Deck 6: Formulating the Reward and Compensation Strategy

Question 1

Before adopting a compensation strategy,it must be able to pass through three screens: affordability,legality,and employee attraction.

Answer 1

True

Question 2

Which of the following issues is not covered by employment standards legislation?

A) Minimum wage
B) Employment equity
C) Hours of work
D) Statutory holidays

Answer 2

B

Question 3

Over time pay rates,paid time off,and minimum wage levels are issues covered by what type of legislation?

A) Human rights
B) Employment standards
C) Trade union
D) Tax

Answer 3

B

Question 4

This term refers to the boundaries within which the compensation system must be designed.

A) Liabilities
B) Constraints
C) Demographics
D) Opportunities

Question 5

In developing a compensation strategy,the two key questions that must be addressed are: "How much is to be paid?" and "When should it be paid?"

Question 6

In defining the role of compensation,trade offs are possible between compensation and other rewards.

Question 7

The key reason that executives earn so much more than other employees is because their base pay is so much higher.

Question 8

All employees expected to perform similar behaviours must be paid in a similar manner.

Question 9

Which of the following is not considered to be a constraint on the compensation strategy?

A) Legislated
B) Labour market
C) Product/service market
D) Demographics

Question 10

Equal pay legislation prohibits discrimination based on which of the following factors?

A) Age
B) Gender
C) Equal work
D) Marital status

Question 11

Which of the following factors does not justify the differences of pay among employees with similar job duties?

A) Seniority
B) Performance
C) Experience
D) Age

Question 12

Which is not one of the key understandings needed to formulate compensation strategy?

A) Understand your organizational context.
B) Understand your people.
C) Understand your technical ladders.
D) Understand your compensation constraints.

Question 13

There are two main constraints on compensation strategy formulation,legislated constraints and labour market constraints.

Question 14

Which of the following workers are not covered under minimum wage legislation in some jurisdictions?

A) Students
B) Employees working from home
C) Domestic servants
D) Commissioned salespeople

Question 15

Utility Analysis is used to determine which benefits will be included in the compensation system.

Question 16

Which of the following best explains the legal difference between an employee and a contractor?

A) Only employees are allowed on the work site.
B) Contractors cannot hire another person to complete the work.
C) Contractors are exempt from employment standards legislation.
D) Employees can be forced to work overtime.

Question 17

When we discuss labour market constraints what are we specifically referring to?

A) Union constraints on labour allocation
B) Availability of employees versus demand
C) Cost of living constraints on pay demands
D) Managerial strategy in recruitment methods

Question 18

The nature of the compensation mix affects the amount that an organization can afford to pay.

Question 19

If compensation is to serve as a strategic tool,it must take into account the managerial strategy of the firm.

Question 20

The text points out four key understandings in the process of developing a compensation strategy: understanding your organizational context;understanding your people;understanding your compensation options;understanding your compensation constraints.

Question 21

Which of the following behavioural objectives is appropriate for companies using a high-involvement strategy?

A) Attract applicants to staff initial needs
B) Attract top-quality applicants well in excess of needs
C) Attract job applicants able to perform basic tasks
D) Attract applicants to replace turnover

Question 22

Which of the following is not one of the main groups for whom the compensation system often differs from the organization's compensation norm?

A) Contingent workers
B) Expatriate and foreign employees
C) Executives
D) Production employees

Question 23

Which of the following steps is not considered part of the compensation strategy formulation process?

A) Determine required behaviour
B) Determine role of compensation
C) Evaluate the proposed strategy
D) Conduct performance appraisals

Question 24

A hybrid compensation-level strategy is one that varies across which of the following?

A) Employee groups
B) Managerial strategies
C) Business segments
D) Industrial sectors

Question 25

You are attempting to define the role compensation will play in your reward strategy.What is the first thing that needs to be examined?

A) The nature of intrinsic and other extrinsic rewards offered
B) The compensation level strategy
C) The indicators of goal achievement
D) The compensation system behavioural objectives

Question 26

According to studies what is the least important reason for using contingent workers?

A) Acquiring special expertise
B) Screening candidates for future employment
C) Developing labour flexibility to meet demand fluctuations
D) Buffering core workers against job loss

Question 27

Which of the following situations best explains a tight labour market?

A) Demand is high but supply is low
B) Both demand and supply is low
C) Demand is low but supply is high
D) Both demand and supply is high

Question 28

The CEO of a food distribution firm is attempting to decide what the compensation strategy will be for the coming year. What is the first step in the process she needs to consider?

A) The role of compensation
B) The compensation mix
C) The required behaviour
D) The compensation level

Question 29

By paying employees 5% below the base pay market,you are using what type of compensation policy?

A) Lag
B) Lead
C) Match
D) Low cost

Question 30

As the owner of a medium-sized engineering consulting firm,you choose to have different pay-level policies for your engineers,managers,and support staff. Which type of compensation policy have you adopted?

A) Lead
B) Match
C) Hybrid
D) Lag

Question 31

Which of the following dimensions of task behaviour is more suited for a high-involvement compensation system?

A) Individual output
B) Low skill requirements
C) High employee risk-taking desired
D) Narrow tasks

Question 32

This method involves using a "what if" scenario to determine which compensation-level strategy is most efficient for your organization.

A) Cost-benefit analysis
B) Market share analysis
C) Trial analysis
D) Utility analysis

Question 33

What two main aspects need to be considered to help you determine what you want the executive compensation system to accomplish?

A) A symbolic aspect and a market aspect
B) A behavioural aspect and a market aspect
C) A behavioural aspect and a symbolic aspect
D) A pay equity aspect and a market aspect

Question 34

Lag strategies are cost-effective for which type of firms?

A) Firms that are labour-intensive
B) Firms needing to attract top-quality applicants
C) Firms that value employee stability
D) Firms that invest heavy in training and development

Question 35

The compensation system needs to be relied on more heavily to motivate behaviour in which of the following circumstances?

A) Pet rescue center animal attendants
B) Food processing plant production workers
C) Food bank packagers
D) Hospital nursing staff

Question 36

Which of the following pay types is currently being used to make up an increasing portion of CEO's compensation?

A) Annual bonuses
B) Base pay
C) Long-term unit /share plans
D) Perks

Question 37

What key constraint has probably forced you as a new owner to relocate your fast-growing labour intensive shoe manufacturing business from Toronto to a small town in Nova Scotia?

A) Labour market
B) Financial
C) Legislated
D) Service market

Question 38

What does utility analysis help managers determine?

A) Which compensation level policy is most efficient
B) Which compensation mix policy is most efficient
C) The utility of different types of task behaviour
D) Which managerial strategy will be most efficient for a firm

Question 39

What causes some firms to end up leading the market unintentionally?

A) A strong union
B) Noncash rewards
C) Utility analysis
D) Budgetary circumstances

Question 40

To keep work interesting and provide higher compensation opportunities for your design engineers,you have created a compensation system that allows them to move from an entry to expert specialist level. What term is used to describe this system?

A) Management pathing
B) Technical ladder
C) Competency based
D) Leader development

Question 41

Briefly discuss the four key understandings necessary for successful formulation of compensation strategy.

Question 42

What are the four special employee groups discussed in the text,and what are some the implications for compensation?

Question 43

Briefly describe the five main steps in the formulation of compensation strategy.

Question 44

What are a firm's choices for compensation level strategy,and how can it decide between them?

Question 45

Briefly summarize the legislative framework that compensation must comply with.