Comp & Benefits Chapter 2
In which of the following situations can performance-based pay be a "worst practice"? (Select all that apply) a. when it prompts government investigation b. when it alienates employees c. when it tries to mirror best practices d. when it is followed by competing companies
a, b
What are the objectives of the compensation strategy followed at Google? (Select all that apply) a. commitment to cost containment b. recognition of contributions c. emphasis on innovation d. focus on customer e. emphasis on productivity
a, b, c
Which of the following are involved in the alignment of pay strategy? (Select all that apply) a. external alignment with the economic and socio-political conditions b. internal alignment within the overall HR system c. alignment with "best practices" d. alignment with employee preferences e. alignment with the business strategy
a, b, e
Identify the union preferences that influence compensation strategy. (Select all that apply) a. the concern with job security b. the focus on base wages c. the preference for different forms of pay d. the concern with work/life balance
a, c
Identify the true statements about a company's strategic compensation map. (Select all that apply) a. it can elucidate the message that the company is trying to deliver with its compensation system b. it helps align the company's business strategy to its compensation system c. it can help decide which compensation strategy is best d. it provides a visual reference of the company's compensation system
a, d
Identify a similarity in the compensation strategies adopted by Google and Microsoft. a. a strong focus on reducing labor costs b. a strong emphasis on stock-related compensation c. a strong focus on total cash compensation d. a strong emphasis on work/nonwork balance
b
Since government are major stakeholders in determining compensation, ________ can be included in a compensation strategy. a. understanding employee needs b. identifying union preferences c. lobbying to influence laws and regulations d. underlining a value and mission statement
c
To deal effectively with turbulent competitive dynamics, an organization should first focus on: a. the satisfaction of individual needs and preferences to better motivate the employees b. the mapping of an overall compensation strategy c. the factors that are of importance to the business environment in the present and in the future d. the role of pay in the overall HR strategy
c
Which of the following is currently believed to be responsible for too much risk-taking at Merrill Lynch and the eventual downfall of the company? a. the focus on cash compensation b. the no-layoff policy c. the aggressive pay-for-performance approach d. the practice of giving out generous stock awards
c
Which of the following is true of Nucor Steel's corporate mission? a. it believes in creating defined career paths for employees b. it offers its employees generous stock programs c. it believes in achieving success by working together d. it offers its employees unique benefits
c
Which test of compensation strategy is the most difficult? a. determining whether it is competitive b. determining whether it differentiates c. determining whether it adds value d. determining whether it aligns
c
_________ is the measure of the significance of total compensation in the overall HR strategy. a. competitiveness b. alignment c. prominence d. management
c
Identify the true statements about Whole Food's business objectives. (Select all that apply) a. to focus on product innovation b. to increase competition among employees by emphasizing pay-for-performance c. to take extraordinary measures to satisfy and delight customers d. to hire and try to retain employees who are going to help the company make money
c, d
Identify the factors that influence the formulation of compensation strategies. (Select all that apply) a. the number of business units owned by a company b. customer demands c. employee and union preferences d. a company's culture and values e. a social and political context
c, d, e
General Mills' flexible benefits they offer their employees
Employees are allowed to exchange several weeks' salary for stock awards
Whole Foods flexible benefits they offer their employees
Employees vote on the benefits of their choice
T/F: Alignment is probably the most difficult test that a pay strategy has to pass.
False Alignment is probably the easiest test t hat a pay strategy has to pass
T/F: Not all organizations that pay people have a compensation strategy.
False All organizations that pay people have a compensation strategy. Some may have written compensation strategies, while others may be unaware that they have a compensation strategy
T/F: The development of a total compensation strategy should not involve trial and error.
False Trial and error, experience, and insight play major roles in the development of a total compensation strategy
Merrill Lynch's strategy for internal alignment
It sizes jobs based on knowledge/skill, complexity, business impact, and strategic value
The cost cutter business strategy
Places emphasis on efficiency and operational excellence
The innovator business strategy
Places emphasis on new products and quick response to market trends
________ refers to the fundamental directions that an organization chooses.
Strategy
Merrill Lynch
They are market competitive in base, benefits, incentive/bonus, and stock
Microsoft's main message being communicated by their compensation strategy maps
Total compensation is given prominence
SAS's main message being communicated by their compensation strategy maps
Total compensation supports work/life balance
T/F: Different business units within the same company can have different compensation strategies.
True
T/F: The results from using a compensation system need to be assessed against the objectives the company is trying to achieve.
True
According to the advocates of the strategic approach, what makes a pay strategy competitive? a. how it is managed b. how easy it is to execute c. how simple it is to follow d. how well it follows best practices
a
How does Whole Foods make its compensation strategies competitive in the external market? a. it provides health insurance for all full-time employees b. it offers employees significant stock programs c. it follows a no-layoff policy to compensate for fluctuating incomes d. it offers unique benefits such as an onsite child care center
a
Steps involved in developing a total compensation strategy in the order in which they are conduced.
1. Assessing the implications of total compensation 2. Mapping a strategy for total compensation 3. Implementing the total compensation strategy 4. Reassessing the total compensation strategy
According to Boxall and Purcell, the _______ _________ is an increasingly common theory of performance that bases performance on ability, motivation, and opportunity.
AMO theory
Netflix's flexible benefits they offer their employees
Employees can select the mix of stock options and salary
Google's strategy for internal alignment
It minimizes hierarchy and stresses collaboration
Nuccor's strategy for internal alignment
It provides several opportunities but no defined career paths
Nuccor
They are market leaders for total cash compensation
They are market leaders in pay and benefits and provide unique benefits
Identify a true statement about the compensation strategy at Google. a. it offers its employees significant stock programs b. it bases its bonuses on company productivity c. it leads the market in terms of total cash compensation d. it maximizes hierarchy based on knowledge/skills and strategic value
a
People who support the idea of adopting best practices in developing a pay strategy feel that this: a. provides the employer with preferential access to superior employees b. helps in the formulation of the most effective business strategy c. ensures good relations between the management and union workers d. best aligns the pay strategy with the company's overall HR strategy
a
Since governments are major stakeholders in determining compensation, _________ can be included in a compensation strategy. a. lobbying to influence laws and regulations b. underlining a value and mission statement c. understanding employee needs d. identifying union preferences
a
What are the pay objectives followed at Merrill Lynch? a. to hire, motivate, and retain the best talent b. to recognize individual contributions through unique benefits c. to minimize labor costs d. to lead the market in terms of total cash compensation
a
Which of the following makes a company's compensation strategy difficult to imitate? a. its alignment with the overall HR strategy b. the company's relationship with workers' unions c. its construction of a basic management hierarchy d. the company's job evaluation methods
a
Identify the union preferences that influence compensation strategy. (Select all that apply) a. the concern with work/life balance b. the concern with job security c. the focus on base wages d. the preference for different forms of pay
b, d
A crucial challenge in the design of next-generation pay system is: a. how to replace cash compensation with other benefits b. how to better sidestep laws and regulations c. how to better satisfy individual needs and preferences d. how to focus on relational rewards rather than on total compensation
c
In the context of compensation, which of the following is a way to better satisfy employees' individual needs and preferences? a. complying with legal and regulatory requirements b. understanding the nature of the union-management relationship c. offering more choice d. delivering business value
c
Why are some people against the idea of viewing pay as an investment with measurable returns? a. they feel that this view does not allow a company's compensation strategy to be externally competitive b. they feel that this view focuses only on one dimension of the pay strategy c. they feel that this view reduces the importance of treating employees equitably d. they feel that this view does not align with a company's overall business strategy
c
_______ refers to the role played by non-HR managers in making compensation decisions. a. alignment b. compliance c. ownership d. prominence
c
People who disagree with the idea of strategic fit in terms of compensation believe that: a. companies should focus on ensuring that their pay strategies are globally competitive b. managers need to be responsive to employees and union relations c. a company's HR strategy should be built around its pay strategy d. a set of best practices that have universal applicability exist
d
A ________ ________ focuses on those compensation choices that help the organization gain and sustain competitive advantage.
strategic perspective