64 Part One introducing the Pay Model and Pay Strategy 2. Contrast the essential differences between the best-fit and best-practices perspectives, 3. Reread Exhibit 2.7. Discuss how those values might be reflected in a compensation system. Are these values consistent with "Let the market decide"? 4. Three tests for any source of competitive advantage are align, differentiate, and add value. Discuss whether these tests are difficult to pass. Can compensation really be a source of competitive advantage? 5. Set up a debate over the following proposition: Nonfinancial returns (great place to work, opportunities to learn, job security, and flexible work schedules) are more important i.e., best practice) than pay. Review Questions 1. Select a familiar company or analyze the approach your college uses to pay teach- ing assistants or faculty. Infer its compensation strategy using the five dimensions (objectives, alignment, competitiveness, employee considerations, and manage- ment). How does your company or school compare to Microsoft and MerrillLynch? What business strategy does it seem to "fit" (i.e., cost cutter, customer centered, in- novator, or something else)