BUSMHR 3200 Exam 2: Compensation
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Compensation - CORRECT ANSWER - The rewards, usually monetary in nature (either
short- and/or long-term) that reinforce behavior, organizational membership, performance and
retention
Compensation to Earlier Class Topics - CORRECT ANSWER - -Directly relates to an orgs
ability to attract, select, hire the best possibly employee/org members
-Strongly related to individual motivation, satisfaction, engagement and retention
-Can cause internal conflicts (team effectiveness) when equity is not perceived to be present
-Needs to be aligned with the goals and strategy of the org
*Different elements of compensation plan (merit vs. bonus)
*Focus for compensation (individual vs. group vs. organizational level)
-Can present difficulties in global org management
(In the U.S., compensation is intensely personal and related to self-worth)
Merit Pay - CORRECT ANSWER - -Link performance-appraisal ratings to annual pay
increases
-A merit increase grid combines an employee's performance rating with the employee's position
in a pay range (often called a "comp-ratio" to determine the size and frequency of his or her pay
increase)
-A merit increase grid can also help bring about perceived pay equity
-Some orgs provide guidelines regarding the percentage of employees who should fall into each
performance category (forced distribution)
-Criticisms of merit pay include emphasis on individual performance vs. team work,
measurement problems, and (from deming) that individuals don't have much impact on their own
performance
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Compensation - CORRECT ANSWER - The rewards, usually monetary in nature (either
short- and/or long-term) that reinforce behavior, organizational membership, performance and
retention
Compensation to Earlier Class Topics - CORRECT ANSWER - -Directly relates to an orgs
ability to attract, select, hire the best possibly employee/org members
-Strongly related to individual motivation, satisfaction, engagement and retention
-Can cause internal conflicts (team effectiveness) when equity is not perceived to be present
-Needs to be aligned with the goals and strategy of the org
*Different elements of compensation plan (merit vs. bonus)
*Focus for compensation (individual vs. group vs. organizational level)
-Can present difficulties in global org management
(In the U.S., compensation is intensely personal and related to self-worth)
Merit Pay - CORRECT ANSWER - -Link performance-appraisal ratings to annual pay
increases
-A merit increase grid combines an employee's performance rating with the employee's position
in a pay range (often called a "comp-ratio" to determine the size and frequency of his or her pay
increase)
-A merit increase grid can also help bring about perceived pay equity
-Some orgs provide guidelines regarding the percentage of employees who should fall into each
performance category (forced distribution)
-Criticisms of merit pay include emphasis on individual performance vs. team work,
measurement problems, and (from deming) that individuals don't have much impact on their own
performance
