Topic 4 - Internal Reward Alignment

Question 1

What is Internal Reward Alignment?

Answer 1

It is the alignment of each employee’s rewards with those received by others in the organization to ensure fairness, performance augmentation, cost management, compliance, and attraction and retention.

Question 2

Why is understanding the value of different jobs important in an organization?

Answer 2

To develop an effective and fair Total Rewards System that aligns rewards with job contributions to organizational goals.

Question 3

What is another term for Internal Reward Alignment, and why is it used?

Answer 3

Internal Equity; it emphasizes fairness in rewards among employees within the organization.

Question 4

What organizational issues can arise from a poorly designed rewards system?

Answer 4

Difficulties with employee morale, turnover, collaboration, and information sharing.

Question 5

How does Internal Reward Alignment contribute to organizational goals?

Answer 5

By ensuring fair pay comparisons, improving performance, managing costs, ensuring compliance, and supporting employee attraction and retention.

Question 6

An Internal Rewards Alignment is best defined as:

A system designed to show compensation managers the market rates for specific jobs
The extent to which an organization’s Total Rewards System aligns each employee’s rewards with those received by others in the organization
The rewards with which competitive employers compensate their employees
A rewards system that allows for bonuses for executive-level managers

Answer 6

The extent to which an organization’s Total Rewards System aligns each employee’s rewards with those received by others in the organization

Question 7

Where could potential problems lie if there are flaws in a compensation system?

Morale
Turnover
Information sharing
All of the above

Answer 7

All of the above

Any rewards system that does not have a clear answer to this question is destined to have difficulties not only with employee morale and turnover, but also internal processes such as collaboration and information sharing.

Question 8

What are the three broad approaches to Internal Reward Alignment?

Answer 8

Job-based, Individual-based, and Performance-based approaches.

Question 9

What does the Job-based approach to Internal Reward Alignment assume?

Answer 9

It assumes that rewards are provided based on the job a person holds.

Question 10

What does the Individual-based approach to Internal Reward Alignment assume?

Answer 10

It assumes that rewards are based on the characteristics of the person holding a job.

Question 11

What does the Performance-based approach to Internal Reward Alignment assume?

Answer 11

It assumes that rewards are based on the performance or results produced by an employee.

Question 12

Why is it important to understand the three approaches to Internal Reward Alignment?

Answer 12

To help an organization decide on its Total Rewards Strategy and systems.

Question 13

Which approach to Internal Reward Alignment is the most common and foundational?

Answer 13

The Job-based approach.

Question 14

Which of the following is not an approach to an Internal Reward Alignment?

Individual-based approach
Job-based approach
Performance-based approach
Group-based approach

Answer 14

Group-based approach

Question 15

The Job-based approach assumes that organizations will reward based on:

Employee merit and end-of-year company performance
Results by an employee
The job a person holds
Characteristics of a person holding a job

Answer 15

The job a person holds

Question 16

The Individual-based approach assumes that rewards should be based on:

Characteristics of a person holding a job
The job a person holds
Merit based pay for end-of-year company performance
Results by an employee

Answer 16

Characteristics of a person holding a job

Question 17

The Performance-based approach assumes that rewards should be based on:

Results by an employee
Characteristics of a person holding a job
Merit based pay for end-of-year company performance
The job a person holds

Answer 17

Results by an employee

Question 18

True or False. Each of these approaches needs to be understood to allow an organization to decide upon its Total Rewards Strategy and systems.

Answer 18

True

Question 19

In a ________________, the job itself is the fundamental unit for designing the rewards system.

Individual-based system
Group-based system
Performance-based system
Job-based system

Answer 19

Job-based system

Question 20

In a job-based system, pay changes occur when:

A new hire starts his/her first day
An employer changes jobs
An employee changes jobs
Pay changes never occur

Answer 20

An employee changes jobs

Question 21

True or False. In a purely job-based system, a highly skilled manager with an MBA who is preparing food in a fast-food restaurant would be paid the same amount as a high school dropout performing the same job.

Answer 21

True

Question 22

Using job analysis, all work in business is organized into:

Job families
Jobs
Job classes
Job approaches

Answer 22

Jobs

Question 23

Through what method do you understand how valuable a job is?

Job creation
Job evaluation
Job analysis
Job devaluation

Answer 23

Job evaluation

Question 24

What is Job Evaluation?

Answer 24

The process by which the value of each job in an organization is established, forming the basis for a pay structure.

Question 25

What is the purpose of Job Evaluation?

Answer 25

To create a rewards structure by determining the relative value of jobs within an organization.

Question 26

What is a Job Structure?

Answer 26

An organized listing of jobs grouped and hierarchically arranged for rewards purposes.

Question 27

What are Job Families?

Answer 27

Large categories of jobs, such as Accounting, Marketing, or Computer Engineering, within a Job Structure.

Question 28

What is a Job-Value Structure?

Answer 28

A structure of jobs internally positioned according to their relative value to the organization.

Question 29

What are the three primary methods for establishing Internal Reward Alignment?

Answer 29

Job Classification Approach, Job Comparison Approach, and Point Factor Approach.

Question 30

What does the Job Classification Approach use to organize jobs?

Answer 30

Logical categories and descriptions.

Question 31

What is a drawback of the Job Classification Approach in large organizations?

Answer 31

It can become overly complex and unwieldy as the number and types of jobs grow.

Question 32

What is the Job Comparison Approach?

Answer 32

A method where jobs are ranked based on their value relative to other jobs in the organization.

Question 33

What is the Point Factor Approach?

Answer 33

A method that allocates points to jobs based on their value to the organization using defined factors and measures.

Question 34

What are Compensable Factors?

Answer 34

Statements of what the organization values, representing parts of work that create value for the organization.

Question 35

How are Benchmark Jobs used in the Point Factor Approach?

Answer 35

They represent a sample of jobs used to develop the system for evaluating all jobs.

Question 36

What is the purpose of rating scales in the Point Factor Approach?

Answer 36

To measure the extent to which a job involves a compensable factor.

Question 37

What is an Anchored Rating Scale?

Answer 37

A scale that uses behavioral examples or definitions for each point value to improve clarity and agreement.

Question 38

What is a Variable Distance Scale?

Answer 38

A scale where the point values between levels vary to reflect "natural breaks" in the factor being measured.

Question 39

What is Factor Weighting?

Answer 39

Determining the relative importance of compensable factors in a reward plan.

Question 40

Why is Factor Weighting important?

Answer 40

It ensures the compensation system reflects the organization's strategy and priorities.

Question 41

What is Face Validity in a Job Evaluation System?

Answer 41

The extent to which the system produces job values that appear accurate and credible to employees.

Question 42

What is the purpose of a pilot test in the Point Factor Approach?

Answer 42

To ensure the system is clear, reliable, and valid before full implementation.

Question 43

What happens after a pilot test reveals issues in the system?

Answer 43

Adjustments are made, and the process is repeated until the system is ready for rollout.

Question 44

What is the final step in the Point Factor Approach?

Answer 44

Measuring factors for all jobs in the organization using the established system.

Question 45

What is the key advantage of the Point Factor Approach?

Answer 45

It is scalable and can handle large organizations with many jobs.

Question 46

What is a tradeoff of having a single reward structure for an organization?

Answer 46

It creates cohesion but may overlook unique contributions of different job families.

Question 47

What is a tradeoff of having multiple reward structures for an organization?

Answer 47

It captures unique contributions but may reinforce silos and impede collaboration.

Question 48

What connects multiple reward structures in an organization?

Answer 48

Common elements or compensable factors.

Question 49

What challenges arise when creating a job classification system?

Answer 49

Ensuring the categories are meaningful, mutually exclusive, and comprehensible.

Question 50

How does the Job Comparison Approach handle job evaluation?

Answer 50

By comparing all jobs and assigning points to indicate relative value.

Question 51

What is the role of a ratings coach in the Point Factor Approach?

Answer 51

To assist raters in understanding and applying the system accurately.

Question 52

Why is job analysis critical in developing a Job Structure?

Answer 52

It provides detailed descriptions of work, forming the foundation for job grouping and evaluation.

Question 53

How does an organization decide the number of compensable factors to use?

Answer 53

By balancing enough breadth to cover all value-creating work and keeping the system manageable.

Question 54

What are the steps involved in the Point Factor Approach?

Answer 54

Step1 - Choose Compensable Factors Step 2 - Develop Factor Measures Step 3 - Determine Factor Weights Step 4 - Pilot Test the Job Evaluation System Step 5 - Measure Factors for All Jobs

Question 55

Job evaluation is: The process by which the value of each employee in an organization is established The process by which the value of each department in an organization is established The process by which the value of each job in an organization is established The process by which the value of the compensation plan is established

Answer 55

The process by which the value of each job in an organization is established

Question 56

A job structure is: A systematic approach to creating a job analysis for the purposes of understanding the compensation plan A value system for the list of jobs created An organized listing of the business’s jobs that functionally groups and hierarchically arranges the jobs for rewards purposes The way a company decides to recruit, retain, and develop employees

Answer 56

An organized listing of the business’s jobs that functionally groups and hierarchically arranges the jobs for rewards purposes

Question 57

The ___________________ is creating a job structure using logical categories and descriptions to organize the jobs. Job comparison approach Classification approach Point factor approach None of the above

Answer 57

Classification approach

Question 58

The ___________________ explains how jobs are placed in a relative hierarchy based upon how their value compares to other jobs. Job comparison approach Classification approach Point factor approach None of the above

Answer 58

Job comparison approach

Question 59

The ____________________ allocates points to jobs based upon the job’s value to the organization. Job comparison approach Classification approach Point factor approach None of the above

Answer 59

Point factor approach

Question 60

Job evaluation is a tool to help organizations create Internal Reward Alignments that are both ____________ and ___________ to effective employee performance. Equitable and conducive Equitable and creative Conducive and available Conducive and developed

Answer 60

Equitable and conducive

Question 61

Job evaluation produces a job value structure through: Placing jobs in a system of classifications Comparing jobs directly to each other Assigning points based on the compensable factors All of the above

Answer 61

All of the above

Question 62

With the job evaluation system in place, the organization now has a ____________ indicator of the value that each job creates for the organization. Qualitative Small Quantitative Large

Answer 62

Quantitative

Question 63

True or False. Organizations face certain challenges when making the connection between the Internal Job Value Structure and the monetary value created externally in labor markets.

Answer 63

True

Question 64

Internal Reward Alignment is the extent to which the relative value of all jobs in the organization is ___________ the business strategy. Clear about Coherent with Fair to Supportive of All of the above

Answer 64

All of the above

Question 65

Job evaluation provides the basis for developing a network or configuration of ________ that make up a rewards structure. Pay differences Pay increases Pay rates Pay decreases

Answer 65

Pay rates Job evalutation provides the basis for developing a network or configuration of pay rates that make up a rewards structure.

Question 66

The most fundamental question of internal reward alignment relates to the number of ____________ in an organization. Distinct reward structures Distinct benefit plans Distinct business goals Distinct business strategy

Answer 66

Distinct reward structures For example, will the organization have one reward structure that covers management, sales, and manufacturing job families, or will the organization have a different reward structure for each job family?

Question 67

Which of the following is not an example of a job family? Engineering All are considered job families Accounting Biology

Answer 67

All are considered job families Job families, such as accounting, marketing, or computer engineering, typically form the largest categories.

Question 68

True or False. Once jobs are broadly organized into such a job structure, the next step is to create a mechanism for assigning their relative value in the organization.

Answer 68

True

Question 69

The job value structure represents: The structure of jobs internally positioned according to their immediate value The structure of jobs internally positioned according to their natural value The structure of jobs internally positioned according to their relative value None of the above

Answer 69

The structure of jobs internally positioned according to their relative value

Question 70

Job-value structure does not answer the question of: How important are jobs What jobs are Whom to recruit for jobs How jobs are related

Answer 70

Whom to recruit for jobs The job value structure answers the question of what the jobs are, how they are related, and the relative importance of each.

Question 71

True or False. Job evaluation is a tool to help organizations create internal reward alignment that is both equitable and conducive to effective employee performance.

Answer 71

True

Question 72

Which approach is a way to establish internal reward alignment? Classification approach Job comparison approach Point factor approach All of the above

Answer 72

All of the above

Question 73

In which approach would it appear that jobs are ordered based on rank and file? Job comparison approach Point factor approach Classification approach None of the above

Answer 73

Job comparison approach In the job comparison approach (or ranking approach), jobs are placed in a relative hierarchy based upon how their value compares to other jobs.

Question 74

In which approach would it appear that jobs are categorized by job descriptions? Job comparison approach Point factor approach Classification approach None of the above

Answer 74

Classification approach The classification approach to creating a job structure uses logical categories and descriptions to organize the jobs.

Question 75

In which approach are jobs compared and “winning” or more “important” jobs get points? Job comparison approach Point factor approach Classification approach None of the above

Answer 75

Job comparison approach All jobs in the organization are compared, with points given for each comparison "won" by each job.

Question 76

The advantage of the job comparison approach is that it is: Intuitive Holistic Intuitive and holistic None of the above

Answer 76

Intuitive and holistic The job is considered as a whole and compared to other jobs as a whole.

Question 77

A downside to the comparison approach is it: Becomes inefficient as size of company grows Becomes inefficient as management grows Becomes inefficient as management shinks Becomes inefficient as size of company shrinks

Answer 77

Becomes inefficient as size of company grows

Question 78

True or False. The goal of job evaluation is to create a way to measure the value (and relative value) of each job in the organization.

Answer 78

True

Question 79

The point factor approach does all except: Defines valuable elements of jobs Measures the extent to which each job has that element Developes revolutionary ideas for job analysis Specifies the importance of each element of a job

Answer 79

Developes revolutionary ideas for job analysis It follows a general process of defining valuable elements of jobs, specifying their importance, and measuring the extent to which each job has that element.

Question 80

Choose the answer which does not complete the blank: internal reward alignment is how _______ the relative value of all jobs in an organization is. Fair Enjoyable Clear Coherent

Answer 80

Enjoyable Internal reward alignment is the extent to which the relative value of all jobs in the organization is clear, coherent, fair, and supportive of the business strategy.

Question 81

It is better to have a _____________ approach in job analysis. Quantitative Qualitative Both A & B None of the above

Answer 81

Quantitative

Question 82

A compensable factor is a: Statement of what the organization values Statement of what the organization wants Statement of what the organization has Statement of what the organization needs

Answer 82

Statement of what the organization values

Question 83

A benchmark job is: A sample of jobs that is representative of the type, content, and level of jobs in the organization A sample of jobs within the organization that are to be addressed for compensation levels A sample of jobs provided by government to control wage decreases None of the above

Answer 83

A sample of jobs that is representative of the type, content, and level of jobs in the organization

Question 84

A graphic rating scale is: Where raters rate the extent to which the job involves the un-compensable factor Where raters rate the extent to which the job involves the compensable factor Both A & B None of the above

Answer 84

Where raters rate the extent to which the job involves the compensable factor The higher a job is rated on the scale, the more value points that it receives.