Chapter 30

Question 1

What are return of employee benefits

Answer 1

• Effective recruitment
• Improve morale and loyalty
• Lower turnover and absenteeism
• Good public relations

Question 2

What is pay-for-performance

Answer 2

A compensation philosophy of higher pay for higher contributions.

Question 3

How performance calculated on pay-for-performance

Answer 3

corporate performance + personal performance

Question 4

What are challenges of pay-for-performance system

Answer 4

• Link pay and performance appropriately
• Use pay-for-performance as part of broad HRM system
• Build employee trust
• Promote the belief that performance makes a difference
• Use multilevel layers of rewards
• Increase employee involvement
• Use motivation and non-financial incentives

Question 5

What are pay-for-performance plans

Answer 5

- Individual-based plan 
  (Merit pay)
  (Bonus program or lump-sum payment)
  (Award)
- Team-based plans 
- Plant-wide plans (gain sharing e.g. some department do excellent work so reward that department)
- Corporate-wide plans (profit sharing)

Question 6

What are six criteria of value of performance

Answer 6

1. Quality
2. Quantity
3. Timeliness
4. Cost effectiveness (minimum input, max output)
5. Need for supervision
6. Interpersonal impact

Question 7

What are reasons for pay-for-performance failures

Answer 7

• Poor perceived connection between performance and pay
• Level of performance-based pay is too low
• Lack of objective accountable results for most jobs, so performance appraisal ratings are used in place of objective outcomes
• Faulty performance appraisal systems
• Union resistance
• Poor connection between pay-for-performance outcomes and corporate performance measures

Question 8

How to improve reward effectiveness

Answer 8

• Link rewards to performance
• Ensure rewards are relevant
• Use team rewards for interdependent jobs
• Ensure rewards are valued
• Beware of unintended consequences

Question 9

What are the reasons people leave organization

Answer 9

• Limited recognition and praise
• compensation
• limited authority
• Personality conflicts
• Other

Question 10

What is highest most reason for people leave organization

Answer 10

• Limited recognition and praise (34%)

Question 11

What is ROI

Answer 11

Return on investment