Deck 8: Variable Pay and Benefits

Question 1

A common metric for variable pay plans is _______________.

A)increase in market share
B)turnover cost reduction
C)increase in customer satisfaction levels
D)return on investment

Answer 1

D

Question 2

An annual "personal statement of benefits" _______________.

A)is a report required by ERISA
B)shows each employee how much his/her benefits are worth
C)is a tool that allows employees to choose the type of benefits that best fits their personal needs
D)is given to an employee upon termination so that he/she is informed on COBRA, severance pay, unemployment compensation, and other continuing benefits

Answer 2

B

Question 3

All of the following are sales compensation plans EXCEPT _______________.

A)salary only
B)piecework
C)straight commission
D)salary plus commission

Answer 3

B

Question 4

Benefits costs have been escalating, but particularly for_______________

A)health care
B)group life insurance
C)vacation pay
D)retirement plans such as pensions and 401(K)

Question 5

One of the main objectives that organizations have for pay-for-performance plans is to _______________.

A)punish lower-performing employees
B)achieve HR objectives such as increasing retention and rewarding safety
C)justify higher rates of pay for higher-performing individuals
D)encourage a greater degree of teamwork within the organization

Question 6

Which of the following benefits are not mandated by federal legislation?

A)pension plan coverage and transferability between employers
B)social security
C)unemployment insurance
D)workers' compensation insurance

Question 7

A/An is plan whereby employees gain stock ownership in the organization for which they work.

A)employee stock ownership plan
B)employee shareholder plan
C)shareholder bonus plan
D)NYSE stock bonus plan

Question 8

How is workers' compensation typically funded?

A)by a tax levied by state governments based on size of payroll
B)by a pool of organizations in the same industry
C)through the Social Security Administration
D)by insurance purchased from a private carrier or state insurance fund

Question 9

Workers' compensation is _______________.

A)the pay and benefits package provided to employees
B)benefits provided to persons injured on the job
C)lawsuit judgments awarded to workers injured on the job
D)what a worker receives in compensation for outstanding performance

Question 10

A disadvantage to profit-sharing plans is that _______________.

A)it is seen as a sort of "people's capitalism"
B)participation is limited only to management-level employees
C)it makes an employee's compensation dependent on the performance of their employer
D)employers are required to pay the taxes on the shares offered to employees

Question 11

A approach is useful when serving and retaining existing accounts is emphasized more than generating new sales and accounts.

A)straight commission
B)salary only
C)salary plus commission
D)salary draw

Question 12

An individual incentive system will be counterproductive when _______________.

A)the organization emphasizes teamwork and cooperation
B)there is a dynamic technological environment
C)it results in competition among the employees
D)the organizational culture stresses individualism

Question 13

Which of the following would be classified as an individual variable pay plan?

A)gainsharing
B)labor-cost reduction
C)attendance bonuses
D)employee stock options

Question 14

On average, benefits costs in the United States are _______________ of an employers' payroll.

A)10% - 20%
B)20% - 30%
C)30% - 40%
D)40% - 50%

Question 15

One example of a/an _______________ incentive is called _______________, which is a system of sharing with employees greater-than-expected gains in profits and/or productivity.

A)organizational; gainsharing
B)group/team; profit sharing
C)organizational; profit sharing
D)group/team; gainsharing

Question 16

Robert is paid by the number of bicycle tires he attaches to wheel rims.If he attaches more than his daily quota of tires, he receives 25 cents extra per extra tire.Robert is paid under a _______________ system.

A)bonus
B)differential piece-rate
C)straight piece-rate
D)production commission

Question 17

_______________ is a type of organization-wide variable pay plan.

A)Bonuses
B)Quality improvement
C)Gainsharing
D)Profit sharing

Question 18

"Compensation linked to individual, team, and/or organization performance" is a definition of _______________.

A)compa-pay
B)benefits
C)executive perquisites
D)variable pay

Question 19

Which of the following is an assumption of variable-pay systems?

A)Some jobs contribute more to organizational success than others.
B)Time spent each day is the primary measure of short-term contributions.
C)Differences in individual contributions to the organization are recognized through different base pay levels.
D)Length of time with the organization is the primary differentiating factor among people.

Question 20

A/An distributes a portion of the organizational profits to employees.

A)profit sharing plan
B)team-based incentive plan
C)gainsharing plan
D)employee stock ownership plan (ESOP)

Question 21

The Health Insurance Portability and Accountability Act (HIPAA) requires _______________.

A)employers with more than 50 employees provide medical insurance for all full-time employees
B)insurance companies to offer coverage to contingent workers
C)that most employers offer extended health-care coverage to employees after they leave the organization
D)that most employees be allowed to switch their health insurance from one company to another to get new health coverage, regardless of pre-existing conditions

Question 22

In a health savings account, _______________.

A)unused amounts in the individual's account cannot be rolled over to future years
B)there is no incentive to employees to spend less on health expenses
C)individual employees can set aside post-tax amounts for medical care into a health savings account
D)both employees and employers can make contributions to the account

Question 23

Employer-provided thrift plans, savings plans, and stock investment plans are considered_________

A) financial services b family-oriented benefits
C) mandated benefits
D) health services

Question 24

If a team incentive plan pays out the same bonus for each team member, most employees will be satisfied.

Question 25

Financial services offered as employee benefits may provide all but which of the following? _______________.

A)information on investments
B)information on tax shelters
C)company reimbursement of income taxes
D)comprehensive financial counseling

Question 26

In a plan the employer makes an annual payment to an employee's pension account.

A)vested
B)defined-benefit
C)non-contributory pension
D)defined-contribution

Question 27

A stock option plan gives employees the right to purchase a fixed number of shares of company stock at a specific price for a limited period of time.

Question 28

is a security benefit voluntarily offered by employers to employees who lose their jobs.

A)Unemployment insurance
B)Supplemental unemployment benefit
C)Severance pay
D)Family security

Question 29

The taxes an employer pays to unemployment compensation funds are determined by _______________.

A)experience rates
B)the size of the organization
C)the employer's turnover rate
D)provisions in the Social Security Act of 1935

Question 30

Special incentive programs focus on rewarding lower-performing individuals in an attempt to motivate and encourage improved performance.

Question 31

The Family and Medical Leave Act of 1993 requires that employers allow eligible employees to take a total of during any period.

A)12 weeks' paid leave; 12-month
B)12 weeks' paid leave; 24-month
C)12 weeks' unpaid leave; 12-month
D)12 weeks' unpaid leave; 24-month

Question 32

_______________ consists of approaches that monitor and reduce medical costs using restrictions and market system alternatives.

A)A benefits consolidation
B)Social security
C)Managed care
D)Defined-contribution plans

Question 33

The Family and Medical Leave Act requires that eligible employees be permitted to take leave for each of the following reasons EXCEPT _______________.

A)caring for a domestic partner with a serious health condition
B)adoption of a child
C)caring for a parent with a serious health condition
D)a serious health condition of the employee

Question 34

The role of variable pay is to link bonuses with performance.

Question 35

Benefits plans that combine sick leave, vacation time, and holidays into a total number of days employees may take off with pay are called__________ plans.

A) Recognition
B) Omnibus
C) Perquisite
D) Paid Time Off

Question 36

Which of the following benefits is not provided by the Social Security system?

A)displacement
B)disability
C)survivor
D)old age

Question 37

Retirement programs established and funded by employers and employees are _______________.

A)mandated by the Employee Retirement Income Security Act (ERISA)
B)called pension plans
C)often treated as "golden handcuffs"
D)substitutes for Social Security

Question 38

The federal statute that requires employers to provide leave to employees to care for relatives with serious health conditions is called the___________________

A) Fair Labor Standards Act
B) Consolidated Omnibus Budget Reconciliation Act (COBRA)
C) Health Insurance Portability and Accountability Act (HIPAA)
D) Family and Medical Leave Act (FMLA)

Question 39

How are Social Security benefits funded?

A)employers are taxed on the amount of wages and salaries paid to employees
B)a tax on employee wages and salaries, paid by the employee
C)a tax on employee wages and salaries, paid by employers and employees
D)general federal tax revenues

Question 40

Social security can be classified as a/an benefit.

A)voluntary
B)insurance
C)security
D)retirement

Question 41

COBRA allows employees who leave a job, either voluntarily or involuntarily, to continue participation in the employers' group health plan for a period of time.

Question 42

The advantage to a straight commission system is that is offers security to the sales staff.

Question 43

ERISA requires many companies to offer retirement plans to all employees if they are offered to any employee.

Question 44

A co-payment strategy requires employees to pay a portion of the cost of insurance premiums, medical care, and prescription drugs.

Question 45

A pension plan that is paid based on age and service is a defined-contribution plan.

Question 46

The most frequently used form of sales compensation is salary-plus-commission.

Question 47

Many employers are turning to consumer-driven health (CDH) plans, which place more of the
control over employee health care with the employer.

Question 48

**One problem with sales compensation programs is that it encourages unethical behavior.

Question 49

A major advantage of benefits is that they are generally not taxed as income to employees.

Question 50

Paid-time-off or PTO plans tend to be more effective in reducing absenteeism than traditional vacation and sick plans.

Question 51

In exchange for workers compensation benefits, employees give up their right to legal actions and awards.

Question 52

Describe the various methods of compensating sales employees.

Question 53

One way in which employers are assisting with childcare is the offering of on-site child-care centers.

Question 54

Identify which benefits are mandated by federal law.

Question 55

Explain the philosophical basic assumptions behind variable pay plans.

Question 56

Explain why health?care cost management has become important. Discuss several strategies available for controlling costs and educating employees on their values.