Monetary and nonmonetary rewards provided by companies to attract, motivate, and retain employees.
Basic compensation that an employee receives, usually as a wage or salary.
Payments calculated directly from the amount of time worked by employees.
Consistent payments made each period regardless of the number of hours worked.
Compensation linked directly to individual, team, or organizational performance.
Indirect reward given to an employee or group of employees as part of membership in the organization.
continuum of compensation philosophies
Assumes that individuals who have worked another year are entitled to pay increases, with little regard for performance differences.
Requires that compensation changes reflect performance differences.
Perceived fairness between what a person does and what the person receives.
Perceived fairness of the process and procedures used to make decisions about employees.
Perceived fairness in the distribution of outcomes.
Rewards individuals for the capabilities they demonstrate and acquire.
Compensation plan that equalizes cost differences between the international assignment and the same assignment in the home country.
global market approach
Compensation plan that attempts to be more comprehensive in providing base pay, incentives, benefits, and relocation expenses regardless of the country to which the employee is assigned.
tax equalization plan
Compensation plan used to protect expatriates from negative tax consequences.
Earnings that are supposed to meet the basic needs of an individual working for an organization.
Employees who are not paid overtime.
Employees who must be paid overtime.
The concept that the pay for all jobs requiring comparable knowledge, skills, and abilities should be the same even if actual job duties and market rates differ significantly.
A court order that directs an employer to set aside a portion of an employee's wages to pay a debt owed to a creditor.
Formal systematic means to identify the relative worth of jobs within an organization.
Job value commonly present throughout a group of jobs within an organization.
Use of market pay data to identify the relative value of jobs based on what other employers pay for similar jobs.
Collection of data on compensation rates for workers performing similar jobs in other organizations.
Jobs found in many organizations that can be used for the purposes of comparison.
Group of jobs having common organizational characteristics.
Groupings of individual jobs having approximately the same job worth.
Graph line that shows the relaionship between job value as determined by job evaluation points and job value as determined pay survey rates.
Grouping jobs into pay grades based on similar market survey amounts.
Practice of using fewer pay grades with much broader ranges than in traditional compensation systems.
Incumbent who is paid above the range set for a job.
Incumbent who is paid below the range set for a job.
Occurs when the pay differences among individuals with different levels of experience and performance become small.
Pay level divided by the midpoint of the pay range.
Time spent in an organization or on a particular job.
lump-sum increase (LSI)
One-time payment of all or part of a yearly pay increase.
Three general components of total rewards and give examples of each.
- Compensation - Base pay
- Benefits - Medical
- Performance and Talent Management - Training
Four compensation system design issues.
- Compensation Fairness and Equity
- External Equity
- Internal Equity
- Pay Secrecy vs. Openness
- Market Competitiveness and Compensation
- Individual v Team Rewards
- Competency-Based Pay Systems
Basic provisions of FLSA
- Minimum Wage - Fed/State whichever is higher.
- Child Labor - 16 yr, 18 yr, 14-15 yr
- Exempt and Non-Exempt
- Overtime Pay - time and a half over 40
Process of building a base pay system.
- Job Analysis
- Valuing Jobs/Pay Surveys
- Pay Policies - Pay Structure
- Individual Pay - Performance Appraisal
- Implementation, Communication, Monitoring
Two Means of Valuing Jobs
- Market Pricing
- Job Evaluation Methods
Two Ways Individual Pay Increases Are Determined
- Pay Adjustment Matrix - Compa-ratio
- Standardized Pay Increases