HRCI
PHR · Question #51
PHR Question #51: Real Exam Question with Answer & Explanation
The correct answer is D. At risk pay. This question tests knowledge of compensation terminology, specifically the formal HR term for pay that varies based on performance outcomes such as sales commissions.
Question
Amy is a sales person for your company and she earns her pay based on commission. Amy's pay is known as variable pay or what other term?
Options
- AFixed pay
- BCommission only
- CBase pay
- DAt risk pay
Explanation
This question tests knowledge of compensation terminology, specifically the formal HR term for pay that varies based on performance outcomes such as sales commissions.
Common mistakes.
- A. Fixed pay is the opposite of commission pay - it refers to guaranteed compensation that does not change based on individual performance.
- B. 'Commission only' describes the payment mechanism but is not the formal HR classification term used to categorize this type of variable compensation structure.
- C. Base pay refers to the guaranteed, fixed salary component of compensation - the direct opposite of variable or at-risk pay.
Concept tested. Variable pay and at-risk compensation terminology
Reference. https://www.shrm.org/topics-tools/topics/compensation-and-benefits
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