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Comp Exam 2 > EXAM 2 Review > Flashcards

EXAM 2 Review Flashcards

1
Q

Assign different pay rates for jobs of unequal worth and provide the framework for recognizing differences in individual employee contributions.

A

pay structure

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2
Q

Representative of typical market pay rates relative to a company’s job structure

A

Market Pay Line

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3
Q

Groups jobs for pay policy application. HR proffessionals typically group jobs based on similar compensable factors and value

A

Pay Grades

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4
Q

Grades are based on a set number of job evaluation points for each grade

A

“Absolute” Job evaluation point spreads

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5
Q

how do HR proffesionals develop pay grades?

A

● “Absolute” Job evaluation point spreads ●Percentage based Job evaluation

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6
Q

Represents horizontal dimensions of pay structures (job evaluation points)

A

Pay grades

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7
Q

Represent the vertical dimension (pay rates) represent the span of possible pay rates for each pay grade. Inude: midpoint,minimum and maximum pay rates

A

Pay ranges

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8
Q

The halfway mark between the range minimum and max rates. represent the competetive market rate determined by the analysis of compensation survey data

A

Midpoint Pay Value

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9
Q

distinguishes a company from the competition, but by compensating employees less than most competitors. Market pay levels below the market pay line

A

market lag

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10
Q

most closely follows the typical market pay rates because companies pay according to the market pay line. Pay rates fall along the market pay line.

A

Market match

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11
Q

distinguishes a company from the competition by compensating employees more highly than most competitors. Market pay levels above the market pay line

A

Market lead

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12
Q

difference between the maximum and the min pay rates of a given pay grade

A

Range Spread

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13
Q

Occurs whenever a company’s pay spread between newly hired or less qualified employees and more qualified job incubents is small

A

Pay Compression

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14
Q

Pay rates that are higher than the designated pay range maximums

A

Red Circle rates

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15
Q

represent pay rates for jobs that fall below the designated pay minimums

A

Green circle rates

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16
Q

midpoint, index the relative competetiveness of internal pay rates based on pay range midpoints

A

Compa-ratios

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17
Q

Compa-Ratio formula

A

Employees pay rate/ Pay range midpoint

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18
Q

Minimum amount employees will see as making a meaningful change in their compensation

A

Just meaningful pay increase

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19
Q

suggest that an employee must regard his or her own ratio of merit increase pay to performance or similar to the ratio for other comparably performing people in the company

A

Equity theory

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20
Q

blueprints that desrcibe the allocation of moneyary resources to fund pay structures

A

compensation budgets

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21
Q

Is the designated date/period when all employees recieve performance appraisals

A

Common review date/period

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22
Q

Fixed base commission, which does not vary with the level of units sold, increase in market share or any other indicator of sales performance

A

Salary-only plans

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23
Q

Form of incentive compensation based on a percentage of the product or service selling price and the number of units sold

A

commission

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24
Q

Fixed base compensation with a bonus

A

Salary plus bonus plans

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25
Q

fixed base compensation and commision

A

salary plus comission plans

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26
Q

awards sales proffessiinals commisions and draws, draws are pay components that cover living expenses. companies usually charge draws against commisiins, they are like advances which are charged against commission sale proffessionals are expected to earn. they need to pay back these advances

A

commision plus draw plans

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27
Q

Act as company loans to employees that are carried forward indefintely until employees sell enough (earn a sufficient amount in commissions) to repay their draws

A

Recoverable Draws

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28
Q

Act as a salary because sale’s employees are not obligated to repay the loans if they do not sell enough.

A

Nonrecoverable Draws

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29
Q

Some salespeople derive their entire income through commissions

A

Commission only plans

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30
Q

Increase percentage pay rates for progressively higher sales volume in a given period

A

Graduated Commissions

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31
Q

Increase percentage pay rates for progressively higher sales volume in a given period only if sales exceed a predetermined level.

A

Multiple tiered commissions

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32
Q

Pay structure form that leads to the consolidation of existing pay grades and pay ranges into fewer wider pay grades.

A

Broadbanding

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33
Q

Reward newly hired employees less than established employees on either a temporary or permanent basis

A

Two tier pay structures

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34
Q

Replaces income for employees who become unable to work because of sickness or accidents

A

Disability Insurance

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35
Q

Provides income benefits for limited periods of time, usually less than 6 months

A

Short term disability insurance

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36
Q

Illness or accidents that prevent an employee from performing his or her “own” occupation over a designated period. The term own occupation applies to employees based on education, training or experience. After the designated period elapses the definition becomes more inclusive by adding the phrase “inability to perform any occupation or to engage in any paid employement. The second stage definition is consistent with the concept of total disability in workers’ compensation programs.

A

Long term disability

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37
Q

Provides benefits for extended periods of time anywhere between 6 months and life.

A

Long term disability Insurance

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38
Q

Policies that compensate employees when they are not performing their primary work duties. Companies offer most paid time off as a matter of costum particularly paid holiday vacations and sick leave

A

Paid time off banks

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39
Q

Help employees cope with personal problems that may impair their job performance such as alcohol or drug abuse, domestic violence, the emotional impact of AIDS and other diseases, clinical depression, and eating disorders, senior care, legal assistance. Ie: Call a 1-800 like a crisis hotline

A

Employee assistance programs (EAPs)

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40
Q

Provides benefits for limited time, more than a week but less than 6 months. Can range 3-6 months. More for people that have an inability to perform everyday duties. As an inability to perform the duties of one’s regular job.

A

STD (Short term disability)

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41
Q

~Income replacement typically between 50%-66.6% of gross wages.
~Runs concurrent with FMLA
o Must be employed with the company for 6-12 months

A

Short term disbaility qualifications

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42
Q

mental or physical ability for which medical advice, diagnosis, care, or treatment was received during a designated period preceding the beginning of disability insurance coverage. (Anytime prior to employment and enrollment in a company’s disability insurance plan).

A

Preexisting condition

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43
Q

list the particular health conditions that are ineligible for coverage. Disabilities like: Self inflicted injuries, and often exclude mental illness or disabilities due to chemical dependencies like additions to drugs and alcohol.

A

Exclusion provisions

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44
Q

Spans firm the initial date of hire to the time of eligibility for coverage in a disability insurance program.

A

Preeligibility

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45
Q

Refers to the minimum amount of time an employee must wait after becoming disabled before disability insurance payments begin.

A

Eliminating condition

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46
Q

~Jury Duty
~Military and medical leave
~Sabbatical
~Volunteerism

A

Types of PTOs

47
Q

PTO for professional activities like a research project or curriculum development. Take time off for research.

A

Sabbatical

48
Q

“We want you to research and cut you out of your regular activities and in 4 months we want you to come back with a solution etc.” This is an example of ?

A

Sabbatical

49
Q

Giving one’s time to support a meaningful cause

A

Volunteerism

50
Q

company sponsored technical and emotional support to employees who are being laid off or terminated.

A

Outplacement assistance

51
Q

`Layoffs due to economic hardship

  • Mergers and acquisitions
  • Company reorganizations
  • Changes in management
  • Plant closings or relocation
  • Elimination of specific positions, often the result of changes in technology
A

Reasons for outplacement assistance

52
Q

Specify the rate at which participants accumulate (or earn) benefits

A

Accrual rates

53
Q

A common feature of fee-for-service plan. The amount you have to pay before your insurance benefits kicks in.

A

Deductible

54
Q

Refers to the percentage of covered expenses paid by the insured.

A

Coinsurance

55
Q

Nominal payments an individual makes as a condition of receiving services.

A

Copay

56
Q

A series of payments for the life of the participant and beneficiary.

A

Annuity

57
Q

Pension plans that meet the minimum standard.entile employees and employers to favorable tax treatment by deducting the contributions from taxable income.

Not favorable to highly compensated employees

A

Qualified retirement plan

58
Q

pension plans that do no meet one at least one minimum standard
Favorable to highly compensated employees

A

Non-qualified retirement plan

59
Q

Similar to commercial insurance plans with one key difference: Companies typically draw from their own assets to fund claims

A

Self Funded plans

60
Q

Traditional health insurance plans in which the insurance company agrees to pay a designated percentage of the costs for health insurance procedures and the insured (recipient of the insurance benefit) agrees to pay a designated percentage.

A

Indemnity plans

61
Q

guarantee retirement benefits specified in the plan document. This benefit is usually expressed in terms of a monthly sum equal to a percentage of a participant’s pre retirement pay multiplied by the number of years he or she has worked for the employer.

A

Defined benefit

62
Q

employers and employees make annual contributions to separate accounts established for each participating employee, based on formula contained in plan document.

A

Defined contribution

63
Q

Type of defined benefit and also a qualified plan

A

Pensions

64
Q

•
Company contributes $ to account regardless of employee participation
• Looks favorable with discrimination testing
• Common with lower-wage employers
Almost always a qualified plan

Can do pre-tax or post-tax (Roth) contributions • $18,000 annual contribution limit • $6,000 additional contributions allowed as catch-up for employees 50 and older

A

401k

65
Q

retirement plans named after the section of the IRC that created them. (almost always a qualified plan)

A

401k

66
Q

(similar to 401k but non profit),

A

403b

67
Q

(NOT QUALIFIED PLAN), profit sharing, stock bonus, employee stock ownership plan (You know how much you put into it, but you don’t know how much you’re gonna get)
Common vehicle for highly compensated employees
Dollars that the company has access to—a company asset

A

457b

68
Q

A potential basis for a 401k plan. Plans invest in company securities making them similar to profit sharing plans and stock bonus plans presumably when the value of the stock has increased

A

ESOP plan (Employee stock ownership plan)

69
Q

Money distributed to employees, seperate from base pay, cost of living adjustment or permanent merit pay increases.

A

Profit sharing

70
Q

A select group of healthcare providers agrees to furnish health care services to a given population at a higher level of reimbursement than under commercial plans

A

PPO (Preferred provider organization)

71
Q

Combine the features of fee-for-service systems and health maintenance organizations. Employees pay a nominal copayment for each visit to a designated network of physicians, alternatively they may receive treatment from providers outside the network but they pay more for this choice

A

POS (Point of service plan)

72
Q

Provide “prepaid medical services” because fixed periodic enrollment fees cover members for all medically necessary services as long as the services are delivered or approved by them. Represent an alternative to commercial and self funded insurance plans

A

HMO (Health Maintenance Organizations

73
Q

promoted the use of health maintenance organizations.

A

HMO (Health Maintenance Organization Act)

74
Q

Provide protection for 3 types of medical expenses: Hospital and surgical expenses and physician’s charges in the form of cash benefit paid to the insured or directly to the health care provider after the employee has received health care services.

A

Fee-for-service plan

75
Q

cover the cost of drugs. Plans apply to exclusively to drugs that state or federal law require to be dispensed by licensed pharmacists

A

Prescription drug plans

76
Q

emphasize cost control by limiting an employee’s choice of doctors and hospitals. 3 kinds: HMOs, PPOs, and POS plans

A

Managed care programs

77
Q

dispenses expensive medication used to treat chronic health conditions such as human immunodeficiency virus (HIV) infection or disorders like Parkinson’s disease. Health insurers specify if the participants must receive prescription through __________
programs or locally approved pharmacies

A

Mail order prescription program

78
Q

Employer-provided medical- permit employees to pay for specified health care costs that are no covered on an employer’s insurance plan.
~Employee funded
~Employees forfeit what is unused at the end of the year
~To be used on ancillary expenses

A

FSA (Flexible spending accounts)

79
Q

~Is employer dollars (employer funded), insurance company is finding a way to make it hard for you to use your benefits
~Appealing for low wage employees
~Employer funded
~Allow for carry-over between plan years
~To be used on deductibles and cover eligible health care costs

A

HRA (Health reimbursement accounts) - Employer-provided medical

80
Q

involve the collection and subsequent analysis of competitors’ compensation data. Focused on competitors pay and salary practices

A

Compensation Surveys

81
Q

Provide reference points against which the values of jobs within the company are judged

A

Benchmark Jobs

82
Q

~Central tendency

~Variation

A

Measures of dispersion

83
Q

represents the fact that a set of data clusters or centers around a central point. Is a number that represents the typical numerical value in a data set.

A

Central tendency

84
Q

Average annual salary in data set then dividing it by total number of annual salaries in data set. Compensation professionals use this to see whether the employees’ compensation is below and above the market

A

Mean

85
Q

Middle value in an ordered sequence of numerical data.

A

Median

86
Q

represents the amount of spread or dispersion in a set of data.

A

Variation-

87
Q

Refers to the mean distance of each salary figure from the mean.

A

Standard deviation

88
Q

allow compensation professionals to describe the distribution of data

A

Quartiles

89
Q

25% of salary figures are less than or equal to that

A

1st quartile ($34,500)

90
Q

50% of salary figures are less than or equal to that

A

2nd quartile ($36,000)

91
Q

75% of salary figures are less than or equal to that

A

3rd quartile ($43,500)

92
Q

100% of salary figures are less than or equal to that

A

4th quartile ($55,000)

93
Q

If $33,000 represents the 10th percentile for accountants,

A

Percentiles:10 percent earn $33,000 or less. But 90% earn more than that.

94
Q

1st- 100th

A

Percentiles

95
Q

If you’re getting paid at the 25th percentile,

A

75 percent people are getting paid more than you

96
Q

~contain immense amount of information
~Statistical analysis needed to integrate internal job structures with external market
~Outdated

A

Weaknesses of Comp surveys

97
Q

~Effective compensation systems based on base pay level, incentive award structures, and both the mix and levels of discretionary benefits
~Sustain a competitive advantage
~Make Sound Judgement about how much to pay employees

A

Strengths (Or what companies gain from compensation surveys):

98
Q

Compulsory hospitalization insurance covers both inpatient and outpatient hospital care and services. Social Security beneficiaries, retirees, voluntary enrollees, and disabled individuals are all entitled. Both employers and employees finance benefits through payroll taxes of 1.45 percent on all earnings.
Examples : Hospital care with general nursing, home health services

A

Medicare Part A

99
Q

12 weeks of unpaid leave for: Birth, adoption, or foster care, Serious family medical or psychological problems or 26 weeks for family member of the military for qualifying exigencies (also unpaid), Must keep employee whole

A

FMLA (Family Medical Leave Act)

100
Q

Minimal income workers who are seeking employment defined as a specific number of applications per week
Paid weekly through a welfare and WIC payment

A

Unemployment and frequency of payments

101
Q

Established 3 main types of legally required benefits: unemployment insurance, retirement income, benefits for dependents and medical insurance

A

Social Security Act 1935

102
Q

Provides income for the married spouse of a deceased participant • Goal is to keep the household somewhat whole

A

Survivors’ Insurance

103
Q

• Participant must have contributed for 40 quarters • Eligibility depends on age, job, and nature of the disability • Benefits are very difficult to obtain are frequently require expensive legal representation • Disability must last for at least a year or be terminal
Average Monthly Benefit in 2015 = $1,166.33

A

Disability Benefits

104
Q

Participating citizens get annual statements discussing their benefits at retirement using current rules • Retiring at age 62 provides partial benefits • Retiring between age 65 & 67 (depending on the year) provides full benefits

A

Retirement

105
Q

Value grows tax-free and no taxes at distribution (with few exceptions)

A

Post tax ROH

106
Q

Most common type offered by companies, provides protection to employees’ beneficiaries only during a limited period based on a specified number of years (i.e. 5 years) subject to a maximum age (65 years old) After that it expires.

Most common form of life insurance
Like all life insurance, it pays a benefit upon the death of the insured
Written only for a specific term (i.e. 10 years)

A

Term life insurance

107
Q

Pays an amount to the designated beneficiaries of the deceased employee, but unlike term policies, whole life plans do not terminate until payment is made to beneficiaries.

~Follows the insured throughout their life; there’s no term
~Premiums are significantly higher, and adjust as the insured’s age & health changes
~Will become higher as you get older, as you pass away etc. Can be very expensive.

A

Whole life insurance

108
Q

If the employee has been there for 3 years. The employee gets all the money. Happens all at once within 3 years.

A

Cliff vesting

109
Q

at year 2, you get 20%, and additional year you get another 20%. Then 100% vesting after 6 years. Happens overtime

A

Graduated vesting

110
Q

Decreased cost of healthcare = successful program
-Employees who meet requirements such as being healthy, improving health, getting a yearly physical, etc, usually get a discounted rate of medical insurance

A

Wellness programs: how do companies gauge success

111
Q
  • Participation requirements
  • Coverage requirements
  • Vesting rules
  • Accrual rules
  • Evidence of nondiscrimination
  • Key employee and top-heavy provisions • Minimum funding standards
  • Social Security integration
  • Contribution and benefit limits
A

13 Characteristics of Qualified Plans

112
Q

13 Characteristics of Qualified Plans

A
  • Participation requirements
  • Coverage requirements
  • Vesting rules
  • Accrual rules
  • Evidence of nondiscrimination
  • Key employee and top-heavy provisions
  • Minimum funding standards
  • Social Security integration
  • Contribution and benefit limits
113
Q

operates similarly to managed care programs because it offers prepaid benefits with nominal copayments.

A

Prescription card program

Comp Exam 2 (1 decks)

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