Deck 2: Strategy: The Totality of Decisions

Question 1

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?

Answer 1

A

Question 2

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

Answer 2

D

Question 3

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

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

Answer 3

C

Question 4

18.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 5

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

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

Question 6

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

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

Question 7

_______ is to increasing variable pay as innovator is to market based pay.

A) Cost-cutter
B) Customer-focused
C) Efficient
D) Competitive

Question 8

All of the following except __________ are compensation systems associated with an innovator strategy.

A) reward innovation in products and processes
B) market-based pay
C) flexible job descriptions
D) customer satisfaction incentives

Question 9

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 10

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 11

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 12

"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

Question 13

In the formula predicting performance,the component most closely related to compensation is ___________

A)A
B)M
C)O
D)C

Question 14

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 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

______________ changed its compensation strategy as the company grew and matured?

A) SAS
B) Google
C) Microsoft
D) CNET

Question 17

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 18

"Everyone wears several hats" and "succeed by working together" are examples of which of the following?

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

Question 19

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 20

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

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

Question 21

_____________ is the measure of how important compensation is in the overall HR strategy.

A) Competitiveness
B) Prominence
C) Centrality
D) Goal-focused

Question 22

Which of the following tests of competitive advantage is the easiest test to pass?

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

Question 23

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 24

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 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

"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 27

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

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

Question 28

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 29

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

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

Question 30

"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

Question 31

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 32

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 33

According to the Hudson survey,__________ is the single thing that would make them happier.

A) more personal days and family leave
B) a more flexible work schedule
C) more money
D) better health insurance

Question 34

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 35

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 36

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 37

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 38

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 39

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

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

Question 40

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 41

Strategy refers to the fundamental direction that an organization chooses.

Question 42

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 43

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 44

Which of the following statements is not true?

A) The effect of performance incentives depends on the context
B) Embedding compensation strategy in HR strategy affects results
C) Focusing on employee contributions vs other objectives is a best practice
D) The effect of paying more than competitors depends on the context

Question 45

All organizations that pay their employees have a compensation strategy even though it may not be stated or written.

Question 46

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 because there is less movement from company to company

Question 47

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

Question 48

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

Question 49

Research shows that ____________can effectively shift an organization in a downward performance spiral to an upward one.

A)reinforcing performance-based pay
B)implementing team-based pay
C)improving work-life balance
D)there are no compensation practices that

Question 50

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 51

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 52

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

Question 53

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

Question 54

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

Question 55

Most firms do not have generic strategies but use a blend of cost and innovation.

Question 56

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

Question 57

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

Question 58

IBM was discussed as an example of an organization that changed it pay system and strategy to meet a different business strategy.

Question 59

_____ 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 60

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

Question 61

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

Question 62

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

Question 63

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

Question 64

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

Question 65

What is strategy? How is it defined?

Question 66

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

Question 67

Pay systems should fit well with other HR systems.

Question 68

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

Question 69

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

Question 70

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

Question 71

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

Question 72

Compensation strategy should reflect the organization's values.

Question 73

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

Question 74

External competitiveness is one test of competitive advantage.

Question 75

Explain AMO theory.

Question 76

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

Question 77

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

Question 78

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

Question 79

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

Question 80

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