Preview Extract
Chapter 09: Employee Benefits and Services
1. Any indirect financial payments given to employees are known as
A. financial incentives.
B. stock options.
C. perquisites.
D. commissions.
E. employee benefits.
Answer: E. employee benefits.
2. Outsourcing benefits administration to a third-party expert has which of the following
advantage(s)?
A. greater efficiency and consistency and enhanced service
B. reduced cost and enhanced service
C. fewer benefit claims
D. reduced cost
E. increased employee understanding of benefits
Answer: A. greater efficiency and consistency and enhanced service
3. The average cost of benefits, as a percentage of payroll, is approximately
A. 30%.
B. 37%.
C. 50%.
D. 25%.
E. 10%.
Answer: B. 37%.
4. A government-sponsored program that provides weekly income benefits if a person is
unable to work through no fault of his or her own is usually called
A. strike pay.
B. employment insurance.
C. severance pay.
D. termination pay.
E. sick pay.
Answer: B. employment insurance.
5. The EI benefit is generally 55% of average earnings during the last 14 to 26 weeks of the
A. qualifying period.
B. previous calendar year.
C. probationary period.
D. previous 52 weeks.
E. benefit period.
Answer: A. qualifying period.
6. The purpose of an SUB plan is
A. to supplement EI benefits by receiving a combined benefit closer to the actual working
wage.
B. to provide benefits separate from EI so that employees can better maintain their standard
of living during periods of unemployment.
C. to supplement maternity leave.
D. the result of collective bargaining.
E. to facilitate an agreement between an employer and the employees.
Answer: A. to supplement EI benefits by receiving a combined benefit closer to the actual
working wage.
7. The three types of benefits provided under the Canada/Quebec Pension Plan are
A. disability, survivor, and old age security.
B. retirement, vacation, and disability.
C. retirement, survivor, and old age security.
D. retirement, disability, and survivor.
E. retirement, survivor, and health care.
Answer: D. retirement, disability, and survivor.
8. Workers' compensation is, in effect, a ________ insurance plan to help employees with
work-related injuries or illnesses get well and return to work.
A. pension
B. bureaucratic
C. guaranteed
D. "no cost"
E. "no fault"
Answer: E. "no fault"
9. Individualized benefit plans allowed by some employers, in order to accommodate
employee preferences for benefits, are known as
A. perquisite benefits plans.
B. flexible benefits programs.
C. individualized benefits plans.
D. constrained benefits plans.
E. family-friendly benefits.
Answer: B. flexible benefits programs.
10. A benefit that provides pay to an employee when he or she is out of work because of a
non-work related injury or illness is called
A. severance pay.
B. unemployment pay.
C. workers' compensation.
D. short-term disability/sick leave.
E. hospitalization benefits.
Answer: D. short-term disability/sick leave.
11. The amount of time off provided for bereavement leave varies by jurisdiction and also
depends on
A. the employee's length of service.
B. family circumstances.
C. the location of the funeral.
D. the closeness of the relationship between the employee and the deceased.
E. the reason for the death.
Answer: D. the closeness of the relationship between the employee and the deceased.
12. Employees in Ontario and the federal jurisdiction may be eligible for ________ in certain
termination situations, in addition to pay in lieu of notice.
A. unemployment pay
B. notice pay
C. exit pay
D. severance pay
E. terminal pay
Answer: D. severance pay
13. An employer is required to provide advance notice to an employee whose employment is
being terminated, unless the employee is working on a short-term contract or
A. the company is shutting down.
B. a mass layoff is occurring.
C. the employee is eligible for early retirement.
D. the employee works outdoors.
E. the employee is being fired for just cause.
Answer: E. the employee is being fired for just cause.
14. Some provinces require additional termination pay when mass layoffs occur. The amount
of additional pay depends on
A. the level of unemployment in the region.
B. the employee's length of service.
C. the time of year.
D. the number of employees being laid off.
E. the reasons for the layoff.
Answer: D. the number of employees being laid off.
15. A type of life insurance that provides lower rates than individual insurance, and includes
all employees, regardless of health or physical condition, is called
A. whole life insurance.
B. group life insurance.
C. endowment insurance.
D. term insurance.
E. universal life insurance.
Answer: B. group life insurance.
16. Group life insurance is usually provided in the amount of
A. $100,000.
B. five years' salary.
C. two years' salary.
D. $25,000.
E. one year's salary.
Answer: C. two years' salary.
17. The benefit that provides a fixed lump-sum benefit in addition to life insurance benefits
when death is accidental is
A. major medical insurance.
B. dental coverage.
C. survivors' benefit.
D. accidental death and dismemberment insurance.
E. health insurance.
Answer: D. accidental death and dismemberment insurance.
18. Critical illness insurance is
A. coverage providing a lump-sum benefit to an employee who is diagnosed with a lifethreatening illness.
B. coverage for prescription drugs.
C. a deductible expense per year that gives money for expensive new drugs.
D. money for an employee paid in incrementals for critical illness.
E. coverage providing a fixed lump-sum benefit in addition to life insurance benefits when
death is accidental.
Answer: A. coverage providing a lump-sum benefit to an employee who is diagnosed with a
life-threatening illness.
19. The benefits that form the cornerstone of almost all benefits programs are
A. life insurance and supplementary health care/medical insurance.
B. life insurance, long-term disability, and supplementary health care/medical insurance.
C. long-term disability and pension plan.
D. life insurance and pension plan.
E. life insurance and long-term disability.
Answer: B. life insurance, long-term disability, and supplementary health care/medical
insurance.
20. Employers provide supplementary health care/medical insurance to provide protection for
employees against all of the following costs except
A. medical supplies.
B. prescription drugs.
C. physiotherapy.
D. physician's fees.
E. private duty nursing.
Answer: D. physician's fees.
21. Common health-related insurance plans, other than supplementary health care/medical
insurance, include
A. vision care and physiotherapy.
B. chronic illness benefits, vision care, and dental care.
C. vision care, hearing aids, and dental care.
D. vision care, psychological counseling, and dental insurance.
E. group legal insurance.
Answer: C. vision care, hearing aids, and dental care.
22. The amount of health/dental expenses an employee must pay before insurance benefits
will be paid is called
A. life insurance.
B. coinsurance.
C. workers' compensation.
D. dental coverage.
E. the deductible.
Answer: E. the deductible.
23. The biggest issue facing benefits managers in Canada today is
A. workers' compensation costs.
B. pension funding.
C. AIDS coverage.
D. retiree benefits.
E. increasing health care benefit costs.
Answer: E. increasing health care benefit costs.
24. Canadian employers pay about ____% of all health care expenses in Canada, most of
which is for prescription drugs.
A. 36
B. 25
C. 40
D. 30
E. 50
Answer: D. 30
25. A golden parachute is an executive perk in the form of a salary guarantee in which of the
following circumstances?
A. overseas transfer
B. targeting of the company for acquisition or merger
C. termination of employment
D. death of the executive in a work-related accident
E. divorce from spouse
Answer: B. targeting of the company for acquisition or merger
26. The percentage of expenses (in excess of the deductible) that are paid for by the insurance
plan is called the
A. insured amount.
B. uninsured amount.
C. coinsurance level.
D. premium.
E. assessment.
Answer: C. coinsurance level.
27. The simplest approach to reducing health benefit costs is to increase the amount of health
care costs paid by
A. employees.
B. the federal government.
C. workers' compensation plans.
D. smokers.
E. provincial governments.
Answer: A. employees.
28. Approaches to health care that benefit cost reduction include all of the following except
A. increasing government subsidies.
B. increase the amount of health care costs paid by employees.
C. risk-assessment programs.
D. health promotion.
E. publishing a restricted list of drugs that will be paid for under the plan.
Answer: A. increasing government subsidies.
29. Employers can reduce the cost of retiree benefits in any of the following ways except
A. increasing deductibles.
B. increasing retiree contributions.
C. increasing costs paid by workers' compensation.
D. tightening eligibility requirements.
E. reducing maximum payouts.
Answer: C. increasing costs paid by workers' compensation.
30. Executive perquisites are usually provided to
A. executives with base salaries of $100 000 or more.
B. only a few top executives.
C. the CEO and the president.
D. head office executives.
E. all executives.
Answer: B. only a few top executives.
31. Disability management is a
A. proactive, employer-centred process that coordinates activities of the employer, the
insurance company, and health care providers.
B. proactive, employer-centred process.
C. reactive, employer-centred process.
D. proactive, employee-centred process.
E. process that coordinates the activities of employer and employee.
Answer: A. proactive, employer-centred process that coordinates activities of the employer,
the insurance company, and health care providers.
32. Effective disability management programs include
A. monitoring worker's compensation.
B. early and safe return-to-work policies.
C. remedial programs.
D. monitoring sick leave plans.
E. a required company medical.
Answer: B. early and safe return-to-work policies.
33. One of the most common approaches to returning a worker with a disability to work is
A. prevention programs.
B. reduced work duties.
C. providing termination pay.
D. early assessment and intervention.
E. providing additional compensation.
Answer: B. reduced work duties.
34. Costs associated with mental health problems relate to
A. younger workers.
B. short- and long-term disability.
C. short-term disability and increased drug usage.
D. long-term disability and increased drug usage.
E. increased drug usage.
Answer: B. short- and long-term disability.
35. The fastest growing occupational disabilities are
A. HIV/AIDS-related.
B. back problems.
C. psychiatric.
D. chronic fatigue.
E. repetitive strain injuries.
Answer: C. psychiatric.
36. The most common psychiatric disability is
A. schizophrenia.
B. depression.
C. obsessive-compulsive disorder.
D. anxiety attacks.
E. multiple personality disorder.
Answer: B. depression.
37. The fastest-growing occupational disability category is
A. repetitive strain injuries.
B. back injuries.
C. eye strain and injuries.
D. falls from a height (including ladders).
E. psychiatric disabilities.
Answer: E. psychiatric disabilities.
38. Many companies are trying to reduce the cost of psychiatric disabilities in all of the
following ways except
A. employment testing.
B. prevention programs.
C. psychiatric counselling.
D. peer support groups.
E. early intervention programs.
Answer: A. employment testing.
39. Unlike government-provided retirement benefits, employer-sponsored pension plans are
A. restricted to deferred profit sharing.
B. easily managed.
C. invested in foreign securities.
D. pre-funded.
E. formalized.
Answer: D. pre-funded.
40. A type of pension plan that contains a formula for determining retirement benefits so that
the actual benefits to be received are defined ahead of time is called a
A. money purchase pension plan.
B. defined contribution pension plan.
C. defined benefit pension plan.
D. deferred profit-sharing plan.
E. retirement plan.
Answer: C. defined benefit pension plan.
41. A type of pension plan that specifies what contribution the employer will make to a
retirement or savings fund set up for the employee is called a
A. government-sponsored plan.
B. defined contribution pension plan.
C. defined benefit pension plan.
D. retirement plan.
E. deferred profit-sharing plan.
Answer: B. defined contribution pension plan.
42. A type of retirement plan that does not guarantee the eventual pension benefit an
employee will receive at retirement, but only what the employee and employer contributions
to the plan will be, is called a
A. government-sponsored plan.
B. defined contribution pension plan.
C. deferred profit-sharing plan.
D. retirement plan.
E. defined benefit pension plan.
Answer: B. defined contribution pension plan.
43. A pension plan in which a certain amount of profit is credited to each employee's account,
payable at retirement, termination, or death, is a
A. group pension plan.
B. defined benefit pension plan.
C. defined contribution plan.
D. deferred profit-sharing plan.
E. group RRSP.
Answer: D. deferred profit-sharing plan.
44. In a contributory pension plan, contributions are made by
A. the government and the employee.
B. the employer only.
C. the government and the employer.
D. both the employer and the employee.
E. the employee only.
Answer: D. both the employer and the employee.
45. Defined benefit pension plans pay out a benefit at retirement
A. that is defined by the amount that the employee contributes to the pension plan.
B. that is defined by the amount that the employer contributes to the pension plan.
C. that is based on years of service and final earnings.
D. that is defined by the amount that both the employee and employer have contributed.
E. as defined by the union agreement.
Answer: C. that is based on years of service and final earnings.
46. A provision in pension plans referring to the money contributed by the employer that has
been placed in a pension fund and cannot be forfeited for any reason is
A. vesting.
B. stockholder equity.
C. non-funding.
D. investing.
E. bonding.
Answer: A. vesting.
47. In most provinces, employer pension plan contributions must be vested once the
employee has completed ________ years of service.
A. 3
B. 1
C. 2
D. 4
E. 5
Answer: C. 2
48. A pension provision whereby employees who change jobs can transfer the lump sum
value of the pension they have earned to a locked-in RRSP or their new employer's pension
plan is
A. non-funding.
B. vesting.
C. a non-locked-in provision.
D. flexible pensions.
E. portability.
Answer: E. portability.
49. Once an employee is vested, he or she will not receive any benefit from the pension plan
until
A. changing jobs.
B. retirement.
C. 30 years of service.
D. disability.
E. termination.
Answer: B. retirement.
50. Employers who offer a defined contribution pension plan must pay careful attention to
their obligation to educate and inform plan members about
A. pension benefits formula.
B. pension vesting.
C. early retirement incentives.
D. pension investments.
E. pension portability.
Answer: D. pension investments.
51. Employers must pay careful attention to their obligation to educate and ________ plan
members about pension investment.
A. advise
B. inform
C. counsel
D. provide quarterly bulletins to
E. provide sessions to
Answer: B. inform
52. The looming labour shortage based on when baby boomers start retiring is resulting in
employers seeking to retain older employees. Mel's organization is experiencing this issue.
One program to support this issue is
A. RRSPs.
B. supplemental employee retirement plans.
C. defined benefit pension plans.
D. phased retirement.
E. defined contribution pension plans.
Answer: D. phased retirement.
53. The following are personal services that most employees will need at one time or another
except
A. social/recreational opportunities.
B. counselling.
C. employee assistance plans.
D. credit unions.
E. clerical services.
Answer: E. clerical services.
54. The following are all counselling services employers often provide to their employees
except
A. family counselling.
B. preretirement counselling.
C. financial counselling.
D. career counselling.
E. real-estate counselling.
Answer: E. real-estate counselling.
55. A formal employer program for providing employees with counselling and/or treatment
programs for problems such as mental health issues, marital/family problems, legal problems,
or stress is called a(n)
A. employee assistance program.
B. legal aid benefits.
C. AA and NA program.
D. rehabilitation program.
E. employee services benefit.
Answer: A. employee assistance program.
56. A job-related services benefit that is designed to help employees who must help elderly
parents or relatives who are not fully able to care for themselves is known as
A. personal care.
B. eldercare.
C. aging care.
D. family medical care.
E. on-site eldercare.
Answer: B. eldercare.
57. The number of EAPs in Canada is growing because they are a proactive way for
organizations to reduce
A. disability costs.
B. employee services costs.
C. counselling costs.
D. supervisory training costs.
E. disciplinary costs.
Answer: A. disability costs.
58. The following are social and recreational opportunities extended to employees except
A. parties.
B. craft activities.
C. pre-retirement counseling.
D. annual summer picnics.
E. athletic events.
Answer: C. pre-retirement counseling.
59. Based on survey data, the following are all benefits to employers who institute subsidized
day-care centres except
A. lowered absenteeism.
B. enhanced recruitment.
C. lower performance appraisals.
D. lower turnover.
E. increased productivity.
Answer: C. lower performance appraisals.
60. To date, the evidence regarding the actual effects of employer-sponsored childcare on
employee absenteeism, turnover, productivity, recruitment, or job satisfaction is
A. positive, without consideration of obstacles or attitudes toward work.
B. neutral, with some positive and some negative effects.
C. positive, with respect to increasing obstacles in coming to work.
D. positive, with respect to reducing obstacles in coming to work and improving workers'
attitudes.
E. negative, in respect to employees' attitudes.
Answer: D. positive, with respect to reducing obstacles in coming to work and improving
workers' attitudes.
61. Employee benefits are available to specific employees and do not include health and life
insurance, vacations, and child-care facilities.
a. True
b. False
Answer: b. False
62. The EI program is funded solely by contributions from eligible employees.
a. True
b. False
Answer: b. False
63. Unemployment benefits are meant for workers who are unable to work through no fault
of their own.
a. True
b. False
Answer: a. True
64. The Canada/Quebec Pension Plan provides three types of benefits: retirement income,
survivor benefits, and disability benefits.
a. True
b. False
Answer: a. True
65. Eligibility requirements for vacations (in excess of the legislated minimum amount) vary
from firm to firm.
a. True
b. False
Answer: a. True
66. Unpaid leaves of absence are costless for employers.
a. True
b. False
Answer: b. False
67. Employees who work during the notice period provided by the employer before
employment is terminated receive a lump sum payment called "pay in lieu of notice."
a. True
b. False
Answer: b. False
68. Most group life insurance plans contain a provision for including all employees regardless
of health or physical condition.
a. True
b. False
Answer: a. True
69. Accidental death and dismemberment coverage provides annuity payments in addition to
life insurance benefits when death is accidental.
a. True
b. False
Answer: b. False
70. Employers are not required to disclose liabilities related to retiree benefits.
a. True
b. False
Answer: b. False
71. A defined benefit pension plan contains a formula.
a. True
b. False
Answer: a. True
72. Melanie has a defined contribution pension plan. She will know the actual benefits she
will get ahead of time.
a. True
b. False
Answer: b. False
73. Eldercare is designed to help older employees who are not fully able to care for
themselves.
a. True
b. False
Answer: b. False
74. Some employers provide subsidized employee transportation.
a. True
b. False
Answer: a. True
75. A flexible benefits plan may include certain non-optional items.
a. True
b. False
Answer: a. True
76. Briefly describe five government-sponsored employee benefits in Canada.
Answer: Two points for Employment Insurance (EI): provides income benefits if a person is
unable to work through no fault of his or her own.
Two points for Canada/Quebec Pension Plan (C/QPP): programs that provide three types of
benefits—retirement income, survivor/death benefits, and disability benefits. Benefits are
payable only to workers who make contributions to the plans and/or their family members.
Two points for Workers' Compensation: provides income and medical benefits to victims of
work-related accidents or illnesses and/or their dependents, regardless of fault.
Two points for Vacations & Holidays: provides minimum amount of paid vacation, usually 2
weeks per year.
Two points for Pay on termination of employment: minimum standards for notice of
termination, and severance pay
Another possibility is leaves of absence, but it is a stretch to call an unpaid leave of absence a
benefit.
77. Identify and describe 5 different voluntary employer-sponsored benefits.
Answer: Two points each for accurate identification and description of life insurance,
supplemental healthcare, short-term disability, long-term disability, and retirement benefits or
sabbaticals.
78. Carlos has noticed that employees in his organization don't really value the benefits
package his organization has designed for them. The workforce in Carlos' organization is
quite diverse in age and other demographic variables. Give Carlos some advice about flexible
benefits—describe what they are and be sure to tell him about at least two key advantages
and disadvantages of flexible benefits.
Answer: Two points for accurate description of flexible benefits and up to two points each of
two advantages and two disadvantages.
79. Felicia has just received the rate increases from the company's extended health care
benefit suppliers and she is dreading the conversation she is about to have with the chief
financial officer. Felicia is the HR generalist in her organization—help her out by giving her
four good ideas she can bring forward to help her organization control health care costs.
Answer: Up to 2.5 points each for discussing increasing the amount employees pay (through
premiums, co-insurance, or caps to coverage), restricting the drug list to generics, health
promotion, and heath care spending accounts.
80. Identify and briefly describe five employee services including at least two from personal
services and two job-related services.
Answer: Up to two points each for accurate identification and description of personal services
(credit unions, counseling services, EAPs, other services) and job-related services (subsidized
childcare, eldercare, subsidized transportation, food services, educational subsidies, and other
family friendly benefits).
Test Bank for Management of Human Resources: The Essentials
Nina D. Cole, Gary Dessler, Nita Chhinzer
9780133807332, 9780134305066
