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HRM > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

All forms of pay or rewards to going to employees and arising from their employment

A

Employee Compensation

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2
Q

Pay in the form of wages (daily compensation), salaries (monthly or annual compensation), incentives, commissions, and bonuses

A

Direct Financial Payments

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3
Q

Pay in the form of financial benefits such as insurance and vacations

A

Indirect Financial Payments

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4
Q

create a reward strategy that is in line with the company’s overall objectives, so that the compensation plan is effective in motivating employees to contribute to the company’s success.

A

Aligned Reward Strategy

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5
Q
  • Encompass traditional pay, incentives, and benefits
  • But also “rewards” such as more challenging jobs (job design), career development, and recognition
A

Total Rewards

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6
Q

Postulates that people are motivated to maintain a balance between what they perceive as their contributions and their rewards

A

Equity Theory of Motivation

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7
Q

Refers to how a job’s pay rate in one company compares to the job’s pay rate in other companies

A

External Equity

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8
Q

Refers to how fair the job’s pay rate is when compared to other jobs within the same company

A

Internal Equity

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9
Q

Refers to the fairness of an individual’s pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each person’s performance.

A

Individual Equity

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10
Q

Refers to the “perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay”

A

Procedural Equity

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11
Q
  • If there is a problem in external equity, conduct a ______?
A

Salary Surveys

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12
Q

If there is a problem in internal equity, conduct a ____?

A

Job Analysis and Job Evaluation

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13
Q

If there is a problem in individual equity, conduct _____?

A

Performance Appraisal and Incentive Pay

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14
Q

They use it to help ensure that employees view the pay process as procedurally fair

A

Communication, grievance mechanisms, and employees’ participation

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15
Q

Act known as the “Wage Rationalization Act”

A

Republic Act 6727 Sec. 1

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16
Q

process by which unions and employers negotiate an employment agreement, including compensation.

A

Collective Bargaining

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17
Q
  • Small firms
  • Involves conducting formal or informal salary surveys to determine what other companies in the same labor market are paying for similar jobs.
A

Market - Based Approaches

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18
Q
  • Involves assigning values to each of the company’s jobs
  • helps produce a pay plan in which each job’s pay is equitable based on what other employers are paying for these jobs and based on each job’s value to the employer
A

Job Evaluation Methods

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19
Q

Where you pay rates are equitable both internally (based on each job’s relative value) and externally (when compared with what other employers are paying)

A

Market - Competitive Pay Plan

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20
Q

Factors that establish how the jobs compare to one another, and that determine the pay for each job

A

Compensable Factors

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21
Q

Preparing Job Evaluation Steps

A
  1. Identifying the need
  2. Getting Cooperation
  3. Choose a Job Evaluation Committee
  4. Perform the Evaluation
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22
Q
  • Usually consists of about five members, most of whom are employees.
  • This committee is typically made up of individuals from various departments or functional areas within the organization who have knowledge and expertise in the jobs being evaluated.
A

Choose a Job Evaluation Committee

23
Q

Simplest Job Evaluation method

A

Ranking Method

24
Q

Job Ranking Method Steps

A
  1. Obtain Job Information
  2. Select and Group Jobs
  3. Select Compensable Factors
  4. Rank Jobs
  5. Combine Ratings
  6. Compare current pay with what others are paying based on salary survey
  7. Assign a new pay scale
25
Q
  • Special ranking method
  • Requires ranking each of a job’s “factors”
  • Then adding up the points representing the number of “degrees” of each factor each job has
A

Factor Comparison Method

26
Q
  • Also known as Job Grading
  • Method where jobs are categorized into groups based on their value for pay purposes
  • Simple and widely used job evaluation method in which raters categorize jobs into groups
A

Job Classification

27
Q
  • Groupings jobs based on a set of rules for each group or class
  • Such as amount of independent judgment, skills, physical effort, and so forth, required
  • Usually contain similar jobs
A

Classes

28
Q
  • Often contain dissimilar jobs but same job difficulty
  • Such as secretaries, mechanics, and firefighters
  • Grades descriptions are written based on compensable factors listed in classification systems.
A

Grades

29
Q

Most popular job evaluation method

A

Point method

30
Q
  • It is when you calculate the job by adding up the points for each factor
  • Can be used to determine the job’s relative value compared to other jobs within the organization
A

Total Point Value

31
Q
  • A number of groups have developed standardized point plans
  • Many thousands of employers use these systems
A

“Packaged” Point Plans

32
Q

representative of the jobs the employer needs to evaluate

A

Benchmark Jobs

33
Q

What is the 4th step

A

convert Percentages to points for each factor

34
Q

What is the 5th step

A

define each factor’s degree

35
Q

What is the 6th step

A

Determine for each factors its factor degree points

36
Q

the heart of job evaluation involves determining the amount or degree to which job contains the selected compensable factors

A

7th step: review job descriptions and job specifications

37
Q

Steps 1 – 7 provides us with information based on which we can evaluate the jobs

A

8th step: evaluate the jobs

38
Q

A pay system in which the employer’s actual pay rates are competitive with those in the relevant labor market

A

Market - Competitive Pay System

39
Q
  • Shows the relationship between the value of the job and the average wage paid for this job
  • Play a central role in assigning wage rates to jobs
A

Wage Curves

40
Q
  • Study how each job’s points relate to its current pay rate, we start by drawing an internal wage curve
  • Plotting each job’s points and the wage rate the employer is now paying for each job produces a scatterplot
A

9th Step: Draw the current (Internal) Wage Curve

41
Q

composed of jobs of approximately equal difficulty

A

Pay Grade

42
Q

Equals an employee’s pay rate divided by the pay range midpoint for his or her pay grade

A

Compa Ratio

43
Q

Span control, the number of functional divisions over which the executive has direct responsibility, and management level

A

Job Complexity

44
Q

Total profit and rate of return

A

Ability to Pay

45
Q

Aim to encourage the executive to take actions that drive up the value of the company’s stock and include things like stock options

A

Long term incentives

46
Q

Usually, cash or stock bonuses for achieving progress toward strategic goals

A

Short term incentives

47
Q

Include things such as supplemental executive retirement pension plans

A

executive benefits and perks

48
Q

Single payments generally to reward the manager for achieving a specific goal

A

bonuses

49
Q

Includes the person’s fixed salary

A

base pay

50
Q

Where an employee’s pay is based on the skills and knowledge they possess, rather than their job title or position.

A

Competency - Based Pay

51
Q

Consolidating salary grades and ranges into just a few wide levels or “bands,” each of which contains a relatively wide range of jobs and salary levels

A

Broad Banding

52
Q

refers to the requirement to pay men and women equal wages for jobs that are dissimilar but of comparable value (for instance measured in points) to the employer.

A

Comparable Worth

53
Q

Encompass not only compensation and benefits but also personal and professional growth opportunities and a motivating work environment

A

Total Rewards

HRM (6 decks)

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