HRCI Compensation and Benefits 3

Question 1

What is a 'short-term incentive' (STI) plan?

Accepted Answer

A bonus program tied to achieving performance goals within a year or less

Answer

STI plans, such as annual bonuses, reward employees for meeting or exceeding performance targets within the current fiscal year.

Question 2

What is 'broadbanding' in pay structure design?

Accepted Answer

Collapsing many narrow pay grades into fewer, wider salary bands

Answer

Broadbanding consolidates multiple traditional pay grades into a smaller number of wide bands, providing more flexibility in pay decisions and career movement.

Question 3

Which benefit is typically excluded from the FLSA's regular rate calculation for overtime purposes?

Accepted Answer

Gifts and payments for occasional periods when no work is performed

Answer

The FLSA excludes gifts and payments for periods when no work is performed (e.g., vacation pay, holiday pay) from the regular rate used to compute overtime.

Question 4

What is an 'Employee Stock Purchase Plan (ESPP)'?

Accepted Answer

A program allowing employees to purchase company stock at a discounted price

Answer

An ESPP lets employees buy company stock at a discount (typically 5–15%) through payroll deductions, aligning employee and shareholder interests.

Question 5

Under the Equal Pay Act, when can employers pay different wages for equal work?

Accepted Answer

When differences are based on seniority, merit, quantity/quality of production, or a factor other than sex

Answer

The EPA allows pay differentials for equal work if based on a seniority system, merit system, production-based system, or any factor other than sex.

HRCI - Human Resource Certification Institute Practice Test

HRCI - Human Resource Certification Institute Practice Test

HRCI Compensation and Benefits 3