1. introduction to compensation and benefits

Question 1

what is compensation?

Answer 1

all forms of financial returns and tangible services and benefit employees receive as part of an employment relationship

Question 2

how should a company compensate?

Answer 2

must be compliant with the law and must be fair

Question 3

what is internal alignment?

Answer 3

it refers to comparisons among jobs or skill levels inside a single organization

Question 4

what does internal alignment pertain to?

Answer 4

the pay rates both for employees doing equal work and for those doing dissimilar work

Question 5

how will pay relationships affect compensation?

Answer 5

it affects the compensation objectives of efficiency, fairness and compliance

Question 6

how will pay relationships affect employees

Answer 6

it will affect decision making

Question 7

what will external competitiveness make the pay to be

Answer 7

market driven

Question 8

what are the objectives of external competitiveness?

Answer 8

• ensure that the pay is sufficient to attract and retain employees
• control labour costs to ensure competitive pricing of products and services

Question 9

what is external competitiveness?

Answer 9

pay comparisons with competitors

Question 10

what is employee contribution for?

Answer 10

understanding the basis for judging performance, helps perceive pay as fair

Question 11

how can companies recognize employee contributions?

Answer 11

motivate and develop incentive programs - monetary or non-monetary

Question 12

what are the components under seniority-based?

Answer 12

loyalty, experience and inflexible

Question 13

what is performance-based?

Answer 13

sales target, individual/team contribution and using performance appraisal to link to salary adjustment

Question 14

what is under the pay model?

Answer 14

implementation, pay for performance, external competitiveness, internal alignment and objectives

Question 15

what is in cash compensation?

Answer 15

the base salary

Question 16

what is considered merit or cost of living?

Answer 16

allowances like attendance, hardship, noise, uniform, etc

Question 17

what is considered short term?

Answer 17

anything that is paid or enjoyed within 0-18 months after the announcement of incentive

Question 18

what are the components in short term?

Answer 18

the commission, annual wage supplement, corporate bonus, etc

Question 19

what is considered long term?

Answer 19

anything that is paid or enjoyed later than 0-18 months after the announcement of incentive

Question 20

what are the components in long term?

Answer 20

deferred bonus, stock purchase, stock grant plan, etc

Question 21

what are the components of benefits?

Answer 21

income protection, work/life balance, allowance

Question 22

what are the components that are considered as leave?

Answer 22

annual, child/elder care, marriage, medical, etc

Question 23

what is under health?

Answer 23

outpatient, specialist, hospital, etc

Question 24

what is in insurance?

Answer 24

gtl, gpa, travel

Question 25

what type of loans are there?

Answer 25

study & housing

Question 26

what are the facilities available?

Answer 26

childcare, gym, canteen, pantry

Question 27

what acts are under statutory/mandatory?

Answer 27

employment, part-time employment, child co-saving, trade union and work injury compensation act

Question 28

what is considered as discretionary?

Answer 28

any benefits give outside the law

Question 29

what is relational returns?

Answer 29

non-financial returns that substantially impact employee behaviours

Question 30

what is the components of rational returns?

Answer 30

recognition, status, employment security, challenging work and learning opportunitities

Question 31

what compensation strategies can companies have?

Answer 31

different business units, product lines, locations and staff population

Question 32

why should pay system align with the business strategy?

Answer 32

better the alignment = more effective organization | changes in business strategies should result in changes in pay system

Question 33

what are the types of business strategy?

Answer 33

innovator, cost cutter and customer focused

Question 34

what is innovator?

Answer 34

increase product complexity and shorten product life cycle + unique and innovative product or service at a premium price

Question 35

what is cost cutter?

Answer 35

focus on efficiency and firms that cut cost

Question 36

what is customer focused?

Answer 36

increase customer expectations and stresses delighting customers and bases employee pay on how well they do this

Question 37

what is competitive advantages?

Answer 37

organization compete for limited talents/employees and a strategic perspective focuses on those competitive choices that help organization gain and sustain competitive advantages