Question 1

Which statement best explains the legal difference between an employee and a contractor?
A) Only employees are allowed on the work site.
B) Contractors cannot hire another person to complete the work.
C) Contractors are exempt from employment standards legislation.
D) Employees can be forced to work overtime.

Accepted Answer

Contractors are not considered employees under employment standards legislation and are therefore exempt from certain legal protections, such as minimum wage and overtime pay. This is one of the main legal differences between employees and contractors. The other options (A, B, and D) are not accurate or applicable in all situations.

Question 2

A particular organization wants to explore the potential for converting many of their employees into contractors.Which characteristic would potentially lead the Canada Revenue Agency to reject this change in classification?
A) The worker has the ability to refuse or accept work from the organization.
B) The company directs how and where the work should be completed.
C) The worker has control over who actually completes the work.
D) The worker can choose the manner in which the work is completed.

Accepted Answer

The Canada Revenue Agency would potentially reject the change in classification if the company directs how and where the work should be completed, as this indicates a level of control over the worker that is more consistent with a traditional employee rather than an independent contractor. The other characteristics listed (A, C, and D) are more consistent with contractor status.

Question 3

What should be your first step when you formulate the compensation strategy?
A) Define the required behaviour.
B) Determine the compensation mix.
C) Evaluate the proposed strategy.
D) Determine the compensation level.

Accepted Answer

The first step in formulating a compensation strategy should be to define the required behaviour. This involves identifying the key goals and objectives of the organization, and determining what behaviours and actions are needed from employees in order to achieve them. Once this has been established, the compensation strategy can be developed, taking into account factors such as the compensation mix and level, as well as the evaluation of the proposed strategy.

Question 4

Which pair of job characteristics is likely associated with a high-involvement managerial strategy?
A) individual and low customer contact jobs
B) low task interdependence and narrow-in-scope jobs
C) simple and repetitious jobs
D) broad and creative jobs

Accepted Answer

A high-involvement managerial strategy typically requires employees with broad and creative job characteristics that allow for autonomy, discretion, and input into decision-making processes.

Question 5

Which method involves using a "what if" scenario to determine which compensation-level strategy is most efficient for your organization?
A) cost-benefit analysis
B) market share analysis
C) trial analysis
D) utility analysis

Accepted Answer

Utility analysis involves using a "what if" scenario to determine the effect of different compensation-level strategies on employee behavior, such as performance and retention. This helps identify the most efficient strategy for your organization. Cost-benefit analysis looks at the monetary costs and benefits of different strategies, market share analysis focuses on market trends, and trial analysis involves testing different strategies on a small scale.

Question 6

Which of the following is NOT covered by employment standards legislation in Canada?
A) minimum wages
B) minimum age for employment
C) pay equity
D) hours of work

Accepted Answer

Pay equity is not specifically covered by employment standards legislation in Canada, but rather falls under human rights legislation.

Question 7

Lag strategies are cost-effective for which type of firms?
A) firms that are labour-intensive
B) firms needing to attract top-quality applicants
C) firms that value employee stability
D) firms that invest heavily in training and development

Accepted Answer

Lag strategies involve delaying investments in new technologies or equipment, which can be a cost-effective approach for firms that rely heavily on labour. These firms can save on costs by not investing heavily in expensive equipment or technology, but instead relying on their workforce to perform tasks. This can be particularly beneficial for firms in industries such as manufacturing or construction, where labour-intensive work is common. Firms that are labour-intensive can benefit from lag strategies because they may not have the resources to make large investments in technology or equipment.

Question 8

As a human resource compensation specialist,you are recommending that your company compensate entry-level factory workers 10 percent below market,while paying 10 percent above market for engineers.What type of compensation policy are you recommending to your organization?
A) lag
B) lead
C) match
D) hybrid

Accepted Answer

This is a hybrid compensation policy because it combines elements of different strategies: paying below market rates for some positions (entry-level factory workers) and above market rates for others (engineers).

Question 9

All Canadian jurisdictions have passed human rights legislation prohibiting employment discrimination based on specific employee factors.What is NOT covered under these broad human rights legislation?
A) marital status
B) race
C) gender
D) education

Accepted Answer

Education is not covered under these broad human rights legislation as it is not considered a protected characteristic.

Question 10

Before implementing a compensation strategy,human resources professionals must ensure the appropriate screens are in place to evaluate the strategy's appropriateness.Which screen is NOT considered one of the so-called "must pass screens"?
A) Costs are within the financial means of the organization.
B) The new compensation strategy meets the minimum standards under employment standards legislation.
C) The new compensation strategy attracts potential employees with the required skill sets.
D) Current employees will be happy with the new compensation strategy.

Accepted Answer

While it is important to consider employee satisfaction, it is not considered a "must pass screen" when evaluating the appropriateness of a compensation strategy. Cost, compliance with employment standards legislation, and attracting potential employees with required skill sets are all essential factors that must be considered.

Question 11

Tommy Jones,a male forklift operator,thinks that his employer is discriminating against him with respect to his pay because of his age.Which legislation would be applicable in this case?
A) labour standards legislation
B) pay equity legislation
C) human rights legislation
D) trade union legislation

Accepted Answer

Human rights legislation protects individuals from discrimination based on various factors, including age. Therefore, Tommy Jones may have a valid claim under this legislation if he can prove that his employer is paying him less because of his age. Labour standards legislation deals with minimum wage, hours of work, overtime pay, etc., but not discrimination. Pay equity legislation is specifically related to ensuring equal pay for those performing similar jobs regardless of their gender. Trade union legislation deals with the formation and operation of trade unions.

Question 12

When we discuss labour market constraints,what are we specifically referring to?
A) union constraints on labour allocation
B) availability of employees versus demand
C) cost-of-living constraints on pay demands
D) managerial strategy in recruitment methods

Accepted Answer

Labour market constraints refer to the limitations or challenges faced by employers in hiring and retaining employees, which can arise due to factors such as a shortage of qualified workers, high competition for skilled labour, or a mismatch between the skills of job seekers and the demands of employers. Option A refers to constraints imposed by labour unions, which may affect negotiations and working conditions but do not directly relate to the availability of employees. Option C may be a factor in determining pay levels, but it does not relate directly to limitations in the labour market. Option D is more of a management decision that would have an impact on recruitment methods but not on the constraints in the labour market.

Question 13

In which circumstance does the compensation system need to be relied on less heavily to motivate behaviour?
A) food processing plant
B) shelter helping the homeless
C) underground coal mine
D) tire manufacturer

Accepted Answer

The shelter helping the homeless would likely have employees who are motivated intrinsically by the desire to help those in need, rather than solely by financial compensation. Therefore, the compensation system may need to be relied on less heavily to motivate behaviour in this context. In contrast, the other options (food processing plant, underground coal mine, tire manufacturer) may have more hazardous or repetitive work conditions where employees may need more incentives to complete their duties consistently and effectively.

Question 14

In Canada,organizations face numerous legislated constraints creating so-called "boundaries" to their compensation systems.Which of the following is NOT categorized as a legislated constraint or boundary?
A) Employment Standards Act or the Canada Labour Code
B) Human Rights Act
C) management strategy constraints
D) income tax,both individual and corporate

Accepted Answer

The three other choices are all examples of legislated constraints that create boundaries to compensation systems in Canada. The Employment Standards Act and Canada Labour Code, Human Rights Act, and income tax laws all have specific provisions related to compensation practices and dictate certain minimum standards and requirements that organizations must adhere to. Management strategy constraints, on the other hand, are not legislated and are instead internal considerations that may impact the design and administration of compensation systems.

Question 15

A particular company operates several food processing plants across Canada.An internal audit of the company determined that several plants were paying above-market wages while other plants were paying below-market wages.What systemic issue could be causing this situation?
A) The company most likely uses one pay scale across Canada.
B) Workers in some of the plants appear to be negotiating higher wages.
C) Different management strategies are being used in each plant.
D) The compensation mix is likely the cause.

Accepted Answer

The use of one pay scale across Canada could lead to discrepancies in wages due to the varying cost of living and market wages in different regions, causing some plants to pay above or below the market rate.

Question 16

Who is primarily responsible for the employee compensation strategy for most Canadian organizations?
A) government and chambers of commerce
B) top leadership,human resources professionals,and compensation specialists
C) compensation survey firms and human resource managers
D) government and human resource managers

Accepted Answer

Top leadership, human resources professionals, and compensation specialists are primarily responsible for the employee compensation strategy for most Canadian organizations. They work together to develop and implement a compensation strategy that is aligned with the organization's goals, values, and budget. Government and chambers of commerce may provide guidance or regulations related to compensation, while compensation survey firms may provide data for benchmarking or market analysis, but they are not primary responsible for developing the strategy.

Question 17

Which type of legislation covers issues such as overtime pay rates,paid time off,and minimum wage levels?
A) human rights
B) employment standards
C) trade union
D) tax

Accepted Answer

Employment standards legislation covers issues such as overtime pay rates, paid time off, and minimum wage levels. Human rights legislation pertains to discrimination and harassment in the workplace, while trade union legislation governs the organization and activities of labour unions. Tax legislation deals with taxation and revenue collection.

Question 18

As the owner of a medium-sized engineering consulting firm,you decide to implement a compensation level policy that compensates your employees based on market rates.Which type of compensation policy have you adopted?
A) lead
B) match
C) hybrid
D) lag

Accepted Answer

A match compensation policy compensates employees based on market rates, meaning that salaries and benefits are aligned with what competitors are offering. This helps to attract and retain top talent and ensures that employees are being fairly compensated for their skills and expertise. A lag compensation policy pays employees below market rates, while a lead policy pays employees above market rates. A hybrid compensation policy is a combination of different types of compensation policies. In this case, a match policy is the best choice for the engineering consulting firm to stay competitive in the job market.

Question 19

A hybrid compensation-level strategy is one that varies across which of the following?
A) employee groups
B) managerial strategies
C) business segments
D) industrial sectors

Accepted Answer

A hybrid compensation-level strategy is one that varies across employee groups, such as offering different compensation packages for executives versus entry-level employees. Varying the compensation strategy based on other factors like managerial strategies, business segments, or industrial sectors would not be considered a hybrid strategy.

Question 20

Which variable in executive compensation packages accounts for the majority of the value associated with executive pay in Canada?
A) annual bonuses
B) base pay
C) stock grants and stock options
D) perks

Accepted Answer

According to research, stock grants and stock options account for the majority of the value associated with executive compensation packages in Canada. This is because these types of variable compensation are often linked to the company's performance, and therefore provide executives with a strong incentive to work towards improving the organization's financial results. Annual bonuses and base pay are also important components of executive compensation, but they tend to be less significant in terms of overall value compared to stock grants and stock options. Perks, such as company cars and club memberships, are generally a smaller component of executive compensation packages.

Quiz 6: Formulating the Reward and Compensation Strategy

Which statement best explains the legal difference between an employee and a contractor?

A particular organization wants to explore the potential for converting many of their employees into contractors.Which characteristic would potentially lead the Canada Revenue Agency to reject this change in classification?

What should be your first step when you formulate the compensation strategy?

Which pair of job characteristics is likely associated with a high-involvement managerial strategy?

Which method involves using a "what if" scenario to determine which compensation-level strategy is most efficient for your organization?

Which of the following is NOT covered by employment standards legislation in Canada?

Lag strategies are cost-effective for which type of firms?

As a human resource compensation specialist,you are recommending that your company compensate entry-level factory workers 10 percent below market,while paying 10 percent above market for engineers.What type of compensation policy are you recommending to your organization?

All Canadian jurisdictions have passed human rights legislation prohibiting employment discrimination based on specific employee factors.What is NOT covered under these broad human rights legislation?

Before implementing a compensation strategy,human resources professionals must ensure the appropriate screens are in place to evaluate the strategy's appropriateness.Which screen is NOT considered one of the so-called "must pass screens"?

Tommy Jones,a male forklift operator,thinks that his employer is discriminating against him with respect to his pay because of his age.Which legislation would be applicable in this case?

When we discuss labour market constraints,what are we specifically referring to?

In which circumstance does the compensation system need to be relied on less heavily to motivate behaviour?

In Canada,organizations face numerous legislated constraints creating so-called "boundaries" to their compensation systems.Which of the following is NOT categorized as a legislated constraint or boundary?

A particular company operates several food processing plants across Canada.An internal audit of the company determined that several plants were paying above-market wages while other plants were paying below-market wages.What systemic issue could be causing this situation?

Who is primarily responsible for the employee compensation strategy for most Canadian organizations?

Which type of legislation covers issues such as overtime pay rates,paid time off,and minimum wage levels?

As the owner of a medium-sized engineering consulting firm,you decide to implement a compensation level policy that compensates your employees based on market rates.Which type of compensation policy have you adopted?

A hybrid compensation-level strategy is one that varies across which of the following?

Which variable in executive compensation packages accounts for the majority of the value associated with executive pay in Canada?