Total Rewards Strategy

Question 1

Term for compensation and benefits

Answer 1

Remuneration

Question 2

Goods or services provided on an individual basis

Answer 2

Perquisites

Question 3

What is the starting point to a total rewards strategy?

Answer 3

the Compensation Philosophy

Question 4

4 Steps to developing a total rewards strategy

Answer 4

1. Assessment
2. Design
3. Implementation
4. Evaluation

Question 5

Culture that puts more emphasis on the success of the org as a whole

Answer 5

Entitlement-oriented

Question 6

Culture that is individual performance-driven

Answer 6

Contribution-oriented

Question 7

Employees feel they are being fairly rewarded according to the relative value of their job

Answer 7

Internal Equity

Question 8

Employees feel they are rewarded fairly in relation to those who perform similar jobs in other orgs

Answer 8

External equity

Question 9

How to communicate a total rewards strategy

Answer 9

• educate employees about the total rewards practices
• achieve employees buy-in and make aware of the overall value
• support the org’s strategic objectives
• support the org’s goals for performance management

Question 10

2 Effective total rewards practices in global orgs

Answer 10

1. research local laws versus org practices
2. involve experts to validate complex local requirements

Question 11

Return on Investment (ROI)

Answer 11

How much you paid for an investment vs. how much you earned (evaluates efficiency)

Question 12

4 Steps to compensation system design

Answer 12

1. Job analysis
2. Job documentation
3. Job evaluation
4. Pay structure

Question 13

Identifies job tasks and qualifications of employees

Answer 13

Job analysis

Question 14

Creation of job descriptions, job specification (qualifications) and job competencies

Answer 14

Job documentation

Question 15

Establishes the value of jobs within the org

Answer 15

Job evaluation

Question 16

Methods that establish a relative order of jobs in an org

Answer 16

Nonquantitative

Question 17

Methods that use a scaling system to determine how much more important one job is to others

Answer 17

Quantitative

Question 18

Hierarchy of jobs from lowest to highest, evaluating the whole job and its overall value to the org

Answer 18

Job Ranking

Question 19

Descriptions for each class of jobs, individual jobs are then put into grade that matches their class description

Answer 19

Job Classification

Question 20

Identifies factors relevant to the nature of jobs (skills, responsibilities, effort/physical demands), and assigns points to each factor, adds to determine overall point value for the job

Answer 20

Point-Factor System

Question 21

Relative worth and pay structure of jobs based on their market value

Answer 21

Market-based job evaluations

Question 22

Collect information on prevailing market compensation and benefits practices

Answer 22

Remuneration Surveys

Question 23

Movement in market rates is used to adjust outdated data

Answer 23

Aged salary data

Question 24

informal or through formal consulting, can improve an org’s ability to attract, retain, engage, and reward talent

Answer 24

Benchmarking data

Question 25

Group jobs with approximately the same relative worth in the org, all jobs within the group are paid the same rate or range

Answer 25

Pay grades

Question 26

Set the upper and lower limits of compensation for employees whose jobs fit within that particular grade

Answer 26

Pay ranges

Question 27

Compa-Ratio calculation

Answer 27

pay rate / midpoint

Question 28

Combines 2 or more salary grades to create larger ranges and give people wide latitude to move within a job, supports de-layering efforts

Answer 28

Broadbanding

Question 29

Each incumbent of a job has the same rate of pay, regardless of performance/seniority

Answer 29

single-rate or flat-rate system

Question 30

Employee's pay rate is based on longevity in the job, increases are on a pre-determined schedule

Answer 30

Time-based step-rate system

Question 31

Employee's performance on the job is basis for amount and timing of pay increases

Answer 31

Merit-based or performance-based system

Question 32

Pay determined by employee output

Answer 32

Productivity-based system

Question 33

Receive a base rate and awarded additional compensation for amount produced

Answer 33

straight piece-rate system

Question 34

Receive one piece rate up to the standard, then higher rate per piece when standard is exceeded

Answer 34

differential piece-rate system

Question 35

Employee characteristics determine pay

Answer 35

Person-based system

Question 36

Pay based on level of knowledge an employee has

Answer 36

Knowledge-based

Question 37

Pay based on number of different skills employee is qualified to perform

Answer 37

Skill-based

Question 38

Pay at the level an employee can operate in defined competencies

Answer 38

Competency-based

Question 39

Depends on performance, not added to base pay

Answer 39

Differential pay

Question 40

Shift pay, emergency-shift pay, premium pay, on-call pay, travel pay, overtime pay

Answer 40

Time-based differential pay

Question 41

Tailor compensation to different local markets for labor costs, to attract workers in certain locations, or for foreign countries

Answer 41

Geographic differential pay

Question 42

Most critical factor in designing executive compensation plans

Answer 42

Incentivizing executives to meet business objectives

Question 43

Employee pay rates above the range maximum

Answer 43

Red circle rates

Question 44

Employee pay rate is below the range minimum

Answer 44

Green circle rates

Question 45

What it means for an org if red circle rates become common

Answer 45

their ranges may lag the market and need to be re-examined

Question 46

When there is only a small difference in pay between employees regardless of experience, skills, level, or seniority

Answer 46

Pay compression

Question 47

Benefits needs assessment purpose

Answer 47

help HR develop a benefits package that is affordable for the org and valued by employees, and allow to build the business case

Question 48

Retirement plan that promises a specific benefit amount, vesting schedule, based on service/salary, amount decided by formula, and employer bears the investment risk

Answer 48

Defined Benefit

Question 49

Retirement plan where amount of money regularly contributed is specified, employer portion is vested, individual accounts for each employee, and employee bears the investment risk

Answer 49

Defined Contribution

Question 50

Metric to identify the proportion of benefits costs

Answer 50

total benefits costs / total payroll costs

Question 51

Metric to calculate the participation rate

Answer 51

number of employees enrolled / total number of employees

Question 52

Establishes the salary range for jobs within a certain grade

Answer 52

Pay banding