CCP Base Pay Structure & Design 3

Question 1

Which pay structure element is most directly used to ensure internal equity across jobs?

Accepted Answer

Job evaluation results

Answer

Job evaluation determines the relative internal worth of jobs, forming the foundation for assigning jobs to pay grades equitably.

Question 2

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:

Accepted Answer

$20,000

Answer

The interquartile range is P75 minus P25: $70,000 − $50,000 = $20,000, representing the middle 50% spread of market pay.

Question 3

An organization uses a 'lead-lag' pay strategy. This means it:

Accepted Answer

Matches market at midyear, resulting in leading at the start and lagging at year-end

Answer

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.

Question 4

Which of the following is a disadvantage of using too many pay grades in a structure?

Accepted Answer

Excessive administrative burden and frequent reclassification requests

Answer

Too many narrow grades create excessive administrative work and incentivize employees and managers to constantly seek reclassifications for small pay increases.

Question 5

A pay line (trend line) in a scatter plot is used to:

Accepted Answer

Establish the statistical relationship between job evaluation points and market pay rates

Answer

A pay line (often derived via regression) maps job evaluation point values to market pay rates, forming the basis for setting grade midpoints.

(CCP) Certified Compensation Professional Practice Test

(CCP) Certified Compensation Professional Practice Test

CCP Base Pay Structure & Design 3