Exam (elaborations)
World At Work Variable Pay C12 / GR6: Q’s And A’s
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World At Work Variable Pay C12 / GR6: Q’s And A’s
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World At Work Variable Pay C12 / GR6: Q’s And A’sWhat are the three categories of variable pay Right Ans - 1-Incentives
2-Bonuses
3-recognition
What are the main characteristics of Incentives Right Ans - 1-Criteria
determined in advance
2-Amount of pay can vary
3-Monetary or non-monetary
4-Self-funded or budgeted
5-Non-discretionary
What are the main characteristics of Bonuses Right Ans - 1-Task
completion
2-Amount determined in advance
3-Monetary
4-Budgeted
5-Non-discretionary
What are the main characteristics of Recognition Right Ans - 1-Criteria
broadly defined and subjective
2-Awarded spontaneously
3-Decision after the fact
4-Focused on behaviors
5-Monetary or non-monetary
6-Budgeted
7-Discretionary
What are short-term incentive plans Right Ans - 1-Profit Sharing
2-Performance Sharing
3-Individual performance based
What are the main characteristics of Profit sharing plans Right Ans - Share
profits with employees, base rewards on financial performance, typically
include entire organization and payout is equal or graduated amounts
What are the objectives of profit sharing plans Right Ans - Foster employee
identification with the organization's success and create a common focus
,What are the considerations of profit sharing plans Right Ans - Promote
awareness / focus, pay out only when company has a profit, employee ability
to influence overall profits, ease of administration
What are the main characteristics of Performance sharing plans Right Ans -
Define performance by select criteria, focus on more than financial results,
exists at all organizational levels, measure performance based on
predetermined objectives and are defined for a specific period
What are the objectives of a performance sharing plan Right Ans - 1-
Improve organization's performance
2-Foster employee identification with the organization's success
3-Increase employee understanding
4-Promote a more balanced approach
What are the considerations for a performance sharing plan Right Ans - 1-
Promote awareness / focus
2-Self-funding
3-Employee ability to influence overall performance
4-Flexibility of design
5-May increase administrative requirements
What are the main characteristics of individual performance based plans
Right Ans - Based payouts on individual performance and focus on more than
financial results
What are the objectives of an individual performance based plan Right Ans
- Focus on personal performance improvement, increase employee
understanding and link rewards with personal performance
What are three types of individual performance based plan approaches
Right Ans - Performance against predetermined objectives (MBO), Output-
based and commissions
Define Performance against predetermined objectives (MBO) Right Ans -
Rewards are earned for the accomplishment of predetermined goals and
objectives set for the individual
, Define Output based individual performance plan Right Ans - Rewards are
earned based on a predetermined amount for each unit (piece-rate plan) -
used when scope is narrow, produce output in a repetitive fashion and
individual has some control over output
Define a Commission based individual performance plan Right Ans - A
predetermined incentive amount for each discrete unit of sales. Designed to
reward individual effort and drive results, create singular focus on sales
volume and motivate the sales success by tying the incentive directly to sales
results
What are the considerations for Individual performance based plans Right
Ans - 1-Reinforcement of performance culture
2-Narrow vision
3-wide variations in pay
4-High levels of administration
What are some approaches of profit sharing plans Right Ans - First-return
plans, Threshold plans, Operating Budget Plans and Peer company
comparisons
What are the two categories of Long-Term Incentive Plans Right Ans -
Equity based and Non-equity based
What are the main characteristics of Long Term Equity Based Plans Right
Ans - Create Equity interest, based on stock performance and paid out using
stock or cash
What are the main objectives of Long Term Equity Based Plans Right Ans -
1-Align employees with shareholders
2-Conserve cash
3-Create employee wealth
4-Increase retention
What are two types of Appreciation only Equity Based plans Right Ans - 1-
Stock Options: employees get the right to buy company shares at a specific
price at a specific time in the future.
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