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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. Which of the following is a type of variable pay?

A) Piece rate
B) Pay for time not worked
C) Hourly pay
D) Bonuses

2. What type of equity incentive gives employees the right to purchase company shares at a specified price?

A) Stock/share grants
B) Performance units
C) Stock/share options
D) Restricted stock/shares

3. The concept of bona fide occupational qualifications has most direct relevance to which of the following components of employee compensation programs?

A) Job descriptions
B) Salary surveys
C) Job specifications
D) Performance evaluations

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) Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount
B) Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible
C) Implement the merit increase budget as is because the anticipated financial obligations have made it necessary
D) 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

5. Which government agency enforces the Sherman Antitrust Acton issues related to the workforce?

A) Equal Employment Opportunity Commission
B) National Labor Relations Board
C) Department of Labor
D) Office of Federal Contract Compliance Programs

Solutions: