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Thandi earns a high salary and good benefits such as

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Thandi earns a high salary and good benefits such as a cell-phone allowance, housing allowance, car allowance, accident insurance and group life/disability insurance. Mary-Ann has been considering moving to the conglomerate where Thandi works, as there is shortly to be a vacancy. She is reluctant, however, as she is gaining experience in a much wider field than Thandi, because the company she works for undertakes PR work for a variety of different corporate clients, whereas Thandi’s responsibilities are mainly the coordination of visits from VIPs from the conglomerate’s head office in Germany. In addition, a week ago, Mary-Ann’s manager, Ayisha, completed her performance appraisal interview with these words: "Well, Mary-Ann, as you can see we are very happy with your work and dedication. This is why we have decided to offer you stock options in addition to the 8% annual increase. We have also decided that you are going to be our chief representative managing the campaign for our London- based client, which means that you will be based in London for about 6 weeks and will have to re-visit the client once every three months for a year afterwards. We know that benefits like these are not to everyone’s taste and that is why we want to offer you the opportunity to think it over. I would appreciate an answer from you by next week Monday." On Monday morning, Mary-Ann informs Ayisha that she would be honoured to accept the stock options and the assignment for the London-based client. 1 According to Mary-Anne, she decided to stay on because she values the experience she will gain from her new responsibilities. This is an example of: 1 intrinsic rewards 2 extrinsic rewards 3 nonfinancial rewards 4 direct compensation 5 indirect compensation
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20 2 Thandi tries to persuade May-Ann to apply for the vacancy at the conglomerate because she will receive a higher salary and better benefits. Thandi probably prefers the following: 1 fixed rewards 2 intrinsic rewards 3 variable rewards 4 indirect compensation 5 nonfinancial rewards 3 The stock options Mary-Ann received are a form of _________________________. 1 merit pay 2 once-off bonus 3 cash compensation 4 long-term incentive 5 short-term incentive 4 The purpose of offering stock options is to 1 increase Mary-Ann’s base salary 2 reward Mary-Ann for past behaviour 3 focus Mary-Ann’s efforts on yearly results 4 ensure that Mary-Ann has work/life balance 5 focus Mary-Ann’s efforts on multi-year results 5 The challenge of being the company’s chief representative for the London-based client and the opportunity to learn from the experience are examples of 1 variable rewards 2 relational returns 3 recognition awards 4 long-term incentives 5 nonfinancial rewards 6 Which three questions must be answered to establish whether a compensation strategy is a source of competitive advantage?
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