SPHR VCE Exam Download

Answer option A is correct.If an employee is called by the employer for work and there is no work available, the employer may be required by state law or employment agreements to pay for a minimum number of hours of work. This is known as reporting pay.Answer option B is incorrect. Hazard pay is additional pay for working in dangerous conditions.Answer option C is incorrect. Gross pay is the amount earned by an employee before taxes are not paid.Answer option D is incorrect. Base pay is the foundation of an employer's compensation program because it reflects the value placed on individual jobs by the organization.

Chapter: Compensation and Benefits

Objective: Total Rewards Defined

At the broadest level, compensation and benefits, also referred to as total rewards, can be described as an exchange of payment from an employer for the services provided by its employees. The components of total rewards package are as follows:

• Monetary compensation: Monetary compensation includes any costs the organization incurs for the benefit of employees, such as all forms of cash compensation, 401(k) matching, medical care premiums, pension plans, and paid time off. Other kinds of rewards include benefits that support the organization's culture such as stock options, Employee Stock Ownership Programs (ESOPs), and incentive plans.
• Nonmonetary compensation: Nonmonetary compensation includes nontraditional work life balance benefits such as telecommuting, on site childcare, and flex time.
• Direct compensation: Direct compensation includes payments made to employees that are associated with wages and salaries. This includes base pay, variable compensation, and pay for performance.
• Indirect compensation: Indirect compensation consists of any employee payments not associated with wages and salaries. This includes fringe benefits such as vacation, sick, and holiday pay; insurance premiums paid on behalf of employees; leaves of absence; 401(k) or other pension plans; and government mandated benefits such as Social Security or Family and Medical Leave Act (FMLA) and other benefits.

Chapter: Compensation and Benefits

Objective: Total Rewards Defined

Answer option B is correct.Transference doesn't make the risk go away, but it transfers the risk to a third party, usually for a fee. Purchasing insurance is an example of transference.

Transference

Transference is a strategy to mitigate negative risks or threats. In this strategy, consequences and the ownership of a risk is transferred to a third party. This strategy does not eliminate the risk but transfers responsibility of managing the risk to another party. Insurance is an example of transference.