According to the HRPA Human Resources Competency Framework (Functional Domain: Total Rewards) and the CHRP Knowledge Exam Blueprint, certified HR professionals must demonstrate the ability to design, assess, and modify total rewards programs to align with organizational strategy, financial realities, and workforce needs.

When an organization faces financial challenges, HR professionals are expected to implement cost-effective compensation strategies while maintaining internal equity, engagement, and performance alignment. The three modifications listed in option C directly reflect these principles:

Create a Two-Tiered Pay SystemThis approach introduces separate pay or benefit structures for new versus existing employees. It allows the organization to manage long-term costs while maintaining fairness and compliance.Extract from HRPA Competency Framework – Total Rewards:

“HR professionals analyze and adapt compensation systems to ensure sustainability, equity, and responsiveness to business conditions.”

(Key Competency: Design and Adapt Total Rewards Systems – CHRP Level)

Replace Fixed Pay with Variable PayShifting from fixed salary increases to performance-based or results-based pay links employee rewards to measurable performance outcomes and organizational success. This introduces flexibility during budget constraints.Extract from HRPA Competency Framework – Total Rewards:

“Implements performance-linked reward mechanisms that align employee contributions with business outcomes and financial capacity.”

(Behavioural Indicator: Implements Variable Compensation Models Tied to Business Performance – CHRP Level)

Replace Pay Raises with BonusesBonuses are temporary and do not increase base salary, helping the organization manage payroll expenses. This maintains motivation without committing to permanent cost increases.Extract from HRPA Competency Framework – Total Rewards:

“Applies compensation strategies that optimize cost management and engagement through contingent or one-time payments.”

(Knowledge Area: Compensation Strategy and Cost Management – Total Rewards Domain)

Together, these strategies reflect an HR professional’s ability to maintain organizational competitiveness and fiscal responsibility, consistent with the CHRP-level behavioural indicators within HRPA’s Total Rewards domain.

Verified Reference Summary (HRPA Frameworks and Study Materials):

HRPA Human Resources Competency Framework – Functional Domain: Total Rewards

CHRP Knowledge Exam Blueprint (HRPA, Ontario)

HRPA Exam Preparation Guide – Total Rewards Section

HRPA Professional Competency Descriptions – CHRP Level, Total Rewards