Compensation and Benefits Final

Question 1

Which two approaches apply to internal reward alignment?
A. Job-based approach
B. Group-based approach
C. Morale-based approach
D. Individual-based approach

Answer 1

A & D

Question 2

Which provision applies if a job is covered by the Fair Labor Standards Act?
A. Employees’ pay rates may be based on an employee’s personal characteristics such as gender or age.
B. Employers are exempt from paying the standard minimum wage and may set the wage they are willing to pay.
C. Employees and independent contractors must be paid the same if they are performing the same or similar tasks.
D. Employees who work more than 40 hours in a week must be paid time and a half for each hour they work over the 40 hours.

Answer 2

D. Employees who work more than 40 hours in a week must be paid time and a half for each hour they work over the 40 hours.

Question 3

What is the relationship among laws regarding pay?
A. Federal law overrides state law
B. State law overrides common law
C. The benefit to employees dictates which law is followed
D. The benefit to the employer dictates which law is followed

Answer 3

C. The benefit to employees dictates which law is followed.

Question 4

What is merit pay?
A. Pay received as a one-time increase
B. Bonuses given to everyone in a company
C. Compensation based on a team-performance
D. Annual increase based on past performance

Answer 4

D. Annual increase based on past performance

Question 5

The CEO of a web development company gives employees a lot of freedom to develop new applications, pays employees by the hour, and allows employees to work as needed to develop applications. Because of this approach, the payroll costs vary quite a bit. The CEO would like to get costs under control and make payroll costs more stable.
Which approach can be used to bring payroll costs under control and make them more stable in this situation?
A. Prove a work at home or telecommuting option for employees
B. Transition employees from an hourly pay model to a salary pay model
C. Offer employees stock options as a part of their compensation packages
D. Group employees in teams and pay them based on the team’s productivity.

Answer 5

B. Transition employees from an hourly pay model to a salary pay model.

Question 6

Which compensation method is an annual pay increase based on past performance that is added to an employee’s base compensation?
A. Merit pay
B. Differential rate
C. Individual bonus
D. Sales commission

Answer 6

A. Merit pay

Question 7

An employee has worked for the same company in two locations over the course of 20 years in Europe and North America. The employee has been trained as an international trade specialist and has been promoted to manager of international operations. Which pay basis should be used to compensate this employee?
A. Merit-based pay
B. Seniority-based pay
C. Experience-based pay
D. Competency-based pay

Answer 7

D. Competency-based pay

Question 8

A company implemented actions to improve its return on investment on human capital. The company wants to be the premier employer in the state. The first step was giving more rewards for jobs compared to its competitors. Which type of reward system is this company using?
A. Relative
B. Absolute
C. Centralized
D. Decentralized

Answer 8

A. Relative

Question 9

At which step in a job analysis do employers determine the tasks, duties, and responsibilities of a job?
A. Identify job
B. Obtain feedback
C. Observe leadership
D. Interview incumbents

Answer 9

D. Interview incumbents

Question 10

An employer has several job incumbents come together to analyze a job.
Which job analysis method is used in this scenario?
A. Panel interview
B. Traditional interview
C. Occupational interview
D. Observational interview

Answer 10

A. Panel interview

Question 11

What is the next step in the job analysis after identifying the job and observing the workplace?
A. Obtain feedback
B. Interview incumbents
C. Revise job description
D. Conduct performance review

Answer 11

B. Interview incumbents

Question 12

A human resources professional at a large law firm needs to fill an accountant position. The job description provides information about the compensation range, firm location, number of employees in the company, minimal qualifications, and company values.
Which part of the job description did the human resources professional fail to include?
A. The job design
B. The job content
C. The job evaluation standards
D. The job performance standards

Answer 12

B. The job content

Question 13

To what does internal alignment refer?
A. It refers to a compensation analysis to gauge the organization’s competitiveness.
B. It refers to the efficacy of the organization’s retention program relative to the industry
C. It refers to how an employee’s rewards compare to rewards received by others in the organization
D. It refers to the situation that exists when an organization’s rewards are at least equal to the market rates.

Answer 13

C. It refers to how an employee’s rewards compare to rewards received by others in the organization.

Question 14

Workers in a small manufacturing company are currently paid whatever the CEO feels is appropriate. The company’s new compensation specialist intends to determine the relative worth or value of each job in the company as part of setting a new salary scale.
Which human resource activity will this compensation specialist be conducting?
A. A pay survey
B. A job structure
C. A job evaluation
D. A performance appraisal

Answer 14

C. A job evaluation

Question 15

An employee is assigned the task of designing the job-value structure at his company. The employee has defined which jobs are within the organization and how they’re related. What is the next step in defining the job-value structure?
A. Recruiting employees
B. Writing job descriptions
C. Performing a job analysis
D. Determining job importance

Answer 15

D. Determining job importance

Question 16

Which type of market gives job seekers more negotiation power than employers?
A. Labor-driven
B. Product-driven
C. Employer-driven
D. Geographically-driven

Answer 16

A. Labor-driven

Question 17

A company that produces poker chips intends to benchmark its rewards system. Which method should be used to select the benchmark in this scenario?
A. Benchmark metrics
B. Benchmark analysis
C. Benchmark competitors
D. Benchmark custom data

Answer 17

C. Benchmark competitors

Question 18

Which type of market gives job seekers more power in negotiating terms of employment?
A. Labor-driven
B. Product-driven
C. Employer-driven
D. Geographically-driven

Answer 18

A. Labor-driven

Question 19

A manager is confronted by an employee who says she is thinking about a job-offer from another company. Subsequently, the manager wants to collect verifiable data on what competing organizations are paying so the organization can match up with the market. From where can the manager collect this data?
A. Public media
B. Internal revenue service
C. Bureau of labor statistics
D. Self-reports on the internet

Answer 19

C. Bureau of labor statistics

Question 20

Which challenge to market analysis is present if a company expands into an international market that has marginally trained workers?
A. Inaccurate data
B. Lack of technology
C. Cultural norms for compensation
D. Failure to define relative labor market

Answer 20

A. Inaccurate data

Question 21

How can central tendency in compensation be used to improve market analysis?
A. By justifying the discrepancies between pay levels
B. By determining the pay range for a specific job position
C. By aligning the single number that represents a current pay trend
D. By finding the single number that represents how many people are paid

Answer 21

D. By finding the single number that represents how many people are paid

Question 22

What is the foundation of external reward positioning in an organization’s overall compensation program?
A. Reward surveys
B. Financial statements
C. Employee expecations
D. Employee appraisal rewards

Answer 22

A. Reward surveys

Question 23

What is the definition of a leading market rate strategy?
A. The organization provides more of a reward than its competitors
B. The organization provides a lesser amount of a reward than its competitors
C. The organization provides a reward equal to the market average
D. The organization provides more of some rewards and less of others than the market average

Answer 23

A. The organization provides more of a reward than its competitors.

Question 24

Which pay system is often used in sales jobs to motivate employees to increase both the number and size of sales that are made?
A. merit pay
B. base salary
C. commission
D. piece rate pay

Answer 24

C. commission

Question 25

What is a key concern when designing a variable pay system?
A. The organization is responsible for the risk when there is a downturn in the business cycle
B. The behaviors that are rewarded need to match the behaviors that are most valued to the organization
C. The pay given to employees remains the same when individual or organizational performance declines
D. Individuals are less motivated by variable pay systems because pay is based on factors other than performance.

Answer 25

B. The behaviors that are rewarded need to match the behaviors that are most valued to the organization

Question 26

A professor who has been at a public university for eight years became aware of a website that lists the salaries of all public sector employees in the professor’s state. On the website, the starting salaries of two new professors hired in the department were listed as higher than the veteran professor’s current salary. What is the major issue being described in this scenario?
A. Pay inflation
B. Pay inversion
C. Pay expansion
D. Pay compression

Answer 26

B. Pay inversion

Question 27

Which method for addressing wage and salary compression does an employer use to pay for future performance based on past performance?
A. Merit pay
B. Pay inversion
C. Individual bonus
D. Cost of living adjustment

Answer 27

A. Merit pay

Question 28

Why is it important to evaluate pay systems and keep them current?
A. To attract top employees
B. To enhance pay inversion
C. To increase pay compression
D. To provide compensation perks

Answer 28

A. To attract top employees

Question 29

A medical supply company recently announced it is offering a week-long, all-expenses paid vacation to Hawaii for the salesperson who sells the highest number of a new model of hospital beds in the upcoming quarter. Why might a salesperson be unmotivated in this situation based on the instrumentality perception of the expectancy theory?
A. The salesperson is sure he can perform at a level that merits the prize
B. The salesperson has never been a top salesperson and believes that the goal is unobtainable
C. The salesperson dislikes competing with coworkers and is unmotivated to be the top salesperson
D. The salesperson has won similar competitions in the past, but the company has retracted the rewards that were offered.

Answer 29

D. The salesperson has won similar competitions in the past, but the company has retracted the rewards that were offered.

Question 30

Which employee benefit is a company not legally required to provide?
A. Paid leave
B. Workers’ compensation
C. Family and medical leave
D. Unemployment insurance

Answer 30

A. Paid leave

Question 31

Which benefit is a statutory benefit that is administered by both the state and federal governments and allows employees to receive compensation for job-related injury or illness?
A. Social security
B. Disability coverage
C. Workers’ compensation
D. Unemployment compensation

Answer 31

C. Workers’ compensation

Question 32

Which benefit program is federally mandated and allows employees time off for the birth of a child?
A. Paid time off
B. Social security
C. Workers’ compensation
D. Family and medical leave

Answer 32

D. Family and medical leave

Question 33

An employee fell off a ladder while working and broke a bone. Why did this person receive workers’ compensation coverage?
A. No-fault principle
B. National labor relations act
C. Disparate impact rule
D. Bona fide qualification

Answer 33

A. No fault principle

Question 34

An employee is immediately terminated after being caught embezzling from a firm. The employee has received good but not outstanding performance reviews and is in good health. The employee is a parent of two young children and is not currently enrolled in school when terminated. The employee begins seeking gainful employment immediately after being terminated. How will this situation affect the employee’s eligibility to qualify for unemployment compensation?
A. The employee will be able to qualify because the employee is supporting two young children
B. The employee will be unable to qualify because the employee was in good health at the time of the termination
C. The employee will be unable to qualify because the employee was terminated for cause rather than involuntarily.
D. The employee will be able to qualify because the employee was terminated and is seeking gainful employment.

Answer 34

C. The employee will be unable to qualify because the employee was terminated for cause rather than involuntarily.

Question 35

A firm is looking for ways to reward its employees and motivate them to work harder. The firm decides to allow top-performing employees to spend a certain portion of their day working on independent projects they feel can benefit the firm in the future. Which type of reward is this firm offering?
A. Spot reward
B. Social reward
C. Tangible reward
D. Psychological reward

Answer 35

D. Psychological reward

Question 36

A firm publishes a monthly newsletter highlighting top employees and their contribution to the community and firm. Which benefit would the firm derive from this decision?
A. Aligned employee salary expenses
B. Increased diversity in employee teams
C. Improved managerial influence over employees
D. Better alignment with the employee purpose principle
E. Lower employee turnover due to improved corporate governance

Answer 36

D. Better alignment with the employee purpose principle

Question 37

A firm has a strong alignment between their core principles and the principles of the employees. As part of their communication system, the firm decides to put out a monthly newsletter highlighting top employees and the good that their work is going in the community and at the firm. Which benefit would the employees derive from this decision?
A. Tangible validation of their efforts under task variety theory
B. Intangible validation of their efforts under task variety theory
C. Tangible validation of their efforts under the purpose principle
D. Intangible validation of their efforts under the purpose principle

Answer 37

D. Intangible validation of their efforts under the purpose principle

Question 38

An employee is getting bored with her job because she has mastered her basic work activities. What is a good way to keep this employee motivated?
A. Increase the workload
B. Assign a nonstandard work schedule
C. Increase the level of managerial supervision
D. Provide a wider variety of tasks to accomplish

Answer 38

D. Provide a wider variety of tasks to accomplish

Question 39

A firm bases its pay systems on rewarding the best employee with a large bonus, while giving only standard pay to all other employees. Additionally, the employee’s picture is posted on the wall with a notice about the accomplishment. Which employee motivational theory is this organization practicing?
A. Justice theory
B. Tournament theory
C. Reinforcement theory
D. Intrinsic motivation theory

Answer 39

B. Tournament theory