Compensation & Benefits Fundamentals Rules Flashcards

What does 'market pricing' as a job evaluation method primarily rely on?

Answer: Comparison of jobs to external salary survey data

Market pricing establishes pay rates by matching jobs to external benchmark data from salary surveys rather than internal job evaluation factors.

A 'flexible benefit plan' (cafeteria plan) is governed under which section of the Internal Revenue Code?

Answer: Section 125

Section 125 of the IRC allows employers to offer flexible benefit plans where employees choose among taxable and nontaxable benefits.

Which concept describes the degree to which an organization's pay rates are above, below, or equal to the market?

Answer: Pay level

Pay level refers to the average pay of a job or pay structure relative to competitors in the external labor market.

What is the primary purpose of conducting a job analysis in compensation management?

Answer: To gather systematic information about job duties and requirements

Job analysis systematically collects data on job duties, responsibilities, and qualifications, which forms the foundation for job evaluation and pay decisions.

Which benefit is required by federal law for employers with 50 or more employees?

Answer: Family and Medical Leave Act (FMLA) leave

The FMLA requires covered employers (50+ employees) to provide eligible employees up to 12 weeks of unpaid, job-protected leave annually.

In a point-factor job evaluation system, 'compensable factors' are best described as:

Answer: Job characteristics that the organization values and is willing to pay for

Compensable factors are the dimensions of work—such as skill, effort, responsibility, and working conditions—that an organization uses to evaluate and price jobs.

Which pay delivery approach ties an employee's pay increase directly to their performance rating?

Answer: Merit pay

Merit pay increases are awarded based on individual performance evaluations, linking pay progression to demonstrated results.