Compensation Chapter 2

In the formula predicting performance, the component most closely related to compensation is _____.

"M"

A compensation system focusing on system control and work specifications is most closely associated with a(n) _____ strategy.

Cost-cutter

A compensation system that focuses on competitor's labor costs is most closely associated with a(n) _____ strategy.

Cost-cutter

The alignment test

Helps ensure passing the differentiation test

Research investigating high-performance workplaces found that performance-based pay _____ when combined with other high-performance practices.

Improves attitudes and behaviors

Career growth, hierarchy, and flexible design are most closely associated with the _____ aspect of mapping a total compensation strategy.

Internal alignment

Whole Foods' shared-fate philosophy of limiting executive salaries to no more than 19 times the average pay of full-time employees is an example of which strategic pay decision?

Internal alignment

Which of the following is NOT included in a strategy map?

Not: HR Alignment

Which of the following is NOT a test of whether a pay strategy is a source of competitive advantage

Not: cost-effectiveness test

The second step of developing a total compensation strategy is to:

Note: I can use any step in a question. Steps: 1. Assess Total Compensation Implications; 2. Map a Total Compensation Strategy; 3. Implement strategy; 4. Reassess

Trying to measure an ROI for any compensation strategy implies that

People are "human capital" similar to other factors of production.

When organization performance declines

Performance-based pay plans do not pay off (example of a vicious cycle)

_____ is the measure of how important total compensation is in the overall HR strategy.

Prominence

Which of the following is the correct order of the steps in formulating a total compensation strategy?

Steps: 1. Assess Total Compensation Implications; 2. Map a Total Compensation Strategy; 3. Implement strategy; 4. Reassess

_____ refers to openness and communication about pay.

Transparency

Which of the following statements regarding allowing employees a choice in their pay mix is NOT true?

True: Allowing employees their choice is difficult to manage; Providing unlimited choices for employees to choose from is difficult to design; Providing too many choices can confuse people False: Allowing employees their choice is easy for competitor companies to imitate

Which of the following statements is NOT true?

True: The effect of performance incentives depends on the context; Embedding compensation strategy in HR strategy affects results; The effect of paying more than competitors depends on the context. Focusing only on one dimension of pay strategy is a best practice.

All of the following EXCEPT _____ are compensation systems associated with a cost-cutter strategy

Will list a bunch of correct examples and then a wrong answer such as customer satisfaction incentives

Based on the opinions of 10,000 U.S. workers, Hudson found that when given their choice of unconventional benefits, most employees would select _____.

a more flexible work schedule.

Union preferences are a major factor in _____ a total compensation strategy.

assessing

Comparisons on the forms of compensation used by other companies are part of _____.

external cometitiveness

Which of the following tests of competitive advantage is probably the easiest test to pass?

helps ensure passing the differentiation test

A compensation system using market-based pay is most likely to be part of a(n) _____ strategy.

innovator

Flexible-generic job descriptions would most likely be used with a(n) _____ strategy.

innovator

Research shows that _____ will effectively shift an organization in a downward performance spiral to an upward one.

it is unclear what compensation practices.

Issues of transparency, technology, and choice are most closely associated with the _____ aspect of mapping a total compensation strategy.

management

According to the Hudson survey, _____ is the single thing that would make 41 percent of the U.S. workers happier.

more money

In mapping a total compensation strategy, the question of how important compensation is in the overall HR strategy is part of _____.

objectives

The role non-HR managers play in making pay decisions is called _____.

ownership