C12 Variable Pay 3-5: Questions With Detailed Answers
3 stages of plan design Right Ans - Pre design, Design and
Funding/Distribution
Pre-Design Right Ans - Consider internal and external factors. Obtain
management support. Identify design team.
Internal factors of Pre-Design Right Ans - Organizational readiness.
Costs/Resource Availability and Timing
External factors of Pre-Design Right Ans - Labor market. Competition.
Geopolitical. Legal/regulatory and Technology.
Organizational Readiness Culture Types Right Ans -
Traditional/hierarchical - High value on people. Hard for individual to affect
change so variable pay may not motivate. Job/task - Low value on people.
Hard for individual to affect change so variable pay may not motivate.
Integrative/team based - High value on people. Individual can affect change.
Needs to be team focused to work. Individually measured - Low value on
people. Individual can affect change so may work.
Variable Pay Effectiveness Model Right Ans - = Direction (Business
Objectives & Culture) * Power (Awareness, Value, Performance sensitivity and
Participation)
Design Team Job Right Ans - Develop a charter, Cross functional
membership with HR as a participant (6-12). Define role in regards to plan
design, approval, evaluation and implementation.
Design Right Ans - Determine plan objectives and type. Define eligibility.
Select performance measures.
Design - Determining Plan Objectives Right Ans - Address business
objectives. Limit the number of objectives. Use SMART Goals. Select a plan
type that supports objectives.
3 stages of plan design Right Ans - Pre design, Design and
Funding/Distribution
Pre-Design Right Ans - Consider internal and external factors. Obtain
management support. Identify design team.
Internal factors of Pre-Design Right Ans - Organizational readiness.
Costs/Resource Availability and Timing
External factors of Pre-Design Right Ans - Labor market. Competition.
Geopolitical. Legal/regulatory and Technology.
Organizational Readiness Culture Types Right Ans -
Traditional/hierarchical - High value on people. Hard for individual to affect
change so variable pay may not motivate. Job/task - Low value on people.
Hard for individual to affect change so variable pay may not motivate.
Integrative/team based - High value on people. Individual can affect change.
Needs to be team focused to work. Individually measured - Low value on
people. Individual can affect change so may work.
Variable Pay Effectiveness Model Right Ans - = Direction (Business
Objectives & Culture) * Power (Awareness, Value, Performance sensitivity and
Participation)
Design Team Job Right Ans - Develop a charter, Cross functional
membership with HR as a participant (6-12). Define role in regards to plan
design, approval, evaluation and implementation.
Design Right Ans - Determine plan objectives and type. Define eligibility.
Select performance measures.
Design - Determining Plan Objectives Right Ans - Address business
objectives. Limit the number of objectives. Use SMART Goals. Select a plan
type that supports objectives.
