Base Pay Administration and Pay for Performance - GR4/C4-
(Actual 2025/2026) Questions and verified Answers
What are the approaches for geographic differential? - ---
Answers----Individual pay adjustment and differentials,
Salary structured differences
If the cost of living is very high, should high wages be paid? - -
--Answers----No
What are the reason for geographic differential? - ---
Answers----Better fit of pay to local markets, Most commonly
used for hourly positions
What are the basis for Hazard Pay? - ---Answers----
Company compensation philosophy, Market data surveys,
union specific contracts
What are the approaches for hazard pay? - ---Answers----
Permanent base pay adjustments, temporary base pay
adjustments
What are the reason for Expatriate Pay? - ---Answers----
Hardship for working outside of their home country.
What is pay action? - ---Answers----The movement of any
employee's base pay due to either external or internal
,pressures can be both company and employee generated. And
can result in either an increase or a decrease in base pay.
What are the examples of Pay Action? - ---Answers----
Promotion, merit, general, market adjustment, demotion,
reclassification
What are the type of Pay Increases? - ---Answers----Lump-
sum increase, Periodic Increase and other
What are the two type of Job Change Promotions? - ---
Answers----Organizational and growth
What are the causes of demotions? - ---Answers----Poor
employee performance, Recoganization or reengineering,
employee request
What is the general increase? - ---Answers----An identical
pay raise either in a flat rate or as a percentage of salary given
to all eligible employees
What is cost of living adjustment? - ---Answers----An
across-the-board wage and salary increase or supplemental
payment designed to bring pay in line with cost of living to
maintain real purchasing power
,What are the basis for General or COLA increase? - ---
Answers----Consumer Price Index, Wage movement in
market, Bargaining, part of collective bargaining agreement
What is reclassification? - ---Answers----The reassignment
of job to a higher or lower grade in the organization's job
worth hierarchy due to a job content reevaluation and /or
significant change in the going rate for comparable jobs in the
external labor market
What is market adjustment? - ---Answers----the percentage
increase to organization, group or individual pay that is
necessary to adjust to the estimated market level
When would Market adjustments be appropriate? - ---
Answers----Incumbent base pay below market, company
philosophy is to pay at/above market, Reclassification, addition
of responsibilities to job
Why the communication is important in communicating pay
actions? - ---Answers----Provide information, improves
emotional environment, clarifies expectations, Increase
awareness, Reinforce decision to join and remain with the
company, Employee expect honest, thorough, understandable
and relevant communication, management understanding
How to handle negative communications? - ---Answers----
Business rationale, Earlier the better, make a comparison,
, explain process, performance related, merger/acquisition
related, company wide
Which of the following describes a characteristic of singe-rate
pay? - ---Answers----Each job has a fixed pay rate (one rate
for all employees)
Awarding an employee a 10% increase in base pay for all hours
worked after 7:00 p.m. is an example of what type of pay
differential? - ---Answers----Shift
What is one advantage of delivering a pay action as a periodic
increase? - ---Answers----Allows organization to establish a
probationary period
Why is communicating pay actions critical to the success or
failure of a base pay program? - ---Answers----It reinforce
the decision to join and remain with an employer.
What is the first step in setting new hire rates? - ---Answers-
---Review market pay studies
In order for a merit pay plan to be effective, what is one of the
conditions? - ---Answers----Individual performance must be
important and measurable.
(Actual 2025/2026) Questions and verified Answers
What are the approaches for geographic differential? - ---
Answers----Individual pay adjustment and differentials,
Salary structured differences
If the cost of living is very high, should high wages be paid? - -
--Answers----No
What are the reason for geographic differential? - ---
Answers----Better fit of pay to local markets, Most commonly
used for hourly positions
What are the basis for Hazard Pay? - ---Answers----
Company compensation philosophy, Market data surveys,
union specific contracts
What are the approaches for hazard pay? - ---Answers----
Permanent base pay adjustments, temporary base pay
adjustments
What are the reason for Expatriate Pay? - ---Answers----
Hardship for working outside of their home country.
What is pay action? - ---Answers----The movement of any
employee's base pay due to either external or internal
,pressures can be both company and employee generated. And
can result in either an increase or a decrease in base pay.
What are the examples of Pay Action? - ---Answers----
Promotion, merit, general, market adjustment, demotion,
reclassification
What are the type of Pay Increases? - ---Answers----Lump-
sum increase, Periodic Increase and other
What are the two type of Job Change Promotions? - ---
Answers----Organizational and growth
What are the causes of demotions? - ---Answers----Poor
employee performance, Recoganization or reengineering,
employee request
What is the general increase? - ---Answers----An identical
pay raise either in a flat rate or as a percentage of salary given
to all eligible employees
What is cost of living adjustment? - ---Answers----An
across-the-board wage and salary increase or supplemental
payment designed to bring pay in line with cost of living to
maintain real purchasing power
,What are the basis for General or COLA increase? - ---
Answers----Consumer Price Index, Wage movement in
market, Bargaining, part of collective bargaining agreement
What is reclassification? - ---Answers----The reassignment
of job to a higher or lower grade in the organization's job
worth hierarchy due to a job content reevaluation and /or
significant change in the going rate for comparable jobs in the
external labor market
What is market adjustment? - ---Answers----the percentage
increase to organization, group or individual pay that is
necessary to adjust to the estimated market level
When would Market adjustments be appropriate? - ---
Answers----Incumbent base pay below market, company
philosophy is to pay at/above market, Reclassification, addition
of responsibilities to job
Why the communication is important in communicating pay
actions? - ---Answers----Provide information, improves
emotional environment, clarifies expectations, Increase
awareness, Reinforce decision to join and remain with the
company, Employee expect honest, thorough, understandable
and relevant communication, management understanding
How to handle negative communications? - ---Answers----
Business rationale, Earlier the better, make a comparison,
, explain process, performance related, merger/acquisition
related, company wide
Which of the following describes a characteristic of singe-rate
pay? - ---Answers----Each job has a fixed pay rate (one rate
for all employees)
Awarding an employee a 10% increase in base pay for all hours
worked after 7:00 p.m. is an example of what type of pay
differential? - ---Answers----Shift
What is one advantage of delivering a pay action as a periodic
increase? - ---Answers----Allows organization to establish a
probationary period
Why is communicating pay actions critical to the success or
failure of a base pay program? - ---Answers----It reinforce
the decision to join and remain with an employer.
What is the first step in setting new hire rates? - ---Answers-
---Review market pay studies
In order for a merit pay plan to be effective, what is one of the
conditions? - ---Answers----Individual performance must be
important and measurable.
