SHRM-CP Total Rewards & Compensation 2

Question 1

Which type of variable pay plan distributes a portion of company profits to eligible employees?

Accepted Answer

Profit-sharing plan

Answer

Profit-sharing plans distribute a percentage of organizational profits to employees, linking their reward to company-wide financial success.

Question 2

Job evaluation using the point-factor method assigns value to jobs based on:

Accepted Answer

Compensable factors such as skill, effort, responsibility, and working conditions

Answer

The point-factor method identifies compensable factors, weights each factor, and assigns point values to quantify and rank job worth.

Question 3

Total compensation cost per employee includes which components?

Accepted Answer

Base pay, variable pay, benefits, retirement contributions, and payroll taxes paid by the employer

Answer

Total compensation cost encompasses all direct and indirect compensation, including employer-paid taxes, benefits, and retirement contributions.

Question 4

Which benefit is REQUIRED for employers under federal law in the United States?

Accepted Answer

Social Security and Medicare (FICA) contributions

Answer

FICA requires employers to withhold and match employee Social Security and Medicare taxes — this is a mandatory federal employer obligation.

Question 5

A non-qualified deferred compensation plan differs from a qualified plan primarily because it:

Accepted Answer

Does not receive favorable tax treatment and is not subject to ERISA contribution limits

Answer

Non-qualified deferred compensation plans offer flexibility for key executives but lack the tax advantages and ERISA protections of qualified plans.

SHRM-CP - Society for Human Resource Management Certified Professional Practice Test