Chapter 1: A Road map to Effective Compensation

Question 1

Which of the following statements most accurately describes extrinsic rewards?

Answer 1

A. They focus on factors inherent in the work itself - the job content
B. They satisfy higher-order human needs
C. They include monetary and non monetary rewards and come from job context
D. They involve skill variety, task identity,
Task significance, autonomy and feedback

Question 2

Joe, a service manager,
Loves his job. He particularly appreciates the l gem of autonomy his job provides. From a
Rewards perspective, which kind of reward appears to be motivating Joe?

Answer 2

A. Extrinsic
B. Incentives
C. Intrinsic
D. Compensation

Question 3

Which statement best describes the difference between the terms “rewards” and “incentives?”

Answer 3

A. Rewards are given to satisfy basic human needs, while incentives are used to satisfy higher-order human needs.
B. Rewards serve to recognize value behaviour, while incentives are intended to produce valued behaviour.
C. Rewards are job-context related, while incentives are given to recognize.
D. Rewards are used to influence future performance and incentives are given to recognize past work behaviour.

Question 4

As a small business owner committed to the total rewards approach to compensation, what do you need to establish before you start to develop your compensation system?

Answer 4

A. a reward system
B. An incentive program
C. A compensation strategy
D. A reward strategy

Question 5

Which of the following items is considered part of the compensation system?

Answer 5

A. Variable pay
B. Flexible work schedules
C. Positive organizational culture
D. Work/ life programs

Question 6

Which statement best describes the term “reward strategy”?

Answer 6

A. The means through which performance bonuses are paid.
B. The mix of rewards provided to organization members
C. The means for recognizing outstanding achievement
D. The means for identifying the key contextual variables for an organization.

Question 7

An owner of an enterprise asks you to describe the major components of a compensation system. Which of the following would you exclude in your description?

Answer 7

A. Base salary
B. Performance pay linked to some organization objectives
C. Employee benefits which may include: disability insurance, medical and dental plans
D. Flexible work schedules and some element do autonomy.

Question 8

Which of the following best explains intrinsic rewards?

Answer 8

A. Intrinsic rewards focus on increasing an employee’s financial position
B. Intrinsic rewards are provided by Job content
C intrinsic rewards provide security and employee services
D. Intrinsic rewards relate to bonus based performance.

Question 9

The compensation system typically refers to which aspect of the rewards system?

Answer 9

A. The mix of intrinsic and extrinsic rewards.
B. The economic or monetary part
C. The entire spectrum of rewards
D. Incentives

Question 10

You have offered to your sales associate an all-expense paid trip for two to Australia if she doubles her annual sales volume from last year. What concept are you applying?

Answer 10

A. Intrinsic rewards
B. Extrinsic rewards
C. Incentives
D. Job enrichment

Question 11

Which of the following would be an example of extrinsic reward?

Answer 11

A. Interesting and meaningful work
B. Pay for performance based on the number of units produced per hour
C. Being able to see the company’s product used by a satisfied customer
D. Work that allows for enhanced personal development.

Question 12

What does a firms compensation strategy identify?

Answer 12

A. All of the financial and non financial rewards of work
B. The total amount of cash compensation employees will receive
C. The mix of intrinsic rewards
D. The mix and total amount of base, performance and indirect pay.

Question 13

Which is the following items is a component of the compensation strategy?

Answer 13

A. Employee benefits
B. Employment security
C. Promotion Criteria
D. Compensation plan.

Question 14

Which of the following would be the best choice for a compensation system?

Answer 14

A. A competitive base pay and incentives are offered
B. Employees share in the organizations profits
C. Compensation is linked to knowledge
D. The system is cost effective and achieves the company goals

Question 15

Which of the following statements most accurately describes the optimal reward system?

Answer 15

A. It adds the most value to the organization after considering all its costs.
B. It maximizes opportunities for learning and development
C. It identifies best practices
D. It provides whatever will satisfy the employees needs

Question 16

Which of the following is considered a goal

Of an effective reward and compensation system?

Answer 16

A. Distributing rewards in an equal manner across the organization
B. Reducing turnover to the lowest possible level
C. Supporting the corporate strategy
D. Decreasing overall salary levels

Question 17

You have been given the responsibility to develop an effective compensation system for your company. Which of the following should serve as your first focus?

Answer 17

A. Understanding your organization and your people
B. Formulating and determining budgets
C. Designing your performance pay and indirect pay plans
D. Implementing, managing, evaluating and adapting the system.

Question 18

What is the last step to effective compensation according to the “Road map to effective compensation?”

Answer 18

A. Developing new job descriptions and performance evaluation criteria
B. Implementing, managing and evaluating the compensation system as circumstances change.
C. Securing senior management approval and implementing the compensation system
D. Determining the compensation mix to be used in the compensation system