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Compensation Management V1
Assignment A
Q .1 What is Employees Compensation? State its two components? Explain the vario
us 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 demerit
s?
Q .7 State the differences between absenteeism and retention? Explain the proces
s, advantages and limitations of retention management
Q .8 Explain performance based rewards and compensation schemes? Also explain co
mpetency mapping?
Assignment B
Case Detail:
Case Study- Seat of the pants
Gaurav cleaning centers doesnt have a formal wage structure nor does it have rat
e ranges or use compensable factors. Wage rates are based mostly on those prevai
ling in the surrounding community and tempered with an attempt on the part of Ga
urav to maintain some semblance of equity between what workers with different re
sponsibilities 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 inform
al surveys among his friends in the local chapter of the laundry and cleaners tr
ade 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 wh
ile 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 wha
t 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 fat
hers informal policy of paying men about 20% more than women for the same job. He
r fathers explanation is, they are stronger and can work harder for longer hours a
nd besides they all have families to support.
Questions
1. Is the company at the point where it should be setting up a formal salary str
ucture 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 states majo
r supermarket chains was almost 5 month old because so many workers were strikin
g (70,000) and because of the issues involved, unions and employers across the c
ountry 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 e
xisting contract, southern Delhi grocery workers had unusually good health benef
its. For example they paid nothing toward their health insurance premiums, and p
aid only Rs 420 co-payments for doctor visits .However, supporting these excelle
nt 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, an
d contributing Rs56.7 per hour for their health insurance coverage. That meant n
ew 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 e
mployers sky rocketing health care cost per undermining their competitiveness; a
nd the current employees feared any step down the slippery slope that might even
tually mean cutting their own health benefits. The unions did not welcome a situ
ation in which theyd end up representing two classes of employees, one(the existi
ng employees) who had excellent health insurance benefits, another(newly hired e
mployees)whose benefits were relatively meager and who might therefore be unhapp
y from the moment they took their jobs and joined the union.
Please give your answer in at least 25 words and press save and continue button.
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 m
ore?
2. From the grocery chains point of view, what is the downside of having tw
o classes of employees, one of which has superior health insurance benefits? How
would you suggest they handle the problem?
Assignment C
1. All forms of pay or rewards going to employees and arising from their em
ployment
a. Skill based pay
b. Employee compensation
c. Broad banding
d. Wage curve
2. A rise in pay based on performance
a. Equity
b. Pay ranges
c. Merit raise
d. Skill based pay
3. Pay based on how many skills employees have or how many jobs they can pe
rform
a. Compensable factors
b. Bonus
c. Need based wage
d. Skill based pay
4. Practice of using fewer pay grades having broader ranges than traditiona
l compensation systems
a. Broad banding
b. Employee compensation
c. Pay ranges
d. Variable pay system
5. Determination of whether or not each individual pay is fair relative to tha
t of that of other individuals doing the same or similar jobs.
a. Individual equity
b. Equity
c. Merit raise
d. Variable pays system
6. Common job characteristics that an organization is willing to pay for s
uch as skill, effort, responsibility etc.
a. Compensable factors
b. Compensable factors
c. Pays ranges
d. Variable-pay systems
7. The perceived fairness of the relation between what a person does (input
s) and what the person receives (outputs)
a. Individual equity
b. Equity
c. Merit Raise
d. Employee compensation
8. Series of steps or levels within a pay grade , usually based on years of
service
a. Pay ranges
b. Equity
c. Merit Raise
d. Variable pay systems
9. Pay programmes that are linked to profit and productivity gain
a. Pay ranges
b. Equity
c. Merit Raise
d. Variable pay systems
10. In an incentive payment plan, worker pay is determined by
a. Profits
b. Seniority
c. Cost of living
d. Performance
11. Group incentives would work best among
a. Accountants
b. Lawyers
c. Stockholders
d. Assembly line workers
12. Merit raises are seldom
a. Decided by supervisors
b. Given to average performers
c. Based on performance Appraisals
d. Tied to payout standards
13. Unions oppose incentive schemes because
a. Standards may go up
b. It dilutes union power
c. It reduces union membership
d. Management may not be honest
14. A disadvantages of ESOPs is
a. They help corporate raiders
b. They reduce the level of employee participation in the plant
c. They help divest unprofitable operations
d. They affect sales growth
15. The minimum and maximum pay rates for each job class.
a. Job ranking
b. Job grading
c. Rate ranges
d. None of these
16. The simplest method of job evaluation, where each job is ranked in impor
tance relative to all other jobs.
a. Job ranking
b. Job grading
c. Rate ranges
d. None of these
17. Each job is combined with other jobs of similar worth into the same clas
sification or pay group.
a. Job ranking
b. Job grading
c. Rate ranges
d. None of these
18. It breaks jobs down based on various identifiable criteria (skill, effor
t, responsibility etc.) and then allocates points to each of these criteria
a. Job evaluations
b. Factor comparison method
c. Point system
d. None of these
19. Systematic procedures used to determine the relative worth of jobs
a. Job evaluations
b. Factor comparison method
c. Point system
d. None
20. A widely used method of ranking jobs according to a variety of skills an
d difficulty factors, then adding up these rankings to arrive at an overall nume
rical rating for each job class
a. Job evaluations
b. Factor comparison method
c. Point system
d. None
21. The results of wages and salary surveys; the value of a job in the labou
r market.
a. Internal equity
b. External equity
c. Both (A & B)
d. None
22. The results of job evaluation, ensuring that all jobs are ranked in term
s of their relative worth to the organization
a. Internal equity
b. External equity
c. Both (A & B)
d. None
23. A job that is used to anchor the employers pay scale and around which oth
er jobs are arranged in order of relative worth.
a. Job analysis
b. Job evaluation
c. Benchmark job
d. None
24. A method of job evaluation which ranks employees from highest to lowest
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
25. A method of job evaluation that concentrates on creating certain common
job grades based on skills, knowledge and abilities.
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
26. A method of job evaluation where job factors are compared to determine t
he worth of a job
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
27. A method of job evaluation where jobs are classified on identification c
riteria and the degree to which these criteria exist on the job.
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
28. Which of the following shows the relationship between the value of the j
ob and the average wage paid for this job?
a. Wage curve
b. Classification method
c. Factor comparison method
d. Point method
29. Which of the following method is superior and widely used methods of eva
luating jobs?
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
30. Which of the following method is more systematic and scientific methods
of evaluating jobs.
a. Ranking method
b. Classification method
c. Factor comparison method
d. Point method
31. Incentive schemes should be installed right from beginning of production
a. True
b. False
c. .
d. .
32. Which one of the following is a quantitative method of job evaluation?
a. Ranking method
b. Points rating method
c. Classification
d. None of above
33. An employee id entitled to bonus if has worked for at least . Working days
in the year.
a. 15
b. 30
c. 60
d. None of above
34. Fringe benefits are the benefits provided to the employees
a. in cash
b. in kind
c. Cash & Kind
d. None of these
35. What are the 3 equities which come under the objective of compensation m
anagement
a. Internal equity
b. External equity
c. Individual equity
d. All
36. What is the percentage of Maximum bonus Payable?
a. 25 %
b. 20 %
c. 22 %
d. 26 %
37. What percentage of Employers Contribution are employees Provident Fund
a. 12 %
b. 8%
c. 8.33%
d. None of above
38. How many wage polices are there in India?
a. 3
b. 2
c. 4
d. 5
39. Minimum wage act was established in which year?
a. 1948
b. 1956
c. 1988
d. 1947
40. What are the different parties involved in the compensation management?
a. Employee
b. Employers
c. Unions and government
d. Employers
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