Final Exam

HR598 Final Exam Page 1 

1. (TCO A) The new CEO of your company, who just came from a competitor, has just asked you to discuss the organization’s compensation system. As the compensation manager, you tell him about the organization’s nearly 500 employees in about 70 different job titles who are located in three locations in L.A. He asks you to describe the strategy used to guide compensation system decisions. You explain that ordinarily, pay models are guided by several strategic policies. Describe what goals a compensation system should have and how four strategic pay policies apply to the organization. (Points : 30)Answer – The compensation system is a key component of the company HR and overall organization strategy and must well thought through in terms of goals and objectives, for it to be able to benefit the organization and help in achievement of organizational goals. The goals of a well-defined and implemented compensation system is that it should be aligned with the overall strategic goals of the organization, it must help support and drive the organizational objectives and it must be fair and equitable to the employees. In addition to this, the compensation should be able to attract and retain the talent that is required by the organization and be a source of motivation for the employees to put in their best in order to achieve organizational goals.There are four strategic pay policies that are key to designing and implementing an effective compensation system. The manner in which these are applied for determining compensation decisions are discussed below 1. Internal alignment - Internal alignment refers to comparisons among jobs or skill levels inside a single organization. The various jobs in the organization are compared with the various skills that are required to perform the jobs, and in relation to the organization’s business objectives. The compensation system should ensure that there is effective alignment between the jobs, skills...