Human Resource Management Final Exam
1. Briefly discuss the motivating value of pay equity and pay expectancy for employees.
Pay equity could be defined as the relationship between actual pay of an employee with
what he actually deserves. If the pay equity factor is high, it means that the employee is
extremely satisfied and motivated from the job. Pay expectancy refers to the relationship
between performance appraisal and the actual work done by the employee. If an individual
believes that the good work done by whim would result in better pay or a raise, then the
pay expectancy is high. This results in better employee motivation.
2. Discuss some of the common goals of a strategic compensation policy.
A strategic compensation policy includes common goals for long-term benefits of the
employees and the organization. It helps in assuring that any employee who enters the
business organization is willing and able to provide his best efforts for attaining his
individual goals, as well as the long-term sustainable goals of the organization. In the long
run, it results in building up a competitive organization with well-defined HR policy and
motivation strategies.
3. Explain competence-based pay including its advantages and disadvantages. Include in
your discussion the practice of broad banding.
Competence-based pay could be defined as an arrangement by the HR management, where
the employee is paid for the skills and knowledge he possesses and not for the position he
holds. The biggest advantage is that the employees are motivated to learn more and
support organizational goals. The biggest disadvantage is that the employees could have
more conflicts as a manager could end up earning lesser salary than his subordinates.
In the practice of broad-banding, this concept is used very commonly since it involves the
creation of very wide bases for salary. Rather than having limited salary bases, a broad
arrangement of salaries is made depending on the individual’s work and knowledge.
4. Explain why an organization may choose to develop a cafeteria benefits plan for its
employees.
Some employers introduce cafeteria benefit plans for the employees. It is pursuant to
Section 125 of Internal Revenue Code devised by the Federal Government. The objective
of this plan is to choose among different items available in the cafeteria managed by the
employer. The benefits of the goods taken away by the employees are not added in their
gross salary. This plan could be adopted by the employers for higher motivation of the
workers.
5. Describe the key requirements and provisions of the Family and Medical Leave Act.
