19 compensation systems can be tailored to three

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19 Compensation systems can be tailored to three general business strategies, namely innovator, cost cutter’s efficiency-focused strategy and customer focused business strategy . Choose the correct alternative by matching the correct strategy with the required HR program alignment and compensation systems. 1 Strategy Characteristic of strategy HR program alignment Compensation systems Innovator Focuses on efficiency Does more with less Value of job and skills based on customer contact Cost cutter Increases customer expectation Committed to agile, risk-taking, innovative people Increases variable pay Customer focused Increases product complexity and shorten product life cycle Delights customer, exceeds expectations Market-based pay 2 Strategy Characteristic of strategy HR program alignment Compensation systems Innovator Increases product complexity and shorten product life cycle Delights customer, exceeds expectations Market-based pay Cost cutter Increases customer expectation Does more with less Value of jobs and skills based on customer contact Customer focused Focuses on efficiency Committed to agile, risk-taking, innovative people Increases variable pay 3 Strategy Characteristic of strategy HR program alignment Compensation systems Innovator Increases customer expectation Committed to agile, risk-taking, innovative people Increases variable pay Cost cutter Increases product complexity and shorten product life cycle Delights customer, exceeds expectations Market-based pay Customer focused Focuses on efficiency Does more with less Value of jobs and skills based on customer contact 4 Strategy Characteristic of strategy HR program alignment Compensation systems Innovator Increases product complexity and shorten product life cycle Committed to agile, risk-taking, innovative people Market-based pay Cost cutter Focuses on efficiency Does more with less Increases variable pay Customer focused Increases customer expectations Delights customer, exceed expectations Value of jobs and skills based on customer contact The correct alternative is 4. See chapter 2, “Support business strategy”, exhibit 2.3 in the prescribed book. The innovator stresses new products and quick responses to market trends. A supporting compensation approach places less emphasis on evaluating skills and jobs and more emphasis on incentives designed to
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