aPHR compensation and benefits, structures to stubs

Crestline Software sets the midpoint of each pay range equal to the market median for that job in its salary survey data. Which pay strategy is this?

1. Lag the market
   A lag strategy pays below the market, often to control costs.
2. Match the market
   A match strategy pays at about the market rate, here by aligning midpoints with the market median.
3. Broadbanding
   Broadbanding is a pay structure with a few wide bands, not a market position.
4. Lead the market
   A lead strategy pays above the market to attract scarce talent.

Luis earns $63,000. His pay range runs from $48,000 to $72,000, with a midpoint of $60,000. What is his compa-ratio?

1. 1.05
   Compa-ratio = salary ÷ range midpoint = $63,000 ÷ $60,000 = 1.05.
2. 1.31
   1.31 divides the salary by the range minimum ($63,000 ÷ $48,000) instead of the midpoint.
3. 0.88
   0.88 divides the salary by the range maximum ($63,000 ÷ $72,000) instead of the midpoint.
4. 0.95
   0.95 divides the midpoint by the salary ($60,000 ÷ $63,000), which reverses the formula.

After a job is regraded downward, Marta's salary is now above the maximum of her new pay range. What is her pay rate called?

1. Green-circle rate
   A green-circle rate is pay below the range minimum, the opposite situation.
2. Broadband rate
   Broadbanding is a structure with a few wide bands; it does not name pay above a maximum.
3. Red-circle rate
   A red-circle rate is pay above the range maximum; it is often frozen until the range catches up.
4. Pay compression
   Pay compression is a narrow pay gap between employees with different experience or levels, not pay above a range.

A 25-person design firm lists all its jobs and orders them from most to least valuable to the business, judging each job as a whole. Which job evaluation method is this?

1. Factor comparison method
   Factor comparison values jobs factor by factor against benchmark jobs in money terms.
2. Point-factor method
   The point-factor method scores each job on compensable factors and totals the points.
3. Job classification method
   Job classification slots jobs into predefined grade descriptions.
4. Ranking method
   The ranking method orders whole jobs by overall value, with no factor scoring; it suits small organizations.

Larchmere Hotels gives employees an engraved watch and a gift card when they reach 10 years with the company. What type of reward is this?

1. Retention bonus
   A retention bonus is paid to keep an employee through a set future period.
2. Service award
   A service award recognizes length of service, such as a 10-year milestone.
3. Merit increase
   A merit increase is a raise to base pay tied to performance.
4. Spot award
   A spot award recognizes a specific act of good work on the spot, not years of service.

Each year Ridgeline Packaging puts 5% of its pre-tax profits into a pool that is divided among all employees. What type of incentive is this?

1. Gainsharing
   Gainsharing shares savings from a group's productivity or cost improvements, not company profits.
2. Piece-rate pay
   Piece-rate pay ties an individual's pay to units produced.
3. Profit sharing
   Profit sharing distributes part of company-wide profits to employees.
4. Spot award
   A spot award is on-the-spot recognition for one person's effort.

Which type of health plan covers care only from in-network providers, except for emergencies, but lets members see specialists without a referral?

1. Point-of-service plan (POS)
   A POS plan usually requires referrals and offers some out-of-network coverage.
2. Preferred provider organization (PPO)
   A PPO also pays for out-of-network care, at a higher cost share.
3. Health maintenance organization (HMO)
   An HMO typically requires a primary care referral to see a specialist.
4. Exclusive provider organization (EPO)
   An EPO limits coverage to its network, except for emergencies, but generally needs no referrals.

An employee wants to pay for her 4-year-old's daycare with pre-tax dollars through her employer's benefits plan. Which account is designed for this?

1. Dependent care FSA
   A dependent care FSA reimburses eligible child or elder care costs with pre-tax money.
2. Health reimbursement arrangement
   An HRA is employer-funded and reimburses medical expenses, not daycare.
3. Health savings account
   An HSA pays medical expenses for someone covered by a high-deductible health plan.
4. Health care FSA
   A health care FSA reimburses medical, dental, and vision costs, not daycare.

An employee will miss eight weeks of work to recover from surgery unrelated to her job. Which benefit is designed to replace part of her income during this time?

1. Short-term disability insurance
   STD replaces part of pay for a temporary non-work-related illness or injury, typically for weeks or a few months.
2. Employee assistance program
   An EAP offers confidential counseling and referrals; it does not replace income.
3. Long-term disability insurance
   LTD starts after a long elimination period, often 90 to 180 days, so it does not cover an eight-week absence.
4. Workers' compensation
   Workers' compensation covers work-related injuries and illnesses; this surgery is unrelated to her job.

Kessler Manufacturing offers a free, confidential phone line where employees can get short-term counseling and referrals for stress, family, financial, or substance use problems. What is this benefit?

1. Health reimbursement arrangement
   An HRA reimburses medical expenses; it is not a counseling service.
2. Short-term disability plan
   Short-term disability replaces income during a temporary disability; it does not provide counseling.
3. Wellness program
   A wellness program promotes healthy habits, such as screenings and fitness challenges, rather than confidential counseling.
4. Employee assistance program
   An EAP provides confidential short-term counseling and referrals for personal and work problems.

Rhonda, age 52, contributes to her employer's 401(k) plan. In 2026, how much may she contribute as a catch-up contribution above the regular elective deferral limit?

1. $7,500
   $7,500 was the age-50 catch-up limit for 2025; it rose to $8,000 for 2026.
2. $8,000
   The IRS set the 2026 catch-up limit for participants aged 50 and over in 401(k) plans at $8,000.
3. $11,250
   $11,250 is the higher catch-up limit for participants aged 60 to 63 only; Rhonda is 52.
4. $4,000
   $4,000 is the 2026 age-50 catch-up limit for SIMPLE plans, not 401(k) plans.

Employees of the City of Westfield defer part of their pay into the city's deferred compensation plan. Which type of plan is most typical for state and local government employers?

1. SEP IRA
   A SEP IRA is an employer-funded plan used mostly by small businesses and the self-employed.
2. 403(b) plan
   403(b) plans serve public schools and 501(c)(3) organizations, not city governments in general.
3. 457(b) plan
   Section 457(b) plans are deferred compensation plans offered by state and local governments and some tax-exempt organizations.
4. SIMPLE IRA
   A SIMPLE IRA is a plan for small businesses with 100 or fewer employees.

Which statement about a 401(k) hardship distribution is accurate?

1. It requires no proof of financial need
   It must be due to an immediate and heavy financial need.
2. It is free of federal income tax
   Hardship distributions are taxable income and may also carry a 10% additional tax.
3. It must be repaid within five years
   Repayment within five years describes a 401(k) loan, not a hardship distribution.
4. It cannot be repaid to the plan
   IRS rules say a hardship distribution cannot be repaid to the plan or rolled over to another plan or IRA.

Which payroll tax applies to all of an employee's wages, with no annual wage base limit?

1. Federal unemployment tax
   FUTA applies only to the first $7,000 of each employee's annual wages.
2. State unemployment tax
   State unemployment taxes apply up to a state-set taxable wage base.
3. Medicare tax
   The IRS states there is no wage base limit for Medicare tax.
4. Social Security tax
   Social Security tax stops once wages reach the annual wage base.

On an employee's pay stub, what does the 'YTD' column show?

1. Projected totals for the full year
   YTD shows actual amounts to date, not projections.
2. Totals since January 1 of the current year
   Year-to-date figures add up earnings, taxes, and deductions from the start of the calendar year.
3. Totals for the last 12 pay periods
   YTD runs from January 1, not over a rolling set of pay periods.
4. Amounts for this pay period only
   The current-period column shows this pay period; YTD covers the year so far.