15 management of a pay system is about ensuring 1

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Hence options 1, 2, 3 and 5 are incorrect. 15 Management of a pay system is about ensuring __________________. 1 that the union agreement is implemented conscientiously 2 that employees are productively engaged 3 that pay is managed as part of the business 4 that compensation costs are kept to a minimum 5 effective administration of benefits and incentives The correct answer is 3. See “Four policy choices” and “Management” in the prescribed book. The traditional focus on how to administer various techniques is something of the past and has been replaced by more strategic thinking – managing pay as part of the business. Options 1, 2, 4 and 5 are therefore incorrect. 16 A compensation strategy adds value when it _____________. (a) provides incentives for time spent at work (b) provides automatic yearly increases in benefits (c) attracts and retains talented staff with potential (d) ensures fair and ethical compensation for all staff (e) ensures yearly across-the- board increases for all staff The correct alternative is 1 a, d 2 a, b 3 c, d 4 c, e 5 d, e The correct answer is 3. See section 2.5 in the study guide. A compensation strategy will add value if it meets the following requirements: Attracts and retains the right human resource talents and potential. Compensates only behaviour which is in line with organisational strategy and goals.
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9 MNH306K/201 Controls the cost of compensation. Compensates employees in an ethical and fair manner. Hence options 1, 2, 4 and 5 are incorrect. 17 A compensation strategy differentiates when it ensures ____________________. 1 compensation that attracts and retains the right staff 2 that compensation is higher than those of competitors 3 compensation that is difficult for competitors to imitate 4 compensation that allows employers to control labour costs 5 that compensation includes long- and short-term incentives The correct answer is 3. See section 2.5 in the study guide. A competitive advantage stems from the unique way in which compensation, human resource management and business strategies in an organisation are effectively integrated and implemented. A competitive advantage is achieved as long as competitors do not succeed in imitating the uniqueness of the particular organisation. Options 1, 2, 4 and 5 are therefore incorrect. 18 Best practice in compensation means ___________________. 1 providing incentives to ensure performance 2 applying certain accepted practices across all situations 3 focusing on all dimensions of the compensation strategy 4 ensuring internal alignment and external competitiveness 5 setting a compensation strategy that is separate from the business strategy The correct answer is 2. See “Best practive VS best fit” in the prescribed book. Some people believe that a set of best-pay practices exists and that these practices can be applied universally across situations. Options 1, 3, 4 and 5 are therefore incorrect.
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