Chapter 2

Question 1

objective for google

Answer 1

emphasis on innovation commitment to cost containment, recognize contributions, attract and reward the best

Question 2

objective for nucor

Answer 2

focus on customer, most productive, highest quality

Question 3

objective for merrill lynch

Answer 3

focus on customer, attract, motivate, and retain the best talent

Question 4

internal alignment for google

Answer 4

minimize hierarchy, everyone wears several hats, emphasize collaboration

Question 5

externally competitive google

Answer 5

market leader in pay and benefits, unique benefits

Question 6

employee contributions for google

Answer 6

recognize individual contributions, significant stock programs

Question 7

management for google

Answer 7

love employees, want them to know it

Question 8

internal alignment for merrill lynch

Answer 8

pay fairly internally, job sized on four factors (knowledge/skill, complexity, business impact, strategic value)

Question 9

externally competitive for merrill lynch

Answer 9

market competitive in base and benefits, market competitive in incentive/bonus and stock

Question 10

employee contributions for merrill lynch

Answer 10

financial advisors work under a strong incentive system based on client wealth management fees/commissions and total wealth of their client base

Question 11

management for merrill lynch

Answer 11

understandable, consistent message

Question 12

internal alignment for nucor

Answer 12

succeed by working together, no defined career paths, but many opportunities

Question 13

externally competitive for nucor

Answer 13

below market for base, market leader for total cash compensation

Question 14

employee contributions for nucor

Answer 14

bonuses based on plant production and company profits

Question 15

management for nucor

Answer 15

not for everyone, no lay-off practice, but income fluctuates

Question 16

strategy

Answer 16

fundamental directions that an organization chooses

Question 17

an organization defines its strategy through

Answer 17

the trade-offs it makes in choosing what and what not to do

Question 18

at the corporate level, the fundamental strategic choice is

Answer 18

what business should we be in

Question 19

at the business level, the fundamental strategic choice is

Answer 19

how do we gain and sustain competitive advantage in this business

Question 20

at the function level, the fundamental strategic choice is

Answer 20

how should total compensation help this business gain and sustain competitive advantage

Question 21

the innovator

Answer 21

stresses new products and short response time to market trends

Question 22

cost cutter’s efficiency focuses strategy

Answer 22

stresses doing more with less by minimizing costs, encouraging productivity increases, and specifying in greater detail exactly how jobs should be performed

Question 23

customer focuses business strategy

Answer 23

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

Question 24

firms do not have generic strategies, they have

Answer 24

aspects of cost and innovation

Question 25

IBM's current strategy

Answer 25

having a focus on the high-growth high-value segments of the IT industry

Question 26

the deemphasis on pay for individual performance reduces

Answer 26

the risk that competition among employees will undermine this objective

Question 27

compensation strategy and HR strategy are central to

Answer 27

successful business strategy execution

Question 28

assess total compensation implications

Answer 28

business strategy and competitive dynamics, HR strategy, culture/values, social and political context, employee/union needs, other HR systems

Question 29

map a total compensation strategy

Answer 29

objectives, alignment, competitiveness, contributions, management

Question 30

reasses

Answer 30

realign as conditions change, realign as strategy changes

Question 31

implement strategy

Answer 31

design system to translate strategy into action, choose techniques to fit strategy

Question 32

pay strategy is influenced by

Answer 32

how it fits with other HR systems in the organization

Question 33

why is unlimited choice bad

Answer 33

challenge to design and manage, not approved by U.S. internal revenues service

Question 34

Jobs Bank program

Answer 34

1984, United Auto Workers would receive compensation when not needed until they were needed again

Question 35

strategic perspective implies

Answer 35

it is the way that programs fit together and fit the organization that is hard to copy

Question 36

what is a company's largest controllable expense

Answer 36

compensation

Question 37

calculating return on investments (ROI)

Answer 37

implies that people are "human capital"

Question 38

three tests of strategy

Answer 38

align, differentiate, add value (most difficult)

Question 39

best-pay practice vs best fit

Answer 39

people believe best pay practices can be applied universally and yield better performances

Question 40

internal alignment

Answer 40

both smaller and larger pay differences among jobs inside an organization can affect results

Question 41

external competitiveness

Answer 41

paying higher than the average paid by competitors can affect results

Question 42

employee contributions

Answer 42

performance-based pay can affect results

Question 43

managing compensation

Answer 43

rather than focusing on only one dimension of the pay strategy, all dimensions need to be considered together

Question 44

compensation strategy

Answer 44

embedding compensation strategy within the broader HR strategy affects results

Question 45

virtuous circle

Answer 45

organization performance increasing, pay for performance rises, risk return balance, ownership culture, upward momentum, continuous improvement

Question 46

vicious cycle

Answer 46

organization performance decreasing, pay for performance lowers, risk return imbalance, ownership culture, downward momentum, continuous difficulties

Question 47

performance-based pay that shares success with employees

Answer 47

does improve employee attitudes

Question 48

What does declining organization performance do?

Answer 48

increases the risks facing employees (risks of still smaller bonuses, demotions, wage cuts, and even layoffs).

Question 49

could performance-based pay sometimes be a "worst" practice

Answer 49

yes when incentive systems don't pay off and they alienate employees or lead to government investigation of possible stock option manipulation

Question 50

what is the easiest test to pass

Answer 50

alignment

Question 51

each company's profile on the strategy map reflects

Answer 51

its main message or "pay brand"