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C236 Compensation and Benefits PA
Questions and Correct Answers
Latest Update 2025/2026 Graded A+
Which provision applies if a job is covered by the Fair Labor Standards Act?
o :## Employees who work more than 40 hours in a week must be paid time and a
half for each hour they work over the 40 hours.
What is the relationship among laws regarding pay?
o :## The benefit to employees dictates which law is followed.
What is merit pay?
o :## Annual increase based on past performance
The CEO of a web development company gives employees a lot of freedom to develop new
applications, pays employees by the hour, and allows employees to work as needed to
develop applications. Because of this approach, the payroll costs vary quite a bit. The CEO
would like to get costs under control and make payroll costs more stable. Which approach
can be used to bring payroll costs under control and make them more stable in this
situation?
o :## Transition employees from an hourly pay model to a salaried pay model
Which compensation method is an annual pay increase based on past performance that is
added to an employee's base compensation?
o :## Merit pay
An employee has worked for the same company in two locations over the course of 20
years in Europe and North America. The employee has been trained as an international
trade specialist and has been promoted to manager of international operations. Which pay
basis should be used to compensate this employee?
o :## Competency-based pay
A company implemented actions to improve its return on investment on human capital.
The company wants to be the premier employer in the state. The first step was giving
more rewards for jobs compared to its competitors. Which type of reward system is this
company using?
o :## Relative
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Which type of market gives job seekers more power in negotiating terms of employment?
o :## Labor-driven
A manager is confronted by an employee who says she is thinking about a job offer from
another company. Subsequently, the manager wants to collect verifiable data on what
competing organizations are paying so the organization can match up with the market.
From where can the manager collect this data?
o :## Bureau of Labor Statistics
Which challenge to market analysis is present if a company expands into an international
market that has marginally trained workers?
o :## Inaccurate data
How can central tendency in compensation be used to improve a market analysis?
o :## By finding the single number that represents how many people are paid
What is the foundation of external reward positioning in an organization's overall
compensation program?
o :## Reward surveys
What is the definition of a leading market rate strategy?
o :## The organization provides more of a reward than its competitors.
The chart shows that the company sets its salary bands so a highly skilled employee in a
lower pay grade may earn more than a less skilled employee in a higher pay grade. Which
principle of setting competitive pay policies is the company following?
o :## The principle of overlap
Which pay system is often used in sales jobs to motivate employees to increase both the
number and size of sales that are made?
o :## Commission
What is a key concern when designing a variable pay system?
o :## The behaviors that are rewarded need to match the behaviors that are most
valued to the organization.
A professor who has been at a public university for eight years became aware of a website
that lists the salaries of all public sector employees in the professor's state. On the
website, the starting salaries of two new professors hired in the department were listed as
C236 Compensation and Benefits PA
Questions and Correct Answers
Latest Update 2025/2026 Graded A+
Which provision applies if a job is covered by the Fair Labor Standards Act?
o :## Employees who work more than 40 hours in a week must be paid time and a
half for each hour they work over the 40 hours.
What is the relationship among laws regarding pay?
o :## The benefit to employees dictates which law is followed.
What is merit pay?
o :## Annual increase based on past performance
The CEO of a web development company gives employees a lot of freedom to develop new
applications, pays employees by the hour, and allows employees to work as needed to
develop applications. Because of this approach, the payroll costs vary quite a bit. The CEO
would like to get costs under control and make payroll costs more stable. Which approach
can be used to bring payroll costs under control and make them more stable in this
situation?
o :## Transition employees from an hourly pay model to a salaried pay model
Which compensation method is an annual pay increase based on past performance that is
added to an employee's base compensation?
o :## Merit pay
An employee has worked for the same company in two locations over the course of 20
years in Europe and North America. The employee has been trained as an international
trade specialist and has been promoted to manager of international operations. Which pay
basis should be used to compensate this employee?
o :## Competency-based pay
A company implemented actions to improve its return on investment on human capital.
The company wants to be the premier employer in the state. The first step was giving
more rewards for jobs compared to its competitors. Which type of reward system is this
company using?
o :## Relative
, 3|
Which type of market gives job seekers more power in negotiating terms of employment?
o :## Labor-driven
A manager is confronted by an employee who says she is thinking about a job offer from
another company. Subsequently, the manager wants to collect verifiable data on what
competing organizations are paying so the organization can match up with the market.
From where can the manager collect this data?
o :## Bureau of Labor Statistics
Which challenge to market analysis is present if a company expands into an international
market that has marginally trained workers?
o :## Inaccurate data
How can central tendency in compensation be used to improve a market analysis?
o :## By finding the single number that represents how many people are paid
What is the foundation of external reward positioning in an organization's overall
compensation program?
o :## Reward surveys
What is the definition of a leading market rate strategy?
o :## The organization provides more of a reward than its competitors.
The chart shows that the company sets its salary bands so a highly skilled employee in a
lower pay grade may earn more than a less skilled employee in a higher pay grade. Which
principle of setting competitive pay policies is the company following?
o :## The principle of overlap
Which pay system is often used in sales jobs to motivate employees to increase both the
number and size of sales that are made?
o :## Commission
What is a key concern when designing a variable pay system?
o :## The behaviors that are rewarded need to match the behaviors that are most
valued to the organization.
A professor who has been at a public university for eight years became aware of a website
that lists the salaries of all public sector employees in the professor's state. On the
website, the starting salaries of two new professors hired in the department were listed as
