Compensation and benefits are primarily designed to attract and retain employees by offering them competitive pay, benefits, and other rewards in exchange for their work.

Vacation time is a type of benefit, not compensation. Compensation typically refers to monetary rewards for work performed.

Benefits packages are designed to provide financial security to employees by offering coverage for various risks, such as illness, disability, and retirement.

Paid time off is a type of compensation, not a benefit. Benefits typically refer to non-monetary rewards provided by an employer.

Job evaluation is the process of determining the value of a job and setting appropriate compensation by comparing it to other jobs within the organization or industry.

Classification method is not a common method of job evaluation. The other three options are widely used methods for determining the value of a job.

Compensation discrepancy refers to the difference between an employee's actual salary and the market value of their job.

Stock options are a type of equity compensation, not incentive pay. Incentive pay is typically based on individual or group performance.

Total rewards planning is the process of designing and implementing a compensation and benefits system that aligns with an organization's strategic goals and takes into account all forms of rewards, including compensation, benefits, and non-monetary rewards.

Stock options are a type of equity compensation, not a non-monetary reward. Non-monetary rewards are typically intangible rewards that recognize and motivate employees.

Total rewards communication is the process of communicating the value of compensation and benefits to employees, including both monetary and non-monetary rewards.

Complying with government regulations is not a common challenge in compensation and benefits management. The other three options are common challenges that organizations face.

Total rewards review is the process of reviewing and updating compensation and benefits programs to ensure they are competitive and aligned with the organization's goals.

Declining use of stock options is not a common trend in compensation and benefits. The other three options are common trends that organizations are adopting.

Total rewards for diversity is the process of designing and implementing compensation and benefits systems that promote diversity, equity, and inclusion in the workplace.