Chapter 8

Question 1

What is the best example of variable pay?

Answer 1

Incentive

Question 2

Team Spark LLC, a producer of consumer goods, practiced gainsharing. After organizational restructuring, the management has decided to replace gainsharing plans with a piece-rate system. What is true of Team Spark LLC?

Answer 2

It provided group incentives; now it provides individual incentives.

Question 3

what is a disadvantage of profit sharing plans?

Answer 3

Employees must trust that management will accurately disclose financial and profit information.

Question 4

What is an advantage of establishing employee stock ownership plans?

Answer 4

Firms can receive favorable tax treatment.

Question 5

According to the provisions of the ___________, publicly listed companies now must allow shareholders to vote on executive compensation.

Answer 5

Dodds-Frank Act

Question 6

___ are special benefits–usually noncash items– for executives.

Answer 6

Perquisites.

Question 7

________ refer to the compensation given to an executive if he or she is forced to leave an organization.

Answer 7

Golden parachutes.

Question 8

Employee benefits can be constructively viewed as a(n):

Answer 8

tool for competitive advantage.

Question 9

What is true of part-time employees?

Answer 9

Most employers do not provide any part-time employee benefits, except some paid time off.

Question 10

Medicare is the health insurance program that was implemented by the government in 1965 to provide medical care primarily for:

Answer 10

people over the age of 65.

Question 11

Jim, a 23 years old factory worker, was seriously injured when a hammer fell on his head while he was at his work station. Jim hadn’t worn his safety helmet at the time of the accident even though the safety rules of the company necessitate the use of safety helmets at all times. What is true?

Answer 11

Jim will receive workers’ compensation even though he is responsible for the injury.

Question 12

Worker’s compensation programs are typically funded:

Answer 12

at the expense of the employer.

Question 13

During times of widespread economic hardship:

Answer 13

the government might increase the number of weeks during which workers receive unemployment compensation.

Question 14

Every company is required to pay an unemployment tax that is based on the:

Answer 14

number of claims filed by ex-employees.

Question 15

Claudia, a legal assistant, has been vested by her employer after having worked with the employer for ten years. This implies that:

Answer 15

she will receive the amounts contributed by both the employer and herself when she retires.

Question 16

What is true of defined benefit pension plans?

Answer 16

The amount of benefit paid at retirement is pre-determined.

Question 17

What is true about the Older Workers Benefit Protection Act (OWBPA)?

Answer 17

It sets forth certain conditions that must be met when older workers are offered early retirement.

Question 18

What is one of the approaches taken by employers offering health care benefits to control and reduce their costs?

Answer 18

Increasing employee contributions.

Question 19

What are the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA) with respect to health care?

Answer 19

Most employers with 20 or more employees must offer extended health care coverage to certain groups for plan participants.

Question 20

Karen, a diabetic patient, has quit her job as an internal auditor with a bank and has joined another company as the assistant CFO. What law enable Karen to switch her health insurance plan from her former employer to her new employer?

Answer 20

HIPAA

Question 21

The Worker Adjustment and Retraining Notification Act (WARN) of 1988:

Answer 21

does not mandate the payment of severance pay to employees.

Question 22

What is true of the Family and Medical Leave Act?

Answer 22

It requires that employers allow employees to take a maximum of 12 weeks of unpaid, job-protected leave for foster care placement of a child.

Question 23

True/False: Variable pay plans attempt to provide tangible rewards, or incentives, to employees for performance beyond normal expectations.

Answer 23

True

Question 24

True/False: Compensation given to an executive if he or she is forced to leave an organization is called a golden parachute.

Answer 24

True

Question 25

True/False: Only employees who have worked at leas 12 months and 1,250 hours in the previous year are eligible for leave under the FMLA

Answer 25

True

Question 26

List the three basic assumptions that the philosophical foundation of variable pay plans rest on.

Answer 26

The three basic assumptions of variable pay are:1) some people or groups contribute more to organizational success than do others; 2) Some people perform better and are more productive than are others; and 3) Employees or groups who perform better or contribute more should receive more compensation (p.163)

Question 27

Describe the primary objectives of profit sharing plans.

Answer 27

The primary objective of these plans can include: increase organizational performance, attract or retain employees; improve product/service quality; enhance employee morale; focus employees on organizational goals and objectives(p.167)

Question 28

How is the provision of benefits rather than wages advantageous for employees?

Answer 28

Many benefits are not taxed as income to employees (p. 170)

Question 29

Define the concepts of vesting and portability.

Answer 29

Vesting means that the employee has a benefit that cannot be taken away. Portability means that a benefit can be moved form one employer to another.(p.175-176)

Question 30

What are the family oriented benefits offered by employers? Which of these are mandated by the federal government?

Answer 30

Leave to take care of a family member is mandated by the government. some employers may offer subsidized care, discounts, or on site programs to care for relatives (children and elder-care) in addition to this (P. 183)