aPHR Compensation and Benefits 3

Question 1

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

Accepted Answer

Broadbanding

Answer

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

Question 2

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

Accepted Answer

Red-circle rate

Answer

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.

Question 3

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

Accepted Answer

OASDI tax

Answer

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

Question 4

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

Accepted Answer

Cafeteria plan

Answer

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

Question 5

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

Accepted Answer

Salary benchmarking

Answer

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

aPHR - Associate Professional in Human Resources Practice Test