USN
1 P E
PESIT Bangalore South Campus
Hosur road, 1km before Electronic City, Bengaluru -100
Department of MBA
INTERNAL ASSESSMENT TEST – 2
Date
: 28.09.2015
Subject & Code : Compensation and Benefits
Name of faculty: Mr.Nagabhushana R
Note:
Max Marks: 50
– 14MBAHR303
Section
Time
: Human Resources
: 11.30-1.00 PM
Answer all the Questions
1. a
What Is External Competitiveness?
External competitiveness refers to pay relationships among organizations - an
organization’s pay relative to its competitors
B
3
Explain the factors shaping External Competitiveness.
7
E LABOR MARKET FACTORS
Nature of Demand
10
Nature of Supply
PRODUCT MARKET FACTORS
Degree of Competition
Level of Product Demand
ORGANIZATION FACTORS
Industry, Strategy, Size
Individual Manager
MBA III SEMESTER
EXTERNAL
COMPETITIVENESS
USN
1 P E
PESIT Bangalore South Campus
Hosur road, 1km before Electronic City, Bengaluru -100
Department of MBA
c
Explain various Competitive Pay Policy Alternatives.
 Three conventional pay-level policies:
–
To lead
–
To meet
–
To follow competition
 Newer policies emphasize flexibility among:
2. a
–
Policies for different employee groups
–
Pay forms for individual employees
–
Elements of the employee relationship that company wishes to
emphasize in its external competitiveness policy
What is Pay For Performance?
Pay for performance plans signal a movement away from entitlements
Pay will vary with some measure of individual, team, or organizational
performance
b
Distinguish between Merit pay and Bonus pay.
 A merit pay system links increases in base pay to how highly employees
are rated on a subjective performance evaluation
 Issues
MBA III SEMESTER
–
Expensive
–
Doesn’t achieve the desired goal: improving employee and
3
7
USN
1 P E
PESIT Bangalore South Campus
Hosur road, 1km before Electronic City, Bengaluru -100
Department of MBA
corporate performance
Bonus pay
 Increasingly used substitute for merit pay
 Not built into base pay
 Viewed as less of an entitlement than merit pay
 Less expensive than merit pay over the long run
c
Who are special groups? Write down Components of an Executive Compensation
Package.
 Supervisors
 Corporate directors
 Top management executives
 Professional employees
 Sales staff
 Contingent workers
Components of an Executive Compensation
 Base salary
 Short-term (annual) incentives or bonuses
 Long-term incentives and capital appreciation plans
 Executive benefits
 Perquisites
MBA III SEMESTER
10
USN
1 P E
PESIT Bangalore South Campus
Hosur road, 1km before Electronic City, Bengaluru -100
Department of MBA
3.
Application Questions ( Each question carries 5 marks)
1. Design a short term incentive plan for sales staff.
Monthly Incentive for individual achievement and Quarterly commission for
group performance.
2. Design a long term incentive plan for senior executives in an IT company.
ESOP, Profit sharing, and annual lump sum bonus.
MBA III SEMESTER
10