Chapter 2 Review Questions

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

(ARE true): allowing employees a choice is difficult to manage, providing unlimited choices is difficult to design, with too many choices it can be confusing

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

(M): motivation

Which of the following is NOT included in a strategy map? (The following ARE included)

Are included: external competitiveness, management, employee contributions, internal alignment

Which of the following is NOT a test of whether a pay strategy is a source of competitive advantage? (The following ARE tests)

Are tests: alignment test, differentiation test, value added test

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

Prominence

The second step of developing a total compensation strategy is to ______.

Step one: assess total compensation implications *Step two: map a total compensation strategy* Step three: implement Step four: reassess

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

Step one: assess total compensation implications Step two: map a total compensation strategy Step three: implement Step four: reassess

_____ refers to openness and communication about pay.

Transparency

Which of the following statements are NOT true? (The following ARE true)

True: effective performance incentive relies on context, embedding compensation strategy in the HR strategy affects results, the effect of paying different than competitors depends on the context

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

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

alignment test

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

assessing

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

cost cutter

A compensation system that focuses on competitor's labor costs is most closely associated with a ____ strategy.

cost cutter

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

customer satisfaction incentives

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

external competitiveness

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

A compensation system using market-based pay is most likely to be part of an _____ strategy.

innovator

Flexible-generic job descriptions would most likely be used with an ____ strategy.

innovator

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

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% 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

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