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425 Compensation Management > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

objective for google

A

emphasis on innovation commitment to cost containment, recognize contributions, attract and reward the best

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2
Q

objective for nucor

A

focus on customer, most productive, highest quality

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3
Q

objective for merrill lynch

A

focus on customer, attract, motivate, and retain the best talent

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4
Q

internal alignment for google

A

minimize hierarchy, everyone wears several hats, emphasize collaboration

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5
Q

externally competitive google

A

market leader in pay and benefits, unique benefits

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6
Q

employee contributions for google

A

recognize individual contributions, significant stock programs

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7
Q

management for google

A

love employees, want them to know it

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8
Q

internal alignment for merrill lynch

A

pay fairly internally, job sized on four factors (knowledge/skill, complexity, business impact, strategic value)

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9
Q

externally competitive for merrill lynch

A

market competitive in base and benefits, market competitive in incentive/bonus and stock

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10
Q

employee contributions for merrill lynch

A

financial advisors work under a strong incentive system based on client wealth management fees/commissions and total wealth of their client base

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11
Q

management for merrill lynch

A

understandable, consistent message

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12
Q

internal alignment for nucor

A

succeed by working together, no defined career paths, but many opportunities

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13
Q

externally competitive for nucor

A

below market for base, market leader for total cash compensation

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14
Q

employee contributions for nucor

A

bonuses based on plant production and company profits

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15
Q

management for nucor

A

not for everyone, no lay-off practice, but income fluctuates

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16
Q

strategy

A

fundamental directions that an organization chooses

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17
Q

an organization defines its strategy through

A

the trade-offs it makes in choosing what and what not to do

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18
Q

at the corporate level, the fundamental strategic choice is

A

what business should we be in

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19
Q

at the business level, the fundamental strategic choice is

A

how do we gain and sustain competitive advantage in this business

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20
Q

at the function level, the fundamental strategic choice is

A

how should total compensation help this business gain and sustain competitive advantage

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21
Q

the innovator

A

stresses new products and short response time to market trends

22
Q

cost cutter’s efficiency focuses strategy

A

stresses doing more with less by minimizing costs, encouraging productivity increases, and specifying in greater detail exactly how jobs should be performed

23
Q

customer focuses business strategy

A

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

24
Q

firms do not have generic strategies, they have

A

aspects of cost and innovation

25
Q

IBM’s current strategy

A

having a focus on the high-growth high-value segments of the IT industry

26
Q

the deemphasis on pay for individual performance reduces

A

the risk that competition among employees will undermine this objective

27
Q

compensation strategy and HR strategy are central to

A

successful business strategy execution

28
Q

assess total compensation implications

A

business strategy and competitive dynamics, HR strategy, culture/values, social and political context, employee/union needs, other HR systems

29
Q

map a total compensation strategy

A

objectives, alignment, competitiveness, contributions, management

30
Q

reasses

A

realign as conditions change, realign as strategy changes

31
Q

implement strategy

A

design system to translate strategy into action, choose techniques to fit strategy

32
Q

pay strategy is influenced by

A

how it fits with other HR systems in the organization

33
Q

why is unlimited choice bad

A

challenge to design and manage, not approved by U.S. internal revenues service

34
Q

Jobs Bank program

A

1984, United Auto Workers would receive compensation when not needed until they were needed again

35
Q

strategic perspective implies

A

it is the way that programs fit together and fit the organization that is hard to copy

36
Q

what is a company’s largest controllable expense

A

compensation

37
Q

calculating return on investments (ROI)

A

implies that people are “human capital”

38
Q

three tests of strategy

A

align, differentiate, add value (most difficult)

39
Q

best-pay practice vs best fit

A

people believe best pay practices can be applied universally and yield better performances

40
Q

internal alignment

A

both smaller and larger pay differences among jobs inside an organization can affect results

41
Q

external competitiveness

A

paying higher than the average paid by competitors can affect results

42
Q

employee contributions

A

performance-based pay can affect results

43
Q

managing compensation

A

rather than focusing on only one dimension of the pay strategy, all dimensions need to be considered together

44
Q

compensation strategy

A

embedding compensation strategy within the broader HR strategy affects results

45
Q

virtuous circle

A

organization performance increasing, pay for performance rises, risk return balance, ownership culture, upward momentum, continuous improvement

46
Q

vicious cycle

A

organization performance decreasing, pay for performance lowers, risk return imbalance, ownership culture, downward momentum, continuous difficulties

47
Q

performance-based pay that shares success with employees

A

does improve employee attitudes

48
Q

What does declining organization performance do?

A

increases the risks facing employees (risks of still smaller bonuses, demotions, wage cuts, and even layoffs).

49
Q

could performance-based pay sometimes be a “worst” practice

A

yes when incentive systems don’t pay off and they alienate employees or lead to government investigation of possible stock option manipulation

50
Q

what is the easiest test to pass

A

alignment

51
Q

each company’s profile on the strategy map reflects

A

its main message or “pay brand”

425 Compensation Management (2 decks)

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