Chapter 11: Total Rewards and Compensation

What is it important for HR to do when trying to measure the effectiveness of employee compensation? a. HR professionals are the only ones who should compile the necessary data. b. HR needs to use only information in the HRIS, as that is the most reliable set of data. c. HR needs to get information from a wide variety of sources all around the organization. d. Consultants should not be engaged in the data collection process.

HR needs to get information from a wide variety of sources all around the organization.

Pradeep is a call center employee working in a U.S. state with the same minimum wage and overtime standards as stipulated in the federal regulations under the Fair Labor Standards Act (FLSA). Pradeep earns $10 an hour and works a 40-hour week. This week, however, many of his colleagues called in sick, and he had to cover for them. As a result, he ended up working 60 hours this week. How much should Pradeep be paid for this workweek? a. $400 b. $700 c. $900 d. $1200

$700

Which of the following questions need to be asked when evaluating a pay survey? Check all that apply. a. When was the survey conducted? b. Who conducted the survey? c. Does the survey have a realistic sample of participants? d. What are the sizes, industries, and locales of the participants in the pay survey?

ALL

Video case study: Tough Mudder - Compensation How are the employees at Tough Mudder paid? Check all that apply. a. With extrinsic rewards b. With intrinsic rewards

BOTH

Denae works for the Federal Department of Education, and she is conducting a job evaluation for her division. She has written descriptions of different job classes, and now she is putting each job into a grade according to the class it best matches. What kind of job evaluation method is Denae using? a. Point factor method b. Compensable factor method c. Classification method d. Ranking method

Classification method

Key performance indicators are linked to which of the following? a. Critical success factors b. Organizational profitability c. Variable pay plans d. Individual performance reviews

Critical success factors

When developing a pay-for-performance system, organizations must answer which of the following questions? Check all that apply. a. Does the plan have five or more levels of key performance indicators? b. Does the plan fit the organization? c. Does the plan require manager input? d. Does the plan reward appropriate actions?

Does the plan fit the organization? Does the plan reward appropriate actions?

___________ occurs when a creditor obtains a court order that directs an employer to set aside a portion of an employee's wages to pay a debt owed to the creditor. a. Garnishment b. Foreclosure c. Distraint d. Ejectment

Garnishment

When considering how to pay your employees, you can choose three levels of variable pay: individual, team, and organizational. Which of the following approaches is ideal when considering these three systems? a. Use team pay and organizational pay only. b. Have elements from every system contribute to the employee's pay. c. Use only organizational pay systems. d. Use individual pay and team pay only.

Have elements from every system contribute to the employee's pay.

A lack of external equity would cause which of the following in an organization? Check all that apply. a. Difficulty in training employees b. Increased turnover c. Increases in highly motivated employees d. Difficulty in recruiting highly skilled employees

Increased turnover Difficulty in recruiting highly skilled employees

_______________ cannot be easily measured. For example, how do you put a value on having job autonomy? a. Tangible direct rewards b. Tangible indirect rewards c. Intangible rewards

Intangible rewards

When deciding on critical success factors for an organization, what should you do? a. Make the success factors as hard as you possibly can. b. Identify success factors that no other companies have. c. Change success factors at least once a year, and preferably every 6 months. d. Keep the number of success factors you choose small (between three and five).

Keep the number of success factors you choose small (between three and five).

What is the fundamental premise of expectancy theory? a. People are motivated when they believe that the more effort they expend, the better they will do on the task, and that the better they do on the task, the more likely they are to get a reward, and that they want the reward they are going to get. b. People are satisfied when they receive motivators, such as recognition, but they are not dissatisfied when they do not receive them. People are dissatisfied when they do not receive hygiene factors, such as a good salary, but they are not overly motivated when they receive hygiene factors. c. People are motivated when they believe that their ratio of inputs to outcomes is equivalent to the ratio of inputs to outcomes for others in the work team.

People are motivated when they believe that the more effort they expend, the better they will do on the task, and that the better they do on the task, the more likely they are to get a reward, and that they want the reward they are going to get.

____________ occurs when the pay given to new hires is higher than the compensation provided to senior employees. a. Salary sacrifice b. Wage slavery c. Salary inversion d. Pay compression

Salary inversion

Who among the following individuals received an intrinsic reward? a. Fiona, who received a travel voucher for exceeding the monthly sales target b. Jake, who received a one-time payment from the management for his 7-year tenure at the company c. Shiraz, who was allowed to choose the work project that interested him the most for his next assignment d. Ritu, who was given the option of buying the company stocks as a reward for her exceptional leadership

Shiraz, who was allowed to choose the work project that interested him the most for his next assignment

Video case study: Tough Mudder - Compensation Alex Patterson, the V.P. of Brand at Tough Mudder, says, "...what we try to create here is a balance between it being a place that's fair in terms of compensation and then sort of more than generous in terms of the rest of our benefits and perks." What are the advantages of using this kind of pay strategy? Check all that apply. a. The company is likely to save money with this pay strategy. b. Employees like the competitive nature of this sort of environment. c. Employees find intrinsic rewards to be highly motivating. d. This pay system is an excellent way to give employees variable pay.

The company is likely to save money with this pay strategy. Employees find intrinsic rewards to be highly motivating.

When are companies most likely to find lump sum increases useful? a. When the cost of living has increased b. When employees are at the bottom of their pay ranges c. When they are trying to improve employee satisfaction d. When employees are at the top of their pay ranges

When employees are at the top of their pay ranges

When a manager is sent on an overseas assignment, determining what to pay him or her becomes _______ complex. a. more b. less

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