Compensation Management
Q .1 What is Employees Compensation? State its two components? Explain the various steps involved in establishing pay rates?
Q .2 Give overview of legislations affecting compensation?
Q .3 What are different elements of managerial compensation?
Q .4 Outline the main employees’ services benefits?
Q .5 What is goal sharing? Why organizations introduce goal sharing?
Q .6 Define Benefits and Incentives? Classify them? State its merits and demerits?
Q .7 State the differences between absenteeism and retention? Explain the process, advantages and limitations of retention management
Q .8 Explain performance based rewards and compensation schemes? Also explain competency mapping?\
Case Study- Seat of the pants
Gaurav cleaning centers doesn’t have a formal wage structure nor does it have rate ranges or use compensable factors. Wage rates are based mostly on those prevailing in the surrounding community and tempered with an attempt on the part of Gaurav to maintain some semblance of equity between what workers with different responsibilities in the stores are paid.
Needless to say, Gaurav doesn’t make any formal surveys when determining what his company should pay. He peruses the want ads almost everyday and conducts informal surveys among his friends in the local chapter of the laundry and cleaners trade association. While Gaurav has taken a “seat-of-the-pants” approach to paying the employees, his salary schedule has been guided by several basic pay policies while many of his colleagues adhere to a policy of paying absolutely minimum rates, Gaurav has always followed a policy of paying his employees about 10%above what he feels are the prevailing rates, a policy that he believes reduces turnover while fostering employee loyalty. Of somewhat more concern to Pragati is her father’s informal policy of paying men about 20% more than women for the same job. Her father’s explanation is,” they are stronger and can work harder for longer hours and besides they all have families to support.”
Questions
1. Is the company at the point where it should be setting up a formal salary structure based on a complete job evaluation? Why?
2. Gaurav policy of paying 10%more than the prevailing rates a sound one and how could that be determined?
Case Study- Health care – Business or Employees
By February 2004 strike by southern Delhi grocery workers against the state’s major supermarket chains was almost 5 month old because so many workers were striking (70,000) and because of the issues involved, unions and employers across the country were closely following the negotiations. Indeed, grocery union contracts were said to expire in several cities later in 2004, and many believed the Delhi settlement-assuming one was reached-would set a pattern.
The main issue was employee benefits, and specifically how much (if any) of the employees’ health care costs the employees should pay themselves. Based on their existing contract, southern Delhi grocery workers had unusually good health benefits. For example they paid nothing toward their health insurance premiums, and paid only Rs 420 co-payments for doctor visits .However, supporting these excellent health benefits cost the big Southern Delhi grocery chain over Rs168 per hour per worker.
The big grocery chains were not proposing cutting health care insurance benefits for their existing employees. Instead, they proposed putting any new employees hired after the new contract went into effect into a separate insurance pool, and contributing Rs56.7 per hour for their health insurance coverage. That meant new employee’s health insurance would cost each new employee perhaps Rs420 per week. And, if that Rs420 per week wasn’t enough to cover the cost of health care, then the employees would have to pay more or do without some of their benefits.
It was difficult situation for all the parties involved. For the grocery chain employers sky rocketing health care cost per undermining their competitiveness; and the current employees feared any step down the slippery slope that might eventually mean cutting their own health benefits. The unions did not welcome a situation in which they’d end up representing two classes of employees, one(the existing employees) who had excellent health insurance benefits, another(newly hired employees)whose benefits were relatively meager and who might therefore be unhappy from the moment they took their jobs and joined the union.
Please give your answer in at least 25 words and press save and continue button.
1. Assume you are mediating this dispute. Discuss three creative solutions you would suggest for how the grocers could reduce the health insurance benefits and the cost of their total benefits package without making any employees pay more?
2. From the grocery chains point of view, what is the downside of having two classes of employees, one of which has superior health insurance benefits? How would you suggest they handle the problem?
1. All forms of pay or rewards going to employees and arising from their employment
a. Skill based pay
b. Employee compensation
c. Broad banding
d. Wage curve
2. A rise in pay based on performance
a. Equity
b. Pay ranges
c. Merit raise
d. Skill based pay
3. Pay based on how many skills employees have or how many jobs they can perform
a. Compensable factors
b. Bonus
c. Need based wage
d. Skill based pay
4. Practice of using fewer pay grades having broader ranges than traditional compensation systems
a. Broad banding
b. Employee compensation
c. Pay ranges
d. Variable pay system
5. Determination of whether or not each individual’ pay is ‘fair’ relative to that of that of other individuals doing the same or similar jobs.
a. Individual equity
b. Equity
c. Merit raise
d. Variable pays system
6. Common job characteristics that an organization is willing to pay for such as skill, effort, responsibility etc.
a. Compensable factors
b. Employee compensation
c. Pays ranges
d. Variable-pay systems
7. The perceived fairness of the relation between what a person does (inputs) and what the person receives (outputs)
a. Individual equity
b. Equity
c. Merit Raise
d. Employee compensation
8. Series of steps or levels within a pay grade , usually based on years of service
a. Pay ranges
b. Equity
c. Merit Raise
d. Variable pay systems
9. Pay programmes that are linked to profit and productivity gain
a. Pay ranges
b. Equity
c. Merit Raise
d. Variable pay systems
10. In an incentive payment plan, worker pay is determined by
a. Profits
b. Seniority
c. Cost of living
d. Performance
11. Group incentives would work best among
a. Accountants
b. Lawyers
c. Stockholders
d. Assembly line workers
12. Merit raises are seldom
a. Decided by supervisors
b. Given to average performers
c. Based on performance Appraisals
d. Tied to payout standards
13. Unions oppose incentive schemes because
a. Standards may go up
b. It dilutes union power
c. It reduces union membership
d. Management may not be honest
14. A disadvantages of ESOPs is
a. They help corporate raiders
b. They reduce the level of employee participation in the plant
c. They help divest unprofitable operations
d. They affect sales growth
15. The minimum and maximum pay rates for each job class.
a. Job ranking
b. Job grading
c. Rate ranges
d. None of these
16. The simplest method of job evaluation, where each job is ranked in importance relative to all other jobs.
a. Job ranking
b. Job grading
c. Rate ranges
d. None of these
17. Each job is combined with other jobs of similar worth into the same classification or pay group.
a. Job ranking
b. Job grading
c. Rate ranges
d. None of these
18. It breaks jobs down based on various identifiable criteria (skill, effort, responsibility etc.) and then allocates points to each of these criteria
a. Job evaluations
b. Factor comparison method
c. Point system
d. None of these
19. Systematic procedures used to determine the relative worth of jobs
a. Job evaluations
b. Factor comparison method
c. Point system
d. None
20. A widely used method of ranking jobs according to a variety of skills and difficulty factors, then adding up these rankings to arrive at an overall numerical rating for each job class
a. Job evaluations
b. Factor comparison method
c. Point system
d. None
21. The results of wages and salary surveys; the value of a job in the labour market.
a. Internal equity
b. External equity
c. Both (A & B)
d. None
22. The results of job evaluation, ensuring that all jobs are ranked in terms of their relative worth to the organization
a. Internal equity
b. External equity
c. Both (A & B)
d. None
23. A job that is used to anchor the employer’s pay scale and around which other jobs are arranged in order of relative worth.
a. Job analysis
b. Job evaluation
c. Benchmark job
d. None
24. A method of job evaluation which ranks employees from highest to lowest
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
25. A method of job evaluation that concentrates on creating certain common job grades based on skills, knowledge and abilities.
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
26. A method of job evaluation where job factors are compared to determine the worth of a job
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
27. A method of job evaluation where jobs are classified on identification criteria and the degree to which these criteria exist on the job.
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
28. Which of the following shows the relationship between the value of the job and the average wage paid for this job?
a. Wage curve
b. Classification method
c. Factor comparison method
d. Point method
29. Which of the following method is superior and widely used methods of evaluating jobs?
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
30. Which of the following method is more systematic and scientific methods of evaluating jobs.
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
31. Incentive schemes should be installed right from beginning of production
a. True
b. False
c. .
d. .
32. Which one of the following is a quantitative method of job evaluation?
a. Ranking method
b. Points rating method
c. Classification
d. None of above
33. An employee id entitled to bonus if has worked for at least ……. Working days in the year.
a. 15
b. 30
c. 60
d. None of above
34. Fringe benefits are the benefits provided to the employees
a. in cash
b. in kind
c. Cash & Kind
d. None of these
35. What are the 3 equities which come under the objective of compensation management
a. Internal equity
b. External equity
c. Individual equity
d. All
36. What is the percentage of Maximum bonus Payable?
a. 25 %
b. 20 %
c. 22 %
d. 26 %
37. What percentage of Employer’s Contribution are employees Provident Fund
a. 12 %
b. 8%
c. 8.33%
d. None of above
38. How many wage polices are there in India?
a. 3
b. 2
c. 4
d. 5
39. Minimum wage act was established in which year?
a. 1948
b. 1956
c. 1988
d. 1947
40. What are the different parties involved in the compensation management?
a. Employee
b. Employers
c. Unions and government
d. Employers
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University: AMITY Year: 2015