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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

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

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

2. What was the Bennett Amendment intended to do?

A) Make it easier to enforce the Equal Pay Act
B) Prohibit gender-based discrimination
C) Eliminate the potential conflict between Title VII and EPA
D) Make the regulations covered under Title VII of the Civil Rights Act of 1964 more strict

3. 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 eventually stabilize and become a consistent percent of revenue.
C) Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.
D) Compensation costs and revenue increase at approximately the same rate.

4. Which of the following combines traditionally segregated time off and leave programs into one policy covering a single block of time?

A) Sabbatical
B) Personal leave
C) Severance allowances
D) Paid time off (PTO) bank

5. 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) 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
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

Solutions: