Certified Human Resource Professional (CHRP) Practice Exam

Which of the following describes employees who are red-circled?

1. Newly hired employees on probation

2. Employees who are paid above the maximum of their pay range

3. Employees at risk of leaving the organization

4. Employees on the layoff priority list owing to low seniority

The correct answer is: Employees who are paid above the maximum of their pay range

Red-circled employees are those whose pay exceeds the maximum limit established for their specific pay grade or salary range. This situation often occurs when employees receive salary increases or have been with the company for a considerable time, resulting in a salary that surpasses the maximum compensation set for their role. Organizations may red-circle these employees to prevent their pay from being reduced, while also ensuring that they do not receive further increases until they fall back within the established pay range. The other scenarios mentioned do not accurately capture the essence of red-circled employees. Newly hired employees on probation typically start at the base of their salary range. Employees at risk of leaving the organization refer to retention issues rather than pay classification. Lastly, employees on the layoff priority list due to low seniority are considered based on their employment status rather than their compensation relative to pay structures.