Total Rewards Management Final Exam
Course Introduction
Total Rewards Management explores the strategic design and implementation of comprehensive compensation and benefits programs within organizations. The course examines the components of total rewards, including base pay, variable pay, incentives, benefits, and non-monetary recognition, emphasizing their role in attracting, motivating, and retaining employees. Students learn to analyze internal and external equity, legal compliance issues, and trends influencing rewards strategies, such as flexible benefits and work-life balance programs. Practical case studies and analytical tools are utilized to develop reward systems that align with organizational goals and drive employee performance.
Recommended Textbook
Strategic Compensation in 6th Canada Edition by Richard Long
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Page 2
Chapter 1: A Road Map to Effective Compensation
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Sample Questions
Q1) According to the textbook,what is the primary reason for the increased usage of compensation consultants by organizations?
A) Corporations are contracting out most human resource functions.
B) Given greater standardization associated with compensation systems,it makes sense to use dedicated outside consultants.
C) The level of complexity of compensation systems has increased.
D) It is often cheaper to use to use consultants.
Answer: C
Q2) A reward strategy is the plan for the mix of rewards to be provided to organization members along with the means through which they will be provided.
A)True
B)False
Answer: True
Q3) There is often one so-called best compensation system that applies to a broad spectrum of organizations.
A)True
B)False
Answer: False
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3
Chapter 2: A Strategic Framework for Compensation
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Q1) You recently transferred from a smaller manufacturing firm to a larger one and discovered that,although entirely different,both compensation systems are effective.How is this possible?
A) Both companies have well-trained managers.
B) Both companies do similar work and hire the same kinds of employees.
C) Both systems fit the organization and its strategy.
D) Both provide compensation packages that lead the marketplace.
Answer: C
Q2) 3M and Apple have organizational strategies that encourage innovation.As a result,their compensation strategies support innovative behaviours by employees.Which term refers to this alignment of strategies?
A) tight fit
B) loose fit
C) horizontal fit
D) vertical fit
Answer: D
Q3) An organization's domain is simply another term for managerial strategy or plan.
A)True
B)False
Answer: False
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Chapter 3: A Behavioural Framework for Compensation
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Q1) Distributive justice refers to the fairness of the process in giving rewards.
A)True
B)False
Answer: False
Q2) Which of the following is associated with job satisfaction?
A) increased job effort
B) lower employee turnover
C) higher training costs
D) job security
Answer: B
Q3) A sales organization rewards employees for the number of client contacts made via telephone.A review of client contact quality determines that most of these contacts will never convert into sales.As it relates to reward problems,this exemplifies a lack of congruency between rewards and behaviour.
A)True
B)False
Answer: True
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Chapter 4: Components of Compensation Strategy
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Q1) For the majority of employees in Canada,what is the largest component of the pay package?
A) benefits
B) performance pay
C) indirect pay
D) base pay
Q2) Peter,a manager at a local manufacturing firm,is perplexed that employees tend to respond to management's request by evoking the dreaded "That is not on my job description," or "That is above my pay grade." From a compensating perspective,which base pay method is normally associated with the aforementioned responses?
A) market pricing
B) job evaluation
C) competency-based pay
D) skill-based pay
Q3) Which condition make it impractical to use output-related pay?
A) Output is easy to measure.
B) Output is very stable.
C) Output cannot be controlled by the individual employee.
D) Output is easy to price in terms of its value to the employer.
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Page 6
Chapter 5: Performance Pay Choices
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Sample Questions
Q1) Discuss the nature of suggestion systems and some of the problems you need to be aware of.
Q2) The central issue associated with attendance incentives is the notion that these programs treat only the symptoms while ignoring the underlying issues that cause absenteeism in the first place.
A)True
B)False
Q3) Sales commissions are usually appropriate in situations where individual sales people exercise significant independence.
A)True
B)False
Q4) According to the textbook,what is the main drawback associated with attendance plans?
A) There are costs associated with administering the program.
B) Both intended and unintended behaviours are not easy to observe.
C) It is difficult to deal with the so-called "legitimate" absences.
D) They do not deal with the underlying cause of the issue.
Q5) Identify and briefly explain the nature of individual performance pay plans.
Q6) Identify and briefly define each of the three types of employee stock plans.
Page 7
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Chapter 6: Formulating the Reward and Compensation Strategy
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Sample Questions
Q1) Golden parachutes generally assure large severance payments for dismissed executives.
A)True
B)False
Q2) In which circumstance does the compensation system need to be relied on less heavily to motivate behaviour?
A) food processing plant
B) shelter helping the homeless
C) underground coal mine
D) tire manufacturer
Q3) The key reason that executives earn so much more than other employees is because their base pay is so much higher.
A)True
B)False
Q4) Briefly summarize the legislative framework that compensation must comply with.
Q5) Salaries are the major component of total compensation for the highest paid executives in Canada.
A)True
B)False
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Chapter 7: Evaluating Jobs: the Job Evaluation Process
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Q1) Which process is looked upon as the process of gathering data and information about the characteristics required for specific jobs?
A) job analysis
B) job evaluation
C) job description
D) job specifications
Q2) Which term is used to describe key characteristics of jobs that are valued by organizations and differentiate jobs from one another?
A) core job dimensions
B) job facts
C) compensable factors
D) benchmarks
Q3) Because your company is newly created,you do not have any job descriptions.Which method of job analysis will you need to use?
A) interviews
B) questionnaires
C) functional
D) observation
Q4) What should a job description contain if it is to be useful for job evaluation?
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Chapter 8: Evaluating Jobs: the Point Method of Job Evaluation
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Sample Questions
Q1) What is a negative consequence of clustering jobs into pay grades?
A) Pay grades make it difficult to justify and explain pay rates to employees.
B) Pay grades create less stability for the pay system.
C) There may be pressure to reclassify borderline jobs or to promote people to get more money.
D) Similar jobs are grouped into the same grades.
Q2) The textbook identifies four possible pitfalls associated with the point method of job evaluation.Which category of pitfalls would include a situation whereby the factor is poorly defined,creating a situation in which the evaluator is not clear what the factor is designed to pick up?
A) hierarchical grounding
B) factor overlaps
C) gender bias
D) inconsistent construct
Q3) Identify and briefly describe the main steps in developing a job evaluation system using the point method.
Q4) Job evaluations help to establish internal equity.
A)True
B)False
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Chapter 9: Evaluating the Market
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Q1) Which condition tends to explain why jobs in the higher hierarchy positions of the public sector tend to be paid less than similar positions in the private sector?
A) a strong union
B) publicly visible salaries
C) the levels of indirect pay provided to senior public sector positions
D) a poor industry reputation
Q2) Which of the following is NOT a possible limitation of compensation surveys?
A) Free labour market data is not readily available.
B) We cannot surmise anything about compensation strategies practised by other firms.
C) They may misrepresent actual pay trends.
D) Markets may not value jobs fairly.
Q3) What does a compa-ratio of greater than 1 mean?
A) Employees,on average,are being paid above the midpoint in the pay range.
B) The majority of employees are in the first pay quartile.
C) The firm is paying their employees in the bottom half of the pay range.
D) The firm has only a minority of their employees in the top pay bracket.
Q4) Briefly describe the process for analyzing and interpreting survey data.
Q5) Briefly discuss some of the limitations of compensation surveys.
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Chapter 10: Evaluating Individuals
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Sample Questions
Q1) Which statement best describes self-appraisals?
A) They tend to be deflated.
B) They tend to be inflated.
C) Poor performers tend to deflate their ratings the most.
D) Self-appraisals are of high value for pay purposes.
Q2) Which source uses many different rating groups to evaluate the employee's performance?
A) professional raters
B) tiered supervisors
C) 360-degree feedback
D) field review
Q3) Which of the following is NOT an administrative reason for doing performance appraisals?
A) to identify employees for merit pay
B) to identify employees for promotion
C) to provide useful feedback to employees
D) to monitor the overall quality of performance of the firm
Q4) Identify the key characteristics and advantages of 360-degree feedback appraisal system.
Q5) Define and describe the key elements of performance management.
Page 12
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Chapter 11: Designing Performance Pay Plans
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Q1) As a medium-sized company owner,you believe that it is morally just that employees receive a portion of the profits they help generate,and you want to provide them with some form of pension plan.Which type of plans should you consider using?
A) deferred profit sharing
B) share appreciation rights
C) registered retirement savings
D) current distribution
Q2) Briefly describe the Scanlon Plan.
Q3) Management decides to allocate 1,000 shares to a particular employee at a market value of $50.00 per share under a share appreciation rights plan.One year later,the value of these shares has increased to $65.00.How many shares would this employee actually receive as a bonus at the end of the year?
A) 15.4 shares
B) 20 shares
C) 230.8 shares
D) 1,000 shares
Q4) Discuss the key issues in designing a nonmonetary reward plan.
Q5) Identify the fundamental ways in which gain-sharing and goal-sharing plans differ.
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Chapter 12: Designing Indirect Pay Plans
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Q1) Which of the following is NOT a government-regulated benefit?
A) outplacement services
B) rest breaks
C) vacation time
D) statutory holidays
Q2) What is the first issue in developing an effective benefit system?
A) determining the tax implications
B) examining the compensation cost structure of the organization
C) establishing the administration process
D) determining the role of indirect pay in compensation strategy
Q3) Which plan allows you to tailor your benefit plan to suit your needs and even trade off benefits that are not important to you?
A) health care spending accounts
B) simplified flex plan
C) flexible benefits plan
D) fixed benefits plan
Q4) Describe the main issues in designing the benefits system.
Q5) Discuss the pros and cons of flexible versus fixed benefits plans.
Q6) Identify and briefly explain the most common and important employee services.
Q7) Describe how a health care spending account works.
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Chapter 13: Activating and Maintaining an Effective Compensation System
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Sample Questions
Q1) Research suggests that employee satisfaction with their compensation is directly related to their understanding of the compensation system.
A)True
B)False
Q2) What would a human resource professional consider part of documenting the compensation system?
A) ensuring stakeholders have up-to-date job evaluation manuals
B) deciding to use an external service provider
C) designing job evaluation criteria that are valid and reliable
D) deciding on the compensation strategy
Q3) What is NOT a key aspect in implementing the compensation system?
A) putting infrastructure in place
B) testing the system
C) conducting job evaluations
D) conducting training
Q4) Identify and describe the steps necessary for implementing a compensation system.
Q5) Identify the four key aspects that need to be considered in planning for compensation administration.
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