Topic 6 - Integrated Reward Structures

Question 1

What is the goal of integrating internal rewards alignment with external rewards positioning?

Answer 1

To determine the connection between internal and external job valuations and create a balanced rewards strategy.

Question 2

What does the process of internal rewards alignment establish?

Answer 2

A structure for internally valuing all jobs within an organization.

Question 3

What does external rewards positioning focus on?

Answer 3

Gathering market reward information for specific benchmark jobs.

Question 4

Why is balancing internal and external job valuations important?

Answer 4

It ensures the organization can develop a fair and competitive rewards strategy.

Question 5

What is the purpose of integrating Internal Alignment and External Reward Positions?

Answer 5

To connect internal job evaluation points with external compensation rates for creating a balanced reward system.

Question 6

What statistical technique is used to determine the relationship between Job Evaluation Points and Compensation?

Answer 6

Regression analysis.

Question 7

What does the Value-Reward Line represent?

Answer 7

It is the line of best fit that connects internal job evaluation points with external market compensation levels.

Question 8

What type of chart is used to plot Job Evaluation Points against Compensation?

Answer 8

A scatterplot.

Question 9

What is the formula for the Value-Reward Line?

Answer 9

The formula is Y=mX+b, where Y is compensation, X is job evaluation points, m is the slope, and b is the Y-axis intercept.

Question 10

What is the utility of the Integrated Value-Reward Line?

Answer 10

It allows for estimating market pay for jobs using job evaluation points, even without direct market compensation data.

Question 11

Why might a single straight line not perfectly touch all points in a scatterplot?

Answer 11

Because the data points often have variability, and the line of best fit minimizes the distance to all points collectively.

Question 12

How are compensable factors represented in the Value-Reward Line process?

Answer 12

As Job Evaluation Points derived from internal alignment methods.

Question 13

What can regression analysis estimate in the context of the Value-Reward Line?

Answer 13

It estimates the mathematical formula for predicting compensation based on job evaluation points.

Question 14

Why is the Value-Reward Line important for organizations?

Answer 14

It helps integrate internal job value structures with external market compensation data, enabling fair and competitive pay strategies.

Question 15

What kind of analysis is best to use when finding out how much a job family should be paid?

Suppression analysis
Point factor analysis
Regression analysis
Job performance analysis

Answer 15

Regression analysis

Question 16

When graphing the salaries in a value reward line, what type of graph would give the best picture of salaries?

Pie chart
Scatterplot
Bar graph
Line graph

Answer 16

Scatterplot

Question 17

The regression analysis can also be called:

The line of great fit
The line of high fit
The line of fit
The line of best fit

Answer 17

The line of best fit

Question 18

The value-reward line can best be explained by the mathematical equation:

y=sx+a
y=ax+m
y=ax+b
y=mx+b

Answer 18

y=mx+b

Question 19

True or False. A regression analysis plots a line minimally distant for each point in the data.

Answer 19

True

Question 20

What factors should an organization consider when designing a Reward-level Strategy?

Answer 20

The criticality of jobs to core strategy, challenges in attracting and retaining employees, competitor practices, and cost-control objectives.

Question 21

What is a Reward-level Strategy?

Answer 21

It refers to the extent to which a company will pay above, at, or below the market average, often expressed as a percentage.

Question 22

What are the strategic options for a Reward-level Strategy relative to competitors?

Answer 22

Lead the market, match the market, or lag the market.

Question 23

Why might an organization choose a lead-the-market Reward-level Strategy?

Answer 23

To attract superior talent and gain a competitive advantage.

Question 24

Why might an organization choose a lag-the-market Reward-level Strategy?

Answer 24

To maintain a lower cost structure than competitors.

Question 25

What does the magnitude of a lead/lag strategy depend on?

Answer 25

The extent to which superior talent is a competitive advantage and the cost required to attract that talent.

Question 26

What is a Job-specific Reward Level Strategy?

Answer 26

Establishing different Reward Level Strategies for different job families or hierarchical levels based on their strategic importance.

Question 27

Provide an example of a Job-specific Reward Level Strategy.

Answer 27

Marketing jobs might be compensated at 7% above market, while administrative jobs might be compensated at 3% below market.

Question 28

What is a Pay Form-specific Reward Strategy?

Answer 28

Varying pay-level strategies across different reward types, such as base pay, benefits, or variable pay.

Question 29

Provide an example of a Pay Form-specific Reward Strategy.

Answer 29

Lagging the market by 5% on base pay but leading by 10% on employee benefits.

Question 30

What is a Job and Pay Form-Specific Reward Strategy?

Answer 30

Customizing reward strategies by combining job-specific and pay form-specific approaches.

Question 31

Provide an example of a Job and Pay Form-Specific Reward Strategy.

Answer 31

Marketing jobs match the market for base pay and lead by 5% on variable pay, while administrative jobs match base pay and lag by 3% on variable pay.

Question 32

Why is customization in Reward Strategies important?

Answer 32

It helps align rewards with strategic objectives and differentiates the organization in the labor market.

Question 33

What are potential fairness issues in Reward Strategies?

Answer 33

Differentiating pay for certain employee groups may create divisions and hurt collaboration or inclusiveness.

Question 34

How can fairness issues in Reward Strategies be mitigated?

Answer 34

Differentiations should be defensible, strategically logical, and supported by evidence.