Chapter 7 - Total Rewards Flashcards
financial inducements and rewards as well as nonfinancial inducements and rewards, such as the value of good job content and good working environment
total rewards
base pay, commissions, bonuses, merit pay, piece rate, differential pay, cash award, profit sharing, gain-sharing
direct compensation
social security, unemployment insurance, disability insurance, pensions, 401(k) and other similar programs, healthcare, vacations, sick leave and paid time off suck as holidays
indirect compensation
The systematic determination of the relative worth of jobs in an organization is known as
job evaluation
comparison of jobs based on each job’s measurable factors
job ranking
the result of grouping jobs into a predetermined number of grades or classifications
job classification
an approach using specific compensable factors as reference points to measure relative job worth
point factor job evaluation
Uses a standard criteria comprising three compensable factors: know-how, problem-solving, and accountability.
the hay plan
Determines levels of duties and responsibilities using a point rating system to evaluate selected positions. Uses weighted factors to address the major position characteristics of responsibility, education/experience, job conditions, physical requirements, supervision, training, and so on.
The Factor Evaluation System (FES)
involves ranking each job by each compensable factor and then, as an additional step, identifying dollar values for each level of each factor to develop an actual pay rate for the evaluated job
factor comparison method
a technique used to make outdated data current
Aging
adjustments to survey numbers by an appropriate percentage needed to achieve a match with specific jobs
leveling
a process that involves each job by each compensable factor and then identifying dollar values for each level of each factor to develop an actual pay rate for the evaluated job
factor comparison job evaluation
listing of grouped pay data from lowest to highest
frequency distribution
number of workers in a particular job classification and their pay data
frequency tables
quantitative or non-quantitative programs allowing sorting or categorizing jobs based on their relative worth to the organization
job evaluation method
key jobs are measured and valued against the market, and the remaining jobs are inserted into a hierarchy based on their whole-job comparison to the benchmark jobs
market based job evaluation
collections of data on prevailing market pay rates and information on starting wage rates, base pay, pay ranges, overtime pay, shift differentials and incentive pay plans
pay survey
an average result taking into account the number of participants and each participant’s pay
weighted average
combination of several pay grades or job classifications with narrow range spreads into a single band with a wider spread
broadbanding
the way an organization organizes jobs of a similar value into job or groups
pay grades
pay amounts constrained by the upper and lower boundaries of each pay grade
pay ranges
distribution of data into percentage ranges, such as top 10 percent
percentiles
distribution of data into 4 quadrants
quartiles
dispersion of pay from the lowest boundary to the highest boundary of the pay range
range spreads
an indicator of how wages match, lead or lag the midpoint of a given pay range computed by dividing the worker’s pay rate by the midpoint of the pay range
compa-ratios
division of the pay range into several steps that can be advanced by an employee when time-in-job has met the step requirement
automatic step rate
employees receive step-rate increases up to the established role
combination step-rate and performance
when pay is linked to the level at which an employee can perform in a recognized competency
competency based system
employee receives one rate of pay up to the production standard and a higher rate of pay when the standard is exceeded
differential piece rate system
each worker in the same job has the same rate of pay regardless of seniority or job performance
flat-rate or single system
pay that is based on the level of knowledge an employee has in a particular field
knowledge-based system
a system with pay determined based on individual job performance
performance-based merit pay system
employee capabilities rather than how the job is performed determine the employee’s pay
person-based system
when pay is determined by the employee’s production output
productivity-based system
when pay is based on the number and depth of skills that an employee has applicable to their job
skill-based system
a system allowing performance to influence the size or timing of a pay increase along the step system
step rate with performance considerations
pay increase given to all employees on the basis of market pressure, usually measured against the consumer price index
cost of living adjustment
pay at a rate lower than the minimum rate for the assigned pay range
green circle rate
pay at a rate higher than the maximum for the assigned pay range
red circle rate
a pay increase given to all employees regardless of their job performance and not linked to market pressures
general pay increases
either a stand-alone performance bonus or part of an annual pay increase
lump sum increases
a pay increase based solely on length of service
seniority pay increases
adjustment to base pay programs based on cost of living requirements in various geographic locations where employees work
geographic based differential pay
additional pay for working under adverse conditions caused by environment or due to specific circumstances
hazard pay
adjustment to pay structures based on local competitive comparisons
labor cost differentials
adjustment to base pay programs based on work location remoteness, lack of amenities. climatic conditions and other adverse conditions
location based differentials
additional compensation paid to an employee as an incentive to accept what would normally be considered adverse working conditions, usually based on time, location or working conditions
pay differentials
payment at rates greater than straight pay for working overtime or other agreed condition
premium pay
shift pay, which is generally time-based rewards for employees who work what are considered undesirable shifts such as night shifts
time based differential pay
extra pay provided for travel time, either under legal requirement or by other agreement
travel pay
the act of managing the payroll function
payroll administration
usually computerized software programs designed to accept work time data and generate paychecks or electronic deposit
payroll systems
program that provides medical care and compensates employees for part of lost earnings as a result of a work-related disability
workers’ compensation
medical insurance programs that cover some or all of the cost of dental services for subscribers
dental plans
allows health plan members to go to any qualified physician, or other healthcare provider, hospital or medical clinic and submit claims to the insurance company
fee-for-service plans
healthcare program where the insurer is paid on a per person basis and offers healthcare services and staff at its facilities
health maintenance organization
insurance that provides plan subscribers with managed healthcare with the purpose of reducing costs and improving the quality of care
managed-care plans
a type of managed-care plan that is a hybrid of HMO and PPO plans
point of service plan
healthcare program including an in-network and an out-of-network option for services
preferred provider organization
medical insurance programs that cover some or all of the cost of prescription drugs for subscribers
prescription drug plans
health insurance programs paid entirely by the employer
fully funded plans
purchasing agents for a large group of employers
health insurance purchasing cooperatives
health insurance programs paid for in part by the employer and in part by the employee
minimum premium plans
health insurance programs where the employer purchases one or two types of stop-loss insurance coverage
partially self-funded plans
health insurance programs where the employer assumes all the risks as a self-insured entity
self-funded plans
health insurance programs where the employer assumes all the risks but hires an independent claims department
third-party administrator plan
health insurance programs in which all of the risks is assumed by the employer
administrative services only plan
when the health plan is protected against the risk of a major illness for one participant or one family unit, covered by the plan
specific stop-loss coverage
methods to be used in fulfilling organizational responsibilities and policies
procedures
the health plan is protected against the risk of large total claims from all participants during the plan year
aggregate stop-loss coverage
allows employees to set aside a pre-established amount of money on a pretax basis per plan year for use in paying authorized medical expenses
flexible spending account
employer funded medical reimbursement plans
health reimbursement accounts
a tax advantaged medical savings account available to tax payers in the US who are enrolled in a HDHP
health savings accounts
these programs help employers lower their costs and allow employees with set-aside money to pay for out-of-pocket medical and medical related expenses
high deductible health plans
allows employees to pay certain qualified expenses one a pretax basis
section 125 cafeteria plans
rewards such as meaningful and fulfilling work, autonomy and positive feedback that lead to high levels of job satisfaction
intrinsic rewards
