Total Rewards and Compensation Flashcards

Under the FLSA, what is the primary requirement for an employee to qualify for the executive exemption?

Answer: Earning a salary above the threshold and primarily managing the enterprise or a department

The executive exemption requires meeting the salary basis/level test plus a duties test centered on managing and directing the work of others.

A pay structure with a single broad range covering many job levels is known as what?

Answer: Broadbanding

Broadbanding consolidates many grades into a few wide bands to allow flexibility in pay movement.

Pay compression most commonly occurs when:

Answer: New hires are paid nearly as much as long-tenured employees

Compression arises when market rates push new-hire pay close to or above that of experienced incumbents.

Which compensation philosophy aims to set pay at the market median?

Answer: Match (meet) the market

A match strategy targets the 50th percentile to stay competitive without overpaying.

The difference between an employee's pay and the midpoint of their pay range, expressed as a ratio, is called the:

Answer: Compa-ratio

A compa-ratio of 1.0 means the employee is paid exactly at the range midpoint.

Which type of benefit is legally mandated for most U.S. employers?

Answer: Social Security and Medicare contributions

Social Security, Medicare, unemployment, and workers' compensation are legally required benefits.

A discretionary bonus paid at year-end with no advance promise of amount is best described as:

Answer: Excludable from the regular rate for overtime purposes

Truly discretionary bonuses can be excluded from the regular rate used to compute overtime pay.