TREX Base Pay Structure & Grades 3

Question 1

A compa-ratio of 0.85 indicates that an employee's pay is:

Accepted Answer

15% below the midpoint

Answer

Compa-ratio = actual pay / midpoint; a ratio of 0.85 means the employee earns 85% of the midpoint, or 15% below it.

Question 2

Which pay structure element is adjusted annually to maintain market competitiveness without changing the individual employee's pay?

Accepted Answer

Pay range

Answer

Organizations conduct annual salary structure reviews and adjust pay ranges upward to reflect market movement, independent of individual pay changes.

Question 3

In a step-rate pay structure, advancement from one step to the next is PRIMARILY based on:

Accepted Answer

Seniority or time in grade

Answer

Step-rate structures, common in public sector and union environments, advance employees automatically based on length of service in a role.

Question 4

What is the PRIMARY purpose of establishing pay grade minimums?

Accepted Answer

To define the lowest acceptable pay for a given job level

Answer

The grade minimum defines the floor—the lowest rate an organization will pay someone in that grade, ensuring pay doesn't fall below an acceptable threshold.

Question 5

An organization's pay ranges have not been updated for three years while market rates rose 5% annually. What is the MOST likely result?

Accepted Answer

New hire offers must exceed midpoints, causing compression

Answer

Stale pay ranges force employers to offer competitive market pay above stagnant midpoints, compressing the gap between new hires and tenured employees.

(TREX) WorldatWork Total Rewards Certification Practice Test

(TREX) WorldatWork Total Rewards Certification Practice Test

TREX Base Pay Structure & Grades 3