Part One

1. The new CEO of your company, who just came from a competitor, has just asked you to discuss the organization's compensation system. As the compensation manager, you tell him about the organization's nearly 500 employees in about 70 different job titles who are located in three locations in L.A. He asks you to describe the strategy used to guide compensation system decisions. You explain that ordinarily, pay models are guided by several strategic policies. Describe what goals a compensation system should have and how four strategic pay policies apply to the organization.
2. The VP for HR met with you, the compensation manager, to go over the new strategies for attracting new employees for the offshore oil recovery division. The division works with oil production companies to help prevent oil spills and recover oil where leakages have occurred. The division employs many engineers and scientists with expertise in hydraulics, oil production, chemistry, etc. Employee assignments are often for three to six months in different countries around the world. The VP for HR indicates that you should use a job-based point method.
   
   In creating a job-based point evaluation plan for the organization, identify and discuss four compensable factors that you would incorporate in the job-based point evaluation plan. Please describe a job-based point evaluation plan. In addition, define each factor, justify why you selected it, and provide the weights or scales that you would assign to it.
3. You are the Compensation Director for Forever-Green Plywood, Inc. The company buys timber, manufactures plywood sheets, and sells on the international market. The organization's three major units are timber purchasing (with five employees), manufacturing plant (with 120 employees), and sales and management (with 12 employees).
   
   You need to develop a job evaluation plan for the organization. Describe the difference between person-based plans and job-based plans. Explain which one you would use. What factors would you consider? What is one advantage and disadvantage of each?
4. A high-tech start-up company has retained your services to assist them in determining a competitive market pay policy for the company to use as they staff up. In order to help them, what information would you need about the company? Describe four competitive market pay policies, and give an example of when an organization might want to use each policy.
5. You are a consultant who specializes in compensation. You are working with Midwest Highway, Ltd., a road construction company housing five plants that produce materials for road building. The CEO of the company wants to know what type of performance measurement tool should be used in its production facilities in the future. The main production job in the five plants (about 85 out of the total of 125) involves operation of machines that mix and form the surfacing materials. The production lines are well established and product lines are consistent. The job appears to you to be a low-level one with prescribed routines. 
   
   The CEO asks you the following question: Should we consider a straight ranking approach, a rating system like a behavioral anchored rating scale (BARS), a management by objectives (MBO) format, or a 360-degree multi-rater approach? Describe the four types of performance assessment approaches. Recommend one and justify why you have chosen it.

Page Two

1. As the Compensation Manager of a large accounting firm, you have reviewed the results of the last performance appraisal cycle. It appears that supervisors and managers may be having difficulty in doing the appraisals. You are concerned about validity and reliability of the process. 
   
   In preparation for a training program for supervisors and managers, identify at least three common errors in the performance appraisal process and describe them. In addition, describe steps to minimize these errors.
2. You are a Compensation Consultant working with a Top 100 bank on the East Coast of the U.S. The Board of Directors of the bank is in the process of hiring a new CEO. They indicate that they are concerned about public perception. You are invited to a Compensation Committee meeting to recommend an executive compensation strategy. 
   
   Describe the components of an executive compensation plan and explain how these components can help support the organizational strategy.
3. The management team of the Fossety Iron Works has raised questions about compensation policies and procedures. They do not seem to understand the basic laws and regulations that affect compensation. The chairperson of the team has asked you, as Compensation Manager, to explain the most important laws to them. You selected Fair Labor Standards Act (FLSA) to start with because it is probably the most comprehensive and far-reaching legislation that affects compensation. Describe the four key requirements and why they are important in compensation.
4. As a Compensation Consultant, you have been asked by a client organization to brief their management group on incentive plans like gain-sharing and profit-sharing plans. 
   
   Briefly describe what gain-sharing and profit-sharing plans involve. What conditions should exist prior to implementation to make it easier to implement? What are the advantages and disadvantages of group incentives like gain-sharing and profit-sharing plans?