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ch 8 comp mgt
| Question | Answer |
|---|---|
| assign different pay rates for jobs of unequal worth and provide the framework for recognizing differences in individual employee contributions | pay structure |
| FLSA, exempt are not subject to overtime and nonexempt are subject to overtime pay | exempt and non exempt pay structures |
| executive, managerial, professional, technical, clerical, and craft job represetn job families. shows distinct salary pay in the market | structure based on job family |
| companies with multiple georgraphically dispersed locations such as sales, offices, manufacturing plants, service centers and corporate offices. | structure based on geography |
| is representative of typical market pay rates relative to a companys job structure | market pay line |
| group jobs for pay policy application, human resource professionals typically group jobs into pay grades based on similar compensable factors and value | pay grades |
| how are jobs grouped into pay grades | ultimately influenced by such other factors as managments philosophy |
| represent the vertical dimension include midpoint, minimum, and maximum pay rates | pay ranges |
| is the halfway point between the range minimum and maximum rates | midpoint pay value |
| is the difference between the maximim and minimum pay rates of a given pay grade | range spread |
| occurs whenever a company pay spread between newly hired or less qualified employees and more qualified job incumbents is small. it does happen when new hires make more than existing employees | pay compression |
| what situations lead to pay compression | 1) companys failure to raise pay range minimums and maximums 2) scarcity of qualified candidates for particular jobs |
| what are pay compressions possible affects | threaten a companies competitive advantage, dysfuncitonal employee turnover is a likely consequence |
| how might a company prevent pay compression | setting the maximum pay rates, match the market |
| represent pay rates for jobs that fall below the designated pay minimums | green circle pay rates |
| why might we see green circle pay rates in an organization | hired at a position, but do not meet all the requirements |
| represent pay rates that are higher than the designated pay range maximums | red circle pay rates |
| why might we see red circle pay rates in an organization | based on job performance |
| index the relative competitiveness of internal pay rates based on pay range midpoints | compa-ratio |
| how is the compa ratio calculated | employees pay rate/pay range midpoint |
| what does a compa-ratio of 1 mean | that the employees pay rate equals the pay range midpoint |
| what does a compa ration of less than 1 mean | that the employees pay rate falls below the competitive pay rate for the job |
| what dos a compa ratio of more than 1 mean | that an employees pay rate exceeds the competitive pay rate for the job |
| use definite links between pay and performance | merit pay |
| how can equity theory explain how people react to certain levels of merit pay | more of a subjective jdugement level |
| are blueprints that describe the allocation of monetary resources to fund pay structures | compensation budgets |
| based on a predetermined outcome | sales comp |
| how do pay structures based on merit differ from sales compensation | 1) based an employees reward on someone elses evaluation of the employees past performance. 2) earns a base pay appropriate for the job with detriment pay raises or one time bonuses |
| how do sales compensation programs help organizations meet their objectives | by aligning the financial self-interest of sales professionals with the companys marketing objectives with companys strategic objectives |
| what are the three sales objectives that can be used | improve sales productivity, improves sales coverage of current customers, and growth sales overall |
| sales professionals receive fixed base compensation, which do not vary with the level of units sold, increase in market share | salary-only plans |
| offer a set salary coupled with a bonus | salary plus bonus plans |
| are particular types of sales compensation plans. Sales professionals receive fixed base compensation and commission | salary plus commission plans |
| award sales professionals with subsistence pay or draws | commission plus draw plans |
| subsistence pay component, like a load | draw |
| sales people derive their entire income from commissions | commission only plans |
| based on a fixed percentage of the sales price of the production service | straight commission |
| increased percentage pay rates for professionaly higher sales volume | graduated commissions |
| employees earn a higher rate of commission for all sales made in a given period if the sales exceeds a predetermined level | multiple-tiered commissions |
| what type of sales incentive plan fits best with differentiation | sales plans with salary components employees can count on receiving incomes |
| what types of sales incentive plan fits best with lowest cost strategies | commission oriented sales compensation plans. the most productive employees earn the best salaries |
| is a pay structure form that leads to the consolidation of existing pay grades and pay ranges into fewer wider pay grades | broadbanding |
| represents the organizations trend toward flatter, less hierarchical corporate structures | major advantage to broadbanding |
| changes how compensation dollars are allocated, but not how much is allocated, more costly for companies | major limitation to broadbanding |
| reward newly hired employees less than established employees | two-tier pay structure |
Created by:
rcu10