1. Which type of compensation program is based, in part, on the human capital theory?
a) merit pay
b) seniority pay
c) incentive pay
d) skill-based pay
2. Passage of this Act requires compensation professionals to demonstrate that alleged discriminatory pay practices are a business necessity.
a) Civil Rights Act of 1991
b) Equal Pay Act of 1938
c) Fair Labor Standards Act of 1938
d) Davis-Bacon Act of 1931
3. Which of the following laws set prevailing wage rates for companies that provide services to the U.S. Government?
a) Civil Rights Act of 1991
b) Equal Pay Act of 1938
c) Fair Labor Standards Act of 1938
d) Davis-Bacon Act of 1931
4. Base pay, protection programs, paid time-off programs, and work-related bonuses are all part of which type of compensation program?
a) intrinsic
b) core (salaries & wages)
c) extrinsic
d) fringe
5. When designing pay-for-knowledge programs, which of the following would be considered part of the transition matters phase?
a. grouping skills
b. aligning pay with the knowledge structure
c. training
d. skill types
6. At which stage in the organizational life cycle is greater emphasis typically placed on base pay and less on long-term compensation programs such as stock options?
a. decline
b. death
c. maturity
d. growth
7. Strategic analysis involves which of the following three internal capabilities?
a. financial condition, human resources capabilities, functional capabilities
b. financial condition, government regulations, functional capabilities
c. human resources capabilities, government regulations financial condition
d. functional capabilities, government regulations, human resources capabilities
8. Which of the following is NOT true of the NAICS? (North American Industry Classification System)
a. The information is used in industry and employment publications.
b. The information used in federal government economic statistics.
c. It includes the economic activities that the U.S. has in common with Mexico and Canada.
d. It uses a code with a maximum of 5 digits.
9. According to the Equal Pay Act, which of the following are acceptable defenses for unequal work?
a. a system that measures earnings by quantity or quality of production, a differential based on any factor other that race, a seniority system, a system that measures earnings by quantity or quality of production
b. a differential based on any factor other that race, a merit system
c. a seniority system, a merit system, a system that measures earnings by quantity or quality of production
d. a differential based on any factor other that race, a seniority system, merit system
10. Discriminatory seniority systems were addressed with passage of which Act?
a. Civil Rights Act of 1964
b. Civil Rights Act of 1991
c. Age Discrimination in Employment Act of 1967
d. Equal Pay Act of 1963
11. Which of the following factors explain inter-industry wage differentials
a. a large labor market, the degree of capital intensity, the profitability of the industry
b. the profitability of the industry, a large labor market, the industry's product market
c. the degree of capital intensity, the industry's product market, a large labor market
d. the industry's product market, the degree of capital intensity, the profitability of the industry
12. If the company adopts a market lag policy, how will that company's pay range midpoint compare to the market average?
a. the midpoint will be the same as the market average
b. not enough information to determine
c. the midpoint will be higher than the market average
d. the midpoint will be lower than the market average
13. Alejandro Martinez is responsible for setting up the pay structure for his company. He believes that newly hired employees should not be paid as much as established employees. Accordingly, what type of pay structure should Mr. Martinez use?
a. broadbanding
b. sales incentives
c. two-tiered
d. merit pay
14. Which of the following is NOT a factor in determining whether an individual will find a "just-meaningful difference" from a merit increase?
a. the individual's length of service with the company
b. the individual's cost of living
c. the individual's expectations of rewards from the job
d. the individual's attitude toward the job
15. Which of the following is a characteristic of job-based pay?
a. it compensates employees for the number of jobs in which they possess the skills to perform
b. it rewards employees on their promise to make positive contributions to the work place
c. it compensates employees for the jobs they are currently performing
d. a reward is based on the successful acquisition of work-related skills or knowledge
16. For part-time employees to be eligible to be in a company's retirement plan, which two qualifications must be met?
a. age 21 or older & worked 1200 hours in a year of service
b. age 21 or older & worked 1000 hours in a year of service
c. age 18 or older & worked 1200 hours in a year of service
d. age 18 or older & worked 1000 hours in a year of service
17. Which pay plan generally rewards employees for acquiring job-related competencies, knowledge, or skills rather than for demonstrating successful job performance?
a. pay-for-knowledge
b. incentive
c. merit
d. person-focused
18. Which pay model promotes learning and skills development for a wide variety of jobs from different job families?
a. cross-departmental
b. job-point accrual
c. stair-step
d. skill blocks
19. These are the three most common sources of job analysis data.
a. job analysts, supervisors, benchmark jobs
b. job incumbents, benchmark jobs, job analysts
c. job incumbents, supervisors, job analysts
d. benchmark jobs, job incumbents, supervisors
20. This evaluation method uses benchmark jobs to determine a job's value.
a. classification plan
b. market-based evaluation
c. point method
d. paired comparisons
21. Which of the following are the four "universal compensable factors"?
a. ability, effort responsibility, working conditions
b. ability, effort, skill, responsibility
c. skill, effort, responsibility, working conditions
d. skill, effort, ability, working conditions
22. What does it mean when the distribution of data is skewed to the right?
a. There is a lower frequency of larger values and the median is less than the mean
b. There is a higher frequency of larger values and the mean is less than the median
c. There is a lower frequency of larger values and the mean is greater than the median
d. There is a higher frequency of larger values and the median is less than the mean
23. Which compensation policy best fits with a lowest-cost competitive strategy?
a. market lead policy
b. market lag policy
c. market match policy
d. any of the above would be appropriate
24. Jose Escobar conducts a survey of salaries at UB2 Enterprises and finds that 50% of the workers fall below the market pay average of $32,000. In which quartile do the workers at ERL Enterprises fall?
a. first
b. second
c. third
d. fourth
25. What data is needed to perform a regression analysis to determine pay rates
a. job evaluation point totals & updated salary survey
b. number of salaries & internal salary amounts
c. internal salary amounts & job evaluation point totals
d. number of salaries & updated salary survey
26. Which performance appraisal system is based on writing performance behaviors as expectations, NOT as observed incidents?
a. MBO (Management by objectives)
b. BOS (Behavioral observation scale)
c. BARS (Behaviorally anchored rating scales)
d. CIT (Critical incident technique)
27. This performance appraisal system is based on employees and supervisors identifying on-the-job behaviors and behavioral outcomes that distinguish successful from unsuccessful performances.
a. Behaviorally anchored rating scales
b. critical incident technique (CIT)
c. behavioral observation scales
d. forced distribution system
28. Which two factors should compensation professionals consider before endorsing the use of merit pay systems?
a. supervisor's rating bias & commitment from top management
b. job design & supervisor's rating bias
c. job analysis & supervisor's rating bias
d. commitment from top management & job design
29. This term refers to the minimum pay increase that employees view as a significant change in their compensation amount?
a. halo effect increase
b. minimal pay incident
c. just-meaningful pay increase
d. satisfactory compensation payment
30. Which two incentive plans are appropriate for companies pursuing a differentiation strategy?
a. team-based and gain sharing
b. piecework and current profit sharing
c. gain sharing and piecework
d. current profit sharing and team-based
31. Company profits, cost containment measures, market share and sales revenue were listed as typical performance measures for which type of incentive plan?
a. individual
b. group
c. company-wide
d. executive
32. This formula for determining the amount available for profit sharing uses a specific percentage of annual profits contingent upon the successful attainment of a specified profit goal.
a. fluctuating first-dollar-of-profits
b. differed first-dollar-of-profits
c. graduated first-dollar-of-profits
d. fixed first-dollar-of-profits
33. Which of the following is true of most general stock compensation plans?
a. The company stock shares represent equity segments of equal value
b. Employees own the stock upon purchase
c. Company stock represents partial equity in the company
d. Stock options refer to what an employee can do with the stock once they purchase it.
34. Discretionary benefits are generally divided into which three categories?
a. Health benefits, pension benefits, paid time-off
b. Pension benefits, protection programs, services
c. Services, paid time-off, protection programs
d. Paid time-off, health benefits, services
35. Which of the following is NOT contained in the definition of "welfare practices"?
a. libraries
b. financial assistance
c. home improvements
d. wages
36. Which of the following NOT a condition manifesting short-term disability
a. pregnancy
b. recovery from surgery
c. recovery from illness (Not requiring Hospitalization)
d. recovery from injuries
37. Which of the following is a feature of short-term disability plans?
a. preexisting conditions
b. inclusion provisions
c. partial disabilities inclusion
d. waiting period
38. "24-hour coverage" refers to integrating what two programs?
a. workers' compensation & disability insurance
b. Medicare Part A & medical insurance
c. workers' compensation & medical insurance
d. workers' compensation & Medicare Part A
39. Under the Family and Medical Leave Act, for Pierre to take time off to take care of his wife and new child how many hours would he have had to work in the previous 12 months?
a. 1,000
b. 1,250
c. 1,600
d. 800
40. Which of the following is covered by Medicare Part A?
a. home health care
b. IV drugs
c. surgery expenses
d. doctor's bills
41. Workers' compensation covers these three types of claims.
a. injury, occupational disease, death
b. chronic unemployment, occupational disease, injury
c. occupational disease, death, chronic unemployment
d. death, chronic unemployment, injury
42. This type of consumer driven health care program allows employees to carry-over the unused funds still in their account.
a. health reimbursement account (HRAs)
b. high-deductible insurance accounts
c. flexible spending account
d. all of the above
43. Which of the following are the 4 broad categories of health protection plans?
a. flexible appending accounts, indemnity plan, fee-for-service, point-of-service
b. health savings accounts, consumer-driven care, managed care, fee-for-service
c. health reimbursement arrangements, managed care, indemnity plan, point-of-service
d. fee-for-service, managed care, point-of-service, consumer-driven care
44. Companies establish retirement plans following which of these three design configurations?
a. Defined benefit, defined contribution, hybrid
b. Qualified benefit, qualified contribution, hybrid
c. Qualified benefit, nonqualified benefit, hybrid
d. Funded, unfunded, hybrid
45. What are the three common forms of managed care plans?
a. Individual practice organizations, point-of-service plans, health maintenance organizations
b. Health maintenance organizations, preferred provider organizations, point-of-service plans
c. Preferred provider organizations, point-of-service plans, individual practice organizations
d. Preferred provider organizations, health maintenance organizations, individual practice organizations
46. Ms. Fernandez, the company's CEO, called and wants you to check to verify that the company's vesting plan is in compliance with federal law. Which law would you need to review?
a. ERISA (Employee Retirement Income Security Act of 1974)
b. COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
c. HIPPA (Health Insurance Portability and Accountability Act of 1996)
d. FLSA (Fair Labor Standards Act of 1938)
47. How many days must temporary and seasonal employees work to meet ERISA requirements to participate in a company's qualified retirement plan
a. 100
b. 163
c. 125
d. 200
48. Temporary employment agencies are responsible for complying with all federal employment legislation except which one?
a. ADA
b. FLSA
c. workers' compensation
d. ERISA
49. Which of the following are the 4 main types of bonuses for executives?
a. discretionary, performance-contingent, pre-determined allocation, target plan
b. performance-contingent, target plan, gain-sharing, phantom stock
c. target plan, performance-allocation, discretionary, gain-sharing
d. phantom stock, discretionary, performance-contingent, target allocation
50. Under SEC rules, which of the following is true?
a. shareholders may be subject to personal liability for paying excessive executive compensation.
b. publicly held corporations must disclose executive compensation information to shareholders, but not the public
c. board of director members can sue a corporation for excessive executive compensation
d. board of director members may be subject to personal liability for paying excessive executive compensation