Total Rewards Flashcards
74.The purpose of a gap analysis is to:
A. Determine which employees are underinsured
B.Revise benefits that are not meeting employee or organizational needs
C.Eliminate benefits that are too costly
D.Ensure that all employees receive the same benefits
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1154). McGraw-Hill Education. Kindle Edition.
74.B is correct. A gap analysis compares the organizational objectives, the employee needs, and the existing set of benefits to determine what the organization’s benefits package should and should not include.
A, C, and D are incorrect because they are all potential conclusions that could be reached based on the results of the gap analysis.
However, the primary reason for a gap analysis is to determine for the entire organization if a change in the total rewards package is necessary in order to continue to support the strategic goals of the organization such as retention, recruitment, etc.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1186-1187). McGraw-Hill Education. Kindle Edition.
75.According to COBRA, a company with 20 or more employees must offer:
A. Health insurance to its employees
B.Continued medical insurance coverage to employees terminated for gross misconduct
C.COBRA benefits to workers if the company terminates its health plan
D.COBRA benefits to spouses of deceased workers
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1154-1155). McGraw-Hill Education. Kindle Edition.
75.D is correct. COBRA provides up to 36 months’ continuation of group health benefits in the event of a divorce or death of the employee’s spouse. None of the other choices are valid COBRA provisions.
A, B, and C are incorrect.
A is incorrect because there is no legal requirement that employers have to offer health insurance to their employees.
B is incorrect because employers are not legally obligated to continue health insurance under COBRA to employees terminated for gross misconduct.
C is incorrect because COBRA doesn’t require that the employer offer health insurance to employees when health insurance is terminated for the whole company.
COBRA states that ex-employees must be offered the opportunity to stay on the company’s health insurance plan for a period of time post employment.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1187). McGraw-Hill Education. Kindle Edition.
76.According to USERRA, employees called to active duty are entitled to:
A.Higher limits for salary deferral contributions
B.Credited service for retirement plan purposes
C.Lower copayments and deductibles for continued family benefits
D.An early vesting schedule for retirement benefits
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1155). McGraw-Hill Education. Kindle Edition.
76.B is correct. USERRA gives employees on military leave the same seniority-based benefits, including retirement accruals, as they would receive if they had not taken leave.
A, C, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1187). McGraw-Hill Education. Kindle Edition.
77.An employee elects a $500 annual deferment in his Section 125 Flexible Benefits Plan (FSA). His employer pays an FSA claim for $500 in March. In April, the employee terminates his employment after deferring only $167 to his plan. What happens in this situation?
A.The employee must pay the company $333 for the amount in excess of his actual deferral.
B.The employer may withhold $333 from the employee’s final paycheck.
C.The employee is entitled to the full reimbursement for $500.
D.The employee becomes ineligible for the full FSA reimbursement.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1155). McGraw-Hill Education. Kindle Edition.
77.C is correct. Flexible spending accounts are authorized under Section 125 (Cafeteria) plans. FSAs offer employees a pre-tax method to defer pay toward their group health plan costs as well as their out-of-pocket medical costs. FSA health care claims below the annual elected deferral must be paid by the employer when they are incurred even though the employee’s FSA payroll deductions have not yet created a sufficient balance to cover the expense.
A, B, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1187). McGraw-Hill Education. Kindle Edition.
78.A window manufacturer guarantees its installers a base wage plus an extra $25 for each job completed to specifications. The employer is using a:
A. Merit pay system
B. Productivity-based pay system
C. Competency-based system
D. Flat-rate system
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1155). McGraw-Hill Education. Kindle Edition.
78.B is correct. The employer is using an incentive program based on performance results, which is considered a productivity-based system. A merit-pay system does not address incentive pay. A competency-based system addresses capabilities, whereas a flat-rate system establishes a fixed rate of pay.
A, C, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1187-1188). McGraw-Hill Education. Kindle Edition.
79.Under the factor comparison method, jobs are evaluated through the use of:
A. Predetermined wage classes
B. A wage/salary conversion table
C.A scale based on compensable factors
D. A comparison with market pricing
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1155-1156). McGraw-Hill Education. Kindle Edition.
79.C is correct. The factor comparison job evaluation method involves a set of compensable factors identified as determining the worth of jobs. Typically, the number of compensable factors is three to seven factors. Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics such as equitable pay and be distributed along a range. The jobs are then priced, and the total pay for each job is divided into pay for each factor. This process establishes the rate of pay for each factor for each benchmark job. The other jobs in the organization are then compared with the benchmark jobs, and rates of pay for each factor are summed to determine the rates of pay for each of the other jobs.
A, B, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1188). McGraw-Hill Education. Kindle Edition.
80.Which of the following laws covers both whistleblower protection and notice requirements for defined contribution plans?
A. ERISA
B. Sarbanes-Oxley Act
C. False Claims Act
D. Privacy Act
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1156). McGraw-Hill Education. Kindle Edition.
80.B is correct. The Sarbanes-Oxley Act protects whistleblowers who expose security violations and also requires administrators of defined contribution plans to provide 30 days’ notice in advance of a blackout period.
A, C, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1188). McGraw-Hill Education. Kindle Edition.
81.Which of the following is an action to lower budgets that is legal in the United States that would most likely violate compensation laws in other countries?
A. Reduce base salary levels
B. Offer early retirement packages
C.Delay or not fill open positions
D. Downgrade job titles
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1156). McGraw-Hill Education. Kindle Edition.
81.A is correct. Decreasing an employee’s salary is illegal in most countries, particularly in Latin America and Europe. It is legal in the United States.
B, C, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1188). McGraw-Hill Education. Kindle Edition.
82.To which of the following job evaluation methods does the paired comparison method belong?
A. Ranking
B. Job classification
C. Point-factor
D. Factor comparison
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1156). McGraw-Hill Education. Kindle Edition.
82.A is correct. This is an example of ranking jobs.
The paired comparison method involves plotting all of the jobs into a matrix.
You then compare each job with every other job.
B, C, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1188-1189). McGraw-Hill Education. Kindle Edition.
83.Which of the following is not a pay differential?
A. Hazard pay
B. Shift pay
C. Base pay
D. Overtime
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1156). McGraw-Hill Education. Kindle Edition.
83.C is correct. Hazard pay, shift pay, and overtime are all differentials. Base pay is the foundation of an employer’s compensation program.
A, B, and D are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1189). McGraw-Hill Education. Kindle Edition.
84.Which of the following terms refers to collapsing multiple pay ranges into a single-wide pay range?
A. Wide banding
B. Pay compression
C. Green circle rates
D. Broad-banding
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1156-1157). McGraw-Hill Education. Kindle Edition.
84.D is correct. Broadbanding is a term that refers to pay ranges with a wide spread.
This is often done to facilitate the management of pay levels within the pay range.
A side effect of broadbanding is to reduce the opportunity for promotions due to a smaller number of ranges.
That can adversely affect morale.
A, B, and C are incorrect.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1189). McGraw-Hill Education. Kindle Edition.
85.You are the HR director of a car seat manufacturing company. You have set a goal of developing a total rewards package that attracts top talent. Which of the following external relationships would be most beneficial in completing this task?
A. Monthly business professionals networking luncheon
B.Monthly checkpoint meeting with the coordinator who organizes the company’s wellness program
C.Quarterly meeting with the health insurance provider the company currently uses
D. Partnering with a compensation analyst
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1157). McGraw-Hill Education. Kindle Edition.
85.A is correct. A monthly business professional networking event allows the HR director to form alliances with other professionals who may be of value to the company in the future. One approach for the HR director could determine whether there is an insurance broker in their network and solicit their assistance to shop for the best insurance package available.
B, C, and D are incorrect.
B is incorrect because the wellness coordinator can share data on utilization of wellness initiatives that could help when putting together the total rewards package, but the contribution is minimal given the scope of the task.
C is incorrect because it is limited to the data the current insurance company can provide. This is useful but not the only piece of information needed to formulate a new total rewards package.
D is incorrect because the relationship should be preexisting. This response assumes that the HR director will now begin to shop for a compensation analyst.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1189). McGraw-Hill Education. Kindle Edition.
86.It is time to renew the medical benefits offering for your company. Because of an increase in stage 3 cancer treatments, the overall cost to your organization has increased by 15 percent. Your recommendation to management is to assume the additional cost and not pass any of it on to the employee. You make this recommendation because you believe it reflects the compensation philosophy of your company. Which of the following describes this system best?
A. Entitlement-oriented
B. People-oriented
C. Contribution-oriented
D. Employer-oriented
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1157-1158). McGraw-Hill Education. Kindle Edition.
86.A is correct because an entitlement-oriented system takes the position that benefits are an entitlement that every employee should have. In this type of system, it is unlikely that the employer will pass the cost of any increase in benefits on to the employee.
B, C, and D are incorrect.
B and D are incorrect because they are not descriptions of a compensation system.
C is incorrect because a contribution-oriented system emphasizes performance.
In this type of system, employees share in the cost of benefits, and incentives or performance-based pay is a norm.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1189-1190). McGraw-Hill Education. Kindle Edition.
87.What is the primary reason HR should communicate their company’s compensation strategy?
A.Companies are mandated to communicate compensation information to employees.
B.Employees don’t value compensation packages they don’t understand.
C.Employees don’t trust leadership if they believe that compensation information is not being presented with full transparency.
D.HR doesn’t need to communicate anything related to compensation as long as employees receive their biweekly pay on time.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1158). McGraw-Hill Education. Kindle Edition.
87.B is correct. Employees need to understand the many components of their compensation, including both direct and indirect compensation. If they don’t understand it, they don’t value it. This can result in low engagement and morale.
A, C, and D are incorrect.
A is incorrect because employers are not mandated to report compensation information to employees. They may have some regulatory mandates to report pension payments or other types of compensation.
C is incorrect because most employees understand and respect the need for employers to keep certain financial information private.
D is incorrect because employees care about more than on-time payments. That is important, but whether there are insurance benefits or other perks, employees like to have a full understanding of what they are entitled to for performing work.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1190). McGraw-Hill Education. Kindle Edition.
88.When designing a compensation system, where would you start?
A.With an evaluation of what the external market pays
B.With a review of what similar roles within the company pay
C. With a job analysis
D. With a job description
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (p. 1158). McGraw-Hill Education. Kindle Edition.
88.C is correct. A job analysis informs what knowledge, skills, abilities, and other characteristics are needed to perform the job effectively.
Without a measure of effective performance, you cannot determine which jobs are similar or compare to the external market in order to benchmark the position.
A, B, and D are incorrect because all three need to be considered in the design of a compensation strategy, but none of these activities can happen before a job analysis is completed.
Willer, Dory; Willer, Dory; Truesdell, William H.; Truesdell, William H.; Kelly, William D.; Kelly, William D.; Simon-Walters, Joanne; Simon-Walters, Joanne. SHRM-CP/SHRM-SCP Certification Bundle (All-In-One) (pp. 1190-1191). McGraw-Hill Education. Kindle Edition.
