SHRM Total Rewards & Compensation 4

Question 1

Which pay structure approach pays employees based on the range and depth of skills they have mastered rather than the job they hold?

Accepted Answer

Skill-based pay

Answer

Skill-based pay compensates employees for the verified skills and competencies they acquire, not simply the position they occupy.

Question 2

An employer contributes a percentage of each eligible employee's annual salary to a retirement account, but the ultimate benefit depends on investment returns. This describes a:

Accepted Answer

Defined contribution plan

Answer

Defined contribution plans specify what the employer contributes, with final retirement balances depending on investment performance.

Question 3

What is the compa-ratio interpretation when an employee's ratio is above 1.0?

Accepted Answer

The employee is paid above the midpoint of their grade

Answer

A compa-ratio above 1.0 (or above 100%) indicates the employee's salary exceeds the midpoint of their pay grade.

Question 4

Which Equal Pay Act requirement allows pay differences between men and women performing equal work?

Accepted Answer

Differences based on seniority, merit, quantity of production, or any factor other than sex

Answer

The Equal Pay Act permits pay differences for equal work when they are based on seniority, merit systems, production quantity, or a factor other than sex.

Question 5

A company offers employees $5,000 annually for tuition reimbursement. Under current IRS rules, how much of this benefit is generally tax-free to the employee?

Accepted Answer

Up to $5,250 per year

Answer

IRS Section 127 allows employers to provide up to $5,250 in educational assistance tax-free to employees each year.

SHRM - Society for Human Resource Management Practice Test

SHRM - Society for Human Resource Management Practice Test

SHRM Total Rewards & Compensation 4