SPHR Questions - Part 3

1. Right Answer: A
Explanation: Answer options A, B, and C are correct.The benefits of gainsharing programs are as follows:1. Aligns employees to organizational goals2. Helps the organization to achieve improvement in key performance measures3. Enhances the focus and awareness of employeesWhat is gainsharing?Gainsharing is a system of management used by a business to get higher levels of performance through the involvement and participation of its people. As performance improves, employees share financially in the gain (improvement). Gainsharing is about people working smarter together and not just working harder.Answer option D is incorrect. This is a disadvantage of gainsharing programs.Reference: 'http://simple.wikipedia.org/wiki/Gainsharing'Chapter: Compensation and Benefits

2. Right Answer: A
Explanation: Answer option A is correct.In 1931, the Davis-Bacon Act, was the first piece of legislation to actually establish a minimum wage. The act was, however, limited to the construction industry.Answer option B is incorrect. The Walsh-Healey Public Contracts Act, addressed contractors with the federal government that exceed $10,000 to pay an established minimum wage to workers, employed through the contract. This act was passed in 1936.Answer option C is incorrect. The Fair Labor Standards Act, was passed in 1938, addressed minimum wage, overtime pay, child labor, and record keeping.Answer option D is incorrect. The Portal-to-Portal Act of 1947, clarified hours of working for the purpose of minimum wage and overtime pay.Certification Institute, ISBN: 978-1-586-44149-4, Section III, The US HR Body of Knowledge.Chapter: Compensation and BenefitsObjective: Compensation

3. Right Answer: C
Explanation: Answer option C is correct.John's base pay is the fixed rate of pay he earns for performing his job in your organization.Answer option A is incorrect. Variable pay is the total pay John earns through variable programs, such as commissions or bonuses.Answer option B is incorrect. This isn't a valid term for employee compensation.Answer option D is incorrect. Market-demand describes the market average for pay, for someone in John's role as a mechanic.Certification Institute, ISBN: 978-1-586-44149-4, Section III, The US HR Body of Knowledge.Chapter: Compensation and BenefitsObjective: Compensation

4. Right Answer: A
Explanation: Answer option A is correct.The compa-ratio helps organizations determine how closely an employee's pay is in synch with market. You must also consider the length of employment, service, skills, and other factors in the decision for compensation. The ratio is found by dividing the employees' salary ($75,000) by the midpoint for the role ($80,000) for the ratio of 88 percent.Answer option B is incorrect. 113 percent is the inverted formula by dividing $80,000 by $75,000.Answer option C is incorrect. $10,000 is the difference of the two values, but this isn't the compa-ratio.Answer option D is incorrect. This isn't a valid figure for the question.Certification Institute, ISBN: 978-1-586-44149-4, Section III, The US HR Body of Knowledge.Chapter: Compensation and BenefitsObjective: Compensation

5. Right Answer: A
Explanation: Answer option A is correct.An excess-deferral plan makes up the difference between what an executive could have contributed to a qualified plan if there had not been a limit on contributions and how much was actually contributed because of the discrimination test required by ERISA. These plans are nonqualified because they are not protected by ERISA; they are limited to a small group of executives or highly compensated employees. A target-benefit plan (B) is a hybrid with elements of defined-benefit and money-purchase plans. A money-purchase plan (C) defers a fixed percentage of employee earnings. A cash-balance plan (D) combines elements of defined-benefit and defined-contribution plans. See Chapter 6 for more information.Chapter: Compensation and BenefitsObjective: Benefits