The Certified Employee Benefit Specialist Program
International Foundation of Employee Benefit Plans
18700 W. Bluemound Rd., P.O. Box 1270, Brookfield, WI 53008-1270, (262) 786-6700
Canada
Errata—September 2010
for
CMS 1—Compensation Concepts and Principles
Module 14—Exam Review Answer Key
The accompanying material updates CMS 1—Compensation Concepts and Principles. This
Errata supplements the Errata—September 2009. They are required reading for purposes of
the CEBS program and are subject to inclusion on the national examination for CMS 1.
Errata—September 2010
CMS 1—Compensation Concepts and Principles
Module 14—Exam Review Answer Key
1. Learning Guide, replace pages 14.29-14.30.
1
2
CMS 1 Exam Review Answer Key
Question number Correct answer module Study material Reference Explanation
1.
C
10
Text271
ptionA:Thefree-ridersyndromeisapotentialproblem.
O
OptionB:Theycanbeadministrativelycomplex.OptionD:
Theyareusedtodemonstrateanorganizationalcommitment
toteamsandtoreinforcetheneedforemployeestowork
togethertoachieveresults.
2.
A
12
LGQ11andQ12,
p.12.11,Text326
OptionB:Determinedbydividingtheaveragesalaryrates
actuallypaidbytherangemidpoint.OptionC:Referstoa
compa-ratiogreaterthan1.00.OptionD:Referstoacomparatiooflessthan1.00.
3.
A
7
Text172
ptionB:Mostlikelylocally.OptionsCandD:Mostlikely
O
locallyorregionally.
4.
B
11
LGQ1,p.11.19
PrivacyLegislationin
Canada,p.11.B1
OptionA:DescribesthePersonalInformationProtectionand
ElectronicDocumentsAct.OptionC:Appliestoallprovinces
andterritories.OptionD:Onlyappliestoafewprovinces.
5.
C
11
Text305-306
ptionA:Thereverseiscorrect.OptionB:Appliesinmost
O
jurisdictions(notall).OptionD:Mostpayequitylegislation
requiresthatpayequitybemaintainedovertime.
6.
D
3
Text52,74,121
ptionsAandC:Applytoperson-basedstructures.
O
OptionB:Appliestopaydifferentials.
7.
B
11
Text300
crossNorthAmerica,EuropeandAustralia,genderisthe
A
bestpredictorofwages,afactorsurpassinginimportance
education,experienceandunionization.
8.
D
3
Text63
henjobanalysisisdoneforcompensationpurposes,the
W
datacollectedisusedtoestablishsimilaritiesanddifferences
inthecontentofjobs.
9.
C
8
LGQ12,p.8.11
Text217
OptionA:Variesbetween75-90%ofnetearnings(most
jurisdictions)or75%ofgrossearnings.OptionB:Funded
solelybyemployers.OptionD:WCbenefitsarenottaxable
totheemployee.
10.
C
8
LGQ13,p.8.13
OptionA:Benefitsaretaxable.OptionB:Itisfundedequally
Text207-208,217-218 byemployeesandemployers.OptionD:Self-employed
individualsareeligibletocontribute.
11.
A
3
LGQ17,p.3.11
Text78
CEBS ExaminationS Reliabilityisameasureoftheconsistencyofresultsifthe
samemeasureisrepeatedmanytimes.Itdoesn’tnecessarily
meanitiscorrect,onlythatrepeatedmeasuresgivethe
sameresult.
CMS1-9/10 14.29
Question number Correct answer module Study material Reference Explanation
12.
B
4
LGQ11,p.4.11
Text90,93,244
Compensablefactorsaredefinedonthebasisofthestrategic
directionoftheorganizationandhowtheworkcontributes
tothatstrategy.Thefactorsarescaledtoreflectthedegree
towhichtheyarepresentineachjobandweightedtoreflect
theiroverallimportancetotheorganization.
13.
C
3
Text62-63,74,84
ptionA:Skillsrequiredforthejob,itsdutiesand
O
responsibilities.OptionB:Theprocessofsystematically
determiningtherelativeworthofjobstocreateajob
structure.OptionD:Awrittensummaryofajob,including
responsibilities,qualificationsandrelationships.
14.
D
4
LGQ8andQ10,
pp.4.7,4.9,4.11
Text90
OptionA:Appliestothealternationrankingmethod.
OptionB:Appliestothepairedcomparisonmethod.
OptionC:Appliestotheclassificationmethod.
15.
A
10
LGQ19,p.10.21
Text278
OptionB:Employeesfacealowerlevelofrisk/rewardwith
performance-acceleratedstockoptionsthanwithastock
purchaseplan.OptionC:Employeesfacealowerlevelofrisk/
rewardwithtime-vestedstockoptionsthanwithpremiumpricedstockoptions.OptionD:Employeesfacealowerlevel
ofrisk/rewardwithperformance-vestedrestrictedstockthan
withindexedstockoptions.
16.
B
5
Text131-132
ptionA:Areliableevaluationisoneinwhichdifferent
O
evaluatorsproducethesameresults.OptionsCandD:
Validity/usefulnessreferstothedegreetowhichthe
evaluationachievesthedesiredresults.
17.
B
5
Text62,84,116,126
ptionA:Describesskillsanalysis.OptionC:Describesjob
O
evaluation.OptionD:Describesjobanalysis.
18.
D
10
LGQ6,p.10.7
Text266
OptionA:Describesthestraightpieceworkplan.OptionB:
DescribestheHalsey50-50method.OptionC:Straight
pieceworkisthemostfrequentlyimplemented.
19.
A
10
LGQ2,p.10.5
Text262-264
OptionB:Addedintobasepay.OptionC:Thereverseis
correct.OptionD:Describesindividualincentiveplans.
20.
A
9
LGQ9,p.9.15
Text235-236
OptionB:Appliestothegoal-settingtheory.OptionC:
Appliestothereinforcementtheory.OptionD:Appliesto
Herzberg’s2-Factortheory.
21.
D
9
Text238
ptionA:Risk-sharingistheriskiest.OptionB:Thereverseis
O
correct.OptionC:Basepayisthemostsecureelement.
22.
A
6
LGQ8,p.6.7
Text152,154
OptionB:Describestheefficiencywagetheory.OptionC:
Describesthesignallingtheory.OptionD:Describesthe
reservationwagetheory.
14.30 CMS1-9/10 CmS 1: ComPEnSation ConCEPtS anD PRinCiPLES