Compensation and Benefits Flashcards

Which pay structure consolidates many narrow pay grades into a few wide salary bands?

Answer: Broadbanding

Broadbanding consolidates many pay grades into fewer, wider bands, giving managers more flexibility in pay decisions.

A newly promoted employee's salary falls above the maximum of the new pay grade. What is this situation called?

Answer: Red-circle rate

A red-circle rate occurs when an employee's pay exceeds the maximum of their pay grade, often resulting from a promotion or grade restructuring.

Which Social Security tax is split equally between the employer and employee at 6.2% each on covered wages?

Answer: OASDI tax

The Old-Age, Survivors, and Disability Insurance (OASDI) tax funds Social Security benefits and is split 6.2% each between employer and employee.

What type of benefit plan allows employees to choose from a menu of benefits up to a set dollar amount?

Answer: Cafeteria plan

A cafeteria plan (Section 125 plan) lets employees select benefits from various options, similar to choosing items from a cafeteria menu.

An organization surveys what competitors pay for similar roles to ensure its salaries remain competitive. What is this process called?

Answer: Salary benchmarking

Salary benchmarking (market pricing) compares an organization's pay rates to external market data for similar jobs.

Which method of job evaluation ranks all jobs from highest to lowest based on overall value without using predetermined factors?

Answer: Whole job ranking

Whole job ranking is the simplest job evaluation method, ranking jobs holistically from most to least valuable without analyzing specific factors.

Which regulation requires most private employers to fund pension benefits and sets minimum vesting standards?

Answer: ERISA

ERISA (Employee Retirement Income Security Act) sets minimum standards for pension plans in private industry, including funding and vesting requirements.