Base Pay Structure & Design Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Base Pay Structure & Design flashcards as text
Which pay structure element is most directly used to ensure internal equity across jobs?
Answer: Job evaluation results
Job evaluation determines the relative internal worth of jobs, forming the foundation for assigning jobs to pay grades equitably.
A salary survey shows the 25th percentile for a benchmark job is $50,000 and the 75th percentile is $70,000. The interquartile range is:
Answer: $20,000
The interquartile range is P75 minus P25: $70,000 − $50,000 = $20,000, representing the middle 50% spread of market pay.
An organization uses a 'lead-lag' pay strategy. This means it:
Answer: Matches market at midyear, resulting in leading at the start and lagging at year-end
A lead-lag strategy sets structure midpoints at projected midyear market rates, so the company leads at year-start and lags at year-end, averaging market pay.
Which of the following is a disadvantage of using too many pay grades in a structure?
Answer: Excessive administrative burden and frequent reclassification requests
Too many narrow grades create excessive administrative work and incentivize employees and managers to constantly seek reclassifications for small pay increases.
A pay line (trend line) in a scatter plot is used to:
Answer: Establish the statistical relationship between job evaluation points and market pay rates
A pay line (often derived via regression) maps job evaluation point values to market pay rates, forming the basis for setting grade midpoints.
Pay compression most commonly occurs when:
Answer: New hires are brought in at rates close to or exceeding those of experienced employees
Pay compression happens when market-driven starting salaries for new hires approach or exceed the pay of longer-tenured employees in the same role.
The 'range penetration' metric measures:
Answer: How far an employee's pay has progressed through their assigned pay range
Range penetration = (Employee Pay − Range Minimum) ÷ (Range Maximum − Range Minimum), showing how far through the range an employee's pay sits.