9.1 Introduction to Compensating Employees Flashcards
Define Direct compensation
the basic wage or salary, and performance-based pay
Define Indirect compensation (also known as “non-monetary rewards”)
Includes employee services, benefits, trainings and/or any other indirect form of compensation or benefit.
What is Total compensation?
the entire value of all direct and indirect payments to the employee
What is Pay equity?
Refers to what people feel they deserve to be paid in relation to what others deserve to be paid.
What does Equity theory state?
The motivation of an individual is positively correlated with his or her perception of justice and fair treatment as practiced by the management of the company or organization.
What is the compensation function of human resources?
the activity within which organizations evaluate the contributions of employees for the purpose of distributing direct and indirect monetary and non-monetary (not involving cash) rewards.
Compensation that includes the basic wage and performance-based pay is what type of compensation?
Simplified
Indirect
Direct
Direct
What does an organization need to do to make their compensation function have a strategic approach?
Create a program to get and keep individuals who will benefit the organization
Create a program to award compensation based on the employees’ personalities
Give the best compensation to employees, when compared to its competitors
An organization must create a program that has the goal of making more money
Create a program to get and keep individuals who will benefit the organization
What is the compensation function of HR?
To give the employees rewards based on how well their supervisor likes them
To make sure that employees are paid above average
To make sure that employees are satisfied with their compensation
To evaluate the contributions of employees and give rewards
To evaluate the contributions of employees and give rewards
True or False: Pay equity is what people deserve to be paid in relation to what others deserve to be paid.
False
An important element of any compensation structure is pay equity. Pay equity refers to what people feel they deserve to be paid in relation to what others deserve to be paid.
Generally, if an employee feels that their compensation is unfair or inequitable (they are doing more work than someone else for the same pay), what are they more likely to do?
Engage in behaviors that will help them stand out more
Engage in behaviors that will limit their contribution to the organization
Actively engage in finding out the organization’s strategic goals and work towards them
Work harder so they will get paid more in the future
Engage in behaviors that will limit their contribution to the organization
