Term
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Definition
| Based on your cultural, political, economical, and socio-economis background |
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Term
|
Definition
| Views may be compared to other companies within the same geographic area |
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Term
|
Definition
| Are driven by the need for return on investment, IE Profit |
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Term
|
Definition
| Driven by the need for personal wealth and success |
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Term
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Definition
| Major expense to the company, affects profitability yet needs to be balanced by employee behavior and performance |
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Term
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Definition
| Personal financial security, prestige and status, social well being, and reward. |
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Term
|
Definition
| Every country may define compensation differently |
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Term
| What is the "real" definition of compensation? |
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Definition
| "All forms of financial returns and tangible services and benefits employees recieve as a part of the employment relationship |
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Term
|
Definition
| Total compensation and relational returns |
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Term
|
Definition
| Career and personal development, status, belonging to a group, challenge, personal satisfaction, etc. |
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Term
| Pay for executives is supposed to be tied to the: |
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Definition
| Company performance measures |
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Term
| Which of the following statements are supported bu compensation research evidence? |
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Definition
| Performance-based pay can affect results |
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Term
All the following are forms of pay Except:
Basse Wage
Incentive Pay
Merit Pay
Recognition
Benefits |
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Definition
| Recognition is not a form of PAY |
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Term
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Definition
| Techniques employed are the vehicles that tie the four basic policies to the cpompanies Strategic Objectives |
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Term
| Caveat Emptor - Be an Informed Consumer |
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Definition
Belief is a poor substitute for informed judgement. Ask yourself the following questions whe evaluating research used to develop pay techniques.
Does the research measure anything useful?
Does the study seperate correlation from cuasation?
Are there alternative explanations? |
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Term
|
Definition
| Direct Pay (EG, base salary, bonus, incentives) indirect pay (EG, health insurance, pensions, and statutory benefits such as social security, workers compensation, and unemployment insurnce). |
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Term
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Definition
| Cash compensation paid to an employee that is intended to reflect the value of the work performed. |
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Term
|
Definition
| Merit increases are given as an increment to base pay to reward past performance |
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Term
| Cost of Living Adjustments |
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Definition
| Pay increases given across the board based on the CPI index or a similar benchmark regardless of individual performance. |
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Term
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Definition
| Does not adjust base pay but rewards past or future performance. The potential size of the reward is generally known in advance. The reward may be tied to individual, team, or company performance. |
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Term
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Definition
| Focus employee efforts on multi-year results in the form of stock, cash, or combination of the two. |
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Term
Benefits provide Income Protection:
Statutory |
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Definition
| Social Security, Workers Compensation, and Unemployment |
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Term
Benefits Provide Income Protection:
Non-Statutory |
|
Definition
| Heatlh Insurance, Life, Disability, Pension |
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Term
Benefits Provide Income Pretection
Pay for Time Not Worked |
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Definition
| Vacation, Holiday, Sick, PTO (Paid Time Off) |
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Term
Benefits Provide Income Protection:
Work/Life |
|
Definition
| Child Care, Flextime, Telecommuting, Financial Planning |
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Term
Benefits Provide Income Protection:
Allowances |
|
Definition
| Housing, Food, Transportation |
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Term
| Relational Returns from Work |
|
Definition
Location
Office Conditions
Great Co-Workers
Great Boss
Challenging Work
Appreciation
Recognition
Low Stress Environment
Self-Satifaction
Work/Life Balance
Continuous Learning |
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Term
| The three basic building blocks framework for examining a pay system |
|
Definition
1. Compensation Objectives
2. Policies forming the foundation for the compensation system
3. Techniques that make up the compensation system |
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Term
| Compensation Basic Objectives |
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Definition
| Objectives vary by the company based on values, culture, industry, and attitudes. Basic objectives include efficiency, fairness, ethics, & legal compliance. |
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Term
|
Definition
| Improving performance & quality, excedding customer & stockholder expectations, while controlling labor costs. |
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Term
|
Definition
| Guides the design of the pay system and serve as the standard for judging the success of the system. |
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Term
| How is the Pay Model different from Strategic Objectives |
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Definition
| The Pay Model supports Strategic Objectives. Strategic Objectives support the organization and define what the pay system should achieve. The Pay Model is employed through the use of various compensation programs. |
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Term
| What are the four Strategic Policies that support Compensation Objectives of the Pay Model |
|
Definition
Internal Alginment
External Competitiveness
Employee Contributions
Administration |
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Term
| Strategic Policy - Internal Alignmant |
|
Definition
| Deals with the comparison of one job to another withn an organization. the comparison is mesured by various criteris, e.g., skill levels, seniority, experience, education, competency, levvel of responibility, number of people managed, etc. |
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Term
| Strategic Policy of the Pay Model - External Competitiveness |
|
Definition
| Refers to the relationship between the same jobs at different organizations, typically competing organizations. May be influenced by sertain factors such as affordability, company life sysle, economic conditions, etc. Refers to how theemployer positions its pay relative to what the compeition pays for similar jobs |
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|
Term
Strategic Policy of the Pay Model -
Employee Contributions |
|
Definition
| Deals with the relative emphasis a company places on employeea performance. The degree of emphasis placed on performance determines how employees will respond to their work. Little emphasis on performance equals little effort on the part of employees to fo above and beyond. The recognition of performance by the company is cruial to the employee's perception of pay equality. |
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|
Term
Strategic Policy fo the Pay Model -
Administration |
|
Definition
| No matter how well the aother policies work, it is nothing if the administration of the pay model is not managed properly. This includes systems of communicating pay policies to employees, systems for tracking compensation data, addressing employee perceptions and attitudes, the analysis of compensation and survey data, and reporting and involvment with management. |
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Term
|
Definition
| The techques employed to be the vehicles that tie the four Strategic Policies to the companies Strategic Objectives |
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Term
|
Definition
| An individual's capability to engage in a specific behavior |
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Term
|
Definition
| The ability of a firm to meet employee wage demands while remaining profitable; a frequent issue in contract negotiations with unions. A firm's ability to pay is constrained by its ability to compete in its product market. |
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Term
|
Definition
| discrimination that focuses on thestaffing and allocation decisions made by employers. It denies particular jobs, promotions, or training opportunities to qualified women or minorities. This type is illegal under Title VII of the Civil Rights Act of 1964 |
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Term
| Across-the-board-increases |
|
Definition
| A general adjustment that provides equal increases to all employees |
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Term
| Age Discrimination in Employment act (ADEA) of 1967 (Amended 1978, 1986, and 1990) |
|
Definition
| Legislation that makes nonfederal employees age 40 and over a protected class relative to their treatment in pay, benefits, and other personnel actions. The 1990 amendment is call the older Worker Benefit Protection Act |
|
|
Term
| Older Workers Benefit Protection Act of 1990 |
|
Definition
| The act that amended the 1967 Age Discrimination in Employment act (ADEA) |
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Term
|
Definition
| A theory of motivation that depicts exchange relationships in terms of two parties; agents and principals. according to this theory, both sides of the exchange will seek the most favorable exchange possible and will act opportunistically if given a chance. as applied to executive compensation, agency theory would place part of the executive;s pay at rick to motivate the executive (agent) to act in the best interest of the shareholders (principals) rather than in the executive's own self-interests. |
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Term
|
Definition
| Pay approach in which not only exempt employees who are traditionally paid a salary rather than an hourly rate, but also nonexempt enployees recieved a prescribed amount of money each pay period that does not primarily depend on the number of hours worked. |
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Term
|
Definition
| A job evaluation method that involves ordering the job description alternately at each extreme. all jobs are considered. Agreement is reached on whcih is the most valuable and then the least valuable. evaluators alternate between the nect most valuable and the next least valuable and so on until the jobs have been odered |
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Term
| Americans with disabilities Act |
|
Definition
| Legislation passed in 1990 that requires that resonable accommodations be provided to permit employees with disabiltities to pefom the essential elements of a job. |
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Term
|
Definition
| Machanisms are created to handle pay disagreements, They provide a forum for employees and managers to voice their complaints and recieve a hearing |
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Term
|
Definition
| A method for compendating expatriates based upon belief that the employee should not suffer financially for accepting a foreign-based assignment. The expatriate's pay is adjusted so that the amounts of the financial responsibilities that expatriate had prior to the assignment are kep at about the same level whil on assignment - the company pays the difference. |
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Term
|
Definition
| A corporatewide, overall performance measure typically incorporating financial results, process improvements, customer service, and innovation |
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Term
|
Definition
| The basic cash compensation that an employer pays for the work performed. Tends to reflect the value of the work itself and ignore differences in individual contributions |
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Term
|
Definition
| Individual incentive plan that provides a variation on straight peicework and standard hour plans. Instead of timing an entire task, a Bedeaux plan requires determination of the time required to complete each simple action of a task. Workers recieve a wage incentive for completing a task in less than the standard time. |
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|
Term
Behaviorally Anchord Rating Scales
(BARS) |
|
Definition
| Variants on standard rating scales in whcih the various scal levels are anchored with behavioral descriptions directly applicable to jobs being evaluated. |
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Term
|
Definition
| Process of matching survey jobs by applying the employer's plan to the external jobs and then comparing the worth of the external job with its internal "match" |
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Term
|
Definition
| a aprototypical job, or group of jobs, used as a reference point for making pay comparisons within or without the organization. Well lnown and stable contents, thier current pay rates are generally acceptable, and the pay differentials among them are relatively stable. a groupf of benchmark jobs, taken together, contains the entire range of compensable factors and is accepted in the external labor market for setting wages. |
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Term
|
Definition
| A maximum payout for specific benefit claims (eg limiting liability for extended hospital stays to $150,000) |
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Term
|
Definition
| Limit of disability income payments to some maximum percentage of income and limit of medical/dental coverage for specific procedures to a certain fixed amount |
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Term
|
Definition
| Compensation practices that allow employers to gain preferential access to superior human resource talent and competencies (ie, valued assets), which in turn influence the strategies the organization adopts. |
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Term
|
Definition
| Bureau of Labor Statistics |
|
|
Term
|
Definition
| A lump sum payment to an employee in a recognition of goal achievement |
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|
Term
| Bottom-up approach to pay budgeting |
|
Definition
| Approach in which individual employee's pay rates for the next year are forecasted and summed to create an organization's total budget |
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Term
|
Definition
| A market that allows haffling ovcer terms and conditions until an agreement is reached. |
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Term
|
Definition
| Establishing an image or reputation associated with a product or service. As related to total compensation systems, it seeks to establish a reputation that will insluence employees' and the public's perceptions about how an organization pays its employees |
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Term
|
Definition
| Benchmark case that interpreted performance evaluation as a test, subject to validation requirements, and used these evaluations based on a rating format to lay off employees, resulting in a disproportionate of minorities being discharged |
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Term
|
Definition
| Collapsing a number of salary grades into a smaller number of braod grades with awide range |
|
|
Term
Broad-Based Option Plans
(BBOPs) |
|
Definition
| Stock grants: a companygives employees shares of stock over a designated time period |
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Term
|
Definition
A part of the organization's planning process; helps to ensure that future financial expenditures are coordinated and controlled. Envolves forcasting total expenditures required by the py system during the next period as well as the amount of the pay increases.
bottom up and top down are the two typical approaches to the process |
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|
Term
Bureau opf Labor Statistics
(BLS) |
|
Definition
| A major source of publicly available pay data. It also calculates the consumer price index. |
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Term
| Cafeteria (Felxable) Benefit Plan |
|
Definition
| A benefit plan in which employess have a choice as to the benefits they recieve within some dollar limit. Usually a common core benefit package is required(eg specific minimum levels ofhealth, disability, retirement, and death benefits) plus elective programs from which they employee may select a set dollar amount. Additional coverage is available through employee contributions |
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|
Term
Captial Appreciation Plans
also known as Long-Term Incentives |
|
Definition
| Inducements offered in advance to influence longer-rate (multiyear) results. usually offered to Top managers and professionals to get them to focus on long-term organization objectives |
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Term
|
Definition
| A progression of jobs within a organization |
|
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Term
|
Definition
| A defined benefit plan that looks like a defined contribution plan. employees have a hypothetical account, such as a 401(k), into which is depositied what is typically a percentage of annual compensation. the dollar amount grows both from contributions by the employer and by some predetermined interest rate (eg often set equal to the rate given on a 30-year treasury certificates). |
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Term
|
Definition
| A midpoint in a group of measures |
|
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Term
|
Definition
| A rating error that occurs when a rater consistently rates a group of employees at or close to the midpoint of a scale irresoective of the true score performance of rates. Avoiding extremes (both high and low) in ratings across employees. |
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Term
|
Definition
| Same as Turnover: the downward pressure on average wage that results from the replacement of high-wage-earning employees wiht workers earning a lower-wage |
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Term
|
Definition
Also know as Churn:
the downward pressure on average wage that results from the replacement of high-wage-earning employees with workers earning a lower wage. |
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Term
|
Definition
| Legislation that prohibits, under Title VII, discrimination in terms and conditions of employment ( including benefits) that is based on race, color, religion, sex, or national origin. |
|
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Term
|
Definition
| Legislation that clarifies the standards for proving discrimination. Allows jury trials and damage awards. |
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Term
|
Definition
| Procedure that begins when an employee asserts that a specific event (eg, disablement, hospitalization, unemployment) has occured and demands that the employer fulfill a promise for payment. As such, a claims processor must first determine whether the act has, infact, occured. |
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Term
|
Definition
| Job evaluation method that involves slotting job descriptions into a series of classes or grades that cover the range of jobs and that serve as a standard against whcih the job descriptions are compared. |
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Term
|
Definition
| A rating error that occurs when a rater gives better ratings to individuals who are like the rater in behavior or personality |
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Term
|
Definition
| Benefit option whereby employees share in the cost of a benefit provided to them |
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Term
|
Definition
| Payment tied directly to achievement of performance standards. commissions are directly tied to a profit index (sales, production level) and employee costs; thus, they rise and fall in line with revenues. |
|
|
Term
| Committee A Priori Judgement Approach |
|
Definition
| Compensable factor improtance weights are assigned by a committee based on judgement |
|
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Term
|
Definition
| When insurance rates are based on the medical experience of that entire community. Higher use of medical facilities and services results in higher premiums. |
|
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Term
|
Definition
| A policy that women performing jobs judged to be equal on some measure of inherent worth should be paid the same as men, excepting allowable differences, such as seniority, merit, production-based pay plans, and other non-sex-related factors. Objective is to eliminate use of the market in setting wages for jobs held by women. |
|
|
Term
|
Definition
| An index that helps assess how managers actually pay employess in relation to the midpoint of the pay range established for jobs. It estimates how well actual practices correspond to intended polciy. Calculated as average rates actually paid divided by range midpoint. |
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|
Term
|
Definition
| Job attributes that provide the basis for evaluating the relative worth of jobs inside an organization. a compensable fctor must be work-related, business-related, and acceptalbe to the parties involved. |
|
|
Term
| Compensating Differentials |
|
Definition
| Economis theory that attributes the variety of pay rates in the external labor market to differences in attractive as well as negative characteristics in jobs. Pay differences must overcome negative characteristics to attract employees. |
|
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Term
|
Definition
| All forms of financial returns and tangible services and benefits employees receive as part of an employement relationship |
|
|
Term
Compensation at Risk
also known as Risk Sharing |
|
Definition
| An incentive plan in which employee's base wages are set below a specified level (eg, 80% of the market wage) and incentive earnings are used to raise wages above the base. In good years an employee's incentive pay will more than make up for the 20% shortfall, giving the employee a pay premium. Because employees assume some of the risk, risk-sharing plans pay more generously than success-sharing plans in good years |
|
|
Term
| Compensation Differentials |
|
Definition
| Differentials in pay among jobs across and within organizations, and differences among individuals in the same job in an organization. |
|
|
Term
|
Definition
| The desired results of the pay sytem. The basic pay objectives include efficiency, fairness, and compliance with laws and regulations. Objectives shapre the design of the pay system and serve as the standard against which the success of the pay system is evaluated. |
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Term
|
Definition
| Basic knowledge and abilities employeesmust acuire or demonstrate in a competency-based plan in order to successfully perform the work, satisfy customers, and achieve business objectives |
|
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Term
|
Definition
| A systematic process to identify and collect information about the competencies required for the person and the organization to be successful. |
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Term
|
Definition
| Compensation approach that links pay to the depth and scope of competencies that are relevant to dong the work. Typically used in managerial and professional work where what is accomplished may be difficult to identify. |
|
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Term
|
Definition
| The collestion and analysis of information about external conditions and competitors that will enable an organization to be more competitive. |
|
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Term
|
Definition
| As apay objective means conforming to federal and state compensation laws and regulations |
|
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Term
|
Definition
| The existence of very narrow pay differentials among jobs at different organizational levels as a result of wages for jobs filled from the outside (frequently these are entry-level jobs) inreasing fster than the internal pay structure |
|
|
Term
|
Definition
| The degree of consistency or "fit" between the compensation system and other organizational components such as strategy, product-market stage, culture and values, employee needs, and union status. |
|
|
Term
Consolidated Omnibus Budget Reconciliation Act
COBRA |
|
Definition
| Legislation that [provides that employees who resign or are laid off through no fault of their own are eligible to continue recieving health coverage under the employer's plan at a cost borne by the employee. |
|
|
Term
| Consumer-Directed Health Care Plans |
|
Definition
| Costs link consumer choice of more or less expensive options to higher or lower individual costs |
|
|
Term
|
Definition
| A measure of the changes in prioces in a fixed market basket of goods and services purchased by a hypothetical average family. Not an absolute measure of living costs; rather, a measure of how fast costs are changing. Published by the Bureau of Labor Statistics (BLS), US Department of Labor. |
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Term
|
Definition
| The work performed in a job and how it gets done (Tasks, behaviors, knowledge required, etc.) |
|
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Term
|
Definition
| Motivation theories that focus on what motivates people rather then on how people are motivated. Maslow's need hierarchy theory and Herzberg's two-factor theory are in this category. |
|
|
Term
|
Definition
| A growing workforse that includes flexable workers, tempraries, part time employees, and independent contractors whose employment is of a limited duration. |
|
|
Term
| Conventional Job Analysis Methods |
|
Definition
| Methods (eg, functional job analysis) that typically invove an analyst using a questionnaire in conjunction with structured interviews of job incumbents and supervisors. the methods place considerable reliance on analysts' ability to understand the work performed and to accurately describe it. |
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Term
|
Definition
| Process of ensuring that employer coverage of an employee does not "double pay" because of identical protection offered by the government (private pension and social sucurity coordination) or a spouse's employer |
|
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Term
|
Definition
| Copay requires that employees pay a fixed or percentage amount of coverage |
|
|
Term
|
Definition
| Workers with whom a long-term, full-time work relationship is anticipated |
|
|
Term
|
Definition
| A common measure of association that indicates how changes in one variable are related to changes in another |
|
|
Term
|
Definition
| An attempt made by organizations to contain benefit costs, such as imposing deductables and coinsurance on health benefits or replacing defined benefit pension plans with defined contribution plans |
|
|
Term
|
Definition
| The cost cutter's efficiency focused strategy stresses doing more with less by minimizing costs, encouraging productivity increases, and specifying in greater detail exactly how jobs should be performed |
|
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Term
|
Definition
| Actual individual expenditures on goods and services. the only wayu to measure it accurately is to examine the expense budget of each employee |
|
|
Term
Cost of Living Adjustments
(COLAs) |
|
Definition
| Across the board wage and salary increases or supplemental payments based on changes in some index of prices, usually the consumer price index (CPI). If included in a union contract, COLAs are designed to increase wages automatically during the life of the contract as a function of changes in the CPI. |
|
|
Term
|
Definition
| Same as across the board increase, except magnitude based on change in cost of living {as measured by the consumer price index (CPI)} |
|
|
Term
|
Definition
| Allowing nonperformance factors to afffect performance scores. |
|
|
Term
|
Definition
| A criterion is deficient if it fails to include all of the dimensions relevant to job performance (eg, excluding key boarding skills for a secretary's job performance) |
|
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Term
|
Definition
| The informal rules, rituals, and value systems that influence how people behave. |
|
|
Term
| Customer-Driven Health Care |
|
Definition
| Medical care package where the employer financies the cost up to the dollar maximum and the employees search for options that best fit their specific needs |
|
|
Term
| Customer-Focused Business Strategy |
|
Definition
| The customer-focused business strategy stresses delighting cusomters and bases employee pay on how well they achieve this |
|
|
Term
|
Definition
| Legislation that requires that most federal contractors pay wage rates prevailing in the area. |
|
|
Term
|
Definition
| Employees cost-saving tool by which the employee pays the first X number of sollars when a benefit is used. they employer pays subsequent costs up to some predetermined maximum. |
|
|
Term
| Deferred Compensation Plan |
|
Definition
| Pay approach that provides income to an employee at some future time as compensation for work performed now. Types of deferred comensation programs include stock option plans and pension plans |
|
|
Term
| Defined Contribution Plan |
|
Definition
| A benefit option or package in which the employer negotiates a dollar maximum payout. Any change ini benefit costs over time reduces the amount of coverage unless new dollar limits are negotiated. |
|
|
Term
|
Definition
| A benefit option or package in which the employer agrees to give the specified benefit without regard to cost maximum. Opposite of Defined Contribution Plan |
|
|
Term
|
Definition
| Eliminating some layers or job levels in the pay structure |
|
|
Term
|
Definition
| Pay differences amoun levels within the organization, such as the difference in pay between adjacent levels in a career path, between supervisors and subordinates, between union and nonunion employees, and between executives and regular employees |
|
|
Term
|
Definition
Pay recieved directly in the form of cash
(wages, bonuses, incentives) |
|
|
Term
|
Definition
| Discrimination theory that outlaws the application of pay practices that may appear to be neutral but have a negative effect on females or minorities unless those practices can be shown to be business-related. |
|
|
Term
|
Definition
| Discrimination theory that outlaws the application of different standards to different classes of employees unless the standards can be shown to be business-related. |
|
|
Term
|
Definition
| Fairness in the amount of reqard distributed to employees |
|
|
Term
|
Definition
a framework for professional employees in an organization whereby at least two general tracks of ascending compendation steps are avaiaable:
(1) A managerial track to be ascended through increasing responsibility for supervision of people
(2) A professional track to be ascended through increasing contributions of a professional nature |
|
|
Term
|
Definition
| A motivational theory that assumes that all behavior is induced by drives (energizers such as thirst, hunger, sex) and that ppresent behavior is based in large part on the consequences or reqards of past behavior. |
|
|
Term
|
Definition
| Presence of two different ways to progress in an organiaation, each reflecting different types of contribution to the organization's mission. The managerial ladder ascends through increasing responibility for supervision or direction of people. the professional track ascends through increasing contributions of a professional nature tht do not mainly entail the supervision of employees |
|
|
Term
|
Definition
| In familes in whcih both spouses work, the coverage of specific claims from each spouse's employment benefit package. Employers cut costs by specifying payment limitations under such conditions |
|
|
Term
|
Definition
| Employee benefits, from information to applications, posted on company intranet by employer, which allows employee access 24/7 and employer to update easily |
|
|
Term
|
Definition
| Confusingly, rent has two different meanings for economists. The first is the commonplace difinition, the income landlords recieve for an apartment. the second, also known as economis rent, is the difference between what a factor of production is paid and how much it would need to be paid to remain in its current use. If an employee is paid $10,000 a week but would be willing to work for $1,000, that employee's economis rent is $9,000 a week. |
|
|
Term
|
Definition
| A theory tht explains why firms are rational in offering higher-than-necessary wages |
|
|
Term
|
Definition
| the parts of the total compensation package, other than pay for time worked, provided to employees in whole or in part by employer payments (life insurance, pension, workers' compensation, vacation) |
|
|
Term
|
Definition
| Comparisons among individuals doing the same job for the same organization |
|
|
Term
|
Definition
| The view that a firm;s external wage competitiveness is just one facet of its overall human resource policy and that competitiveness is more properly judged on overall polices. challenging work, great colleagues, or an organization's prestige must be factored into an overall consideration of attractiveness |
|
|
Term
|
Definition
| Employee belief that returns and/or rewards are due regardless of individual or company performance |
|
|
Term
|
Definition
| Jobs that are filled from the external labor market and whose pay tends to reflect external exonomic factors rather than an organization's culture and traditions |
|
|
Term
| Equal Pay Act (EPA) of 1963 |
|
Definition
| An amendment to the Fair Labor Standards Act of 1938 that prohibits pay differentials on jobs that are substantially equal in terms of skills, efforts, responsibility, and working conditions, except when they are the result of bona fide seniority, merit, production-based systems, or any other job-related factor toher than sex |
|
|
Term
|
Definition
| A theory proposing that in an exchange relationship ( such as employment) the equality of outcome/input ratios between a person and a comparison other (a standard or relevant person/group) will determine fairness or equity. If the ratios diverge from each other, the person will experience reactions of unfairness and inequity |
|
|
Term
Employee Stock Ownership Plan
ESOP |
|
Definition
| A plan in which a company borrow money from a financial institution by using its stock as a collateral for the loan. Principal and interest loan repayments are tax-deductable. With each loan repayment, the lending institution releases a certain mount of stock being held as security. the stock is them placed into an employee stock ownership trust (ESOT) for distribtuion at no cost to all employees. the employees recieve the stock upon retirement or seperation from the company. TRASOPs and PAYSOPs are variants of ESOPs |
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Term
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Definition
| An open-ended performance appraisal format. The descriptors used can range from comparisons with other employees to adjectives, behaviors, and goal accomplishment. |
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Term
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Definition
| The parts of a job that cannot be assigned to another employee. The Americans with disabilities Act requires that if applicants with disabilities can perform the essential elements of a job, resonable accommodations must then be made to enable the qualified individuals to perform the job |
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Term
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Definition
| The price of labor (the wage) determined in a competitive market; in other words, labor's worth (the price) is whatever the buyer and seller agree upon. |
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Term
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Definition
| Law signed in 1965 that prohibits discrimination by federal contractors and subcontractors in all employment practices on basis of race, sex, color, religion, or national origin. |
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Term
Executive Perquisites
PERKS |
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Definition
| Special benefits made available to top executives ( and sometimes other managerial employee). May be taxable income to the receiver. Company-related perks may include luxury offices, special parking, and company-paid memberships in clubs/associations, hotels, and resorts. Personal Perks include low-cost loans, personal and legal counseling, free home repairs and improvements, and so on. Since 1978, various tax and agency rulings have slowly been requiring that companies place a value on perks so they can be taxed |
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Term
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Definition
| Jobs not subject to provisions of the Fair Labor Standards ACt with respect to minimum wage and overtime. Exempt employees include most executives, administratiors, professionals, and outside sales representatives. |
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Term
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Definition
| Time during which, or after which, an individual who has been granted stock options is permitted to exercise them |
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Term
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Definition
| A section of a large city where expatriates tend to locate an form a community that takes on some of the cultural flavor of their home country |
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Term
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Definition
| Employees assigned outside their base country for any period of time in excess of one year. |
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Term
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Definition
| A motivation theory that proposes that individuals will select an alternative based on low this choise related to outcomes such as rewards. The choice made is based on the strength or value of the outcome and on the percieved probability that this choice will lead to the disired outcome. |
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Term
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Definition
| Rating system in whcih insurance premiums vary directly withthe number of claims filed. an experience rating is allpied to unemployment insurance and workers' compensation and may be applied to commerical health insuance premiums. In a community rating system, insurance rates are based on the medical experience of the entire community. |
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Term
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Definition
| The pay relationships among organizations; focuses attention on the competitive positions reflected in these relationships. |
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Term
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Definition
| Rewards that a person receives from sources other than the job itself. They include compensation, supervision, promotions, vacations, friendships, and all other important outcomes apart from the job itself |
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Term
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Definition
| The determination of the relevance of a measuring device on the basis of "appearance" only |
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Term
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Definition
| Measures that reflect different degrees within each compensable factor. Most copmmonly five to seven degrees are defined. EAch degree may be anchored by typical skills. tasks, and behaviors, or key job titles. |
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Term
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Definition
| Measures that indicate the importance of each compensable factor in a job evaluation system. Weights can be derived through either a committe judgement or a statistical analysis. |
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Term
Fair Labor Standards Act of 1938
FLSA |
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Definition
| A federal law governing minimum wage, overtime pay, equal pay for men and women in the ame typoes of jobs, child labor, and record-keeping requirements |
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Term
Family Medical Leave Act
FMLA |
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Definition
| Legislation passed in 1993 that entitles eligible employees to recieve unpaid leave up to 12 weeks per year for specified family or medical reasons,such as casing for ill family members or adopting a child. |
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Term
Federal Insurance Contribution Act
FICA |
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Definition
| The source of social security contribution withholding requirments. The FICA deduction is paid by both employer and employee. |
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Term
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Definition
| Rating error in whcih the rater develops a negative (ppositive) opinion of an employee early in the review period and allows it to negatively (positively) color all subsequent perceptions of performance. |
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Term
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Definition
| A single rate, rather than a range of rates, for all individuals performing a certain job. Ignores seniority and performance differences |
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Term
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Definition
| Benefit package in which employees are given a core of critical benefits (necessary for minimum security) and permitted to expend the remainder of their benefit allotment on optins that they find most attractive. |
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Term
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Definition
| The allocation of employee compensation in a variety of forms tailored to organization pay objectives and/or the needs of individual employees. |
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Term
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Definition
| The various typoes of pay, whcih may be received directly in the form of cash (wages, bonuses, incentives) or indirevctly through series and benefits (pensions, health insurance, vacations). This difinition excludes other forms of reqards or returns that employees may recieve, such as promotion, recognition for outstanding work behavior, and the like. |
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Term
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Definition
| Named for the section of the Internal Revenue Code describing the requirements, is a savings plan in whcih employees are allowed to defere pretax income. |
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Term
Gain-Sharing Plans
(Group Incentive) |
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Definition
| Incentive plans that are based on some measure of group performance rather than individual performance. Taking data on a past year as a base, group incentive plans may focus on cost savings ( the Scanlon, Rucker, and Improshare plans) or on profit increases (profit-sharing plans) as the standard for distributing a portion of the accrued funds among relevant employees |
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Term
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Definition
| Individual incentive plan that provides far variable incentives as a function of a standard expressed as time period per unit of production. Under this plan, a standard time for a task is purposely set at a level requiring high effort to complete. |
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Term
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Definition
| A job structure used by the US Office of Personnel Management for white-collar employees. It has 15 greads (classes) plus 5 more levels on an Executive Schedule |
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Term
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Definition
| Local condidtion that employees in a specific geographic area encounter, such as labor shortages and difference in housing costs |
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Term
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Definition
| Substitution of a particular skill and experience level for job descriptions in determing external market rates. Includes rates for all individuals who possess that skill |
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Term
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Definition
| A contract clause that calls for the payment of a large lump sum in specified circumstances of an executive's termination, for example, following the company's acquisition by another firm. |
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Term
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Definition
Rating error in whcih an appraiser gives favorable ratings to all job duties based on impressive performance in just one job function. for example, a rater who hates tardiness rates a prompt suboordinate high across all performance demensions exclusively bacause of this one characteristic
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Term
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Definition
Individual incentive method that provides for variable incentives as a function of a standard expressed as time period per unit of production. This lan derives its name from the shared split between worker and employer of any savings in direct costs.
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Term
| Hay Job Evaluation System |
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Definition
| A point factor system that evaluates jobs with respect to know-how, problem solving, and accountability. It is used primarily for exempt (Managerical/Professional) jobs. |
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Term
| Health Maintenance Act of 1973 |
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Definition
| Legislation that requires that employers offer alternative health coverage options (health maintenance organization HMOs) to employees |
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Term
Health Maintenance Organization
HMO
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Definition
| A nontraditional health care delivery system. HMOs offer comprehensive benefits and outpatient services, as well as hospital coverage, for a fixed monthly prepaid fee. |
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Term
Health Reimbursement Arrangements
HRAs |
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Definition
| The employer sets up an account for a specified amount. When an employee has qualified medical costs, they are submittede for reimbursement until the account is depleted. |
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Term
Health Savings Account
HSA |
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Definition
| An HSA is a tax-exempt account built up through contributions of the employee or the employer, or both, that can abe used to pay for health care. |
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Term
Hierarchies
(Job Structures) |
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Definition
| Jobs ordered according to their relative content and/or value |
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Term
| High-Commetment Practices |
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Definition
| Fractors such as high base pay, sharing success only (not risks), guaranteed employment security, promotions from within, training and skill development, employee ownership, and long-term pers[pective. High commitment practices are believed to attract and retain a high committed workforce that will become the source of competitive advantage |
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Term
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Definition
| The ability of a ob evaluation plan to replicate a predetermined, agreed-upon job structure |
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Term
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Definition
| The opposite of Halo error; downgrading an employee across all performance dimensions exclusively because of poor performance on one dimension. |
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Term
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Definition
| An economic theory proposing that the investment one is willing to make to enter an occupation is related to the retirns one expects to earn over time in the form of compensation |
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Term
| Human Resource Planning System |
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Definition
| Put in place by the benefit administrator to make realistic estimes of human resource needs and avoid a pattern of hasty hiring and morale-breaking terminations |
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Term
Improshare
(IMproved Productivity through SHARing) |
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Definition
| A gain-sharing plan in which a standard is developed to identify the expected hours required to produce an acceptable level of output. Any savbings arising from production of agree-upon output in fewer-than-expected hours are shared by the firm and the worker. |
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Term
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Definition
| Inducement offered in advance to influence future performance (sales commission) |
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Term
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Definition
| The degreeto which pay influences individual and aggregate motivation among employees at any point in time. |
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Term
Incentive Stock Options
ISO |
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Definition
| A form of deferred compensation designed to influence long-term performance. Gives an executive the right to pay today's market price for a block of shares in the company at a future time. No tax is due until the shares are sold |
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Term
|
Definition
| Inherent compensation system controls. they specify the amount and timing of pay increases on an organizational basis. |
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Term
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Definition
| Noncash benefits provided to an employee |
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Term
| Individual Incentive Plans |
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Definition
| Incentive compensation that is tied directly to objective measures of individual production (sales commission) |
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Term
Indivisual Retirement Accounts
IRAs |
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Definition
| Tax-favored retirement savings plans that individuals can establish themselves |
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Term
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Definition
| The inovator stresses new products and short resome time to market trends |
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Term
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Definition
| The perceived contigency that an outcome (performing well) has another outcome (a reqard such as pay) |
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Term
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Definition
| The pay relationship among jobs or skill levels within a single organization; focuses attention on employee and management acceptance of those relationships. It involves establishing equal pay for jobs of equal worth and acceptable pay differentials for jobs of unequal worth. |
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Term
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Definition
| The extent of agreement among raters rating the same indivdual, group, or phenomena. |
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Term
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Definition
| A particular numerical point difference has the same meaning on all parts of a scale |
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Term
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Definition
| The systematic process of collecting information related to the nature of a specific job. It provides the knowledge needed to define jobs and conduct job evaluation. |
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Term
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Definition
| Questionnaires in whcih tasks, behaviors, and abilities are listed. The core of all quantitative job analysis. |
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Term
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Definition
| A job-based structure relies on work content-tasks, behaviors, responsibilties. |
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Term
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Definition
| Systems that focus on jobs as the basic unit of analysis to determine the pay structure; hence, job analysis is required. |
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Term
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Definition
| A grouping of jobs that are considered substatially similar for pay purposes |
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Term
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Definition
| Information that describes a job. May include responsibilityassumed and/or the tasks performed |
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Term
|
Definition
| A summary of the most important features of a job. It identifies the job and describes the general nature of the work, specific task responsibilities, outcomes, nd the employee characteristics required to perform the job. |
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Term
|
Definition
| A systematic procedure designed to aid in establishing pay differentials among jobs within a single company. It includes classification, compaarison of the relative worth of jobs, blending internal and external market forces, measurement, negotiation, and judgement |
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Term
|
Definition
Group that may be charged with the responsibility of:
1. Selecting a job evaluation system
2. Carrying out or at least supervising the process of evaluation of jobs
3. evaluating the success with which the job evaluation has beenconducted. Its role may very among organizations, but its members usually represent all important consituencies within the organization |
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Term
|
Definition
| Handbook tht contains information on the job evaluation plan and is used as a "yardstick" in evaluating jobs. It includes a description of the job evaluation method used, descriptions of all jobs, and , if relevant, a description of compensable factors, numerical degree scales, and weights; may also contain a description of the available review or appeals procedure. |
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Term
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Definition
| A group of jobs involving work of some nature but requiring different skill and responsibility levels (computing and account recording are a job family; bookkeeper, accounting clerk, and teller are jobs within that family. |
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Term
|
Definition
| A grouping of jobs based on their job-related similarities and differences and on their value to the organization's objectives |
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Term
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Definition
| The process of assigning pay to jobs, based on thorough job analysis and job evaluation |
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Term
|
Definition
These things that can be used as a basis for hiring:
knowledge
skills
abilities
required to adequately perform the tasks |
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Term
|
Definition
| Relationship among jobs inside an organization, based on work content and each job;s relative contribution to achieving the organization's objectives. |
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Term
|
Definition
| The theory of job value tht posits a "just" or equitable wage for any occupation based on the occupation's place in the larger social hierarchy. According to this doctrine, pay structures should be designed on the basis of societal norms, customs, and tradition, not on the basis of economic and market forces. |
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Term
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Definition
| The employment level organizations require. Anincrease in wage rates will reduce the demand for labor, other factors constant. Thus, the labor demand curve (the relationship between employment levels and wage rates) is downward-sloping |
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Term
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Definition
| The different numbers of employees available at different pay rates |
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Term
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Definition
| A wage structure that is set to match market rates at the beginning of the plan year only. the rest of the plan year, internal rates will lag behind market rates. Its objective is to offset labor costs, but it may hinder a firm's ability to attract and retain quality employees. |
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Term
|
Definition
| A wage structure that is set to lead the market throughout the plan year. Its aim is to maximize a firm's ability to attract and retain quality employees and to minimize employee dissatisfaction with pay. |
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Term
| Legally Required Benefits |
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Definition
Benefits that are required by statutory law:
Workers' Compensation, social Security and unemployment - required by the US.
Required benefits vary among countries.
Companies opering in foreign countries must comply with host-country compensation and benefit mandates. |
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Term
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Definition
| Rating error in which the rater consistently rates someone higher than is deserved. |
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Term
|
Definition
| Weighting market survey data according to the clseness of the job matches. |
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Term
|
Definition
| Most prevalent in Jaoanese companies, the notion of employee's staying with the same company for their entire career, despite possible poor performance on the part of either an employee or the company. |
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Term
|
Definition
| An employee's ability to see how individual performance affect incentive payout. Employees on a stright piecework pay system have a clear line of sight - their pay is a direct function of the number of units they produce; employees covered by profit sharing have a fuzzier line of sight - their payouts are a function of many forces, only one of which is individual performance. |
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Term
|
Definition
| Pay legislation in some US cities that require wages well above the federal minimum wage. Oftem applies only to city government employees |
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Term
Local Country Nationals
(LCNs) |
|
Definition
| Citizens of a country in which a US foreign subsidiary is located. LCNs' compensation is tied ither to local wage rates or to the rates of US expatriates performing the same job. |
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Term
| Long Term Disability (LTD) Plan |
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Definition
| An insurance plan that provides payments to replace income lost through an inability to work that is not covered by other legally required disability income plans |
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Term
|
Definition
| Inducements offered in advance to influence longer-rate (multi-year) results. usually offered to top managers and professionals to get them to focus on long-term organization objectives |
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Term
|
Definition
| use of the lowest- and highest-paid benchmark job in the external market to anchor an entire skill-based structure |
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Term
|
Definition
| payment of entire increase (typically--based) at one time. Because amount is not factored into base pay, any benefits tied to base pay do not increase |
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Term
|
Definition
| Steps taken to comtain health care and workers' compensation costs, such as awitching to preferred provider organizations for health care delivery, utilization-review procedures, and medical bill audits. |
|
|
Term
Managed By Objectives
(MBO) |
|
Definition
| An employee planning, development, and appraisal procedure in which a supervisor and a subordinate, or group of subordinates, jointly identify and establish common performance goals. employee performance on the absolute standards is evaluated at the end of the specified period |
|
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Term
|
Definition
| the fourth dimension in the pay model; ensuring the right people get the right pay for achieving the right objectives in the right way. |
|
|
Term
Marginal Productivity Theory
(MPT) |
|
Definition
| In contrast to Marxist "surplus value" theory, |
|
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Term
|
Definition
| The addional revenue generated when the firm employs one additional unitof humen resources, with other factors held constant |
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Term
|
Definition
| Using key/benchmark jobs, a market pay policy line can be constructed tht shows external market pay survey data as a function of internal job evaluation points. In many cases, the market pay policy line is abtained by using regression analysis, whcih yeilds an equation of the form "market pay = intercept+slopeXjob evaluation points." by plugging the job evaluation points for any job (both benchmark and non-benchmark jobs) into the equation, the predicted pay for each job can be obtained. |
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Term
|
Definition
| Setting pay structures almost exclusivly through maching pay for a very large percentage of jobs with the rates paid in the external market |
|
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Term
|
Definition
| A plot of the empirical relationship between current pay and years since a professional has last recieved a degree (YSLD), thus allowing organizations to determine a competitive wage level for specific professional employees with varying levels of experience |
|
|
Term
| Medicare Prescription Drug, Improvement and Modernization Act of 2003 |
|
Definition
| Seniors must choose among a variety of plans written in bureaucratic hieroglyphics |
|
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Term
|
Definition
| Law passed in 1997 that stipulates that mental illness must be covered to the same extent that other medical conditions are covered. |
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|
Term
| Merit Increase Guidelines |
|
Definition
| Specifications that tie pay increases to performance. They may take on of two forms: The simnplest version specifies pay increases permissible for different levels of performance. The more complex guidlines tie pay not only to performance but also to position in the pay range |
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Term
|
Definition
| A reward that recognizes outstanding past performance. It can be given in the form of lump-sum payments or in increments to the base pay. Merit programs are commonly designed to pay different amounts (often at different times) depending on the level of performance |
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Term
|
Definition
Individual incentive plan that provides for variable incentives as a function of units of production per time period. It works like the Taylor Plan, but three piecework rates are set:
1. high- for production exceeding 100% of standard
2. medium- for production between 83% and 100%
3. low- for production less than 83% of standard |
|
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Term
|
Definition
| A level for most Americans established by Congress as part of the Fair Labor Standards Act of 1938 |
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Term
|
Definition
An individual's willingness to engage in some behavior. Primarily concerned with
1. what energizes human behavior
2. what directs or channels such behavior
3. how this behavior is maintained or sustained |
|
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Term
|
Definition
| Systems that link pay to the number of different jobs (breadth) an employee is certified to do, regardless of the specific job he or she is doing. |
|
|
Term
National Electrical Manufacturers Association
(NEMA) Plan |
|
Definition
| A point factor job evaluation system that evolved into the National Position Evaluation Plan sponsored by NMTA associates |
|
|
Term
NationalMetal Trades Association
(NMTA) Plan |
|
Definition
| a point factor job evaluation plan for production, maintenance, and service personnel |
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|
Term
| Noncontributory Financing |
|
Definition
| Bemefity option in which an employee benefit is fully paid for by the employer |
|
|
Term
|
Definition
| Jobs subject to provision of the Fair Labor Standards Act with respect to minimum wage and overtime. Exempt employees include most executives, administrators, professionals, and outside sales representatives. |
|
|
Term
| Nonqualified Deferred Compensation Plans |
|
Definition
| A plan does not qualify for tax exemption if an employer who pays high levels fo deferred compensation to executives does not make proportionate contributions to lower-level employees |
|
|
Term
| Nonqualified Stock Options |
|
Definition
| Form of compensation that gives an executive the right to purchase stock at a stipulated price, the excess over fair market value is taxed as ordinary income. |
|
|
Term
| Objective Performance-Based Pay Systems |
|
Definition
| Pay apprach that focuses on objective performance standards (counting output) derived from organizational objectives and a thorough analysis of the job (incentive and gain-sharing plans) |
|
|
Term
|
Definition
| Diseases that arise out of the course of employment, not including "ordinary diseases of life" for which workers' compensation claims can be filed |
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|
Term
|
Definition
Referes to the movement of jobs to locations beyond a country's borders
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|
|
Term
|
Definition
| Employees who must respond to work-related assignments/probelms 24 hours a day. firefighters, SPCA Human Officers, and other emergency personnel are traditional examples. Increasingly, this group includes technical workers such as software service personnel. |
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|
Term
|
Definition
| The composite of shared values, symbols, and cognitive schemes that ties people together in the organization |
|
|
Term
|
Definition
| An extreme value that may distort some measures of central tendency |
|
|
Term
|
Definition
| The practice of hiring outside vendors to perform functions tht do not directly contribute to business ogjectives and in which the organization does not have a comparative advantage |
|
|
Term
|
Definition
| Eliminates the distinction between sick days and other paid days off,thus eliminating the incentive to "fake" illness. |
|
|
Term
| Paired Comparison Ranking |
|
Definition
| A ranking job evaluation method that involves comparing all possible pairs of jobs under study |
|
|
Term
|
Definition
Usually defined as including:
1. Access Discrimination
2. Valuation Discrimination |
|
|
Term
|
Definition
| A compensation praactice whereby employees are paid for the number of different jobs they can adequately perform or the amount of knowledge they possess |
|
|
Term
| Pay-For-Performance Palns |
|
Definition
| Pay that varies with some measure of individual or organizational performace, such as merit pay, lump-sum bonus plans, skill-baed pay, incentive plans, varible pay plans, risk sharing, and success sharing. |
|
|
Term
|
Definition
| The various types of payments, or pay mix, that make up total compensation |
|
|
Term
|
Definition
| Oneof the classes, levels, or groups into which jobs of some or similar values are grouped for compensation purposes. all jobs in a pay grade have the same pay range - maximum, minimum, and midpoint |
|
|
Term
|
Definition
| The machanisms through which levels are translated into pay increases and, therefore, dictate the size and time of the pay reward for good performance. |
|
|
Term
|
Definition
| An average of the array of rates paid by an employer |
|
|
Term
|
Definition
Decisions concerning a firm;s level of pay vis-a"-vis product and labor market competitors. There are three classes of pay-level policies:
To Lead
To Match
To Follow Competition |
|
|
Term
|
Definition
The percentage increase in the average wage rate paid. Calculated as :
100X[(Average pay-yearend - average pay at year beginning)/Average pay at year beginning] |
|
|
Term
|
Definition
| Relative emphasis among compensation components such as base pay, merit, incentives, and benefits. |
|
|
Term
|
Definition
| Representation of the organization's pay-level policy relative to what competitors pay for similar jobs |
|
|
Term
|
Definition
| A function of the discrepancy between employees' perceptions of how much pay they should recieve and how much pay they do recieve. If these perceptions are equal, an employee is said to experience pay satisfaction |
|
|
Term
|
Definition
| The systematic process of collecting information and making judgements about the compensation paid by other employers. Pay (wage) survey data is useful in designing pa levels and structures |
|
|
Term
|
Definition
| the array of pay rates for different jobs within a single organization; they focus attention on differential compensation paid for work of unequal worth. |
|
|
Term
|
Definition
| mechanisms or technologies of compensation management, such as job analysis, job descriptions, market surveys, job evaluation, and the like, that tie the four basic pay policies to the pay objective. |
|
|
Term
| Pay-With-Competition Policy |
|
Definition
| Policy that tries to ensure that a firm's labor costs are approximately equal to those of its competitors. It seeks to avoid placing an employerat a disadvantage in pricing products or in maintaining a qualified work force. |
|
|
Term
Pension Benefit Guaranty Corporation
PBGC |
|
Definition
| Agency to which employers are required to pay insurance premiums to protect individuals from bankrupt companies ( and pension plans!). In turn, the PBGC gaurantees payment of vested benefits to employees formerly covered by terminated pension plans. |
|
|
Term
|
Definition
A form of deferred compensation. All pension plans usually have four common characteristics:
1. Involves deferred payments to a former employee or surving spouse for past services rendered
2. Specify a normal retirement age, at whcih time benefits begin to accrue to the employee
3. Specify a formula for calculating benefit
4. Provide for integration with social security benefits |
|
|
Term
| Performance-Dimension Training |
|
Definition
| Training that gives performance appraisers an understanding of the dimension on which to evaluate employee performance |
|
|
Term
Performance Evaluation
(Performance Appraisal) |
|
Definition
| A process to determine correspondence between worker behavior/task outcomes and employer expectations (Performance Standards) |
|
|
Term
|
Definition
| Quantitative measure of job performance |
|
|
Term
| Performance Share/Unit Plans |
|
Definition
| Cash or stock awards earned through achieving specific goals |
|
|
Term
|
Definition
| An explicit statement of what work output is expected from employees in exchange for compensation |
|
|
Term
| Performance-Standard Training |
|
Definition
| Training that gives performance appraisers a frame of reference for making ratee appraisals |
|
|
Term
|
Definition
| The extras bestowed on top of management, such as priovate dining rooms, company cars, and first-class airfare |
|
|
Term
|
Definition
| A person-based structure shifts the focus to the employee: the skills, knowledge, or competencies the employee poossesses, whether or not they are used in the employee's particular job. |
|
|
Term
Personal Care Account
PCA |
|
Definition
| A toolused by employers to fain some control over health care costs while still providing health security to workers. The employer establishes a high deductable paid by employees but cushions the blow by setting up a PCA to cover part of the deductable cost. |
|
|
Term
|
Definition
| Stock Plan in whcih an increase in stock price at a fixed future sate determines the cash or stock award. It is called a phantom plan because the organization in question is not publicly traded. Stock price, therefore, is an illusion. The "Phantom Price" is derived from standard financial accounting procedures. |
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Term
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Definition
| The Pecentage increase in average pay that is planned to occur after considering such factors as anticipated rates of change in market data, changes in cost of living, the employer's ability to pay, and the efforts of turnover and promotions. this index may be used in top-down budgeting to control compensation costs. |
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Term
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Definition
A job evaluation method that employs:
1. compensable factors
2. factor degrees numerically scaled
3. weights reflecting the relative improtance of each factor.
Once scaled degrees and weights are established for each facor, each job ios mesured against each compensable factor and a total score is calculated for each job. The total points assigned to a job determine the job's relative value and hence its location in the pay structure |
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Term
Point-Of-Service Plan
POS |
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Definition
| A point-of-service plan is a hybrid plan combining health maintenance organization (HMO) abnd preferred provider organization (PPO) benefits. |
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Term
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Definition
| Compensable factor importance weights are inferred using statistical methods such as regression analysis |
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Term
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Definition
| A pay line that reflects the organization's polisy with respect to the external labor market |
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Term
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Definition
| Transferability of pension benefits for employees moving to a new organization. ERISA does not require mandatory portabiloity of private pensions. On a voluntary basis, the employer may agree to let an employee's pension benefit transfer to an individual retirement account (IRA) or, in a reviprocating arrangement, to the new employer. |
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Term
Position Analysis Questionnaire
PAQ |
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Definition
A structured job analysis technique that classifies job information into seven basic factors:
Information input, mental processes, work output, relationships with other persons, job context, other job characteristics, and general deminsions. The PAQ analyzes jobs in terms of worker-oriented data. |
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Term
Preferred Provider Organization
PPO |
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Definition
| Health care delivery system in which there is a direct contractural relationshp between and among employers. health care provider, and third-party payers. An employer is able to select providers (selected docotors) who agree to provide prioce discounts and submit to strict utilization controls |
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Term
| Pregnancy discrimination Act of 1978 |
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Definition
| An act amendment to Title VII of the Civil Rights Act. It requires employers to extend to pregnant employees or spouces the same disabilit and medical benefits provided to other employees or spouses of employees. |
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Term
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Definition
| Legislation that provides for a government-defined prevailing wage as the minimum wage that must be paid for work done on covered government projects or purchases. In practice, these prevailing rates have been union rates paid in various geographic areas. |
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Term
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Definition
| Period during which new employees are excluded from benefits coverage, usually until some term of employmnet (like 3 months) is completed. |
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Term
| Procedural Justice/Fairness |
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Definition
| Concept concerned with the process used tomake and implem,ent decisions about pay. It suggests that the way pay decisions are made and implemented may be as important to employees as the results of the decisions |
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Term
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Definition
| an employee who has specialized training of a scientic or intellectual nature and whose major duties do not entail the supervision of people |
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Term
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Definition
Plan focused on profitability as the incentive
1. Cash or current distribution plans provide full payment to participants soom after profits have been determine (quarterly or annually)
1. Deferred plans where portions of profits are credited to employee accounts with cash payments made at retirement, disability, severance, or dealth
3. combination that incorporates aspects of both current and deferred options |
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Term
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Definition
| the ability to buy goods and services in a certain currency, determined by exchange rates and availability of goods. Companies must determine purchasing power when allocating alloqances to expatriates |
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Term
| Qualified Deferred Compensation Plan |
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Definition
| A deferred compensation plan that qualifies for tax exemption. It must provide contributions or benefits for employees other than executives that are proportionate to contributions provided to executives |
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Term
Quantitative Job Analysis
QJA |
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Definition
| Job analysis method that relies on scaled questionnaires and inventories that produce job-related data that are documentable, can be statistically analyzed, and may be more objective than other analyses |
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Term
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Definition
| Stores that label each item's price or ads that list a job's opening starting wage are examples of quoted-price markets |
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Term
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Definition
| The maximum values to be paid for a job grade, rpresenting the top value the organization places on the output of the work. |
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Term
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Definition
| the slary midway between the minimum and maximum rates of a salary range. The midpoint rate for each range is ually set to correspond to the pay-policy line and represents the rate paid for satisfactory performance on the job. |
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Term
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Definition
| The minimum values to be paid for a job grade, representing the minimum value the organization places on the work. Often, rates below the minimum are used for trainees. |
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Term
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Definition
| The degree of overlap between adjoining grade ranges and the ranage spread. a high degree of overlap and narrow midpoint differentials indicate small differences in the value of jobs in the adjoining grades and permit promotions without much change in the rates paid. By contrast, a small degree of overlap and wide midpoint differentials allow the manager to reinforse a promotion with a large salary increase |
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Term
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Definition
| Created by Jack Welch, it requires managers to forse-rank employees according to some preset distribution |
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Term
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Definition
| A type of performance appraisal format that requires that the rater compare employees against each other to determine the relative ordering of the group on some performance measure. |
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Term
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Definition
| Training that enables performance appraisers to identify and suppress psychometric errors such as leniency, severity, central tendency, and halo errors when evaluating employee performance |
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Term
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Definition
| Errors in judgement that ocur in a systematic manner when an individual observes and evaluates a person, group, or phenomenon. The most frequently described rating errors include halo, leniency, severity, and central tendency errors. |
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Term
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Definition
| A type of performance appraisal format that requires that raters evaluate employees on absolute measurement scales tht indicate varying levels of performance |
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Term
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Definition
| the opposite of first-impression error. Performance (either good or bad) at the end of the review period play too large a role in determining an employee's rating for the entire period |
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Term
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Definition
| Pay rates that are above the maximum rate for a job or pay range for a grade. |
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Term
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Definition
| Making changes in the way work is designed to include external customer focus.Usually includes organizational delayering and job restructuring |
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Term
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Definition
| A statistical technique for relating present-pay differentials to some criterion, that is, pay rates in the external market, rates for jobs held predominantly by men, or factor weights that duplicate present rates for all jobs in the organization |
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Term
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Definition
| One output form a regression analysis is the R2. The R2 is much like a correlation in that it tless us what percentage of the variation is accounted for by the variables we are using to predict or explain |
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Term
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Definition
| The nonquantifiable returns emplpoyees get from employment, such as social satisfaction, friendship, feeling of belonging, or accomplishment |
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Term
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Definition
| The relative contribution of jobs to organizational goals, to their extenal market rates, or to some other agreed-upon rates. |
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Term
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Definition
| Those employers with which an organization competes for skills and products/services. three factors commonly used to determine the relevant markets are the occupation or skills required, the geography (williness to relocate and/or commute), and employers that compete in the product market. |
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Term
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Definition
| The consistency of the results obtained, this is, the extent to which any mesuring procedure yeilds the same results on repeated trials. Reliable job information does not mean that it is accurate (valid), comprehensive, or free from bias. |
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Term
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Definition
| A provision in an employment contract that specigfies that wages, and sometimes such nonwage items as pension/benefits, will be renegotiated under certain conditions (changes in cost of living, organization, profitability |
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Term
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Definition
| A provision in an enployment contraact that specifies that wages, and sometimes such nonwage items as pension/benefits, will be renegotiated under certain conditions (changes in cost of living, organization, profitabiity, and so on.) |
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Term
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Definition
| Plan that grants stock at a reduced price with the condition thatit not be sold before a specified date. |
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Term
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Definition
| A plan where there is penalty for poor performance rather than reward for good. |
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Term
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Definition
| The composit of all organizational mechanisms and strategies used to formally acknowledge employee behaviors and performance. It includes all forms of compensation, promotions, and assignments; nonmonetary awards and recognitions; training opportunities; job design and working conditions; the supervisor;social networks; performance standards and reward criteria; performance ecvaluation; and the like |
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Term
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Definition
| For employees whomeet certain requirements, all earnings are tax free when withdrawn. However, no income tax deductions are allowed for contributions |
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Term
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Definition
| Individual incentive plan that provides for variable incentives as a functionof a standard expressed as time period per unit of production. It is similar to the Halsey Plan, but in this plan a worker's bonus increases as teh time required to complete the eask decreases |
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Term
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Definition
| A group cost savings plan in which cost reductions due to employee efforts are shared with the employees. It involves a somehwat more complex formula than a Scanlon plan for determing employee incentive bonuses |
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Term
| Salary Continuation Plans |
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Definition
| Benefits options that provide some form of protection for disability. some are legally required, such as workers' compensation provisions for work-related disability and social security disability income provisions for those qho qualify. |
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Term
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Definition
| Pay given to employees who are exempt form regulations of the Fair Labor Standards Act and hence do not recieve overtime pay. Exempt pay is calculated at an annual or monthly rate rather than hourly |
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Term
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Definition
| Any form of compensation paid to sales representatives. Sales compensation formulas usually attemp to establish direct incentives for sales outcomes |
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Term
Sales Value of Productions
SVOP |
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Definition
| An incentive metric that calculates the dollar value of good produced and in inventory |
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Term
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Definition
| Legislation passed in 2002 that prohibits executives from retaining bonuses or profits from selling company stock if the lislead the public about the financial health of the company |
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Term
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Definition
| Determing the intervals on a measurement instrument |
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Term
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Definition
| A group cost-savings plan designed to lower labor costs without lowering the leel of a firm's activity. Incentives are derived as the ratio between labor costs and sales value of production (SVOP) |
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Term
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Definition
| Legislation passed in 1934 that created the Securities and Exchange Commission (SEC) |
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Term
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Definition
| A labor supply that comes from multiple markets. Some employeesmay come from different global locations, may recieve different pay forms, and may have varied employment relationships |
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Term
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Definition
| These plans specify that payouts only occur after the company reaches a certain profit target. Then variable payouts for individual, team, and company perforamnce are triggered |
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Term
| Self-Insurance Compensation |
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Definition
| System in which an organization funds its own insurance claims, for wither health or life insurance or workers' compensation. |
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Term
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Definition
| Pay ioncreases tied to a progrssion pattern based on seniority. to the extent performance improves with time on the job, this method has the rudiments of paying for performance. |
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Term
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Definition
| The opposite of leniency error. Rating someone consistently lower than is deserved. |
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Term
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Definition
| An external competitiveness policy tghat offers employees substantial choice among their pay forms |
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Term
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Definition
| The propensity of employees to allow the marginal revenue product of their labor to be less than its margional cost; to be lax. |
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Term
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Definition
| Inducements offered in advance to infouence furture short-range (annaual) results. usually very specific performance standards are established. |
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Term
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Definition
| Paid time when an employee is not working due to illness or injury. |
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Term
Simplified Employee Pension
SEP |
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Definition
| A retirement income arrangement inteded to markedly reduce the paperwork for regular pension plans. |
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Term
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Definition
| A compensation polisy under which all employees in a given job are paid at the same rate instead of being placed in a pay grade. Generally applies to situations in whch there is little room for variation in job performance, such as an assembly line. |
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Term
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Definition
| A systematic process to identify and collect information about the skills required to perform work in an organization. |
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Term
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Definition
| Structure that links pay to the depth or breaadth of the skils, abilities, and knowledge a person acuires that are relevant to the work. |
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Term
|
Definition
| Compensation approach that links pay to the depth and/or breadth of the skills, abilities, and knowledge a person acquires/demonstrates tht are relevant to the work. Typically applies to operators, techicians, and office workers where the work is relatively specifi and defined. The criterion chosen can influence employee behaviors by secribing what is required to get higher pay. |
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Term
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Definition
| Basic units of knowledge employees must master to perform the work, satisfy customers, and achieve business objectives. |
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Term
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Definition
| Composite of experience, training, and ability as mesured by the performance requirements of a particular job. |
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Term
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Definition
| Same of Turnover Effect - the downward pressure on aberage wage that results from the replacement of high-wage earning employee with a worker earning lower wages |
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Term
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Definition
| The effect that pay can have on the composition fo the workforce. different types of pay strategies may cause different types of people to apply to and stay with an organization |
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Term
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Definition
| Employee groups for whom compensation practices diverge from typical company procedures (supervisors, middle and upper management, nonsupervisory professionals, sales, and personnel in foreign subsidaiaries) |
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Term
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Definition
| The fact that improvements obtained in unionized firms "spill over" to nonunion firms seeking ways to lessen workers' incentives for organizing a union. |
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Term
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Definition
| Ratig error in which a rater continues to downgrade an employee for performance errors in prior rating periods |
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Term
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Definition
| One-time award for execptional performance; also called a spot bonus. |
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Term
|
Definition
| Individual incentive plan in which rate determination is based on time period per unit of production and wages vary directly as a constant function of product level. In this context, the incentive rate in standard hour plans is set based on completion of a task insome expected time period. |
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Term
|
Definition
Appraisal system characterized by:
1. One or more performance standards are developed and defined for the appraiser and 2. each performance standard having a measurement scale indicating varying levels of performance on the dimension. appraisers rate the appraisee by checking the point on the scale tht best represents the appraisee's performance level. Rating scales vary in the extent to which anchors along the scale are defined. |
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Term
Stock Appreciation Rights
SARs |
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Definition
| Rights that pemit an executive to recieve all the potential capital gain of a stock incentive option (ISO) without having to purchase the stock; thus, they reduce an executive's cash commitment. Payment is provided on demand for the difference between the stock option price and the current market price. |
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Term
Stock Purchase Plan
(nonqualified) |
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Definition
A plan that is, in effect, a management stock purchase plan, It allows senior managment or other key personel to buy stock in the business. this plan has certain restrictions:
1. The stockholder must be employed for a certain period of time
2. the business has the right to buy back the stock, and
3. Stockholders cannot sell the stock for a defined period. |
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Term
Stock Purchase Plan
(qualified) |
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Definition
| a program under which employees buy chares in the company's stock, with the company contributing a specific amount for each unit of employee contribution. also, stock may be offered at a fixed price (usually below market) and paid for in full by the employees. |
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Term
| Straight Piecework System |
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Definition
| Indivdual incentive plan in whcih rate determination is based on units of production per time period; wages vary directly as a constant function pof production level. |
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Term
| Straight Ranking Procedure |
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Definition
| A type of performance appraisal format in which the rater compares or ranks wach employee relative to each other employee. |
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Term
|
Definition
| Tje fundamental direction of the organization. It guides the deployment of all resources, including comensation. |
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Term
|
Definition
| Focuses on thoses compensation choices that help the organization gain and sustain competitive advantage |
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Term
|
Definition
| Price an individual is permitted to buy a stock at by the company granting the stock. |
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Term
| Subjective performance-Based Pay Systems |
|
Definition
| Pay approach that focuses on subjective performance standards ( achieving agreed-upon objectives) derived from organizational objectives and a thorough analysis of the job. |
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Term
|
Definition
| An incentive plan (profit sharing or gain sharing) in which an employee's base wage matches themarket wage and variable pay adds on during successful years. Because base pay is not reduced in bad years, employees bear little risk |
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Term
Supplemental Unemployment Benefits Plan
SUB Plan |
|
Definition
| Employer-funded plan that supplements state unemployment insurance payments to workers during temporary periods of layoffs. Largely concentrated in the automoblie, stell, and related industires |
|
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Term
|
Definition
| As applied to work flow analysis, it looks at how an organization does its work: activities pursued to accomplish specific objectives for specific customers. |
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Term
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Definition
The difference between labor's use and exchange values. According to Marx, under capitalism, wages are based on labor's exchange value - which is lower than its use
value - and thus provide only a subsistence wage. |
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Term
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Definition
| The systematic process of collecting and making judgements about the compensation paid by other employers |
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Term
|
Definition
| Complex work ( as compared to transactional, or routine, work) |
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Term
|
Definition
| A tally cheet gives a comprehensive view onthe true value of executive compensation. Add up the value of base salary, annual incentives, long-term incentives, benefits, and perks. Part of this process includes estimating the current value of stock options (using something called the Black-Scholes Model), stock appreciation rights, vested and unvested pensions, and payouts upon termination. |
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Term
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Definition
| iN SOME EUROPEAN COUNTRIES, THE WAGE RATES NEGOTIATED BY EMPLOYER ASSOCIATIONS AND TRADE UNION FEDERATIONS FOR ALL WAGE EARNERS FOR ALL COMPANIES IN AN INDUSTRY GROUP |
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Term
|
Definition
| Information on the elemental units of work (tasks) with emphasis on the purpoase of each task, collected for job analysis. This discribes the job in terms of actual tasks performed and their output. |
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Term
|
Definition
| A method whereby an expatriate pay neither more nor less than the assumed home-country tax on base remuneration. |
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Term
|
Definition
| Indivdual incentive plan that provides for variable incentives as a function units of production per time period. It provides two piecework rates that are established for production above and below standard, and these rates are higher and lower than regular wage incentive level. |
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Term
|
Definition
| Group incentive restricted to team members with payout usually based on improvements in productivity, customer satifaction, financial performance, or quality of goods and services directly atributable to the team. |
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Term
Third-Country Nationals
TCNs |
|
Definition
| Employees of a US Foreign subsidiary who maintain citizenship in a country other than the United States or the host country. Compensation is tied to comparative wages in the local country, the United States, or the country of citizenship. |
|
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Term
|
Definition
A rating method that assesses employee performance from five points of view:
Supervisor
Peer
Self
Customer
Subordinate |
|
|
Term
| Title VII of the Civil Rights Act of 1964 |
|
Definition
| A major peice of legislation prohibiting pay discrimination. Itis much broader in intent than the Equal Pay Act, forbidding discrimination on the bases of race, color, religion, sex, pregnancy, or national origin. |
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Term
| Top-Down Approach to Pay Budgeting |
|
Definition
| also known as UNIT-LEVEL BUDGETING, an approach in which s total pay budget for the organization ( or unit) is determined and allocated "down" to individual employees during the plan year. There are many kinds to unit-level budgeting. They differ in the type of financial index is used as the control measure. Controlling to a planned level rise and controlling to a planned comp-ratio are two typical approaches |
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Term
|
Definition
| Situation in which employees in a skill-based compensation plan attain the top pay rate in a job category by accumalating and/or becoming certified for the top-paid skill blcok(s) |
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Term
|
Definition
| Base wage plus cash bonus; does not include benefits or stock options |
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Term
|
Definition
| The complete pay package for employees, including all forms of money, bonuses, benefits, services and stock. |
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Term
|
Definition
| All returns to an employee, including financial compensation, benefits, opportunties for social interaction, security, status and recognition, work variety, appropriate workload, importance of work, authority/control/autonomy, advancement opportunities, feedback, hazard-free working conditions, and opportunities for personal and professional development. an effective cpompensation system will utilize many of these returns. |
|
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Term
|
Definition
| the notion that larger differences in pay are more motivating than smaller differences. Like prize awards in a golf tournament, payu increases should get successively greater as one moves upo the job hierarchy. Differences between the top job and the second-highest job should be the largest. |
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|
Term
Traditional-Time Off Plan
TTO |
|
Definition
| Paid Vacations, holidays (or pay if wored), sick leave, and personal leave, tracked seperately |
|
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Term
|
Definition
|
|
Term
|
Definition
| The downward pressure on average wage that results from the replacement of high-wage-earnig employees with workers earning a lower wage. |
|
|
Term
|
Definition
| Wage structures that differentiate pay for the same jobs based on hiring date. A contract is negotiated that specifies that employees hired after a stated day will recieve lower wages than their higher-seniority peers working on the same or similar jobs. |
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Term
|
Definition
| A stock option with a market price lower than the origional offer price. Fairly common dyuring a market downturn, these options are of no value to someone who has recieved then as an incentive. |
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|
Term
Unemployment Insurance
UI |
|
Definition
| State-administered program that provides financial security for workers during periods of joblessness. |
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|
Term
|
Definition
|
|
Term
|
Definition
| The value or price ascribed to the use or consuption of labor in the production of goods or services |
|
|
Term
|
Definition
| American Citizens working for a US subsidiary in a foreign country. Main compensation concerns are to "keep the expatriates whole" relative to their US based counterparts and to provide expatriates with an incentive wage for accepting the foreign assignment. |
|
|
Term
|
Definition
| The analysis of utility, the dollar value created by increasing revenues and/or decreasing costs by changing one or more human resources practices. It has most typically been used to analyze the payoff to making more valid emplpoyee hiring/selection decisions |
|
|
Term
|
Definition
| The amount of positive or negative value placed on specific outcomes by an individual |
|
|
Term
|
Definition
| The accuracy of the results obtained; that is, the extent to which any measuring device measures what ir purports to measure |
|
|
Term
|
Definition
| The worth of the work; its relative contribution to organizxation objectives |
|
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Term
|
Definition
| Discrimination that focuses on the pay women and minorities recieve for the work they perform. discrimination occurs when members of these groups are paid less than white males for performing substantially equal work. This definition of pay discrimination is based on the standard of "eual pay for equal work" |
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Term
|
Definition
| Pay tied to productivity or some measure that can vary with the firm's productivity |
|
|
Term
|
Definition
| A benefit plan provision that gaurantees that participants will, after meeting certain requirments, retain a right to the benefits they have accrued, or some portion fo them, even if employment under their plan terminates before retirement. |
|
|
Term
|
Definition
| Pay given to employees who are covered by overtime and reporting provisions of the FLSA. Nonexempts usually have their pay calculated at an hourly rate rather than a monthly or annual rate. |
|
|
Term
| Wage Adjustment Provisions |
|
Definition
Clauses in a multilayer union contract that specify the typoes of wage adjustments that have to be implemented during the life of the contract. These adjustements might be specified in the major ways:
1. deferred wage increases- negotiated at the time of contract negotiation, with the time and amount specified in the contract
2. cost-of-living adjustements (COLAs) or escalator clauses
3. Reopener clauses |
|
|
Term
|
Definition
| Government regulations that aim at maintaining low inflation and low levels of unemployment. They frequently focus on "cost-push" inflation, limiting the size of pay raises and the rate of increases in proces charged for goods and services. Used for limited time periods only |
|
|
Term
| Walsh-Healey Public Contracts Act of 1936 |
|
Definition
| A federal law requiring certain employers holding federal contracts for the manufacturr or provision of materials, supplies, and equipkejt to pay inductry prevailing-wage rates |
|
|
Term
| Worker Economis Opportunity Act |
|
Definition
| Law passed in 2000 that provides that income form most stock plans need not be included in calculating overtime pay. |
|
|
Term
|
Definition
| Refers to the process by which goods and services are delivered to the customer |
|
|
Term
|
Definition
| Ranges of pay used as controls or guidlines within pay bands that can keep the system more structurally intact. manimums, midpoints, and minimums provide guides to appropriate pay for certain levels of work. Without these, employees may flaot to the maximum pay, which for may jobs in the band is higher than market value |
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