SHRM Knowledge 2 — Questions and Answers
Question 1: Under the FLSA, which of the following employees is correctly classified as exempt from overtime requirements?
- A non-supervisory warehouse worker earning $40,000/year
- An administrative assistant who primarily performs clerical tasks
- A senior financial analyst earning $70,000/year who exercises independent judgment on significant matters (Correct answer)
- A retail sales associate who occasionally trains new hires
Correct answer: A senior financial analyst earning $70,000/year who exercises independent judgment on significant matters
The FLSA administrative exemption requires the employee to earn at least $684/week and exercise discretion and independent judgment on matters of significance.
Question 2: Which HR metric best measures the effectiveness of a recruiting process by comparing the number of applicants to those who receive offers?
- Time-to-fill
- Yield ratio (Correct answer)
- Cost-per-hire
- Turnover rate
Correct answer: Yield ratio
A yield ratio compares the number of applicants at one stage of the recruiting process to the number who advance to or succeed at the next stage.
Question 3: An organization's mission statement primarily serves to:
- Define specific annual financial targets
- Articulate the organization's fundamental purpose and reason for existence (Correct answer)
- Outline the step-by-step operational procedures for daily work
- Identify the organization's competitive weaknesses
Correct answer: Articulate the organization's fundamental purpose and reason for existence
A mission statement communicates the organization's core purpose—why it exists—and guides strategic and operational decisions.
Question 4: Which of the following best describes constructive discharge?
- An employee is terminated for performance reasons after a documented improvement plan
- An employer creates intolerable working conditions that force a reasonable employee to resign (Correct answer)
- A layoff conducted due to business restructuring
- An employee voluntarily resigns to take a better-paying job
Correct answer: An employer creates intolerable working conditions that force a reasonable employee to resign
Constructive discharge occurs when an employer makes working conditions so intolerable that a reasonable person would feel compelled to resign, treating the resignation as an involuntary termination.
Question 5: What is the primary purpose of a job evaluation process?
- To assess individual employee performance against goals
- To determine the relative worth of jobs within an organization for pay purposes (Correct answer)
- To identify candidates for promotion based on skill assessments
- To comply with EEO reporting requirements
Correct answer: To determine the relative worth of jobs within an organization for pay purposes
Job evaluation establishes the relative value of jobs within an organization to create an internally equitable pay structure.
Question 6: The Genetic Information Nondiscrimination Act (GINA) prohibits employers from:
- Requiring drug tests as a condition of employment
- Using an individual's genetic information in employment decisions (Correct answer)
- Conducting background checks without consent
- Denying employment to individuals with visible disabilities
Correct answer: Using an individual's genetic information in employment decisions
GINA prohibits employers with 15 or more employees from discriminating based on genetic information in hiring, firing, pay, job assignments, and other terms of employment.
Question 7: A 'broadbanding' compensation strategy differs from traditional pay grades primarily because it:
- Eliminates variable pay components entirely
- Consolidates many pay grades into fewer, wider salary bands (Correct answer)
- Ties all compensation exclusively to market benchmarks
- Requires more frequent performance reviews
Correct answer: Consolidates many pay grades into fewer, wider salary bands
Broadbanding collapses many narrow pay grades into a smaller number of wider bands, allowing greater flexibility in pay decisions and lateral movement.
SHRM Knowledge 2
Under the FLSA, which of the following employees is correctly classified as exempt from overtime requirements?