chapter 3 review Flashcards
Total compensation
cash and benefits
Wages
paid by the hour, time and a half after 40 hours NON-EXEMPT
salaries
fixed compensation paid no matter how much they worked EXEMPT
Types of Compensation
wages, salaries, benefits, restricted stock units, stock options
wage efficiency theory
wages influence worker productivity, more pay means better job is done, higher pay outweighs higher costs when technologies and structures depend on skilled employees
Pay level vs. job structure
pay level is the average pay of jobs in an organization (number) and job structure is the relative pay (range)
Internal equity
pay comparisons that focus on what employees within the same organization are paid
external equity
pay comparisons that focus on what employees in different organizations are paid
Product market competition
when businesses compete with each other to sell similar products or services to customers. It’s about who can attract more customers by offering better quality, lower prices, or other advantages.
labor market competition
when employers compete to hire the best workers and workers compete for the best job opportunities. It’s about finding the right people for the job and getting the best jobs available.
What are the components of collecting market wage data?
market pay surveys, benchmarking, and key/non-key jobs
market pay surveys
collecting market wage data
benchmarking
comparing an organizations practices against their competition
key jobs
benchmark jobs
non-key jobs
unique to its organization
what is job evaluation?
Composed of compensable factors and a weighting
scheme, and includes input from many people
the point-factor system
measures your education in points, total points group you into a class
pay policy line
mathematical equation that describes the relationship between job pay and internal comparisons
pay grades
when similar jobs are grouped together for pay purposes
broad banding
A compensation strategy that simplifies job classifications and pay by using fewer, broader pay ranges, unlike traditional systems with many narrow pay grades and specific salary ranges
Equal Pay Act of 1963
prohibits job discrimination for “substantially equal” jobs, but allows it for seniority, performance etc
Fair Labor Standards Act of 1938
established minimum wage of $7.25
