Compensation and Benefits
Chapter Exam Questions
Course Introduction
This course provides a comprehensive overview of compensation and benefits, exploring the strategic and operational aspects of designing and managing employee reward systems. Topics include job evaluation, wage and salary structures, incentive programs, non-monetary rewards, and the regulatory environment surrounding employee compensation. Students will also examine the role of benefits such as health insurance, retirement plans, and paid leave, as well as emerging trends in compensation practices. The course equips students with the analytical tools and practical knowledge necessary to develop fair, competitive, and motivating compensation packages that align with organizational goals and comply with legal requirements.
Recommended Textbook
Strategic Compensation in 5th Canada Edition by Richard Long
Available Study Resources on Quizplus
13 Chapters
590 Verified Questions
590 Flashcards
Source URL: https://quizplus.com/study-set/1649 Page 2
Chapter 1: A Road Map to Effective Compensation
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/32730
Sample Questions
Q1) Which of the following would be an example of an extrinsic reward?
A) interesting and meaningful work
B) pay for performance based on the number of units produced per hour
C) being able to see the company's product being used by a satisfied customer
D) work that allows for enhanced personal development
Answer: B
Q2) A reward strategy is the plan for the mix of rewards to be provided to organization members along with the means through which they will be provided.
A)True
B)False
Answer: True
Q3) What does a firm's compensation strategy identify?
A) all of the financial and nonfinancial rewards of work
B) the total amount of cash compensation employees will receive
C) the mix of intrinsic rewards
D) the mix and total amount of base, performance, and indirect pay
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: A Strategic Framework for Compensation
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/32731
Sample Questions
Q1) A prospector strategy, short life cycle products, a highly skilled work force, and a relatively small organization would be a good combination of variables for which managerial strategy?
A) classical
B) human relations
C) high-involvement
D) mechanical
Answer: C
Q2) Supporters of the classical managerial approach to management assume employees are inherently lazy and require constant vigilance
A)True
B)False
Answer: True
Q3) What can you determine by examining a firm's contextual variables?
A) the managerial strategy that a firm is actually using
B) the type of structure the organization should be using
C) the firm's competitive advantage and required resources
D) organizational goals, mission, and vision
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: A Behavioural Framework for Compensation
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/32732
Sample Questions
Q1) From an employee behavioural perspective, what steps need to be followed to design an effective reward system?
Answer: An effective reward system generates the types of employee behaviour that an organization needs. The following steps will help create an effective reward system. 1. Define the employee behaviour that is really needed. 2. Determine the employee attributes and qualifications necessary to perform the needed behaviour. 3. Identify the needs that individuals possessing these qualifications are likely to find salient. 4. Ensure a positive valence for needed behaviour by providing rewards that address salient needs and by reducing the costs to the employee of performing the behaviour. 5. Make it clear that performance of the behaviour will lead to the promised rewards. 6. Provide conditions that make it likely that employee effort will actually lead to the desired behaviour.
Q2) One of the keys for generating citizenship behaviour is motivation.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Components of Compensation Strategy
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/32733
Sample Questions
Q1) Competency-based systems have been proven valid, given the wide body of research associated with this compensation system.
A)True
B)False
Q2) Which of the following conditions make it impractical to use output-related pay?
A) Output is easy to measure.
B) Output is very stable.
C) Output cannot be controlled by the individual employee.
D) Output is easy to price in terms of its value to the employer.
Q3) Johnny is compensated based on a rate of $25.00 per hour worked. Which of the following terms best describes the manner in which Johnny is compensated?
A) commission
B) wage
C) piece rate
D) salary
Q4) Briefly discuss the advantages and disadvantages of using indirect pay.
Q5) Briefly describe the three main categories of performance pay, and provide examples for each category.
Q6) According to the text, what are the key conditions for using output-related pay?
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Performance Pay Choices
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/32734
Sample Questions
Q1) Your CEO is concerned that employees are not saving enough for their retirement. At the same, the CEO wants to have some of the company's profits shared with all employees. To address these issues, your CEO asks you, a human resource compensation specialist, to recommend the most appropriate profit-sharing plan to address this retirement issue. Which of the following profit-sharing plans would you recommend?
A) deferred profit sharing
B) combination profit sharing
C) current distribution
D) cash plan
Q2) In what way are piece rates and commissions similar to each other?
A) Employees don't have to worry about working themselves out of a job.
B) They reduce the need for external control of employees through supervision.
C) Both types are commonly used in conjunction with base pay.
D) Both are popular systems widely used in the service sector.
Q3) Explain the difference between goal-sharing and gain-sharing plans.
Q4) Identify and briefly define each of the three types of employee stock plans.
Q5) Identify and briefly explain the nature of individual performance pay plans.
Q6) What is the rationale that makes employee stock plans such a "natural fit" with organizations using a high-involvement management strategy?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Formulating the Reward and Compensation Strategy
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/32735
Sample Questions
Q1) Which type of management strategy will use economic variables as key motivators to drive employee behaviour?
A) lead
B) high-involvement
C) classical
D) human relations
Q2) The key reason that executives earn so much more than other employees is because their base pay is so much higher.
A)True
B)False
Q3) To keep work interesting and provide higher compensation opportunities for your design engineers, you have created a compensation system that allows them to move from an entry level to an expert specialist level. What term is used to describe this system?
A) management pathing
B) technical ladder
C) competency-based
D) leader development
Q4) Briefly summarize the legislative framework that compensation must comply with.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Evaluating Jobs: The Job Evaluation Process
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/32736
Sample Questions
Q1) The Position Analysis Questionnaire uses some 187 "job elements" to describe work activities.
A)True
B)False
Q2) The textbook identifies several methods that may be used when comparing female and male job classifications. Which of the following methods would you consider NOT appropriate?
A) the proxy method
B) the job-to-job method
C) the ad-hoc method
D) the proportional value method
Q3) Under Ontario pay equity legislation, going through the pay equity process is unnecessary if your firm has no female job classes.
A)True
B)False
Q4) Which of the following is NOT a valid reason to re-evaluate jobs?
A) Labour market conditions change significantly.
B) The strategy of the organization changes.
C) A new performance system is implemented.
D) There is a high level of appeals.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Evaluating Jobs: The Point Method of Job Evaluation
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/32737
Sample Questions
Q1) What criteria are used to determine movement through the pay range?
Q2) Assume that options (a), (b), (c), and (d) below represent degree 1, 2, 3, and 4, respectively, for the formal education factor on your summary rating chart for the point method of job evaluation. Based on the degree definitions, which of the following degrees is arranged out of place on the chart?
A) degree 1: completion of high school
B) degree 2: one year of post secondary education
C) degree 3: three year college diploma or university degree
D) degree 4: completion of grade 9
Q3) What does a -1 (negative one) correlation coefficient mean?
A) There is a positive relationship between job evaluation points score and pay levels.
B) There is an inverse relationship between job evaluation points score and pay levels.
C) Your regression equation has a very steep upwards slope.
D) There is very little relationship between job evaluation points score and pay levels.
Q4) Discuss the advantages and disadvantages of the point method of job evaluation.
Q5) What are the key considerations in establishing pay grades and pay ranges?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Evaluating the Market
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/32738
Sample Questions
Q1) Which of the following is a potential drawback associated with using compensation consultants to gather labour market information?
A) The data is usually not presented in a "user-friendly manner"; hence, it is difficult to use.
B) The data is usually old and not relevant.
C) The data may be restricted to a few organizations; hence, it does not comprise an appropriate sample.
D) The data tends to be more expensive compared to designing and administering your own survey.
Q2) Which of the following is NOT a possible limitation of compensation surveys?
A) Free labour market data is not readily available.
B) We cannot surmise anything about compensation strategies practised by other firms.
C) They may misrepresent actual pay trends.
D) Markets may not value jobs fairly.
Q3) A very large interquartile quotient tends to indicate that all jobs in the sample are equivalent.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Evaluating Individuals
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/32739
Sample
Questions
Q1) There are several critical issues that need to be addressed in designing an effective merit system. Which of the following is NOT identified as a critical issue in the textbook?
A) the ultimate goal(s) of the merit system
B) the process for training evaluators
C) the manner in which feedback will be provided
D) the process that ensures equal increases across employee job ratings
Q2) John has fabulous interpersonal skills. This causes raters to ignore some of his weaknesses, which include time management, technical, and leadership skills. Which of the following perceptual errors is likely impacting John's rating?
A) central tendency error
B) halo error
C) leniency effect
D) contrast effect
Q3) Which of the following is NOT a source of performance appraisals?
A) supervisors
B) board of directors
C) subordinates
D) professional raters
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Designing Performance Pay Plans
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/32740
Sample Questions
Q1) An employer issues Johnny 2,000 stock options in recognition of a very good year. These particular options vest after 24 months from the date of issuance with an exercise price of $21.00 per share. After 24 months, these shares trade in the open market at $25.00 per share, and Johnny decides to exercise his 2,000 options, generating a gain of $8,000 (minus transaction fees). Which of the following statements regarding Johnny's tax situation pursuant to these gains is true?
A) Because these options were a bonus provided by the employer, there are no tax consequences attributable to Johnny.
B) Because these shares are "under water," Johnny's employer is responsible for any taxes on the gains.
C) Johnny will have to pay taxes based on the corporate tax rate.
D) Johnny's gain will be deemed as income, but taxes will be paid at the capital gains rate.
Q2) Briefly describe the Scanlon Plan.
Q3) Deferred profit-sharing plans are often used as quasi pension plans, particularly in medium-sized companies.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Designing Indirect Pay Plans
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/32741
Sample Questions
Q1) Which of the following variables is NOT used to determine the income level provided to employees upon retirement under a "defined benefit program"?
A) some variable (percentage) of the average income over a certain period of time, usually three to five years
B) the company's profit level over a period of three to five years
C) employees' years of service
D) employees' salary level
Q2) Which of the following is NOT a possible reason for implementing flexible benefit plans?
A) cutting benefit costs
B) developing a more diverse work force
C) lowering overall administrative costs
D) shifting employee perspective away from an entitlement approach
Q3) A force promoting flexible benefits plans is the increasing diversity of the work force.
A)True
B)False
Q4) Describe the main issues in designing the benefits system.
Q5) Discuss the pros and cons of flexible versus fixed benefits plans.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Activating and Maintaining an Effective Compensation System
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/32742
Sample Questions
Q1) One of the key functions associated with documentation of compensation systems is the establishment of service contracts with external service providers. Which of the following criteria is likely to be the most difficult to document in the contract?
A) addressing unforeseeable events
B) employer responsibilities
C) penalties for failing to meet standards
D) minimum performance standards
Q2) In order to avoid resistance to a new compensation system, it a good practice to discontinue the usage of the old system before you have fully tested the new system. Otherwise, employees will gravitate to the old and familiar system. .
A)True
B)False
Q3) What main indicators should firms examine in the process of examining compensation costs?
A) budgeted costs and actual costs
B) compensation cost ratios and budget ratios
C) net profit per employee and average employee earnings
D) compensation cost ratios and average employee earnings
To view all questions and flashcards with answers, click on the resource link above. Page 15