MGI Compensation Practice Problems Answer Key

1) What does an employee’s total compensation include? 2) What does EEOC mean? What do some people think is an ever-increasing challenge for the EEOC? 3) What does a collective Bargaining Contract ensure? 4) Placing jobs in broader bands of classification gives managers the opportunity to: a. limit salary increases b. isolate non-performers c. increase opportunities for promotion d. reward high performers with merit increases 5) Salary level decisions can be broken down into which of the following two areas? Select all that apply: a. Job shadow b. Individual pay c. tax bracket d. pay structure 6) Employees typically view their compensation in terms of which of the following? Select all that apply: a. As a sign of status and success b. As it relates to the pay of their colleagues c. As a means of negotiating more money to stay with the company d. As a way of evaluating their relationship with the organization 7) The concept of reducing the number of job levels within an organization in order to gain flexibility in job assignments is called___? 8) The relative pay of jobs in an organization is known as the organization’s__ a. wage chart b. job structure c. pay structure d. payment plan 9) Which of the following factors determine the size and frequency of pay increases on the merit increase grid? Select all that apply: a. an individual’s compa-ratio b. an individual’s tenure within a company c. departmental goal attainment levels d. An individual’s performance rating 10) A ____program considers group or plant performance to determine incentive payouts, whereas profit sharing plans use organization-level indicators. a. stock ownership b. gainsharing c. communitarian d. collectivisation 11) In order to address multiple objectives and track both financial results and progress made in expanding capabilities and acquiring intangible assets, organizations can take an approach known as a(n)____. a. Individual incentive plan b. Gainsharing plan c. balanced scorecard d. merit pay program 12) Under a profit sharing system, payments are___. a. Given to all employees on a weekly basis b. Not part of base salary c. Distributed equally d. Part of base salary 13) The effect pay has on workforce composition is known as ___. a. The demand curve b. A dividing outcome c. The Collins Curve d. A sorting effect 14) Which of the following can be combined to contribute to improvement in a wide array of performance dimensions? Select all that apply: a. Gainsharing b. Merit pay c. Profit sharing d. Labor organization 15) A grid that combines an employee’s performance rating with his or her position within a pay range so as to determine the size and frequency of pay increases is known as the ___grid. a. Agency theory b. Outcome-oriented c. Merit increase d. Profit sharing 16) The compensation plan known as ___involves payments being based on some measure of organizational performance, and the payments do not become part of the base salary. a. Individual incentives b. Labor union c. Merit pay d. Profit sharing 17) What are some of the goals of unemployment insurance? Select all that apply: a. To get rid of employees who are not performing well b. To help unemployed workers secure new work c. To financially support unemployed workers during unemployment d. To encourage employers to retain employees and not lay them off 18) What should be a key factor in designing an employee benefits package? a. The wishes of current employees b. Competitors benefit packages c. What customers approve of d. Recommendations from the board of directors 19 ) In which type of retirement plan does an employee’s account earn a predetermined interest rate? a. 401(k) plan b. Defined contribution retirement plan c. Profit sharing plan d. Cash balance plan 20) Which strategies can employers use to control the cost of employee benefits? Select all that apply: a. Reduce the number of work hours within each department b. Change status of employees from nonexempt to exempt c. Categorize workers as employees, not as independent contractors d. Increase employee hours without incurring overtime charges 21) What are some of the characteristics of employee wellness programs (EWP’s)? Select all that apply: a. They provide benefits on a prepaid basis b. They are often designed to target certain health care issues, such as high blood pressure c. They work to lower the amount an employer must spend on employee health care d. They are effective at increasing the wellness of participants, but they are costly for employers 22) Once employees enter a company pension plan, the employer has ____to provide employees with a summary plan description, which provides detailed information about the plan. a. 60 days b. 30 days c. 120 days d. 90 days 23) Employers can obtain competitive information about other employer’s benefit packages through ___. Select all that apply: a. The Bureau of Labor Statistics b. The U.S. Chamber of Commerce c. Reading the publications of various trade associations d. Hiring private consultants 24) Why have some companies set up voluntary employee benefit association(VEBA) trusts? a. To move retiree health care obligations off their financial statements b. To make employee unions pay for health care benefits c. To inspire employees to plan for retirement on their own d. To speculate on future health care costs for active employees 25) The unemployment insurance program is financed primarily through ___. a. Federal and state taxes on employers b. Federal and state taxes on employees c. Federal and state taxes on employers and employees d. Local taxes on employees 26) To___, an employer may hire more part time workers than full time ones. a. Increase employee wellness b. Be