Module 1 Introduction to Total Rewards

Question 1

Why is it important for total rewards professionals to understand labor market trends?

A. To attract talent at an affordable cost
B. To adapt alternative programs to ensure legal compliance
C. To update the organization’s business strategy
D. To change the vision and mission of the organization

Answer 1

A. To attract talent at an affordable cost

Question 2

Which of the following best describes the business strategy?

A. A plan for the products than an org will produce
B. An org’s reason for existence or its purpose for being
C. A set of believes or values adopted by an org
D. A broad plan for competitively positioning products supporting the mission

Answer 2

D. A broad plan for competitively positioning products supporting the mission

Question 3

Which of the following are three of the six elements of total rewards?

A. Base pay, variable pay and performance management
B. Talent development, recognition and benefits
C. Recognition, health coverage and work-life effectiveness
D. Attraction, motivation and retention

Answer 3

B. Talent development, recognition and benefits

Question 4

Which of these key players involved in the development of the total rewards strategy works
closely with HR to facilitate the process?

A. Customers
B. Senior management
C. Employees
D. Outside consultants

Answer 4

D. Outside consultants

Question 5

What is one of the advantages of taking a total rewards approach?

A. Ensures that the HR strategy will align with the business strategy
B. Ensures compliance with legal and regulatory requirements
C. Offers flexibility for customizing total rewards programs in unique proportions
D. Offers more career opportunities for HR professionals

Answer 5

C. Offers flexibility for customizing total rewards programs in unique proportions

Question 6

Components of base pay

Answer 6

Hourly wage or annual salary
Job description
Job evaluation

Question 7

Components of total cash

Answer 7

Base pay
Variable pay (bonus, incentives, commissions)

Question 8

Examples of variable pay

Answer 8

Bonus
Incentives
Commissions

Question 9

Components of total compensation

Answer 9

Base pay
Variable pay
Benefits

Question 10

Components of total rewards

Answer 10

Compensation
Benefits
Work-life effectiveness
Recognition
Performance management
Talent development

Question 11

External influences on total rewards (4)

Answer 11

• Economic (rising or falling conditions in global economic landscape)
• Labor market (trends & movement, incl. supply & demand of key talent)
• Cultural norms (customs, social mores, & drivers of diverse makeup & expectations of workforce)
• Regulatory (regulatory/legal environment can vary widely & change quickly)

Question 12

Drivers of total rewards strategy

Answer 12

Business strategy + org culture > HR strategy > total rewards strategy

Question 13

Business strategy

Answer 13

Broad framework of principles & approaches that guide day-to-day decisions affecting the business, derived from vision & mission

Question 14

Examples of business strategy (3)

Answer 14

Operational excellence (Amazon)
Product/service leadership (Apple)
Customer intimacy (Zappos)

Question 15

Stages of business life cycle

Answer 15

1. Start-up (new org with little to no formal policy or procedures, focus on obtaining capital, marketing products or services, initial sales growth, & cash conservation)
2. Growth (focused on growing sales, inc distribution capability, & determining how to efficiently produce products/services)
3. Mature (focus on maintaining/inc market share, improving productivity, and reducing cost of sales)
4. Decline (decide whether to reinvest, create new products, or maximize revenues w/ current products as long as poss)

Question 16

Aspects of organizational culture

Answer 16

Subject to internal & external influences

Greatly influenced by org’s leadership

Question 17

HR strategy

Answer 17

Plan for attraction, motivation, engagement, & retention of employees. Developed based on business strategy + org culture.

Question 18

Total rewards strategy identifies:

Answer 18

• The desired competitive marketing positioning (ex: target at 50th % of competitors)
• The rewards programs that are offered & the optimal mix for each employee group
• The way each reward program will be earned & allocated (employee classifications/populations eligibility, team vs individual performance)

Question 19

Key players in total rewards strategy development

Answer 19

• Senior management/board of directors (gives approval)
• HR leadership (articulates HR strategy, design, implement)
• Employees (help ID relative importance of elements, collective bargaining agreement may need to be considered if applicable)
• Outside consultants (work w/ HR to develop overall strategy & design)

Question 20

Total rewards approach

Answer 20

Attract, motivate, engage, retain

Question 21

Advantages of a total rewards approach

Answer 21

• Greater flexibility (customize in unique proportions - the total rewards mix)
• More profitable (direct link btwn attracting talent, having engaged + motivated employees, & long-term bus profitability)
• Better place to work