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Compensation > "Quiz" > Flashcards

"Quiz" Flashcards

1
Q

What are the 3 characteristics of a goal?

A
  • Difficult
  • Specific
  • Believable
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2
Q

What is the key to success between employees and managers?

A

Communication

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3
Q

What’s the first step in designing compensation?

A

Know the business strategy!

  • Where do we compete?
  • What unique value do we bring?
  • What resources / capabilities do we utilize?
  • How do we sustain our unique values?
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4
Q

What is Efficiency Wage Theory?

A

Suggests that if you pay above the market, you will
- attract better talent
- employees will work harder and be less likely to shirk for fear of losing their job, and
- less likely to voluntarily leave.

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5
Q

Compare Equity Theory and Fairness

A

Equity theory involves comparing inputs and outputs – Equity versus equality. Suggests employee motivation at work is largely driven by their sense of fairness

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6
Q

Job-Based Pay Structure

A

Focuses on the work content (tasks, behaviors, roles, and responsibilities)

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7
Q

Person-Based Pay Structure

A

Focused on KSAOs (knowledge, skills, abilities, and other characteristics) of the employee in role (detailed, customized)

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8
Q

What will be affected by pay level and structure decisions (5 things)?

A
  • Operating expenses
  • Applicant pool (size and quality)
  • Turnover
  • Union Status
  • Organizational Climate
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9
Q

What are the 7 traditional uses of Performance Management?

A
  • Performance Feedback*
  • Compensation/Rewards*
  • Performance Improvement*
  • Motivation
  • Talent Decisions (staffing)
  • Legal Documentation
  • Coaching for Development

*most common

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10
Q

What is Performance Management?

A

A set of management and analytical processes that enable the management of an organization’s performance to achieve goals.

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11
Q

What are the goals of Performance Management?

A
  • Improve org performance
  • Create differentiation of rewards
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12
Q

What are the assumptions of Performance Management?

A
  • Employees are at least partially extrinsically motivated;
  • talent is mobile
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13
Q

What are the actions of Performance Management?

A
  • Goal setting and follow-up
  • Measurement
  • Actions
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14
Q

Why should we have a Performance Management system?

A
  • Differentiate Performance
  • Provide Performance Feedback
  • Guide Compensation
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15
Q

What methods are available for Performance Management?

A
  • Performance Appraisal: key: what are we comparing to?
  • Electronic document
  • Balance Scorecard – combines individual and organizational goals
  • 360 degree review – more as a developmental tool
  • Self Review – adv so manager can see how well communicating (Insight into where ee thinks they are and easier to deliver message from mgr.)
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16
Q

What is Internal Alignment?

A

How to differentiate jobs and pay relative to each other and the value they add to the organization.

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17
Q

What is Intrinsic Motivation?

A

Actions that are driven by internal rewards (i.e. doing it because you want to, not because of pay, culture, etc.)

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18
Q

What is Extrinsic Motivation?

A

Actions/motivation that is driven by external rewards.

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19
Q

What is a Job Description?

A

A summary of the most important features of a job. It identifies the job and describes the general nature of the work, specific task responsibilities, outcomes, and the employee characteristics required to perform the job.

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20
Q

What is a Job Evaluation?

A

A systematic procedure designed to aid in establishing pay differentials among jobs within a single company. It includes classification, comparison of the relative worth of jobs, blending internal and external market forces, measurement, negotiation, and judgment.

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21
Q

What is a Job Evaluation based off of?

A
  • job content
  • skills
  • value add to organization
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22
Q

Reliability

A

Does it produce the same results every time?

23
Q

Validity

A

Did it measure what I wanted to? (accuracy)

24
Q

What is a Job Analysis?

A

The systematic process of collecting information related to the nature of a specific job that provides the knowledge needed to define jobs for job evaluation

25
Q

What is Tournament Theory?

A

If you have higher pay at the top, everyone works hard bc they want to be there

26
Q

Why do we need 3 data points for regression?

A

To better define the line and ensure that it is a good representation of the relationship between the variables (any line can pass through 2 points, 3 points will offer a better representation of the data)

27
Q

What is Pay Level?

A

the average pay rates per employee, and it needs to be compared within jobs with other companies.

28
Q

What is pay form/mix?

A

The pay mix that makes up the total compensation (base, short term incentives etc)

29
Q

What is Agency Theory?

A

Assumes that managers can choose between offering incentives or monitoring behavior to elicit high performance.

30
Q

What are the 3 ways to compete?

A
  • Operationally efficient (low price)
  • Innovative (product development)
  • Customer intimate (know customer needs and meet them very well)
31
Q

What are sorting effects of pay?

A

Different levels of pay can attract different types of workers to certain jobs.

Influences composition of workforce (via attraction, selection, and attrition)

32
Q

What are the incentive effects of pay?

A

When pay is connected to performance, it’s seen as more motivational. Influences motivation, attitudes, attention, effort, and behavior of current employees

33
Q

What are the 3 comp ways to motivate human capital resources (i.e. 3 comp components)?

A
  • Salary level
  • PFP (Pay for Performance) proportion
  • Organization level where PFP targets are provided
34
Q

What are the most common job evaluation methods?

A
  • Ranking
  • Classification
  • Point
35
Q

Describe Objective Goals

A

(High Acceptance, Low Quality)
These kinds of goals are very general and purposely vague.

36
Q

Describe Operative Goals

A

(Low Acceptance, High Quality)
Operative goals are very specific in detail.

37
Q

Internal Competitiveness

A

Refers to the fairness and equity of the compensation system within an organization, based on factors such as job responsibilities, skills, and performance.

38
Q

External Competitiveness

A

Refers to the comparability of the compensation package offered by an organization to those offered by other organizations in the same labor market.

39
Q

Market Competitiveness

A

Refers to the overall level of competitiveness in the overall labor market, determined by factors such as supply and demand for labor, economic conditions, and industry practices.

*Not industry specific

40
Q

What factors influence competitiveness?

A
  • Organizational goals and strategies
  • Labor market conditions
  • Economic conditions
  • Industry practices
41
Q

What are the 6 steps in a job analysis?

A
  1. Develop preliminary job information.
  2. Conduct initial tour of work site.
  3. Conduct interviews.
  4. Conduct second tour of work site.
  5. Consolidate job information.
  6. Verify job descriptions.
42
Q

What 4 concepts do you use to judge a job analysis after completion?

A
  • Reliability
  • Validity
  • Acceptability (did job incumbents/mgrs approve of it?)
  • Usefulness (practicality)
43
Q

What are some benefits of Pay Transparency?

A
  • No secrecy
  • Harder to discriminate
  • May build trust/loyalty

**Use it if you have a good pay system (and PFP)

44
Q

What criteria is used to determine grades and differences in a compensation plan?

A
  • Content
  • Value add
45
Q

Organizations Top 10 Desired Candidate Qualities

A

1.Professionalism
2. Critical Thinking
3. Communication skills + presentation skills (thinking on your feet)
4. Ability to listen and respond
5. Inquisitive-ness
6. Ability to function well in a team
7. Resiliency + adaptability
8. Passion for making money
9. Decision Making
10. Technical Skills

46
Q

What is Compensation?

A

What you want to accomplish and how you get people to do it.

47
Q

Culture and recognition are examples of what?

A

rewards

48
Q

Employees are are least partially _______ motivated? (Extrinsic or Intrinsic)

A

Extrinsic

49
Q

Talent is ____?

A

Mobile

50
Q

What three questions should we ask in regard to performance management?

A

1) What are we trying to accomplish?
2) What methods are available to achieve those goals?
3) What will keep us from being successful?

51
Q

What is 360-feedback?

A

A feedback process where not just your superior but your peers and direct reports and sometimes even customers evaluate you.

52
Q

What does a balance scorecard do?

A

Combines individual and organizational goals

53
Q

What is calibration and why is it important?

A

Getting everyone to agree on what specific ratings mean - allows for consistency and clarity when giving rating

54
Q

What is external competitiveness of pay?

A

How and what pay competitors are using

Compensation (1 decks)

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