Topic 1, Volume A
John earns $45,200 per year as a mechanic in your organization. The $42,500 per year does not
include earnings John may have through shift differentials, benefits, overtime, incentives, and
bonuses. Which one of the following terms best describes the $45,200 per year that John earns?
A.
Variable pay
B.
Hygiene factor pay
C.
Base pay
D.
Market-demand pay
Base pay
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.
Reference: PHR Exam Prep, Pearson Education, ISBN: 978-0-7897-3677-2. Chapter Six: Total
Rewards. Official PHR and SPHR Certification Guide, HR Certification Institute, ISBN: 978-1-586-
44149-4, Section III, The US HR Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Compensation
What is the compa-ratio for an employee that earns $75,000 per year, but the midpoint for the role
is $85,000 per year?
A.
88 percent
B.
113 percent
C.
$10,000 difference
D.
1:88
88 percent
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 comparatio.
Answer option D is incorrect. This isn't a valid figure for the question.
Reference: PHR Exam Prep, Pearson Education, ISBN: 978-0-7897-3677-2. Chapter Six: Total
Rewards. Official PHR and SPHR Certification Guide, HR Certification Institute, ISBN: 978-1-586-
44149-4, Section III, The US HR Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Compensation
Which of the following is an example of a nonqualified deferred-compensation plan?
A.
An excess-deferral plan
B.
A target-benefit plan
C.
A money-purchase plan
D.
A cash-balance plan
An excess-deferral plan
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 Benefits
Objective: Benefits
COBRA, the Consolidated Omnibus Budget Reconciliation Act, requires some organizations to
offer continuation of group health care coverage to employees and family members based on
certain qualifying events. How many employees must exist within an organization for COBRA
requirements to be enforced?
A.
10
B.
20
C.
50
D.
100
20
Answer option B is correct.
Consolidated Omnibus Budget Reconciliation Act (COBRA) requires all organizations with 20 or
more employees to participate.
Answer options A, C, and D are incorrect. Organizations with less than 20 employees are not
required to participate in COBRA. The value for participation is 20 employees or more.
Reference: PHR Exam Prep, Pearson Education, ISBN: 978-0-7897-3677-2. Chapter Six: Total
Rewards. Official PHR and SPHR Certification Guide, HR Certification Institute, ISBN: 978-1-586-
44149-4, Section III, The US HR Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Benefits
Robert is the HR Professional for his organization and he's speaking with the federation chairman
about the labor and the direction of unions. What is a federation?
A.
A federation is the same as a union.
B.
A federation is a group of national unions.
C.
A federation is a union that has international members.
D.
A federation is the governing body of a union.
A federation is a group of national unions.
Answer option B is correct.
A federation is a collection of national unions. Federations usually lobby on behalf of its union
members to speak collectively for the labor which the federation represents. The AFL-CIO is one
of the largest federations.
Answer option A is incorrect. A federation is not the same as a union. Federations are made up of
unions.
Answer option is incorrect. A federation represents national unions, not international unions.
Answer option D is incorrect. A federation is not the governing body of unions. Federations do not
get involved with bargaining or contract administration.
Reference: PHR Exam Prep, Pearson Education, ISBN: 978-0-7897-3677-2. Chapter Seven:
Employee and Labor Relations. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US HR Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Executive Compensation
An employee has come forward with an allegation of quid pro quo harassment by her supervisor.
As the HR manager, you are responsible for investigating the complaint. The supervisor in
question is someone with whom you have become quite friendly. In this case, who is the best
person to conduct the investigation?
A.
You
B.
The corporate attorney
C.
The direct manager of the accused supervisor
D.
A third-party investigator
A third-party investigator
Answer option D is correct.
In this case, the organization will be best served by a third-party investigator. The most important
consideration in an investigation of sexual harassment is that the investigator is seen as credible
and impartial. Because you have become friendly with the accused, it will be difficult to maintain
impartiality during an investigation. While the corporate attorney (B) may be selected to conduct
investigations, this solution can lead to conflict-of-interest issues. The direct manager of the
accused supervisor (C) may not be viewed as impartial by the accuser or by regulatory agencies.
See Chapters 2 and 8 for more information.
Chapter: Employee and Labor Relations
Objective: Federal Employment Legislation
When an individual files a charge of discrimination with the EEOC against an employer, what will
the EEOC do?
A.
The EEOC will investigate the claim by inspecting the employer's place of business.
B.
The EEOC will create a hearing with the complainant and the employer to investigate the charge.
C.
The EEOC will send the employer a letter informing them of the charge.
D.
The EEOC will visit the employer to inform them of the charge.
The EEOC will send the employer a letter informing them of the charge.
Answer option C is correct.
The first thing that the EEOC will do is send the employer a letter informing them of the charge
and allow the employer to respond accordingly.
Answer option A is incorrect. The EEOC won't visit the place of employment, but will first send a
letter informing the employer of the charge.
Answer option B is incorrect. The EEOC doesn't create a hearing. The employer will first receive
the letter allowing them to respond to the charge.
Answer option D is incorrect. The EEOC won't visit the place of employment, but will first send a
letter informing the employer of the charge.
Reference: PHR Exam Prep, Pearson Education, ISBN: 978-0-7897-3677-2. Chapter Seven:
Employee and Labor Relations. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US HR Body of Knowledge.
Chapter: Employee and Labor Relations
Objective: Federal Employment Legislation
As a Senior HR Professional, you must be aware of contracts, laws, and commitments made to
employees. Which of the following statements is an example of an express contract that could
affect a person's employment?
A.
You'll have a job as long as we're in business.
B.
Either party, the employer or employee, can terminate the employment relationship at will.
C.
If you quit that position in our company, we'll give you this position here.
D.
You will do what I say when I say it
You'll have a job as long as we're in business.
Answer option A is correct.
A verbal promise to continue employment under certain conditions is an example of an express
contract. An express contract can negate employment at will.
Answer option C is incorrect. This statement is the definition of the employment at will relationship.
Answer option C is incorrect. This statement is an example of promissory estoppel - if the
company doesn't follow through on the promise.
Answer option D is incorrect. This statement is likely an example of an employee who's going to
experience constructive discharge. This happens when the employer makes the environment so
hostile that the employee resigns.
Reference: Professional in Human Resources Certification Guide, Sybex, ISBN: 978-0-470-43096-
5. Chapter 7: Employee and Labor Relations. Official PHR and SPHR Certification Guide, HR
Certification Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Employee and Labor Relations
Objective: Federal Employment Legislation
As a Senior HR Professional you should be familiar with employment laws and their effect on your
company. What did the lawsuit Payne v. The Western & Atlantic Railroad Company establish?
A.
Employment at will
B.
Employers could be liable for sexual harassment of its employees
C.
Employers could be liable for the actions of its employees
D.
A company couldn't coerce an employee to commit a crime to retain employment
Employment at will
Answer option A is correct.
The lawsuit Payne v. The Western & Atlantic Railroad Company in 1884 established the principle
of employment at will.
Answer option B is incorrect. Employers can be found liable for sexual harassment of its
employees. This is an example of respondeat superior.
Answer option C is incorrect. Employers can be found liable for the actions of its employees. This
is an example of respondeat superior.
Answer option D is incorrect. Companies cannot coerce employees to commit a crime. This is the
outcome of the Petermann v. International Brotherhood of Teamsters.
Reference: Professional in Human Resources Certification Guide, Sybex, ISBN: 978-0-470-43096-
5. Chapter 7: Employee and Labor Relations. Official PHR and SPHR Certification Guide, HR
Certification Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Employee and Labor Relations
Objective: Federal Employment Legislation
What term is assigned to the barriers that women and minorities may face when trying to advance
to senior levels of an organization?
A.
Societal barrier
B.
Internal structure barrier
C.
Governmental barrier
D.
Glass ceiling
Glass ceiling
Answer option D is correct.
The term "glass ceiling" describes the invisible, but evident barriers that can prevent women and
minorities from achieving the senior levels of an organization. Robert Dole introduced the
legislation that was amended into Title II of the Civil Rights Act of 1991.
Answer option A is incorrect. The societal barrier is one of the three barriers of the glass ceiling
concept. It addresses limited educational opportunities and biases related to gender, race, and
ethnicity.
Answer option B is incorrect. Internal structure barrier is one of the three barriers of the glass
ceiling concept. It addresses corporate practices, management control, and recruiting programs.
Answer option C is incorrect. Governmental barrier is one of the three barriers of the glass ceiling
concept. It addresses the inconsistent enforcement of equal opportunity.
Reference: Professional in Human Resources Certification Guide, Sybex, ISBN: 978-0-470-43096-
5. Chapter 7: Employee and Labor Relations. Official PHR and SPHR Certification Guide, HR
Certification Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Employee and Labor Relations
Objective: Federal Employment Legislation
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