M1 Market Pricing and Business Strategy: Part 1

Question 1

What is Total Rewards

Answer 1

A system by which we connect people to the business

Question 2

Corporate Vision

Answer 2

what the organization has inspired to become. Why the organization exists and where its going in the future

Question 3

Corporate Mission

Answer 3

What we have to do in order to win at the game

Question 4

Business Strategy

Answer 4

is picking one of the 3 business directions, do we want to be 1, organizational excellent, 2, customer intimate or 3 innovation (trade off decision) cant do all three

Question 5

Human resource strategy

Answer 5

answers the question, what kind of people do we need

Question 6

Total Rewards Strategy

Answer 6

what we offer to people in exchange for their efforts

Question 7

Program Design and Administration

Answer 7

Take everything into account to make the best program, thinking about what kind of org we are, why we exist and where we’re going and what our primary business strategy is

Question 8

Compensation Philosophy

Answer 8

A broad statement of what the organization believes about how
people should be rewarded. It should support the business strategy and be a good fit with the
organization’s culture. It includes items such as:
• Desired competitive pay level versus market
– Are all jobs positioned similarly against the market, or can some differences be observed
at different seniority levels or in different functions?
• Definition of “market” (i.e., who are our competitors for talent?)
• Mix of reward elements (e.g., base pay vs. variable pay, short-term vs. long-term)
• How are jobs valued? (i.e., what is job evaluation based on?)
• What behaviors are rewarded? (e.g., pay for performance, teamwork, innovation)

Question 9

Compensation strategy

Answer 9

The compensation strategy includes specific principles that guide the
design, implementation and administration of a compensation program in an organization. It may
also specify what programs will be used and how they will be administered.
It is strongly recommended that organizations create a written compensation philosophy and strategy

Question 10

Factors Influencing Compensation

Answer 10

1. External Competitiveness
   - focuses on the market in which we operate (industry, location etc)
2. Pay Competitiveness
   - internal perspective on how we set our ranges

Question 11

Relevant labor market

Answer 11

markets from which the org draws or loses employees, defined by org size, geo location, industry specific jobs. Differ by job groups

Question 12

Internal Equity

Answer 12

not looking at market, just your org, Take each jobs relative value and compare it to jobs inside the org

Question 13

External Equity

Answer 13

target pay levels more focused on whats happening around us