MAN 4330 Exam 3 Complete Guide: Budgeting, Compensation, and
Performance Management, Exams of Advanced Education
What are the benefits of Budgeting? - ANSWER1. Control of your Expenses
(Revenue Ratio)
Expenses > Revenue = LOSSES
2. Coordinate Activities (Budget for ALL Departments and activities) Develop
a budget for all major HR
3. Set some performance standards (Goal for Sales and Operational Budgets)
4. Evaluation Tool (Deviation Analysis +- Comparison to actual results to
planned (budgeted)
5. Corrective & Remedial control (Take necessary action to prevent future
over expenditures or under sales forecast)
What is the Budgeting Process? - ANSWER-All starts with Revenue
Projections! Forecasts!
,- Effects available resources for all business activities- very difficult process
but critical~
- UNDERSTAND YOUR CHALLENGES/Role of Assumptions- explains the
reasoning to determine the budget
What is MEA? - ANSWERUsed to identify the issues such as economic activity,
competitive activity, market expectations/demands, pricing tech
development
What is part of the budgeting process? - ANSWERDevelop complete charts of
accounts
Research costs for each account
Develop a written budget for each account
Avoid straight line estimating
Forecasts sales volume
Relate to revenue and projected profits to HR requirements
Project best case/worst case scenarios
Project break-even budget point
Forecasting Revenue- Sales or budget Allocations - ANSWERMinimum
Budget- determines the minimum costs for each activity to meet perform.
requirements
Must do Budget- minimum revenue to survive
,2 common Budget Approaches - ANSWERBottom Up- determine the cost for
each activity and sum them to determine Revenue needs
Top down- begin with estimate (or available) revenue and allocate to the
business activities
Forecasting compensation Budgets: A process view - ANSWER- Determine
pay of present employees
- Calculate total compensation for present employees (salary + benefit rider)
-Estimate (forecast) present employee total compensation for the next year
-Include forecasted pay adjustments and possible bonuses to occur during
the year
-Calculate total compensation costs for additional new positions!
-Total all comp costs
Who are Special Groups? - ANSWERSupervisors,
Professional employees,
Sales Staff,
Contingent Workers,
Corporate directors,
Top Management Executives
Characteristics of Special Groups: - ANSWER-Tend to be strategically
important to a company
- Positions tend to have conflict, that comes up bc different situations place
incompatible demands on members of group
, The Issues of Supervisory Pay: - ANSWERCaught between demands of: -
Upper management in terms of production and employees in terms of
rewards, reinforcements and counseling
Major Challenge in paying supervisors - ANSWER-Equity
- Provide incentives to attract nonexempt employees to accept challenges of
being a supervisor
Pay Strategies: - ANSWER-Key base salaries of supervisors to an amount
exceeding highest paid employee (Salaries of supervisors should be Higher
than the highest paid employee)
- Pay supervisors for scheduled overtime
The Trend in supervisory compensation - ANSWER- Increased use of variable
pay
- More than half of all companies have a variable pay component for
supervisors.
Conflicts faced by Sales Staff: - ANSWER- Often go for extended periods in
field with little supervision
Challenges of Sales staff are: - ANSWER-Staying motivated
-Continuing to make sales calls despite little supervision
Reward components of Professional employees: - ANSWER-Dual Career
ladder
Performance Management, Exams of Advanced Education
What are the benefits of Budgeting? - ANSWER1. Control of your Expenses
(Revenue Ratio)
Expenses > Revenue = LOSSES
2. Coordinate Activities (Budget for ALL Departments and activities) Develop
a budget for all major HR
3. Set some performance standards (Goal for Sales and Operational Budgets)
4. Evaluation Tool (Deviation Analysis +- Comparison to actual results to
planned (budgeted)
5. Corrective & Remedial control (Take necessary action to prevent future
over expenditures or under sales forecast)
What is the Budgeting Process? - ANSWER-All starts with Revenue
Projections! Forecasts!
,- Effects available resources for all business activities- very difficult process
but critical~
- UNDERSTAND YOUR CHALLENGES/Role of Assumptions- explains the
reasoning to determine the budget
What is MEA? - ANSWERUsed to identify the issues such as economic activity,
competitive activity, market expectations/demands, pricing tech
development
What is part of the budgeting process? - ANSWERDevelop complete charts of
accounts
Research costs for each account
Develop a written budget for each account
Avoid straight line estimating
Forecasts sales volume
Relate to revenue and projected profits to HR requirements
Project best case/worst case scenarios
Project break-even budget point
Forecasting Revenue- Sales or budget Allocations - ANSWERMinimum
Budget- determines the minimum costs for each activity to meet perform.
requirements
Must do Budget- minimum revenue to survive
,2 common Budget Approaches - ANSWERBottom Up- determine the cost for
each activity and sum them to determine Revenue needs
Top down- begin with estimate (or available) revenue and allocate to the
business activities
Forecasting compensation Budgets: A process view - ANSWER- Determine
pay of present employees
- Calculate total compensation for present employees (salary + benefit rider)
-Estimate (forecast) present employee total compensation for the next year
-Include forecasted pay adjustments and possible bonuses to occur during
the year
-Calculate total compensation costs for additional new positions!
-Total all comp costs
Who are Special Groups? - ANSWERSupervisors,
Professional employees,
Sales Staff,
Contingent Workers,
Corporate directors,
Top Management Executives
Characteristics of Special Groups: - ANSWER-Tend to be strategically
important to a company
- Positions tend to have conflict, that comes up bc different situations place
incompatible demands on members of group
, The Issues of Supervisory Pay: - ANSWERCaught between demands of: -
Upper management in terms of production and employees in terms of
rewards, reinforcements and counseling
Major Challenge in paying supervisors - ANSWER-Equity
- Provide incentives to attract nonexempt employees to accept challenges of
being a supervisor
Pay Strategies: - ANSWER-Key base salaries of supervisors to an amount
exceeding highest paid employee (Salaries of supervisors should be Higher
than the highest paid employee)
- Pay supervisors for scheduled overtime
The Trend in supervisory compensation - ANSWER- Increased use of variable
pay
- More than half of all companies have a variable pay component for
supervisors.
Conflicts faced by Sales Staff: - ANSWER- Often go for extended periods in
field with little supervision
Challenges of Sales staff are: - ANSWER-Staying motivated
-Continuing to make sales calls despite little supervision
Reward components of Professional employees: - ANSWER-Dual Career
ladder
