CH9 Flashcards
Compensation
All rewards employees receive for their work (Direct + Indirect).
Total Rewards Strategy or Employee Value Proposition formula
Direct Compensation + Indirect Compensation + Work-life balance + Recognition + Development opportunities.
Equity Theory
People compare effort vs. reward with others — perceived unfairness causes dissatisfaction.
Expectancy Theory
Motivation = Effort → Performance → Reward (if reward is valued).
Internal Factors (Comp)
Compensation strategy, job worth, employee worth, ability to pay.
External Factors (Comp)
Labour market, area wage rates, CPI, collective bargaining.
CPI
Consumer Price Index — Measures inflation (Cost of Living).
Escalator Clause
Automatic wage adjustments based on CPI.
Job Evaluation
Systematic process of determining a job’s worth within the organization.
Job Evaluation Methods
Ranking, Classification, Point System, Hay Profile Method.
Pay Grade
Group of jobs with similar worth paid within a specific range.
Rate Range
Minimum, Midpoint, Maximum pay within a pay grade.
Competency-Based Pay
Pay based on knowledge, skills, competencies — not job title.
Canada Labour Code
Federal legislation regulating minimum employment standards.
Pay Equity
Equal pay for work of equal value.
Pay Equity Act (2021)
Employers must proactively create pay equity plans (Federal Sector).
Wage-Rate Compression
New hires earning close to experienced staff — erodes morale.
Pay Transparency
Employees know how pay decisions are made & wage comparisons across roles.
Wage Curve
Graph showing relationship between job worth vs. wage rate.
