Question 1

Why are lump-sum increases generally used?

Options :

A : To control annual fixed costs from base pay adjustments

B : To elevate employees who are below the midpoint in the range

C : To reward employees under short-term incentive plans

D : To make up for benefits not provided by the organization

Answer: A

Question 2

Upon which criterion are step increases typically based?

Options :

A : Market adjustment

B : Longevity

C : Individual performance

D : Skills

Answer: B

Question 3

Which of the following statements best describes defined contribution (DC) plans?

Options :

A : They require complex actuarial calculations and assumptions.

B : The benefit is based on a formula that considers pay and service.

C : They generally provide better benefits to employees with longer service.

D : The employee assumes the risk for the investments.

Answer: D

Question 4

Who are you most likely to hear from if there are questions about an employee’s compensation?

Options :

A : The employee

B : A concerned co-worker

C : The employee’s manager

D : The employee’s department head

Answer: C

Question 5

Regarding cost analysis of compensation expense, which job is most likely to incur fixed costs for the company?

Options :

A : Production worker

B : Account executive

C : IT contractor

D : HR Director

Answer: D