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| The human resource practice of rewarding employees for their contributions. |
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| A compensation approach that determines how much to pay employees by assessing how much they could make working for other organizations. |
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| Employee perceptions of fairness based on how much they are paid relative to people working in other organizations. |
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| Employee perceptions of fairness based on how much they are paid relative to others working in the same organization. |
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| A reward system that pays some employees substantially more than others in order to emphasize difference between high and low performance. |
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| A reward system that minimizes differences among workers and offers similar compensation to all employees. |
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| A sense of loyalty to an organization that is based not only on financial incentives but also on social ties. |
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| A sense of obligation to an organization that is created primarily by financial incentives. |
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| Uniform transactional compensation |
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Definition
| A reward package that uses money to build commitment and minimizes differences in the pay levels of employees. |
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| Uniform relational compensation |
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Definition
| A reward package that develops long-term loyalty and minimizes differences in the pay levels of employees. |
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| Variable transactional compensation |
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Definition
| A reward package that uses money to build commitment and emphasizes differences in the pay of high and low performers. |
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| A situation created when new employees receive higher pay than employees who have been with the organization for a long time even though they perform the same job |
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| Variable relational compensation |
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| A reward package that develops long-term loyalty and emphasizes differences in the pay of high and low performers |
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| The sum of forces that cause an individual to engage in certain behaviors rather than alternative actions |
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| A psychological theory suggesting that people are motivated by antecedents (environmental cues) and consequents (rewards and punishments). |
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| A reinforcement principle requiring that desirable consequents only be given after the occurence of a desirable behavior. |
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| Compensation practices that use differences in employee performance to determine differences in pay |
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| A psychological theory suggesting that an individual's conscious choices explain motivation |
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| A psychological theory suggesting that motivation is driven by beliefs about fairness |
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| A justice perspective suggesting that people determine the fairness of their pay by comparing what they give to and receive from the organization with what others give and receive. |
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| Perceptions of fairness based on the outcomes (such as pay) received from an organization |
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| Perceptions of fairness based on the processes used to allocate outcomes such as pay. |
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| A psychological theory suggesting that people are motivated by a combination of three beliefs: valence, instrumentality, and expectancy. |
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| The value that an individual places on a reward being offered. |
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| The belief in the likelihood that the reward will actually be given contingent on high performance. |
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| An individual's belief that he or she can do what is necessary to achieve high performance. |
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| An economic theory that uses differences in the interests of principles (owners) and agents (employees) to describe reactions to compensation. |
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| The compensation decision concerning how much to pay employees relative to what they could earn doing the same job elsewhere. |
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| Gathering information to learn how much employees are being paid by other organizations. |
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| A compensation decision to pay employees an amount similar to what they can make working for other organizations |
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| A compensation decision to pay employees an amount below what they might earn working for another organization |
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| A compensation decision to pay employees an amount above what they might earn working for another organization |
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| A determination of how much to pay an employee that is based on assessments about the duties performed |
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| A determination of how much to pay an employee that is based on skills, even if those skills are not currently used to perform duties. |
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Definition
| A process of assigning numerical values to each job in order to compare the value of contributions within and across organizations |
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| The practice of reducing the number of pay categories so that each pay grade contains a large set of different jobs |
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| Fair Labor Standards Act (FLSA) |
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Definition
| Federal legislation that governs compensation practices and helps ensure fair treatment of employees. |
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Definition
| Workers, such as executives, administrators, professionals, and sales representatives, who are not covered by the FLSA |
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| All employees who are not explicitly explicitly exempt from the FLSA, sometimes referred to as hourly workers |
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| A compensation rule requiring organizations to pay employees at least a certain amount for each hour they work |
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| A compensation rule requiring organizations to pay a higher hourly rate for each hour that a nonexempt employee works beyond 40 hours in a one-week period. |
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