Compensation & Benefits Flashcards
6 cards from real Human Resources practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Compensation & Benefits flashcards as text
What is 'broadbanding' in compensation structure?
Answer: Using wide salary ranges that consolidate multiple traditional pay grades
Broadbanding consolidates many narrow pay grades into fewer, wider salary bands, giving managers more flexibility in pay decisions.
What is a 'cafeteria plan' (Section 125 plan) in employee benefits?
Answer: A flexible benefits plan allowing employees to choose among pretax benefit options
A Section 125 cafeteria plan lets employees select from a menu of pretax benefit options, allowing customization of their benefits package.
What does 'pay compression' mean in compensation management?
Answer: When the pay gap between new hires and more experienced employees narrows unacceptably
Pay compression occurs when starting salaries rise faster than incumbent wages, creating inequitable gaps that can fuel turnover among experienced staff.
What is the purpose of a job evaluation in compensation?
Answer: To determine the relative worth or value of jobs within the organization for pay purposes
Job evaluation assigns relative value to jobs within an organization to create an internally equitable pay structure.
Which payroll tax funds the federal unemployment insurance system?
Answer: FUTA
The Federal Unemployment Tax Act (FUTA) funds the federal portion of the unemployment insurance system and is paid solely by employers.
What is 'merit pay' and how does it differ from a cost-of-living adjustment (COLA)?
Answer: Merit pay rewards individual performance while COLA adjusts pay to account for inflation
Merit pay increases are earned through individual performance, while COLAs maintain purchasing power by adjusting wages for inflation regardless of performance.