18. The United States is the only major developed nation that does not guarantee workers paid sick leave.
19. In the U.S., part-time employees are most likely to receive health and life insurance benefits and paid
time off and least likely to receive retirement benefits.
20. Organizations rarely view benefits as an effective retention tool because employees generally have
very little understanding of the benefits provided by their employers.
21. Legally required benefits make up more than half of the total cost of benefits.
22. Workers cannot be asked to make financial contributions for coverage under workers’ compensation
programs.
23. An employee who is out of work and actively looking for employment can receive up to 26 weeks of
pay through unemployment compensation.
24. In companies that provide defined benefit plans, if the funding is inadequate to pay the benefits
promised, the employees must make up the shortfall.
25. Defined contribution pension plans offer employees retirement benefits that are more secure and
predictable.
26. Employees find 401(k) plans unattractive because these plans require employees to pay higher income
taxes during working years.
27. The Employee Retirement Income Security Act (ERISA) gives participants the right to file lawsuits
for violations of the law.
28. Increasing the retirement age for employees is a strategy to keep the Social Security program
insolvent.
29. Increases in employer expenditures for health benefits are growing faster than increases in wages for
employees.
30. Copayments are costs that an insured pays for medical treatment.
31. Copayments are paid by insured individuals to cover their entire medical expenses.
32. An employee would have limited access to a company’s health plan if the employee’s spouse works
for another company that offers health insurance.
33. Divorced spouses and dependent children of former or current employees should be offered extended
health care coverage under the COBRA.
34. The federal government mandates a minimum of two weeks’ severance pay for older employees who
are asked to retire early.
35. Only employees who have worked at least 12 months and 1,250 hours in the previous year are eligible
for leave under the FMLA.
36. FMLA leave is typically paid and employers are also required to cover the workload for employees on
family leave.
37. Employees are more likely to stay with employers who provide child-care and elder-care benefits.
38. Union contracts have an impact on the number of paid holidays offered by organizations.
39. Unpaid leaves of absence generally do not cost the firm much beyond continued benefits for the
employee on leave.
40. Research has shown that absenteeism because of illness is lower when employees are not paid for sick
time.
SHORT ANSWER
1. List the three basic assumptions that the philosophical foundation of variable pay plans rest on.
2. Why do employers use variable pay?
3. List the conditions necessary for the use of individual incentives.
4. Describe the two primary ways of distributing group/team incentives.
5. Define gainsharing.
6. Describe the primary objectives of profit sharing plans.
7. What are employee stock ownership plans?
8. Explain perquisites.
9. How is the provision of benefits rather than wages advantageous for employees?
10. John is a part-time employee in a publishing company. Is he eligible to receive benefits?
11. Why do companies outsource benefits administration?
12. George is unemployed and is actively searching for a job. Is there any legal provision regarding
benefits that can help George?
13. Define the concepts of vesting and portability.
14. What are the legal regulations regarding early retirement in U.S. companies?
15. Why are employee contributions to health plans in companies increasing?
16. What are the family oriented benefits offered by employers? Which of these are mandated by the
federal government?
17. George, a travel agent, shares some of his unused vacation time with his colleague Sam. Is such an
arrangement legal in the U.S.?
18. What are employee-paid group benefits?
ESSAY
1. Describe the categories of variable pay.
2. Describe piece-rate systems.
3. Explain bonuses.
4. Describe the challenges faced by group/team incentives.
ANS:
5 Describe the different types of group/team incentives.
6. Explain profit sharing.
7. Explain employee stock plans.
8. Describe the elements of executive compensation.
9. How do employee benefits provide competitive advantage to employers?
10. Arexa, a toy manufacturing company, allows its employees to select the benefits that they would like
to attain from a list of options established by the company. What are such benefit plans called? What
are the disadvantages of using such benefit plans?
11. Why is the communication of benefits important for the efficient functioning of a company?
12. What is workers’ compensation? Explain.
ANS:
13. Elaborate on the two main types of retirement benefits?
14. Explain any three laws that affect the retirement plans of employees.
15. Which are the two important U.S. laws that govern issues related to the protection of the health of
former workers?
16. Discuss the financial benefits that companies commonly offer their employees?
17. What are the different conditions under which employers grant “leaves of absence” to their
employees?
18. What are the advantages of using paid-time-off (PTO) plans?