PHR Certification EXAM QUESTIONS &
ANSWERS SOLUTION 2026 COMPLETE
EXAM | 100% CORRECT
What are the two main types of compensation? - CORRECT ANSWERS Monetary and
nonmonetary
Monetary Compensation - CORRECT ANSWERS includes direct payments, such as salary,
wages, and bonuses, and indirect payments, such as payments to cover benefits and services (tangible
rewards. Ex: 401(k) contributions).
Nonmonetary Compensation - CORRECT ANSWERS includes many forms of social and
psychological rewards, such as recognition and respect from others, enjoyment from doing the job itself,
opportunities for self development, and so on.
Direct Compensation - CORRECT ANSWERS Includes payments made to the employee
through salary and wages, including variable pay and pay for performance.
Indirect Compensation - CORRECT ANSWERS Form of compensation commonly referred to as
benefits (i.e. Fringe benefits)
Variable Pay - CORRECT ANSWERS a pay system in which an individual's compensation is
contingent on performance
Fringe Benefits - CORRECT ANSWERS Any financial extras beyond the regular pay check, such
as health insurance, life insurance, paid vacation and/or retirement
procedural justice - CORRECT ANSWERS pay concept in which employees perceive the
PROCEDURES used to determine pay rates as either fair or unfair.
, Distributive Justice - CORRECT ANSWERS the perceived degree to which outcomes and
rewards are fairly distributed or allocated
Pay Openness - CORRECT ANSWERS disclosure of pay-related information on a scale from
very little to very much
Performance-based and Entitlement - CORRECT ANSWERS What are the two basic
orientations of compensation philosophies?
Performance-Based Compensation - CORRECT ANSWERS Compensation is tied to effort,
inputs, and results.
Entitlement Compensation - CORRECT ANSWERS More likely to provide cost-of-living or
seniority increases (or other non-performance related factors)
Compensation Strategy - CORRECT ANSWERS Involves the organizational choices that must
be made in the application of resources to attract, retain, and motivate employees.
Compensation Philosophy - CORRECT ANSWERS Short but broad statement documenting an
organization's guiding principles and core values about employee compensation.
5 - CORRECT ANSWERS The Securities and Exchange Commission (SEC) requires public
companies to disclose compensation fully for the top _____ executives.
Fiduciary Responsibility - CORRECT ANSWERS An ethical and legal obligation to perform a
person's duties in a trustworthy manner (i.e. confidence/trust and the highest standard of care).
ANSWERS SOLUTION 2026 COMPLETE
EXAM | 100% CORRECT
What are the two main types of compensation? - CORRECT ANSWERS Monetary and
nonmonetary
Monetary Compensation - CORRECT ANSWERS includes direct payments, such as salary,
wages, and bonuses, and indirect payments, such as payments to cover benefits and services (tangible
rewards. Ex: 401(k) contributions).
Nonmonetary Compensation - CORRECT ANSWERS includes many forms of social and
psychological rewards, such as recognition and respect from others, enjoyment from doing the job itself,
opportunities for self development, and so on.
Direct Compensation - CORRECT ANSWERS Includes payments made to the employee
through salary and wages, including variable pay and pay for performance.
Indirect Compensation - CORRECT ANSWERS Form of compensation commonly referred to as
benefits (i.e. Fringe benefits)
Variable Pay - CORRECT ANSWERS a pay system in which an individual's compensation is
contingent on performance
Fringe Benefits - CORRECT ANSWERS Any financial extras beyond the regular pay check, such
as health insurance, life insurance, paid vacation and/or retirement
procedural justice - CORRECT ANSWERS pay concept in which employees perceive the
PROCEDURES used to determine pay rates as either fair or unfair.
, Distributive Justice - CORRECT ANSWERS the perceived degree to which outcomes and
rewards are fairly distributed or allocated
Pay Openness - CORRECT ANSWERS disclosure of pay-related information on a scale from
very little to very much
Performance-based and Entitlement - CORRECT ANSWERS What are the two basic
orientations of compensation philosophies?
Performance-Based Compensation - CORRECT ANSWERS Compensation is tied to effort,
inputs, and results.
Entitlement Compensation - CORRECT ANSWERS More likely to provide cost-of-living or
seniority increases (or other non-performance related factors)
Compensation Strategy - CORRECT ANSWERS Involves the organizational choices that must
be made in the application of resources to attract, retain, and motivate employees.
Compensation Philosophy - CORRECT ANSWERS Short but broad statement documenting an
organization's guiding principles and core values about employee compensation.
5 - CORRECT ANSWERS The Securities and Exchange Commission (SEC) requires public
companies to disclose compensation fully for the top _____ executives.
Fiduciary Responsibility - CORRECT ANSWERS An ethical and legal obligation to perform a
person's duties in a trustworthy manner (i.e. confidence/trust and the highest standard of care).
