Compensation and Benefits Administration
Chapter Exam Questions
Course Introduction
Compensation and Benefits Administration explores the principles, strategies, and legal frameworks involved in designing and managing employee compensation and benefits programs. The course examines topics such as job evaluation, pay structures, incentive systems, executive compensation, health and retirement benefits, and compliance with relevant labor laws. Through case studies and practical exercises, students learn how to develop equitable and competitive compensation packages that support organizational goals, attract and retain talent, and comply with ethical and regulatory requirements.
Recommended Textbook
Strategic Compensation A Human Resource Management Approach 8th Edition by Joseph J. Martocchio
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Chapter 1: Strategic Compensation: a Component of Human Resource Systems
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Q1) These compensation systems go a long way in attracting and retaining the most qualified employees and are based upon market and compensation surveys.
A)internally consistent compensation systems
B)market-competitive pay systems
C)job evaluation compensation systems
D)externally consistent compensation systems
Answer: B
Q2) Protection programs are what type of compensation benefits?
A)external
B)non-monetary
C)internal
D)monetary
Answer: B
Q3) Employment ________ occurs when an employee's agreement to perform work is ended,whether it is voluntarily or involuntarily.
Answer: termination
Q4) ________ compensation refers to the mental state of employees as a result of their performance on the job.
Answer: Intrinsic
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Chapter 2: Contextual Influences on Compensation Practice
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Q1) A policy that applies to all company employees,but unintentionally hurts a protected group disproportionately,would be what form of discrimination?
A)disparate treatment
B)disparate impact
C)disparate causality
D)situational discrimination
Answer: B
Q2) Which branch of the federal government is responsible for interpreting laws?
A)service branch
B)legislative branch
C)executive branch
D)judicial branch
Answer: D
Q3) The ________ Amendment allows female employees to charge employers with Title VII violations regarding pay only when the employer has violated the Equal Pay Act of 1963.
Answer: Bennett
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Page 4
Chapter 3: Traditional Bases for Pay: Seniority and Merit
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Q1) Jack works at an auto dealer as a sales professional.At the beginning of every year,he and his supervisor determine objectives for Jack together,which are tied to corporate objectives.One of the objectives is related to the customer satisfaction.Jack always remains in contact with customers to whom he sold cars even after six months following the sale.His performance appraisal partially depends on the customer satisfaction survey results.What kind of performance appraisal method does this auto dealer use for Jack?
A)trait systems
B)comparison systems
C)behavioral systems
D)goal-oriented systems
Answer: D
Q2) If an employee is rated as outstanding on her leadership ability,she was probably rated using which appraisal system?
A)trait system
B)goal-oriented system
C)comparison system
D)behavioral system
Answer: A
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Chapter 4: Incentive Pay
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Q1) The general rule of thumb is that short-term company goals last less than how long?
A)1 month
B)6 months
C)1 year
D)5 years
Q2) This formula for determining the amount available for profit sharing uses a specific percentage of annual profits contingent upon the successful attainment of a specified profit goal.
A)fluctuating first-dollar-of-profits
B)differed first-dollar-of-profits
C)graduated first-dollar-of-profits
D)fixed first-dollar-of-profits
Q3) What is the main objective of Scanlon plans?
A)to standardize the workforce
B)to encourage unionization
C)to increase workforce competitiveness
D)to increase employee involvement
Q4) ________ teams consist of a group of people assigned to complete a one-time project.
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Chapter 5: Person-Focused Pay
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Q1) Which one of the following would be correct regarding person-focused pay programs?
A)the skill blocks model only emphasizes horizontal skills
B)the stair-step model addresses depth,while the skill blocks model emphasizes both horizontal and vertical skills
C)employees do not progress to more complex jobs in the stair-step model
D)stair-step models do not apply to jobs within the same family
Q2) Which pay model promotes learning and skills development for a wide variety of jobs from different job families?
A)cross-departmental
B)job-point accrual
C)stair-step
D)skill blocks
Q3) Both unions and contractors,who employ carpenters,use ________ pay plans.
Q4) ________ pay programs have been used most widely in service and manufacturing industries.
Q5) ________ of skills is the level of expertise or specialization an employee brings to a job.
Q6) ________ skills refer to similar skills or knowledge.
Page 7
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Chapter 6: Building Internally Consistent Compensation Systems
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Q1) This section concisely summarizes the job with two to four descriptive statements.
A)job summary
B)job duties
C)job titles
D)job preview
Q2) In the job analysis process,this term represents a group of positions that are identical with respect to their major tasks.
A)job
B)element
C)job family
D)occupation
Q3) Market-based job evaluation uses which method to collect data to determine prevailing pay rates?
A)observations
B)interviews
C)questionnaires
D)surveys
Q4) Summarize the five main activities of job analysis work.
Q5) Compare and contrast job analysis and job evaluation.
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Chapter 7: Building Market-Competitive Compensation Systems
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Q1) What is an appropriate pay policy mix?
Q2) This term refers to the distance of each salary figure from the mean.
A)standard deviation
B)quartile
C)percentile
D)deviated mean
Q3) XYZ Inc.pursues a low-cost strategy in its industry and generally needs lower skilled employees.As a result,their management team decided to establish a compensation policy that pays less than the marketplace.In recent years,the company became susceptible to labor shortages and high turnover.What kind of pay level policy does XYZ Inc.follow?
A)market match
B)market lag
C)market lead
D)market pay line
Q4) ________ allow compensation professionals to describe the distribution of data based on four groupings.
Q5) The ________ is the most commonly used method for tracking cost changes throughout the United States.
Q6) The ________ is the middle value in an ordered sequence of numerical data. Page 9
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Page 10
Chapter 8: Building Pay Structures That Recognize
Individual Contributions
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Q1) Alejandro Martinez is responsible for setting up the pay structure for his company.He believes that newly hired employees should not be paid as much as established employees.Accordingly,what type of pay structure should Mr.Martinez use?
A)broadbanding
B)sales incentives
C)two-tiered
D)merit pay
Q2) When these spreads are used to develop pay grade widths,the grades are based on a set number of job evaluation points for each grade that increases as an employee moves up the pay structure.
A)pay rate spreads
B)percentage-based job evaluation point spreads
C)pay range spreads
D)absolute job evaluation points spreads
Q3) The ________ pay value is the halfway mark between the range minimum and maximum rates.
Q4) ________ rates pay wages higher than the maximum listed in order to help retain valued employees fielding big job offers elsewhere.
11
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Chapter 9: Discretionary Benefits
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Q1) Which of the following would be considered an act as part of a company's wellness program?
A)putting a soda machine in the break room
B)giving out cigars to expecting fathers
C)offering anti-smoking courses
D)giving employees free pizza at lunch
Q2) ________ are paid time off for professional activities,such as a research project or a curriculum development.
Q3) Due to a recent merger with another major airline,ABC Airlines decided to layoff some of its employees.ABC Airlines offers training sessions to teach job search and interviewing techniques to those laid off employees.What kind of service was provided by this airline?
A)employee assistance program
B)tuition reimbursement
C)wellness program
D)outplacement assistance
Q4) In the 1940s and 1950s,companies began offering ________ as an alternative to pay hikes in order to motivate employees through greater work benefits.
Q5) What are the implications of discretionary benefits for strategic compensation?
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Chapter 10: Employer-Sponsored Retirement Plans and Health Insurance Programs
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Q1) In which plan do employees possess the option to receive care from health care providers outside the designated network of physicians,paying more for the choice?
A)fee-for-service plans
B)preferred provider organizations
C)HMOs
D)point-of-service plans
Q2) These represent a series of payments for the life of the participant and beneficiary.
A)collateral payments
B)periodic payments
C)lump sum distributions
D)annuities
Q3) ________ plans refer to pension plans that do not meet at least one of the minimum standard provisions.
Q4) What specifies the rate at which participants accumulate benefits?
A)accrual rules
B)combination procedures
C)Sarbanes-Oxley
D)build-up rules
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Chapter 11: Legally Required Benefits
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Q1) Briefly describe the impetus for the establishment of legally required benefits in the United States.
Q2) How often will Jill receive an unemployment check?
A)daily
B)weekly
C)bi-monthly
D)monthly
Q3) Which one of the following is a wrong belief regarding the Social Security System in the United States?
A)The viability of Social Security programs has been a subject of heated debates between Democrats and Republicans across the country.
B)The Social Security taxes paid by today's workers and their employers are used to pay the benefits for today's retirees and other beneficiaries.
C)Social Security taxes paid by employees and their employers are held in interest-bearing accounts set aside by the federal government to meet their own future retirement income needs.
D)The Social Security System is a pay-as-you-go system.
Q4) ________ specify insurance rates based on classifications of businesses.
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Chapter 12: Compensating Executives
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Q1) In 2011,the average CEO earned how much more annually than the average shampooer?
A)12 times greater
B)38 times greater
C)74 times greater
D)178 times greater
Q2) This is the difference between the stock price at the time of purchase and the lower stock price at the time an executive receives the stock option.
A)disposition value
B)discounted value
C)fair market value
D)capital gains
Q3) Which executive bonus amount varies with the extent to which a pre-established minimum performance level is met?
A)target plan
B)predetermined allocation
C)performance-contingent
D)discretionary
Q4) Company stock shares are the main form of executives' ________ compensation.
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Chapter 13: Compensating the Flexible Work Force:
Contingent Employees and Flexible Work Schedules
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Q1) When a telecommuting employee works from a remote extension from the employer's office that includes a clerical staff and a full-time manager,that employee is said to be working at what type of office?
A)remote work office
B)nomadic work center
C)neighborhood work center
D)satellite work center
Q2) John is offered to be an adjunct faculty for a semester to teach a statistics class in place of a professor,who is on a sabbatical leave.This example represents which of the following?
A)independent contractor
B)on-call arrangement
C)job sharing
D)leased employee
Q3) ________ occurs when all members of a group agree on mistaken conclusions due to conformity in sharing the same mind-set.
Q4) Carlos works at XYZ Innovations Inc.as a computer scientist.________ schedules enable Carlos working four 10-hour days.
Q5) Explain the reasons why employers hire temporary workers.
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Chapter 14: Compensation Expatriates
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Questions
Q1) ________ is the increase in prices for consumer goods and services.
Q2) AT&T plans on sending R.J.to Peru to work for at least 3 years.They will probably use which method to set his base pay?
A)host-country-based
B)home-country-based C)headquarters-based
D)third-country based
Q3) If your company hired a Canadian manager to work in your plant in Taiwan,she would be considered which type of international employee?
A)foreign country national
B)third country national
C)host country national
D)non-host country national
Q4) Which of the following are used by the State Department to determine the per diem schedules?
A)length of stay,family size
B)location,family size
C)cost of living,family size
D)length of stay,location
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Chapter 15: Pay and Benefits Outside the United States
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Q1) What Canadian province has the highest minimum wage?
A)Newfoundland
B)British Columbia
C)Nunavut
D)Alberta
Q2) ________ has by far the strongest economy out of all the countries in South America.
Q3) India's labor force has over how many people based on 2012 estimates?
A)118 million
B)273 million
C)388 million
D)498 million
Q4) In which country do companies incur the highest hourly cost for employing a manufacturing worker?
A)China
B)Norway
C)United States
D)Canada
Q5) The country with the lowest GDP per capita reviewed in the chapter is ________.
Page 18
Q6) Identify the countries that are part of NAFTA and its main provisions.
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Chapter 16: Challenges Facing Compensation Professionals
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Q1) Tim owns a fruit distribution company and hires around 100 employees.Before PPACA became a law,he did not provide health insurance coverage for the workers.After March 2010,he started to provide the coverage.However,from then on,the costs of his company have been increasing exponentially.Which of the following cannot be one of the ways to limit the rising costs of offering health care coverage?
A)lowering wages to offset the costs of health insurance
B)decreasing the size of his workforce
C)limiting the waiting periods to receive health care coverage to 90 days (for new workers)
D)imposing lifetime benefit caps at $1 million
Q2) According to the Federal Reserve Bank,what is the percentage of industries that have cut back production since the beginning of the Great Recession?
A)82%
B)86%
C)90%
D)75%
Q3) ________ refers to a general slowdown in economic activity.
Q4) ________ measures the purchasing power of a dollar.
Q5) ________ is the face value of a dollar.
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