Review the following scenario and answer the questions below. You will have two attempts for this assessment.

Fresh Munchables is a mid-sized but steadily growing food-processing company founded in 1967. Since its inception, the company has been committed to providing only premium quality health foods. The company is headquartered in Wichita, Kansas, and it is one of the area’s largest producers of soups and simple meals. In the past 20 years, the company has also begun processing healthy snacks and beverages. Fresh Munchables has traditionally sold its products through large grocery stores, but it is now venturing into online and restaurant businesses, which is all very new territory for management.

The company is split up into three overarching strategic business units—soups and meals, drinks, and snacks. Additionally, the company is divided into several business units at the operational level, consisting of a mix of business operations, manufacturing (production), research and development, finance, and so on. As the company continues to grow, the executive team and other leaders are constantly looking for ways to improve processes.

Because Fresh Munchables has grown from a very small company into a well-established organization, management has decided to broaden the company’s strategic HR functions. The human resources team is currently working to improve recruiting and hiring processes, succession planning, and most importantly, compensation and rewards.

For many years, the company has delegated compensation decisions to managers with little to no training on the subject. This has left the company in a disorganized, confused state when it comes to paying and rewarding employees. These problems have compounded as Fresh Munchables has recently opened up new manufacturing locations with new managers and many new employees.

The chief human resources officer has organized a team of compensation specialists of which you are a part to spearhead total compensation-related problems and help the company to reach its current and future goals. You and your team can achieve this by revising the current total compensation system to reflect the company’s current business strategies and goals as well as attract and retain top talent.

The shipping division at one of Fresh Munchables’ facilities has been struggling with both absenteeism and high regrettable turnover. The facilities manager at this location is not sure what to do.

What steps can HR take to address this concern?

• Ensure that wages are at least average or above; wages that are even slightly below average cause absenteeism and turnover.
• Ensure that wages in the unit are just and fair; the perception of justice plays an important role in absenteeism and turnover.
• Ensure that employees in this division can receive promotions; employees won’t stick around unless they have a clear career path.
• Ensure that employees aren’t being poached by other companies; many companies will actively steal talented people, and organizations must be aware of it.

The executive department at Fresh Munchables has decided to completely change the company’s current compensation system. They are considering implementing the same compensation system used by a similar food company that has been extremely successful. However, Fresh Munchables’ compensation team strongly disagrees with this idea.

Why would it be a bad idea for the company to use another company’s system as opposed to creating its own compensation system?

• Creating an effective compensation system will require you to have a clear understanding of your own company’s management system and culture.
• Creating an effective compensation system will require you to have a clear understanding of your own company’s total equity and value.
• Creating an effective compensation system will require you to have a clear understanding of your own company’s rewards and how it competes in the market.
• Creating an effective compensation system will require you to have a clear understanding of your own company’s employees and what they have traditionally been paid.

An area competitor of Fresh Munchables, Tio’s Foods, has good, hardworking employees—many of whom could be valuable employees at Fresh Munchables. In fact, the executive team has been trying to poach Tio’s employees for some time now. Tio’s, in many ways, has neglected to take care of its employees, which could potentially lead to the formation of a union. If the compensation team at Fresh Munchables were to perform a SWOT analysis, this situation is likely considered to be a(n) ________.

• Strength, because Fresh Munchables can use this information to add value to its customers
• Threat, because Fresh Munchables is now likely to experience union activity as well
• Opportunity, because Fresh Munchables can leverage the information to target desired talent
• Weakness, because Fresh Munchables must now consider whether it is also treating its employees poorly

Communication at Fresh Munchables has traditionally been all over the place. Both misinformation and a lack of information among all levels of employees have created many avoidable problems over the years.

While developing the new compensation system for Fresh Munchables, what kind of communication strategy should the compensation team incorporate, and why?

• Bottom-up, because it allows management to consider information gathered from employees when making decisions
• Top-down, because it ensures that employees get the correct information from managers, who are the correct and best source
• Two-directional, because it enables the sharing and receiving of important information between the organization and employees
• Multifaceted, because it allows for an increase in collaboration between functions and business units

One of the strategic goals for the restaurant and dining business unit at Fresh Munchables is to improve its human capital by attracting target employees. This unit is becoming increasingly vital to Fresh Munchables’ success, and in order for Fresh Munchables to reach its goals, the restaurant and dining unit must have the right talent.

With this knowledge in mind, what might the compensation team at Fresh Munchables work toward in order to achieve the desired outcomes?

• Ignore the market, because hiring and compensation goals should not be stipulated by external factors
• Lag the market in total compensation, because the savings will make up for the lack of needed talent
• Lead the market in total compensation, because this will help draw in the desired talent
• Match the market in total compensation, because it is cost-effective and suitable enough to draw in talent

Several new positions have recently been created to streamline the delivery of ingredients from Fresh Munchables’ factories to its restaurants. The CEO of Fresh Munchables wants the HR department to figure out how much each position should be paid based on the company’s internal rewards alignment.

What question should not be considered in order to make these new positions fit within the company’s pay structure?

• How should two employees with similar duties but different titles be paid?
• How can the company maintain good morale, collaboration, and information sharing among employees?
• How well does each position’s rewards align with those received by others in the company?
• How well does each position’s rewards align with those received by others in similar positions in competing companies?

Amanda, Fresh Munchables’ new compensation manager, is evaluating the company’s current compensation system and is thinking about making large, but valuable, changes. Amanda knows she also needs to consider the effects of the changes on the people at the company.

Which of the following people will be most affected by changes in the rewards system used at Fresh Munchables?

• Maria, a manager who earns a fixed salary and a performance bonus
• Tasha, the CEO who has worked for Fresh Munchables for 15 years
• John, a newly hired warehouse employee who has not yet been paid
• All individuals who work for the company at any level

Fresh Munchables’ compensation system has stayed the same for many years. The newly hired chief human resources officer is stunned to discover how outdated it is, as the company has grown and changed significantly over the years. However, changing the company’s compensation system is not cheap, and Fresh Munchables’ executive team is hesitant to act.

What information could the chief human resources officer share to convince the executive team that building a new compensation system is worthwhile?

• An aligned compensation system will improve culture, morale, performance, and the company’s brand.
• An aligned compensation system will produce higher-caliber managers, directors, executive team members, and employees.
• An aligned compensation system will improve performance, retention, perceptions of fairness, and efficiency.
• An aligned compensation system will improve diversity, company presence in the media, public relations, and costs.

Chris and Becky are the managers of two respective Fresh Munchables restaurants that recently opened in Wichita, Kansas, and Oklahoma City, Oklahoma. Chris is currently trying to come up with a business strategy that best prepares his location to stay competitive within the Wichita health food marketplace. Becky is trying to decide if she is compensating her employees fairly in her own location. Chris is trying to make ________, while Becky is trying to make ________.

• A fairness equity decision; a comparative decision
• A comparative equity decision; a fairness equity decision
• An internal equity decision; an external equity decision
• An external equity decision; an internal equity decision

After carefully considering different approaches for internal alignment at Fresh Munchables, the compensation team has officially decided to use a point factor approach. After choosing compensable factors, developing factor measures, and determining factor weights, you are now ready to pilot test the job evaluation system. This is an important step in which the compensation team can make sure that all parts of the system come together effectively. Another concern the team wants to address during this step is evaluating employee satisfaction with the new system. Fresh Munchables has not used a system like this before, and some employees have raised questions and concerns about it.

Because one of the company’s biggest goals with this change is to ensure employee satisfaction, what is an important element to keep in mind as you pilot test the system?

• The extent to which the system produces relative job values that make sense to each employee who views the results
• The extent to which the system produces relative job values that are better than the previously-used system.
• The extent to which the system produces relative job values that make sense to the company’s financial department.
• The extent to which the system produces relative job values that will ensure all employees get raises.

Because Fresh Munchables has grown so much since its inception, the CEO wants to revisit the company’s methods for establishing internal reward alignment. The executive team has advised the HR department to use a job classification approach. However, you disagree.

What information could you use to show the executive team one primary disadvantage of using a job classification approach?

• It is difficult to create distinctions between jobs as the number and types of jobs in an organization grows.
• It is impossible to assign value to each job without first analyzing how other companies have valued similar jobs.
• It is difficult to hire qualified employees because the recruitment and selection process becomes more generalized.
• It is impossible to determine all the tasks done in each position, so classification is also impossible.

In the preliminary stages of developing the compensation system, the compensation team at Fresh Munchables assigns a member of the team to perform a SWOT analysis to better understand the organization’s environment and how that may influence the compensation system.

Which of the following outcomes may be discovered in the SWOT analysis for Fresh Munchables?

• Vital success components—such as a strength in marketing and a weakness in employee retention and satisfaction—that will allow for a competitive advantage
• Critical success factors—such as customer perceptions of the company as the leading healthy packaged foods brand—that will foster competitive advantage
• Strategic compensation factors—such as overarching company goals to outperform competitors in the food and beverage industry—that will allow for a competitive advantage
• Strategic performance factors—such as metrics for productivity in the snacks division and detailed plans for improvement in the soup division—that will provide a competitive advantage

Fresh Munchables has traditionally paid minimum wage for low-level positions. However, the company is having difficulty attracting employees to work in its food processing facilities. Some of these jobs require night and weekend hours.

Which of the following types of compensation would be most helpful for the company to offer to potential employees in the Fresh Munchables food processing plant, and why?

• Reporting time, because it gives employees more control over the hours they work
• Shift pay, because it provides additional compensation for hours worked at undesirable times
• Overtime pay, because it provides an incentive for employees to work additional hours
• Paid vacation time, because it shows employees that the company is generous with its benefits

The HR department at Fresh Munchables is considering a job comparison approach for establishing internal alignment. Fresh Munchables has been around for several decades, but it has always struggled with determining appropriate compensation for different levels of jobs.

What is true about a job comparison approach that would benefit Fresh Munchables?

• The point factor approach involves defining valuable elements of jobs and determining their relative importance, which helps managers know how to train their employees to receive promotions faster.
• In a job comparison approach, pay is set by how well employees in different jobs perform over a set period of time, which is easily determined in an established organization.
• In the job comparison approach, jobs are valued in comparison to other jobs in a company using a point system, which allows for pay to be determined by a job’s importance to the organization.
• In the job comparison approach, jobs are placed in a nonhierarchical system to avoid complaints of unfairness, which is important when increasing organizational complexity.

The compensation team at Fresh Munchables has begun a review into the company’s current compensation system. You have been assigned to conduct short interviews with mid-level and low-level employees to assess what type of compensation would be most attractive to them.

Which other group in the organization should you interview in order to fulfill the purpose of the total compensation system?

• An outside consultant, because an external contact will provide less biased information
• The finance department, because if the company is successful and profitable, more employees can be hired
• More mid-level and low-level employees, because if the employees’ needs are not met, they will likely leave the company
• Top management, because both the employer and employees need to be satisfied in order for the working relationship to continue