Total Rewards and Compensation Flashcards
7 cards from real CHRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Total Rewards and Compensation flashcards as text
A Scanlon Plan is a type of gain-sharing program. What metric does it primarily use to calculate bonuses?
Answer: Ratio of labor costs to sales value of production
The Scanlon Plan calculates gain-sharing bonuses based on the ratio of payroll costs to the sales value of production compared to a historical baseline.
Which type of flexible spending account (FSA) allows employees to set aside pre-tax dollars specifically for dependent care expenses?
Answer: Dependent care FSA
A Dependent Care FSA (DCFSA) allows employees to contribute pre-tax funds for qualifying dependent care expenses such as daycare or elder care.
A company offers a 'cafeteria plan' under IRS Section 125. What is the primary tax advantage of this plan?
Answer: Employees can pay for qualifying benefits with pre-tax dollars
Section 125 cafeteria plans allow employees to redirect pre-tax salary to pay for qualifying benefits, reducing taxable income for both employee and employer.
Which pay strategy positions an organization's pay rates above the market median to attract and retain top talent?
Answer: Lead strategy
A lead (or lead-the-market) strategy intentionally sets compensation above the market median to gain a competitive advantage in talent attraction and retention.
When benchmarking benefits, an HR professional finds the company's benefits cost is 38% of total compensation. How does this compare to the typical U.S. employer average of approximately 30%?
Answer: It is above average, which may signal a need to review benefits cost-effectiveness
A benefits cost of 38% exceeds the ~30% U.S. average, signaling the organization may need to evaluate whether its benefits spending yields sufficient return in attraction and retention.
Which compensable factor reflects the physical and mental demands placed on an employee while performing their job?
Answer: Effort
The effort factor in job evaluation captures both physical exertion and mental concentration required to perform job duties.
A company uses a phantom stock plan as a long-term incentive. What does an employee actually receive at payout?
Answer: A cash payment equal to the value of hypothetical shares
Phantom stock plans provide a cash payout tied to the appreciation of hypothetical company shares without transferring actual equity ownership.