Variable Pay - Improving Performance
with Variable Pay- Questions and
Answers
Distributing Plan Earnings Correct Ans-Form of payment; Frequency of payout and Timing
of payout
Form of payment Correct Ans-Cash, non-cash and stock
Frequency of payout Correct Ans-How often payouts are made; annual, quarterly, monthly
Timing of payout Correct Ans-How long after the measurement cycle incentives will be paid
Final Approval Correct Ans-Statement of design team objectives; Goals/objectives or plan;
Plan overview; Financial impact; Implementation plan; Seek senior management support;
Consider beta testing
Low Volatility Correct Ans-Simple historical averages appropriate; Trends should be taken
into account; Frequent payouts possible
High Volatility Correct Ans-Payout period may be longer; Measuring performance may
require rolling averages
,Aberration Occurrances Correct Ans-Unplanned and unexpected events that happen, ie new
business; data dropped from historical calculation
Seasonality Correct Ans-Baseline may change season to season, based on comparable,
previous periods
Plan Implementation Activities Correct Ans-Selecting the implementation team; Developing
the plan; Introducing the plan; Coordination plan administration
Developing the Communication Plan Correct Ans-Determine key points; Tailor to audience;
Choose communication channels; Document the communication plan; Determine ongoing
communications
Communication - Key Points Correct Ans-Objectives; Employees' role; Methods; Eligibility;
Feedback; Rewards; Reviews; Impact on compensation; More information
When presenting to management, consider Correct Ans-Anticipated concerns; Strengths of
the plan; Obstacles of the plan; Messages to be communicated; What will happen and why, and
how it will affect people
When presenting to supervisors, consider Correct Ans-Group meetings and workshops;
process, what can be done to improve performance, what is in it for me
, When presenting to employees, consider Correct Ans-Scripted Q&A; Manage expectations;
What is the aim of the program; How it works, policies, procedures; Specifics on how payouts
are determined
Communication Channels Correct Ans-Face-to-face; Paper-based; Technology-based
Document Communication Plan Correct Ans-What will be communicated; When will it be
communicated; What communication channel will be used; Who will deliver the message
Gaining Employee Commitment Correct Ans-Keep it simple; Focus on main elements; Use
effective communications; Managers communicate to employees
Coordinating Plan Administration Correct Ans-Ongoing performance tracking; Calculating
payouts; Communication payouts; Coordination with other functions
Coordination with other Functions Correct Ans-Payroll; Accounting/Finance; HRIS; Savings
account administration (401(k) and tax withholding
Plan Effectiveness Correct Ans-When to evaluate; Duel perspective Evaluation; Plan
assessment
Evaluation - Plan Assessment Correct Ans-Determine plan effectiveness; Why plans fail;
Potential evaluation outcomes
with Variable Pay- Questions and
Answers
Distributing Plan Earnings Correct Ans-Form of payment; Frequency of payout and Timing
of payout
Form of payment Correct Ans-Cash, non-cash and stock
Frequency of payout Correct Ans-How often payouts are made; annual, quarterly, monthly
Timing of payout Correct Ans-How long after the measurement cycle incentives will be paid
Final Approval Correct Ans-Statement of design team objectives; Goals/objectives or plan;
Plan overview; Financial impact; Implementation plan; Seek senior management support;
Consider beta testing
Low Volatility Correct Ans-Simple historical averages appropriate; Trends should be taken
into account; Frequent payouts possible
High Volatility Correct Ans-Payout period may be longer; Measuring performance may
require rolling averages
,Aberration Occurrances Correct Ans-Unplanned and unexpected events that happen, ie new
business; data dropped from historical calculation
Seasonality Correct Ans-Baseline may change season to season, based on comparable,
previous periods
Plan Implementation Activities Correct Ans-Selecting the implementation team; Developing
the plan; Introducing the plan; Coordination plan administration
Developing the Communication Plan Correct Ans-Determine key points; Tailor to audience;
Choose communication channels; Document the communication plan; Determine ongoing
communications
Communication - Key Points Correct Ans-Objectives; Employees' role; Methods; Eligibility;
Feedback; Rewards; Reviews; Impact on compensation; More information
When presenting to management, consider Correct Ans-Anticipated concerns; Strengths of
the plan; Obstacles of the plan; Messages to be communicated; What will happen and why, and
how it will affect people
When presenting to supervisors, consider Correct Ans-Group meetings and workshops;
process, what can be done to improve performance, what is in it for me
, When presenting to employees, consider Correct Ans-Scripted Q&A; Manage expectations;
What is the aim of the program; How it works, policies, procedures; Specifics on how payouts
are determined
Communication Channels Correct Ans-Face-to-face; Paper-based; Technology-based
Document Communication Plan Correct Ans-What will be communicated; When will it be
communicated; What communication channel will be used; Who will deliver the message
Gaining Employee Commitment Correct Ans-Keep it simple; Focus on main elements; Use
effective communications; Managers communicate to employees
Coordinating Plan Administration Correct Ans-Ongoing performance tracking; Calculating
payouts; Communication payouts; Coordination with other functions
Coordination with other Functions Correct Ans-Payroll; Accounting/Finance; HRIS; Savings
account administration (401(k) and tax withholding
Plan Effectiveness Correct Ans-When to evaluate; Duel perspective Evaluation; Plan
assessment
Evaluation - Plan Assessment Correct Ans-Determine plan effectiveness; Why plans fail;
Potential evaluation outcomes
