TUTORIAL CHAP 1 & 2 (COMPENSATION MANAGEMENT)

How compensation can be best described?

• hourly/ monthly salary

• non-monetary reward

• incentive reward

• intrinsic & extrinsic rewards

What are the two essential parts that constitute core compensation?

• base pay + employee benefits

• base pay + COLA

• seniority & merit pay

• person focused pay

What category of decision involves aligning compensation with business strategy (long-term goals)?

• tactical decision

• strategic decision

What group receives incentive payments under profit-sharing arrangements?

• top management only

• shareholders only

• All (most) employees

What is one downside of using only seniority as the basis for employee pay increases?

• can demotivate high-performing employees

• difficult to administer

• decrease employees retention

What is the term for a pay system that rewards based on the position’s role in the organization?

• person-focused pay

• job-based pay

• incentive pay

• merit pay

Give two company-wide incentive plans

• profit sharing plans & employee stock option plans

• team-based or small- group incentive plans & gain sharing plans