Chapter 7 Compensating Employees | Test Bank – 6th Edition

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A Framework for Human Resource Management, 6e (Dessler)

Chapter 7 Compensating Employees

1) ________ refers to all forms of pay or rewards going to employees and arising from their employment.

A) Reimbursement

B) Employee compensation

C) Salary

D) Benefits

Diff: 1 Page Ref: 199

Objective: Chapter objective 1

2) Direct financial payments include all of the following except

A) wages

B) insurance

C) salaries

D) incentives

Diff: 1 Page Ref: 200

Objective: Chapter objective 1

3) Which of the following is categorized as an indirect payment portion of employee compensation?

A) wages

B) salaries

C) employer-paid insurance

D) bonuses

Diff: 2 Page Ref: 200

Objective: Chapter objective 1

4) Which of the following factors affects the design of any pay plan?

A) legal

B) union

C) equity

D) all of the above

Diff: 1 Page Ref: 200

Objective: Chapter objective 2

5) Which compensation-related law contains minimum wage, maximum hours, overtime pay, equal pay, and child labor provisions?

A) Davis-Bacon Act

B) Fair Wages Act

C) Civil Rights Act

D) Fair Labor Standards Act

Diff: 3 Page Ref: 200

Objective: Chapter objective 1

6) Which of the following is addressed by the Fair Labor Standards Act?

A) minimum wage

B) maximum hours

C) child labor

D) all of the above

Diff: 1 Page Ref: 200

Objective: Chapter objective 1

7) The Fair Labor Standards Act covers workers employed in ________.

A) manufacturing

B) retailing

C) service industries

D) all of the above

Diff: 1 Page Ref: 200

Objective: Chapter objective 1

8) Which law makes it illegal to discriminate against any individual with respect to compensation because of race, color, religion, sex, or national origin?

A) Fair Labor Standards Act

B) Civil Rights Act

C) Employer Retirement Income Security Act

D) Davis-Bacon Act

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

9) According to the Fair Labor Standards Act, if a worker covered by the act works more than 40 hours, he or she will receive overtime pay at a rate of ________ of normal pay for any hours worked over 40 in a workweek.

A) 50%

B) 100%

C) 125%

D) 150%

Diff: 3 Page Ref: 200

Objective: Chapter objective 1

10) Jill works as a cashier at a grocery store. She earns $8 an hour (or $320 for a 40-hour week). Last week, she worked 44 hours. What did she earn last week?

A) $320

B) $336

C) $344

D) $368

Diff: 3 Page Ref: 200

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

11) Jack worked 6 hours of overtime this week but has decided to take time off instead of overtime pay. How many hours will Jack get off?

A) 3 hours

B) 6 hours

C) 9 hours

D) 12 hours

Diff: 3 Page Ref: 200

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

12) Which of the following occupations must adhere to overtime and minimum pay provisions stated in the Fair Labor Standards Act?

A) paralegals

B) pharmacists

C) attorneys

D) department heads

Diff: 2 Page Ref: 200

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

13) All of the following occupations are exempt from the overtime provisions stated in the Fair Labor Standards Act except

A) physicians

B) dentists

C) management trainees

D) teachers

Diff: 2 Page Ref: 200

Objective: Chapter objective 1

14) The ________ states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work.

A) American Disabilities Act

B) Civil Rights Act

C) Employer Retirement Income Security Act

D) Equal Pay Act

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

15) Under which condition below is it acceptable for employees of the opposite sex to receive different pay for doing roughly equivalent work?

A) when the difference exists despite equal skills

B) when the difference exists despite similar responsibility

C) when the difference exists because of a merit system

D) it is never acceptable

Diff: 3 Page Ref: 202

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

16) Which of the following professions is considered "nonexempt" from provisions of the Fair Labor Standards Act?

A) attorney

B) physician

C) management trainee

D) general manager

Diff: 2 Page Ref: 200

Objective: Chapter objective 1

17) The ________ prohibits discriminating against employees who are 40 years of age and older in all aspects of employment, including compensation.

A) Fair Labor Standards Act

B) Civil Rights Act

C) Equal Pay Act

D) Age Discrimination in Employment Act

Diff: 2 Page Ref: 202

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

18) According to the Family and Medical Leave Act, eligible employees can take up to ________ weeks of unpaid, job-protected leave for the birth of a child or for the care of a child, spouse, or parent.

A) two

B) four

C) six

D) twelve

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

19) According to the Family and Medical Leave Act, eligible employees can take unpaid, job-protected leave for the ________.

A) care of a child

B) birth of a child

C) care of a parent

D) all of the above

Diff: 1 Page Ref: 202

Objective: Chapter objective 1

20) Which of the following is true for employers who use independent contractors?

A) Fair Labor Standards Act regulations do not apply

B) Social Security taxes are higher than for regular employees

C) State income taxes are charged at a higher rate

D) Social Security taxes are charged at a higher rate

Diff: 2 Page Ref: 200

Objective: Chapter objective 1

21) The ________ gave employees the right to organize, bargain collectively, and engage in concerted activities for the purpose of collective bargaining.

A) Fair Labor Standards Act

B) Civil Rights Act

C) Employer Retirement Income Security Act

D) National Labor Relations Act

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

22) Historically, the main issue in collective bargaining is ________.

A) time off with pay

B) wage rates

C) income security

D) health care benefits

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

23) Unions negotiate all of the following pay-related issues except

A) wage rates

B) income security

C) unpaid leave to care for an immediate family member

D) time off with pay

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

24) Which form of equity refers to how a job's pay rate in one company compares to the job's pay rate in other companies?

A) external

B) internal

C) distributive

D) procedural

Diff: 3 Page Ref: 203

Objective: Chapter objective 1

25) Jason is an information systems technician in a town in North Carolina with a population of 100,000. He earns 35,000/year. He recently found out that a nearby town with a similar population pays people in the same position $40,000/year. Jason is concerned with the ________ form of equity.

A) distributive

B) procedural

C) internal

D) external

Diff: 3 Page Ref: 203

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

26) Which form of equity refers to how fair a job's pay rate is, when compared to other jobs within the same company?

A) external

B) internal

C) distributive

D) individual

Diff: 1 Page Ref: 203

Objective: Chapter objective 1

27) Jack is a sales manager and he recently learned that human resource managers with similar responsibilities and spans of control earn more than he does. Jack is concerned with the ________ form of equity.

A) external

B) internal

C) distributive

D) individual

Diff: 3 Page Ref: 203

Skill: AACSB: Analytical Skills

Objective: Chapter objective 1

28) External equity refers to ________.

A) how a job's pay rate in one company compares the job's pay rate in other companies

B) how fair the job's pay rate is, when compared to other jobs within the same company

C) the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance

D) the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay

Diff: 2 Page Ref: 203

Objective: Chapter objective 1

29) Internal equity refers to ________.

A) how a job's pay rate in one company compares the job's pay rate in other companies

B) how fair the job's pay rate is, when compared to other jobs within the same company

C) the fairness of an individual's pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance

D) the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay

Diff: 2 Page Ref: 203

Objective: Chapter objective 1

30) ________ is a formal and systematic comparison of jobs to determine the worth of one job relative to another.

A) Job analysis

B) Job evaluation

C) Benchmark analysis

D) Job ranking

Diff: 1 Page Ref: 204

Objective: Chapter objective 1

31) Which of the following is not one of the compensable factors emphasized in the Equal Pay Act?

A) skills

B) effort

C) accountability

D) responsibility

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

32) Factors that establish how the jobs compare to one another and set the pay for each job are called ________.

A) compensable factors

B) job evaluation factors

C) ranking factors

D) analysis factors

Diff: 1 Page Ref: 205

Objective: Chapter objective 2

33) When using the job classification method of job evaluation, raters categorize jobs into groups of similar jobs called ________.

A) classes

B) grades

C) sections

D) cohorts

Diff: 2 Page Ref: 205

Objective: Chapter objective 2

34) When using the job classification method of job evaluation, raters categorize jobs into groups of jobs that are similar in difficulty but not in context called ________.

A) classes

B) grades

C) sections

D) cohorts

Diff: 2 Page Ref: 205

Objective: Chapter objective 2

35) The point method of job evaluation entails ________.

A) identifying several compensable factors, each having several degrees, and the degree to which each of these factors is present in the job

B) ranking each job relative to all other jobs based on some overall factor

C) using raters to categorize jobs into groups

D) deciding which jobs have more of the chosen compensable factors

Diff: 2 Page Ref: 205

Objective: Chapter objective 2

36) Which job evaluation method is a quantitative technique involving the identification of several compensable factors and the degree to which each of these factors is present in the job?

A) ranking method

B) point method

C) factor comparison

D) job classification method

Diff: 2 Page Ref: 205

Objective: Chapter objective 2

37) A ________ is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

A) pay group

B) benchmark

C) pay grade

D) class

Diff: 1 Page Ref: 206

Objective: Chapter objective 2

38) The ________ shows the pay rates currently paid for jobs in each pay grade, relative to the points or rankings assigned to each job or grade by the job evaluation.

A) pay group

B) pay grade

C) class

D) wage curve

Diff: 1 Page Ref: 207

Objective: Chapter objective 2

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

Diff: 3 Page Ref: 207

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

Diff: 1 Page Ref: 208

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

Diff: 1 Page Ref: 209

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

Diff: 3 Page Ref: 209

Objective: Chapter objective 2

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

Diff: 1 Page Ref: 210

Objective: Chapter objective 2

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

Diff: 2 Page Ref: 211

Objective: Chapter objective 3

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

Diff: 1 Page Ref: 212

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

Diff: 1 Page Ref: 215

Objective: Chapter objective 3

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

Diff: 2 Page Ref: 215

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

Diff: 2 Page Ref: 214

Objective: Chapter objective 3

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

Diff: 2 Page Ref: 213

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

Diff: 1 Page Ref: 216

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

Diff: 1 Page Ref: 216

Objective: Chapter objective 3

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

Diff: 1 Page Ref: 216

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

Diff: 1 Page Ref: 216

Objective: Chapter objective 3

54) The Scanlon plan includes all of the following features except

A) a philosophy of cooperation

B) an emphasis on individual achievement

C) identity

D) an involvement system

Diff: 1 Page Ref: 216

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

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

56) Identity in the Scanlon plan refers to a focus on ________.

A) a philosophy of cooperation

B) the clear articulation of the company mission and vision

C) a high level of competence from employees at all levels

D) improvement suggestions from employees

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

57) Competence in the Scanlon plan refers to a focus on ________.

A) a philosophy of cooperation

B) the clear articulation of the company mission and vision

C) a high level of competence from employees at all levels

D) improvement suggestions from employees

Diff: 1 Page Ref: 216

Objective: Chapter objective 3

58) Sharing of benefits in the Scanlon plan refers to a focus on ________.

A) a philosophy of cooperation

B) the clear articulation of the company mission and vision

C) improvement suggestions from employees

D) sharing benefits that result from improvement suggestions

Diff: 2 Page Ref: 217

Objective: Chapter objective 3

59) 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

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

60) 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

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

61) 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

Diff: 1 Page Ref: 218

Objective: Chapter objective 4

62) 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

Diff: 1 Page Ref: 216

Objective: Chapter objective 4

63) Approximately what percentage of employers offer some health insurance coverage?

A) 25%

B) 40%

C) 60%

D) 99%

Diff: 2 Page Ref: 218

Objective: Chapter objective 4

64) 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

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

65) 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

Diff: 2 Page Ref: 224

Objective: Chapter objective 3

66) 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

Diff: 2 Page Ref: 219

Objective: Chapter objective 4

67) 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

Diff: 2 Page Ref: 219

Objective: Chapter objective 4

68) 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

Diff: 1 Page Ref: 219

Objective: Chapter objective 4

69) 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.

Diff: 3 Page Ref: 219

Objective: Chapter objective 4

70) 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

Diff: 1 Page Ref: 218

Objective: Chapter objective 4

71) ________ 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

Diff: 2 Page Ref: 218

Objective: Chapter objective 4

72) Who contributes funds to workers' compensation benefits?

A) each state

B) federal government

C) employers

D) all of the above

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

73) 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

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

74) 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

Diff: 1 Page Ref: 220

Objective: Chapter objective 4

75) 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

Diff: 3 Page Ref: 220

Objective: Chapter objective 4

76) 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

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

77) 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

Diff: 1 Page Ref: 220

Objective: Chapter objective 4

78) ________ 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

Diff: 1 Page Ref: 220

Objective: Chapter objective 4

79) 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

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

80) 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

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

81) 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

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

82) 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

Diff: 1 Page Ref: 220

Objective: Chapter objective 4

83) The full retirement age according to Social Security for individuals born in 1960 or later is ________.

A) 62

B) 65

C) 67

D) 70

Diff: 2 Page Ref: 223

Objective: Chapter objective 4

84) Social Security provides all of the following benefits except

A) income if retirement is at age 62 or later and individual is insured under the Social Security Act

B) death benefits to surviving dependents for those insured under the Social Security Act

C) Medicare

D) income if retirement is at age 55 or later

Diff: 1 Page Ref: 223

Objective: Chapter objective 4

85) When an employer makes all of the contributions to the pension plan, the pension plan is classified as ________.

A) qualified

B) non qualified

C) defined contribution

D) non-contributory

Diff: 1 Page Ref: 223

Objective: Chapter objective 4

86) Malcolm is interviewing for a new job and he is evaluating the quality of the pension plans offered for each company he is considering. One company offers a pension plan in which the company will make all contributions to the plan and will base his pension benefit on a formula linked to his pay at the time of retirement and the number of years he was with the firm. This pension plan could be classified as ________.

A) qualified, defined benefit

B) non-contributory, defined benefit

C) non-contributory, defined contribution

D) contributory, qualified

Diff: 2 Page Ref: 223

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

87) Jenny's pension plan encourages her to contribute at least 5% of her annual salary in addition to the set amount that her company contributes. She is given choices regarding how the money is invested. When she retires, the amount she has available will depend on how much she invested herself, and the rate of return on the investments she chose. This pension plan could be classified as ________.

A) qualified, defined benefit

B) non-contributory, defined benefit

C) contributory, defined contribution

D) contributory, defined benefit

Diff: 2 Page Ref: 223

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

88) A defined contribution pension plan encourages employees to contribute a portion of their earnings to the fund with an employer contribution that is matched to that of the employee in whole or part is called a(n) ________.

A) savings and thrift plan

B) matching plan

C) deferred profit-sharing plan

D) employee stock ownership plan

Diff: 2 Page Ref: 223

Objective: Chapter objective 4

89) ________ provide services like personal legal and financial counseling, child care referrals, elder care referrals adoption assistance, mental health counseling, and life event planning.

A) Social Security programs

B) Pension plans

C) Employee assistance programs

D) Family-friendly benefits

Diff: 1 Page Ref: 225

Objective: Chapter objective 4

90) ________ seek to enable employees to better meet the demands of their family and work lives.

A) Sick leave

B) Family-friendly benefits

C) Pay plans

D) Benefit management systems

Diff: 1 Page Ref: 225

Objective: Chapter objective 4

91) Esop 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) provides tax advantages for employees by deferring income taxes, often until the employee retires

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

92) An employee stock ownership plan is an incentive plan that ________.

A) 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

B) focuses on the sharing of benefits between employer and employees

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 distributing total annual profits each year among employees based on their merit rating

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

93) Plans that put some portion of the employee's weekly pay at risk to encourage goal attainment are called ________ pay plans.

A) at-risk variable

B) Rucker

C) Improshare

D) Scanlon

Diff: 1 Page Ref: 217

Objective: Chapter objective 3

94) Financial benefits like employer-paid insurance and vacations are not a part of employee compensation.

Diff: 1 Page Ref: 200

Objective: Chapter objective 1

95) Historically the main issue in collective bargaining is wage rates.

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

96) Indirect payments that contribute to an employee's compensation include variable pay like commissions and bonuses.

Diff: 2 Page Ref: 200

Objective: Chapter objective 1

97) When employees work more than 40 hours per week, employers must pay overtime at a rate of at least one and a half times the normal pay for any hours worked over 40 in a workweek.

Diff: 2 Page Ref: 200

Objective: Chapter objective 1

98) Because the minimum wage is set by the Fair Labor Standards Act, all states adhere to that wage.

Diff: 3 Page Ref: 200

Objective: Chapter objective 1

99) The Equal Pay Act states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work.

Diff: 2 Page Ref: 202

Objective: Chapter objective 1

100) While laws exist to protect against discrimination in compensation based on gender and age, no law protects against such discrimination against persons with disabilities.

Diff: 2 Page Ref: 202

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

101) The provision of the Family and Medical Leave Act that entitles employees to take up to 12 weeks of unpaid, job-protected leave for the birth of a child only applies to women.

Diff: 2 Page Ref: 202

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

102) Some employers may misclassify employees as independent contractors to reduce the taxes they must pay.

Diff: 2 Page Ref: 201

Objective: Chapter objective 1

103) External equity refers to how fair the job's pay rate is, when compared to other jobs within the same company.

Diff: 2 Page Ref: 203

Objective: Chapter objective 1

104) The Equal Pay Act focuses on three compensable factors—know-how, problem solving, and accountability.

Diff: 3 Page Ref: 202

Skill: AACSB: Multicultural and Diversity

Objective: Chapter objective 1

105) The Sarbanes-Oxley Act of 2002 makes board members personally liable for violating their fiduciary responsibilities to their shareholders.

Diff: 2 Page Ref: 211

Objective: Chapter objective 3

106) All merit increases are cumulative in that they become a part of an employee's base salary.

Diff: 1 Page Ref: 215

Objective: Chapter objective 3

107) A key advantage of employee stock ownership plans is that the company gets a tax advantage equal to the fair market value of the shares that are transferred to the trustee and can also claim an income tax deduction for dividends paid on ESOP-owned stock.

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

108) The Scanlon plan is a type of gainsharing plan.

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

109) Scanlon plans involve putting some portion of an employee's weekly pay at risk for the opportunity to earn incentives if the employee meets or exceeds his or her goals.

Diff: 2 Page Ref: 216

Objective: Chapter objective 3

110) Job classification is the simplest of the job evaluation methods.

Diff: 1 Page Ref: 205

Objective: Chapter objective 2

111) Competencies are demonstrable characteristics of a person including knowledge, skills, and behaviors that enable performance.

Diff: 2 Page Ref: 209

Objective: Chapter objective 2

112) The primary advantage of broadbanding is that it provides greater flexibility into employee assignments.

Diff: 3 Page Ref: 210

Objective: Chapter objective 2

113) About 99% of employers in the United States offer some form of health insurance coverage.

Diff: 2 Page Ref: 218

Objective: Chapter objective 4

114) Employee benefits account for about one-third of wages and salaries.

Diff: 2 Page Ref: 218

Skill: AACSB: Analytical Skills

Objective: Chapter objective 4

115) Workers' compensation benefits can be medical or monetary.

Diff: 2 Page Ref: 218

Objective: Chapter objective 4

116) If an employee is injured at work due to a blatant disregard for company safety policies, the company is not required to pay workers' compensation.

Diff: 3 Page Ref: 220

Objective: Chapter objective 4

117) Women affected by pregnancy and childbirth are eligible for the same benefits as disabled employees.

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

118) The American Disabilities Act makes it illegal for employers to discriminate against women by providing benefits of a lower amount or duration for pregnancy, childbirth, or related medical conditions.

Diff: 3 Page Ref: 220

Objective: Chapter objective 4

119) The Comprehensive Omnibus Budget Reconciliation Act ensures that employers are not responsible for making health benefits available to terminated or retired employees and their families.

Diff: 2 Page Ref: 220

Objective: Chapter objective 4

120) There is no limit to the amount an employee can contribute pre-tax into a 401 (k) plan each year.

Diff: 2 Page Ref: 224

Objective: Chapter objective 4

121) Broadbanding refers to the requirement to pay men and women equal wages for jobs of comparable value to the employer.

Diff: 1 Page Ref: 210

Objective: Chapter objective 2

122) List the steps used to establish pay rates while ensuring external, internal, and procedural equity.

The five steps are as follows.

• Conduct a salary survey of what other employers are paying for comparable jobs.

• Determine the worth of each job in your organization through job evaluation.

• Group similar jobs into pay grades.

• Price each pay grade by using wave curves.

• Fine-tune pay rates.

Diff: 2 Page Ref: 204

Skill: AACSB: Communication

Objective: Chapter objective 2

123) List the steps used in the job ranking method of job evaluation.

The steps in the job ranking method are as follows.

• Obtain job information

• Select jobs

• Select compensable factors

• Rank jobs

• Combine ratings and average the rankings

Diff: 2 Page Ref: 206

Skill: AACSB: Communication

Objective: Chapter objective 2

124) What are the steps for pricing jobs with a wage curve?

Diff: 3 Page Ref: 207

Skill: AACSB: Communication

Objective: Chapter objective 2

125) Explain the advantages of employee stock ownership plans.

Diff: 2 Page Ref: 215-216

Skill: AACSB: Communication

Objective: Chapter objective 3

126) Explain the purpose of sick leaves and why sick leave pay causes difficulties for many employers.

Diff: 1 Page Ref: 218

Skill: AACSB: Communication

Objective: Chapter objective 4

127) Why do employers provide severance pay to employees who are being terminated? Offer at least three reasons. What standards guide the amount of severance pay offered?

Diff: 2 Page Ref: 219

Skill: AACSB: Communication

Objective: Chapter objective 4

128) Explain the three types of benefits provided by Social Security.

Diff: 1 Page Ref: 223

Skill: AACSB: Communication

Objective: Chapter objective 4

129) Explain the three classifications that apply to basic pension plans.

Diff: 3 Page Ref: 223

Skill: AACSB: Communication

Objective: Chapter objective 4

130) Why are family-friendly benefits increasingly valuable to employees? What are some examples of family-friendly benefits?

Diff: 2 Page Ref: 225

Skill: AACSB: Communication

Objective: Chapter objective 3

131) Briefly explain how an at-risk variable pay plan works.

Diff: 1 Page Ref: 217

Objective: Chapter objective 3