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Comp > Ch 1-4 > Flashcards

Ch 1-4 Flashcards

1
Q

How much of their operating budgest do Canadian firms typically spend to compensate their employees?

A

40-70%

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2
Q

What is the purpose of a compensation system?

A

To help create a willingness among qualified persons to join the organization and to perform the tasks the organization needs.

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3
Q

What is a reward?

A

Anything provided by the organization that satisfies one or more of an employee’s needs.

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4
Q

Where are extrinsic rewards derived from?

A

The job context: the factors surrounding the job.

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5
Q

Where are intrinsic rewards derived from?

A

The job content: factors inherent in the work itself.

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6
Q

What is the difference between rewards and incentives?

A

Rewards are the positive consequences of performing behaviours desired by the organizaton; an incentive is a promise that a specified reward will be provided if the employee performs a specified behaviour.

Incentives induce valued behaviour; rewards serve to recognize valued behaviour.

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7
Q

What is a reward system?

A

The mix of intrinsic and extrinsic rewards that an organization provides to its members.

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8
Q

What is a compensation system?

A

The economic or monetary part of the reward system.

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9
Q

What is the term for the practice of looking at the total spectrum of rewards?

A

Total rewards approach.

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10
Q

What is the plan for the mix of rewards that the organization intends to provide to its members, as well as the means through which they will be provided, in order to elicit the behaviours necessary for the organization’s success?

A

The reward strategy.

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11
Q

What are the three main components of the compensation system?

A

Base pay, performance pay, and indirect pay.

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12
Q

What is base pay usually based on?

A

A unit of time, like an hour, month, or year.

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13
Q

Define compensation strategy.

A

The plan for the mix and total amount of base pay, performance pay, and indirect pay to various categories of employees.

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14
Q

Name the eight goals of the reward and compensation system.

A
  1. Promote achievement of the organization’s goals
  2. Fit with and support the organization’s strategy and structure
  3. Attract and retain qualified individuals
  4. Promote desired employee behaviour
  5. Be seen as equitable
  6. Comply with the law
  7. Be within the financial means of the organization
  8. Achieve the above goals in the most cost-effective manner
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15
Q

What is the name for the reward system that adds the most value to the organization, considering all its costs?

A

The optimal reward system.

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16
Q

What are the five steps on the Road Map to Effective Compensation?

A
  1. Understand your organization and your people
  2. Formulate your reward and compensation strategy
  3. Determine your compensation values
  4. Design your performance pay and indirect pay plans
  5. Implement, manage, evaluate, and adapt the compensation system
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17
Q

What three factors typically determine the dollar value of compensation to be provided to a specific employee?

A
  1. The value of the employee’s job relative to other jobs in the firm (determined through job evaluation).
  2. The value of the employee’s job relative to the market (labour market surveys).
  3. The value of the employee’s job performance relative to other employees performing the same job (performance appraisal).
18
Q

What is vertical fit?

A

The alignment between an organization’s mission, vision, and/or values, and the various supportive strategies that cascade down an organization.

19
Q

What is horizontal fit?

A

The alignment between and among strategies at the same level. For instance, HRM strategies such as performance management and compensation are aligned or support each other.

20
Q

What are the two main sets of variables when designing a reward system?

A

Contextual and Structural

21
Q

What are the five other structural variables?

A
  1. Job design
  2. Coordination and departmentation
  3. Decision-making and leadership structure
  4. Communication and information structure
  5. Control structure
22
Q

What are the three main patterns of structural variables (managerial strategies)?

A
  1. Classical
  2. Human relations
  3. High-involvement
23
Q

What is an organization’s domain?

A

The domain defines the specific products or services to be offered by the organization.

24
Q

What is the task environment?

A

The specific slice of the general environment of particular relevance to the organization.

25
Q

Define the “classical managerial strategy”.

A

Assumes most employees inherently dislike work, but can be motivated to do so due to economic needs.

26
Q

Define the “human relations managerial strategy.”

A

Assumes most employees inherently dislike work, but can be motivated to do so via meeting social needs.

27
Q

Define the “high-involvement managerial strategy.”

A

Assumes work can be inherently motivating if an organization is structured properly.

28
Q

Define organizational culture.

A

The set of values, guiding beliefs, understandings, and ways of thinking that are shared by members of an organization.

29
Q

What are the five key contextual variables?

A

Environment, business strategy, technology, organization size, and nature of the workforce.

30
Q

What is the defender business strategy?

A

Focuses on dominating a narrow product or service market segment.

31
Q

Prospector business strategy?

A

Focuses on identifying and exploiting new opportunities quickly.

32
Q

Analyzer business strategy?

A

Focuses on exploiting new opportunities at a relatively early stage while maintaining a base of traditional products or services.

33
Q

What are the three main categories of reward problems?

A
  1. Failure to produce desired behaviour.
  2. Production of desired behaviour but with undesirable consequences.
  3. Production of reward dissatisfaction.
34
Q

What are the three kinds of desired behaviour?

A
  1. Membership behaviour.
  2. Task behaviour.
  3. Organizational citizenship behaviour.
35
Q

What are the key employee attitudes that need to be created to generate the employee behaviour we desire?

A
  1. Job satisfaction (the attitude toward one’s job and workplace)
  2. Work motivation (the attitude one holds toward good job performance)
  3. Organizational identification (a sense of shared goals and values, a sense of membership and belonging, and an intention to remain a member)
36
Q

What causes reward dissatisfaction (4)?

A
  1. Violation of the psychological contract
  2. Perceived inequity
  3. Relative deprivation
  4. Lack of organizational justice
37
Q

What is the two-factor theory of motivation?

A

It argues that intrinsic factors influence work motivation, while extrinsic factors influence job satsifaction.

38
Q

What are two causes of organizational identification?

A

Shared organizational goals and feelings of membership (or belonging).

39
Q

Behavioural implications for designing effective reward systems.

A
  1. DEFINE the employee behaviour that is really needed.
  2. DETERMINE the employee attributes and qualifications necessary to perform the needed behaviour.
  3. IDENTIFY the needs that individuals possessing these qualifications are likely to find salient.
  4. ENSURE a positive valence for needed behaviour by providing rewards that address salient needs and by reducing the costs to the employee of performing the behaviour.
  5. MAKE IT CLEAR that performance of the behaviour will lead to the promised rewards.
  6. PROVIDE CONDITIONS that make it likely that employee effort will actually lead to the desired behaviour.
40
Q

What are the major categories of indirect pay?

A
  1. Benefits mandated by law
  2. Deferred income plans (retirement)
  3. Life insurance, extended health coverage
  4. Pay for time not worked (holiday, leaves)
  5. Employee services (counselling, food)
  6. Miscellaneous (company car, discounts)

Comp (3 decks)

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