Chapter 10

Question 1

What is direct compensation

Answer 1

Employees wages and salaries, incentives, bonuses, commissions

Question 2

What is indirect compensation

Answer 2

These are benefits outside regular pay supplied by employer. (Health benefits, vac pay, paid time off, retirement funds, childcare…)

Question 3

What is Non-financial compensation

Answer 3

these are in forms of; employee rec programs, employee recognition, files work hours, work environment)

Question 4

Define strategic compensation

Answer 4

It is a planning that goes beyond the market rate to provide compensation to employees that align with the organizations objectives

Question 5

What are rewards

Answer 5

It’s a combination of direct, indirect and non-financial + other organizational rewards

Question 6

Equity theory?

Answer 6

It’s a theory under motivating employees through compensation. It’s an employee perspective that they believe whatever compensation they get is equals to their performance in their roles.

Question 7

Expectancy theory?

Answer 7

a motivation theory that employees would perform more if they have reason to expect it would resultón in a valued reward

Question 8

Mention 2 basis for compensation

Answer 8

1. Piece work
2. Hourly work

Question 9

What is hurly work?

Answer 9

it is work that is paid based on hurry basis

Question 10

What is known as work whereby employee is paid according to number of units produced?

Answer 10

a piece work

Question 11

Mention 3 internal factors affecting wage mix

Answer 11

1. Compensation strategy
2. Worth of the job
3. Worth of the worth
4. Ability for employer to pay

Question 12

External factors affecting wage mix

Answer 12

1. Labour market conditions.
2. Cost of living
3. Area wage rate

Question 13

What is full meaning of CPI

Answer 13

CONSUMER PRICE INDEX

Question 14

What is th measure of the average change in price overtime of fixed market

Answer 14

CPI

Question 15

To achieve increase in real wages through collective bargaining is whose goal

Answer 15

The labour union

Question 16

What is when wage increases larger than rise in the CPI is known as

Answer 16

Real wage

Question 17

Systemic process of determining the worth of jobs to know which job should be paid more than the other

Answer 17

Job Evaluation

Question 18

Which is the simplest and oldest way to evaluate jobs

Answer 18

Job Ranking systems

Question 19

Where jobs are evaluated based on their relative worth is done in which system

Answer 19

Job Ranking system

Question 20

Jobs are classified and grouped in a series of predetermined wage grades are called

Answer 20

Job classification System

Question 21

Creating. A work environment whereby employees can perform to the best of their ability is known as

Answer 21

Performance management

Question 22

Bob is evaluating binta’s performance based on her job requirements. This is known as

Answer 22

Performance Review.

Question 23

Which is a reason why performance management fails

Answer 23

1. It emphasizes short term gains over long term goals
2. It emphasizes long term golas over short term gains

Question 24

Which is not a purpose of performance management.

Answer 24

1. Administrative purpose: performance data can be used to document HR actions
2. Developmental purpose: provide managers with concrete framework to gather and organize info on employee performance.
3. Rewards purpose: provides HR with benefits and plans of employees

Question 25

Mention the 4 basic elements for creating performance standards.

Answer 25

1. Strategic relevance
2. Criterion deficiency
3. Criterion contamination
4. Reliability