Q&A Hero

Q: Severance pay is(a) money received when transferred from one job to another(b) compensation paid to hourly workers placed into new jobs(c) a compensation payment made beyond the normal base pay when an individual leaves the organization(d) the amount of money paid at the end of a defined work period to an employee

Q: All but which one of the following are generally guaranteed to a golden parachute holder?(a) immediate vesting of any stock option(b) continuation of pay for usually one to five years(c) the minimum level of income to be received over the term of the contract(d) payment of taxes incurred as a result of the golden parachute contract taking effect

Q: Which of the following is not a mandated benefit payment?(a) Workers' Compensation(b) unemployment compensation(c) supplemental unemployment benefits(d) old age, survivors, and disability insurance payment

Q: Which one of the following benefits is least costly to the employer?(a) Social Security payment(b) life insurance premium(c) employer-provided retirement(d) health and medical coverage insurance

Q: Many employee benefits are taken for granted primarily because(a) too much information is given about benefits(b) employees demand increases in base pay rather than increases in benefits(c) the cost of benefits cannot be determined(d) employers fail to communicate the value of benefits to their employees

Q: The most commonly used costing methods for benefits include all of the following except(a) number of benefits distributed per year (per employee)(b) annual cost of benefits for all employees(c) percentage of payroll(d) cost per employee per year

Q: Match the description of a feature of the corporate insurance program listed in the right-hand column with the appropriate insurance program listed in the left-hand column: Corporate Insurance Feature18. Section 79(a) Can provide employees with up to $50,000 of tax-free group life insurance19. Split Dollar(b) Combines low-cost term insurance with tax-sheltered investment opportunities20. Supplemental Incentive Plan (SIP)(c) Resulting cash value of plan can fund a deferred compensation agreement21. GULP(d) A future income contract between employer and employee that provides supplemental income payments for a specified period of time or until death

Q: Match the description of a tax-related term listed in the right-hand column with the appropriate term listed in the left-hand column:Tax TermDescription/Example14. Nonqualified(a) Employee must not have control over funds15. Top-Heavy Plan(b) Employee does not have ownership to any of plan funds16. Constructive Receipt(c) Employer cannot take a tax deduction until employee is required to include it as taxable income17. Nonfunded(d) Accumulated benefits accruing to key employees exceed 60 percent of present value of accrued benefits of all participants in plan

Q: The hiring of TCNs rather than expatriates includes all but which one of the following factors?(a) accept lower salaries(b) understand local customs(c) better understanding of corporate policies(d) reduced relocation costs

Q: The title given to those employees of US companies in a foreign country whose basic residence is the host country is(a) locals(b) expatriates(c) third-country nationals(d) repatriots

Q: Which one of the following is not included in defining an insider for SEC requirements?(a) has annual cash remuneration of $150,000(b) has annual cash remuneration of at least $60,000 and is one of the five highest-paid executive officers(c) receives annual perquisites valued at $25,000(d) has available a golden parachute valued at $60,000 or more

Q: Which one of the following is not a compensation plan used by organizations to overcome ERISA-imposed limits on qualified pension plans?(a) COLI(b) rabbi trust(c) SEP(d) SERP

Q: Trusts include all but which one of the following?(a) trustee(b) grantor(c) government overseer(d) beneficiary

Q: Supplemental Executive Retirement Plans (SERPs) are used for all but which one of the following?(a) overcome ERISA-imposed limits on qualified pension plans(b) guarantee employees that future retirement payments will be made(c) promote executive fulfillment of contractual obligations(d) retain control of assets by employers

Q: FASB has increased its influence on executive compensation by(a) increasing income tax rates on executive compensation(b) forbidding organizations to offer certain kinds of perquisites(c) restricting time when executives can buy or sell stock(d) establishing accounting treatment for various kinds of stock-based incentive plans

Q: SEC regulations regarding compensation include disclosure information on all but which one of the following?(a) cash remuneration of ten highest-paid executives(b) stock options and exercises during the fiscal year(c) golden parachutes valued at $60,000 or more(d) incremental cost to the company of perquisites valued at $25,000 or more

Q: Stock acquisition plans provide for all of the following except(a) promote substantial organization ownership rights(b) avoid federal income tax obligation(c) assist employees develop an estate(d) enhance employee willingness to save for the future

Q: Which one of the following would not be considered a perk?(a) company car,(b) ESOP(c) spouse travel allowance(d) kidnap and ransom protection

Q: Which one of the following features is least common in golden parachutes?(a) opens with a change of 20 percent in ownership(b) provides continuation of base pay from one to five years(c) permits immediate vesting of any stock option(d) grants employee continuation of supplemental benefits

Q: Nonqualified stock plans include all but which one of the following?(a) Incentive Stock Options(b) variable price stock options,(c) restricted stock options(d) tax-offset stock option plan

Q: The Omnibus Budget Reconciliation Act of 1993 placed a ________ cap on deductible compensation of the top five executive officers of an organization.(a) $500,000(b) $750,000(c) $1,000,000(d) $1,500,000

Q: Match the description of a feature in the right-hand column with the appropriate deferred compensation arrangement listed in the left-hand column:Deferred Compensation Arrangement Feature1. Social Security(a) Involves a payment of a specified amount to each participant2. Defined Benefits Plan(b) Payments are linked to the CPI3. Defined Contribution Plan(c) Employer contribution is a certain percentage of employees earnings from time employee enters the program4. Cash-Balance Plan(d) Involves use of a formula to determine amount of benefit an employee will receive

Q: Match the pension plan listed in the right-hand column with the characteristic listed in the left-hand column that best fits it:CharacteristicPension Plan1. Allows no tax deduction for annual contribution(a) SIMPLE2. TRA 86 restricted use to employers with less than(b) IRA 26 employees3. Available for individuals who do not participate in(c) SEP an employer-sponsored retirement plan4. Designed for employers with no more than 100(d) Keogh (HR-10) Plan employers5. Can take three options, one being a profit-sharing plan(e) Roth IRA

Q: ESOPs provide all but which one of the following as benefits to an employer?(a) company can sell its stock and redeem it without reducing the true value of the stock(b) owner's equity can be diluted(c) company can increase its working capital(d) company can pay off stock-related loans and redeem stock through the use of pretax dollars

Q: An ESOP is a(a) defined contribution plan(b) nonqualified stock bonus plan(c) qualified profit-sharing plan(d) defined benefit plan

Q: Retirement before age _______ is considered early retirement(a) 70(b) 65(c) 62(d) 55

Q: A major difference between a savings and thrift plan and a 401(k) plan is(a) employers can match employee contributions (within a prescribed limit)(b) a savings and thrift plan is a defined contribution plan(c) employee contributions (within a limit) are tax deferred(d) profit sharing can be tied to a 401(k) plan

Q: An employee can contribute up to ______ percent of his or her salary with total employee and employer contribution limited to $_____ or 25 percent of salary in a savings or thrift plan.(a) 10%, $25,000(b) 40%, $7,000(c) 5%, $25,000(d) 6%, $30,000

Q: Which one of the following statements is not true regarding a defined contribution plan?(a) most pension plans are defined contribution plans(b) crucial to a defined contribution plan are investment and management skills(c) employers assume the investment risk(d) most plans have less than 100 participants

Q: A defined contribution plan has all but which one of the following features?(a) employer contributions can be a flat dollar amount(b) employer contribution can be based on some special formula(c) provides a definitely determinable payment over a prescribed schedule(d) top limit to the contribution is $30,000

Q: Which one of the following statements does not describe a defined benefits plan?(a) funded by a specified payment to the account of each participant(b) includes a formula that defines the benefit an employee is to receive(c) annual contribution by employer made on an actuarial basis(d) employees can be required to contribute to the plan

Q: Which one of the following statements is not true regarding Supplementary Executive Retirement Plans (SERPs)?(a) plans seldom make any contractual requirements on recipient(b) plans are unfunded(c) frequently funds are made available through employer's own insurance policies(d) employer retains control of plan assets

Q: Which of the following compensation areas is most affected by changes in IRS regulations?(a) minimum wages(b) union contracts(c) executive compensation(d) professional employee compensation

Q: The primary reason for integrating pension plans with Social Security is to(a) reduce company cost(b) capitalize on government deductions(c) eliminate pension benefits for lower-paid employees(d) provide reasonable retirement benefits to employees at all income levels

Q: Pension plans are offered to employees to affect their(a) past lifestyles(b) current lifestyles(c) current job security(d) future lifestyles

Q: Who finances the majority of pension plans existing in industry today?(a) unions(b) employees(c) employers(d) federal government

Q: Under the Employee Retirement Income Security Act, employees may not be excluded from pension plans on the basis of age, if they are at least(a) 18(b) 21(c) 25(d) 45

Q: Which one of the following is least likely to appear in an employee's long-term compensation plan?(a) Social Security(b) retirement plan(c) Keogh Plan(d) 401(k) plan

Q: Which one of the following is not part of a long-term incentive plan according to Peter Chingos?(a) gainsharing plans(b) qualified deferred(c) capital accumulation(d) other deferred and supplemental arrangements

Q: Which section of the Internal Revenue Code defines rights and opportunities for long-term compensation programs?(a) 125(b) 401(c) 520(d) 717

Q: All but which one of the following are major reasons for an employee to defer income?(a) save for the future(b) permit savings to accumulate interest tax free(c) currently low tax rates(d) inability to forecast what the future may hold

Q: Which one of the following groups of employees is most likely to receive a pension that equals or at times exceeds their annual salary?(a) top-level operating managers(b) administrators(c) executives(d) professionals

Q: Which one of the following is not a benefit to the employer when offering an ESOP?(a) maintains a stable work force(b) owner can sell stock to a friend(c) results in a dilution of value of the stock(d) ESOT can borrow money under favorable conditions

Q: Payments to a defined contribution plan will be limited to ______ of the benefits in a defined benefits plan when the limits to a defined benefit plan reach $120,000.(a) 1/4(b) 1/3(c) 1/2(d) 2/3

Q: ___________ refers to earned pension rights that are not forfeitable for any reason(a) Vesting(b) Severance pay(c) Retirement earnings(d) Deferred profit sharing

Q: Integrating primary Social Security payments with the corporate pension plan will normally provide the least benefits to employees in which job?(a) president(b) engineer(c) middle manager(d) janitor

Q: What measure is used in a Scanlon Plan pay system?(a) sales(b) profitability(c) sales-labor cost reduction(d) cost-effectivenessANSWERS TO TEST BANK QUESTIONS

Q: The ratio that determines the standard that serves as a measure for judging business performance, Total Labor Cost/Sales Value of Production, is a part of the(a) Rucker Plan(b) Scanlon Plan(c) Work Measurement Plan(d) AT&T Profit-Sharing Plan

Q: A screening committee within a typical cost-reduction plan consists of 12 members representing plan management and the workers. Its purpose is to(a) screen interviews(b) review bonuses and production problems, consider suggestions for improvement, discuss business trends(c) review loan requests(d) make investment suggestions

Q: The Lincoln Incentive System includes all but which one of the following factors?(a) the rating of each employee's performance(b) most operative employees in a piecework incentive plan(c) work unit granted group bonuses(d) annual profits split three ways

Q: Group incentive plans are more desirable than individual incentive plans in situations where(a) teamwork is required(b) costs cannot be forecast(c) individual contributions can be determined(d) production standards cannot be established

Q: Which one of the following is not an example of a gainsharing plan?(a) Gantt Plan(b) Scanlon Plan(c) IMPROSHARE(d) Rucker Plan

Q: A gainsharing plan(a) shares productivity gained benefits with employees(b) pays different rates of pay for different shifts(c) pays a premium to employees who individually produce greater output(d) is a standard piecework/bonus plan

Q: Employees of the federal government are eligible for(a) patent awards(b) outstanding contributor award(c) special achievement award(d) perfect attendance award

Q: Bonuses related to the work/results of an individual include all but which one of the following?(a) attendance(b) referral(c) contest(d) signing of union contract

Q: A standard is _______ when management contends that workers' earnings are excessive, taking into account the extra effort involved in producing the output.(a) tight(b) rich(c) loose(d) inaccurate

Q: Which of the following statements is least descriptive of why many suggestion plans have failed?(a) employee apathy(b) failure to recognize contributions(c) management lacks interest(d) union members block suggestions through committee action

Q: The National Association of Suggestion Systems claims that a dollar spent in rewarding suggestions will return ______ dollars in improved operations to the organization.(a) $1(b) $250(c) $5(d) $15

Q: The discussion of workers doing ten minutes work for 12 hours pay within a nuclear power facility relates to which of the following?(a) high emotional stress(b) severe physical discomfort(c) critical long-term health-related problems(d) danger in high places

Q: In contrast to compensation systems in the private sector, those for government employees are less likely to include use of(a) wage surveys(b) job descriptions(c) job evaluation(d) financial incentives

Q: In giving a reward, which one of the following times, in general, would have the lowest motivational impact on an employee?(a) before Christmas(b) closely following the demonstration of a desired behavior or result(c) prior to vacation(d) on the employee's birthday

Q: The size of a bonus received by an operating manager will quite often be determined by all but which one of the following criteria?(a) work unit reduction in cost(b) performance rating of manager's subordinates(c) employee's own performance rating(d) area of functional responsibility

Q: What is the basic requirement for an incentive wage plan?(a) union approval(b) employee approval(c) government approval(d) a quantifiable volume of work

Q: In the late 19th and early 20th century, work-improvement researchers recognized the advantages to be gained through the three Ss of work design. Which one of the following is not one of the three Ss?(a) standardization(b) specialization(c) simplification(d) selection

Q: Which of the following is not true about a well-designed incentive scheme?(a) it should reflect the desire of the business to recognize performance(b) it should be limited to individual efforts(c) it should assist in coordinating the efforts of all employees(d) it should demonstrate the ability of the business to reward performance at all levels

Q: Probably the oldest of all incentive programs are(a) those that use the group outputs(b) those that tie workers' earnings directly to the number of units produced(c) those that base their incentive plans on seniority(d) those that use the differential day rate plan

Q: To what level employees can incentive plans apply?(a) any level(b) management only(c) salespersons only(d) those on piece rates only

Q: Which one of the following is not a recent addition to recognized workplace related hazards?(a) other employees who smoke(b) working with a VDT(c) cleaning corroded pipes in a nuclear power plant(d) working at extreme heights

Q: Work premiums or differentials consist of all but which one of the following?(a) shift differential(b) weekend pay(c) pay for extra quantity and quality of output(d) overtime pay

Q: A good example of a work premium is(a) a piecework payment(b) overtime pay(c) cost-reduction payment(d) profit sharing

Q: In addition to pay received by employees on first shift, employees working second and third shifts normally receive(a) larger merit increases(b) shift differential pay(c) incentive bonuses periodically(d) the prevailing union scale for such work

Q: Match the results of the court case described in the right-hand column with the appropriate title of the court case listed in the left-hand column:Court CaseResults30. Wade v Mississippi Cooperative(a) All-white supervisors using Extension Service subjective and vague standards to rate black employees is discriminatory31. Mistretta v Sandia Corp.(b) There is an assumption that of workers in the later years their work life are in a decline stage32. Moody v Albermarle Paper Co.(c) Trait ratings can be subjective and biased and are not usually based on job content33. Rowe v General Motors Corp.(d) Irrespective of the work they were doing, employees were rated against each other without establishing any criteria for job-related performance

Q: Using two completely comparable or equivalent test instruments for determining reliability is the(a) test-retest method(b) subdivided method(c) parallel test method(d) split-half method

Q: The critical incident technique is extremely useful for(a) setting goals(b) documenting observed behaviors(c) measuring results achieved(d) establishing job rates of pay

Q: Some experts state that pay for performance programs have had little effect because all but which one of the following reasons?(a) employees have little trust in them(b) plans do too good a job of measuring actual performance(c) poor relationships between levels of performance and rewards received(d) performance ratings are frequently biased

Q: Merit pay can best be defined as(a) an annual increase in pay(b) an adjustment to base pay relating directly to an employee's performance(c) an increase in pay to top performers(d) an annual adjustment to the pay plan

Q: Who typically initiates MBO objectives?(a) supervisors(b) each employee(c) supervisor's supervisors(d) a conference between employees and their supervisor

Q: How often should an employee's performance be appraised?(a) once a year(b) quarterly(c) every six months(d) continuously

Q: A weakness of an odd number of intervals in a rating scale is that it(a) does not allow differentiation of performance(b) forces raters to inflate ratings(c) forces raters to be too strict(d) allows raters to escape making a valid rating decision

Q: A measure of the relationship of test items and actual properties the test instrument is designed to test is(a) reliability(b) criterion-related validity(c) construct validity(d) content validity