Regulatory Environments for Compensation Programs

Question 1

Which of the following acts is focused on employers with construction contracts with the government?

A. Sherman Antitrust Act

B. Davis-Bacon Act

C. National Labor Relations Act

D. McNamara-O'Hara Act

Correct Answer: B

Question 2

Regarding presentations to executives, which of the following is most accurate?

A. Use multiple media

B. Include all details related to the issue

C. Leave backup data out of the presentation so there is time to develop an effective response to unexpected questions

D. Keep them brief

Correct Answer: D

Question 3

What is the minimum age for an individual to qualify for protection under the Age Discrimination in Employment Act?

A. 45

B. 40

C. 50

D. 55

Correct Answer: B

Question 4

Which type of base pay is typically based on an individual employee's rate of production?

A. Piece rate

B. Hourly rate

C. Salary

D. Production rate

Correct Answer: A

Question 5

Regarding fixed and variable costs, what tends to happen as revenue increases?

A. Fixed costs remain the same and consume a lower percent of revenue

B. Fixed costs decrease

C. Variable costs decrease

D. Variable costs increase and consume a higher percent of revenue

Correct Answer: A

Question 6

Which of the following documents is a requirement of the FLSA for all nonexempt employees?

A. Records on hours worked and wages paid

B. Copies of employee W-2s

C. Copies of pay stubs

D. Discharge notices stating reason for discharge

Correct Answer: A

Question 7

Which of the following is a type of variable pay?

A. Piece rate

B. Pay for time not worked

C. Hourly pay

D. Bonuses

Correct Answer: D

Question 8

If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?

A. Compensation costs and revenue increase at approximately the same rate.

B. Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.

C. Compensation costs eventually stabilize and become a consistent percent of revenue.

D. Compensation costs eventually decrease as a percent of revenue, increasing profit growth.

Correct Answer: D

Question 9

When connecting with other business units, what best describes a reason why is it important to keep up to date on organizational challenges?

A. Because you will be able to explain the negative consequences of opposing your position

B. Because stakeholders with diverse opinions tend to compromise when they are aware that others know their weaknesses

C. Because you can demonstrate your understanding of issues from multiple perspectives

D. Because you will be more informed when differences of opinion occur, lending more credibility to your position

Correct Answer: C

Question 10

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. Implement the merit increase budget as is because the anticipated financial obligations have made it necessary

B. Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible

C. 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

D. Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount

Correct Answer: B

WorldatWork Regulatory Environments for Compensation Programs - C1 Exam Practice Test

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