Q&A Hero

Q: Which of the following is rationale to apply a probationary period prior to permitting participation in an employee benefits plan? A) Companies view such periods as an opportunity to ensure that they have made sound hiring decisions. B) Companies enable new employees to decide whether they wish to remain employed on a long-term basis before completing extensive paperwork. C) Companies attempt to reduce employee entitlement. D) Companies attempt to discourage long-term employment.

Q: Under which type of plan may employees exercise the option of trading extra benefits credits for cash? A) cafeteria benefits plans B) core plus option plans C) flexible spending accounts D) defined contribution plans

Q: Since the costs of benefits has risen so dramatically in recent years, the majority of the companies decided to finance discretionary benefits using which of the following methods? A) noncontributory financing B) contributory financing C) employee-financed benefits D) employer-financed benefits

Q: Mary works at a pharmaceutical company as a customer service representative. Her employer allows her to choose the set of benefits she will receive on top of preestablished sets of benefits, such as medical insurance and term life insurance. The company gave her credits equal to 6% of her salary with which she decided to purchase dental and vision insurance. This pharmaceutical company uses what kind of benefits plan? A) cafeteria B) flexible benefits C) employee-financed D) core plus option

Q: Effective employee benefits communications programs can help reduce which of the following? A) an appreciation of benefits B) increased flexibility C) costs D) an entitlement mentality

Q: ________ rights refer to nonforfeitable rights to retirement benefits.

Q: The ________ is the U.S. tax code.

Q: Which of the following is NOT a provision of the Employee Retirement Income Security Act? A) vesting rights B) fiduciary responsibilities C) employer matching contributions D) reporting and disclosure duties

Q: Which of the following do qualified plans provide? A) matching contributions to defined contribution plans B) substantial tax breaks to employers and employees C) substantial tax breaks to employees D) matching contributions to defined benefit plans

Q: Which set of rules prohibit employers from discriminating in favor of highly compensated employees in contributions or benefits, availability of benefits, rights, or plan features? A) Equal Pay Act B) vesting rules C) nondiscrimination rules D) participation rules

Q: Under a cliff vesting arrangement, after how many years must full vesting rights be granted? A) 1 B) 3 C) 5 D) 7

Q: Which of the following laws permit employers to automatically enroll employees in a defined contribution plan? A) Consolidated Omnibus Reconciliation Act B) Employee Retirement Income Security Act C) Pension Protection Act D) Internal Revenue Code

Q: Distinguish between qualified and nonqualified retirement plans.

Q: How are integrated paid time off policies different than holiday, vacation, sick leave, and personal leave policies?

Q: Define three types of life insurance.

Q: 401(k) and 403(b) plans are examples of ________ plans.

Q: ________ are career and personal programs designed to develop the job-hunting skills and strategies of employees being laid off or terminated.

Q: ________ help bring employees to the workplace and back home again.

Q: Retirement programs, or ________, provide income in the form of an annuity to employees and their beneficiaries during some or all of their retirement.

Q: IRS guidelines define ________ plans as "defined benefit plans that define benefits for each employee by reference to the amount of the employee's hypothetical account balance."

Q: An ________ refers to the minimum amount of time that an employee must wait after becoming disabled before disability insurance payments begin.

Q: Which of the following would be considered 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

Q: The XYZ Company tries to influence employee food choices by stocking vending machines with l healthy food. They also offer programs to teach stress reduction techniques. Which kind of discretionary benefit program does this company sponsor? A) family assistance program B) employee assistance program C) wellness program D) employer assistance program

Q: Outplacement assistance programs are best suited for which condition? A) new plant openings B) mergers and acquisitions C) workforce increases D) global operations

Q: Due to a recent merger with another major airline, ABC Airlines decided to lay off some of its employees. ABC Airlines offers training sessions to teach job search and interviewing techniques to those laid off employees. Which kind of service was provided by this airline? A) employee assistance program B) tuition reimbursement C) wellness program D) outplacement assistance

Q: In 2014, approximately what percentages of private-sector employees and government employees, respectively, had access to an EAP? A) 24 percent, 94 percent B) 39 percent, 54 percent C) 54 percent, 74 percent D) 74 percent, 39 percent

Q: The XYZ Company provides a program for its employees who need help dealing with the effects of domestic violence. The XYZ Company can offer this kind of service through which of the following programs? A) family assistance program B) employee assistance program C) wellness program D) employer assistance program

Q: Unscheduled absenteeism has climbed to its highest levels in the XYZ Company last month. In order to reduce costs, HR professionals in the XYZ Company changed their paid time off policy. This company used to grant each employee 10 vacation days, 5 paid days for sick leave, and 4 days for personal leave. With the new policy, this company combines vacation, sick leave, and personal leave policies into one paid time off policy (i.e., 19 days). The management kept funeral leave as a stand-alone policy. What is the XYZ Company's new policy called? A) integrated paid time off B) combined paid time off C) sabbatical leave D) volunteer leave

Q: Which of the following is associated with Roth 401(k) plans? A) Employees pay taxes on their contribution. B) Employees do not pay taxes on their contributions. C) Investment gains are taxed. D) Employees can deduct their contributions from post taxable income.

Q: Which of the following is the most common type of life insurance policy offered by companies? A) group life B) term life C) whole life D) universal

Q: What type of pension plan commonly includes profit-sharing plans, stock bonus plans, and employee stock ownership plans? A) defined benefit B) defined contribution C) deferred contribution D) deferred benefit

Q: A 401(k) plan is which of the following types of retirement benefits? A) defined contribution B) defined benefit C) qualified benefit D) nonqualified benefit

Q: 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

Q: You broke your neck at work. The company called to inform you that they had to switch your benefits from the short-term disability account to the long-term disability account. Based on this decision, how long have you been off work? A) at least 3 to 6 months B) at least 1 to 2 months C) 12 months D) 18 months

Q: Which of the following is a commonly used employer-sponsored retirement plan design? A) defined contribution B) qualified contribution C) Roth IRA D) IRA

Q: What are the implications of discretionary benefits for strategic compensation?

Q: In response to government-imposed wage freezes, many companies began offering ________ as an alternative to motivate employees through greater work benefits.

Q: Which of the following benefits was previously offered on a discretionary basis, but, is now mandatory? A) health insurance B) retirement plans C) paid time off D) employee assistance programs

Q: Which of the following contributed to the use of flexible benefits plans? A) greater workforce diversity B) cost savings initiatives C) unions D) global competition

Q: Which government action contributed to the use of welfare benefits? A) the passage of the National Labor Relations Act B) the passage of the Social Security Act C) wage freezes D) recovery from economic depression

Q: Which type of plan appeared as one of the first discretionary benefits practices? A) wellness plans B) employee discounts C) educational assistance D) retirement plans

Q: What is broadbanding? What are its limitations?

Q: Which types of companies are most likely to utilize two-tier wage systems? A) unionized firms B) sales firms C) public sector companies D) private sector companies

Q: 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. Which type of pay structure should Mr. Martinez use? A) broadbanding B) sales incentives C) two-tiered D) merit pay

Q: Which of the following would be considered as an advantage of broadbanding? A) Creation of broad bands lessens employees' job duties and responsibilities. B) Reduced organizational hierarchies support flexibility. C) Creation of management layers promotes quicker decision making. D) Increased responsibility requires supervisors to more closely administer pay.

Q: The HR manager of a company thinks that they have too many narrow pay grades within the organization. By getting the support from upper management, the manager decided to consolidate existing pay grades and ranges into fewer pay grades and broader pay ranges in order to create a flatter organization in terms of compensation. This is an example of which pay structure variation? A) broadbanding B) two-tier pay system C) pay compression D) multiple-tier pay system

Q: ________ makes sure that employees have at least a minimally acceptable level of skill proficiency upon completion of a training unit.

Q: This term describes a set of skills necessary to perform a specific job or a group of similar jobs. A) skill range B) skill grade C) skill block D) skill structure

Q: Which of the following is a major challenge in setting up skill-based pay programs? A) determining the number of skill blocks B) convincing shareholders that this type of pay system can facilitate competitive advantage C) demonstrating that the benefits of adopting a pay-for-knowledge program outweighs the costs D) pricing individual skill blocks

Q: Typically, what is the number of skill blocks used in skill-based pay programs? A) 1 B) 1 to 2 C) 1 to 3 D) 2 or more

Q: What are the three considerations used in determining fixed pay and the compensation mix in sales compensation plans?

Q: Money that covers the basic living expenses of sales professionals is better known as a ________.

Q: ________ is a form of compensation based upon a percentage of the selling price of a product or service.

Q: A company adopting a commissions-oriented sales compensation plan would most likely pursue which type of competitive strategy? A) highest quality B) lowest-cost C) differentiation D) fairest-price

Q: With which type of sales commission plan does an employee earn a higher rate for all sales made in a given period if the sales level exceeds a predetermined level? A) commission-plus-draw B) straight C) multiple-tiered D) graduated

Q: Wherever proprietary information is the subject of training, a company most often relies on which of the following sources of expertise? A) expertise in university professors B) expertise within the company C) both expertise within and outside the company to provide training D) expertise in competitor companies

Q: A recently opened car dealership uses an incentive compensation plan for its sales people. The dealer provides money to its salespeople to cover basic living expenses and then shares a fixed percentage of the selling price of each car sold. However, the salesperson should repay the subsistence pay component within a year; otherwise he/she cannot continue in the employment of this dealer. Which type of sales compensation plan does this dealer adopt? A) salary-plus-bonus B) salary-plus-commission C) commission-plus-draw D) commission only

Q: Jasmine Black believes that the company should share part of the risk for her sales position. Which sales compensation plan should she pursue? A) salary-plus-bonus B) salary-plus-commission C) commission-plus-draw D) commission-only

Q: This type of sales incentive compensation plan offers the sales person a salary and further compensation for achievement of specific, exceptional sales goals A) salary-plus-bonus B) salary-plus-commission C) salary-plus-draw D) salary-plus-graduated commission

Q: Which scenario would be appropriate for using a salary-only plan? A) The salesperson is selling high-priced products B) The salesperson has substantial influence over sales C) The company wants to save money due to budget constraints D) The company wants to create competition among its sales staff

Q: With which sales compensation plan does the level of pay not vary when sales volume does vary? A) commission-only B) salary-only C) salary -plus-bonus D) salary plus-commission

Q: ________, or lump sum bonuses, lend themselves well to cost containment since these bonuses are not permanent percentage increases.

Q: ________ describe the allocation of monetary resources to fund pay structures.

Q: Common review dates provide which of the following advantage? A) The company can equate all employees' job performance at the same time. B) The company minimizes the administrative burden of the plan. C) The company trains supervisors about the most effective way to conduct performance reviews. D) Common review dates ensure that some employees' reviews will be overlooked.

Q: A 10 percent merit pay increase budget tells us which of the following? A) The minimum pay increase amounts to 10 percent. B) The maximum pay increase amounts to 10 percent. C) The average pay increase amounts to 10 percent. D) The standard deviation of any pay increase cannot be more than 10 percent below or above the average.

Q: Which of the following theories suggests that an employee must regard his own ratio of merit increase pay to performance as similar to the ratio for other comparably performing people in the company? A) comparable ratio theory B) comparable pay theory C) equality theory D) equity theory

Q: What is pay compression and how can companies minimize the occurrence of it?

Q: What are the differences between pay grades and pay ranges?

Q: ________ rates pay wages higher than the maximum listed in order to help retain valued employees fielding big job offers elsewhere.

Q: A ________ is the difference between the maximum and minimum pay rates of a given pay grade.

Q: The ________ pay value is the centrally located mark between the range minimum and maximum rates.

Q: ________ represent the vertical dimension of pay structures.

Q: ________ assign different pay rates for jobs of unequal worth and provide the basic framework for recognizing differences in individual contributions.

Q: Richard's job has a compa-ratio of 0.85. What does this ratio tell about Richard's pay rate? A) It is highly competitive with the market. B) It is not competitive with the market. C) There is no way to judge its competitiveness. D) You need more information to judge it.

Q: How are compa-ratios calculated? A) the green circle rates midpoint divided by the normal pay range B) the pay rate divided by the market line rate C) the pay rate divided by the pay range midpoint D) the red circle rates divided by the normal pay range

Q: This type of pay rate applies to an employee who is demoted but is paid more than the maximum rate for the pay grade he is now in. A) graduated B) green circle C) red circle D) multi-tier

Q: John is just hired by a software company as a programmer. He is also a part-time student at the local college and needs just a few credits to graduate from this college. A college degree is required in order to work as a programmer in this software company. Therefore, John receives below-minimum pay rate until he graduates from college. Which type of pay rate does John receive? A) green circle B) red circle C) midpoint pay D) two-tier pay

Q: Which term is used to describe the situation where the pay spread between newly hired employees and more qualified job incumbents is small? A) pay structures B) pay compression C) red circle pay rates D) green circle pay rates

Q: If the company adopts a market lead policy, how will that company's pay range midpoint compare to the market average? A) The midpoint will be the same as the market average. B) The midpoint will be higher than the market average. C) The midpoint will be lower than the market average. D) There is not enough information to make this determination.

Q: Midpoint, minimum, and maximum are values used to define which of the following? A) pay grades B) pay ranges C) pay structures D) pay levels