Human Resource Management Questions And Answers

This questions are based on following textbook:  Strategic Compensation: A Human Resource Management Approach, 8th Edition by Joseph J. Martocchio ISBN 10: 1-269-91926-1, ISBN 13: 978-1-269-91926-5

  1. The textbook discusses several factors that influence a company’s choice of competitive strategies and compensation tactics. Discuss three factors.

The three factors that influence a company’s choice of competitive strategies and compensation tactics include labor market factors, product market factors, and organization factors. As far as labor market factors are concerned, employers need to consider demand and supply of labor when selecting competitive compensations for their employees. The market rate falls where labor demand crosses labor supply. According to Martocchio (2011), employers should look at the degree of competition and product demand when they want to use product market factors to determine competitive compensations. In this context, the compensation level used by an employer depends on its ability to compete in the product market. Although companies can set their payment policies based on product market and labor factors, a range of organization factors also influence an organization’s choice of competitive strategies and compensation tactics. Examples of these organization factors include the types of technology used, size of the company, and the type of strategy chosen by a company (Martocchio, 2011).

  1. Identify and explain the contextual influences that will pose the greatest and least challenge to companies’ competitiveness.

The contextual influence that will pose the greatest challenge to companies’ competitiveness is when an organization chooses to outsource jobs from another country. When this occurs, a company will offer lower wages to its employees than it competitor that directly hires workers. The outsourcing company will be able to make huge profit at lower wage, while the hiring company will earn less profit because it has to take care of labor laws and the minimum wage. Conversely, the contextual influence that will pose the least challenge to companies’ competitiveness is when an organization is the only provider of a given product or service. Such a company will face no competition and it will be able to set high wages for employees without any difficulty (Martocchio, 2011).

  1. The textbook discusses internally consistent compensation systems, explain the role of job analysis and evaluation in this process

Job analysis and evaluation assist companies to establish internally consistent compensation systems. Various jobs within an agency vary in terms of their requirements and relative importance. Employers can use these criteria to match employee performance. This approach cam assist companies to make appropriate decisions about pay increases by setting standards against which employee performance is judged. Therefore, companies need to analyze the job of all their workers as a basic procedure for introducing an internally consistent compensation system (Martocchio, 2011).

  1. What impact will flexible work schedules have on employees’ commitment to their     employers, on productivity, and on company effectiveness?

Flexible work schedules have a positive impact on employees’ commitment and help to promote company effectiveness. Employees who have flexible work schedules are more engaged to their organizations than workers who are not. Additionally, engaged workers and are concerned to producing quality work which enhances productivity in an organization. A company with highly engaged and committed employees is highly likely to realize it objectives and set goals. Therefore, flexible work schedules have positive impacts on company effectiveness (Martocchio, 2011).

  1. Merit pay increases should reflect prior job performance levels and motivate employees to perform their best. How does this relate to Equity Theory? Explain?

Companies should grant employees different salary increases based on their prior job performance levels as a way of motivating them to perform their best. This form of motivation is directly related to Equity Theory of Motivation. Equity theory postulates that employers should specify the types of inputs that are valued, establish explicit rewards for different types of jobs done to ensure that all workers are equitably remunerated, and communicate all information concerning compensation to employees. The main aim of implementing merit pay systems is to make different pay increases to workers holding the same job positions based on their performance. When all employees feel equitably rewarded through a merit pay system, they tend to feel satisfied and rates of turnover and absenteeism are reduced (Martocchio, 2011).

  1. Which component of compensation is most important for a company’s competitive advantage:  internal consistency or market competitiveness? Explain your answer.

The component of compensation that is most important for a company’s competitive advantage is market competitiveness. While internal consistency is concerned with analyzing compensation for workers in a company, market competitiveness is concerned with retaining experienced workers employees in an organization. Under market competitiveness, companies develop compensation systems through strategic alliances and by gathering information about the nature of completion in the industry. Additionally, market competitiveness form of compensation requires organizations to conduct comprehensive labor market assessments and foreign demand which are very important for a company’s competitive advantage (Martocchio, 2011).

  1. Discuss the concept of whether discretionary employee benefits should be an entitlement or something earned based on job performance.

Discretionary employee benefit should be something earned based on a job performance but not an entitlement. According to Martocchio (2011), discretionary employee benefits are incentives offered by employers to their employees to increase their remuneration via improved performance. The wordings used to define discretionary employee benefit reveal that it should not an entitlement. However, employers are expected to exercise discretion rationally and in good faith while paying attention to principles that had been applied in the past. Suppose discretion employee benefit is not based on performance, even workers who perform poorly will receive the bonuses at the expense of hard working employees (Martocchio, 2011).

  1. Explain and discuss some of the compensation issues to be addressed when dealing with the compensation of expatriates; and how do you best maintain a competitive advantage.

Employers need to understand some of the compensation issues that should be addressed when dealing with compensation of expatriates in order to learn how they can best maintain a competitive advantage. These issues include variations in pay policies and working environments between parent and host country and differences in compensation approaches used by multinational organizations. These issues can be solved by formulating standard pay policies and compensation approaches that will help multinational companies to prepare competitive compensation packages for expatriates.

  1. The textbook discusses seven challenges facing compensation professionals. Discuss and explain what you consider as the top four challenges (Martocchio, 2011).

Compensation professionals are faced with a number of challenges. First, they are often faced with the challenge of striking a balance between executive compensations and what is acceptable in the industry. Second, compensation professionals normally face the problem of setting internally competitive compensation rates. Third, they normally find it difficult to establish compensation that will help companies to retain employees and compete favorably in the market. Fourth, compensation professionals are faced with the challenge of designing reward and recognition programs that will motivate employees (Martocchio, 2011).

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