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Compensation Management Question Paper

Compensation Management

Course:Bachelor Of Business Management

Institution: Moi University question papers

Exam Year:2010

UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR EXAMINATION
COMPENSATION MANAGEMENT
DATE: APRIL 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer Question ONE and Any other TWO Questions
QUESTION ONE
a. Differentiate between the following terms
(i) Compensation and pay
(ii) Total rewards and relational rewards
(iii) Bonus and perquisites [6 Marks]
b. With the help of illustration, explain four factors that influence the compensation package.
[12 Marks]
c. You have just been employed as a HRM in an upcoming organization. You are mandated with the task of evaluating existing jobs in that organization. With the use of illustrations, explain three methods you would use. [12 Marks]
QUESTION TWO
a. The purpose of a pay structure is to provide a fair and consistent basis for motivating and rewarding employees. It seeks to ensure a framework, which is an internally equitable and externally competitive reward for an organization. Explain four criterion that should be followed in establishing a good pay structure. [8 Marks]
b. Compensation management is a core function of the HR department. With the help of an
illustration, explain three objectives of compensation management in an organization. [3 Marks]
c. Internal alignment refers to pay relationships among different jobs or competences within an
organization. Using an illustration, explain how the following affect internal alignment.
(i) Government policies
(ii) Trade unions
(iii) Organizations culture and customs
[9 Marks]
QUESTION THREE
You have been appointed by Ushirika ltd. As leading consultant in the firm. The HRM wishes to introduce performance related pay system. Advice the management team on the following.
(i) Meaning of performance related pay [1 Mark]
(ii) Three objectives of performance related pay [3 Marks]
(iii) Four considerations made in introducing performance related pay [8 Marks]
(iv) At least four types of performance related pay schemes [8 Marks]
QUESTION FOUR
a. Differentiate between minimum wage and living wage [3 Marks]
b. Identify three objectives of a pay policy [3 Marks]
c. You recently overheard a heated discussion between Tony and Mark. At the end of the discussion,Mark remarked “after all, what you take home at the end of the day is what really matters in any employment relationship”. Do you agree with Mark? Support your answer clearly explaining any advice that you would give to Mark and Tony. [8 Marks]
d. Explain the relationship between appraisal and compensation management. [6 Marks]
QUESTION FIVE
a) Define the term external competitiveness [2 Marks]
b) Identify at least three organizational factors that affect compensation or and show how they affect compensation [9 Marks]
c) Identify three challenges that face HRM in the course of administering the compensation. For each challenge identified, provide a possible solution. [9 Marks]

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