Compensation Chapter 2 & 3

According to the pay model, the strategic compensation decisions regarding management involve:

• how the different types and levels of skills and work should be paid within the organization

• how total compensation should be positioned against competitors

• how pay increases should be based

• how open and transparent the pay decisions should be to all employees

A customer-focused business strategy:

• stresses new products and short response times to market trends

• focuses on business practice that results in better performance than one's competitors

• stresses delighting customers and bases employee pay on how well they do this

• places less emphasis on evaluating skills and jobs and more emphasis on incentives to encourage innovations

Which of the following pay strategies is a source of competitive advantage?

• a pay strategy that adds value and is difficult for employers to imitate

• a pay strategy that specifies low base pay and high job security

• a pay strategy that ignores individual attitudes and preferences

• a pay strategy that overemphasizes on outstanding employee performance and commitment

"How much does pay differ among job levels and how well does compensation support career growth" relates to _______ strategic policy dimension of the pay model.

As organizational performance increases, pay-for-performance should _______.

• decrease

• increase

• stay the same

• none of the above

The process by which goods and services are delivered to the customer is known as _____.

• pay structure

• salary administration

• line-of-sight

• workflow

_____ refer to the pay variances between job levels in an organization.

Employees judge the fairness or equity of their pay by comparing it to that for other jobs at their own employer but not to that for jobs at other employers.

• True

• False