Question

1. Contrast intrinsic and extrinsic rewards.

2. How do financial and nonfinancial rewards differ?

3. What is a membership-based reward? How does it differ from a performance-based reward?

4. What is compensation administration? What does it entail?

5. How do governmental influences affect compensation administration?

6. What is job evaluation? Discuss the three basic methods of job evaluation.

7. What are the advantages and disadvantages of (a) individual incentives, (b) group incentives, and (c) organizational-wide incentives?

8. What is broad-banding and how does it work?

Answer 1

1. Intrinsic rewards are a source of motivation that originates from once behavior and thus are not tangible. On the other hand, extrinsic rewards are tangible sources of motivation given to a person physically.

2. Financial rewards differ from the nonfinancial rewards in that they involve monetary aspects, while the nonfinancial rewards are sources of motivation that cannot be measured in monetary terms.

3. Membership based rewards are rewards given to a person for being a member of a certain organization. They differ from performance based rewards ion that the later involves giving of rewards in respect to the performance level of an individual.

4. Compensation administration is a segment of the human resource that deals with payments to the employees for the work done (Joshi, et al. 2015). The segment entails the planning, controlling and organizing how the direct and indirect payments will be done and to which employees.

5. Governmental influences affect the compensation administration. This is seen by the aspect of laws made on the minimum wages that employees need to be paid. The compensation administration takes into account the provisions of the government on the minimum wage limit.

6. Job evaluation is an assessment of the worth of a position in the organization through the determination of the skills, knowledge and responsibilities it entails. Three types of job evaluation are ranking, classification and factor comparison. Ranking method entails giving the highest job position the highest ranking, going down to the least. Classification entails grouping of the jobs that have similar traits under the same category, thus having different categories of jobs. Factor comparison method entails ranking of jobs based on the breakdown of factors and not roles, and then attaching a financial; value to them.

7. Advantage of individual incentive

The outcomes are measured objectively. Employees have control over the outcome of the incentives

Disadvantages

There is a chance of overlooking the unrewarded factors. The process is time consuming.

Advantages of group incentives

They impact the performance of a wider area. They are usually based on the team overall measures.

Disadvantages

They may be rejected by the high performers. Teams may not support the organizational incentives as they eliminate the competitiveness of the teams.

Advantages of organization based incentives

They are based on the overall organization measures. They impact the overall performance of the organization and not individuals.

Disadvantages

They expose compensation process to risk. They increase the chances of instability of the compensation process. They may be rejected by individual high performers.

8. Broad banding is the aspect of having a big difference between the highest and the lowest salary levels. It works in that the percentage difference is set at a high level, to the extent of a hundred percent (Shields, et al. 2015). This enhances having different workers earning different levels of categories, thus enabling the organization to be in control of the results.