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Using legal connotations, we can exclude following payments to employees from the purview
of wages:
Payment of bonus which is outside the contract of employment

Question 5
Identify which is not an objective of compensation:
Micro-economic stability Correct Answer

Question 7
Indicate which is not a theory of compensation determination:
Institutional theory

Question 8

According to VIE theory, motivation and performance are influenced by:

The perceived link between effort and performance

The perceived link between performance and outcome

The significance of the outcome to the person

All of the above

Question 12:
Indicate which characteristic of a job cannot be attributed to higher level of employees' job

Task simplification

Question 1
Identify which is not a strategy for job analysis:

Interviewing customers who are using the products and services for doing the job
Question 6
Identify which is not a common performance indicators for an organization:
Ans: Profit Correct Answer

Question 7
A simple model of performance matrix does not consider:


Question 8
Performance engineering model (PEM) was pioneered by:


Question 9
Competency-based pay does not emphasize on:

Job efficiency

Question 1
A trade-off between executive compensation and organizational objectives can be achieved with the
following action plans, excepting:

Reduction of learning and development programmes for executives

Question 2
In deciding executive compensation, organization follow different criteria, identify which is not a
criterion for executive compensation design:

Higher qualification

Question 4
Indicate which statement is not correct for sales cycles:
For long sales cycle, organizations being unable to ascertain the closure of a sales deal, no

incentives or commissions are paid to the sales people

Question 5
Indicate which does not form the part of sales compensation component:

Travelling Allowances
Question 6
Contribution-based sales compensation is designed with the following considerations, excepting:
Decision on base salary levels Correct Answer

Question 7
Which one of the following is not an objective of wage incentive programmes

Adding to employees' retirement benefit funds

Question 8
Indicate which one of the following is an example of fringe benefits

Health insurance

Question 9
Equal pay for equal job ensures:


Question 10
Wages which are usually positioned above the minimum wages but below the living wages are
described as:

Fair wages Correct Answer

Question 11
A broad band pay structure represents a:

A broad pay structure developed after merger of several pay structures

Question 12
When executives are offered free membership of a club, we call it:



Question 1
The term `industry of the common people' was advocated by:

F.W. Taylor
Question 2

The term `natural price of labour' is part of:

Subsistence theory of wages Correct Answer

uestion 3
Bargain theory of wages was advocated by:


Question 8
The term strike price denotes:

A stock option gives an employee the ability to purchase specific numbers of shares of

his company on a future date at a pre-determined price

A stock option with four to five years of vesting period.

Market price of stock when the employees decide to sell their stake

All of the above

Question 10
Difficulty in productivity measurement for knowledge workers centre on the following

Effects of a strategic decision, both positive and negative, may not be immediately


Knowledge workers often extend services to other units of an organization

Knowledge workers often contribute indirectly to the achievement of the end result, which

is difficult to measure

All of the above

Question 1
Indicate which is not part of employee benefits:

Bonus as per Payment of Bonus Act

Question 2
When employee benefits are given in kind, we call it:
Salary sacrifice Correct Answer

Question 4
Indicate which is not a valid statement on perks:


Question 6
Strategic non-monetary incentives is/are:

Career advancement opportunities

Flexible working hours

Opportunities to acquire new skills and knowledge

All of the above

Question 9
Employee benefits cover:

Employment security



All of the above

Question 10
Indicate which is not a part of statutory employee benefits in India:

Non-qualified deferred compensation

Question 1
Indicate which is not part of the continuum of motivational cycle:

Reap the benefits of motivation Question 2

Indicate which is not an important objective of an organization:

Inorganic growth
Question 3

Designing compensation with employee motivation:

Understanding the potentialities of attracting the talents

Question 4
Motivation is a dynamic human resource process because:

It is difficult to specify an organization-specific motivation tool

Employees' perceived needs widely vary

Employees' motivation is very time specific

All of the above

Question 7
Identify which is not a hygiene factor as per Herzberg:


Question 8
Indicate which is not a group of motivational theories:

Normative theories

Question 3
The principles of job design incorporate the:


Question 4
While designing a job, management must be concerned with the:
Practical considerations of quantity and quality of available personnel, both within the

organization and in the labour market

Personality conflicts and friction

Boredom, and obsessive thinking

All of the above

Question 8
Identify which is not a recommended strategy for job analysis:

Monitor employees while they do the job

Question 9
Job rotation involves:

Periodic vertical and horizontal movement of employees within a set of jobs or


Providing some relief from the boredom and monotony of the repetitive jobs or


Multi-skilling of employees through continuous training and learning activities

All of the above

Question 3
Job evaluation serves following purposes, excepting:

Optimizes compensation cost

Question 6
Job evaluation techniques are:
Ranking, classification, points rating, and factor comparison Correct Answer

Question 9
Effectiveness of a job evaluation technique is assessed in terms of the following criteria, excepting:


Question 11
Work study assists management in meeting following objectives, excepting:

Effective use of plant and equipment

Effective use of human effort

Evaluation of human work

All of the above


Question 1
Identify which is not relevant for performance management:

Preparing confidential reports about employees' performance

Question 2
PMS helps us to think through various facets of performance, excepting:

Initiating disciplinary action against non-performers

Question 5
Which is not a PRP principle:

Rewards for higher educational qualification

Question 6
For implementing PRP, which factor(s) is/are ignored:

Company's products and services

Question 7
Adverse selection syndrome affects PRP in Public Sector companies:
As low quality workers prefer a job with fixed/guaranteed pay Correct Answer

Question 9
Identify which statement is not appropriate for EVA based performance measures:

Organizations juggle with revenues and costs to measure EVA

Question 1
Indicate which is not a feature of team:

Perform the similar nature of job

Question 2
The team-based compensation system cannot be effective when:

It also considers individual KRAs and KPAs

Question 7
Designing team-based compensation in organization is not always feasible because:

Absolute teamwork is often more of a myth than a reality

Organizations cannot avoid considering a portion of individual's base pay while deciding

team-based compensation

Individual level performance and involvement cannot be ignored

All of the above

Question 8
To align individual and team performance to the compensation plan, organizations follow certain
steps, excepting:

Assigning differential weights on individual and group performance

Question 9
Identify which is not true for gain-sharing plan:

Requires less documentation of performance targets and performance standards

Question 1
Indicate which is not a component of executive compensation:

Overtime allowances

Question 3
Calibrating executive pay to performance is known as:

Market value measure

Question 4
To sustain competitive advantage, organizations always focus on retention of executives because of

Inimitable skill and knowledge base

Question 6
Indicate which is not a theory of executive compensation:

Walled garden strategy

Question 11
External inputs for performance measures to design executive compensation do not consider:

Linking executive behaviour to business performance

Question 12
Identify important benefit(s) of performance-based incentives plans:
Increased retention of key executives, allowing organization to focus on strategic


Feasibility of rewarding executives for meeting performance goals, even when stock

prices are low

Better control over incentives to manipulate the performance of executives

All of the above

Question 13
Identify which is not a criterion for executive compensation:

Performance criterion

Question 3
Indicate which is an example of administrative work for a sales personnel:

Generating reports and maintaining records

Question 6
A combo-compensation plan for sales function cannot:

Link commission component of the incentive directly to actual sales

Question 7
For longer sales cycle, sales compensation are designed:

Based on periodic payment of commission in accordance with various milestones

Question 1
India which step is irrelevant for designing a total reward strategy:
Maintaining rigidity in total rewards strategy Correct Answer

Question 3
Reward is add-on to compensation because:
It is given as an award for performance

Question 5
Rewards are more inclusive approach not because:

It focuses on payment for work

Question 7
C&B can influence:

Only behavioural dynamics of the employees

Question 11
Indicate which is not a type of reward:



Question 2
Identify which is considered as wages under Section 2 of Payment of Wages Act, 1936:
any remuneration payable under any reward or settlement between the parties or order
of a court Correct Answer

Question 3
Which is not considered as wages under Section 2 of the Industrial Disputes Act 1947
any contribution paid or payable by the employer to any pension fund or provident fund or for the

benefit of the workers under any law for the time being in force

Question 4

Identify value of which is not excluded from the definition of wages as per Section 2(b) of the
Minimum Wages Act 1948:
any sum paid to employed persons to defray special expenses entailed on them by the nature of their


Question 5

Identify which is not provided in The Payment of Bonus Act 1965:

Minimum payment of 20% of annual salary as bonus

Question 9

Identify which is not correct for section 80C of The Income Tax Act:

Payment of interest for the educational loan can be included

Question 10
Identify which section of The Income Tax Act does not run concurrently with section 80C:



Both (a) and (b) Correct Answer

Question 11
Maximum allowable deduction, including the preventive health check up costs under section 80D of
The Income Tax Act, when dependent parents are above 65 years are:
Rs. 40000 Correct Answer


Question 1
Strategic compensation is:
Payment of compensation to employees for the services they render to the
organization Correct Answer
Question 2
In strategic compensation ?-2-3 principle means:
Aligning with business needs, vision, and mission

Question 5
Configuration school is part of:

Descriptive schools

Question 6
While framing compensation strategies, organization should:

Align policies and practices with its strategy

Ensure fulfillment of role expectations for employees within the organization

Link importance of people with other economic assets of the organization

All of the above

Question 7
Human resource accounting theory was pioneered by:


Question 8
The agency theory was pioneered by:



Question 1
Interpret the table below and then relate your observation to identify the correct statement: Employee
Salary (rs) Midpoint (rs) Compa?ratio (%) Performance X 42,500 50,000 85 Excellent Y 56,000
50,000 112 Excellent

X should get more increment than Y

Question 2
For the variable pay plan to be optimally successful, the employees must understand how
their individual performance affects their variable pay and the company performance. This is
referred to as:
Line of sight Correct Answer

Question 4
Identify which compensation metrics help in tracking effectiveness of talent management in
the company:

Voluntary employee turnover rate

Question 5
Information given in the table below can be measured by:
Observational Scale Correct Answer

Question 6
Payroll administration deals with:

Maintaining managerial aspects of maintaining payroll

Question 7
Dearness allowance (DA) is paid to employees to compensate erosion of real income/wage due to
inflation, with respect to a specified benchmark data in terms of:

Variation in consumer price index

Question 10
Perceived differences in compensation as presented in table below is an example of:

Ordinal Scale

Question 11
Identify which is not correct for RSU:

It is a hypothetical stock

Question 13
In comparative scaling, the respondent is asked to:

Compare one brand or product against another

Question 14
In compensation design team goals have the advantage of:

Peer influence


Question 1
Relocating production facilities to low labour cost countries do not require consideration of the
following issue(s):

Deciding on the compensation based on the headquarters level pay

Question 2
For short term international assignments, compensation design need to consider:
Expatriates will get their usual salaries plus some living expenses to meet their additional expenses in

international assignment.

Question 4
An expatriate is a citizen of:

The country where their organization is headquartered

Question 7
Chinese workers working for Infosys's software development projects in the US represent:

Question 8
Designing performance-related pay (PRP) with more focus on individualization agenda may be a right
strategy for countries where the national culture emphasizes on:

Individual merit