rewards provided to an employee or group of employees for organizational membership.
Which of the following statements is true of standardized pay adjustments?
They are used by companies that have an entitlement philosophy.
In the context of employee benefits, which of the following is true of Millennial employees?
They place high value on in-person interactions regarding their employee benefits.
Which of the following statements is true of salaried workers?
They receive the same consistent payments each pay period.
Which of the following is NOT a type of variable pay?
Wages
Employers offering health care benefits are taking several approaches to control and reduce costs, which include all of the following EXCEPT:
covering spouses and other family members.
To determine whether a pay survey is relevant and valid, an organization should ascertain that it:
covers a realistic sample of the employers with whom the organization competes for employees.
A _____ sponsored by an employer provides savings, checking, lending, and other financial services for employees.
credit union
An organizational incentive system compensates all employees according to:
how well the organization performs.
The purpose of stock purchase plans is to:
increase employee loyalty to an organization and interest in its success.
Communicating an organization's pay philosophy to employees is:
likely to enhance younger workers' satisfaction and retention.
To address pay compression, companies can do all of the following EXCEPT:
reduce salaries of new recruits.
To overcome the problem of some employees choosing inappropriate options from flex plans, employers can require employees to:
select a core set of benefits and then offer options on other benefits.
Rhonda earns $20 an hour and works a 40-hour week. She receives a 3 percent lump-sum increase (LSI) as her yearly pay increase. Assuming she works for 2,080 hours in the year, Rhonda receives a lump sum of:
$1,248.
Which of the following is an intrinsic reward?
Autonomy
Which of the following is NOT a guideline regarding Family and Medical Leave Act (FMLA) administration?
Days off must be consecutive.
_____ occurs when the pay given to new hires is more than the compensation provided to more senior employees.
Salary inversion
_____ refers to security benefits provided to workers who are injured on the job.
Workers' compensation
A _____ is the money paid by an insured individual before his or her health plan pays for medical expenses.
deductible
An example of a tangible, indirect reward is:
dental insurance.
The major federal law that affects compensation is the:
Fair Labor Standards Act.
Which of the following is a common work unit/team incentive?
Gainsharing
Which of the following is one of the primary ways for distributing team incentives?
Giving the same size reward to each member of the team
_____ are elements of compensation that cannot be easily measured or quantified.
Intangible rewards
The term _____ refers to a situation in which only higher-risk employees opt for and use certain benefits.
adverse selection
An example of an intangible reward is:
autonomy
The term _____ refers to groupings of individual jobs that have approximately the same value to an organization.
pay grade
Andy is an employee in Pay Grade 2. The pay range for Grade 2 is minimum = $8.50, midpoint = $10.00, and maximum = $11.50. Andy earns $9.30 per hour. Andy's compa-ratio is:
0.93.
The Family and Medical Leave Act (FMLA) allows eligible employees to take a maximum of _____ weeks of unpaid, job-protected leave during any _____-month period.
12; 12
The normal retirement age to receive maximum Social Security benefits has been steadily increased from:
65 to 67.
_____ is an indirect reward given to an employee or group of employees as part of membership in an organization, regardless of performance.
A benefit
Which of the following statements regarding benefit costs is NOT true?
A common means of benefit cost control is instituting low-deductible plans.
Which of the following is NOT a criterion for exempt status?
A minimum pay level of $1,000 per week
According to a 1986 amendment to the _____, most employees cannot be forced to retire at a specific age.
Age Discrimination in Employment Act (ADEA)
Based on a typical pay adjustment matrix, which of the following employees would receive the largest percentage pay increase?
Alex, who is in the second quartile and whose performance exceeds expectations
Which of the following is the correct definition of a serious health condition?
An illness or injury that requires inpatient care or continuing treatment by a health care provider for medical problems that exist beyond three days
Which of the following statements is NOT true regarding workers' compensation?
An injured worker cannot receive workers' compensation benefits if the injury was the worker's fault.
In the context of HR metrics for compensation, which of the following is a measure of base pay?
Average hourly rate
Which of the following is true of benefits administration and communication?
Benefit communication and employees' satisfaction with benefits are most definitely linked.
Which of the following types of leaves of absence is NOT required by federal or state laws?
Bereavement leave
Which of the following is an example of an extrinsic reward?
Bonus
Which of the following statements regarding the entitlement philosophy is NOT true?
Bonuses are given based on merit.
_____ is the practice of using fewer pay grades with much wider ranges than in a traditional compensation system.
Broadbanding
Which of the following statements regarding broadbanding is NOT accurate?
Broadbanding may lead employees to feel that there are more promotional opportunities.
In the context of legal issues, which of the following statements is true of pay surveys?
Companies participating in pay surveys must safeguard employee privacy.
Which of the following is NOT a recommended approach to bringing a red-circled employee's pay into line?
Cutting the employee's pay
Which of the following is a voluntary benefit and provides continuing income for workers who become disabled and are unable to work?
Disability insurance
The _____ was enacted in 1974 to ensure that private pension plans meet minimum standards.
Employee Retirement Income Security Act
Which of the following is NOT a guideline regarding Family and Medical Leave Act (FMLA) administration?
Employees on leave must be able to return to a job, which may be a different job of lower status and pay.
In the context of pay, which of the following represents valence in expectancy theory?
Employees placing a high value on receiving high commission pay
Which of the following statements regarding overtime pay issues is NOT true?
Employers in the private sector are allowed to offer compensatory time off to nonexempt employees in lieu of payment for extra time worked.
Which of the following statements regarding severance payments is NOT accurate?
Employers must give the same severance package to all employees regardless of position or years of service.
The _____ prohibits companies from using different wage scales for men and women performing substantially the same jobs.
Equal Pay Act
Which of the following is a factor that leads to success in utilizing bonuses?
Establishing clear, metric-based employee reviews
_____ means that workers' compensation benefits are the only benefits injured workers may receive from the employer to compensate for work-related injuries.
Exclusive remedy
In hotels, which of the following is often used as the basis for providing recognition awards to front-desk representatives, housekeepers, food and beverage workers, and other hourly employees?
Guest comment cards
Which of the following situations would NOT qualify for a leave of absence under the Family and Medical Leave Act (FMLA)?
Handling the affairs of a military family member who has lost his or her job
In the context of HR metrics for compensation, which of the following is a measure of sales incentives?
Increase in market share
Which of the following statements regarding the Family and Medical Leave Act (FMLA) is NOT true?
It allows eligible employees to take a maximum of six weeks of paid leave.
Which of the following statements is true about a retirement plan?
It is a program established and funded by the employer and/or employees to fund employees' retirement years.
Which of the following statements regarding a defined benefit pension plan is true?
It is a retirement program in which employees are promised a pension amount based on age and years of service.
Which of the following statements regarding a defined contribution pension plan is true?
It is a retirement program in which the employer and/or employee makes payments to fund an employee's retirement account.
Which of the following statements is true of gainsharing?
It is a team-level incentive.
Which of the following is a disadvantage of market pricing?
It is likely to lead to wide fluctuations in pay.
Which of the following statements regarding a pay adjustment matrix is NOT accurate?
It is used in a company that has an entitlement philosophy.
In the context of executive compensation, which of the following is true of a clawback provision?
It permits an organization to require an employee to return rewards obtained through unethical or negligent actions.
Which of the following statements is true of the Worker Adjustment and Retraining Notification Act of 1988?
It requires employers to give 60 days' notice of mass layoff or plant closings.
Which of the following is NOT true about the Patient Protection and Affordable Care Act (PPACA)?
It requires employers who fail to provide adequate health coverage to pay an annual penalty of $1,000 per employee beyond the first 30 full-time workers.
Which of the following statements related to the Older Workers Benefit Protection Act (OWBPA) is NOT accurate?
It requires older workers to have the option of phased retirement and the benefit of outplacement assistance services.
Which of the following statements is true of variable pay?
It shifts some risk to employees.
Which of the following represents an input in the equity theory of motivation?
Knowledge
Which of the following statements is NOT true regarding Medicare?
Like the taxes paid for Social Security, there is an earnings limit on Medicare contributions.
Which of the following is a strategy that employers can use to control health care benefit costs?
Limiting family coverage
Which of the following is a voluntary financial benefit that allows employees to purchase insurance to cover costs for long-term health care in an assisted-living facility?
Long-term care insurance
_____ emphasize primary and preventive care, the use of specific providers that charge lower prices, restrictions on certain kinds of treatment, and prices negotiated with hospitals and physicians.
Managed care plans
Identify a true statement about benefits.
Most benefits are not taxed as income to employees.
Which of the following statements regarding taxes and benefits is NOT true?
Most benefits are not taxed as income to employees.
In the context of the Fair Labor Standards Act (FLSA), which of the following is an overtime pay requirement for nonexempt employees?
One and a half times the regular pay rate for all overtime hours
Which of the following statements explains the basic concept behind organizational incentive plans?
Overall results depend on company-wide efforts and cooperation.
_____ combine all sick leave, vacation time, and holidays into a total number of hours or days that employees can take off with pay.
Paid-time-off (PTO) plans
_____ occurs when compensation differences among individuals with different levels of experience and performance become small.
Pay compression
Which of the following is another term for variable pay?
Pay for performance
_____ allows employees to bridge between working full time and retiring full time while offering the employees' organization a chance to retain important knowledge and skills.
Phased retirement
In the context of administrative responsibilities, which of the following HR functions is likely to be the first to be outsourced?
Processing payroll
Which of the following represents an outcome in the equity theory of motivation?
Recognition
Which of the following is NOT a qualifying event that would cause a covered employee or a covered family member to lose group health benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985?
Reduction in wages
In the context of employee benefits, which of the following benefits is a part-time employee more likely to receive?
Retirement plan benefits
In the context of HR metrics for compensation, which of the following is a measure of variable pay on the organizational level?
Return on investment
Which of the following sales compensation plans is useful when an organization emphasizes serving and retaining existing accounts over generating new sales and accounts?
Salary only
_____ is technology that allows employees to enroll in and change their benefit choices, track their benefit balances, and submit questions to HR staff members and external benefit providers.
Self-service
In the context of benefits administration, which of the following statements is NOT true of self-service?
Self-service is designed so that HR assistance is not required by employees.
Which of the following is a voluntary benefit offered to employees by employers?
Severance pay
Which of the following is a basic assumption that underlies the philosophical foundation of variable pay?
Some people or groups contribute more to organizational success than do others.
Which of the following is an example of a perquisite?
Stress counseling
_____ was enacted in 1990 as an amendment to the Age Discrimination in Employment Act to address issues related to early retirement and severance situations.
The Older Workers Benefit Protection Act
A company with 25 employees who work 30 hours a week opts to not provide health coverage to its employees. It also plans to hire more part-time staff to avoid providing health insurance coverage to its employees. Which of the following is NOT a possible consequence of this decision?
The company will have to pay a heavy annual fine of $2,320 per employee.
Which of the following statements regarding employee-paid group benefits is NOT true?
The cost for benefits purchased through payroll deductions is typically more than if the employee purchased them on his or her own.
In the context of developing a base pay system, which of the following methods of determining the worth of jobs in an organization has an external focus?
The market pricing method
Which of the following statements is true of the child labor provisions of the Fair Labor Standards Act (FLSA)?
The minimum age for employment with limited hours outside of school hours is 14 years.
Which of the following statements about the Employee Retirement Income Security Act (ERISA) is NOT accurate?
The purpose of this law is to ensure equal treatment for older workers in early retirement or severance situations.
Which of the following job evaluation methods is a simple system that places jobs in order, from highest to lowest?
The ranking method
Which of the following statements is true of pay surveys?
They are an important element for establishing external pay equity.
Which of the following statements is true of benchmark jobs?
They are common across different employers.
Which of the following is the primary objective of profit sharing plans?
To focus employees on organizational goals
Which of the following is the goal of employee stock option plans?
To get employees to think like owners
Which of the following is NOT a reason for adopting variable pay?
To reward employees financially for the amount of time that they work
Which of the following statements regarding paid holidays is NOT true?
U.S. employers commonly offer more paid holidays than those in many other countries.
Which of the following statements regarding lump-sum increase (LSI) plans is NOT accurate?
Unions generally insist on LSI programs as part of a total rewards package.
Which of the following statements regarding leaves of absence is NOT true?
Unpaid leaves of absence do not add to employer costs.
Which of the following approaches should companies use to improve employee participation in 401(k) plans?
Using automatic enrollment and increases to get employees to participate
Which of the following is NOT one of the three general types of sales compensation plans?
Wages only
Which of the following is NOT a key decision to be made as part of benefits design?
What benefits should be promoted to employees as valuable?
Which of the following statements regarding public-sector benefits is NOT accurate?
Workers in the public sector have for many years received less generous benefits than those in the private sector.
An example of a tangible direct reward is:
a cash bonus.
Even though paternity leave is available to male workers under the Family and Medical Leave Act (FMLA), _____.
a relatively low percentage of men take it
A revision made to the Family and Medical Care Act (FMLA) in 2009:
allows families of injured active military servicemembers to take caregiving leave for up to 26 weeks to assist servicemembers who were injured on active duty.
Many employers have found paid-time-off (PTO) plans to _____ reducing absenteeism, scheduling time off, and assisting with recruiting and retention.
be more effective than other means of
A _____ is a percentage of the revenue generated by sales that is given to an agent or salesperson.
commission
To determine each individual employee's standing in relationship to the midpoint of a pay range, many organizations use a value called the:
compa-ratio.
A _____ is a health plan that provides employer financial contributions to employees to help cover their health-related expenses.
consumer-driven health plan
The cost of Social Security is funded through a tax on _____.
employees' wages or salaries
Since 1980, all of the following are considered the legs of the three-legged stool of retirement income EXCEPT:
employer-funded pension plan/defined benefit.
Programs to help employees deal with child-care and elder-care issues include all of the following EXCEPT:
employer-sponsored health care insurance for nannies.
The _____ states that individuals judge fairness in compensation by comparing their inputs and outcomes against the inputs and outcomes of referent others.
equity theory of motivation
The _____ states that an employee's motivation is based on the probability that his or her efforts will lead to a presumed level of performance that is linked to a valued reward.
expectancy theory of motivation
Relocation benefits offered by employers may include all of the following EXCEPT:
financial planning services.
The expectancy theory of motivation emphasizes the importance of:
finding valued rewards for employees.
A company targets pay ranges so that 75 percent of other firms pay above it and 25 percent pay below it. The company is using a _____ strategy.
first-quartile
A(n) _____ allows employees to select the benefits they prefer from options established by the employer.
flexible benefits plan
In a piece-rate system, people are paid:
for the work completed.
A(n) _____ is an incumbent who is paid below the range set for a job.
green-circled employee
An exempt employee is an employee who:
holds a position for which he or she is not paid overtime.
In the context of variable pay, the term _____ refers to the idea that employees can clearly see how their actions and decisions lead to desired outcomes.
line of sight
A(n) _____ is a one-time payment of all or part of a yearly pay increase.
lump-sum increase
One of the several legally required benefits is _____.
medical plans
Employees in most organizations can change their participation level in various benefit plans and switch between benefit options:
once per year during open enrollment.
For the typical U.S. employer, the average cost of benefits often averages at least _____ of payroll expenses.
one-third
In the context of employee pay grades, green-circled problems are likely to be the result of:
opportunistic hiring.
In highly unionized U.S. manufacturing and utility industries, the average cost of benefits may represent _____ of payroll expenses.
over half
A retirement plan feature that allows employees to move their retirement benefits from one employer to another is called:
portability
Labor unions are likely to oppose variable pay because they:
prefer that employees be paid for the amount of time they work.
A company that follows a pay-for-performance philosophy is most likely to:
provide market-adjusted pay scales.
In the context of employee benefits and status, part-time employees are most likely to _____.
receive paid holidays and vacation
A(n) _____ is an incumbent who is paid above the range set for a job.
red-circled employee
In the context of work teams, free riders are also called:
social loafers.
In _____ of job evaluation, descriptions of job categories are written and then each job is put into the category it best matches.
the classification method
The effectiveness of any variable pay program relies on its consistency with:
the organization's culture.
Firms that have contracts with the U.S. government must pay their employees:
the prevailing wage in their geographic area for similar work.
In the context of employee benefits, one significant trend is the outsourcing of benefits administration to _____, who are vendors that provide enrollment, recordkeeping, and other administrative services to organizations.
third-party administrators
A right commonly associated with retirement plans is _____, which means that once an employee has worked for a required number of years, his or her pension rights and the amounts contributed by both the employer and the employee cannot be taken away.
vesting
