SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Compensation Management

Sample Questions:
Section I: Subjective Questions

1. What kind of fringe benefits are offered to employees? Name at least 10 of them.

2. Classify perquisites. List few non-taxable perquisites.

3. Explain the concept of Business Process Re-engineering. What are the parallel terms
used for BPR?

4. What is Employee Stock Ownership Plan? Write 5 to 6 lines to explain the concept.

5. For taxation purpose, under which major heads computation of total income is classified?

6. Explain the concept of Business Process Re-engineering. What are the parallel terms
used for BPR?

7. Explain the Residual Claimant Theory of Wages.

8. Write a short note on Public Provident Fund.

Section II: Objective Questions

Multiple Choice Single Response

1. For sales persons who work on the basis of " commission", the advances given to
them are known as,
1] salary
2] extra pay
3] incentives
4] draw
2. In order to participate in Profit sharing plans, and enable workers to avail of this
opportunity, the worker
1] must not remain absent for any day during the year
2] must achieve laid down targets of production
3] must prove his productive abilities
4] is required to work for a certain number of years and develop some seniority in
the organisation
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Compensation Management

3. Various organisations which have launched Profit Sharing as incentive have

realised,
1] employees point of view
2] social point of view
3] higher profits and increased efficiency
4] functional point of view
4. Direct cost is the cost or expenditure
1] incurred by an organisation for purchase of raw material
2] incurred by an organisation for production and sale of materials
3] incurred on remuneration of employees engaged in conversion of raw material
into finished products
4] incurred directly by the organisation for the clients
5. The Return of Contributions received towards Employee's State Insurance Act are
indicated in form No.
1] Form No. 11
2] Form No. 10
3] Form No. 6
4] Form No. 7
6. The trade unions in order to tilt the balance in their favour use the weapon of
1] manpower
2] voice power
3] strike or threat of strike
4] muscle power
7. The Scanlon Plan of profit sharing was developed in the year
1] 1937
2] 1948
3] 1952
4] 1953
8. The amount deducted towards The Labour Welfare Fund is,
1] Rs. 25/-
2] Rs. 5/-
3] Rs.15/-
4] Rs. 10/-
9. If the job performed by two or more persons are the same, then the salary to be
earned by both the persons
1] should be same
2] should be different depending on the place of work
3] should be different depending on the capacity to pay of the employer
4] should be different depending on the gender of the persons
10. The labour cost on Piece workers is assigned towards
1] principal cost
2] loan amount
3] direct cost
4] profits
Multiple Choice Multiple Response
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Compensation Management

11. The elements of costs are

1] management
2] material
3] labour
4] expenses
12. Basic Minimum Wage is to be fixed in accordance with the awards and judicial
pronouncements of
1] Industrial Tribunals
2] Labour courts
3] District courts
4] National Tribunals
13. The objectives of wage incentive plan are,
1] to prove domination of man over machines
2] to improve the profit of a firm through reduction in unit cost of labour and
materials
3] to avoid additional capital investment for he expansion of production capacity
4] to increase worker's earnings without dragging the firm into higher wage rate
regardless of productivity
14. The source documents for the preparation of pay roll/ wage sheets are
1] Form 24
2] Daily time sheet
3] weekly time sheet
4] attendance register
15. Engineering department helps
1] in exercising management control over all the engineers in the company
2] in maintaining control over working conditions at plant level
3] in maintaining control over production methods for each job
4] in maintaining control over production processes of all products
16. Before sixties, multi- national companies offered and continued with the practice of
offering different terms and conditions to the local staff at the same level, because
1] local staff was not dependable
2] to attract better talent by offering higher salaries
3] to encourage their postings and work abroad
4] due to past historical and colonial reasons
17. Annual payments made to the employees are generally in the form of
1] bonus
2] commission
3] leave travel allowances
4] holiday allowances
18. Three IT companies emerged as the best paying companies as a result of HR survey
which are
1] SAP
2] CADENCE
3] Adobe
4] Croma
Fill in the Blanks
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Compensation Management

19. The Employees' State Insurance act is a ___________ measure in the field of social
insurance in India
1] important
2] economic
3] necessary
4] pioneering
20. Retention of one copy of pay slip by the employer is one of the requirements of
___________.
1] Insurance Act
2] Factories Act
3] Disciplinary Procedure Act
4] Prevention of Corruption Act
21. A___________work force can always perform better
1] stable
2] permanent
3] dependable
4] loyal
22. A salary survey gathers information about___________ jobs
1] benchmark
2] permanent
3] dependable
4] all
23. The value of ___________ is one of the important elements of tax planning and
payroll components
1] group
2] decision making
3] perquisites
4] consultants
24. Companies with good sales with higher ___________ tend to pay higher wages
1] profits
2] labour force
3] production
4] efficiency
25. The ___________means the wages paid should be adequate to enable an employee
to maintain himself and his family at a reasonable level of existence.
1] maximum wage
2] living wage
3] bare minimum wage
4] minimum wage
26. The transport allowance granted to an employee to meet his expenditure for the
purpose of commuting between his place of residence and the place of duty is
exempt maximum to the amount ___________as allowed as per the IT Act.
1] of Rs.1000 pm
2] of Rs. 800 pm
3] of Rs. 2000 pm
4] at actual
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Compensation Management

27. The ___________workers are more mobile

1] male
2] female
3] skilled
4] unskilled
28. The term-___________is used to describe wage relationships within a particular
groupings
1] intrinsic
2] extrinsic
3] bonus structure
4] wage structure
State True or False

29. Non statutory welfare facilities do not have to be provided to the employees

30. It is the primary job of time keeping department to assign costs to various
departments.
31. For sales persons who work on the basis of " commission", the advances given to
them are known as,
32. The benefit of use of company car may be offered as with or without the driver to
the employees of the company in the past.
33. Incentive system is related with the profitability of the organisation.

34. The strategic process will be constantly subject to revision and experiment in the
light of changing circumstances.
35. Ascertainment of labour cost is not very useful for pricing decision of the product
and services.
36. Without knowing the labour costs the selling price of the product and services can
be fixed
37. Profit sharing plans may serve multiple of objectives, depending upon the type of
plan, which is adopted.
38. Accelerating premium systems provide for a guaranteed minimum wage for the
output below standard.
Match the Following

39. 1] Inefficiency of labour 1] results in increase in cost of

production and lowering the quality of
goods
2] Schemes which provide opportunity 2] reward system
to employee to earn more is called
3] The primary concern of management 3] to utilise the cost of labour most
is economically
4] Some managers felt that by paying 4] they would attract better workers who
high wages would produce more than the average
worker in the industry
5] very essential and necessary costs
6] importance to the trade union leaders
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Compensation Management

40. 1] Pay practises should be consistent 1] the pay structure in compatible

with organisations
2] The existing pay structures 2] should be reviewed on a regular basis
and revised accordingly
3] The basic salary as the main 3] with reduced indirect component cost
component of overall compensation has that affected the retiral benefits
consequently become lower substantially, is often ignored by the
companies.
4] Approved Superannuation fund is a 4] which is beneficial on retirement of
scheme the employee
5] makes distinction between high and
low performance in the amount of pay
given
6] does make distinction between high
and low performance in the amount of
pay given
41. 1] Monetary rewards closely follow 1] performance so as to be reinforcing
2] Monetary rewards are perceived 2] by the employees to be a function of
work performance
3] A sound and effective 3] would depend on an understanding of
administration of incentive scheme the problems of human relations as well
as those of engineering
4] Some studies on wage incentive 4] indicate that the incentive schemes
scheme have a dubious value for the increase in
output
5] reflect on the life style generally
adopted by persons
6] changed the world of interaction with
people
42. 1] Some companies paid lower wages 1] by lowering hiring requirements they
because economically they felt that could keep the jobs adequately manned
2] Wages paid to the employees should 2] enable an employee to maintain
be adequate to himself and his family at a reasonable
level of existence
3] Productivity could be measured at 3] several levels, at - Job, plant, industry
levels etc
4] Compensation put into perspective is 4] nothing more than a reinforcement of
management technique
5] are found to be in direct proportion to
their individual efficiency
6] identify direct labour costs on jobs
and products