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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

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

A) Compensation costs eventually decrease as a percent of revenue, increasing profit growth.
B) Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.
C) Compensation costs and revenue increase at approximately the same rate.
D) Compensation costs eventually stabilize and become a consistent percent of revenue.

2. What are usual, customary and reasonable charges (UCR)?

A) The charges that an insurance carrier determines are normal for a particular medical procedure within a specific geographical area
B) The charges that are allowable for any given medical procedure with no pre-treatment authorization
C) The charges that are typically paid up front by a plan participant for services rendered.
D) The charges that are published annually in the Global Insurers' Medical Cost Comparison Guide

3. Which of the following statements regarding the Worker Economic Opportunity Act is most accurate?

A) Employees are not required to participate
B) Employers must include stock profits in overtime calculations.
C) Stock options may be granted at a 20% discount
D) Employees must hold options for at least 3 months.

4. Which of the following best describes severance allowances?

A) A continuation of an employee's salary after termination
B) A continuation of a portion of an employee's salary to a beneficiary after the death of an employee
C) A practice of paying a lump sum to employees during a company shutdown
D) A portion of one's salary paid during reserve duty and military leave

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

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

Solutions: