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HRM > Chapter 2: compensation > Flashcards

Chapter 2: compensation Flashcards

1
Q

What is compensation

A

total of all rewards provided to employees

in return for their services

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2
Q

What are the components of compensation?

A

financial

non-financial

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3
Q

What are the different types of direct financial incentive?

A

individual
group or team
company-wide

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4
Q

What are examples of the individual-based incentive plan?

A

merit pay
piecework plan
commission

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5
Q

What are examples of company-wide incentive programme?

A

profit sharing

gain sharing

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6
Q

What are the profit-sharing plans?

A

current plan
deffered plan
combination plan

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7
Q

What are the gainsharing plans?

A

scanlon

improshare

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8
Q

What are the types of indirect financial compensation?

A

legally required/mandatory/compulsory
voluntary/discretionary
flexible/cafeteria benefits scheme

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9
Q

What are examples of legally required indirect financial compensation?

A

CPF (Central Provident Fund)
WICA (Work injury compensation act)
Employment Act
WSJA (Workplace safety and health act)

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10
Q

What are examples of voluntary discretionary benefits?

A 
payment for time not worked
healthcare
life insurance
employee services
premium pay
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11
Q

What are the purposes of all kinds of compensation

A

attract
retain
motivate employees

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12
Q

What does direct financial compensation consist of

A 
wages
salaries
commissions
bonuses
incentives
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13
Q

Where does non-financial compensation come from?

A

satisfaction from job
psychological environment
physical environment

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14
Q

What are the two ways companies can choose to base their compensation on?

A

seniority

performance

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15
Q

For a compensation to motivate an employee, what must incentive be based on

A

performance

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16
Q

What is performance-related compensation that increase productivity known as

A

incentive compensation

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17
Q

When a company knows how to motivate employees to be more productive, what does it gain

A

competitive advantage

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18
Q

the composition of the workforce changes with pay for performance because

A

high performers paid for, more motivated
below-average discouraged
buck up or leave

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19
Q

What is merit pay?

A

absolute sum of money

added to base salary

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20
Q

Who receives merit pay

A

deserving employees with good performance

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21
Q

What is the problem with merit pay

A

treated as cost of living allowance

expect regular and frequent

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22
Q

When do company’s hold back on merit pay

A

bad year

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23
Q

What is set and established in a piecework plan?

A

minimal hourly wage rate

meeting a pre-established output

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24
Q

What is the rate called when employee exceeds the standard

A

differential piece rate

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25
Q

What is the advantage of using a piecework plan

A

simple and easily understood

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26
Q

What is the problem with piecework plan

A

change in payscale, new piece rate
work does not come in neat piecemeal manner
cannot attribute output to an individual

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27
Q

What kind of personnel work on a commission basis?

A

sales

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28
Q

What is a sales commission?

A

% of sales price

added to base wage

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29
Q

Overall, what do individual incentives create that motivates employees

A

clear performance objectives

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30
Q

If individual incentives fail, what will happen

A

dysfunctional competition
encourage inflate perspectives
reduced interaction and communication
compromise on safety and quality

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31
Q

How are employees paid in a group incentive plan

A

for theircombined performance

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32
Q

When should group incentive plan be implemented?

A

tasks are interdependent

requires cooperation and teamwork

33
Q

What is the disadvantage of team incentive plan

A

a single ‘freeloader’ can jeopardise the group

peer pressure- conform or leave

34
Q

What good things does team incentive plan bring about

A

teamwork
encourage peers to become counsellers watches
helping hand

35
Q

What does profit-sharing distribute?

A

predetermined percentage of company’s profits

36
Q

What do employees get in the current plan

A

cash

stock

37
Q

When can employees get their incentives in the deffered profit sharing plan

A

retirement
termination
death

38
Q

Where does the fund go to in defferred profit sharing plan

A

invested in securities

39
Q

How do employees get their share of profit in deffered profit sharing

A

irrevocable trust of company

credited to employee accounts

40
Q

What does the combination plan do for employees?

A

receive part of profits on current basis

defer the rest

41
Q

What are the positive effects of profit-sharing

A

efficiency

lower cost

42
Q

What is the negative effect of profit-sharing

A 
do not know how they helped generate profit
dilution effect (entitlement, expect and depend. less ownership)
43
Q

What does gain sharing aim to do with employees

A

bind them with company productivity

44
Q

What is the incentive based on gainsharing?

A

improved company performance

45
Q

How is gainsharing different from profit sharing?

A

% vs payment

46
Q

What does the scanlon plan reward employees for?

A

savings in labour costs

47
Q

In the scanlon plan, savings in labour costs arise from

A

suggestions and ideas

48
Q

What are the platforms used for generating ideas to improve productivity?

A

QCC
WIT
suggestion scheme

49
Q

What does improshare use to determine staff bonuses?

A

mathematical formula

50
Q

What are the goals of indirect financial compensation?

A

attract keep employees

51
Q

Employee benefits are membership-based and there not related to productivity and does not serve as a direct

A

motivation

52
Q

What are the purposes of employee benefits?

A

increase recruitment success rate
improved morale
enhance quality of work life
improve overall productivity

minimise union-management conflict
gain favourable competitive position in industry

53
Q

Where do contributions for CPF come from?

A

employee

employer

54
Q

What kind of benefit scheme is CPF under?

A

retirement

55
Q

What does WICA provide payment for?

A

death or accident at work

workplace diseases

56
Q

Who receives the compensation from WICA

A

injured workman

or dependents

57
Q

When is WICA void?

A

injury or death out of employement

injury caused when drunk or drugged

58
Q

What is the purpose of the employement act

A

basic rights of employees

duties of employers

59
Q

What are some things spelled out in the employment act?

A 
annual leave entitlement
overtime pay rate
hours of work
rest days
maternity leave
60
Q

What is the aim of WSHA

A

cultivate good safety habits

strong safety culture

61
Q

How does WSHA decrease the risks

A

make stakeholders accountable

62
Q

What are the examples of payment for time not worked

A 
paid vacations
paid sick leave
sabbaticals
compassionate 
marriage 
rest periods
63
Q

What do paid vacations help with employees

A

rejuvenated

rest

64
Q

What does paid sick leave do for employees?

A

too sick to report for work

receive their pay

65
Q

What are sabbaticals

A

temporary leave of absence from organisation

at reduced pay

66
Q

Healthcare benefits are the most expensive form of indirect financial compensation because

A

ageing population
growing demand for medical care
expensive technology
inefficient administrative processes

67
Q

Who receives the benefit of life insurance

A

employee’s family

in death

68
Q

Who pays for life insurance

A

employee pay part of premium

69
Q

What benefits does employee services encompass

A 
company subsidised food
loans for housing
renovation
car
club membership
sports and wellness
70
Q

What kind of employees get premium pay

A

work long hours

dangerous conditions

71
Q

What are examples of premium pay

A

shift allowances

risk allowance/ hazard pay

72
Q

What does a flexible/cafeteria benefits scheme allow employees to do?

A

choose from a range of available benefits

73
Q

What is the purpose of flexible benefits scheme

A

employees see the cost and value of each benefit/ total benefit programme
improvement in QWL
productivity enhanced (loyalty and motivation)

74
Q

What are the limitations of benefits package?

A

control cost of benefits against the expectation of employees
limited motivation to increase motivation

75
Q

What does non-financial compensation use to motivate people?

A

intrinsic value

76
Q

What are examples of non-financial compensation

A

job content
job environment
work flexibility

77
Q

What are components of the job environment

A 
sound policies
competent supervision
good working colleagues
status symbols
comfortable working conditions
78
Q

What does work flexibility give employees

A

greater control over their jobs

79
Q

What are examples of work flexibility

A

compressed workweek
flexitime
job sharing
telecommuting

HRM (14 decks)

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