Total Rewards/Compensation and Benefits

Question 1

What is the Fair Labors Standards Act (FSLA)?

Answer 1

Guides minimum wage standards and classifies employees.

Question 2

What is an exempt employee?

Answer 2

Not subject to the FSLA. Paid a salary and not subject to overtime pay.

Question 3

What is a non-exempt employee?

Answer 3

Entitled to overtime and minimum wage.

Question 4

What is a Salary Level Test?

Answer 4

Determines how much an employee earns. Employees earning less than $23,000 per year are non-exempt.

Question 5

What is a Salary Basis Test?

Answer 5

The salary can’t be reduced or increased.

Question 6

What is the Duties Test?

Answer 6

The Duties Test determines exempt or non-exempt status.

Question 7

What are examples of exempt employees?

Answer 7

1. Executives
2. Administrative Professionals
3. Sales Personnel
4. Computer-Related Occupations
5. Teachers and Nurses

Question 8

What are Monetary Compensations?

Answer 8

Base pay, commissions, overtime pay, bonuses, profit sharing, merit pay, stock options, and per diems.

Question 9

What are Non-Monetary Compensations?

Answer 9

Medical insurance, paid time off, retirement plans, and perquisites (car allowances, club memberships, mobile devices, etc.)

Question 10

What are 2 compensation philosophies?

Answer 10

1. Entitlement - Rewards are based on longevity.
2. Pay for Performance - Rewards are based on merit.

Question 11

What are Total Rewards?

Answer 11

All of the financial and non-financial benefits that are of value to the employee.

Question 12

What are the 4 job pricing methods?

Answer 12

1. Point Method
2. Ranking
3. Classification
4. Factor Comparison

Question 13

What is a Compa-Ratio?

Answer 13

Compares internal pay rates to external market rates.

Question 14

What is Range Penetration?

Answer 14

Compares employee’s pay to the total pay range.

Question 15

What is Pay Compression?

Answer 15

When internal wages don’t grow as quickly as external wages.

Question 16

What is a Competency-Based Pay Approach?

Answer 16

Pay is determined by job responsibilities.

Question 17

What is Procedural Justice?

Answer 17

Employee’s perception of how pay ranges are established and how raises are given.

Question 18

What are the 3 parts to creating a benefits program?

Answer 18

1. Benchmarking - Comparing your company’s benefits in the external market.
2. Ask employees what they want.
3. Ensure legal compliance.

Question 19

What are the 2 types of benefits?

Answer 19

1. Statutory
2. Voluntary

Question 20

What is a statutory benefit?

Answer 20

A benefit created by law or regulated by a law.

Question 21

What is a voluntary benefit?

Answer 21

A benefit offered by choice by the employer.

Question 22

What are non-monetary rewards for executives?

Answer 22

Corporate housing, club memberships, company cars, and tax benefits.

Question 23

What is the Securities and Exchange Commission?

Answer 23

Discloses executive pay and annually reports on compensation packages.

Question 24

What is a Golden Handshake?

Answer 24

Defines the terms of severance agreement.

Question 25

What is a Golden Parachute?

Answer 25

Minimizes executive risks due to a merger.

Question 26

What are Golden Handcuffs?

Answer 26

Prevents executives from leaving without losing significant money.

Question 27

What are Golden Life Jackets?

Answer 27

Encourages executives to stay with a new company during acquisition.

Question 28

What is a Clawback Clause?

Answer 28

Allows a company to take money back from the executive.

Question 29

What is Employee Stock Ownership (ESOP)?

Answer 29

Provide equity ownership in the company.

Question 30

What is Restricted Stock?

Answer 30

Can’t be cashed until certain conditions are met.

Question 31

What is Phantom Stock?

Answer 31

Stock ownership, but not equity.