Exam Review Flashcards

Question 1

Q

Which of the following terms refers to all forms of pay or rewards going to employees and arising from their employment?
A) salary
B) employee benefits
C) wage reimbursement
D) employee compensation

Answer

A

Answer: D

Question 2

Q

Which of the following is NOT a type of direct financial payment? A) wages
B) insurance
C) incentives
D) commissions

Answer

A

Answer: B-

insurance

Question 3

Q

Which of the following terms refers to pay in the form of financial benefits, such as insurance?
A) direct financial payments
B) out-of-pocket expenses
C) indirect financial payments
D) sales commissions

Answer

A

C - indirect financial payments

Question 4

Q

John is a sales representative in a jewelry store. He typically works 40 hours per week and his pay is completely based on his sales. He earns a 5% commission for every sale he makes. Which of the following terms best describes John’s situation?
A) pay for performance
B) indirect financial compensation C) time-based compensation
D) piecework pay

Question 5

Q

Which of the following factors has the LEAST effect on the design of an organization's pay plan?
A) legal
B) union
C) company vision
D) company policy

Question 6

Q

Which of the following was enacted in 1931 for the purpose of setting wage rates for laborers and mechanics employed by contractors working for the federal government?
A) Walsh-Healey Public Contract
B) Fair Labor Standards Act
C) Civil Rights Act
D) Davis-Bacon Act

Question 7

Q

Which of the following sets basic labor standards for employees working on any government contract that amounts to more than $10,000?
A) Davis-Bacon Act
B) Walsh-Healey Public Contract
C) Fair Wages Act
D) Fair Labor Standards Act

Question 8

Q

Which compensation-related law contains provisions for minimum wage, maximum hours, overtime pay, equal pay, record-keeping, and child labor?
A) Davis-Bacon Act
B) Fair Wages Act
C) Fair Labor Standards Act
D) Walsh-Healey Public Contract

Question 9

Q

Which of the following issues is NOT addressed by the Fair Labor Standards Act? A) record-keeping
B) overtime pay
C) child labor
D) termination

Question 10

Q

Which law makes it illegal to discriminate against any individual with respect to compensation because of race, color, religion, sex, or national origin?
A) Fair Labor Standards Act
B) Title VII of the Civil Rights Act
C) Equal Pay Act
D) Taft-Hartley Act

Question 11

Q

According to the Fair Labor Standards Act, what rate of normal pay would a covered employee receive for working more than 40 hours in a workweek?
A) 50%
B) 100%
C) 150%
D) 200%

Question 12

Q

Jill works as a cashier at a grocery store. She earns $10 an hour (or $400 for a 40-hour week). Last week, she worked 46 hours. What is the minimum amount that Jill earned last week? A) $460
B) $490
C) $520
D) $550

Question 13

Q

Joseph worked 6 hours of overtime this week but has decided to take time off instead of overtime pay. How many hours will Joseph receive in time off from work?
A) 3 hours
B) 6 hours
C) 9 hours
D) 18 hours

Question 14

Q

Which of the following is true for employers who use independent contractors? A) Fair Labor Standards Act overtime requirements do not apply.
B) Social Security taxes are higher than for regular employees.
C) Federal income taxes are charged at a reduced rate.
D) Payroll taxes are paid by the employer.

Question 15

Q

In most cases, which of the following occupations is NOT exempt from the overtime provisions of the Fair Labor Standards Act?
A) physicians
B) engineers
C) paralegals
D) teachers

Question 16

Q

Which of the following jobs is most likely categorized as nonexempt from the overtime pay provisions of the Fair Labor Standards Act?
A) taxicab driver
B) personnel director
C) newspaper writer
D) computer systems analyst

Question 17

Q

Anita, a manager at a department store, needs to determine whether one of her employees is exempt or nonexempt under the Fair Labor Standards Act. Which of the following would be the best resource for Anita?
A) organizational chart
B) performance appraisal C) business plan
D) job description

Question 18

Q

Which of the following states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work? A) Americans with Disabilities Act
B) Title VII of the Civil Rights Act
C) Social Security Act
D) Equal Pay Act

Question 19

Q

Which act regulates vesting rights and portability rights? A) Fair Labor Standards Act
B) Title VII of the Civil Rights Act
C) Employer Retirement Income Security Act
D) Equal Pay Act of 1963

Question 20

Q

Which of the following terms refers to the ownership employees build up in their pension plans should their employment with a firm end prior to retirement?
A) portability
B) equity
C) vesting
D) shares

Question 21

Q

Which of the following laws has the LEAST amount of influence on compensation decisions?
A) Americans with Disabilities Act
B) Labor Management Relations Act
C) Family and Medical Leave Act
D) Age Discrimination in Employment Act

Question 22

Q

Bonnie, a data analyst, needs to take time off from work to care for her elderly mother. According to the Family and Medical Leave Act, what is the maximum number of weeks of unpaid, job-protected leave that Bonnie may take?
A) 4
B) 6
C) 12
D) 16

Question 23

Q

Which of the following gives employees the right to organize, bargain collectively, and engage in concerted activities for the purpose of collective bargaining?
A) Equal Pay Act
B) Civil Rights Act
C) Fair Labor Standards Act
D) National Labor Relations Act

Question 24

Q

What has historically been the key issue in collective bargaining? A) wage rates
B) income security
C) health care benefits
D) cost-of-living adjustments

Question 25

Q

Which of the following issues would LEAST likely be negotiated by unions? A) income security
B) time off with pay
C) health care benefits
D) unpaid medical leave

Question 26

Q

Which of the following terms refers to a compensation plan that advances a firm's strategic goals?
A) strategic management
B) performance pay plan
C) aligned reward strategy
D) workers' compensation package

Question 27

Q

Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the past few years, the company’s market share has dropped significantly, and employee turnover has increased. Upper management is considering the implementation of a new compensation policy in its efforts to turn the company around. Historically, the company has paid all employees similarly with some variation for seniority but no distinction between high and low performers.
Which of the following questions is LEAST relevant to Homelife’s decision to develop an aligned reward strategy?
A) What compensation programs should Homelife use to reinforce necessary employee behaviors?
B) How well does Homelife’s current compensation program match the company’s strategic aims?
C) What compensation programs should Homelife use to reinforce desired employee behaviors? D) What are the results of Homelife employee salary surveys in regards to wage satisfaction?

Question 28

Q

Which of the following is the LEAST likely way that an employer would address a cost-of- living differential?
A) paying a nonrecurring amount spread over one to three years
B) paying a nonrecurring, lump sum amount
C) raising an employee’s base salary
D) raising commission percentages

Question 29

Q

Which of the following is the LEAST likely way that an employer would address a cost-of- living differential?
A) paying a nonrecurring amount spread over one to three years
B) paying a nonrecurring, lump sum amount
C) raising an employee’s base salary
D) raising commission percentages

Question 30

Q

What theory of motivation states that people are strongly motivated to maintain a balance between what they perceive as their contributions and their rewards?
A) Two-factor theory
B) Equity theory
C) Learned needs theory
D) Expectancy theory

Question 31

Q

Which of the following is NOT one of the forms of equity related to compensation issues? A) group
B) external
C) individual
D) procedural

Question 32

Q

Which form of equity refers to how a job's pay rate in one company compares to the job's pay rate in other companies?
A) distributive
B) internal
C) external
D) procedural

Question 33

Q

Jason is an information systems technician in a town in North Carolina with a population of 100,000. He receives an annual salary of $35,000. He recently found out that a nearby town with a similar population pays people in the same position $40,000 annually. With which form of equity is Jason most concerned?
A) distributive
B) procedural
C) internal
D) external

Question 34

Q

Which form of equity refers to the fairness of a job's pay rate in comparison to other jobs within the same company?
A) external
B) internal
C) distributive
D) individual

Question 35

Q

Trevor, a sales manager at IBM, recently learned that an IBM human resources manager with comparable responsibilities and spans of control earns a higher salary than Trevor. Which form of equity is of most concern to Trevor?
A) external
B) internal
C) distributive
D) individual

Question 36

Q

Which form of equity refers to the fairness of an individual's pay as compared with what his or her co-workers are earning for the same or very similar jobs within the company, based on each individual's performance?
A) internal
B) distributive
C) individual
D) procedural

Question 37

Q

Audrey is a lawyer in a mid-size firm in Chicago. She recently learned that another lawyer who joined the firm at the same time earns a lower salary than she does. Which form of equity is most relevant to Audrey's situation?
A) internal
B) distributive
C) individual
D) procedural

Question 38

Q

Which form of equity refers to the perceived fairness of the processes used to make decisions regarding the allocation of pay?
A) internal
B) distributive
C) individual
D) procedural

Question 39

Q

External equity refers to ________.
A) how a job’s pay rate in one company compares to the job’s pay rate in other companies
B) the fairness of an individual’s pay as compared to a co-worker’s pay for the same job
C) the perceived fairness of the processes and procedures used to make decisions about compensation
D) the use of salary surveys and job evaluation comparisons to monitor pay levels within an industry

Question 40

Q

Which of the following best defines internal equity?
A) how a job’s pay rate in one company compares to the job’s pay rate in other companies
B) how fair the job’s pay rate is, when compared to other jobs within the same company
C) the fairness of an individual’s pay as compared to a co-worker’s pay for the same job
D) the perceived fairness of the processes and procedures used to make compensation decisions

Question 41

Q

Which of the following is used to maintain internal equity? A) job analysis comparisons
B) organizational charts
C) incentive pay
D) salary surveys

Question 42

Q

What type of equity is a manager most likely trying to maintain through the use of performance appraisals and incentive pay?
A) internal
B) external
C) individual
D) procedural

Question 43

Q

Beth, a small business owner, wants to ensure external equity when establishing pay rates. Beth should most likely ________.
A) use wage curves to price each pay grade
B) compare performance appraisals
C) conduct a salary survey
D) check online pay sites

Question 44

Q

Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the past few years, the company’s market share has dropped significantly, and employee turnover has increased. Upper management is considering the implementation of a new compensation policy in its efforts to turn the company around. Historically, the company has paid all employees similarly with some variation for seniority but no distinction between high and low performers.
Which of the following, if true, best supports the argument that Homelife executives should primarily address internal equity issues when developing a new compensation plan?
A) Homelife employees receive annual performance appraisals at which time they set career goals.B) Salary surveys indicate dissatisfaction among the Homelife managers in different departments. C) Online pay sites show the pay range for sales associates at both Homelife and its competitors. D) Homelife pays its sales managers commissions in addition to base salaries and health benefits.

Question 45

Q

Homelife, a national chain of high-end furniture stores, employs nearly 800 workers. In the past few years, the company’s market share has dropped significantly, and employee turnover has increased. Upper management is considering the implementation of a new compensation policy in its efforts to turn the company around. Historically, the company has paid all employees similarly with some variation for seniority but no distinction between high and low performers.
Which of the following, if true, best supports the argument that Homelife should distribute salary surveys before establishing new pay rates?
A) Homelife executives want to identify benchmark jobs before determining the worth of other jobs.B) Homelife executives plan to use the compensable factors emphasized by the Equal Pay Act. C) Computerized job evaluation systems will be used by Homelife to generate questionnaires. D) A wage curve needs to be established by Homelife for the purpose of federal compliance.

Question 46

Q

What are the two primary ways to make direct financial payments to employees? How does compensation for managers or professionals differ from compensation for clerical or production workers at a firm?

Answer

A

There are two basic ways to make direct financial payments to employees: base them on increments of time or on performance. Time-based pay is still the foundation of most employers’ pay plans. Blue-collar and clerical workers get hourly or daily wages, for instance, and others, like managers or Web designers, tend to be salaried and paid by the week, month, or year. The second direct payment option is to pay for performance. Piecework and sales commissions are examples of performance-based compensation. Developing compensation plans for managers or professionals is similar in many respects to developing plans for any employee. The basic aim is the same: to attract and keep good employees. Managerial jobs tend to stress harder to quantify factors like judgment and problem solving more than do production and clerical jobs. There is also more emphasis on paying managers and professionals based on results—based on their performance or on what they can do—rather than on the basis of static job demands like working conditions. So, job evaluation, although still important, usually plays a secondary role to non-salary issues like bonuses, incentives, market rates, and benefits.

Question 47

Q

What are the advantages for employers of claiming that someone doing work for them is an independent contractor rather than an employee? What generally makes a worker classified as an “independent contractor”?

Answer

A

There are many advantages to organizations. The Fair Labor Standards Act does not apply to independent contractors. The employer does not have to pay unemployment compensation, payroll taxes, Social Security taxes, or city, state, and federal income taxes.
In general, an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. However, there is no single rule or test. Instead, the courts will look at the total situation. The major consideration is this: The more the employer controls what the worker does and how he or she does it, the more likely it is that the courts will find the worker to be an employee, not an independent contractor.

Question 48

Q

What are your compensation options if you are an employer who needs to transfer an employee from a low cost-of-living area to a high cost-of-living area?

Answer

A

Employers have different ways of handling cost-of-living differentials. One is to give the transferred person a nonrecurring payment in a lump sum amount. Another is to pay a differential for ongoing costs in addition to a one-time allocation. Others simply raise the employee’s base salary.
For international transfers, companies can go with a home-based or host-based salary plan.
With a home-based salary plan, an international transferee’s base salary reflects his or her home country’s salary. The employer then adds allowances for cost-of-living differences–housing and schooling costs, for instance. This is a reasonable approach for short-term assignments, and avoids the problem of having to change the employee’s base salary every time he or she moves.
In the host-based plan, the firm ties the international transferee’s base salary to the host country’s salary structure. In other words, the manager from New York who is sent to France would have his or her base salary changed to the prevailing base salary for that position in France, rather than keep the New York base salary. The firm usually tacks on cost-of-living, housing, schooling, and other allowances here as well.

Question 49

Q

Explain the equity theory of motivation. What are the four forms of equity?

Answer

A

Equity theory states that people are strongly motivated to maintain a balance between what they perceive as their inputs or contributions and their rewards. If a person perceives an inequity, a tension or drive will develop in the person’s mind and the person will be motivated to reduce or eliminate the tension and perceived inequity. The four forms are external, internal, individual, and procedural. External equity refers to how a job’s pay rate in one company compares to the job’s pay rate in other companies. Internal equity refers to how fair the job’s pay rate is when compared to other jobs within the same company. Individual equity refers to the fairness of an individual’s pay as compared with what his or her co-workers are earning for the same or very similar jobs within the company, based on each individual’s performance. Procedural equity refers to the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay.

Question 50

Q

Which of the following is used to anchor the employer’s pay scale? A) grades
B) job metric
C) benchmark job
D) human resource metric

Question 51

Q

Which of the following terms refers to a systematic comparison done in order to determine the worth of one job relative to another?
A) job analysis
B) job evaluation
C) job description
D) job classification

Question 52

Q

Central basic factors that establish how several jobs compare to one another and that determine the pay for each job are called \_\_\_\_\_\_\_\_.
A) compensable factors
B) job evaluation factors
C) ranking factors
D) analysis factors

Question 53

Q

In most cases, the majority of the members on a job evaluation committee are ________. A) managers
B) employees
C) HR specialists
D) union representatives

Question 54

Q

Which of the following is NOT one of the typical methods used by job evaluation committees to determine the worth of a job?
A) ranking
B) point method
C) job classification
D) paired comparison

Question 55

Q

When using the job evaluation method of job classification, raters categorize jobs into groups of similar jobs called \_\_\_\_\_\_\_\_.
A) classes
B) sections
C) grades
D) cohorts

Question 56

Q

Which of the following best describes the point method of job evaluation? A) ranking each job relative to all other jobs based on pay grade
B) categorizing jobs into grades and classes based on specific rules
C) deciding which jobs have a higher number of compensable factors
D) identifying and quantifying the compensable factors present in a job

Question 57

Q

Which job evaluation method is a quantitative technique involving the identification of several compensable factors and the degree to which each of these factors is present in the job? A) ranking method
B) point method
C) job grading method
D) job classification method

Question 58

Q

Which job evaluation method is used by most modern employers? A) job classification method
B) job grading method
C) ranking method
D) point method

Question 59

Q

What are the two primary components of computerized job evaluations? A) compensable factors and benchmark jobs
B) grade definitions and factor comparisons
C) structured questionnaires and statistical models
D) structured questionnaires and grade definitions

Question 60

Q

Which of the following is NOT one of the compensable factors emphasized in the Equal Pay Act?
A) skills
B) accountability
C) responsibility
D) working conditions

Question 61

Q

A \_\_\_\_\_\_\_\_ is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.
A) wage curve
B) benchmark
C) pay grade
D) class

Question 62

Q

Which of the following shows the relationship between the value of the job and the average pay for this job?
A) benchmark
B) pay grade
C) scatter plot
D) wage curve

Question 63

Q

The purpose of the wage curve is to ________.
A) show the relationship between the value of the job and the current average pay rates
B) equate jobs of similar difficulty or importance as established by job evaluation
C) choose benchmark jobs within each pay grade
D) cluster jobs into logical groupings

Question 64

Q

Phil, the owner of Eastline Electronics, recently learned that the current rate being paid for the position of engineering assistant at his firm falls significantly below the wage line. Which of the following steps should Phil most likely take to correct this problem?
A) enact a pay freeze for that job
B) assess a decrease in wages C) pay a one-time bonus
D) provide a pay raise

Answer 8

A

There are several reasons to use pay ranges for each pay grade. First, it lets the employer take a more flexible stance in the labor market. For example, it makes it easier to attract experienced, higher-paid employees into a pay grade at the top of the range, since the starting salary for the pay grade’s lowest step may be too low to attract them. Pay ranges also let companies provide for performance differences between employees within the same grade or between those with different seniorities. Companies create broadbands for several reasons. The basic advantage is that it injects greater flexibility into employee assignments. It is especially sensible where firms organize into self-managing teams. However, broadbanding can be unsettling, particularly for new employees. “There’s a sense of permanence in the set of job responsibilities often attached to job titles,” one manager says. That sense of permanence isn’t nearly as clear when employees move frequently from project to project and job to job.

Answer 9

A

Most competency-based pay plans contain five elements. The employer defines specific required skills and chooses a method for basing the person’s pay on his or her skills. A training system lets employees acquire skills. There is a formal competency testing system. And, the work is designed so that employees can easily move among jobs of varying skill levels.

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Exam Review Flashcards

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