Welcome to the HR Certification Podcast: a podcast for HR leaders working towards their human resources certification with HRCI and SHRM. Join host Jessica Miller-Merrell, founder of Workology.com and HR certification prep program, Ace The HR Exam, as she shares study tips, exam insights, and topical review for HR exams, including the aPHR, PHR, SPHR, SHRM-CP, and SHRM-SCP. Now, here’s Jessica with this episode of the HR Certification Podcast.
HR Certification Podcast Episode 10: Total Rewards Review for HRCI & SHRM
Jessica Miller-Merrell: [00:00:38.11] Hi and welcome to the HR Certification Podcast. I’m your host, Jessica Miller-Merrell, and I’m so excited to have you here. My mission, purpose and passion is elevating the HR industry. And in the HR Certification Podcast, I help HR leaders in personal and professional development solely focused on their HR certification prep for SHRM and HRCI. It is season two for us. I’m so excited! This podcast is powered by Workology’s HR certification prep program, our course, and resources. If you’d like to learn more about our offerings, you can head on over to www.HRCertificationPodcast.com. So many good resources served for you right there. Now, before I dive into today’s podcast, I do want to hear from you. Give me a follow over on Instagram or TikTok at @WorkologyBlog. So it’s @WorkologyBlog where I’m happy to answer your questions about HR certification. That’s @WorkologyBlog over on Instagram or TikTok. And maybe I’ll feature your question in a another episode of the HR Certification Podcast. Now, in every single episode, I cover information and resources to help you with your HR certification exams. This podcast is short and to the point. Really, in under 15 minutes, I want you to get your review in and move on. The HR Certification Podcast is divided into different segments. In every single episode, we’re going to address a common question or HR topical area to assist you in your review. We will review an HR glossary term and walk you through an HR certification exam question, all in a single episode.
Jessica Miller-Merrell: [00:02:25.30] It’s going to be great. Again, these are designed for the SHRM and HRCI exams and that includes the following HR certification exams the aPHR, the PHR, the SPHR, the SHRM-CP and the SHRM-SCP. In every single episode, we’ll have transcription notes of the podcast, and I’ll also share some recommended resources and information to assist you in your review, which is available at www.HRCertificationPodcast.com. It’s going to be great, I promise. Total rewards is a key content cornerstone for SHRM exams, but it is even more important for HRCI. If you are like me, I have not been strong in the area of total rewards because I worked at HR at large companies where comp and benefits were done by those specialists within HR. Or I eventually managed those departments, but I was never the subject matter expert, meaning that I didn’t have a strong grasp on total rewards. So this is why we are talking about this in today’s episode, I want you to make your prep a focus on total rewards. When I took the SPHR and also the PHR. This was huge. So much is focused on total rewards. Same with SHRM and their BASK, but there’s a much, much broader meaning to what you have to know and understand for the SHRM exams. If you’re taking the PHR or SPHR, total rewards continues even this year with all their changes happening, it is a large part of your exam, so you have to be solid in these areas. We have extensive review of total rewards in both our Ace The HR Exam courses for SHRM and HRCI. I covered total rewards in our HRCI course in more detail because it’s more meaty over there. You’re going to have more test questions for total rewards and comp than in SHRM. So we have more information for you, including more test questions for total rewards. You can learn more about what’s inside our course at wwww.AcetheHRExam.com. We offer a monthly or annual learning subscription.
Jessica Miller-Merrell: [00:04:33.61] Because total rewards can be a challenge, I really want to dive into our HR glossary term, so be prepared for a lengthy overview here. I’m going to talk about at length factor comparison method. And I want to even break down five steps in detail. Are you ready? Let’s go. The factor comparison method is a systematic approach used for job evaluation. This involves comparing jobs based on various compensable factors to determine their relative worth within an organization. So here are the five steps typically involved in the factor comparison method. Let’s go. The first step in our factor comparison method is to identify key compensable factors. This first step involves identifying those key factors that contribute to the value of jobs within your organization. These factors may include skills, responsibilities, working conditions, complexity, and the qualifications required for every single job. Second area is rank factors. Once key compensable factors are identified, they are ranked based on their importance or relevance to your organization’s objectives and overall compensation strategy. These factors are typically ranked from most to least important, reflecting their impact on overall job worth. The third area is developing factor scales. For each compensable factor, a scale or scoring system is developed which measures the degree to which each job possesses that factor, so these scales may range from low to high, or use numerical values to quantify the level of each factor present in the job. The fourth is comparing jobs using the established factor scales, jobs are then compared against each other to assess the extent to which they possess each compensable factor. This comparison involves evaluating the level or degree of each factor present in each job, and assigning scoring factors accordingly. Okay, the fifth step here is determining the job’s relative worth. After comparing jobs on each compensable factor, the scores are totaled to determine the overall relative worth of each job. Jobs within higher total score are considered to be of greater value or worth within the organization’s pay structure, while jobs with lower scores are deemed to be of a lesser value. So by following these steps, organizations can systemically evaluate and establish equitable pay structures based on the relative worth of these different jobs within your or the organization. Sounds simple right? So that is a brief overview of what is called the factor comparison method. Let’s move on to our next segment.
Break: [00:07:39.71] I know that was a lot of information. Maybe you aren’t familiar with total rewards. It was a fast review. But let’s go ahead and take a reset before we move into our next segment here on the HR Certification Podcast, which is powered by Workology. Again, I’m your host, Jessica Miller-Merrell. It’s season two of our HR Certification Podcast. We’re talking about total rewards. Now Workology offers HR certification prep courses and resources. You can learn more about those courses and the prep resources we offer by visiting our podcast link at HRCertificationPodcast.com . Or you can head on over to Workology.com where we offer a variety of prep resources, including physical products like flashcards, study guides, along with courses for different types of learners. Most importantly, our prep courses and resources are accessible whenever and wherever you are. Our digital courses are on demand, and they’re also accessible in our very own Workology app, which is available for Android and iOS, Google and Apple. I do want to hear from you. Send me your HR certification questions. Hit me up on TikTok or Instagram, @WorkologyBlog. I’m happy to answer questions there, connect to talk more and you’ll get a lot more resources about HR certification prep.
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HR Glossary Term(s) – Total Compensation Ratio
Jessica Miller-Merrell: [00:08:56.00] I’m excited that we’re now moving into a special segment on the HR Certification Podcast. We’re going to review that glossary term, and we do this for every single episode. Again, this is the total rewards podcast episode. So know that these terms are going to be about total rewards. And all our terms covered are focused on SHRM and HRCI knowledge bases.
Jessica Miller-Merrell: [00:09:17.51] So we are going to talk again about the total compensation ratio. Maybe you haven’t heard about this one. So the total compensation ratio or TCR is a metric used to compare an employee’s total compensation. This includes both fixed and variable components. We’re going to look at the median or average compensation of all employees in your or the organization. So to calculate TCR accurately this requires a comprehensive data on employee compensation and can be challenging, right? Due to things like variations in pay structure or those job roles. The total compensation ratio, or TCR, is typically calculated using the following formula. Are you ready? So it is TCR equals total compensation divided by the median or average compensation multiplied by 100. So let’s talk about each of these. Break it down in the formula. Total compensation represents the total compensation package received by an individual. This includes both fixed like base salary and variable compensation including bonuses, incentives, and other components. Now moving on the median or average compensation. This refers to the median or average compensation of all employees in your organization. This median, average, or median, or average compensation serves as the benchmark against which individual employee compensation is compared. It’s important so the TCR is expressed as a percentage, and the TCR is going to provide you insights into how an employee’s total compensation compares to that of their peers within a specific organization. A TCR of above 100% indicates that an employee’s total comp is higher than the median average, while a total compensation ratio of below 100 indicates the opposite. Clear as mud, right? All right.
HR Test Question Review for SHRM and HRCI Certification Exams
Jessica Miller-Merrell: [00:11:27.78] We are moving into a special segment of the HR Certification podcast where we review an HR test question. We do this for every single episode. So we have been talking about total rewards and compensation. So the, the question we’re going to be talking about today is going to be covered for SHRM and HRCI exams. So know that this material is for each or both or all. But before I share the question with you today, I want to give you a quick overview of my HR test question framework. More information is available about, about the HR Test Question Framework in more detail on our Workology YouTube channel. I’m going to link here in the transcript of the podcast episode so you can go directly to it. So let me give you an overview here. There are five different steps in the HR test question framework. Step one is reading each question slowly and concisely. Step two is to identify the HR competency this test question is about. Helps you organize your thoughts. Step three is to eliminate wrong answers. Step four is WWSD or WWHD, what would SHRM or HRCI do in this question? Think about the test question from the point of view of HRCI or SHRM writing that question, what do they want from you and which is the best answer? And step five is to go with your gut. So let’s go ahead and walk through this episode’s featured HR certification exam practice test question are you ready? Let’s go.
Jessica Miller-Merrell: [00:12:59.37] Total rewards philosophy can help an organization achieve its strategic goals by: A) Attracting and retaining employees with the necessary kSAs. Is it B) Maintaining an entitlement culture? C) Positioning a company to leave the competition for employees, or D) Establishing a pecking order for jobs in the organization? I’m going to go ahead and read the test question a second time for you, because it’s a lot:
Total rewards philosophy can help an organization achieve its strategic goals by doing what? Is it…
A) Attracting and retaining employees with the necessary KSAs? Or is it…
B) Maintaining an entitlement culture? Is it…
C) Positioning a company to leave the competition for employees, or…
D) Establishing a pecking order for jobs in the organization?
Jessica Miller-Merrell: [00:13:57.63] What do you think the correct answer is? A drum roll, please. The correct answer is A) Retaining and attracting employees with the necessary KSAs. Skills, knowledge and abilities. Knowledge, skills and abilities. Total rewards is a concept that describes all the tools available to an employer that may be used to attract, motivate, and retain employees in an organization. Now, if you didn’t get this one, don’t worry, just make a note for yourself. I like to use a little notebook and make a note to review it later. I add this topic to my notebook and then go through my daily review and review terms, important items that I want to make sure I really grasp and understand better. I do have more test questions. You can access them in our test question bank. We have 25 free test questions at www.HRTestQuestions.com. I also have over 1500 test questions inside of our Ace The HR Exam course organized by competency and area. Check it out.
Closing: [00:15:04.65] HR certification is such an important step in your career. Whether you’re looking to increase your knowledge in HR, gain credibility in your office, increase your income potential. This wasn’t a big one for me. Or prove to yourself that you deserve to be in this role as an HR leader in professional. And I’m here to tell you, you do deserve to be here. Together, let’s elevate the HR profession. Thank you for joining me on this episode of the HR Certification Podcast. My name is Jessica Miller-Merrell. I help HR leaders ace their HR certification exams. Let me do the same for you. Workology offers a host of courses and resources to help you ace your HR certification exam. Visit HRCertificationPodcast.com to learn more about how we help with HR certification prep for the aPHR, the PHR, the SPHR, the SHRM-CP, and the SHRM-SCP exams. If you have a question or suggestion or a podcast topic area for review, and you want to make a suggestion for an upcoming episode of the HR Certification Podcast now in season two, give me a follow on @WorkologyBlog on Instagram or TikTok and let me know your suggestion or idea that you have for the next episode. I’ll see you next time on the HR Certification Podcast.
RECOMMENDED RESOURCES FOR YOUR HR CERTIFICATION FOR aPHR, PHR, SPHR, SHRM-CP, AND SHRM-SCP
– HR Certification: SHRM and HRCI
– Workology on Youtube | HR Test Question Framework
– Workology on Youtube | What is a Passing Score on the SHRM and HRCI Exams
– HR Certification Podcast Episode 6: Employment Law Review for SHRM and HRCI
– HR Certification Podcast Episode 7: Union Review for SHRM and HRCI Exams
– HR Certification Podcast Episode 8: Global Review For SHRM And HRCI Exams
– HR Certification Podcast Episode 9: 2024 Changes To HRCI And SHRM Exams
– Workology Podcast | Ep 161 – The Value of HR Certification: #HRCI or #SHRM?
– Workology Podcast | Episode 262: Test-Taking Strategies for HRCI and SHRM Certification
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