The XYZ Co. took back performance-based compensation of $1.2 million from their
CEO because of his decision of the buyout of another firm that eventually lowered the
overall value of the XYZ Co. Which of the following compensation agreements
allowed the board of directors to take back this $1.2 million?
A) platinum parachutes
B) clawback provisions
C) phantom stock
D) golden parachute
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
An employee has a regular hourly rate equal to $10 and works 45 hours within a period
of 7 consecutive days. What is the total amount the employer should pay this employee
for 45 work hours?
A) $425
B) $450
C) $475
D) $500
Market lag policies are generally set to which quartile in the salary survey?
A) 1st
B) 2nd
C) 3rd
D) 4th
Which of the following factors contributes to the short-term costs of engaging
contingent workers?
A) Fair Labor Standards Act minimum wage provision
B) downtime while employees are participating in training
C) Fair Labor Standards Act overtime pay provision
D) employee benefits costs
In which important way are relative pay and pay rate differentials consistent?
A) magnitude
B) direction
C) absolute value
D) direction and absolute value
Which source is generally able to provide the most extensive and detailed information
about how job duties are performed?
A) job analysts
B) supervisors
C) job incumbents
D) benchmark jobs
Which two factors should compensation professionals consider before endorsing the
use of merit pay systems?
A) a supervisor’s bias and stock price
B) job design and a supervisor’s bias
C) job analysis and stock price
D) commitment from top management and job design
Which of the following is the fundamental purpose of legally required benefits?
A) Social Security benefits
B) paid time off
C) social insurance
D) tax revenue source for the government
Jose Escobar conducts a survey of salaries at ERL Enterprises and finds that 50% of the
workers fall below the market pay average of $32,000. In which quartile do the workers
at ERL Enterprises fall?
A) first
B) second
C) third
D) fourth
This type of individual incentive plan rewards employees who recruit new customers or
new employees.
A) behavior encouragement
B) referral
C) management incentive
D) piecework
Employers usually rely on which source to determine housing and utilities support?
A) U.S. Department of State’s quarters allowances
B) Consumer Price Index
C) Indexes of international labor costs
D) U.S. Department of State’s International Consumer Price Index
XYZ Movers, a professional relocation company, has 3-person teams for their moving
services. The company asks customers to complete a satisfaction survey regarding their
recent move. For an employee’s performance appraisal, customer satisfaction surveys
are also considered in addition to supervisor and team member ratings. Which of the
following appraisal methods best describes this situation?
A) paired comparisons
B) positive halo effect
C) 360-degree performance appraisals
D) first-impression effect
Which of the following represents the relationship between a company’s valuation of
jobs based on job evaluation and the valuation of jobs within the external market as
assessed by compensation surveys?
A) market-competitive pay structure
B) pay grade
C) pay range
D) market pay line
Antidiscrimination laws have contributed to which of the following?
A) some of the decline in union influence
B) all of the decline in union influence
C) stronger human capital
D) spillover effect
Which of the following describes the worth of all goods and services produced in a
foreign country valued at prices prevailing in the United States?
A) real gross domestic product
B) purchasing power parity exchange rates
C) wholesale exchange rates
D) nominal gross domestic product
Quarters allowance is the U.S. Department of State’s nomenclature for which expatriate
cost provision?
A) cost-of-living allowance
B) inflation provision
C) housing and utilities allowance
D) assimilation allowance
The XYZ Company ranks its employees from the best performer to the poorest
performer, and the employee with the best performance receives the highest ranking.
What type of performance appraisal method is used by this company?
A) comparison system
B) trait system
C) behavioral system
D) goal-oriented system
Samuel’s full retirement age is 65 years old; and his monthly benefit at that age is
$1,000. According to the Social Security Administration retirement program, what will
Samuel’s monthly benefit be if he decides to take retirement as early as age 63?
A) equal to $1,000
B) greater than $1,000
C) less than $1,000 but greater than $0
D) $0
Without which type of skills is an expatriate’s credibility likely to be undermined?
A) accounting
B) mathematical
C) language
D) marketing
Employees who take advantage of person-focused pay program opportunities may
experience which of the following?
A) difficulty in finding employment elsewhere because person-focused pay programs
are always firm specific
B) higher likelihood of being laid off during periods of business slowdown
C) higher likelihood of remaining employed during periods of business slowdown
D) feelings of inequity
What do compensation managers use to recognize differences in the relative worth of
jobs and to establish pay differentials based upon management priorities?
A) job evaluation
B) internal consistency
C) job analysis
D) strategic analysis
Temporary employment agencies are responsible for complying with all employment
legislation, except?
A) ADA
B) FLSA
C) workers’ compensation
D) ERISA
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
One of the essential skills that software development engineers must have is the
proficiency in at least one of the modern computer programming languages, such as
Java or C++. This must be indicated in which part of the job analysis description?
A) working conditions
B) job evaluation
C) worker requirement
D) job content
Which of the following type of program can help reduce workers’ compensation
claims?
A) COBRA coverage
B) wellness
C) workplace safety
D) employee assistance
To be fully insured under the OASDI retirement benefit, an employee would have to
work at least how long?
A) 24 months
B) 5 years
C) 10 years
D) 30 years
How is Medicare Part A financed?
A) payroll taxes paid only by employers
B) out-of-pocket
C) payroll taxes paid by both employers and employees
D) congressional fiat
Which of the following is covered by Medicare Part A?
A) inpatient hospital care
B) IV drugs
C) ambulance
D) outpatient care
Which of the following represent formal criteria for defining executive status?
A) board of directors and key employees
B) key employees and highly paid employees
C) CEO and highly compensated employees
D) key employees and highly compensated employees
________ describe preferences for work environments and outcomes.
Define three types of life insurance.
________ compensation refers to the mental state of employees as a result of their
performance on the job.
________ part-time employees work fewer than 35 hours per week because they are
unable to find full-time employment.
How are integrated paid time off policies different than holiday, vacation, sick leave,
and personal leave policies?
Define capital intensity and explain how it relates to compensation outcomes.
________ accounts allow employees to pay for specified health care costs not covered
by an employer’s insurance plan.
In ________, employees are entitled to 6 vacation days after 1 year of employment and
to 2 more days for each subsequent year up to a maximum of 12 days.
The ________ is the minimum period of time an individual must be employed before
becoming eligible to receive unemployment insurance under the Social Security Act of
1935.
Discuss the three key provisions of the Dodd-Frank Act that apply to setting executive
compensation.
The sales value of production (SVOP) is the sum of sales ________ plus the value of
goods in inventory.
________ allow compensation professionals to describe the distribution of data based
on four groupings.
________ rates pay wages higher than the maximum listed in order to help retain
valued employees fielding big job offers elsewhere.
________ pay practices focus on employees who have achieved the maximum pay rate
for their jobs.
James works at home 3 days a week and works at his office 2 days a week. His
employer provides a computer, modem, and printer for him to use at home. The
equipment for his off-site use is an example of ________.