p.11
Role of HR in Strategic Compensation
How does human capital contribute to a company's success?
By applying collective skills, knowledge, and abilities to create value.
p.17
Building Blocks of Strategic Compensation Systems
What components are included in extrinsic compensation?
Core compensation, adjustments to core compensation, legally required employee benefits, and discretionary employee benefits.
p.6
Strategic Compensation Overview
What is Strategic Compensation?
The design and implementation of compensation systems to reinforce HR strategies and competitive business strategies.
p.6
Strategic Compensation Overview
What are the objectives of Strategic Compensation?
To align compensation systems with HR strategies and competitive business strategies.
p.21
Base Pay Adjustments and Types
How does merit pay determine employee compensation?
By differences in job performance.
p.21
Base Pay Adjustments and Types
What does COLA stand for in base pay adjustments?
Cost of Living Adjustment.
p.23
Compensation Strategy Alignment
How can companies enhance employee engagement through compensation?
By implementing profit-sharing plans that align employee interests with company success.
p.23
Merit Pay and Incentive Programs
What is an innovative way to recognize employee achievements?
Creating a peer recognition program where employees can nominate each other for rewards.
p.11
Role of HR in Strategic Compensation
What is human capital?
Sets of collective skills, knowledge, and abilities that employees can apply to create value for their employers.
p.10
Role of HR in Strategic Compensation
What mindset should HR and compensation professionals adopt?
They need to think like the chief executive officer (CEO).
p.16
Competitive Business Strategy
When is a differentiation strategy effective?
When jobs require highly creative behaviors.
p.17
Building Blocks of Strategic Compensation Systems
What are legally required employee benefits?
Benefits mandated by law, such as Social Security and unemployment insurance.
p.4
Attendance and Participation Policies
What is the consequence of arriving over 15 minutes late?
You will not be allowed to sign the attendance sheet.
p.8
Role of HR in Strategic Compensation
What is the purpose of using multiple HR practices?
To reinforce competitive business strategy.
p.4
Attendance and Participation Policies
What happens if a student exceeds 4 absences?
Point reductions in the attendance/participation portion of the course assessment.
p.17
Building Blocks of Strategic Compensation Systems
What is core compensation?
The base salary or wage paid to employees.
p.23
Strategic Compensation Overview
How can companies use flexible work arrangements as a form of compensation?
By allowing remote work or flexible hours to improve work-life balance.
p.18
Building Blocks of Strategic Compensation Systems
What are non-monetary rewards?
Recognition, career development opportunities, and work-life balance initiatives.
p.19
Base Pay Adjustments and Types
How does an employee's effort influence base pay?
Higher effort can justify higher compensation as a compensable factor.
p.14
Competitive Business Strategy
What does a differentiation strategy emphasize?
Offering unique goods or services to the public.
p.12
Merit Pay and Incentive Programs
What effect do incentive programs have on employee entitlement?
They reduce employee entitlement.
p.16
Competitive Business Strategy
What characteristic of jobs involves a differentiation strategy?
Involvement in risk-taking.
p.9
Compensation Strategy Alignment
Why is it important to align compensation practices with business strategy?
Aligning compensation practices with business strategy ensures that the organization can effectively attract, motivate, and retain employees who contribute to its success.
p.23
Merit Pay and Incentive Programs
What is a creative way to reward employees for their contributions?
Offering personalized experiences, such as travel vouchers or event tickets.
p.20
Person-focused pay or competency-based pay
What is pay-for-knowledge?
A compensation strategy that rewards employees for acquiring new skills or knowledge.
p.5
Intrinsic vs. Extrinsic Compensation
What is intrinsic compensation?
The psychological mind-sets that result from performing jobs.
p.12
Merit Pay and Incentive Programs
How can compensation professionals leverage human capital?
By implementing well-designed merit pay and incentive programs.
p.21
Base Pay Adjustments and Types
What is the basis for COLA increases?
Changes in prices as indexed by the consumer price index (CPI).
p.20
Base Pay Adjustments and Types
What is a Cost-of-Living Adjustment (COLA)?
An adjustment made to base pay to keep up with inflation and changes in the cost of living.
p.14
Competitive Business Strategy
What is the focus of a lowest cost strategy?
Being the lowest cost producer/seller of goods or services.
p.15
Competitive Business Strategy
What type of jobs is a Lowest Cost Strategy effective for?
Jobs that include predictable behaviors.
p.22
Base Pay Adjustments and Types
Who primarily benefits from skill-based pay?
Employees who perform physical work, as their pay increases with the mastery of new skills.
p.9
Role of HR in Strategic Compensation
What is the role of compensation practices in achieving strategic objectives?
Compensation practices serve as a tool to motivate employees and align their performance with the organization's strategic objectives.
p.17
Building Blocks of Strategic Compensation Systems
What are discretionary employee benefits?
Benefits offered by employers that are not required by law, such as health insurance and retirement plans.
p.20
Person-focused pay or competency-based pay
What is skill-based pay?
A compensation system that pays employees based on the skills they possess.
p.13
Strategic Compensation Overview
What is the third question related to the implementation of compensation practices?
Does the implementation of compensation practices effectively direct employee behavior to enhance job performance?
p.22
Base Pay Adjustments and Types
What do pay-for-knowledge plans reward?
They reward managerial, service, or professional workers for successfully learning specific curricula.
p.6
Strategic Compensation Overview
How does Strategic Compensation benefit an organization?
By ensuring that compensation systems support overall business objectives.
p.17
Building Blocks of Strategic Compensation Systems
What are the main building blocks of strategic compensation systems?
Extrinsic compensation and intrinsic compensation.
p.20
Base Pay Adjustments and Types
What is seniority pay?
A type of compensation that increases with an employee's length of service.
p.22
Base Pay Adjustments and Types
What is incentive pay?
Incentive pay rewards employees for partially or completely attaining a predetermined work objective.
p.12
Merit Pay and Incentive Programs
What is the purpose of merit pay and incentive programs?
To reinforce excellent job performance.
p.15
Competitive Business Strategy
What is a characteristic of jobs suitable for a Lowest Cost Strategy?
They have a short-term focus.
p.10
Merit Pay and Incentive Programs
What are key pay programs mentioned for employee development?
Pay-for-knowledge and skill-based pay programs.
p.20
Merit Pay and Incentive Programs
What is merit pay?
Compensation based on an employee's performance and contributions.
p.18
Building Blocks of Strategic Compensation Systems
What are the key components of a strategic compensation system?
Base pay, variable pay, benefits, and non-monetary rewards.
p.13
Strategic Compensation Overview
What is the first question compensation professionals should answer to provide a strategic contribution?
Does compensation strategy fit well with the objectives of company competitive business and HR strategies?
p.5
Intrinsic vs. Extrinsic Compensation
What does extrinsic compensation include?
Both monetary and nonmonetary rewards.
p.21
Base Pay Adjustments and Types
What does seniority pay reward employees for?
Length of service in performing their jobs.
p.9
Compensation Strategy Alignment
How do strategic decisions influence compensation practices?
Strategic decisions shape the goals and objectives of an organization, which in turn dictate the compensation practices to attract and retain talent aligned with those goals.
p.7
Competitive Business Strategy
What types of capital are considered in competitive business strategy?
Financial capital, equipment capital, and human capital.
p.23
Building Blocks of Strategic Compensation Systems
What type of compensation can foster a sense of community among employees?
Team-building retreats or group activities funded by the company.
p.5
Intrinsic vs. Extrinsic Compensation
What does compensation represent?
The rewards employees receive for performing their jobs.
p.11
Strategic Compensation Overview
What does capital refer to in the context of value creation?
Factors that enable companies to generate income, higher stock prices, economic value, and reputation.
p.10
Role of HR in Strategic Compensation
How can HR and compensation professionals assist the CEO and CFO?
By providing an understanding of how employees combine with business processes to affect shareholder value.
p.18
Building Blocks of Strategic Compensation Systems
How does base pay function in a strategic compensation system?
It provides a stable income for employees and reflects their skills and experience.
p.13
Strategic Compensation Overview
What is the second question regarding compensation practices?
Does the choice and design of compensation practices fit well to support compensation strategy?
p.10
Merit Pay and Incentive Programs
What is the purpose of pay-for-knowledge and skill-based pay programs?
To equip employees with the necessary knowledge and skills for new workplace technology.
p.20
Merit Pay and Incentive Programs
What is incentive pay?
Compensation designed to motivate employees to achieve specific performance goals.
p.23
Intrinsic vs. Extrinsic Compensation
How can companies use educational opportunities as a form of compensation?
By offering tuition reimbursement or funding for professional development courses.
p.19
Base Pay Adjustments and Types
What is an example of a compensable factor related to an employee's capabilities?
An employee’s skill level.
p.7
Competitive Business Strategy
What does competitive business strategy involve?
The planned use of company resources.
p.20
Compensation Strategy Alignment
What is person-focused pay?
Compensation based on an employee's skills, knowledge, or competencies rather than their job position.
p.18
Building Blocks of Strategic Compensation Systems
What role does variable pay play in compensation systems?
It incentivizes performance and aligns employee goals with organizational objectives.
p.18
Building Blocks of Strategic Compensation Systems
How does the structure of a compensation system impact employee motivation?
A well-structured system aligns rewards with performance, enhancing motivation.
p.19
Base Pay Adjustments and Types
What role does an employee's level of responsibility play in base pay?
Higher levels of responsibility typically lead to higher base pay.
p.23
Merit Pay and Incentive Programs
What is a unique form of compensation that encourages employee wellness?
Wellness programs that offer gym memberships or health incentives.
p.9
Compensation Strategy Alignment
What can happen if compensation practices are not aligned with strategic decisions?
Misalignment can lead to decreased employee motivation, higher turnover rates, and ultimately hinder the organization's ability to achieve its strategic goals.
p.19
Base Pay Adjustments and Types
What is base pay?
The initial rate of compensation an employee receives, typically expressed as an hourly wage or annual salary.
p.18
Building Blocks of Strategic Compensation Systems
Why are benefits important in a strategic compensation system?
They enhance employee satisfaction and retention by providing additional value.
p.19
Base Pay Adjustments and Types
What are compensable factors?
Factors that determine the amount of compensation an employee receives, including skill level, effort, responsibility, and working conditions.
p.19
Base Pay Adjustments and Types
How do working conditions affect base pay?
Severe or hazardous working conditions may warrant higher compensation.
