Exam 4: Components of Compensation Strategy

As a human resource consultant, you have been asked to provide some rationale why an organization may decide to use base pay as a cornerstone for a compensation scheme. Which of the following notions would you advance in supporting your argument?

A particular company wants to make sure employees feel they are appreciated, while at the same time ensuring key employees have a sense of loyalty towards the company. Which of the following systems does this company most likely use?

One major advantage of job evaluation programs is that they require the use of comprehensive job descriptions.

An advantage of indirect pay is that benefits receive more favourable income tax treatment than direct pay.

A flexible benefits system with cost sharing on individual benefits is a good fit for which type of firm?

Explain why organizations pursuing a high-involvement management strategy may find the notion of offering indirect pay to employees somewhat problematic and at odds with the principles of high involvement?

Briefly describe the three main categories of performance pay, and provide examples for each category.

Peter, a manager at a local manufacturing firm, is perplexed that employees tend to respond to management's request by evoking the dreaded "That is not on my job description," or "That is above my pay grade." From a compensating perspective, which base pay method is normally associated with the aforementioned responses?

Which of the following is the most important potential disadvantage of performance pay?

As a human resource specialist, you have been asked by your organization to provide recommendations on which base pay method to use, given that the human resources department has very limited human capital and financial resources. Which of the following methods would be on top of your list of recommendations?

Your executive vice president has asked you to explain the basic notion of "skill blocks" within the context of skill-based pay systems design. What two variables would you emphasize?

Which pay type usually makes up a small proportion of total compensation, and may not be used at all by some employers?

Which of the following best explains why medical and dental coverage can be purchased more cheaply by the employer than the employee?

Pay for knowledge systems are beneficial for organizations that require great task flexibility from their labour force.

Johnny is compensated based on a rate of $25.00 per hour worked. Which of the following terms best describes the manner in which Johnny is compensated?

Your company offers you pay for time not worked, disability benefits, supplemental medical coverage, and a full range of free employee services. These items refer to which component of the compensation mix?

Which of the following conditions make it impractical to use output-related pay?

Which methods are used to establish base pay?

Performance pay plans are difficult to administer and have a high discontinuation rate.

Identify and briefly describe the issues in developing a skill-based pay system.