Compensation and Benefits Flashcards

Which pay philosophy positions an organization's compensation at the 75th percentile of the market?

Answer: Lead strategy

A lead strategy sets pay above the market median to attract top talent, while a lag strategy pays below market and a match strategy aligns with the median.

What is the term for the range between the minimum and maximum of a pay grade?

Answer: Pay spread

The pay spread (or range spread) is the percentage difference between the minimum and maximum of a pay grade, typically ranging from 50% to 150%.

An employee's salary is $55,000, and the midpoint of their pay grade is $50,000. What is the compa-ratio?

Answer: 1.10

Compa-ratio = employee salary ÷ pay grade midpoint; $55,000 ÷ $50,000 = 1.10, meaning the employee is paid 10% above midpoint.

Which law established the first federal minimum wage and mandated overtime pay at 1.5 times the regular rate?

Answer: Fair Labor Standards Act (FLSA)

The FLSA of 1938 established the federal minimum wage, overtime pay standards, recordkeeping, and child labor laws.

Under COBRA, how long may a qualified beneficiary typically continue group health coverage after a qualifying event such as termination of employment?

Answer: 18 months

COBRA generally allows qualified beneficiaries to continue group health coverage for up to 18 months after a qualifying event like job loss.

Which gain-sharing plan rewards employees based on improvements in labor cost ratios compared to historical baselines?

Answer: Scanlon Plan

The Scanlon Plan is a gain-sharing program that compares labor costs to sales value of production, sharing savings with employees when the ratio improves.

Which situation would most likely trigger an employer's obligation to provide COBRA continuation coverage?

Answer: An employee voluntarily reduces hours below the benefit eligibility threshold

A reduction in hours that causes an employee to lose health coverage eligibility is a qualifying event that triggers COBRA continuation rights.