09 Employee Compensation

Question 1

Refers to all forms of pay or rewards given to employees

Answer 1

compensation

Question 2

2 main components of compensation

Answer 2

direct and indirect financial payments

Question 3

Direct financial payments come in the form of (blank)

Answer 3

wages, salaries, incentives, commissions, bonuses

Question 4

Indirect financial payments come in the form of (blank)

Answer 4

financial benefits such as insurance

Question 5

What is the minimum wage in NCR in the service sector?

Answer 5

Php 500-537

Question 6

4 types of financial rewards in the workplace

Answer 6

1. membership- and seniority-based
2. job status-based
3. competency-based
4. performance-based

Question 7

[Financial Rewards]

Given on the basis of being part of the organization and years rendered

Answer 7

membership- and seniority-based

Question 8

[Financial Rewards]

2 main advantages of membership- and seniority-based rewards

Answer 8

1. guaranteed wages are attractive to applicants

2. seniority-based rewards reduce turnover

Question 9

[Financial Rewards]

3 main disadvantages of membership- and seniority-based rewards

Answer 9

1. not motivating
2. discourages poor performers from leaving
3. golden handcuffs not facilitating affective commitment

Question 10

Why is early retirement offerred?

Answer 10

expensive to maintain senior employees because they require higher pay

Question 11

[Financial Rewards]

Given on the basis of status or worth of the jobs they occupy

Answer 11

job status-based

Question 12

[Financial Rewards]

Job status-based rewards include (blank) and (blank)

Answer 12

job evaluation and status perks

Question 13

[Financial Rewards]

This is used to systematically rate the worth of jobs

Answer 13

job evaluation

Question 14

[Financial Rewards]

3 main advantages of job status-based rewards

Answer 14

1. maintains internal equity
2. minimizes pay discrimination
3. motivates employees to compete for promotions

Question 15

[Financial Rewards]

5 main disadvantages of job status-based rewards

Answer 15

1. encourages hierarchy
2. increases costs
3. reduces responsiveness
4. reinforces status differences
5. motivates job competition and exaggerated job worth

Question 16

[Financial Rewards]

Given on the basis of their assessed competencies and whether they actually use those in their current job

Answer 16

competency-based rewards

Question 17

[Financial Rewards]

Refers to a specific competency-based reward where people receive higher pay based on their mastery of measurable skills

Answer 17

skill-based pay

Question 18

[Financial Rewards]

2 main advantages of competency-based rewards

Answer 18

1. motivates employees to learn new competencies

2. improves quality with multi-skilled employees

Question 19

[Financial Rewards]

2 main disadvantages of competency-based rewards

Answer 19

1. subjective measurement of competencies

2. expensive because employees spend more time learning new skills

Question 20

[Financial Rewards]

Given on the basis of high levels of performance

Answer 20

performance-based rewards

Question 21

[Financial Rewards]

Performance-based rewards given based on objective performance measures

Answer 21

pay-for-performance

Question 22

[Financial Rewards]

Pay-for-performance is also known as (blank)

Answer 22

earning-at-risk

Question 23

[Financial Rewards]

Performance-based rewards based on subjective measures

Answer 23

merit pay

Question 24

[Financial Rewards]

3 types of performance-based rewards

Answer 24

1. organizational
2. team
3. individual

Question 25

[Financial Rewards] Individual performance-based rewards may come in these 3 forms

Answer 25

1. bonuses 2. commissions 3. piece rates

Question 26

[Financial Rewards] Team performance-based rewards may come in these 2 forms

Answer 26

1. bonuses | 2. gainsharing

Question 27

[Financial Rewards] Organizational performance-based rewards may come in these 4 forms

Answer 27

1. profit sharing 2. share ownership 3. stock options 4. balanced scorecard

Question 28

[Financial Rewards] 4 main advantages of performance-based rewards

Answer 28

1. motivates performance 2. attracts performance-oriented aspects 3. organizational rewards create an ownership culture 4. profit sharing may avoid layoffs

Question 29

[Financial Rewards] 5 steps to improving reward system effectiveness

Answer 29

1. link rewards to performance 3. ensure that rewards are relevant 3. use team rewards for interdependent jobs 4. ensure that rewards are valued 5. watch out for unintended consequences

Question 30

Refers to creating a total rewards package to elicit employee behaviors the firm needs to support and achieve its competitive strategy

Answer 30

aligned reward strategy

Question 31

The equity theory of motivation states that employees are strongly motivated to maintain a balance between (blank) and (blank)

Answer 31

their perceived contributions and rewards

Question 32

4 forms of equity

Answer 32

1. external 2. internal 3. individual 4. procedural

Question 33

[Forms of Equity] Refers to how a job's pay rate in one company compares to the equivalent job's pay rate in other companies

Answer 33

external equity

Question 34

[Forms of Equity] Refers to how fair a job's pay rate is compared to other jobs in the same company

Answer 34

internal equity

Question 35

[Forms of Equity] Refers to the fairness of an individual's pay as compared to his/her coworkers

Answer 35

individual equity

Question 36

[Forms of Equity] Refers to the perceived fairness of the processes and procedures used to make in allocating pay

Answer 36

procedural equity

Question 37

This method monitors and maintains external equity

Answer 37

job surveys

Question 38

2 methods that maintain internal equity

Answer 38

job analysis and job evaluation

Question 39

2 methods that maintain individual equity

Answer 39

performance appraisal and incentive pay

Question 40

3 methods to ensure transparency in the pay process

Answer 40

1. communication 2. grievance mechanisms 3. employees' participation

Question 41

2 ways to establish pay rates

Answer 41

salary survey and job evaluation

Question 42

Used to anchor the employer's pay scale around other jobs arranged in order of relative worth

Answer 42

benchmarking

Question 43

4 compensable elements of a job

Answer 43

skills, effort, responsibilities, and working conditions

Question 44

4 steps in job evaluation using the Point Method

Answer 44

1. determines compensable factors 2. evaluate the degree of each compensable factor to each job 3. sum the points of each job for each factor 4. plot actual salaries for each job against the total points

Question 45

Refers to the requirement to pay men and women equal wages for jobs that are of comparable value to the employer

Answer 45

comparable worth

Question 46

Comparable worth seeks to address which issue?

Answer 46

women being paid less for being given jobs that are valued less compared to those given to men