Compensation Management

Assignment A
Q .1 What is Employees Compensation? State its two components? Explain the various steps involved
in establishing pay rates?
Q .2 Give overview of legislations affecting compensation?
Q .3 What are different elements of managerial compensation?
Q .4 Outline the main employees services benefits?
Q .5 What is goal sharing? Why organizations introduce goal sharing?
Q .6 Define Benefits and Incentives? Classify them? State its merits and demerits?
Q .7 State the differences between absenteeism and retention? Explain the process, advantages and
limitations of retention management
Q .8 Explain performance based rewards and compensation schemes? Also explain competency
mapping?

Assignment B
Case Detail:
Case Study- Seat of the pants Gaurav cleaning centers doesnt have a formal wage structure nor does
it have rate ranges or use compensable factors. Wage rates are based mostly on those prevailing in the
surrounding community and tempered with an attempt on the part of Gaurav to maintain some
semblance of equity between what workers with different responsibilities in the stores are paid.Needless
to say, Gaurav doesnt make any formal surveys when determining what his company should pay. He
peruses the want ads almost every day and conducts informal surveys among his friends in the local
chapter of the laundry and cleaners trade association. While Gaurav has taken a seat-of-the-pants
approach to paying the employees, his salary schedule has been guided by several basic pay policies
while many of his colleagues adhere to a policy of paying absolutely minimum rates, Gaurav has always
followed a policy of paying his employees about 10%above what he feels are the prevailing rates, a
policy that he believes reduces turnover while fostering employee loyalty. Of somewhat more concern to
Pragati is her fathers informal policy of paying men about 20% more than women for the same job. Her
fathers explanation is,
they are stronger and can work harder for longer hours and besides they all have families to support.
Questions
1. Is the company at the point where it should be setting up a formal salary structure based on a
complete job evaluation? Why?
2. Gaurav policy of paying 10%more than the prevailing rates a sound one and how could that be
determined?
Case Study- Health care
Business or Employees By February 2004 strike by southern Delhi grocery workers against the state
s major supermarket chains was almost 5 month old because so many workers were striking (70,000)
and because of the issues involved, unions and employers across the country were closely following the
negotiations. Indeed, grocery union contracts were said to expire in several cities later in 2004, and
many believed the Delhi settlement-assuming one was reached-would set a pattern.The main issue was
employee benefits, and specifically how much (if any) of the employees health care costs the
employees should pay themselves. Based on their existing contract, southern Delhi grocery workers
had unusually good health benefits. For example they paid nothing toward their health insurance
premiums, and paid only Rs 420 co-payments for doctor visits .However, supporting these excellent
health benefits cost the big Southern Delhi grocery chain over Rs168 per hour

per worker.The big grocery chains were not proposing cutting health care insurance benefits for their
existing employees. Instead, they proposed putting any new employees hired after the new contract
went into effect into a separate insurance pool, and contributing Rs56.7 per hour for their health
insurance coverage. That meant new employees health insurance would cost each new employee
perhaps Rs420 per week. And, if that Rs420 per week wasnt enough to cover the cost of health care,
then the employees would have to pay more or do without some of their benefits.It was difficult situation
for all the parties involved. For the grocery chain employers sky rocketing health care cost per
undermining their competitiveness; and the current employees feared any step down the slippery slope
that might eventually mean cutting their own health benefits. The unions did not welcome a situation in
which they end up representing two classes of employees, one(the existing employees) who had
excellent health insurance benefits, another(newly hired employees)whose benefits were relatively
meager and who might therefore be unhappy from the moment they took their jobs and joined the union.

Please give your answer in at least 25

.1. Assume you are mediating this dispute. Discuss three creative solutions you would suggest for how
the grocers could reduce the health insurance benefits and the cost of their total benefits package
without making any employees pay more?
2. From the grocery chains point of view, what is the downside of having two classes of employees, one
of which has superior health insurance benefits? How would you suggest they handle the problem?

Assignment C
Question No. 1

All forms of pay or rewards going to employees and arising from their employment
Options

Skill based pay

Employee compensation
Broad banding
Wage curve
Question No. 2

Marks - 10

A rise in pay based on performance

Options

Equity
Pay ranges
Merit raise
Skill based pay

Question No. 3

Pay based on how many skills employees have or how many jobs they can perform
Options

Compensable factors
Bonus
Need based wage
Skill based pay

Question No. 4

Practice of using fewer pay grades having broader ranges than traditional compensation systems
Options

Broad banding
Employee compensation
Pays ranges
Variable-pay systems

Question No. 5

Question No. 6
Marks - 10

Marks - 10

Determination of whether or not each individual pay is fair relative to that of

that of other individuals doing the same or similar jobs.
Options

Individual equity
Equity
Merit Raise
Variable pays systems

Common job
characteristics that an
organization is willing
to pay for such as skill,
effort, responsibility
etc.
Options

Compensable factors
Employee compensation
Pays ranges
Variable-pay systems
Question No. 7

The perceived fairness of the relation between what a person does (inputs) and what the
person receives (outputs)
Options

Individual equity
Equity
Merit Raise
Employee compensation

Question No. 8

Series of steps or levels within a pay grade , usually based on years of service

Options

Pay ranges
Equity
Merit Raise

Variable pay systems

Question No. 9

Pay programmes that are linked to profit and productivity gain

Options

Pay ranges
Equity
Merit Raise
Variable pay systems

Question No. 10

In an incentive payment plan, worker pay is determined by

Options

Profits

seniority

Cost of living

Performance
Question No. 11

Group incentives would work best among

Options

Accountants

Lawyers

Stockholders

Assembly line workers

Question No. 12

Merit raises are seldom

Options

Decided by supervisors
Given to average performers
Based on performance Appraisals
Tied to payout standards
Question No. 13

Unions oppose incentive schemes because

Options

Standards may go up
It dilutes union power
It reduces union membership
Management may not be honest
Question No. 14

A disadvantages of ESOPs is

Options

They help corporate raiders

They reduce the level of employee participation in the plant
.They help divest unprofitable operations
They affect sales growth

Question No. 15

The minimum and maximum pay rates for each job class.

Options

Job ranking
Job grading
Rate ranges

None of these

Question No. 16

The simplest method of job evaluation, where each job is ranked in importance relative to all other jobs.
Options

Job ranking
Job grading
Rate ranges
None of these

Question No. 17

Each job is combined with other jobs of similar worth into the same classification or pay group.

Options

Job ranking
Job grading
Rate ranges
None of these

Question No. 18

It breaks jobs down based on various identifiable criteria (skill, effort, responsibility etc.) and then allocates points
Options

Job evaluations
Factor comparison method
Point system

None of these
Question No. 19

Systematic procedures used to determine the relative worth of jobs

Options

Job evaluations
Factor comparison method
Point system
None

Question No. 20

A widely used method of ranking jobs according to a variety of skills and difficulty factors, then adding up these r
job class

Options

Job evaluations
Factor comparison method
Point system
None
Question No. 21

The results of wages and salary surveys; the value of a job in the labour market.
Options

Internal equity
External equity
Both (A & B)
None

Question No. 22

The results of job evaluation, ensuring that all jobs are ranked in terms of their relative worth to the organization

Options

Internal equity
External equity
Both (A & B)
None
Question No. 23

A job that is used to anchor the employers pay scale and around which other jobs are arranged in order of relati
Options

Job analysis
Job evaluation
Benchmark job
None

Question No. 24

A method of job evaluation which ranks employees from highest to lowest

Options

Ranking method
Classification method
Factor comparison method

10

Point method

Question No. 25

A method of job evaluation that concentrates on creating certain common job grades based on skills, knowledge

Options

Ranking method

Classification method

Factor comparison method

Point method

Question No. 26

A method of job evaluation where job factors are compared to determine the worth of a job
Options

Ranking method

Classification method

11

Factor comparison method

Point method

Question No. 27

A method of job evaluation where jobs are classified on identification criteria and the degree to which these crite
Options

Ranking method

Classification method

Factor comparison method

Point method

12

Question No. 28

Which of the following shows the relationship between the value of the job and the average wage paid for this jo

Options

Wage curve

Classification method

Factor comparison method

Point method

Question No. 29

Which of the following method is superior and widely used methods of evaluating jobs?

Options

Ranking method

Classification method

Factor comparison method

13

Point method

Question No. 30

Which of the following method is more systematic and scientific methods of evaluating jobs.

Options

Ranking method

Classification method

Factor comparison method

Point method

Question No. 31

Incentive schemes should be installed right from beginning of production

Options

True

14

False

Question No. 32

Which one of the following is a quantitative method of job evaluation?

Options

Ranking method

Points rating method

Classification

None of above

Question No. 33

An employee id entitled to bonus if has worked for at least . Working days in the year.

Options
15

15

30
60

None of above

Question No. 34

Fringe benefits are the benefits provided to the employees

Options

in cash

in kind

Cash & Kind

None of these

q
uestion No. 35

What are the 3 equities which come under the objective of compensation management?
Options

16

Internal equity

External equity
Individual equity

All
Question No. 36

What is the percentage of Maximum bonus Payable?

Options

25 %

20 %

22 %

26 %
Question No. 37

What percentage of Employers Contribution are employees Provident Fund.

Options

17

12 %

8%

8.33 %

None of the above

Question No. 38

How many wage polices are there in India?

Options
3
2
4
5

Question No. 39

Minimum wage act was established in which year?

Options
1948
1956

18

1988
1947
Question No. 40

What are the different parties involved in the compensation management?

Options

Employee

Employers

Unions and government

Employers

19