Total Rewards

Question 1

Total Rewards

Answer 1

encompasses direct and indirect remuneration approaches that employers use to attract, recognize and retain workers; “remuneration” and compensation and benefits” have the same meaning.

Question 2

Benefits

Answer 2

tangible payments or services provided to broad groups of employees to cover common issues, in addition to those required by law.

Question 3

Compensation

Answer 3

refers to all other financial returns, including salary and allowances

Question 4

Perquisites

Answer 4

compensation provided on an individual basis in the form of goods or services

Question 5

Incentives or permiums

Answer 5

Payments in return for the achievement of specific, time-limited, targeted objectives; often calculated as a percentage of base salary and paid as lump sums or ongoing payments

Question 6

Compensation philosophy

Answer 6

A short (but broad) statement documenting the organizations guiding principles and core values about employee compensation

Question 7

Objectives of a Total Rewards Strategy

Answer 7

Compatible with the organizations mission and strategy
Compatible with the organizational culture
Appropriate for the workforce
internally and externally equitable

Question 8

Advantages of Pay Transparency

Answer 8

Supports the achievement of strategic business objectives

Reduces conflicts among employees and between employees and management regarding pay

Question 9

Challenges to Pay Transparency

Answer 9

Can lead to jealousy and performance problems
Poses a risk that information may be used for inappropriate or unintended purposes
Requires protection of employee privacy and propriety information
Raises individual and cultural concerns about fairness in the global environment

Question 10

Due Diligence should include an understanding of relevant:

Answer 10

International standards and regulations
Extraterritorial application of national law
Application of national laws to international-owned subsidiaries operating within a nation’s borders

Question 11

Compensation System Design

Answer 11

Job Analysis–>Job Documentation–>Job Evaluation–> Pay Structure

Question 12

Job Analysis

Answer 12

Knowledge, Skills & Abilities

Question 13

Job Evaluation

Answer 13

determines the relative worth and pay structure of jobs based on an assessment of their content and relationship to other jobs in the organization.

Question 14

Market-Based Job Evaluation

Answer 14

determines the relative worth and pay structure of different jobs based on their market value or the going rate in the marketplace.

Question 15

Benchmarking

Answer 15

Initiative range from informal networking and knowledge sharing to formal engagements with private firms. Helps to identify gaps in policies and procedures compared to competitors and best practices.

Question 16

Creating a Pay Structure

Answer 16

Establish pay grades

Set pay ranges

Question 17

Compa-Ratios

Answer 17

divide the pay rate of an employee by the midpoint range.

Question 18

Broadbanding

Answer 18

Combines salary grades to create larger ranges. Allows people to move within their job without outgrowing the pay scale.

Question 19

Base-Pay Systems

Answer 19

in the form of an hourly wage or salary

Question 20

Performance Based Merit

Answer 20

Pay linked to measures of work quality or goals.

Employers must be able to defend practices.

Question 21

Differential Pay

Answer 21

Pay based on when an employee works:

• Shift pay
• premium pay
• on-call or call-back pay

Question 22

Incentive Pay

Answer 22

Pay that motivates employees to perform at higher levels. Paid for performance and must be related to aspects of the job.

Question 23

Health Benefits

Answer 23

funded through social or private insurance: affected by culture and location.
ex. medical, dental, wellness, employee assistance

Question 24

Disability Benefits

Answer 24

Pays employees unable to work because of illness or injuries; causes may be in or outside the workplace; may be funded by government, employer and employee.

Question 25

Life Insurance

Answer 25

Funded through social insurance and/or private insurance paid to beneficiary

Question 26

Workers’ Compensation

Answer 26

Pays employees portion of salary if they are unable to work due to a work-related accident or illness.

Question 27

Unemployment Insurance

Answer 27

Applies toward paying a percentage of an employee’s salary in the case of the employee losing his or her job through no fault of the employee. Helps workers who have been terminated to transition from one job to another equally suitable job.

Question 28

Retirement Plan

Answer 28

Promises payment of a specific benefit amount at retirement. Employer bears investment risk.

Question 29

Defined Contribution Plan

Answer 29

Employees receive 100% of their investment and the vested employer portion. Requires individual employee accounts. Amount at retirement depends on the return.

Question 30

Fiduciary Duty

Answer 30

Implies a legal obligation of one party to act in the best interest of another

Question 31

Fiduciary

Answer 31

Refers to the obligated party

Question 32

Social Security

Answer 32

Generally refers to social insurance, where people receive benefits or services in recognition of contributions to an insurance program.