CODESP Classification and Compensation Studies 4

Question 1

Which method of job evaluation assigns predetermined point values to compensable factors such as skill, effort, and responsibility?

Accepted Answer

Point-factor method

Answer

The point-factor method assigns numerical points to each compensable factor, and the total points determine the job's relative worth.

Question 2

In a broadbanding compensation structure, how does the number of pay grades compare to a traditional structure?

Accepted Answer

Broadbanding uses fewer pay grades with wider salary ranges

Answer

Broadbanding consolidates many traditional pay grades into fewer, wider bands to allow greater flexibility in pay decisions.

Question 3

What is the primary purpose of a 'red-circle' rate in compensation administration?

Accepted Answer

It flags an employee whose pay exceeds the maximum of their pay grade

Answer

A red-circle rate occurs when an employee's salary is above the maximum of the assigned pay grade, typically frozen until the range catches up.

Question 4

When conducting a classification study, which document is the primary source of information about a position's duties and responsibilities?

Accepted Answer

Position description or job description

Answer

The position description captures actual duties, responsibilities, and qualifications and is the foundation for classification decisions.

Question 5

The 'lead-lag' pay strategy in compensation means an organization:

Accepted Answer

Pays above market at the start of the year and falls to market by year-end

Answer

A lead-lag strategy sets pay above market at implementation so the average pay across the year aligns with market midpoint as pay ages.

CODESP - Cooperative Organization for the Development of Employee Selection Procedures Practice Test