CPHR Total Rewards and Compensation 2

Question 1

Which pay structure design uses broad salary bands that overlap significantly, giving managers more flexibility in rewarding performance?

Accepted Answer

Broadbanding

Answer

Broadbanding consolidates many traditional pay grades into fewer, wider salary bands, granting managers greater discretion over pay decisions.

Question 2

Under the Fair Labor Standards Act (FLSA), which of the following employees is most likely classified as exempt from overtime requirements?

Accepted Answer

A salaried marketing director earning $75,000/year

Answer

Salaried employees in bona fide executive, administrative, or professional roles who meet the salary threshold are exempt from FLSA overtime provisions.

Question 3

A company offers employees the option to redirect a portion of their salary to pay for dependent care expenses before taxes are applied. This is an example of:

Accepted Answer

A flexible spending account (FSA)

Answer

A Dependent Care FSA allows employees to set aside pre-tax dollars to pay for eligible dependent care expenses, reducing taxable income.

Question 4

When designing a long-term incentive plan for senior executives, which vehicle aligns executive interests most directly with shareholder value creation?

Accepted Answer

Restricted stock units (RSUs)

Answer

RSUs tie compensation directly to the company's stock price, aligning executives' financial interests with those of shareholders over a vesting period.

Question 5

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

Accepted Answer

Lead strategy

Answer

A lead strategy sets pay above the market median, used to attract talent and reduce turnover at the cost of higher payroll expense.

(CPHR) Chartered Professional in Human Resources Practice Test

(CPHR) Chartered Professional in Human Resources Practice Test

CPHR Total Rewards and Compensation 2