Compensation and Benefits Quiz

What is the primary purpose of compensation in an organization?

• To attract, retain, and motivate employees

• To increase company profits

• To reduce employee job satisfaction

• To provide nonfinancial rewards

What is the main component of direct financial compensation?

• Cost-of-living adjustments

• Employee base pay

• Pay-for-performance

• Seniority pay

What is the purpose of merit pay?

• To reward employees for their seniority

• To provide a guaranteed base pay

• To provide one-time annual financial awards

• To reward employees based on their level of performance

What is the main goal of incentive pay?

• To provide a guaranteed base pay

• To provide one-time annual financial awards

• To reward employees for attaining predetermined work objectives

• To reward employees based on their seniority

What is the purpose of gain sharing plans?

• To provide an incentive payment based on improved company performance

• To reward employees for their seniority

• To provide a guaranteed base pay

• To reward employees for attaining predetermined work objectives

What is the main difference between job-based pay and person-focused pay?

• Job-based pay compensates employees for their job performance, while person-focused pay compensates employees for their job-related competencies

• Job-based pay compensates employees for their job-related skills, while person-focused pay compensates employees for their job descriptions

• Job-based pay compensates employees based on their seniority, while person-focused pay compensates employees based on their job performance

• Job-based pay compensates employees for jobs they currently perform, while person-focused pay compensates employees for developing flexibility, knowledge, and skills

What is the purpose of profit sharing plans?

• To provide a guaranteed base pay

• To reward employees based on their level of performance

• To distribute a predetermined percentage of the firm's profits to employees

• To reward employees for their seniority

What is the impact of a booming economy on compensation decisions?

• Lowers the labor supply and decreases the market rate

• Results in greater competition for workers and drives the price of labor upward

• Leads to lower per-unit labor costs

• Results in lower employee turnover

What is the market match policy?

• Paying above the market rate

• Not considering market rates

• Paying below the market rate

• Paying the average rate for a similar job in a particular area or industry

What percentage of a firm's financial compensation costs do employee benefits typically account for?

• 20%

• 10%

• 30%

• 40%