TREX Base Pay Structure & Grades 2

Question 1

A company wants to minimize overlap between adjacent pay grades to create clear promotion incentives. Which design feature accomplishes this?

Accepted Answer

Narrowing the range spread

Answer

Narrowing the range spread reduces overlap between adjacent grades, making grade distinctions clearer and promotion pay increases more meaningful.

Question 2

Which term describes the practice of setting pay grade midpoints as a percentage increase over the previous grade's midpoint?

Accepted Answer

Midpoint progression

Answer

Midpoint progression (also called midpoint differential) is the percentage increase from one grade midpoint to the next.

Question 3

An employee's salary is at 115% of their pay grade midpoint. How would a compensation analyst classify this position?

Accepted Answer

Red-circled

Answer

A salary above the pay range maximum (red-circle) indicates the employee is paid above the intended range, often requiring a pay freeze until the range catches up.

Question 4

Which pay structure design is MOST appropriate for an organization with many narrowly defined job titles and a strong emphasis on internal equity?

Accepted Answer

Traditional grade structure

Answer

Traditional grade structures with many narrow grades support strong internal equity by precisely ranking and differentiating jobs.

Question 5

When converting from a traditional grade structure to broadbands, what is a common unintended consequence?

Accepted Answer

Loss of promotion opportunities as visible milestones

Answer

Broadbanding eliminates many grade-to-grade promotions, reducing the visible milestones that employees use to track career progression.

(TREX) WorldatWork Total Rewards Certification Practice Test

(TREX) WorldatWork Total Rewards Certification Practice Test

TREX Base Pay Structure & Grades 2