Society For Human Resource Management (SHRM) Certified Professional Practice Exam

A company car is an example of a:

1. Perk

2. Benefit

3. Compensation

4. Performance reward

The correct answer is: Perk

A company car is classified as a perk. Perks are additional benefits offered by employers that go beyond standard compensation and benefits packages. They are designed to enhance the overall job satisfaction for employees and can include items like company vehicles, gym memberships, or flexible working hours. A company car serves as an incentive for employees, contributing to their work-life convenience, and is often seen as a status symbol within the workplace. In contrast, benefits generally refer to more formalized offerings such as health insurance, retirement plans, or paid time off, which are crucial parts of a compensation package but not necessarily considered perks. Compensation pertains to the salary or wages paid to employees for their work, while performance rewards specifically relate to incentives given to employees based on their individual performance, such as bonuses or commissions. A company car does not fit neatly into these categories, making it distinct as a perk meant to improve the overall employment experience.