TREX Compensation & Benefits Fundamentals Rules 2

Question 1

Which pay structure element defines the minimum and maximum pay an organization will pay for a job?

Accepted Answer

Pay range

Answer

A pay range establishes the minimum, midpoint, and maximum pay the organization will offer for jobs assigned to a given grade.

Question 2

An employee's base salary is $55,000 and the midpoint of their pay range is $50,000. What is their compa-ratio?

Accepted Answer

1.10

Answer

Compa-ratio = actual pay ÷ midpoint; $55,000 ÷ $50,000 = 1.10.

Question 3

Which legal act requires employers to pay men and women equally for substantially equal work performed under similar conditions?

Accepted Answer

The Equal Pay Act of 1963

Answer

The Equal Pay Act of 1963 prohibits wage differentials based on sex for equal work in the same establishment.

Question 4

What is 'broadbanding' in compensation design?

Accepted Answer

Collapsing many pay grades into fewer, wider bands

Answer

Broadbanding consolidates numerous narrow pay grades into fewer, wider pay bands to allow greater flexibility in pay decisions.

Question 5

A 'defined contribution' retirement plan differs from a 'defined benefit' plan primarily because:

Accepted Answer

The employee's retirement income depends on account balance and investment returns

Answer

In a defined contribution plan, the retirement benefit is not guaranteed; it depends on contributions made and investment performance.

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