Total Rewards & Compensation Flashcards

Which retirement plan type allows employees to contribute pre-tax dollars with employer matching, subject to IRS annual contribution limits?

Answer: 401(k) plan

A 401(k) is a defined contribution plan funded by employee pre-tax contributions and optional employer matching, subject to IRS limits.

Broadband pay structures are MOST beneficial in organizations that:

Answer: Rely heavily on lateral career movement, cross-functional teams, and skills-based development

Broadbanding supports flat organizations where career growth is lateral and skill-based rather than hierarchical and title-driven.

The purpose of a benefits needs analysis is to:

Answer: Identify the benefits most valued by the workforce to maximize impact and retention

A benefits needs analysis surveys the workforce to understand which offerings align with employee needs and drive engagement and retention.

Which compensation strategy is MOST aligned with a differentiation business strategy focused on innovation?

Answer: Competency-based or skill-based pay that rewards acquiring new capabilities

Skill-based or competency-based pay directly rewards employees for developing new capabilities, supporting an innovation-focused business strategy.

Under ERISA, a plan fiduciary is required to act:

Answer: Solely in the interest of plan participants and beneficiaries with the care of a prudent person

ERISA's fiduciary duty requires managing plan assets solely for participants' benefit using the prudent person standard.

Which pay practice is designed to reward employees for gaining and demonstrating specific skills or competencies rather than for the job title they hold?

Answer: Skill-based pay

Skill-based pay systems compensate employees based on the skills or competencies they have acquired and can demonstrate, regardless of current job assignment.