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Test bank For Human resource Management chapter 9 (13th Edition by Hermann Schwind )
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Test bank For Human resourceManagement chapter 9 (13th Edition by
Hermann Schwind )
Direct Compensation - ANSwages paid by employers to employees in exchange for the work
they do. In addition to wages or salary, direct compensation includes variable pay, such as
bonuses, commissions and stocks paid as short or long term incentives
internal equity - ANSperceived equity of a pay system across different jobs within an
organization
external equity - ANSperceived fairness in pay relative to what other employers are paying for
the same type of work
effective compensation management objectives - ANS1. Aquire qualified personnel
2. Retain present employees
3. Reward desired behaviours
4. control costs
5. comply with legal regulations
phase 1 of compensation management - ANSlead - company pays rates that are higher than
the relative marketplace(used to attract and retain top talent)
match - matches the market by paying comparable rates
lag - pay rates lower than the relative marketplace( used in low competitive communities to cut
costs)
phase 2 of compensation management - ANSexamine job analysis information - includes job
descriptions, job specification, and performance standards
job analysis data is then used to compare jobs for internal equity and to identify comparable
jobs to determine external equity assessments
phase 3 of compensation management - ANSPRICE THE WORTH OF EACH JOB
three approaches
- job evaluation
-market-pricing
-skill-based
job evaluation - ANSsystematic processes of assessing job content and ranking jobs according
to a consistent set of job characteristics and worker traits
, job-ranking - ANSa form of job evaluation in which jobs are ranked subjectively according to
their overall worth to the organization(least precise method of job evaluation)(suited for small
organizations with simple organizational hierarchies)
job grading - ANSa form of job evaluation that assigns jobs to predetermined job classifications
according to their relative worth to the organization
point-system - ANSa form of job evaluation that assesses the relative importance of the jobs key
factors in order to arrive at the relative worth of jobs.
six steps of the point system - ANS1. determine compensable factors ie:( responsibility 40%,
skill 30%, effort 20%, working conditions 10%)
2.determine levels(or degrees) of factors ie: (4 levels with percents)
3. allocate points to subfactors ie ( the sub factors in responsibly or skill)
4. allocate points to levels (degrees)
5. develop the point manual - written explanation of each job element, also defines what is
expected for the four levels(degrees)
6. apply the point system (subjective process
market pricing - ANSmarekting pricing focuses on external competivness-how much
organizations should pay for jobs based on what their competitors are offered for similar work
wage and salary surveys - ANSstudies of the wages and salaries paid by other organizations
within the employers labour market
sources of compensation data - ANS- employment and social development Canada
-Canadian Human Resources centre
-employee trade and professional associations
consulting companies
- consulting companies
market pricing approaches - ANSmatching the market - pay at the middle of all organizations
with similar positions
market leader- aim for paying at the 75th percentile, meaning 75 percent of competitors will pay
less for the same job.(used when competing for employees with specialized skills.EX:google)
Market lag - paying at the 25th percentile, where only 25 percent of firms pay less for
comparable jobs(used for loose labour markets, and org. with strong variable compensation or
benefit programs)
skill- or knowledge-based pay - ANSa pay system based on the employees mastery of skills or
knowledge (in contrast to the more common job based pay)ex: trades millwright, carpenter etc
rewards the employee based on depth, breadth and self management
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