Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

SPHR Review > Total Rewards > Flashcards

Total Rewards Flashcards

1
Q

Sherman Antitrust Act

A

The first US government action to limit monopolies and is the oldest of all US antitrust laws.

Also limits salary fixing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Davis-Bacon Act

A

US Federal law that est the requirement for paying prevailing wages on public works projects

All federal government contracts over $2,000 must include provisions for paying workers no less that locally prevailing wages/benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Copeland Act

A

Prohibits contractors from in any way inducing and employee to give up any part of comp to which he is entitled under his contract

Requires contractors to submit weekly statements of compliance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Walsh-Healey Act

A

Requires contractors engaged in manuf of materials/supplies/equipment to the US gov to pay employees who produce goods exceeding $10,000 the fed minimum wage for all hours worked and time 1/2 for over 40 hours in 1 week

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Fair Labor Standards Act (FLSA)

A

Prescribes standards for the basic minimum wage and overtime pay

  • affects most private and public employment
  • req employers to pay employees who are not exempt the federal min wage and time 1/2 for overtime
  • does not req employers to provide severance pay, sick leave, vacations, or holidays
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

FLSA - Minimum Wage

A

All employees covered by the law must pay employees at least the set min wage per hour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

FLSA - Overtime Pay

A

Non-exempt employees who work > 40 hours per week must be paid 1.5x base wage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

FLSA - Child Labor

A

An employee must be at least 16 years old to work in most non-farm jobs

At least 18 to work in non-farm jobs declared hazardous by sec of labor

Youths 14-15:

  • may work outside school hours in non-manuf, non-mining, non-hazardous jobs
  • no more than 3 hrs on a school day or 18 hours in school week
  • 8 hours on non-school day or 40 hours in non-school week
  • work may not begin before 7 am or end after 7 pm except 6/1 - Labor Day when hours are extended to 9 pm
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

FLSA - Recordkeeping

A

Every employer covered by FLSA must keep records including info about the employee, hours worked and wages earned

Employer must maintain for period of at least 3 years

  • employees full name as for social security purposes
  • address
  • birth date
  • sex & occupation
  • time and day of week work week begins, hours worked each day, total hours worked each week
  • pay period
  • pay rate
  • total overtime for work week
  • additions to or deductions from employees wages
  • total wages paid each pay period
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Executive Exemption

A

Qualifications:

  • employee must be comp’d at rate of at least $684 weekly
  • employee’s primary duty must be managing the enterprise or managing a dept/subdivision of enterprise
  • employee must direct the work of at least 2 or more full time employees
  • employee must have authority to hire/fire other employees or make suggestions on such
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Administrative Exemption

A

Qualifications:

  • employee must be comp’d at least $684 weekly
  • primary duty must be performance of office or non-manual work directly related to general business operations of employer
  • primary duty includes exercise of discretion and judgement with respect to matters of significance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Professional Exepmtion

A

Qualifications:

  • employee must be comp’d at least $684 per week
  • employee’s primary duty must be performance of work requiring advanced knowledge (work which is predominantly intellectual in character and requires consistent exercise of judgement)
  • advanced knowledge must be in a field of science or learning
  • advanced knowledge must be customarily acquired by prolonged course of specialized instruction

Also — creative professional exemption and computer employee professional exemption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Outside Sales Exemption

A

Qualifications:

  • employees primary duty must be making sales (as defined in FLSA) or obtaining orders/contracts for services or for use of facilities for which a consideration will be paid by client
  • employee must be regularly engaged away from the employer’s place or places of business
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Highly Compensated Employees

A

These employees making $107,432 or more are exempt from the FLSA if they regularly perform at least one of duties of an exempt executive, administrative, or professional employee

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Blue Collar Workers

A

The exemptions in section 13(a)(1) apply only to “white collar” employees meeting the salary and duties tests in the regulations

Exemptions do not apply to manual laborers or “blue collar” workers who perform physical work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Police, fire fighters, paramedics, and other first responders

A

Exemptions do not apply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Section 13(a)(1) of the FLSA

A

Provides exemption from both minimum wage and overtime pay

To qualify, employees must meet certain tests regarding job duties and be paid on a salary basis (not less than $684 per week

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Equal Pay Act (EPA)

A

Requires equal pay for men and women doing substantially equal work under similar working conditions

EPA is incorporated into FLSA and applies to all employers subject to FLSA

NOT same pay for same job
It’s same pay for similar job

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Lilly Ledbetter Fair Pay Act

A

Clarified comp practices that allow pay discrimination to be determined with the issuance of each new pay check rather than the old system which gave the complainant 180 days to file a complaint from last issuance of discriminatory pay check

Ledbetter was paid less than male colleagues while employed. She discovered the wage disparity after she retired. This new act awarded her restitution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Portal-to-Portal Act

A

Defined exactly what time was considered compensable work time

As long as an employee is doing work that benefits the employer, regardless of when they are performed, the employer is obligated to pay the employee for his or her time

Time to and from work is not considered paid working time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

McNamara-O’Hara Service Contract Act (SCA)

A

Requires contractors and subcontractors performing services on covered federal contracts in excess of $2500 to pay service employees no less than the monetary wage rates and to furnish fringe benefits found prevailing in the locality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Wage Garnishment Act

A

Aka wage garnishment provisions of the Consumer Credit Protection Act (CCPA)

Protects employees from discharge by employers because their wages have been garnished for any one debt

It also limits the amt of an employee’s earnings that may be garnished in any one week

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Disposable Earnings

A

Different from gross pay or take home pay

“Earnings” means compensation paid or payable for personal services and includes wages, salary, commission, bonus, and includes periodic payments through pension or retirement program

Does not include tips

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Deductions

A

Disposable earnings means only that portion of earnings left after deductions required by law

Can include fed income tax withholding, fed social security taxes, state & city tax withholding, state unemployment insurance taxes, and deductions required under state employees retirement systems

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Fair Credit Reporting Act (FCRA)

A

Regulates the collection, dissemination and use of consumer credit info

Under this law users of information for credit, insurance, or employment must:

  • notify the consumer when an adverse action is taken on the basis of these reports
  • identify the company that provided the report so that the accuracy and completeness of the report may be verified or contested by the consumer
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Independent Contractors

A

The employer is generally relieved of responsibility for withholding and paying employment taxes. And for providing benefits and ensuring protections of other employment laws

An employer that incorrectly classifies a worker as an independent contractor can be liable for tax, interest, and penalties

Test to determine:

  • who sets hours of work?
  • who sets pay rate?
  • who pays for equipment?

Real determination is answering “is the person in business for themselves?”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Benefit Laws - Social Security Act

A

A social insurance program funded through dedicated payroll taxes called FICA (Federal Insurance Contributions Act)

Major benefits include:

  • retirement
  • disability
  • survivorship
  • death
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Benefits Laws - Workers’ Compensation

A

Provides employees with financial protection in the event of a disabling workplace injury or illness and protects employers from costly damage suits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Benefits Laws - Age Discrimination in Employment Act (ADEA)

A

Prohibits employment discrimination against persons 40 years of age or older

Also sets standards for pensions and benefits provided by employers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Employee Retirement Income Security Act (ERISA)

A

Requires that employers provide employees with specific info concerning benefit plans

Requires reporting and disclosure of pension and profit sharing plans and welfare plans such as those dealing with group life, group accident, hospitalization, medical and surgical, and dental care insurance

If employers modify plans they must communicate to employees

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Form 5500

A

A financial report that must be filed with IRS by employers who provide a qualified retirement plan (i.e. a pension, profit sharing or 401(k) plan, or section 125 plan)

This form is also needed when an employer provides group medical, dental, life, or disability with 100 or more plan participants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Pregnancy Discrimination Act

A

Prevents expectant mothers from being fired, not hired, or discriminated against due to pregnancy or intent to become pregnant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Consolidated Omnibus Budget Reconciliation Act (COBRA)

A

Mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Uniformed Services Employment and Reemployment Rights Act (USERRA)

A

Requires employers to provide health insurance continuation for individuals performing military duty of more than 30 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Older Workers Benefit Protection Act (OWBPA)

A

Amended ADEA to specifically prohibit employers from denying benefits to older employees

This is because it is more expensive to provide benefits to older workers than younger workers and this could create disincentive to hire older workers

36
Q

Family and Medical Leave Act (FMLA)

A

Allows an employee to take unpaid leave due to serious health condition that makes the employee unable to perform his job (up to 12 weeks unpaid)

Events covered:

  • birth, adoption, or placement in foster care of a child
  • “serious health condition” involving the employee or an immediate family member (spouse, child, parent)

Must have worked for an employer for 12 months to qualify

37
Q

Health Insurance Portability and Accountability Act (HIPAA)

A

Limits restrictions that a group health plan can place on benefits for pre-existing conditions

Was superseded by Affordable Care
Act

Still relevant to the candidate in relation to privacy provisions - est regs for the use and disclosure of “Protected Health Information”

38
Q

Sarbanes-Oxley Act

A

Requires that rank-and-file participants in “individual account plans” be notified when they will be subject to a “blackout period”

Think selling profit shares to retire

39
Q

Patient Protection & Affordable Care Act (ACA)

A

Ensures all Americans have access to quality, affordable health care

Things to know:

  • eliminates lifetime annual limits on benefits
  • prohibits rescissions of health ins policies (cancellations due to health problems)
  • provides assistance to those uninsured due to preexisting conditions
  • requires coverage of preventative services and immunizations
  • extends dependent coverage to age 26
  • develop a uniform coverage docs so consumers can make apples to apples comparisons for health ins
  • ensures consumers have access to effective appeals process
  • est internet portal to assist Americans in identifying coverage options
  • facilitates admin simplification to lower health system costs
40
Q

Total Comp: Compensation Strategies

A

Comp is single most important element in the employment relationship

Top factor in deciding whether to accept or continue employment

Comp is largest component of total labor costs and far exceeds expenses for recruitment, training, administration, or HR functions

41
Q

Matching Compensation to Strategic Goals

A

Understanding a company’s business objectives is the most important knowledge a compensation planner can possess

Comp plans can:

  • communicate business objectives
  • provide incentives for employees to change behaviors
  • reinforce relat btw individual goals and corporate objectives
  • reward discretionary effort
42
Q

Comp & HR Goals: 3 primary goals of a compensation program

A

Effective recruitment
Retention
Motivation

43
Q

Recruitment

A

Appropriate starting rates and an attractive pay program can position a company to meet its recruitment needs on a consistent basis

Low starting rates - shortage of suitable candidates, low-potential employees

High rates - overpaying exp workers can undercut internal equity

44
Q

Retention

A

Comp program can be used to adjust turnover for various positions to achieve optimal workforce at the lowest cost

Turnover is expensive - recruiting, hiring new employees, orientation and training and downtime

A company’s growth potential diminishes every time an experienced and promotable employee resigns

45
Q

Motivation

A

A comp program based solely on market rates and length of service fails to motivate

A program based on skills and performance turns every paycheck into a concrete statement of a company’s business objectives

46
Q

Traditional Compensation Plans

A

Largely consist of base pay - grounded in extensive job evaluation - plus a fixed package of benefits

Employees comp level depends on length of service and fulfillment of job requirements

47
Q

Alternative Compensation Systems

A

Less standardized and less centralized

Rely less on job evaluation and more on performance appraisal

De-emphasize base pay - rely more on incentives for unit, group, or individual performance as defined by growth or productivity

Successful AC Systems are based on:

  • sound projections about financial returns that result from improved performance
  • accurate methods of measuring improvements
  • effective methods of tying improvements to payouts
48
Q

Reward Strategies

A

Primary objective of a comp program is to motivate employees behaviors needed to achieve business goals

49
Q

Equity Theory (Adams) of pay comparisons

A

Based on an individual subjective determination about his perception of pay comparisons

3 types:

  • internal: employee compares his pay to others within the org
  • external: employee compares his pay to a similar job outside the org
  • individual: employee compares his/her pay to individual doing same job within same organization
50
Q

Expectancy Theory (Vroom)

A

Holds that employees expectations determine effort and performance

Performance appraisal system ensures that employees receive feedback they need to perform well

A well-designed pay system ensures that performance is rewarded appropriately

51
Q

Maslow’s Hierarchy of Needs

A

Human nature is an ascending hierarchy of 5 basic needs

When one need is fulfilled a person strives to fulfill the need from the next level - once a need is satisfied it’s no longer a motivator

Basic needs = sufficient salary
Safety or security needs = safe environment, job stability
Social needs = sense of belonging/acceptance and interpersonal relationships
Esteem needs = feeling of self-worth, sense of achievement, appreciation from others
Self-actualization = fulfillment of ones full potential

52
Q

Reward Theory or Reinforcement Theory

A

Based on idea that employees will repeat behaviors that are rewarded and will avoids behaviors that are not rewarded

Just paying for time worked doesn’t motivate high performers. This rewards standard levels of performance

Pay is contingent on high performance can directly influence behavior

53
Q

Goal-setting Theory (Management by Objectives)

A

Only those rewards that employees value can motivate behaviors

Must set mutual goals that benefit the org and its employees

This theory holds that pay can motivate employees if:

  • employees participate in goal setting and accept these goals as their own
  • goals are specific and set a sufficiently challenging level
  • specific monetary rewards are designated for each goal achieved

Intrinsic vs. extrinsic rewards:
Intrinsic = psychological & intellectual rewards (i.e. performing meaningful work or feeling accomplished)
Extrinsic = derive from sources external to job itself (can be prestige/positive feedback or $$)

54
Q

Designing the Comp System

A

4 basic steps:

1) determining relative worth of benchmark jobs and collecting data on market rates for these jobs
2) analyzing how actual pay rates compare to market rates
3) deciding where target pay rates should be relative to market rates
4) establishing appropriate pay grades and pay ranges

55
Q

Internal Equity Issues

A

Employees compare their pay with other positions to determine fairness of their title’s comp vs. others

56
Q

Wage Compression

A

Refers to situations where pay differences between employees in different jobs are so small that internal pay inequities occur

Example: supervisors exempt from overtime pay vs. subordinates with a lot of overtime pay

57
Q

Permissible wage differentials

A

EPA allows wage differentials if based on:

  • a seniority system
  • a merit system
  • a system that measures earnings by quantity or quality of production
  • any other factor other than sex

Employers may pay different wages and provide different terms of employment for employees who work at different locations

58
Q

External Equity Issues

A

Value differential btw org’s internal reward system relative to employees in the outside marketplace

59
Q

Benchmark Jobs

A

A job with duties that can be clearly identified, defined, and compared to other jobs in the marketplace

Employers utilize area wage surveys to gauge whether they lead, lag, or match marketplace pay rates

60
Q

Lead vs. Lag: Lead Policy

A

Company projects where market will be at end of the structure plan head and matches those rates at the start of the plan year

61
Q

Lead vs. Lag: Lag Policy

A

A company matches market rates at the beginning of the plan year. Structure is competitive with the market at the start of the year and as competition moves ahead the structure will lag behind the market

62
Q

Lead vs. Lag: Lead/Lag Policy

A

Company projects where market rates will be at the middle of the plan year and matches those rates at the start of the plan year.

The structure will lead the competition for the first part of the year and lag behind the market for the second part of the year.

63
Q

Compa-Ratio and Measures of Central Tendency

A

Statistical metrics used to judge the health of the pay system - central tendency

3 ways to find the measure of central tendency:

  • mean = average
  • median = middle most score
  • mode = most frequent score
  • range = difference between greatest and least #s
64
Q

Compa-ratio

A

Provides an employer with a benchmark to determine how close actual pay rates compare to the company defined mid-point of pay range

It’s the avg of an employees actual pay divided by the range midpoint

Indicates how well an employee is paid compared against an industry standard

65
Q

Compa-ratio calculation

A

Compa-ratio = Actual Salary / Mid-point of Pay Range

$44,200 / $52,000 = .85

$103,100 / $90,000 = 1.15

80-86% - new inexperienced or unsatisfactory
96-103% - fully competent performing as job is defined
112-120% - universally recognized as outstanding performers inside and outside org

66
Q

Establishing Pay Grades and Ranges

Multiple Pay Structures

A

How many structures should a company have?

67
Q

Range of Pay Rates

A

Range may be so great that one structure may not comfortable fit highest and lowest rate

Example: CEO vs hourly employee

Separate structures should be established - exempt job structure vs. non-exempt structure

68
Q

Setting Grades

A

Once a pay line has been est you must then define a series of pay grades.

Pay grades group together jobs of similar internal value that will be considered similar for pay purposes

Consider for pay grades:

  • internal relationship of jobs & job groups
  • # of structures that will be used
  • # of jobs to be included
  • system of determining internal values
  • external values and differentiations
69
Q

Grouping Jobs

A

The key to est job grades is the grouping of jobs

This is done by considering both internal relationships of each job and the type of job evaluation system used

Natural breaks are defined by distinctions such as:

  • reporting relationships: manager/supervisor or supervisor/subordinate
  • job families: senior accountant/accountant/junior accountant or senior clerk/clerk
70
Q

Job Evaluations

A

The process of systematically determining a relative value of jobs in an org to set pay grades and group jobs

Most job evaluation systems divide job factors into 4 categories:

  • skill
  • effort
  • responsibility
  • working conditions
71
Q

Job evaluations: Skill

A

Includes job factors like: education, training, time reqd to learn, knowledge of equipment, initiative/creativity, resourcefulness, manual dexterity, interpersonal skills, analytical ability

72
Q

Job evaluations: effort

A

Covers both physical and mental exertion

Includes job factors like: mental effort, concentration, fatigue, eye fatigue and visual application, physical effort, demand, monotony, deadline and high work volume pressure

73
Q

Job evaluations: responsibility

A

Includes job factors relating to responsibility for: other workers, their work product, property, equipment, assets, cash, records, material, decision making, judgement, independent action, quality, accuracy, coordination of work, safety

74
Q

Job evaluations: working conditions

A

Includes job factors like: temperature, noise, isolation, health/safety hazards

75
Q

How to select meaningful job factors:

A
  • focus on factors that contribute to differences in job worth and differences in rates of pay
  • select factors that are independent and unique (avoid redundancy)
  • keep factors simple and concrete so they are clearly defined
  • ensure each factor selected can be realistically measured
76
Q

Ranking Method

A

Job ranking involves ordering jobs from highest to lowest based on definition of value/contributions

Advantage = least expensive and easiest to understand

Disadvantage = does not measure differences between jobs

77
Q

Classification/Grading Method

A

Used by fed gov

Each job is categorized into groups called classes if they contain similar jobs or grades if they contain jobs that are similar in difficulty but otherwise different

Advantage = easy to administer and inexpensive

Disadvantage = difficult to write the class or grade descriptions and requires a lot of judgement

78
Q

Factor Comparison Method

A

This method is seldom used by employers

Instead use modern adaptation that uses a computer and specialized statistical software

Compares several factors to obtain a numeric value for each job and to arrive at a job structure

Jobs are compared with each other using factors like:

  • mental requirements
  • physical requirements
  • skill requirements
  • responsibility
  • working conditions
79
Q

Point Method

A

Involved rating each job on several compensator factors and adding the scores on each factor to obtain a point total for a job

Advantage = the stability of the rating scales. Only major changes in the org demand a change in scales

Most commonly used job content evaluation system

Job evaluators apply the following methodology:

  • determine appropriate # of points (typically between 400 - 1,000 pts)
  • assign range of pts to each factor based on relative value
  • divide each factor into degrees to represent varying levels of the characteristic under review
  • define each degree and provide work examples
  • assign point values to each degree
  • analyze specific duties performed by each job by examining the first factor and determining the extent it is present on the job
  • sum up points for the job and array total pts assigned to each job to establish relative order of job worth
  • compare hierarchy against market values
  • make adjustments and develop a final structure
80
Q

Guide Chart-Profile Method (Hay Method)

A

Most popular point factor plan

Described as a form of factor comparison for the following reasons:

  • uses universal factors
  • bases job values in 15% intervals
  • makes job-to-job comparisons
81
Q

Universal factors in the Hay plan

A
  • know how (skill)
  • procedures and techniques
  • breadth of mgmt skills
  • person to person skills
  • problem solving
  • thinking environment
  • thinking challenge
  • accountability
  • freedom to act
  • impact on results
  • magnitude
  • working conditions
  • hazards
  • environment
  • physical demand
82
Q

Point Spreads

A

Internal point values can be used in determining pay grades

If a percent-based point spread is used, equal or increasing % are applied to the internal point values

Ex: lower grades may have 20% point spread, middle 25% and upper 30%

83
Q

Pay Line as a Continuum

A

Another method of identifying pay grades

Each internal value point has its own pay value

No magical # of grades to use - will depend on company’s needs and best for of the jobs

84
Q

3 major considerations in setting pay ranges:

A
  • midpoint progressions
  • range spread
  • range overlap
85
Q

Midpoint Progressions

A

Represent the percent increase from
The midpoint of one grade to the midpoint of the next higher grade

Can be constant % or can increase from grade to grade

Idea is to create enough pay grades so that there is a sufficient but not too great difference between grades

Rule: midpoint differentials will be smaller for lower lay grades and will increase for higher pay grades

86
Q

Range Spread

A

Next step is to determine range spread of pay grade. This in combination with the midpoint is used to derive mins and maxs for grades

Generally narrow ranges with smaller percent spread are used for lower pay grades

Spread increases as pay grade levels increase

SPHR Review (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions