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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. What is a primary objective of profit-sharing and performance-sharing variable pay plans?

A) To reward individual employees for some significant contribution
B) To increase employee identification with the organization's success
C) To achieve organizational cost savings through base pay reductions
D) To defer compensation expenses to future reporting periods

2. Which of the following acts is focused on employers with service contracts with the government?

A) Sherman Antitrust Act
B) Davis-Bacon Act
C) McNamara-O'Hara Act
D) National Labor Relations Act

3. How does the Fair Labor Standards Act require employers to pay their nonexempt employees?

A) Double time for time worked on Sunday
B) Double time for work on Saturday
C) Time and a half for all hours worked over 40 in the workweek
D) Time and a half for all hours worked over 8 in the workday

4. Your company has had a strong fiscal year with a 15% increase in net income over the prior fiscal year. Share prices are at an all time high. Working with Finance, you have arrived at a 2.5% merit increase budget for the next fiscal year, a smaller increase than the last fiscal year. Finance has indicated that some large capital expenditures will be needed next year, so the company needs to conserve resources. Additionally, Legal is in final negotiations on a lawsuit that may be very costly to the company. Word of the smaller increases has line management concerned that they will lose their best performers. Given all of these factors, what is your best course of action?

A) Meet with Finance and make a case for a larger merit increase budget because the loss of key talent will cost more over the long term than the savings from the smaller merit increases
B) Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount
C) Implement the merit increase budget as is because the anticipated financial obligations have made it necessary
D) Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible

5. What is the most accurate statement regarding forecasting?

A) It uses internal and external factors to help answer questions about business expectations for the future.
B) It is a precise estimate of what the future holds for the organization.
C) It is done primarily by using historical revenue and expense data.
D) It is done primarily by evaluating market conditions and economic indicators.

Solutions: