WGU C202 Managing Human Capital All-in-
One Practice Questions | Most Tested
Questions & 100% Correct Answers | 2026
Update
Direct financial compensation - correct answercompensation received in the form of
salary, wages, commissions, stock options or bonuses
indirect financial compensation - correct answerall the tangible and financially valued
rewards that are not included in direct compensation including free meals, vacation time
and health insurance
nonfinancial compensation - correct answerrewards and incentives given to employees
that aren't financial in nature
base pay - correct answerreflects the size and scope of an employee's responsibilities
severance pay - correct answergive to employees upon termination of their employment
fixed pay - correct answerpays employees a set amount regardless of performance
variable pay - correct answerbases some or all of an employee's compensation on
employee, team, or organizational
pay structure - correct answerthe array of pay rates for different work or skills within a
single organization
pay mix - correct answerthe relative emphasis give to different compensation
components
pay leader - correct answerorganization with a compensation policy of giving employees
greater rewards than competitors
pay follower - correct answeran organization that pays its front-line employees as little
as possible
resource dependence theory - correct answerproposition that organizational decisions
are influenced by both internal and external agents who control critical resources
wage differentials - correct answerdifferences in wage between various workers, groups
of workers, or workers within a career field
,labor market - correct answerall of the potential employees located within a geographic
area from which the organization might be able to hire
cost of living allowances - correct answerclauses in union contacts that automatically
increase wages base on the U.S. Bureau of Labor Statistics' cost of living index
market pricing - correct answeruses external sources of information about how others
are compensating a certain position to assign value to a company's similar job
Compensation surveys - correct answersurveys of other organizations conducted to
learn what they are paying for specific jobs or job classes
benchmark jobs - correct answerjobs that tend to exist across departments and across
diverse organizations allowing them to be used as a basis for compensation
comparisons
job evaluation - correct answera systematic process that uses expert judgement to
assess differences in value between jobs
ranking methos - correct answersubjectively compares jobs to each other based on their
overall worth to the organization
job classification method - correct answersubjectively classifies jobs into an exiting
hierarchy of grades and categories
point factor method - correct answeruses a set of compensable factors to determine a
job's value. skill, resp, effort, working cond.
compensable factor - correct answerany characteristic used to provide a basis for
judging a job's value
skills, responsibilities, effort, working conditions - correct answerFour categories of
compensable factors
Hay Group Guide Chart - Profile Method - correct answera point-factor system is used
to produce both a profile and a point score for each position.
know how
problem solving
accountability
working conditions
Know-how, problem solving, accountability, working conditions - correct answerHay
Group Method based on four main factors
,Position Analysis Questionnaire - correct answera structured job evaluation
questionnaire that is statistically analyzed to calculate pay rates based on how the labor
market is valuing worker characteristics. a copyrighted, standardized, structured job
analysis questionnaire. 6 sections covering 187 job elements.
job pricing - correct answerthe generation of salary structures and pay levels for each
job based on the job evaluation data
single rate system, pay grades and broadbanding - correct answerThree most common
job pricing systems
pay grade (pay scale) - correct answerthe range of possible pay for a group of jobs
broadbanding - correct answerusing very wide pay grades to increase pay flexibility
internal equity - correct answerwhen employees perceive their pay to be fair relative to
the pay of other jobs in the organization
employee equity - correct answerthe perceived fairness of the relative pay between
employees performing similar jobs for the same organization
external equity - correct answerwhen an organization's employees believe that their pay
is fair when compared to what other employers pay their employees who perform similar
jobs
comparable worth - correct answerif two jobs have equal difficulty requirements, the pay
should be the same, regardless of who fills them
wage rate compression - correct answerstarting salaries for new hires exceed the
salaries paid to experienced employees
golden parachute - correct answerlucrative benefits given to executives in the event the
company is taken over
Cost-of-living adjustments - correct answerpay increases to account for a higher cost of
living in one country versus another
Housing allowance - correct answerpayments to subsidize or cover housing and related
costs
hardship premiums - correct answerincreased salary for living in an area with a lower
quality of life, less safety, etc.
tax equalization payments - correct answerincreased salary to make up for higher taxes
that reduce take-home pay and decrease employee's purchasing power
, inflation adjustments - correct answerlarger and/or more frequent raises to maintain
employee's purchasing power in the face of inflation
Fair Labor Standards Act of 1938 - correct answera federal law that sets standards for
minimum wages, overtime pay, and equal pay for men and women performing the same
jobs
exempt employees - correct answeremployees who meet one of the FLSA exemption
tests, are paid on a fixed salary basis and are not entitled to overtime pay
non-exempt employees - correct answeremployees who do not meet any of one of the
FLSA exemption tests and are paid on an hourly basis and covered by wage and hour
laws regarding minimum wage, overtime pay and hours worked
workers' compensation - correct answera type of insurance that replaces wages and
medical benefits for employees injured on the job in exchange for relinquishing the
employee's right to sue the employer for negligence
fixed rewards - correct answerpredetermined compensation (salary and benefits)
variable rewards (incentives) - correct answer"at risk" rewards which are linked to
factors determined as valuable, including performance, skills, competence and
contribution
- Recognize and reward high performers
- Increase the likelihood of achieving corporate goals
- Improve productivity
- Move away from an entitlement culture - correct answerTop four reasons
organizations give for tying pay to performance ar
- Preference of individual employees
- Size of the rewards for high performance
- Method of motivating individual job performance
- Objectivity of the evaluation process that determines the rewards - correct
answerBefore designing an incentive pay plan to motivate performance, it is important
to consider the
- Company performance
- Reduced merit increases
- Reductions in head count
- Reduced benefits
- Pay freezes - correct answerMost common way employers fund variable pay programs
reward differnentiation - correct answerdifferentiating rewards based on performance
rather than giving all employees the same reward
One Practice Questions | Most Tested
Questions & 100% Correct Answers | 2026
Update
Direct financial compensation - correct answercompensation received in the form of
salary, wages, commissions, stock options or bonuses
indirect financial compensation - correct answerall the tangible and financially valued
rewards that are not included in direct compensation including free meals, vacation time
and health insurance
nonfinancial compensation - correct answerrewards and incentives given to employees
that aren't financial in nature
base pay - correct answerreflects the size and scope of an employee's responsibilities
severance pay - correct answergive to employees upon termination of their employment
fixed pay - correct answerpays employees a set amount regardless of performance
variable pay - correct answerbases some or all of an employee's compensation on
employee, team, or organizational
pay structure - correct answerthe array of pay rates for different work or skills within a
single organization
pay mix - correct answerthe relative emphasis give to different compensation
components
pay leader - correct answerorganization with a compensation policy of giving employees
greater rewards than competitors
pay follower - correct answeran organization that pays its front-line employees as little
as possible
resource dependence theory - correct answerproposition that organizational decisions
are influenced by both internal and external agents who control critical resources
wage differentials - correct answerdifferences in wage between various workers, groups
of workers, or workers within a career field
,labor market - correct answerall of the potential employees located within a geographic
area from which the organization might be able to hire
cost of living allowances - correct answerclauses in union contacts that automatically
increase wages base on the U.S. Bureau of Labor Statistics' cost of living index
market pricing - correct answeruses external sources of information about how others
are compensating a certain position to assign value to a company's similar job
Compensation surveys - correct answersurveys of other organizations conducted to
learn what they are paying for specific jobs or job classes
benchmark jobs - correct answerjobs that tend to exist across departments and across
diverse organizations allowing them to be used as a basis for compensation
comparisons
job evaluation - correct answera systematic process that uses expert judgement to
assess differences in value between jobs
ranking methos - correct answersubjectively compares jobs to each other based on their
overall worth to the organization
job classification method - correct answersubjectively classifies jobs into an exiting
hierarchy of grades and categories
point factor method - correct answeruses a set of compensable factors to determine a
job's value. skill, resp, effort, working cond.
compensable factor - correct answerany characteristic used to provide a basis for
judging a job's value
skills, responsibilities, effort, working conditions - correct answerFour categories of
compensable factors
Hay Group Guide Chart - Profile Method - correct answera point-factor system is used
to produce both a profile and a point score for each position.
know how
problem solving
accountability
working conditions
Know-how, problem solving, accountability, working conditions - correct answerHay
Group Method based on four main factors
,Position Analysis Questionnaire - correct answera structured job evaluation
questionnaire that is statistically analyzed to calculate pay rates based on how the labor
market is valuing worker characteristics. a copyrighted, standardized, structured job
analysis questionnaire. 6 sections covering 187 job elements.
job pricing - correct answerthe generation of salary structures and pay levels for each
job based on the job evaluation data
single rate system, pay grades and broadbanding - correct answerThree most common
job pricing systems
pay grade (pay scale) - correct answerthe range of possible pay for a group of jobs
broadbanding - correct answerusing very wide pay grades to increase pay flexibility
internal equity - correct answerwhen employees perceive their pay to be fair relative to
the pay of other jobs in the organization
employee equity - correct answerthe perceived fairness of the relative pay between
employees performing similar jobs for the same organization
external equity - correct answerwhen an organization's employees believe that their pay
is fair when compared to what other employers pay their employees who perform similar
jobs
comparable worth - correct answerif two jobs have equal difficulty requirements, the pay
should be the same, regardless of who fills them
wage rate compression - correct answerstarting salaries for new hires exceed the
salaries paid to experienced employees
golden parachute - correct answerlucrative benefits given to executives in the event the
company is taken over
Cost-of-living adjustments - correct answerpay increases to account for a higher cost of
living in one country versus another
Housing allowance - correct answerpayments to subsidize or cover housing and related
costs
hardship premiums - correct answerincreased salary for living in an area with a lower
quality of life, less safety, etc.
tax equalization payments - correct answerincreased salary to make up for higher taxes
that reduce take-home pay and decrease employee's purchasing power
, inflation adjustments - correct answerlarger and/or more frequent raises to maintain
employee's purchasing power in the face of inflation
Fair Labor Standards Act of 1938 - correct answera federal law that sets standards for
minimum wages, overtime pay, and equal pay for men and women performing the same
jobs
exempt employees - correct answeremployees who meet one of the FLSA exemption
tests, are paid on a fixed salary basis and are not entitled to overtime pay
non-exempt employees - correct answeremployees who do not meet any of one of the
FLSA exemption tests and are paid on an hourly basis and covered by wage and hour
laws regarding minimum wage, overtime pay and hours worked
workers' compensation - correct answera type of insurance that replaces wages and
medical benefits for employees injured on the job in exchange for relinquishing the
employee's right to sue the employer for negligence
fixed rewards - correct answerpredetermined compensation (salary and benefits)
variable rewards (incentives) - correct answer"at risk" rewards which are linked to
factors determined as valuable, including performance, skills, competence and
contribution
- Recognize and reward high performers
- Increase the likelihood of achieving corporate goals
- Improve productivity
- Move away from an entitlement culture - correct answerTop four reasons
organizations give for tying pay to performance ar
- Preference of individual employees
- Size of the rewards for high performance
- Method of motivating individual job performance
- Objectivity of the evaluation process that determines the rewards - correct
answerBefore designing an incentive pay plan to motivate performance, it is important
to consider the
- Company performance
- Reduced merit increases
- Reductions in head count
- Reduced benefits
- Pay freezes - correct answerMost common way employers fund variable pay programs
reward differnentiation - correct answerdifferentiating rewards based on performance
rather than giving all employees the same reward
