Total Rewards Management
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Course Introduction
Total Rewards Management explores the strategies, tools, and frameworks organizations use to attract, motivate, and retain talent through comprehensive compensation and benefits programs. The course examines the integration of monetary and non-monetary rewards, including base pay, incentives, benefits, recognition, and work-life balance initiatives. Students will analyze market trends, regulatory considerations, and internal equity to design reward systems aligned with organizational goals. Emphasis is placed on evaluating reward effectiveness, communicating total rewards to employees, and leveraging total rewards as a strategic driver for organizational success.
Recommended Textbook
Compensation 11th Edition by George Milkovich
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Chapter 1: The Pay Model
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Q1) Employees view compensation as all but which of the following?
A) A return
B) An entitlement
C) A reward
D) An investment Answer: D
Q2) List and define the different policy decisions of the pay model.
Answer: i.Internal alignment refers to comparisons among jobs or skill levels inside a single organization.
ii.External competitiveness refers to pay comparisons with competitors.
iii.Employee contribution emphasizes on the pay mix for different employees according to performance and/or seniority.
iv.Management means ensuring that the right people get the right pay for achieving the right objectives in the right way.
Q3) When unemployment increases,the proportion of the population covered by health insurance decreases.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Strategy: The Totality of Decisions
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Sample Questions
Q1) Which of the following relationships within a pay system is accurate?
A) Compensation objectives shape pay policies.
B) Pay policies determine the objectives of the pay system.
C) Organization strategies determine employee pay needs.
D) Pay policies form the compensation strategy of the organization.
Answer: A
Q2) _____________ is the measure of how important compensation is in the overall HR strategy.
A) Competitiveness
B) Prominence
C) Centrality
D) Goal-focused
Answer: B
Q3) When Microsoft replaced stock options with stock awards,they were asking employees to put more "skin in the game".
A)True
B)False
Answer: False
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Chapter 3: Defining Internal Alignment
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Sample Questions
Q1) Content refers to the
A) worth of the work.
B) work performed in a job and how it gets done.
C) relative contribution to the organization objectives.
D) different pay level policies.
Answer: B
Q2) What is the significance of internal labor markets in an organization?
Answer: Internal labor markets combine both external and organizational factors.Internal labor markets refer to the rules and procedures that (1)determine the pay for the different jobs within a single organization and (2)allocate employees among those different jobs.
Q3) Exchange value is always higher than use value.
A)True
B)False
Answer: False
Q4) Pay structures with more levels,though relatively small pay differences between levels,offer a sense of career progress.
A)True
B)False
Answer: True
Page 5
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Chapter 4: Job Analysis
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Q1) "Does the analysis create an accurate perception of the work?" is a question answered by _____.
A) reliability
B) validity
C) acceptability
D) usefulness
Q2) One of the best ways to increase employee acceptance for job analysis is to
A) reduce costs.
B) meet Fair Labor Standards Act requirements.
C) increase reliability.
D) increase the involvement of employees.
Q3) To be valid,acceptable,and useful,job information must be _____.
A) authentic
B) technical
C) industry specific
D) up to date
Q4) One of the best solutions to a poorly defined or changing job is including more respondents.
A)True
B)False
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Chapter 5: Job-Based Structures and Job Evaluation
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Q1) Compensable factors and weights are derived using all the jobs in the job family to which the pay structure will be applied.
A)True
B)False
Q2) Acceptance of compensable factors by top management is most important since they are responsible for company profit.
A)True B)False
Q3) Each compensable factor degree should be equidistant from the adjacent degrees. A)True B)False
Q4) What are some of the challenges of the classification system?
Q5) Point plans represent a significant change from ranking and classification methods in that they make explicit the criteria for evaluating jobs: compensable factors. A)True B)False
Q6) Discuss the two methods of ranking.
Q7) What are the steps in designing a point plan?
Page 7
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Chapter 6: Person-Based Structures
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Q1) What are the objectives that may be used to assess a skill-based pay plan?
Q2) Competency-based plans have the potential to clarify new standards and behavioral expectations.
A)True
B)False
Q3) The most important factor determining success of a skill-based pay plan is:
A) its impact on labor costs.
B) how well it aligns with the organization strategy.
C) the stakeholder satisfaction with the plan.
D) its effect on productivity.
Q4) Person-based pay systems are best suited for all of the following except:
A) supporting continuous learning.
B) flexibility.
C) transactional work.
D) complex work.
Q5) Defining the compensable factors and scales to include the content of jobs held predominantly by women is one of the methods to ensure that job evaluation plans are bias-free.
A)True
B)False
8
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Chapter 7: Defining Competitiveness
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Q1) Differences in starting salaries for college graduates is mainly due to differences in grades and interview skills.
A)True
B)False
Q2) Rent sharing is most commonly associated with the _____ theory.
A) human capital
B) signaling
C) marginal productivity
D) efficiency wage
Q3) If Company A and Company B pay the same total compensation for a job,which of the following is most likely true?
A) Base pay is same
B) Benefits costs are the same
C) The pay mix differs
D) The pay mix is the same
Q4) Combat pay premiums paid to military personnel offset some of the risk of being fired upon is an example of a lead pay-level policy.
A)True
B)False
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Chapter 8: Designing Pay Levels, mix, and Pay Structures
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Q1) What is a survey? What purpose does it serve in terms of compensation?
Q2) The most common measure of variation in pay surveys is the standard deviation.
A)True
B)False
Q3) The measure of central tendency that minimizes distortion is the mode.
A)True
B)False
Q4) Regression smoothes large amounts of data while minimizing variations.
A)True
B)False
Q5) Market lines may be constructed by either freehand drawing or linear regression.
A)True
B)False
Q6) The primary responsibility for conducting a pay survey is _____.
A) top management
B) the facility or plant manager
C) outside consultants
D) the compensation manager
Q7) What are the advantages and disadvantages of the different measures of compensation?
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Chapter 9: Pay-For-Performance: the Evidence
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Q1) Work load and work variety are both components of a total reward system.
A)True
B)False
Q2) What are the implications for performance-based pay based on the theory of reinforcement?
Q3) Eligibility refers to who in the organization may participate in an incentive pay program.
A)True
B)False
Q4) Goal setting theory argues that employees' performance in maximized when performance targets are stated as "do your very best".
A)True
B)False
Q5) Incentive effect means pay can motivate people to perform better.
A)True
B)False
Q6) What predictions can be made about performance-based pay based on Maslow's theory?
Q7) Explain how personality characteristics can influence an employee's preference for rewards.
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Chapter 10: Pay-For-Performance Plans
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Q1) ( p.336)Pay-for-performance plans are used for more than three-quarters of all exempt,clerical,and administrative employees.
A)True
B)False
Q2) Surveys show the most popular type of variable pay plan is ____________
A) stock options.
B) gainsharing.
C) individual incentives.
D) special recognition
Q3) Employees working under individual incentive plans tend to resist the introduction of new technology.
A)True
B)False
Q4) Paying a dime for every bottle collected and turned into a collection center is an example of:
A) a commission based work.
B) a standard hour based work.
C) straight piecework.
D) a Rowan plan.
Q5) Why do companies prefer lump-sum pay over merit pay increases?
Page 12
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Chapter 11: Performance Appraisals
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Q1) Since peers and co-workers have good knowledge of the work of their peers,peer ratings have become more common than ratings done by supervisors.
A)True
B)False
Q2) What are the types of pay systems that do not have high motivational potential,but provide equal increases to all employees regardless of performance?
Q3) _____ is one of the best appraisal formats in terms of legal defensibility.
A) BARS
B) MBO
C) Standard rating scales
D) Ranking
Q4) The main problem of use of merit pay is how to get employees to view raises as a reward for performance.
A)True
B)False
Q5) In most Asian cultures,employees do not welcome performance feedback.
A)True
B)False
Q6) What is the significance of promotions as a pay-for-performance tool?
Page 13
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Chapter 12: The Benefit Determination Process
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Q1) For most benefits,providing a level of coverage is more costly to employers than providing a benefit at a specific cost level.
A)True
B)False
Q2) _____ is not an example of an approach to customer-driven health care.
A) Tiered networks
B) Cafeteria plans
C) Managed competition
D) Full-defined contribution
Q3) The only two benefits shown to reduce turnover are pensions and medical coverage.
A)True
B)False
Q4) Cost pressure related to increasing diversity of the workforce is one of the reasons companies are offering flexible benefit plans.
A)True
B)False
Q5) List some examples of customer-driven healthcare benefits packages.
Q6) What are the major disadvantages of a flexible benefits package?
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Chapter 13: Benefit Options
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Q1) All of the following are examples of methods to motivate employees to change their demand for health care except:
A) using intranet allowing employees access to medical information.
B) promotion of preventive health plans.
C) co-pays.
D) setting maximum benefit levels.
Q2) The basic purpose of social security is to provide basic financial security for Americans and their families.
A)True
B)False
Q3) Experts attribute the decline in dollar cost of workers' compensation cost after 2005 to:
A) increased variable component.
B) devaluation of the dollar.
C) employer safety programs.
D) relaxed federal regulations.
Q4) Most employers prefer defined contribution pension plans to defined benefit plans.
A)True
B)False
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Chapter 14: Compensation of Special Groups
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Q1) What is a tally sheet and what is it used for?
Q2) Which of the following benefits is not tied to earnings?
A) Life insurance
B) Disability insurance
C) Vehicle loans
D) Pensions
Q3) Nonqualified stock options involve _____.
A) purchase of stock at a stipulated price, not conforming with Internal Revenue Code
B) cash or stock award determined by increase in stock price at a fixed future date
C) cash or stock award determined by increase in stock price during any time chosen in the option period
D) grant of stock at a reduced price with the condition that it may not be sold before a specified date
Q4) List the components of an executive compensation package.
Q5) Incentive stock options may be deducted as a company expense.
A)True
B)False
Q6) Describe how executives ensure themselves high compensation.
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Chapter 15: Union Role in Wage and Salary Administration
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Q1) In a _____ pay plan,a contract is negotiated that implements two wage scales,a lower one for employees hired after a given date and a higher scale for those hired before.
A) person-based
B) efficiency-based
C) one-tier
D) two-tier
Q2) What are the reasons for the decline in unionization?
Q3) Which of the following is not one of the main dimensions of structuring wage packages?
A) Union versus nonunion members' preferences
B) The division between direct wages and employee benefits
C) Use of two-tier pay plans
D) The relationships between worker wages and their managers' pay
Q4) One dimension of wage package structuring concerns the division between _____ and _____.
A) direct wages; employee benefits
B) paid vacation; time off with out pay
C) employee skills; job requirements
D) task difficulty; working conditions
17
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Chapter 16: International Pay Systems
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Q1) Which of the following is based on the premise that employees on overseas assignments should have the same spending power as they would in their home country?
A) The assets-liability approach
B) The balance sheet approach
C) The local plus approach
D) The income statement approach
Q2) Understanding international compensation begins with recognizing differences and similarities and figuring out how to best manage them.
A)True
B)False
Q3) Managing employee compensation in any country involves understanding the social contract of that country.
A)True
B)False
Q4) A French citizen working for IBM in Canada is _____.
A) host-country national
B) third-country national
C) expatriate
D) local-country national
Page 18
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Chapter 17: Government and Legal Issues in Compensation
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Q1) In Gunther v.County of Washington,the Supreme Court ruled that a wage discrimination suit could be brought under Title VII where the jobs were dissimilar.
A)True
B)False
Q2) Because relatively few people are paid minimum wage,raising the minimum wage does not affect pay structures.
A)True
B)False
Q3) Which of the following is not true regarding minimum wage?
A) Nearly three-fourths of those earning minimum wage or less are in service occupations.
B) The percent of women and men earning minimum wage is approximately equal.
C) Minimum wages are more common in retailing than other industries.
D) The minimum wage directly affects only a small number of people.
Q4) Regarding pay differences for different jobs,_____.
A) there is considerable acceptance of comparable worth
B) the courts favor reliance on use of unbiased job analysis results
C) court decisions have been inconclusive
D) courts continue to uphold use of market data to justify differences
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Chapter 18: Management: Making It Work
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Q1) Why is outsourcing a viable alternative for organizations? What are the major potential advantages and disadvantages of outsourcing? Value chain analysis and Six Sigma are processes used to improve quality and ensure that value is added by each technique and at each stage in a process.For the compensation system,the basic question to ask is,"Does each specific activity directly contribute to our objectives?" If some added value is not apparent,then the question is,"How should it be redesigned? Or should it be dropped?" Of those activities that do add value,the next question is,"Who should do it?" "Should the activity be done in-house,or can others do it more effectively? That is,should it be outsourced?"
Q2) All of the following are recommended steps in the compensation communication cycle by WorldatWork except _____.
A) defining the objectives of the communication program
B) a communication program that will convey the information needed to accomplish the original objectives
C) collecting information from executives, managers, and employees
D) operate an informal communication network
Q3) The CPI measures the cost of living.
A)True
B)False
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