9. Managing Compensation Flashcards
hourly work
Work paid on an hourly basis
piecework
Work paid according to the number of units produced
consumer price index (CPI)
A measure of the average change in prices over time in a fixed “market basket” of goods and services
escalator clauses
Clauses in collective agreements that provide for quarterly cost-of-living adjustments in wages, basing the adjustments on changes in the consumer price index
These clauses provide for cost-of-living adjustments (COLAs) in wages based on changes in the CPI. The most common adjustments are 1 cent per hour for each 0.3- or 0.4-point change in the CPI
real wages
Wage increases larger than rises in the consumer price index, that is, the real earning power of wages
job evaluation
A systematic process of determining the relative worth of jobs to establish which jobs should be paid more than others within an organization
job ranking system
The simplest and oldest system of job evaluation by which jobs are arrayed on the basis of their relative worth
job classification system
A system of job evaluation in which jobs are classified and grouped according to a series of predetermined wage grades
point system
A quantitative job evaluation procedure that determines the relative value of a job by the total points assigned to it
work valuation
A job evaluation system that seeks to measure a job’s worth through its value to the organization
Hay profile method
A job evaluation technique using three factors—knowledge, mental activity, and accountability—to evaluate executive and managerial positions
wage and salary survey
A survey of the wages paid to employees of other employers in the surveying organization’s relevant labour market
wage curve
A curve in a scattergram representing the relationship between the relative worth of jobs and wage rates
pay grades
Groups of jobs within a particular class that are paid the same rate
red circle rates
Payment rates above the maximum of the pay range
