CPHR Total Rewards and Compensation 4

Question 1

Which of the following best describes a defined benefit (DB) pension plan?

Accepted Answer

The employer promises a specific monthly benefit at retirement based on a formula using years of service and salary

Answer

The employee bears all investment risk and the benefit depends on account balance at retirement

Answer

Both employer and employee contribute to a pooled fund with no guaranteed payout

Answer

The plan is funded entirely by voluntary employee contributions

Question 2

Executive perquisites (perks) such as company cars, club memberships, and financial planning assistance are PRIMARILY designed to:

Accepted Answer

Attract and retain senior leaders while providing status-oriented benefits

Answer

Comply with IRS reporting requirements

Answer

Replace base salary for tax efficiency

Answer

Meet collective bargaining obligations

Question 3

Under the Equal Pay Act of 1963, pay differences between men and women performing substantially equal work are permissible when based on:

Accepted Answer

A seniority system, merit system, quantity/quality of production, or any factor other than sex

Answer

Job title differences only

Answer

Supervisor preference

Answer

Geographic location alone

Question 4

A company wants to reward employees for achieving specific short-term business targets during a fiscal year. Which plan structure is MOST appropriate?

Accepted Answer

Annual incentive plan (AIP) / bonus plan

Answer

Long-term incentive plan (LTIP)

Answer

Employee stock purchase plan (ESPP)

Answer

Defined contribution retirement plan

Question 5

Which concept in total rewards theory holds that employees evaluate their pay fairness by comparing their input-to-outcome ratio with that of a relevant peer?

Accepted Answer

Equity theory

Answer

Expectancy theory

Answer

Herzberg's two-factor theory

Answer

Maslow's hierarchy of needs

Question 6

When an employer provides group-term life insurance coverage above $50,000 to an employee, the cost of excess coverage is treated as:

Accepted Answer

Imputed income subject to FICA and income tax

Answer

A tax-exempt fringe benefit

Answer

A qualified retirement contribution

Answer

A nontaxable de minimis benefit

Question 7

A pay structure that sets the same fixed wage for all employees performing a given job, regardless of performance or seniority, is called:

Accepted Answer

Flat-rate (single-rate) pay

Answer

Step-rate pay

Answer

Broadbanding

Answer

Pay-for-performance