Total Rewards & Compensation Flashcards

What is the primary purpose of a compensation philosophy statement?

Answer: To guide compensation decisions by defining the organization's pay strategy and market position

A compensation philosophy statement articulates the organization's approach to pay, including market positioning (lead, match, or lag), pay-for-performance principles, and equity goals.

What does the compa-ratio measure in compensation analysis?

Answer: An employee's pay relative to the midpoint of their salary range

Compa-ratio is calculated by dividing an employee's actual pay by the midpoint of their salary range, with 1.0 (or 100%) indicating the employee is paid at the midpoint.

Which federal law establishes the requirement for overtime pay at 1.5 times the regular rate?

Answer: Fair Labor Standards Act (FLSA)

The FLSA requires that non-exempt employees receive overtime pay at 1.5 times their regular rate for hours worked over 40 in a workweek.

What is a total rewards strategy?

Answer: A comprehensive approach combining compensation, benefits, work-life balance, development, and recognition

Total rewards encompasses all elements of the employment value proposition: compensation, benefits, work-life balance, professional development, and recognition programs.

What is the purpose of a salary survey in compensation management?

Answer: To collect market data on pay practices for comparable positions

Salary surveys collect compensation data from other organizations for benchmark positions, enabling the employer to compare its pay levels to the external market.

Which compensation strategy involves paying above the market average to attract top talent?

Answer: Market lead strategy

A market lead strategy sets pay levels above the market median to attract and retain high-quality talent, often used by organizations competing for scarce skills.