9 - Rewards Management

Question 1

employer concerns

Answer 1

corporate reputation
competitiveness
motivate staff
driving change
control
costs/affordability

Question 2

employee concerns

Answer 2

purchasing power (desired standard of living)
fairness/equity
reward composition
rights

Question 3

perspectives of reward strategy

Answer 3

cost (sustainable cost)
market (how competitive rewards should be)
employer (company’s needs for talents)
employee (values)

Question 4

tangible rewards

Answer 4

benefits = create value
(fringe benefits: health insurance, car, phone…)

variable salary = recognize performance
(bonus, incentives, commissions…)

base salary = pays for skills + responsibilities

Question 5

key concepts of reward strategy

Answer 5

internal equity: fair distribution increases satisfaction + motivation
- regression line (dispersion of compensation)

external competitiveness: how well a company compensates compared to its competitors
- external competitiveness analysis: show position in market

Question 6

goals of reward management

Answer 6

attract + retain employees

motivate employees to high performance levels + organizational results

Question 7

to attract + retain employees

Answer 7

influence of external environment (salaries, laws, unions, competition, economic conditions…)

organization’s objectives + context (needs, economic situation, resources + objectives)

appreciation criteria of jobs + people (ranking jobs to determine rewards rationally)

attractive reward composition

attractive individual benefits (attractiveness, multiplicity + selectivity)

Question 8

job evaluation methods

Answer 8

job ranking (most simple)

• considers job as whole
• compares w/ other job

job classification

• considers job as whole
• compares jobs w/in scale

factor comparison

• considers elements of job
• compares w/ other job

point rating (most used)

• considers elements of job
• compares jobs w/in scale

Question 9

factors in factor comparison (Eugene Benge)

Answer 9

skill requirements
mental requirements
physical requirements
responsibilities
working conditions

Question 10

to motivate + commit employees…

Answer 10

manage fixed + variable elements of pay according to motivational effects

manage incentive programs based on:

• performance
• skills acquisition
• results
• profit

Question 11

rewards

Answer 11

set of tangible + intangible assets earned by employees in return for performance + contribution to the company

reward management should:

• be aligned w/ business strategy
• respond to both employee + employer concerns

Question 12

fixed vs variable elements of pay

Answer 12

fixed: salary, additional, fringe benefits + contractual premia
variable: overtime payment, occasional premia, incentives + bonus