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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. The XYZ Company opened a new manufacturing facility with a capital investment of 10,000,000. The cost to obtain the capital was 8%. In its first year of operations, the facility's net operating profit after taxes was
10,500,000. What was the economic value added (EVA) using the EVA formula?

A) 500,000
B) 9,700,000
C) 840,000
D) 8,000,000

2. Until what age does the FLSA limit the number of hours of nonhazardous work? (...as long as the overtime pay provisions are met)

A) 18 years of age
B) 16 years of age
C) 14 years of age
D) 15 years of age

3. Internal process metrics are most useful in which of the following situations?

A) Determining employee satisfaction levels
B) Assessing how well the business is running
C) Evaluating customer perceptions of products or services
D) Measuring the financial success of the business

4. Which type of base pay is typically based on an individual employee's rate of production?

A) Hourly rate
B) Piece rate
C) Production rate
D) Salary

5. What is a primary objective of profit-sharing and performance-sharing variable pay plans?

A) To increase employee identification with the organization's success
B) To achieve organizational cost savings through base pay reductions
C) To defer compensation expenses to future reporting periods
D) To reward individual employees for some significant contribution

Solutions: