Deck 2: Strategy: The Totality of Decisions

Question 1

The decision to base pay increases on individual or group performance is made within the _____ strategic compensation choices.

A) internal alignment
B) external competitiveness
C) employee contributions
D) management

Answer 1

C

Question 2

"Choosing techniques to fit strategy" is a part of which step in developing a total compensation system?

A) Reassess
B) Implement strategy
C) Map a total compensation strategy
D) Assess total compensation implications

Answer 2

B

Question 3

"Putting some skin in the game" refers to:

A) employees paid entirely on commission
B) being paid as a contract vs.a regular employee
C) below market base pay with stock ownership
D) above market base pay with low benefits

Answer 3

C

Question 4

Flexible-generic job descriptions would most likely be used with a _____ strategy.

A) innovator
B) customer-focused
C) differentiated
D) cost-cutter

Question 5

A focus on competitor's costs is most closely associated with a _____ strategy.

A) innovator
B) customer-focused
C) cost-cutter
D) differentiated

Question 6

The second step of developing a total compensation strategy is to:

A) implement strategy.
B) assess total compensation implications.
C) estimate the cost of the strategy.
D) map a total compensation strategy.

Question 7

At the corporate level,a strategic compensation perspective addresses the question:

A) What business should we be in?
B) What is our desired return on assets?
C) How can our total compensation help gain competitive advantage to achieve organization success?
D) How can job analysis help us select the most appropriate certain compensation technique(s)for our organization?

Question 8

The choice to communicate and make open an organization's pay system to employees is an example of which strategic choice?

A) Internal alignment
B) External competitiveness
C) Employee contributions
D) Management

Question 9

Whole Foods' decision to seek and engage employees who are going to help the company make money is an example of which strategic pay decisions?

A) Objectives
B) Employee contributions
C) Internal alignment
D) Management

Question 10

"Supporting promotional growth opportunities" is an example of which of the following?

A) Objectives
B) Internal alignment
C) Externally competitive
D) Employee contributions

Question 11

A compensation system using market-based pay is most likely to be part of a _____ strategy.

A) innovator
B) cost-cutter
C) global
D) customer-focused

Question 12

Whole Foods' policy of holding executive salaries to no more than 14 times average pay of full-time employees is an example of which strategic pay decision?

A) External competitiveness
B) Employee contributions
C) Management
D) Internal alignment

Question 13

A compensation system focusing on system control and work specifications is most closely associated with _____ strategy.

A) global
B) customer-focused
C) cost-cutter
D) differentiated

Question 14

A book listing the previous year's pay of all employees is part of Whole Foods "No-secrets" philosophy.This is an example of which strategic compensation choice?

A) Internal alignment
B) External competitiveness
C) Employee contributions
D) Management

Question 15

A compensation system that pays employees such that "some skin is in the game" means that

A) a portion of employee pay is at risk
B) employers risk high labor costs
C) level of base pay is below competitors
D) base pay is low while benefits are generous

Question 16

What level of strategy is the question "how do we gain competitive advantage"?

A) Corporate
B) Business unit
C) HR
D) Departmental

Question 17

Decisions regarding what forms compensation should be are part of _____.

A) internal alignment
B) external competitiveness
C) employee contributions
D) management

Question 18

In which of the following country would it be most difficult for someone to move from one employer to another?

A) U.S.
B) Korea
C) Germany
D) Canada

Question 19

Which of the following relationships within a pay system is accurate?

A) Compensation objectives shape pay policies.
B) Pay policies determine the objectives of the pay system.
C) Organization strategies determine employee pay needs.
D) Pay policies form the compensation strategy of the organization.

Question 20

The social,competitive and regulatory environment factors are most important for which type of strategy?

A) Corporate
B) Business unit
C) HR
D) Strategic compensation

Question 21

The alignment test

A) is difficult to imitate.
B) is the most difficult test.
C) helps ensure passing the differentiation test.
D) becomes difficult if the differentiation test is not clear.

Question 22

Which of the following is the easiest test to pass?

A) Alignment
B) Differentiation
C) Integration
D) Adding value

Question 23

The issue of how much and what forms of pay are our competitors using is part of which objective of total compensation strategy?

A) Objectives
B) Internal alignment
C) External competitiveness
D) Management

Question 24

When organization performance declines,

A) a virtuous circle may be created.
B) performance-based pay plans do not pay off.
C) managers will change the pay practices.
D) employees will work harder to improve performance.

Question 25

Which of the following is the correct order of the steps in formulating a total compensation strategy?

A) Assess total compensation strategy,implement strategy,map a total compensation strategy,reassess
B) Assess total compensation strategy,map a total compensation strategy,implement strategy,reassess
C) Map a total compensation strategy,implement strategy,assess total compensation strategy,reassess
D) Map a total compensation strategy,assess total compensation strategy,implement strategy,reassess

Question 26

Among unconventional benefits,U.S.workers in the Hudson's survey rated _____ as their most preferred.

A) more supplemental insurance
B) more job training
C) a more flexible work schedule
D) more personal days and family leave

Question 27

In mapping a total compensation strategy,the question of how is compensation in the overall HR strategy is part of _____.

A) objectives
B) internal alignment
C) external competitiveness
D) management

Question 28

Issues of transparency,technology,and choice are examples of choices related to the _____ strategy choice of total compensation.

A) objectives
B) management
C) employee contributions
D) internal alignment

Question 29

Examination of employee and union needs and the social and political context is a part of _____ step in formulating a total compensation strategy.

A) assess total compensation implications
B) implement strategy
C) mapping strategy
D) assessing business needs

Question 30

Which of the following is not one of the tests to determine if a pay strategy is a source of competitive advantage?

A) Alignment of the pay system with the organization's business strategy
B) Differentiation of an organization's strategy from its competitors
C) Internal alignment of the pay strategy with the organization's strategy
D) External competitiveness of the pay system

Question 31

Which of the following is not a test of whether a pay strategy is a source of competitive advantage?

A) Alignment with business strategy
B) Cost effectiveness
C) Differentiation
D) Adding value

Question 32

Union preferences is a major factor in _____ of a total compensation strategy.

A) implementing
B) reassessing
C) assessing implications
D) mapping

Question 33

_____ is a "best practice".

A) Smaller internal pay differences
B) Larger internal pay differences
C) Both smaller and larger internal pay differences
D) Neither smaller nor larger internal pay differences

Question 34

Research investigating high-performance workplaces found that performance-based pay _____ when combined with other high performance practices.

A) improves attitudes and behaviors
B) shows large productivity improvements
C) reduces labor costs
D) has little effect on quality

Question 35

Trying to measure an ROI for any compensation strategy implies that

A) it is possible to align and differentiate and still fail to add value.
B) people are "human capital," similar to other factors of production.
C) adding value is the most difficulty test.
D) value created as a result of costs is difficult to specify.

Question 36

The role non-HR managers play in making pay decisions is called _____.

A) ownership
B) transparency
C) technology
D) decentralized decision-making

Question 37

"To maintain good citizenship as a company" and "To make a fair profit on current operations" are examples of _____.

A) values
B) mission
C) goals
D) operating principles

Question 38

Which of the following statements regarding allowing employees choice in their pay mix is not true?

A) A wide-range of choices is difficult to manage
B) It provides an employer a clear competitive advantage
C) Unlimited choice is difficult to design
D) Too many choices can confuse people

Question 39

Career growth,hierarchy and flexible design are examples of choices related to the _____ strategy choice of total compensation.

A) objectives
B) internal alignment
C) external competitiveness
D) employee contributions

Question 40

A strategy map contains strategies about all but which of the following?

A) External competitiveness
B) Management
C) HR alignment
D) Employee contributions

Question 41

Most organizations rely upon the market to determine how to pay their employees since compensation strategy is uncertain and complex.

Question 42

Customer-focused pay strategies are very likely to use market-based pay.

Question 43

Internal alignment refers to how differently levels of skills and work are paid across different organizations.

Question 44

When Microsoft replaced stock options with stock awards,they were asking employees to put more "skin in the game".

Question 45

The major challenge in the design of future pay systems is reducing the pay gap between top executives and low-level employees.

Question 46

Useful compensation comparisons across countries may be done by focusing on hourly wages and productivity.

Question 47

Labor market-based compensation practices in countries such as China,Germany and France,are likely to be less effective than in countries such as the U.S. ,Korea or Singapore.

Question 48

An organization's strategy is defined by the tradeoffs in choices of what to do and what not to do.

Question 49

In the proper sequence of strategic decisions,HR strategies are made before business unit strategies.

Question 50

The fourth step of formulating a total compensation strategy is to reassess.

Question 51

Unlimited compensation choices by employees would meet with disapproval from the U.S.Internal Revenue Service.

Question 52

What business should a company be in and how does the company win are questions that are a part of mapping a total compensation strategy.

Question 53

A major challenge in the design of future pay systems is how to better satisfy individual needs and preferences.

Question 54

Strategy refers to the fundamental direction that an organization chooses.

Question 55

Although three separate compensation strategies may be identified,many companies use a combination of all three.

Question 56

One of Whole Foods' employee contributions strategic compensation choices is to seek and engage employees who are going to help the company make money.

Question 57

International compensation comparisons are challenging because retirement and health care programs,paid holidays and length of work week varies across countries.

Question 58

Compensation strategy should reflect the organization's values.

Question 59

How an organization positions its total compensation against competitors is part of external competitiveness strategic choices.

Question 60

Compensation systems focusing on competitor labor costs typically follow a cost-cutter strategy.

Question 61

Explain AMO theory.

Question 62

Research on the effects of pay level showed that pay level affects financial performance while how employees are paid has no effect.

Question 63

In a high-performance system,pay strategy plays a lead,as opposed to support role.

Question 64

List the different factors in mapping a total compensation strategy.

Question 65

What are the different steps in formulating a total compensation strategy? List them in their order of occurrence.

Question 66

Offering employees choice in their compensation mix provides firms a distinct competitive advantage.

Question 67

Since unions represent such a small fraction of the labor force,their influence on pay decisions is relatively minor.

Question 68

What are the aspects of the alignment of pay strategies?

Question 69

Define defenders and prospectors as referred to by Miles and Snow.

Question 70

Write short notes on Virtuous and Vicious Circles.

Question 71

Compensation systems can be tailored to general business strategies.List and explain these strategies.

Question 72

External competitiveness is one test of competitive advantage.

Question 73

What is the first step in assessing total compensation implications?

Question 74

Work/life balance issues are part of competitiveness decisions in the pay model.

Question 75

Pay systems should fit well with other HR systems.

Question 76

What are the different levels of strategy and the strategic choices in each level?

Question 77

A compensation strategy map shows which strategy is best for an organization.

Question 78

What is strategy? How is it defined?

Question 79

When an organization uses pay for performance and performance is improving,this is a virtuous circle.

Question 80

Benchmarking and copying best practices does not lead to competitive advantage.