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Fresh Munchables is a mid-sized but steadily growing...

Fresh Munchables is a mid-sized but steadily growing food-processing company founded in 1967. Since its inception, the company has been committed to providing only premium quality health foods. The company is headquartered in Wichita, Kansas, and it is one of the area's largest producers of soups and simple meals. In the past 20 years, the company has also begun processing healthy snacks and beverages. Fresh Munchables has traditionally sold its products through large grocery stores, but it is now venturing into online and restaurant businesses, which is all very new territory for management.

The company is split up into three overarching strategic business units—soups and meals, drinks, and snacks. Additionally, the company is divided into several business units at the operational level, consisting of a mix of business operations, manufacturing (production), research and development, finance, and so on. As the company continues to grow, the executive team and other leaders are constantly looking for ways to improve processes.

Because Fresh Munchables has grown from a very small company into a well-established organization, management has decided to broaden the company's strategic HR functions. The human resources team is currently working to improve recruiting and hiring processes, succession planning, and most importantly, compensation and rewards.

For many years, the company has delegated compensation decisions to managers with little to no training on the subject. This has left the company in a disorganized, confused state when it comes to paying and rewarding employees. These problems have compounded as Fresh Munchables has recently opened up new manufacturing locations with new managers and many new employees.

The chief human resources officer has organized a team of compensation specialists of which you are a part to spearhead total compensation-related problems and help the company to reach its current and future goals. You and your team can achieve this by revising the current total compensation system to reflect the company's current business strategies and goals as well as attract and retain top talent.

1.     Bookmark question for later

Chris and Becky are the managers of two respective Fresh Munchables restaurants that recently opened in Wichita, Kansas, and Oklahoma City, Oklahoma. Chris is currently trying to come up with a business strategy that best prepares his location to stay competitive within the Wichita health food marketplace. Becky is trying to decide if she is compensating her employees fairly in her own location. Chris is trying to make ________, while Becky is trying to make ________.

o  An internal equity decision; an external equity decision

o  

o  An external equity decision; an internal equity decision

o  A fairness equity decision; a comparative decision

After a hugely successful marketing campaign, demand for Fresh Munchables' products has increased rapidly. More demand means more manufacturing and more employees. The company needs to hire many new employees—and quickly.

Why would it be beneficial for Fresh Munchables to use a job-based approach in this situation?

o  The value of each job is fixed; all employees will always be paid the same amount.

o  The value of each job is fixed; all employees are paid the same regardless of their qualifications.

o  The value of each job is flexible; managers, not HR, determine how much each employee is paid.

2.     Bookmark question for later

In the preliminary stages of developing the compensation system, the compensation team at Fresh Munchables assigns a member of the team to perform a SWOT analysis to better understand the organization's environment and how that may influence the compensation system.

Which of the following outcomes may be discovered in the SWOT analysis for Fresh Munchables?

o  Vital success components—such as a strength in marketing and a weakness in employee retention and satisfaction—that will allow for a competitive advantage

o  Critical success factors—such as customer perceptions of the company as the leading healthy packaged foods brand—that will foster competitive advantage

o  Strategic compensation factors—such as overarching company goals to outperform competitors in the food and beverage industry—that will allow for a competitive advantage

3.     Bookmark question for later

The HR department at Fresh Munchables is considering a point factor approach for establishing internal alignment. The company is mid-sized but is growing steadily, and it is projected to become a large organization within the next 10 years.

What is true about the point factor approach that would benefit Fresh Munchables?

o  The point factor approach allocates points to jobs based on how much value the people who hold those jobs provide, which allows the company to reward individual employees.

o  

o  The point factor approach provides a method for calculating points for each job based upon the job's value to the organization, which is easily scalable for use in a large company.

o  The point factor approach ranks each job in a company from "most important" to "least important," which is key for a company with a growing number of positions.


4.     Bookmark question for later

As part of Fresh Munchables' new online marketplace venture, you have determined that 15 new jobs will be required to sell Fresh Munchables' products online and have arranged these jobs into three groups for internal alignment purposes: website development and support, processing, and shipping.

o  You have created a job categorization structure to ensure that different types of employees will be paid equally as long as they contribute the same amount of relative value to the company.

o  You have created a job-value structure to help determine what the jobs are, how they are related, and the relative importance of each one.

o  You have created a job-value structure to determine the relative value of each job within the company for comparison to similar jobs at competing companies.

What have you created in doing this, and why is it important in the process of determining compensation?

5.     Bookmark question for later

Several new positions have recently been created to streamline the delivery of ingredients from Fresh Munchables' factories to its restaurants. The CEO of Fresh Munchables wants the HR department to figure out how much each position should be paid based on the company's internal rewards alignment.

What question should not be considered in order to make these new positions fit within the company's pay structure?

o  How can the company maintain good morale, collaboration, and information sharing among employees?

o  How well does each position's rewards align with those received by others in similar positions in competing companies?

o  How should two employees with similar duties but different titles be paid?

The executive department at Fresh Munchables has decided to completely change the company's current compensation system. They are considering implementing the same compensation system used by a similar food company that has been extremely successful. However, Fresh Munchables' compensation team strongly disagrees with this idea.

Why would it be a bad idea for the company to use another company's system as opposed to creating its own compensation sy

o  Creating an effective compensation system will require you to have a clear understanding of your own company's total equity and value.

o  Creating an effective compensation system will require you to have a clear understanding of your own company's employees and what they have traditionally been paid.

o  Creating an effective compensation system will require you to have a clear understanding of your own company's rewards and how it competes in the market.

6.     Bookmark question for later

Unlike other healthy food producers in the local market that sell low-quality and cheap products, Fresh Munchables wants to provide premium food products at a high cost. In fact, Fresh Munchables has become known in its community for placing a high priority on always providing great food and superior customer service.

In order to continue to facilitate Fresh Munchables' goals and reputation, what competitive strategy should HR implement?

o  

o  A cost leadership strategy, because the company desires to lead the market in providing the best products at a high cost

o  A niche-focused strategy, because the company is targeting a small group of people in a segmented market

o  A differentiation strategy, because this approach justifies spending more money to stand out from competitors

7.     Bookmark question for later

As the compensation team at Fresh Munchables develops a new compensation strategy, they begin to consider the impact it will have on company culture. The current culture values high-quality products and high performance from employees but doesn't necessarily emphasize teamwork or openness.

When it comes to organizational culture fit, which of the following would be the best practice at Fresh Munchables?

o  Integrate norms from companies like Google and SASS, because they apply to most organizations across the board and have proven successful in increasing employee satisfaction.

o  Consider the cultural elements of quality and employee performance within the total rewards design, because a dramatic paradigm shift will increase the chance of rejection by employees.

o  Build a compensation system that deviates from the emphasis on product quality, because it will help the company reach new strategic goals of decreasing costs and increasing productivity.

o  

8.     Bookmark question for later

After carefully considering different approaches for internal alignment at Fresh Munchables, the compensation team has officially decided to use a point factor approach. After choosing compensable factors, developing factor measures, and determining factor weights, you are now ready to pilot test the job evaluation system. This is an important step in which the compensation team can make sure that all parts of the system come together effectively. Another concern the team wants to address during this step is evaluating employee satisfaction with the new system. Fresh Munchables has not used a system like this before, and some employees have raised questions and concerns about it.

Because one of the company's biggest goals with this change is to ensure employee satisfaction, what is an important element to keep in mind as you pilot test the system?

·                The extent to which the system produces relative job values that make sense to each employee who views the results

·      The extent to which the system produces relative job values that will ensure all employees get raises.

·      The extent to which the system produces relative job values that make sense to the company's financial department.

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