Variable Pay - Improving Performance With Variable Pay: Qs & As

Variable Pay - Improving Performance With Variable
Pay: Qs & As

Primary Elements of Compensation Right Ans - Fixed and variable pay
rewards

Market-based Right Ans - Rewards individuals for their value relative to
the labor market

Performance-based Right Ans - Rewards individuals for their sustained
performance over time

Skill-based Right Ans - Rewards individuals for their acquisition of new
skills and competences

Fixed pay rewards are based on Right Ans - Market-base; Performance-
base and Skill-base

Fixed pay rewards are based on Right Ans - Employee's value

Variable pay rewards for Right Ans - Accomplishments and results

Variable pay rewards Right Ans - Organizational, group or individual
results

Performance-based compensation Right Ans - Serves as a pay
differentiator between those who achieve results and those who do not

The goal of variable pay Right Ans - To improve organizational
performance

Business strategy Right Ans - The broad framework of principles and
approaches that guide the day-to-day decisions affecting the business

Business strategy Right Ans - Supports the organization's mission, goals
and objectives

,Organizations place primary focus on three strategies Right Ans -
Operational excellence; Product/service leadership and Customer intimacy

Strategy -Operational excellence Right Ans - This strategy includes a
combination of price, quality, dependability and ease of purchase that
competitors cannot match. The corporate culture typically strives to minimize
waste and reward efficiency

Strategy -Operational excellence Right Ans - The corporate culture
typically strives to minimize waste and reward efficiency

Strategy -Product/service leadership Right Ans - Primarily an innovation-
based strategy

Strategy -Operational excellence Right Ans - Primarily a price/cost-based
strategy

Strategy -Product/service leadership Right Ans - This strategy focuses on
innovation, product development and market exploitation.

Strategy -Product/service leadership Right Ans - The corporate culture
encourages imagination and a mind-set driven by the prospect of creating the
future

Strategy -Product/service leadership Right Ans - Organizations that use
this strategy offer products and services that expand performance boundries

Strategy -Customer intimacy Right Ans - Primarily a solutions-based
strategy

Strategy -Customer intimacy Right Ans - This strategy focuses on creating
results for carefully selected customers (making them successful)

Strategy -Customer intimacy Right Ans - The corporate culture encourages
deep and lasting relationships with customers

Strategy -Customer intimacy Right Ans - Organizations that use this
strategy build bonds with targeted customers; they meet or exceed customer
needs to build customer loyalty

, Business objectives Right Ans - The link between an organization's
business strategy and the specific actions or behaviors employees must take

Business objectives: Strategy -Operational excellence Right Ans - Product
quality; Operational efficiency improvement; process improvement and cost
reduction

Business objectives: Strategy -Product/service leadership Right Ans -
Market share/market penetration; Product development and Time from
innovation to market

Business objectives: Strategy -Customer intimacy Right Ans - Customer
option of products; Product quality; Customer retention and Customer
satisfaction

Business Life Cycle Right Ans - The progression of steps an organization
passes through from its creation to its decline

Business Life Cycle -Start-up Right Ans - Obtain capital; Cash conservation;
Develop brand awareness and Develop marketing plan

Business Life Cycle -Growth Right Ans - Production capability; Market
share/market penetration and Sales volume/revenue growth

Business Life Cycle -Mature Right Ans - Improve operational efficiency;
Stock price appreciation and Maintain/increase market share

Business Life Cycle -Decline Right Ans - Maximize profits; Extend product
demand and New product development

Strategy -Operational excellence: Business Life Cycle -Start-up Right Ans -
Obtain capital; Cash conservation and Develop brand awareness

Strategy -Operational excellence: Business Life Cycle -Growth Right Ans -
Sales volume growth;Product quality and Production capability

Strategy -Operational excellence: Business Life Cycle -Mature Right Ans -
Improve operational efficiency; Stock price appreciation and Product quality