A key provision of the employee Retirement Income Security Act concerns vesting Quizlet
Employee assistance plans are designed to help employees who require urgent medical support for family members in case of accidents. false From 2027, individuals will not be able to retire with full benefits of the Social Security program until they reach age 67. true The Social Security system is aimed at providing a minimum sustenance amount to individuals who are between jobs. false Bonuses are typically a function of the performance of the organization and are less dependent on the perceived performance of the executive. true Pay compression is least likely to develop when the market rate for starting salaries increases at a rate faster than an organization can raise pay for individuals who are already on the payroll. true The basic aim of the Affordable Care Act is to lower the number of uninsured employees. trueish The most commonly used method of job evaluation is the point system. true External equity in compensation refers to comparisons made by employees to other employees performing similar jobs within the same organization. false In the context of mandated employee benefits, the government pays the cost of workers' compensation insurance. false Workers' compensation is a nonmandated employee benefit. false In the context of nonmandated employee benefits, contributions to private pension plans come solely from the employer. false Which of the following statements is true of external inequity? a. It occurs when lower-level employees in a firm receive less incentives than the top
executives. c Which of the following statements is true of cafeteria-style benefits plans offered by organizations?
a. Cafeteria-style benefits are funded jointly by the employer and the government. c _____ occurs when individuals with substantially different levels of experience, or performance abilities, or both in an organization are paid wages or salaries that are relatively equal. a. Pay compression a Which of the following is a nonmandated benefit? a. Unemployment insurance d Unlike pay for knowledge plans, skill-based pay plans: a. are more likely to be associated with hourly workers. a Which of the following statements is true of the Employee Retirement Income Security Act (ERISA)? a. It prevents organizations from establishing private pension plans. c _____ is mostly concerned with establishing internal pay equity. a. A pay survey b Grenstall Inc., a software development firm, has adopted a new job evaluation system in which managers are asked to objectively quantify the value of eight to ten compensable factors of each job in the organization. These compensable factors are based on their importance to that particular job and may include skill, physical effort, mental effort, and so forth. In this system, jobs are compared against a standard of key ratings. Which of the following job evaluation systems is Grenstall Inc. most likely using in the given scenario? a. The market-basket analysis method d Which of the following statements is true of life-cycle benefits? a. They can be availed only at the end of an employee's service with the organization. c The Employee Retirement Income Security Act (ERISA): a. prevents organizations from establishing private pension plans. b Which of the following is true of workers' compensation? a. It is aimed at helping people who have chronic problems with
alcohol or drugs. c Which of the following statements is true of the classification system as a job evaluation method? a. It can easily accommodate changes in the value of various
individual jobs in an organization. a Which of the following statements is true of internal equity? a. It occurs when lower-level employees in a firm receive the same incentives as the top executives. c Which of the following is the second step in the factor-comparison method for job evaluation in an organization? a. The
comparison factors to be used are selected and defined. b Barry & Finch, a law firm in Connecticut, performs job evaluation by organizing different sets of jobs in the firm into clusters called grades. The job evaluator then writes definitions and descriptions of each grade, which serves as a tool for deciding the compensation for each job. Which of the following job evaluation methods is Barry & Finch using in the given scenario? a. The classification system a _____ is intended to provide a basic subsistence payment to employees who are between jobs—that is, for people who have stopped working for one organization but who are assumed to be seeking employment with another organization. a. The Social Security system b In the context of nonmandated benefits, a _____ is an extra benefit that may or may not have any direct financial value but is considered an important reward by employees. a. wage b The actual funding for Social Security benefits comes from the _____. a. income of the legal child of a retired employee b In the context of compensations, perquisites are: a. mandated family health-care benefits. b Which of the following is a difference between salaries and wages?
a. Performance is the basis for wages, whereas time is the basis for salaries. d Which of the following statements is true of employee assistance plans? a. They focus on keeping employees from becoming sick rather than simply paying expenses when they do become sick. b Brad, a manager at a new investment firm, is performing job evaluation. He selects twelve benchmark jobs in the firm and then ranks each of these jobs against compensable job factors such as physical effort, responsibility, skill, and so forth. This ranking is based on job descriptions created during job analysis. Later, the management meets as a group and develops a consensus on the assigned values for each job. In the given scenario, Brad is most likely using the _____ for job evaluation. a. point system a _____ are private pension plans in which the size of the benefit is precisely known and is usually based on a simple formula using input such as years of service and salary. a. Unemployment
insurances c Which of the following statements defines total compensation? a. It refers to the compensation paid to employees for learning specific material that might be useful to the organization in the future. c Which of the following statements is true of the Fair Labor Standards Act? a. It makes vesting rights operational after 6 years of service at the most. d Which of the following is a problem surrounding executive compensation? a. Little or no relationship seems to exist between the performance of an organization and the compensation paid to its senior
executives. a Scott, the chief technical officer of a telecommunications company, is a member in the Golden Scion Country Club, one of the most exclusive country clubs in the United States. Having a membership in such country clubs is usually an expensive affair. It is, however, free of cost for Scott as it is paid by his company. In the given scenario, the membership can be considered as a _____ given to Scott by his company. a. remittance b Which of the following is a disadvantage of the classification system for job evaluation? a. It assumes that a constant and inflexible relationship exists between job factors and their value to an organization. a In the context of the purposes of compensation, compensation serves a(n) _____ function wherein companies indicate to employees what they feel is important for an employee to focus on by paying for certain kinds of activities or behaviors. a. workload reduction d Tessy, a senior accountant at a private bank in Massachusetts, retired at the age of 62. Upon retirement, she received a benefit amount from the bank. This benefit amount equaled the total sum of money she had added to her pension plan each year plus the amount that the bank added to it every year. In this scenario, the sum of money that Tessy received post retirement comes from the _____. a. Workers' Compensation Insurance Program c Donald, the CEO of a multinational organization, is given a reward by the organization in the form of a contract that allows him to purchase 5 percent shares of the company anytime in the future at a predetermined price. Three years later, Donald purchases those shares at half their market price. Additionally, he gets more motivated to work toward increasing the performance of the organization. In this scenario, Donald was given a _____. a. cafeteria-style benefits plan b Which of the following is a problem of the Social Security system? a. Social Security benefits do not directly depend on the withholdings assessed against the employee who is retiring. d? Which of the following statements is true of pay surveys? a. Individual employees should not have access to the data collected from these surveys. c Jennifer, an account manager in an automobile company, has a previous work experience of six years and has become one of the best employees of the company in the two years since joining. However, she resigns her job when she finds out that most of the new employees of the company, who have only two or three years of experience, get the same salary as her. In the given scenario, Jennifer most likely resigned due to _____. a. pay compression a In the context of cafeteria-style benefits plans, _____ refers to the fact that the employee most likely to select a benefit is also most likely to use the benefit, which tends to drive up benefit costs. a. the Peltzman effect d An HR manager at a cosmetics company invites its new employees to a meeting to discuss company policies and to explain the benefit plan used by the company. As part of this benefit plan, he gives each employee a list of benefits and asks him or her to choose the benefits that he or she really wants. The company aims to increase employee satisfaction by using this benefit plan. Which of the following benefit plans is the cosmetics company using in the given scenario? a. A defined contribution plan c A leading placement consultancy firm gathers and presents information about the average compensation for attorneys to its clients. This information includes data on the compensation paid by other law firms in a specific geographic region. The firm uses this information to inform its clients about the companies that have the most external equity. In the given scenario, the placement consultancy firm has most likely used _____ to gather information about compensation rates at different firms. a. job evaluation b A laborer who is paid in terms of the hours worked per week is most likely to receive a _____. a. salary b In the context of employment legislation, _____ are guaranteed rights to receive pension benefits. a. human rights c A(n) _____ is established to give senior managers of a company the option to buy the company shares in the future at a predetermined, fixed price. a. social security system b Which of the following is the first step in the factor-comparison method for job evaluation in an organization? a. The job factors to be used are selected and defined. a The third step in the factor-comparison method for job evaluation is: a. selecting and defining the comparison factors to be used. d Which of the following statements is true of a maturity curve? a. It is used to identify benchmarks or key jobs in an organization. d _____ are designed to assist employees who have chronic problems with alcohol or drugs or who have serious domestic problems. a. Employee assistance plans a Which of the following is a disadvantage of using an above-market compensation strategy? a. It encourages voluntary turnover among employees. b In the context of nonmandated benefits, _____ are targeted at different stages of an employee's existence. a. wellness programs c Which of the following is a life-cycle benefit offered by employers? a. Helping employees cope with chronic drug and alcohol problems b _____ are private pension plans in which the size of the benefit depends on how much money is put into the plan. a. Unemployment insurances c
The _____ is a job evaluation technique that requires managers to quantify, in objective terms, the value of the various elements of specific jobs. a. market-basket analysis method d Briefly explain pay secrecy, pay compression, and pay inversion in the context of wage and salary administration. pay secrecy - the extent to which the compensation of any individual in an organization is secret or the extent to which information on compensation is formally made available to other individuals pay compression - when individuals with substantially different levels of experience, or performance abilities, or both are paid wages/salaries that are relatively equal pay inversion - when the external market changes so rapidly that new employees are actually paid more than experienced employees What are private pension plans? Briefly explain the two types of private pension plans. private pension plans - prearranged plans administered by the organization that provides income to employees at their retirement 1) defined benefit plans - private pension plans in which the size of the benefit is precisely known and is usually based on a simple formula using input such as years
of service Briefly explain the steps involved in the classification system for job evaluation. 1) classification - group sets of jobs together into classifications, often called grades Differentiate between pay for knowledge and skill-based pay with examples. pay for knowledge - compensating employees for learning specific information (paying programmers to learn new programming language, paying managers who master a new mfg system) skill-based pay - rewards employees for acquiring new skills (paying an administrative assistant for learning how to use spreadsheets) Discuss the various determinants of a firm's compensation strategy 1)overall strategy of the organization - a clear and carefully developed relationship should exist between a firm's corporate and business strategies and its HR strategy (a growing firm may have to pay above-market rates to attract talent, etc.) |