Term
| What are the three elements of total financial compensation? |
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Definition
1.) Base compensation
2.) Pay incentives
3.) Indirect compensation ( benefits ) |
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Term
| What are the two elements of base pay? |
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Definition
1.) Hourly pay
2.) Annual wage |
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Term
| What are the 6 base pay adjustments? |
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Definition
| COLAS, Merit Pay, Pay for knowledge, skill based pay, incentive pay, and seniority pay. |
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Term
| What are the three goals for compensation when it comes to organizations. |
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Definition
1.) Market competitiveness
2.) Internal consistency
3.) Recognizing individual efforts |
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Term
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Definition
| average amount the organization pays for a PARTICULAR JOB |
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Term
| What is the job and pay structure? |
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Definition
Job: Relative pay for different jobs within the organization
Pay: The pay policy resulting from job structure and pay level decisions. |
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Term
| What are the three issues in developing a pay structure? |
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Definition
1.) Legal requirements
2.) Market forces
3.) Organizations goals |
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Term
| What does the equal employment opportunity say? |
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Definition
| Differences in pay cannot be because of employees age, sex, religion, etc. The goal is to provide equal pay for equal work. |
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Term
| What is comparable worth? |
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Definition
| This policy uses job evaluation to establish the worth of an organization’s jobs in terms of such criterion as their difficulty and their importance to the organization. The employer then compares the evaluation points awarded to each job with the pay for each job. If they are not, the pay of the lower paid job is raised. It puts companies at a economic disadvantage. |
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Term
| What is the fair labor standard act, and what does it do? |
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Definition
- establishes a minimum wage requirement
- Workers who work beyond 40 hours a week are required to be paid overtime. |
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Term
| When it comes to overtime employees, what does the FLSA say about exempt employees |
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Definition
| Under the FLSA, executive, professional, administrative, and highly compensated white collar employees are not covered by overtime laws, and do not have to be paid overtime |
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Term
| According to the FLSA, what are none exempt employees? |
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Definition
| They are employees who are covered by the FLSA requirements for overtime pay. |
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Term
| What are the restrictions on child labor that the FLSA has? |
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Definition
- restrictions apply to children under 18.
- children 16 and 17 may not be employed in hazardous occupations.
- children 14 and 15 may only work outside school hours
- children under 14 may not be employed unless by childs guardien. |
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Term
| What does the Equal Pay Act of 1963 say? |
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Definition
| promotes equal pay for equal work ( not worth |
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Term
| What is equal work defined as? |
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Definition
| Same skill, effort, responsibility, and working conditions. |
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Term
| What are the exceptions to equal work? |
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Definition
| Seniority, merit, production quality and quantity, or any factor other than sex. |
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Term
| What is an executive employee? |
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Definition
- primary duties include managing organization
- has authority to hire or promote and discharge workers. |
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Term
| What is an Administrative employee? |
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Definition
- perform non manual work directly related to management operations.
- Performs specialized or technical work, or perform special assignments with only general supervision |
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Term
| What are professional employees? |
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Definition
- work requires advanced knowledge in a field of science or learning
- primary work requires inventiveness, imagination, or a talent |
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Term
| What are the two market forces that influence pay? |
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Definition
| Product and Labor markets |
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Term
| What is a job evaluation? |
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Definition
| An administrative procedure for measuring the relative internal worth of the organizations jobs. |
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Term
| What are the five different methods for job evaluation? |
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Definition
1.) Ranking
2.) Factor Comparison
3.) Job classification
4.) Point method
5.) Hay guide chart profile method |
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Term
| What is a Hay guide chart profile method for job evaluation? |
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Definition
- method of job evaluation that creates a profile for each position based on its
1) required know how
2) degree of problem solving
3.) Accountability |
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Term
| What four things would a pay structure be compromised of? |
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Definition
1.) Salary, hourly rate, or piecework rate
2.) Pay policy line ( shows the mathematical relationship between job evaluation points and pay rate )
3.) Pay grades ( Sets of jobs having similiar worth or content, grouped together to establish rates of pay)
4.) Pay ranges ( the minimum and maximum amounts for each pay grade ) |
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Term
| What are the 5 steps in constructing a pay structure? |
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Definition
1) deciding on the number of pay structures
2) Determining a market/pay policy line
3) defining pay grades ( horizontal dimensions)
4.) Calculating pay ranges per grade ( vertical dimension)
5.) evaluating results. |
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Term
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Definition
| sets of jobs having similiar worth or content, grouped together to establish rates of pay. |
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Term
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Definition
| Set of possible pay rates defined by a maximum, minimum and midpoint of pay for employees holding a particular job or a job within a particular pay grade. |
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Term
| What is a pay differential? |
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Definition
| Adjustment to a pay rate to reflect differences in working conditions or labor markets. |
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Term
| What is broad banding/ delayering? |
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Definition
It means reducing the number of levels in the organizations job structure.
- It creates broad rather than several pay grades. |
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Term
| What is a skill based pay system? |
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Definition
| Pay structure that sets pay according to the employees' levels of skill or knowledge and what they are capable of doing. |
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Term
| What are the two alternatives to job based pay ? |
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Definition
1.) Broad banding / delayering
2.) Skill based pay system |
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Term
| What are the benefits to delayering? What are the cons? |
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Definition
- gives managers more flexibility in rewarding pay increases.
-Broad bands reduce the opportunities for promoting employees. |
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Term
| What are the pros and cons of skill based pay systems? |
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Definition
- gives employees a broader view of how organization works.
- supports effort to empower employees.
- cons are does not provide a way to ensure that employees can use their new skills. |
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Term
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Definition
- the ratio of average pay to the midpoint of the pay range
- If the average equals the midpoint the compa ratio is 1. |
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Term
| What are some issues dealing with how companies should handle military pay? |
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Definition
- military pay falls short of what they probably would earn during civilian life.
- some companies pay the difference between what they get serving, and what they would earn civilian wise.
- it is costly, but important for the good will of the people. |
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Term
| Based on equity theory, how does executive compensation affect employees? |
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Definition
- some issues arise when the lowest level employee is getting paid 1/500th of what the CEO is making, can the CEO really do 500 times more than what the lowest level employee does?
- If CEO salaries are too high, it will demorilize workers.
- If employees see it as unfair, they will work less |
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