Compensation 'Quiz' Flashcards
Organizations Top 10 Desired Candidate Qualities
1.Professionalism
2. Critical Thinking
3. Communication skills + presentation skills (thinking on your feet)
4. Ability to listen and respond
5. Inquisitive-ness
6. Ability to function well in a team
7. Resiliency + adaptability
8. Passion for making money
9. Decision Making
10. Technical Skills
3 Rules to Making Goals
Difficult, specific, attainable
Efficacy Wage Theory
The idea that increasing wages can lead to increased labour productivity because workers feel more motivated to work with higher pay.
Nyberg: “Talks about how if you pay more than the rest of the market, you will attract higher performers + lower turnover rates + your workers will be more motivated”
What is comp?
What you want to accomplish and how you get people to do it.
What is validity?
Am I measuring what I want to be measuring?
What is reliability?
Will I get the same results every time?
Culture, recognition, and who is on your team is all a ____?
reward
Internal Alignment
Refers to the pay relationships among different jobs/skills/competencies within a single organization.
How to differentiate jobs in pay (How are jobs structured in line with one another)
What three things are job evaluations based off of?
Job content, skills required, and value added
Equity Theory
Theory of motivation that suggests that employee motivation at work is driven largely by their sense of fairness. Nyberg defined it as “I compare myself to people like me and I get upset if they are paid more than me”
Intrinsic Motivation
Actions driven by internal rewards -Doing something because it’s interesting or enjoyable
Extrinsic motivation
Motivation that is driven by external rewards (motivation that come from outside oneself)
Why do we need three points in all useful regressions?
Better defines the line and ensures that it is a good representation of relation between variables. (Defines the relationship between X and Y better)
What is job evaluation?
Process of systematically determining the relative worth of the jobs to create a job structure for the organization
What is job analysis?
Systematic process of collecting information related to the nature of a specific job
What is performance management?
A set of management and analytical processes that enable the management of an organization’s performance to achieve goals
What is a job description?
Explains the tasks, duties, functions, and responsibilities of a position
Employees are are least partially _______ motivated? (Extrinsic or Intrinsic)
Extrinsic
Talent is ____?
Mobile
Why are performance management systems important?
- Differentiates performance
- Provides performance feedback for performance improvement
- Provides guidance for compensation
What three questions should we ask in regard to performance management?
- What are we trying to accomplish?
- What methods are available to achieve those goals?
- What will keep us from being successful?
What is 360-feedback?
A feedback process where not just your superior but your peers and direct reports and sometimes even customers evaluate you.
What does a balance scorecard do?
Combines individual and organizational goals
What are the 7 traditional uses of performance management?
- Motivation
- Performance Feedback
- Compensation/Rewards
- Performance Improvement
- Talent Decisions (staffing)
- Legal documentation
- Coaching for development
((the three most common are feedback, comp, and performance improvement))
What is calibration and why is it important?
Getting everyone to agree on what specific ratings mean - allows for consistency and clarity when giving rating
What is external competitiveness of pay?
How and what pay competitors are using
What is the key to success between employees and managers?
communication
What is the first step in designing compensation?
Know the business strategy!
- Where do we compete?
-What unique value do we bring?
- What resources/ capabilities do we utilize?
-How do we sustain our unique values?
Job-Based Pay Structure
Focuses one the work content (tasks, behaviors, roles, and responsibilities)
Person-based Pay Structure
Focused on KSAOs (knowledge, skills, abilities, and other characteristics) of the employee in role (detailed, customized)
What will be affected by pay level and structure decisions (5 things)?
-Operating expenses
-Applicant pool (size and quality)
-Turnover
-Union Status
-Organizational Climate
What are the actions of Performance Management?
-Goal setting and follow-up
-Measurement
-Actions
What methods are available for Performance Management?
-Performance Appraisal: key: what are we comparing to?
-Electronic document
-Balance Scorecard – combines individual and organizational goals
-360 degree review – more as a developmental tool
-Self Review – adv so manager can see how well communicating (Insight into where ee thinks they are and easier to deliver message from mgr.)
What criteria is used to determine grades and differences in a compensation plan?
-content
-value added
What are some benefits of Pay Transparency?
- no secrecy
-harder to discriminate
-may build trust/loyalty
What are the 6 steps in a job analysis?
1.Develop preliminary job information.
2.Conduct initial tour of work site.
3.Conduct interviews.
4.Conduct second tour of work site.
5.Consolidate job information.
6.Verify job descriptions.
What factors influence competitiveness?
-Organizational goals and strategies
-Labor market conditions
-Economic conditions
-Industry practices
Market Competitiveness
Refers to the overall level of competitiveness in the labor market, determined by factors such as supply and demand for labor, economic conditions, and industry practices.
External Competitiveness
Refers to the comparability of the compensation package offered by an organization to those offered by other organizations in the same labor market.
Internal Competitiveness
Refers to the fairness and equity of the compensation system within an organization, based on factors such as job responsibilities, skills, and performance.
What are the 3 comp ways to motivate human capital resources?
-Salary level
-PFP (Pay for Performance) proportion
-Organization level where PFP targets are provided
What are the 3 comp ways to motivate human capital resources?
-Salary level
-PFP (Pay for Performance) proportion
-Organization level where PFP targets are provided
What are sorting effects of pay?
Sorting is the degree to which employees select organizations based on the pay type provided by the organization. Influences composition of workforce (via attraction, selection, and attrition)
What is Agency Theory?
Assumes that managers can choose between offering incentives or monitoring behavior to elicit high performance.
What is pay form/mix?
The pay mix that makes up the total compensation (base, short term incentives etc)
What is Pay Level?
total pay per employee relative to competitors (Total pay, including base pay, bonuses, benefits, stock holdings, etc.)
What is Tournament Theory?
If you have higher pay at the top, everyone works hard bc they want to be there
