Employee Compensation Systems Quiz

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Questions and Answers

Blank plans for employee's compensation on a pre-tax basis

insurance
401k (correct)
benefits
compensation

Which of the following programs are legally required?

Social Security (correct)
Unemployment Insurance (correct)
Workers Compensation (correct)

Which of the following is true about unionization?

It is supported by laws like the National Labor Relations Act which aims to create an environment conducive to collective bargaining (correct)
The process by which employees form or join a labor union to collectively negotiate with their employers for better wages, benefits, etc. (correct)

Which of the following accurately describes capitalism, socialism, and government bureaucracy?

Capitalism focuses on private ownership and free markets. (A), Socialism emphasizes government owns and controls key industries (state ownership). (B) Signup and view all the answers

Which of the following sought to provide an environment conductive to collective bargaining?

The National Labor Relations Act (NLRA) of 1935 is sought to create an environment that supports collective bargaining. (A) Signup and view all the answers

Which of the following is true about HMOs and PPOs?

Health maintenance organizations (HMOs) require the use of specific healthcare providers (typically lower premiums and out of pocket costs). (A), Preferred provider organizations (PPOs) offer flexibility in choosing providers at reduced rates (typically higher premiums and out of pocket costs). (B) Signup and view all the answers

Which of the following is a method used for determining employee compensation?

Pay policy line approach: Establishing a mathematical pay formula between job evaluation points and pay rates (A), Market survey data approach: Using benchmarking to find competitive pay levels, aligning pay with external markets (B), Delayering approach: reducing job levels (C), Pay grade approach: Grouping jobs of similar worth (D), Skill-based pay approach: Compensation based on acquired skills (E) Signup and view all the answers

Which of the following dimensions are considered in determining the fairness of a compensation system?

Procedural dimensions emphasize the fairness in the pay decisions process, transparency, and consistency. (A), Ownership dimensions refer to compensation systems that give employees a sense of ownership, like stock options, or employee stock ownership plans. (B), Distributive dimension relates to the perceived fairness of the actual pay distribution among employees. (C) Signup and view all the answers

Which of the following plans insulates employees from investment risks?

Benefit plans guarantee specific retirement benefits (A) Signup and view all the answers

Which of the following is typically used to measure pay equity?

Compa ratio (A) Signup and view all the answers

Which of the following accurately describes the characteristics of different organizational cultures?

Weak uncertainty avoidance cultures have a flexible approach to rules and innovation. (A), Large power distance refers to cultures where hierarchical differences are accepted, and authority and decision making are centralized. (B), Small power distance refers to cultures where hierarchical differences are minimized, and equality is emphasized. Employees expect more participation in decision making. (C), Strong uncertainty avoidance cultures prefer structure, clear rules, and risk mitigation. (D), Collectivist culture emphasizes group goals and teamwork over individual achievements. Loyalty to the organization is valued. (E) Signup and view all the answers

Which of the following provides 12 weeks of unpaid absence from work to care for a sick child or parent?

The Family and Medical Leave Act (FMLA) (A) Signup and view all the answers

What is the difference between marginal tax rate, gross income, net income, incremental income, and maximum income?

Marginal tax rate refers to the percentage of tax applied to each additional dollar of income earned. (A) Signup and view all the answers

Which of the following are key components of pay administration strategies?

Benchmarking involves comparing an organization's practices (like pay levels) to competitors in the market to ensure competitiveness and alignment with industry standards. (A), Attitudinal structure refers to the trust and relationship between negotiators during collective bargaining. (B), Legal support includes legal advice and compliance with labor laws and regulations related to pay practices. (C) Signup and view all the answers

What is the function of the National Labor Relations Board?

The National Labor Relations Board (NLRB) protects employees' rights to organize, join unions, and engage in collective bargaining. It investigates and resolves unfair labor practices committed by employers or unions, and oversees union elections to ensure they are conducted fairly. Signup and view all the answers

Which of the following is an example of an ownership plan used in compensation systems?

Employee stock ownership plans (ESOPs) (A) Signup and view all the answers

Why do US companies tend to relocate their low-skilled, high-wage manufacturing assembly jobs to Mexico?

Low labor costs (A) Signup and view all the answers

When a company has a growth strategy, what typically happens to pay levels?

Pay levels are typically below market level in the short term during a growth strategy. (A) Signup and view all the answers

Which of the following accurately defines the concepts of capitalism, personal achievement, individualism, human capital, and personal productivity?

Human capital represents the skills, knowledge, and abilities that employees bring to an organization. (A), Individualism refers to societies where individuals prioritize personal goals over group objectives. (B), Capitalism is an economic system characterized by private ownership and free markets, focusing on profits and competition. (C) Signup and view all the answers

Which of the following is most likely to provide intrinsic motivation?

Performing meaningful work provides intrinsic motivation. (A) Signup and view all the answers

Which of the following compensation methods are commonly used in various organizations?

Profit sharing - based on company profits (A), ESOPs (Employee Stock Ownership Plans) - stock ownership for employees (B), Individual incentives - tied to personal performance (C), Gain sharing - group performance-based pay (D) Signup and view all the answers

What is the difference between range spread, job structure, pay level, pay grade, and compa ratio?

Pay grade groups jobs of similar worth into categories with defined pay ranges to simplify pay administration. (A), Pay level refers to the average pay for jobs in an organization. (B), Job structure is the relative pay of different jobs within the organization based on job evaluation and internal equity. (C), Range spread refers to the difference between the minimum and maximum pay within a pay grade. (D), Compa ratio is an index that compares the actual average pay for a grade to the policy midpoint, measuring pay equity. (E) Signup and view all the answers

Which of the following accurately describes the different types of countries involved in global employment?

Third country - Country that is neither host or parent country (A), Expat - employees working abroad (B), Parent/home country - Company headquarters (C), Host country - Location of subsidiary (D) Signup and view all the answers

What does it mean when a company is described as a union shop?

Employees must join the union within a certain period after being hired. (A) Signup and view all the answers

What are the key considerations in transitioning to an expat job and repatriating from abroad?

Transition to an expat job requires adaptive skills, including cultural training, language preparation, etc. (A), Repatriation (return) focuses on re-acclimating expatriates to their home environment by addressing cultural differences and organizational changes, such as new office rules and policies. (B) Signup and view all the answers

What are the key differences among forecasting, delayering, benchmarking, offshoring, and job evaluation?

Benchmarking - Industry comparison (A), Delayering - Reducing hierarchy (B), Forecasting - predicting HR needs (C), Offshoring - Relocating jobs abroad (D) Signup and view all the answers

Which of the following are key components of pay administration strategies?

Forecasting - predicting HR needs (A), Benchmarking - Industry comparison (B), Delayering - Reducing hierarchy (E) Signup and view all the answers

Which of the following terms are commonly used in pay administration?

Range spread - refers to the difference between the minimum and maximum pay within a pay grade. (A), Rate ranges - refers to the set range of pay rates for a specific job or grade, allowing for variations based on performance, seniority, etc. (B), Pay grades - Groups jobs of similar worth into pay categories to simplify pay administration. (C), Key Jobs - Benchmarked jobs with stable content and commonality across many organizations, often used in market pay surveys. (D), Compensable factors - Characteristics of a job that an organization values and chooses to pay for, such as education, experience, etc. (E) Signup and view all the answers

Which theory suggests that the likelihood of future high performance is less likely when high performance is not followed by a monetary reward?

Reinforcement theory - Behaviors followed by rewards are more likely to be repeated, while absence of rewards decreases the likelihood of the behavior occurring again. (A) Signup and view all the answers

Which of the following are common pay administration strategies?

Merit pay - Traditional system where base pay increases are tied to performance rating and are permanent adjustments. (A), Gain sharing - A group-based incentive program, bonuses are tied to improvements in group or plant performance. (B), Incentive pay - Compensation not rolled into base pay, must be earned continuously based on meeting specific performance goals. (C), Skill-based pay - Compensation is based on acquiring and demonstrating specific skills or knowledge. (D) Signup and view all the answers

Which of the following accurately describes different types of countries involved in global operations and employment?

Parent/home country - Company headquarters. (A), Guest country - A country that temporarily hosts individuals for business purposes. (B), Host country - Location of subsidiary. (C), Third country - Country that is neither host or parent country. (D), Expat country - Country where employees are working abroad. (E) Signup and view all the answers

Which of the following statements is true about labor relations in the public sector?

Public sector unions often have more legal restrictions on collective bargaining, government oversight, and often restrictions on the right to strike. (A) Signup and view all the answers

What is a notable trend in union membership and coverage?

Union membership has been declining, and that employer resistance and market changes are contributing factors. (A) Signup and view all the answers

Which of the following organizations play key roles in employee benefits administration?

Equal employment opportunity commission (EEOC) - Enforced federal laws prohibiting discrimination in the workplace. (A), Employee benefits security administration (EBSA) - Oversees the administration of employee benefits, including health and retirement plans. (C), Bureau of labor statistics (BLS) - Collects, analyzes, and publishes data on employment, wages, and workplace trends. (D), Pension benefit guaranty corporation (PBGC) - Guarantees payment of basic pension benefits if a company is unable to meet its obligations. (E) Signup and view all the answers

Which of the following qualities is likely valued in a culture with a long-term orientation?

Future rewards, sustained effort, and pragmatism (A) Signup and view all the answers

What are the key differences among expectancy perception, reinforcement perception, actual perception, agency perception, and equity perception?

Equity perception - Addresses fairness in rewards based on effort and contribution relative to others. (A), Agency perception - Focuses on the relationship between principals (owners) and agents (managers) and the alignment of their interests. (B), Expectancy perception - Suggests employees are motivated when they believe their efforts will lead to desired outcomes. (C), Reinforcement perception - Emphasizes that behaviors followed by rewards are more likely to recur. (D) Signup and view all the answers

Which of the following are key components of HR practices and strategies?

Benchmarking - Involves comparing an organization's practices, like pay or benefits, with industry standards. (A), Attitudinal structuring - Refers to building trust and managing relationships during the labor management negotiation process (B), Delayering - Refers to reducing the number of job levels in an organization to create broader, more flexible job roles (C), Collective bargaining - Refers to the negotiation process between unions and employees to agree on wages, working conditions, etc. (E) Signup and view all the answers

Which of the following theories are commonly used to understand employee motivation and behavior?

Reinforcement theory - States that behaviors following by positive rewards are more likely to be repeated, while those not rewarded are less likely to repeat (A), Social exchange theory - Suggests that individuals are motivated by the perceived fairness of the exchanges they make in relationships. (B), Equity theory - Focuses on fairness in how rewards are distributed compared to others, affecting motivation and satisfaction (C), Expectancy theory - Suggests that employees are motivated when they believe their effort will lead to performance and desired rewards (D) Signup and view all the answers

What is the primary source of funding for the unemployment insurance program?

Employers (A) Signup and view all the answers

Which of the following accurately describes different economic and political systems?

Socialist system - Emphasizes public ownership of resources and wealth distribution to meet social needs. (A), Collectivist system - Prioritizes group goals and shared responsibilities over individual goals, aligning with collectivist cultural values. (B), Capitalist system - Focuses on private ownership and free markets, emphasizing competition, profit, and individual achievement. (C) Signup and view all the answers

Which of the following describes different cultural dimensions that influence organizational behavior?

Culture with low power distance - Cultures emphasize equality, and hierarchical differences are minimized. (A), Culture with long term orientation - Cultures value future rewards, perseverance, and long-term planning over immediate results. (B), Cultures with low uncertainty avoidance - Cultures are comfortable with risk taking and have flexible rules. (C), Feminine culture - Focuses on nurturing roles, relationships, and quality of life, rather than competition and material success. (D), Individualist culture - Prioritizes personal goals and individual achievements over group objectives. (E) Signup and view all the answers

Most national unions are affiliated with which organization?

American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) (A) Signup and view all the answers

Which of the following job categories is typically exempt from the Fair Labor Standards Act (FLSA)?

Key Jobs (A) Signup and view all the answers

On what basis are incentive pay performance measures primarily based?

Specific, measurable performance goals (A) Signup and view all the answers

Why do companies often purchase insurance or self-insure at a lower rate?

Risk pooling, spreading financial risk across a larger group, reduces per-person costs (A) Signup and view all the answers

According to agency theory, who are the principles?

Owners or shareholders of the company (A) Signup and view all the answers

Which of the following terms relates to pay administration and union practices?

Union shop - Requires employees to join the union within a certain time after being hired (A), Check-off provision - Requires employers to deduct union dues directly from employees' paychecks (B), Fair share provision - Requires non-union members to pay a fee for union services since they benefit from collective bargaining (C), Closed shop - Requires employees to be union members before they are hired (now illegal) (D) Signup and view all the answers

Which of the following is a federal law that provides benefits to workers who are injured or become ill due to work-related conditions?

Workers compensation (A) Signup and view all the answers

Which of the following federal laws provides retirement income, disability insurance, and survivor benefits to workers?

Social Security Act (A) Signup and view all the answers

Flashcards

401(k) plan

A retirement savings plan for employees, often funded through pre-tax contributions.

Legally required employment programs

Social Security, unemployment insurance, and workers' compensation are legally mandated programs.