1. In terms of pay strategy, describe the three ways that pay systems should be
ID: 343177 • Letter: 1
Question
1. In terms of pay strategy, describe the three ways that pay systems should be aligned.
2. Explain the difference between the incentive and sorting effects in motivating employees.
3. The number of pay ranges in a pay structure is referred to as _______
4. In a job evaluation for one organization, we find that only one job has a particular factor. Which of the following is true?
a. We are required by law to include that factor in our system
b. We might include it because the employees doing that job will feel left out if we don’t.
c. We might leave it out because it is unnecessary
d. Either B or C
None of the above
a. We are required by law to include that factor in our system
b. We might include it because the employees doing that job will feel left out if we don’t.
c. We might leave it out because it is unnecessary
d. Either B or C
None of the above
Explanation / Answer
Ans -1) Pay strategy can be aligned in several ways and some of the most important drivers of pay strategy are:
Value-driven pay startegy - The value created by an employee towards its organization leads to the compensation package developed for the employee.
Market-driven - The pay strategy should be relevant and linked to the market in which the organization operates.
Benefit driven - The pay startegy should be designed in such a manner that its should cater to certain executive benefits for the employees.
Ans -2) Incentives are about giving high performing employees extra benefits which would further motivate them and increase productivity whereas sorting effect in case of pay for performace is about profiling employees from the high productive ones to the average ones which helps in determining their pay incentives.
Ans -3) The number of pay ranges in pay structures is referred to as pay bands or pay scales.
Ans -4) (A) We are required by law to include that factor in our system.
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