39) What is the purpose of the wage curve?
A) to show the relationship between the value of the job as determined by one of
the job evaluation methods and the current average pay rates for your grades
B) to equate jobs of approximately equal difficulty or importance as established
by job evaluation
C) to assign pay rates to pay grades
D) to choose benchmark jobs within each pay grade
Objective: Chapter objective 2
40) Which of the following is typically included in compensation packages for a
company’s top executives?
A) short-term and long-term incentives
B) perks
C) executive benefits
D) All of the above.
Objective: Chapter objective 2
41) Supplemental executive retirement plans and supplemental life insurance are
classified as ________ in executive compensation packages.
A) base pay
B) short-term incentives
C) long-term incentives
D) executive benefits
Objective: Chapter objective 2
42) A company using competency-based pay compensates for all of the following
except an employee’s ________.
A) range of skills
B) job title
C) depth of knowledge
D) type of skills
Objective: Chapter objective 2
11
43) ________ means collapsing salary grades and ranges into just a few wide
levels or bands, each of which contains a relatively wide range of jobs and salary
levels.
A) Comparable worth
B) Strategic compensation
C) Broadbanding
D) Job grading
44) According to the Sarbanes-Oxley Act of 2002, if a company must restate
financial statements due to material noncompliance with a financial reporting
requirement, the act requires that the CEO ________.
A) repay any bonuses received during the 12 months prior to the issuance of the
financial statements in question
B) make a public apology to stock holders
C) resign from the position of CEO
D) All of the above.
45) What type of pay plan is being used when workers are paid a sum for each
unit they produce?
A) base pay
B) competency-based pay
C) job-based pay
D) piecework
Objective: Chapter objective 3
46) ________ is any salary increase the firm awards to an individual employee
based on his or her individual performance.
A) Merit pay
B) Variable pay
C) Competency-based pay
D) Piecework
Objective: Chapter objective 3
12
47) How does merit pay differ from a bonus?
A) Merit pay becomes part of an employee’s base pay, but a bonus does not.
B) A bonus becomes part of an employee’s base pay, but merit pay does not.
C) Merit pay is linked to individual performance, while a bonus is not.
D) A bonus is linked to individual performance, while merit pay is linked to
company performance
Objective: Chapter objective 3
48) Which of the following is true of recognition programs?
A) They have a positive impact on performance.
B) They are expensive to administer.
C) They reduce extrinsic motivation.
D) Both A and B.
Objective: Chapter objective 1
49) All of the following are advantages of team incentives except that:
A) team planning is reinforced.
B) worker’s pay may not be proportional to his or her efforts.
C) jealousy is reduced.
D) collaboration is encouraged.
Objective: Chapter objective 3
50) What type of profit-sharing plan involves the awarded shares of stock as part
of the incentive plan?
A) cash plan
B) Lincoln incentive system
C) Jefferson incentive system
D) ESOP
Objective: Chapter objective 3
51) Which profit-sharing plan provides tax advantages for the employer at fair
market value?
A) cash plan
B) Jefferson incentive system
C) deferred profit-sharing plan
D) ESOP
Objective: Chapter objective 3
13
52) Companywide plans in which a corporation contributes shares of its own
stock or cash to be used to purchase company stock to a trust established to
purchase shares of the firm’s stock for employees are called ________.
A) cash plans
B) Jefferson incentive systems
C) deferred profit-sharing plans
D) employee stock ownership plans
Objective: Chapter objective 3
53) Which plan uses a trust to hold stock in individual employee accounts and
distributes it to employees upon retirement?
A) cash plan
B) Jefferson incentive system
C) deferred profit-sharing plan
D) employee stock ownership plan
Objective: Chapter objective 3
54) The Scanlon plan includes all of the following features except:
A) improving productivity.
B) an emphasis on individual achievement.
C) sharing.
D) financial gains.
Objective: Chapter objective 3
55) Which incentive plan is based on a philosophy that managers and employees
must cooperate together?
A) cash plan
B) Scanlon plan
C) deferred profit-sharing plan
D) employee stock ownership plan
Objective: Chapter objective 3
14
56) A(n) ________ plan is an incentive plan that engages many or all employees
in a common effort to achieve a company’s productivity objectives with any
resulting cost-savings gains shared among employees and the company.
A) Scanlon
B) Lincoln incentive
C) Gainsharing
D) ESOP
Objective: Chapter objective 3
57) Gainsharing is an incentive plan that ________.
A) uses a trust to hold stock in individual employee accounts and distributes it to
employees upon retirement
B) engages many or all employees in a common effort to achieve a company’s
productivity objectives with any resulting cost-savings gains shared among
employees and the company
C) contributes company shares of its own stock or cash to be used to purchase
company stock to a trust established to purchase shares of the firm’s stock for
employees
D) involves the firm simply distributing a percentage of profits as profit shares to
employees at regular intervals
Objective: Chapter objective 3
58) The indirect financial and nonfinancial payments employees receive for
continuing employment with the company are called ________.
A) reimbursement
B) employee compensation
C) salary
D) benefits
Objective: Chapter objective 4
59) Nonfinancial payments like health and life insurance, pensions, time off with
pay, and child care facilities are examples of ________.
A) variable pay
B) competency-based incentives
C) benefits
D) salary
Objective: Chapter objective 4
15
60) Approximately what percentage of employers offer some health insurance
coverage?
A) 25%
B) 40%
C) 60%
D) 99%
Objective: Chapter objective 4
61) Which of the following benefits is required by federal or state law?
A) disability insurance
B) workers’ compensation
C) paid time off for vacations and holidays
D) pensions
Objective: Chapter objective 4
62) Which regulation covers pension plans and requires employers to have written
plan documents that establish terms such as eligibility and participation?
A) Employee Retirement Income Security Act (ERISA)
B) Economic Growth and Tax Relief Conciliation Act
C) Newborn Mother’s Protection Act
D) Health Insurance Portability and Accountability Act
Objective: Chapter objective 4
63) Which regulation ensures that an employer must grant an employee up to 12
weeks of leave in a twelve-month period for the birth or care of a newborn child,
placement of a child for adoption, to care for a spouse, child, or parent with a
serious health condition, or to care for the employee’s own serious health
condition?
A) Family and Medical Leave Act
B) Economic Growth and Tax Relief Conciliation Act
C) Job Creation and Worker Assistance Act
D) Newborn Mother’s Protection Act
E) Health Insurance Portability and Accountability Act
Objective: Chapter objective 4
16
64) The Family and Medical Leave Act ________.
A) provides guidelines regarding what rates of return employers should use in
computing their pension plan values
B) ensures that an employer must grant an employee up to 12 weeks of leave in a
twelve-month period for the birth or care of a newborn child, placement of a child
for adoption, to care for a spouse, child, or parent with a serious health condition,
or to care for the employee’s own serious health condition
C) prohibits an employer’s health plan from using incentives to encourage
employees to leave the hospital after childbirth after less than the legislatively-
determined minimum stay
D) sets minimum requirements for protecting individuals’ health-care data
accessibility and confidentiality
Objective: Chapter objective 4
65) How many weeks may an employee take as unpaid leave under the Family
and Medical Leave Act?
A) two
B) four
C) six
D) twelve
Objective: Chapter objective 4
66) Which of the following is false regarding the application of the Family and
Medical Leave Act?
A) Up to 12 weeks must be granted in a twelve-month period.
B) To be eligible, an employee must have worked for the employer for at least
twelve months.
C) No advance notice is necessary.
D) To be eligible, an employee must have worked for a minimum of 1250 hours
in the past twelve months.
Objective: Chapter objective 4
67) Holidays, vacations, jury duty, funeral leave, military duty, personal days, sick
leave, sabbatical leave, and maternity leave are classified as ________ benefits.
A) supplemental pay
B) insurance
C) services
D) premium
Objective: Chapter objective 4
17
68) ________ provides benefits if a person is unable to work through no fault of
his or her own.
A) Supplemental pay benefits
B) Unemployment insurance
C) Retirement
D) Health insurance
Objective: Chapter objective 4
69) Who contributes funds to workers’ compensation benefits?
A) each state
B) federal government
C) employers
D) All of the above.
Objective: Chapter objective 4
70) The goal of ________ is to provide sure, prompt income and medical benefits
to work-related accident victims or their dependents, regardless of fault.
A) severance pay
B) sick leave
C) workers’ compensation
D) the Health Insurance Portability and Accountability Act
Objective: Chapter objective 4
71) Which of the following benefits could be awarded as workers’ compensation?
A) cash benefit
B) medical services
C) time off with pay
D) Both A and B.
Objective: Chapter objective 4
18
72) Which of the following conditions must be met for an injured employee to
earn workers’ compensation from his or her employer?
A) The injury must have occurred while the employee was on the job.
B) The employee suffered the injury through no fault of his or her own.
C) The employee must have worked for a minimum of 1250 hours during the past
twelve consecutive months.
D) All of the above.
Objective: Chapter objective 4
73) Which health benefit listed below is offered by almost all employers?
A) mental health insurance
B) chiropractic insurance
C) medical care insurance
D) wellness program
Objective: Chapter objective 4
74) A(n) ________ is a medical organization consisting of specialists operating
out of a community-based health care center that provides routine medical
services to employees who pay a nominal fee.
A) PPO
B) HMO
C) DMO
D) hospital
Objective: Chapter objective 4
75) ________ are groups of health care providers that contract with employers,
insurance companies, or third-party payers to provide medical care services at a
reduced fee.
A) PPOs
B) HMOs
C) DMOs
D) Hospitals
Objective: Chapter objective 4
19
76) The ________ requires employers to treat women affected by pregnancy,
childbirth, or related medical conditions the same as any employee not able to
work, with respect to all benefits, including sick leave and disability benefits,
health and medical insurance.
A) Family and Medical Leave Act
B) Pregnancy Discrimination Act
C) Comprehensive Omnibus Budget Reconciliation Act
D) American Disabilities Act
Objective: Chapter objective 4
77) Which regulation listed below requires that most private employers continue
to make health benefits available to terminated or retired employees and their
families for a period of time?
A) Family and Medical Leave Act
B) Pregnancy Discrimination Act
C) Comprehensive Omnibus Budget Reconciliation Act
D) Health Insurance Portability and Accountability Act
Objective: Chapter objective 4
78) The Pregnancy Discrimination Act ________.
A) requires employers to treat women affected by pregnancy, childbirth, or related
medical conditions the same as any employee not able to work, with respect to all
benefits, including sick leave and disability benefits, health and medical insurance
B) covers pension plans and requires employers to have written plan documents
that establish terms such as eligibility and participation
C) prohibits an employer’s health plan from using incentives to encourage
employees to leave the hospital after childbirth after less than the legislatively-
determined minimum stay
D) sets minimum requirements for protecting individuals’ health-care data
accessibility and confidentiality
Objective: Chapter objective 4
79) The Comprehensive Omnibus Budget Reconciliation Act requires most
private employers to continue to make health benefits available to terminated or
retired employees and their families for a period of time, generally ________.
A) 6 months
B) 12 months
C) 18 months
D) 24 months
20