1. Which one of the following is not a benefit to the employer when offering an ESOP? (Points : 1)
maintains a stable work force
owner can sell stock to a friend
results in a dilution of value of the stock
ESOT can borrow money under favorable conditions
2. All but which one of the following theories are included within content theories of motivation? (Points : 1)
Maslow's hierarchical needs
Herzberg's two-factor theory
McClelland's four modes of success
Adams' equity theory
3. Which of the following compensation areas is most affected by changes in IRS regulations? (Points : 1)
minimum wages
union contracts
executive compensation
professional employee compensation
4. A defined contribution plan has all but which one of the following features? (Points : 1)
employer contributions can be a flat dollar amount
employer contribution can be based on some special formula
provides a definitely determinable payment over a prescribed schedule
top limit to the contribution is $30,000
Question 1: The correct answer is "results in a dilution of value of the stock." To determine the correct answer, we can look at each option and evaluate whether it is a benefit or not.
To understand the concept of an ESOP (Employee Stock Ownership Plan), we need to study the benefits it offers to the employer. In this case, the first option, "maintains a stable work force," can be seen as a benefit for the employer as it promotes employee loyalty and reduces turnover. The second option, "owner can sell stock to a friend," is not a benefit for the employer as it does not provide any direct advantage related to the operation of the ESOP. The third option, "results in dilution of value of the stock," is a disadvantage for the employer as it reduces the value of the stock due to the distribution of shares to employees. Finally, the fourth option, "ESOT can borrow money under favorable conditions," is another benefit for employers as it allows the ESOP to access funds at better rates.
Therefore, the correct answer is "owner can sell stock to a friend," as it is not a benefit to the employer when offering an ESOP.
Question 2: The correct answer is "Adams' equity theory." To determine the correct answer, we need to identify which theory does not belong to the content theories of motivation.
Among the given options, Maslow's hierarchical needs, Herzberg's two-factor theory, and McClelland's four modes of success are all content theories of motivation. These theories focus on understanding the specific factors that motivate individuals.
Adams' equity theory, on the other hand, belongs to the process theories of motivation. It focuses on how individuals perceive fairness in the workplace and how it affects their motivation.
Therefore, the correct answer is "Adams' equity theory."
Question 3: The correct answer is "executive compensation." To determine the correct answer, we should analyze which compensation area is most affected by changes in IRS regulations.
Minimum wages are regulated by government laws and are typically not affected by changes in IRS regulations. Union contracts are negotiated between labor unions and employers and may be influenced by IRS regulations indirectly in terms of tax implications, but they are not directly tied to IRS regulations. Professional employee compensation may also have tax implications but is not directly influenced by IRS regulations to the same extent.
On the other hand, executive compensation is heavily regulated and subject to scrutiny by the IRS, especially regarding tax deductibility and compliance with compensation-related laws and regulations.
Therefore, the correct answer is "executive compensation."
Question 4: The correct answer is "top limit to the contribution is $30,000." To determine the correct answer, we need to identify the feature that does not apply to a defined contribution plan.
A defined contribution plan is a retirement plan where the employer makes contributions into an individual account for each participant. The contributions are usually based on a percentage of the employee's salary, and the investment performance of the account determines the eventual benefits.
The first option, "employer contributions can be a flat dollar amount," is a feature of a defined contribution plan, as employers have flexibility in determining the contribution method. The second option, "employer contribution can be based on some special formula," is also a feature, as employers can choose to contribute based on a formula tied to employee performance or other factors. The third option, "provides a definitely determinable payment over a prescribed schedule," is another feature, as the eventual benefit is determined by the account balance at retirement. However, the fourth option, "top limit to the contribution is $30,000," is not a feature of a defined contribution plan, as there is no specific limit to the contribution amount.
Therefore, the correct answer is "top limit to the contribution is $30,000."