Human Resources Compensation & Benefits 3

Question 1

What is 'broadbanding' in compensation structure?

Accepted Answer

Using wide salary ranges that consolidate multiple traditional pay grades

Answer

Providing broad employee benefits packages

Answer

Broadcasting pay information publicly

Answer

Linking pay to broad market indices

Question 2

What is a 'cafeteria plan' (Section 125 plan) in employee benefits?

Accepted Answer

A flexible benefits plan allowing employees to choose among pretax benefit options

Answer

An employer-provided meal subsidy program

Answer

A retirement savings vehicle

Answer

A healthcare reimbursement account

Question 3

What does 'pay compression' mean in compensation management?

Accepted Answer

When the pay gap between new hires and more experienced employees narrows unacceptably

Answer

Reducing all salaries during a downturn

Answer

Limiting the highest earner's pay

Answer

Automating payroll processing

Question 4

What is the purpose of a job evaluation in compensation?

Accepted Answer

To determine the relative worth or value of jobs within the organization for pay purposes

Answer

To assess individual employee performance

Answer

To write job descriptions

Answer

To conduct salary negotiations

Question 5

Which payroll tax funds the federal unemployment insurance system?

Accepted Answer

FUTA

Answer

FICA

Answer

SUTA

Answer

Medicare surtax

Question 6

What is 'merit pay' and how does it differ from a cost-of-living adjustment (COLA)?

Accepted Answer

Merit pay rewards individual performance while COLA adjusts pay to account for inflation

Answer

Merit pay and COLA are identical; both reward performance

Answer

COLA is larger than merit pay increases

Answer

Merit pay applies only to executives