Questions and Answers of Compensation

Use Exhibit 18.13 to explain how the research on individual decision making can be used in pay communication.
Why would parties choose to settle instead of going to trial?
How common are settlements in lieu of going to trial?
Does a settlement mean that Lady Gaga violated the FLSA or another wage and hour (e.g., state or local) law?
Can you find any other examples in the news of similar lawsuits? If so, please again form an opinion on whether the plaintiff is exempt or not and which exemption is most relevant.
Is Ms. O’Neill exempt or nonexempt under the FLSA? Which exemption would be most relevant in this case?
One concern expressed by Mr. Dyke is that the English national team may be suffering because fewer English players can develop in the English Premier League. Jürgen Klinsmann, former coach of the
Why is it easier to explain a $2 million payout to Jordan Spieth for working four days to win a Masters Championship than it is to explain why William Clay Ford made $30 million as CEO of Ford Motor
What factors influence the dollar amount you can pay for increases in ticket sales?
Your book talks about unit rate plans. Which of these types of plan would you use for sales of tickets?Which plan might be appropriate for sales of advertising? Why?
Of the above information, what is most important in your design of a sales incentive plan for the three sales staff? How does this information affect your plan design?
The CEO of Krinkle Forms Inc. says there is a serious problem with turnover, with data for her observation provided below.The CEO wants to use employee benefits to lessen this problem. Before
Google is famous for paying wages significantly above the market and also providing employee benefits that one might call lavish. The European Union fined Google for its monopolistic behavior,
Eighty-eight percent of your workforce is male, and there is hardly any turnover. Not much is happening on the job front. How do these facts influence your decisions about designing an employee
You are the benefits manager in a firm metaphorically described as part of the rust belt, in Syracuse, NY. The average age of your 600-person workforce is
Early in this chapter, we identified reasons for the historical growth in the size of benefits packages.Which of these reasons still affect the growth of employee benefits today? Which actually might
You are the teacher in a class where team projects account for 25 percent of course grades. Each student is assigned to a team and that team is responsible for all team assignments. Students come to
How is an earnings-at-risk plan different from an ordinary gain-sharing or profit-sharing plan? How might earnings-at-risk plans affect attraction and retention of employees? How does whether the
As VP of HR at Pilsner Roofing, the eleventh largest roofing company in the world, you are experiencing turnover problems with the employees who actually install roofs (roofers). General Manager Roy
Eric Dempsey Associates (EDA) is a relatively small public relations/advertising firm in western New York. It recently shifted its strategic plan to focus almost exclusively on clients who generate
A father decides to put his two sons to work landscaping. The business involves going to a customer’s home and providing landscaping services (cut grass, edge sidewalk, pull weeds in flower beds,
If you were a manager, how would you justify paying one of your employees either higher or lower than the results shown on this website?
With this information available for free, why would you bother with consultants’ surveys?
Look for a description of how these salary data are developed. Do you think it provides enough information? Why or why not? Discuss some of the factors that might impair the accuracy of these
For each job, compare the median salary to the low and high averages. How much variation exists?What factors might explain this variation in pay rates for the same job?
What is the relevant labor market for these jobs? How big are the differences between salaries in different locations?
How could you use this information while negotiating your salary in your job after graduation? What data would you provide to support your “asking price”? What factors will influence whether or
Check out pay levels for these types of jobs in your school’s career office. How does the pay for jobs advertised in your career office differ from the pay levels on salary.com? Why do you think
Read the job descriptions. Are they accurate descriptions for jobs that you would be applying for? Why or why not? Are there jobs for which you cannot find an appropriate match? Why do you think this
Do the data include the value of stock options? What are the implications of this?
Do the jobs have different bonuses as a percentage of their base salaries? What could explain these differences?
Which jobs are paid more or less? Is this what you would have expected? Why or why not? What factors could explain the differences in the salaries?
Will Google’s pay strategy work “forever”? What changes might be needed going forward?
Do you get the sense that companies act on the best information they have at the time, but that in retrospect, they are not so good at predicting the future?
Do you think Google has made the right choices in changing its compensation strategy? How much do these changes cost? How do these costs compare to Google’s total costs and operating income? Are
Why did Google reprice its stock options and also give a 10 percent salary increase (in an era when 2 to 3 percent annual salary increase budgets are the norm)? Is it because its business strategy
Does your answer to the above question depend on what point in time it is answered? For example, what was Google’s pay level the day before it repriced employee stock options? What was Google’s
What pay level does the efficiency wage predict? Does the theory accurately predict organization behavior? Why or why not?
Why does the process used in the design of the internal pay structure matter? Distinguish between the processes used to design and administer a person-based and a job-based approach.
You are the manager of ten people in a large organization. All of them become very suspicious and upset when they receive a memo from the HR department saying their jobs are going to be evaluated.
Reread Exhibit 2.6. Discuss how those values might be reflected in a compensation system. Are these values consistent with “Let the market decide”?
Do you have any suggestions for either or both companies that might make their ESG incentives more effective?
In looking at the ESG incentive at Starbucks, is it about the same, stronger, or weaker than what Apple will use? Explain. Given Starbuck’s business strategy and its stakeholders, would it make
In Chapter 1, we saw the major components of chief executive officer compensation. Apple’s ESG incentive focuses primarily on the bonus. In thinking about the (a) typical size of the bonus relative
Answer the three questions in the section Caveat Emptor—Be an Informed Consumer for any study or business article that tells you how to pay people.
We will see that choosing peer companies to compare compensation includes those that are product market competitors, as well as labor market competitors. Based on the ratios you have computed and
How does the ratio of operating income to revenue compare across segments within and across the companies? Focusing on Amazon, how do these operating income/revenue ratios differ across its segments?
How do the revenue/employee numbers compare across companies?
Walmart recently announced a commitment to sourcing $10 billion in India-made goods by
We know that Walmart keeps a careful eye on compensation cost of its employees, as part of its strategy of keeping its product prices low. What about workers it does not employ, but that are in its
How does Walmart describe its approach to safeguarding the treatment of workers (including fair pay)in its supply chain?
To what degree has Walmart achieved desirable levels of diversity and inclusion? What steps is the company taking to improve in this area?
Promotion to higher job levels is the main way that pay increases over the course of one’s career.What are the promotion opportunities like at Walmart? How much is opportunity is there for career
What is the minimum pay at Walmart? What is the average pay at Walmart? To what degree has each changed year to year?
Use Exhibit 18.10to explain how the research on individual decision making can be us ed in pa y c ommunication.
How c an e mployers c ontrol la bor c osts?
As VP of HR at Pilsner Roofing, the eleventh largest roofing company in the world, you are experiencing turnover problems with the employees who actually install roofs (roofers) General Manager Roy
From the information provided above, what part of the total package is base pay? What kind of incentive rewards are the rest of the forms of compensation? Does there appear to be any merit pay in
How is compensation different in baseball? And how does this affect clubby pay?
Does the compensation for Ken Higdon seem excessive? Is he like a highly paid executive?
Which part of the compensation for “clubbies” is similar to what happens in any organization?
A father decides to put his two sons to work landscaping. The business involves going to a customer’s home and providing landscaping services (cut grass, edge sidewalk, pull weeds in flower beds,
If you were a manager, how would you justify paying one of your employees either higher or lower than the results shown on this Web site?
With this information available for free, why would you bother with consultants’ surveys?
Look for a description of how these salary data are developed. Do you think it provides enough information? Why or why not? Discuss some of the factors that might impair the accuracy of these data.
For each job, compare the median salary to the low and high averages. How much variation exists? What factors might explain this variation in pay rates for the same job?
What is the relevant labor market for these jobs? How big are the differences between salaries in different locations?
How could you use this information while negotiating your salary in your job after graduation? What data would you provide to support your “asking price”? What factors will influence whether or
Check out pay levels for these types of jobs in your school’s career office. How does the pay for jobs advertised in your career office differ from the pay levels on salary.com? Why do you think
Read the job descriptions. Are they accurate descriptions for jobs that you would be applying for? Why or why not? Are there jobs for which you cannot find an appropriate match? Why do you think this
Do the data include the value of stock options? What are the implications of this?
Do the jobs have different bonuses as a percentage of their base salaries? What could explain these differences?
Which jobs are paid more or less? Is this what you would have expected? Why or why not?What factors could explain the differences in the salaries?
What pay level does the efficiency wage predict? Does the theory accurately predict organization behavior? Why or why not?
Finally, would you physically locate all the actual software development in Laramie? What, if any, ot her opt ions would you consider?
List three pieces of additional information you would like to have to refine your recommendation. Explain how this information would help you.
Consider the theories and research presented in this chapter. Which ones did you use to support your recommendation?
What forms of pay and in what percentages would you recommend? Again, offer your rationales.
What policy regarding external competitiveness would you advise? List the options and the pros and cons of each policy option. Offer the rationale for your recommendation.
Why does the process used in the design of the internal pay structure matter? Distinguish between the processes used to design and administer a person-based and a job-based approach.
Answer the three questions in the Caveat Em ptor—Be An I nformed Consumer section for any study or business article that tells you how to pay people.
More recently, Fiat Chrysler CEO Sergio Marchionne referred to the two-tier wage structure as “impossible” and described it as “almost offensive.” He also offered more detail on his preferred
What would your pay strategy design cost and how would it be funded? What impact would the required level of funding have on colleges and universities? How would athletes outside of sports such as
One concern expressed by Mr. Dyke is that the English national team may be suffering because fewer English players can develop in the English Premier League. Jürgen Klinsmann, coach of the U.S.
A few years ago, Sullivan & Cromwell announced that year-end bonuses would be cut in half, with a maximum of $17,500 for early-career associates and $32,500 for eighth-year associates. In the
Do players from England play in elite leagues outside of England? Does that affect your evaluation of the proposal? If so, how?
Consider the proposal by Mr. Dyke to limit the number of foreign players in theEnglish Premier League.Take the perspective of owners, players, and fans/consumers.Whowould benefit and who would lose
Has the globalization of the English Premier League been a good thing? Who is better off as a result? Who is worse off? Think carefully about owners, fans/consumers, and players. Are there others who
Rank the factors in the global guide according to your belief in their importance for understanding and managing compensation. How does your ranking differ from those of your peers? From those of
What pay level (e.g., 50th or other) would you recommend be used for the Whole Foods Jobs? Would you use the same pay level for all jobs? Explain.
Given the facts from the case, what can you glean from news reports about McDonald’s, what do you think is going on? Specifically, how do corporate strategy and wage/benefit decisions either
Google is famous for paying wages significantly above the market and also providing employee benefits that one might call lavish. Currently the European Union is suing Google for its monopolistic
You are the teacher in a class where team projects account for 25 percent of course grades. Each student is assigned to a team and that team is responsible for all team assignments. Students comes to
What are the limitations of the Occupational Employment Statistics data?
How strongly do relative job evaluation points and relative survey pay correspond? For example, what is the ratio of job evaluation points you assigned to Job B (Cashier) and Job F (Team Member,
What factors shape an organization’s external competitiveness?
Eric Dempsey Associates (EDA) is a relatively small Public Relations/Advertising firm in Western New York. They recently shifted their strategic plan to focus almost exclusively on clients who
What would you deduce these two airlines believe about the importance of base wages relative to variable pay (profit sharing)?
The likely behavioral impact of profit sharing in this case, assuming the payout is based on overall net revenue of the organization. Some impacts might be positive or negative. What is your
How important is seniority in each of these situations? Should the importance be more or less? Why?

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