Chapter 1: Effective Compensation System Overview Quiz

What is the single largest operating expenditure for Canadian employers?

The level of alignment of compensation system with firm’s strategy
High compensation costs as a percentage of firm’s total expenses
Value of compensation system to the job candidates
Take home pay (correct)

What aspect is considered a key part of getting organization members to do what the organization wants?

The level of alignment of compensation system with firm’s strategy (correct)
High compensation costs as a percentage of firm’s total expenses
Value of compensation system to the job candidates
Take home pay

What needs must employees perceive that accepting a job with an employer will help satisfy?

All the above (correct)
Economic needs for basic necessities of life
Needs for security, social interaction, status
Achievement, recognition, growth and development

What is the purpose of the compensation system?

To align with firm’s strategy (B) Signup and view all the answers

What percentage of operating budgets typically compensates employees?

70-90% (C) Signup and view all the answers

What does the compensation system aim to help create among qualified persons?

Recognition and growth opportunities (C) Signup and view all the answers

What is the key aspect of a compensation strategy related to the total amount of compensation?

How much compensation should be paid (A) Signup and view all the answers

Which component of a compensation system is generally based on a unit of time worked?

Base pay (B) Signup and view all the answers

What is the blueprint for creating the reward system within an organization?

Reward Strategy (B) Signup and view all the answers

Which type of pay involves noncash items or services that cater to specific employee needs?

Indirect pay (A) Signup and view all the answers

When should interns be paid according to the text?

Interns should always be compensated (C) Signup and view all the answers

What must be developed before establishing the compensation system within an organization?

Reward Strategy (C) Signup and view all the answers

What are the two types of human needs mentioned in the text?

Primary and secondary needs (C) Signup and view all the answers

Which of the following is a characteristic of intrinsic rewards?

Received during performance of the behavior (D) Signup and view all the answers

What is the main difference between rewards and incentives according to the text?

Incentives are promised rewards for future behavior, while rewards are given after behavior (C) Signup and view all the answers

Which of the following is NOT an example of broader rewards mentioned in the text?

Base Pay (C) Signup and view all the answers

What do total rewards encompass according to the content?

The mix of extrinsic and intrinsic rewards along with compensation (A) Signup and view all the answers

In the context of reward systems, what does a compensation system primarily focus on?

Economic aspect of rewards only (D) Signup and view all the answers

What is the main purpose of a compensation system?

To help achieve organizational strategies and objectives (A) Signup and view all the answers

Why is an effective compensation system important for most organizations?

To attract, retain, and motivate employees (C) Signup and view all the answers

What distinguishes extrinsic rewards from intrinsic rewards?

Extrinsic rewards are tangible rewards, while intrinsic rewards are intangible rewards. (D) Signup and view all the answers

What distinguishes a reward system from a compensation system?

A reward system is broader and includes non-monetary recognition, while a compensation system is narrower and includes only monetary rewards. (D) Signup and view all the answers

Why must a compensation system be viewed in the context of the total reward system and the broader organizational environment?

To align compensation with organizational culture and values (D) Signup and view all the answers

What is one key criterion for evaluating the success of a compensation system?

The alignment with organizational goals (C) Signup and view all the answers

What is the primary goal of compensation systems?

Satisfy basic human needs (B) Signup and view all the answers

Which role focuses on determining the budget in designing a compensation system?

Manager of Compensation (C) Signup and view all the answers

In the context of reward systems, what do extrinsic rewards primarily address?

Basic human needs (A) Signup and view all the answers

What is the last component that should serve in designing an effective compensation system for a company?

Implementing and evaluating the system (A) Signup and view all the answers

Which aspect is NOT addressed by compensation systems according to the text?

Employee motivation techniques (D) Signup and view all the answers

What is the combination of intrinsic and extrinsic rewards called in an organization?

Reward system (B) Signup and view all the answers