CH 2 The Totality of Strategy

Question 1

What is the strategic perspective?

Answer 1

• refers to the focus on compensation decision that allows an organization to sustain competitively advantage

Question 2

What is strategy?

Answer 2

refers to the fundamental decision organization chooses and the trade-off it makes in choosing what to do and what not to do

corporate –> what business we should do
business unit level: how do we gain and sustain competitive advantage?
Function level: how should total compensation help this business gain and sustain ?

Question 3

what is competitive advantage?

Answer 3

a business practice or process that results in better performance that one’s compeititors

Question 4

What are the three general business strategy that compensation can be tailored to?

Answer 4

• innovator
• cost cutter
• customer focused

Question 5

What is the innovator strategy?

Answer 5

stresses new products and short response times and market trends

• compensation is based on less emphasis on evaluating skills and jobs and more on incentives designed to encourage innovation
• prospector perspective
  differentiation

Question 6

What is the cost-cutter strategy?

Answer 6

• do more with less
• productivity increases and greater detail on how jobs should be performed
• defender perspective
• cost leadership

Question 7

What is the customer-focused startegy?

Answer 7

• stresses delighting customers and bases employee on how well they do this

Question 8

Four steps of developing total compensation strategy?

Answer 8

1. assess the total compensation implication (business start, hr start, culture, social/polic, employee union, other hr)
2. map total comp start (objectives, internal alignment, employee cont, management)
3. implement start (Design and choose technique)
4. reassess