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Case Study (Compulsory)
The Total Reward Scheme at Crown Estate
Crown Estate is a public body and has a dual role as both guardian of some of the UKs
most important land and as a revenue generator for HM Treasury. This single
organisation is responsible for managing over 6 billion worth of land in the UK
including Regent Street in London to Windsor Great Park, Portland stone mines in
Dorset and agricultural estates in Scotland as well as extensive marine assets.
Valerie Burns, Head of Human Resources explains: In late 2006 we were experiencing
recruitment problems because our reward packages did not reflect the job markets in
which we were operating. We had a very traditional public sector pay model which was
generalist and inflexible it simply didnt allow us to attract and retain the calibre ofpeople we needed to meet our business objectives. Burns tasked her Remuneration
Committee with agreeing a way forward that would lead to a more market oriented
reward structure.
They concluded this would require nothing less than a complete reworking of base pay,
performance management, bonus, pension and benefits, terms and conditions. Our
strategy, says Burns was to redistribute the reward budget rather than increase it. We
were spending too much on pension and benefits and not enough on salary and
performance incentives.
Burns initiated a competitive tender to recruit third party assistance as she had neither
the resources nor the expertise to execute a project of this scale internally. We
selected Innecto based on their track record of working in both the public and private
sector and the confidence they gave us of understanding our needs and what was
required to achieve them. Theirs was the only presentation that gave us clear advice on
the sheer momentum required to make this project successful.
Looking at the scale of the project, The Crown Estate HR team and Innecto agreed a
phased approach was best. Innecto Director Justine Woolf says: At the time, this was
probably the most complex reward review we had ever considered. Our task was to
produce a single reward strategy that could be applied to people working in very
different environments and job markets the difference between the reward
requirements of the property management team based in London and Edinburgh are a
long way removed from the estate workers who tend woodland or agricultural land.
Dividing the project into three phases allowed us to focus on each sector of employment
separately and clearly.
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The unique culture of The Crown Estate also presented some interesting challenges.
The organisation has three core values: Commercialism, Integrity and Stewardship.
With Commercialism rising to prominence, it was important that the other values werent
sidestepped and would need to be built in as modifiers to the performance management
system, for example.
Over the next two years, Burns and Innecto looked at job descriptions, carried out job
evaluations and benchmarked against the relevant markets. The result was a total
reward programme that included a new pay structure based on a job family framework,
a new performance management system linked directly to a new bonus scheme, new
pension arrangements and a revised benefits package. The decision was made to
create two separate reward packages: one for existing employees, and one for people
joining in the future. This meant that The Crown Estate could continue to honour
existing pension arrangements and benefits, terms and conditions for current staff while
introducing sustainable and more affordable options for new joiners.At launch, we created an internal brand for the new reward packages with a unique
design and colour coding for each area which allowed us to present complex
information clearly to help employees choose which of the two reward packages suited
them best. All employees were invited to a presentation by the Chief Executive to
explain the new packages and were given a handbook to take home as well as a
personal letter outlining their own individual position and options. Managers were given
training and question and answers to support them in their important role
communicating the new structure to their direct reports. The investment in employee
engagement paid off.
Now largely complete, the new total reward scheme is proving to be successful. Valerie
Burns says: Its been hard work but we are now able to recruit with no difficulties as we
are consistent with the commercial markets. Its also given us a degree of flexibility we
didnt have before. Id like to thank Innecto for their expert knowledge, project
management, technical skills and sensible pragmatic advice which all contributed
towards a successful outcome.
Questions:1. Identify the weaknesses of reward system followed by Crown Estate during late
2006.
2. Critically analyse the new reward and performance management strategy at Crown
Estate.
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Section B
Answer the following one mark questions from (1-50):(1*50=50marks)
1. Maslows Need Hierarchy Theory considers compensation to fall in which of the
below -needs category?
a. Social needs
b. Esteem needs
c. Safety needs
d. Physiological needs
2. Which of the following is not a direct compensation?
a. Base Pay
b. Disability Pay
c. Merit Pay
d. Wage
3. Which of the following is not an outcome of an effective Compensation and
Rewards system
a. Attracting and retaining competitive workforce in the organization
b. Motivating employees to put their best efforts in organizational development.
c. Minimization of cost of compensation thereby further adding to organizational
effectiveness
d. Increased attrition rate
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Citizens of the country in which the subsidiary or branch of parent company is located
are called
a. Local Country Nationals.
b. Third Country Nationals
c. NRIs
d. Expatriates
5. The method of studying and identifying various jobs in the organization which result
in description of job is called:
a. Job evaluation
b. Job description
c. Job specification
d. Job analysis
6. Rewarding and encouraging outstanding employees who show exceptional results
but for whom suitable promotion opportunities dont exist fall into which of the grade payzone?
a. Qualified zone
b. Premium Zone
c. Learning zone
d. Outstanding zone
7. The salary progression curve is also known as:
a. Maturity curve
b. Learning curve
c. Wage curve
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d. None of the above.
8. The allowance given to the wage earners so as to give assistance to them in the
inflationary situations is called
a. Basic Pay
b. Bonus
c. Dearness Allowance
d. Provident Fund
9. The system of Dearness Allowance which provides a lump-sum payment to the
employees over a period of time to adjust for the growth in inflation is called
a. Annual Bonus
b. Provident Fund
c. Flat rate system of neutralization
d. Consumer price linked system
10. Net intake of --------------calories should be taken into account at the time of
minimum wage calculation.
a. 3700
b. 1700
c. 2700
d. 3200
11. The wage which is capable of meeting the normal needs of an employee on an
average is called:
a. Living wage
b. Minimum wage
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c. Fair wage
d. Real wage
12----------------can be defined as a process where standards are formed to govern
labor relationsincluding wages and working conditions.
a. Adjudication by Third Party
b. Wage Boards
c. Pay Commissions
d. Collective Bargaining
13. ------------------ is concerned with fixing the fair wages on an industry-cum-region
basis.
a. International Labor Organization
b. Pay Commission
c. Third Party
d. Wage Board
14. Pay commission deals with the service condition of ..
a. Private Sector employees
b. Unskilled labourers
c. Semi-skilled labourers
d. Public sector employees
15. --------------refers to the equal pay for the same kinds of jobs in the organization.
a. External Equity
b. Internal Equity
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c. Social equity
d. Personal equity
16. The process of determining and identifying the relative worth or the value of the job
in relation to the various other jobs in the firm is called:
a. Job analysis
b. Job description
c. Job evaluation
d. Job specification
17. A statement which contains knowledge, skills and abilities of an employee, which
are required for the successful task completion is called:
a. Job analysis
b. Job description
c. Job evaluation
d. Job specification
18. Which of the following is a non-quantitative method of conventional job evaluation
methods?
a. Point rating method
b. Ranking system method
c. Factor comparison method
d. Forced distribution Method
19. ----------------is a way of showing your appreciation to your employees hard work
and giving them recognition.
a. Flexi work
b. Professional development
c. Bonus
d. Tuition reimbursement
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20. Identification of the points and factors which are assigned to different aspects of the
job in order to evaluate it is called
a. Point method
b. Factor comparison method
c. Grade/Job classification method
d. Ranking system method
21. The management system that enables organizations to enhance the clarity of their
vision and strategy to translate them into action is called
a. Performance appraisal method
b. Critical Incident Technique
c. Balance Score Card Method
d. Behavioural Interviewing Method
22. In ---------------------- method, employees are compared directly against one another
identifying the best employee, second best, and so on.
a. Paired Comparison Method
b. Forced Choice Method
c. Behaviourally Anchored Rating Scale
d. Straight Ranking method.
23. The process that includes activities which ensure that goals of the organization are
consistently being met in an effective and efficient manner.by aligning it with employees
performance is called.
a. Performance management
b. Performance strategies
c. Mission and Vision
d. Performance appraisal
24. Which of the following is not one of the categories of remuneration structure formanagers
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a. Salary
b. Allowances
c. Income Tax
d. Contribution of superannuation, gratuity and provident funds
25. Which of the following does not affect Executive Compensation?
a. Governance
b. Investor confidence
c. Effective benchmarking
d. Outsourcing
26. Individuals born between 1980 and 1995 are called
a. Gen Xb. Baby Boomers
c. Gen Y
d. Gen Z
27. The concept of using is given importance worldwide in
designing a strategic reward system.
a. Fixed Payb. Variable Pay
c. Retirement Pay
d. None of the above
28. -----------------------is the most common method used by organizations to reduce
excess manpower in a cordial way.
a. Retrenchment
b. Lay Offc. Voluntary Retirement Scheme
d. Attrition
29. The Worker Adjustment and Retraining Notification (WARN) Act requires employers
who have 100 or more employees to give an advance notice period of -----------days
before mass lay off or closure of a plant.
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a. 100 days
b. 120 days
c. 60 days
d. 90 days
30. Which of the following category of compensation does not fall into Tax exempted
category
a. Medical insurance
b. Charity
c. Variable Pay
d. House Rent Allowance
31. Gratuity up to Rs.--------------------------- is exempted from tax
a. Rs. 1,00,000
b. Rs. 5,00,000
c. Rs. 10,00,000
d. Rs. 15,00,000
32. Which of the following does not fall under employee benefits?
a. Employee Stock Option Plan
b. Group Insurance
c. Base Salary
d. Gratuity
33. An analysis done for the reduction of tax liabilities that enables employers and
employees to evaluate their financial profile is called:
a. Tax deduction
b. Tax saving
c. Tax minimization
d. Tax planning
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34. The jobs in which workers perform manual labor and get hourly wages in return are
called:
a. White Collar Job
b. Grey Collar Job
c. Blue Collar Job
d. Yellow collar Job
35. _________________are monetary emoluments paid to an employee in
acknowledgment of their enhanced performances aiming at motivating the performance
of individuals and groups in the organization.
a. Salary
b. Wage
c. Incentive
d. Variable pay
36. In Emerson Plan up to --------------per cent of efficiency, the worker is paid by time-
rate.
a. 67
b.77
c.57d.87
37. The system of payment for work on the basis of the number of points of work
done in a given amount of time, each point representing one minute of work on a given
job at a normal rate of speed is called__________
a. Rowan
b. Bedauxc. Hasley
d. Emerson
38. A statement which contains Task, duties, Responsibilities of a job is called:
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a. Job analysis
b. Job description
c. Job evaluation
d. Job specification
39. Which of the following is a non-quantitative method of conventional job evaluation
methods?
a. Point rating method
b. Ranking system method
c. Factor comparison method
d. Critical Incident Technique
40. The building blocks of compensation model does not include which of the below?
a. Objective of compensation
b. Strategic issues/policies of compensation
c. Compensation techniques
d. Distribution of Compensation
41. One of the unconventional methods of job evaluation in which the panel members
evaluate and record the ranking of job assessment of each individual and then feed
it into a system is called
a. Urwick Method
b. Hay Plans Guide Chart Profile method
c. Direct consensus method
d. Decision Band method.
42. ------------------- system, the minimum wage is guaranteed even if the output fallsbelow the standard.
a. Hasley
b. Bedaux
c. Emerson
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d. Rowan
43. Which of the below includes Total Compensation?
a. Money paid directly
b. Money paid Indirectly
c. Money paid both directly and indirectly
d. Money paid at a later stage
44. The percentage of education cess charged on the entire tax amount is
a. 5%
b. b.7%
c. 3%
d. d.2%
45. VRS is not applicable for which category of employees?
a. Permanent Workers
b. Casual Workers
c. Bad workers
d. Temporary workers
46. Optimizing the positions and numbers of an employee in order to make an
organization more profitable and efficient is called
a. Downsizing
b. Lay off
c. Retrenchment
d. Right-sizing
47. --------------------------- includes acquiring highly specialized skills related to same job.
a. Horizontal skill
b. Vertical skill
c. Depth skill
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d. Basic skill
48. Which of the following Acts enacted by Government of India is not related to respect
to compensation policy at national level?
a. Factories Act 1948
b. Minimum Wage Act, 1948
c. Industrial Dispute Act, 1947
d. Fair and Living Wage Act., 1938
49. ______________ is a situation when prices tend to rise sharply in economy bringing
down their purchasing power.
a. Inflation
b. Deflation
c. Stagflation
d. Recession
50. ____________ firm holds back a sum equal to home country tax-obligation of
expatriates and pays all taxes in the host country.
(a) Tax-equalization
(b) Tax protection
(c) Ad hoc approach
(d) Lassiez-faire
Answer the following two mark questions from (51-75) (2*25=50
marks)
1. State whether the following statements are true or false
i. Developmental Approach of Performance Appraisal focuses on previous years
performance and can also be used to determine the efficacy of recruitment and
selection.
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ii. In Evaluative approach manager plays the role of a coach and mentor to reward
good performance and give advice on how to improve.
a. ( i) False, (ii) Trueb. (i) True, (ii) False
c. (i) True (ii) True
d. (i) False (ii) False
2. State whether the following statements are True or False
i. Performance linked rewards is concerned with administration of compensation
revision and career progression of employees.ii. Performance feedback and counseling includes creating action plans for improving
performance deficiencies.
Choose the correct options from the following:
a. ( i) False, (ii) True
b. (i) True, (ii) False
c. (i) True (ii) True
d. (i) False (ii) False
3. State whether the following statements are true or false
i. Any private or public organization which is a subsidiary of public company must pay
11% of its net profit of any financial year executive remuneration to its directors which
comprises of any manager and whole time managing director.
ii. In case an organization in financial year has no profits or inadequate profits, an
organisation will not pay to its directors which comprise of any manager and whole time
or managing director any remuneration except the one which is previously approved by
the Central Government.
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a. (i) True, (ii) False
b. (i) True, (ii) True
c. (i) False, (ii) True
d. (i) False, (ii) False
4. i. ----------------------is the monetary and non-monetary rewards valued for emp loyees
relative contribution to MNC performance.
ii. --------------------------is the non-financial compensation which is related to the
nature of the work, interesting work and career prospects.
a. i. Direct compensation ii. Indirect compensation
b.. i. Direct compensation ii. Intrinsic compensation
c.. i. International compensation ii. Extrinsic compensation
d.. i. International Compensation ii. Intrinsic Compensation
5. Choose the correct options
i.------------ is an extra monetary reward which is added to the basic pay such as cash
bonuses which are described as variable pay.
ii. ------------- refers to rules, procedures and standards which are linked and
associated with the benefits and pay of the employees.
a..i. Financial reward ii. Non-financial reward
b. .i. Contingent payii. Compensation Management
c..i. Contingent Pay ii. Reward
d.i. Intrinsic reward ii. Extrinsic reward
6. Arrange the following processes related to compensation design in correct sequence.
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1. Collection of data,
a. 2. Identifying the need for policy
b. 3. Analysis of alternatives and
c. 4. Finalizing the policy
Choose the correct sequence of the process from the following
a. 3,4,2,1
b. 1,2,3,4
c. 2,1,4,3
d. 2,1,3,4
7. State whether the following statements are true or false
i. Job evaluation and differentiation considerations are one of the elements of
compensation policy.
ii. Provision for welfare, security, motivation, incentives and growth opportunities are
one of the elements of compensation policy
a. (i) True, (ii) False
b. (i) True, (ii) True
c. (i) False, (ii) True
d. (i) False, (ii) False
8. State whether the following statements are true or false
i. In case of plant closing that can bring loss of employment of 100 or more employeesduring any 30 day period then it is mandatory to give notice period.
ii. In case of mass layoff an organization has to give 1 month notice for 50 to 499
workers if they make up at least 33% of the employer's workforce.
a. (i) True, (ii) False
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b. (i) True, (ii) True
c. (i) False, (ii True
d. (i) False, (ii) False
9. Arun, aged 58, works in a PSU XYZ. He has worked there for past 20 years. Arundecided to take VRS being offered by the PSU. His Basic is 10,000 and DA is 5,000.
According to the package of VRS, the employees are entitled 25 days of compensation
for completion of each year of service and compensation for the number of months of
the remaining service. Aruns total VRS amount is
a. 4,03,006
b. 5,01,998
c. 3,33,506
d. 2,88,500
10. State True/False for the following statements.
i. Todays organizations thrive and survive on the productivity and efficiency of their
employees.
ii. With greater customization and product variety, the service component of the
product will decrease
a. (i) True, (ii) False
b. (i) True, (ii) True
c. (i) False, (ii) False
d. (i) False, (ii) True
11. State which of following statements on w.r.t declaration made by employer for
VRS scheme is true?
1. The minimum service period and the age limit of the employee who can apply for
the - Voluntary Retirement Scheme in the organization.
2. The approaches to be adopted for workforce redundancy.
3. The right of the employer for the acceptance and rejection of any application to
voluntary retirement.
4. The Post- Voluntary Retirement Scheme benefits to be rendered to employees.
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a. 1 and 2
b. 1 and 3
c. 2 and 3
d. 2 and 4
12. Kamal is working in a rail wheel construction company where he receives earnings
on the basis of Merrick differential piece rate system. The Standard output = 100 units,
Piece Rate = Rs.20. The company pays Straight piece rate up to 83% of standard
output, at which bonuses of 10% of time-rate is also paid. Further a 20% bonus is given
on reaching standard output and for output above standard high-piece rate is paid.
What will be Kamals earning when the output is 130 units?
a. Rs. 2460
b. Rs. 3380
c. Rs. 3860
d. Rs. 2880
13. State whether the following statements are true or false
1. Donations to political party is eligible for tax benefit.2. Interest Paid on Education Loan for self, spouse and children is not eligible for tax
benefit.
a. (1)False, (2) False
b. (1) True, (2) False
c. (1) False, (2) True
d. (1) True, (2) True
14. State whether the following statements are true or false
i.. For the computation of Voluntary Retirement Scheme, basic salary plus Dearness
Allowance 4is to be considered
ii. Casual leave (CL) may be encashed on the basis of prorata up to the date of relief
of employees.
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Select the correct option
a. (i) True, (ii) False
b. (i) True, (ii) True
c. (i) False, (ii) True
d. (i) False, (ii) False
15. Choose the correct option.
i ----------------are citizens of the country in which the subsidiary or branch of parent
company is located.
ii.---------------------are individuals who are in the process of applying visas to move to
the countries which are not their country of origin.
a. i. Third Country Nationals ii. Local Country National
b. i. Local Country National ii. Third Country National
c. i. Non-Residential India, ii. Third Country National
d.. i. Local Country National ii. Non-Residential India
16. a. Tax exemption up to ` _____________ per year is available for your medical
expenses reimbursed by the employer.b. Tax rebate of ` ____________ on education per child to the maximum of two
children.
1. a. 15,000 b. 12,000
2. a. 10,000 b. 18,000
3. a. 12,000 b. 15,000
4. a. 18,000 b. 10,000
17. State whether the following statements are true or false
a. According to Section 10 (14), childrenseducation and hostel allowance can be
claimed as exemption
b. About 4 percent of the salaried employees on an average pay a self-
assessment tax of ` 15,000.
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a. (a) True, (b) False
b. (a) False, (b) True
c. (a) False, (b) False
d. (a) True, (b) True
18. State whether the following option is True or False
i. Deflation is also another important factor that affects the benefit program of the
employees.
ii. Legal compliance cannot be taken into account while determining the
objectives of the benefits and services.
a. (i) True, (ii) False
b. (i) False, (ii) True
c. (i) False, (ii) False
d. (i) True, (ii) True
19. An Indian working in the TCS branch in Australia is a----------------
a. Third Country National
b. Expatriates
c. Non-Residential Indian
d. Local Country National.
20. a. Net intake of --------------calories should be taken into account at the time of
minimum wage calculation.
b. According to Need-based Minimum wage, the per-capita consumption of ---------------
yards of clothing requirement per annum is taken into consideration for calculating
minimum wage.
1. a. 200, b.20
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2. a. 2000 b. 200
3. a. 2700 b. 28
4. a. 2700 b. 18
21. i. ------------------ plan stressed on improvement in wages through increased
productivity.
ii. ------------------- plan recommended that the reward structure of the industrial
employees in terms of wage and non-wage benefits must be related to performance
records.
a. i. 3rd ii. 1st
b. i. 2nd, ii. 5th
c. i. 5th, ii. 2nd
d. i. 1st, ii. 2nd
22. The Top Management decision may show its result after few years as compared to
the decision taken up by the supervisor (in a week) and worker (in a few hours)
decision. ? This is true in case of which unconventional method of job analysis?
a. Hay Plans Guide chart profile method
b. Time span discretionary method
c. Urwick method
d. Decision band method
23. i. In ------------------- system, the minimum wage is guaranteed even if the output falls
below the standard.
ii. --------------system was introduced with the objectives of giving sufficient incentives
to workmen to motivate them to produce at their full capacity, and to remove the fear of
earning deductions.
a. i. Hasley ii. Taylors differential piece rate system
b. i Bedeaux ii. Merricks differential piece rate system
c i.Emerson ii. Gantt Task system
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. d.i. Rowan ii. Emersons Efficiency system
24. State whether the following statements are true or false
i. Donations to political party is eligible for tax benefit.ii. Interest Paid on Education Loan for self, spouse and children is not eligible for tax
benefit.
a. (i)False, (ii) False
b. (i) True, (ii) False
c. (i) False, (ii) True
d. (i) True, (ii) True
25. State whether the following statements are True or False based on eligibility of an
individual to be considered as a Resident and Ordinary Resident (ROR) for taxation
purpose.
i. He is a resident in India for 3 out of 10 years immediately preceding the relevant
previous years
ii. He has been in India for a period of 730 days or more during last
5 years immediately preceding the relevant previous year.
a. (i)False, (ii) False
b. (i) True, (ii) False
c. (i) False, (ii) True
d. (i) True, (ii) True