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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

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

2. Which of the following best describes a factor that has influenced the growth and change in benefits?

A) There is a decreasing number of females in the workforce.
B) Employees are expressing a greater desire for choice in their benefits.
C) Employees have longer career expectations.
D) Decreasing costs are causing growth in the numbers of benefits employers offer.

3. Which of the following is appropriate when an employee is required by the employer to attend training as a condition of employment?

A) No training time is considered hours worked even if it is a condition of employment, since the employee is free to leave the company.
B) Only educational programs focused on remedial education (up to eighth grade) can be excluded from the 40-hr criteria for time and a half.
C) Even when the training is required, as long as the classes are outside working time and not on company property, they are not hours worked.
D) Appropriate study time does not count as hours worked regardless of the educational level of the training program.

4. Which employees are covered by the National Labor Relations Act?

A) Airline and railroad employees
B) Employee who work for companies that sell goods in various states
C) City, state and federal government employees

5. As a general rule, what are individual contributors most likely to ask about their compensation?

A) What the take-home pay will be
B) How the company sets compensation budgets
C) How their pay compares to co-workers
D) How the company makes pay decisions that affect them

Solutions: