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Human Resource Management > Chapter 9 > Flashcards

Chapter 9 Flashcards

1
Q

Both the intrinsic and extrinsic rewards employees receive for
performing their jobs.

A

Total compensation

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2
Q

Pay that a person receives in

the form of wages, salary, commissions, and bonuses.

A

Direct financial compensation (monetary compensation)

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3
Q

All financial rewards that are not

included in direct financial compensation.

A

Indirect financial compensation (employee benefits)

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4
Q

Satisfaction that a person receives from the job itself or

from the psychological and/or physical environment in which the person works

A

Nonfinancial compensation

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5
Q

Potential employees located within the geographic area from which
employees are recruited.

A

Labor market

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6
Q

Non-union companies offer of similar compensation unionized
companies with the goal of reducing the likelihood that non-union workforces will seek
union representation

A

Spillover effect

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7
Q

Pattern of pay and benefits

associated with characteristics of industries

A

Interindustry wage or compensation differentials

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8
Q

Employees categorized as executive, administrative, professional, or
outside salespersons, and not required to be paid at an overtime rate for work beyond the
completion of standard work hours

A

Exempt employees

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9
Q

Employees not categorized as executive, administrative,
professional, or outside salespersons, and required to receive overtime pay for work
beyond the completion of standard work hours.

A

Nonexempt employees

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10
Q

The monetary compensation employees earn on a regular basis for performing
their jobs. Hourly pay and salary are the main forms.

A

Base pay

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11
Q

One type of base pay. Employees earn hourly pay for each hour
worked.

A

Hourly pay (wage)

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12
Q

One type of base pay. Employees earn salaries for performing their jobs,
regardless of the actual number of hours worked. Companies generally measure salary on
an annual basis

A

Salary

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13
Q

Escalator clause in a labor agreement that
automatically increases wages as the U.S. Bureau of Labor Statistics’ cost-of-living index
rises.

A

Cost-of-living adjustment (COLA)

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14
Q

Measure of the purchasing power of a dollar

A

Real hourly compensation

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15
Q

The face value of a dollar.

A

Nominal hourly compensation

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16
Q

Length of time an employee has been associated with the company, division,
department, or job

A

Seniority

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17
Q

Pay program in which pay increases are based on length of service

A

Seniority pay

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18
Q

A theory premised on the idea that employees’ knowledge and
skills generate productive capital known as human capital. Employees can develop
knowledge and skills from formal education or on-the-job experiences

A

Human capital theory

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19
Q

As defined by economists, refers to sets of collective skills, knowledge,
and ability that employees can apply to create economic value for their employers

A

Human capital

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20
Q

Classification of federal government jobs into 15 classifications (GS-
1 through GS-15), based on such factors as skill, education, and experience levels. In
addition, jobs that require high levels of specialized education (e.g., a physicist),
significantly influence public policy (e.g., law judges), or require executive decision
making are classified in three additional categories: Senior Level (SL), Scientific &
Professional (SP) positions, and the Senior Executive Service (SES)

A

General Schedule

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21
Q

Pay increase added to employees’ base pay based on their level of
performance.

A

Merit pay

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22
Q

One-time annual financial award based on productivity that is not added
to base pay.

A

Merit bonuses

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23
Q

Relatively small monetary gift provided employees for outstanding work or
effort during a reasonably short period.

A

Spot bonus

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24
Q

Compensation, other than base wages or salaries, that fluctuates
according to employees’ attainment of some standard (e.g., a pre-established formula,
individual or group goals, or company earnings)

A

Incentive pay

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25
Incentive pay plan in which employees are paid for each unit they produce
Piecework
26
Bonuses to managers who meet or exceed objectives based on sales, profit, production, or other measures for their division, department, or unit
Management incentive plans
27
Individual incentive pay plans that reward employees | for specific behavioral accomplishments as such good attendance.
Behavioral encouragement plans
28
Individual incentive pay plans for rewarding the referral of new customers or recruiting successful job applicants
Referral plans
29
Group incentive systems that provide participating employees with an incentive payment based on improved company performance for increased productivity, increased customer satisfaction, lower costs, or better safety records
Gain sharing
30
Gainsharing plan that provides a financial reward to employees for savings in labor costs resulting from their suggestions
Scanlon plan
31
Compensation plans that result in the distribution of a predetermined percentage of the firm’s profits to employees.
Profit sharing
32
The right to purchase shares of company stock.
Employee stock plans
33
Incentive plan in which employees can buy a specified amount of stock in their company in the future at or below the current market price
Stock option
34
The total equity or worth of the company.
Company stock
35
Equity segments of equal value, which increase with the | number of stock shares held
Company stock shares
36
Employee compensation for jobs employees currently perform.
Job-based pay
37
Compensation for developing the flexibility, knowledge, and skills to perform a number of jobs effectively
Person-focused pay
38
System that compensates employees for their job-related skills and knowledge, not for their job titles
Skill-based pay
39
Compensation plan that rewards employees for the capabilities they attain
Competency-based pay
40
An ordered set of similar jobs based on worth.
Job structure
41
Process that determines the relative value of one job in relation to another
Job evaluation
42
Job evaluation method in which the raters examine the description of each job being evaluated and arrange the jobs in order according to their value to the company
Job evaluation ranking method
43
Job evaluation method in which classes or grades are defined to describe a group of jobs
Classification method
44
Job evaluation method that assumes there are five universal factors consisting of mental requirements, skills, physical requirements, responsibilities, and working conditions; the evaluator makes decisions on these factors independently.
Factor comparison method
45
Job evaluation method in which the raters assign numerical values to specific job factors, such as knowledge required, and the sum of these values provides a quantitative assessment of a job’s relative worth.
Point method
46
Policies that provide general guidelines for making compensation decisions
Compensation policy
47
Determine whether the company will be a pay leader (market lead), a pay follower (market lag), or assume an average position (market match) in the labor market.
Pay level compensation policies
48
Pay policy that distinguishes companies from the competition by compensating employees more highly than most competitors. Leading the market denotes pay levels above the market pay line.
Market lead policies
49
Average pay that most employers provide for a similar job in a particular area or industry.
Market match policies
50
Pay policy that distinguishes companies from the competition by compensating employees less than most competitors. Lagging the market indicates that pay levels fall below the market pay line
Market lag policies
51
Pay rate differences for jobs of unequal worth and the framework for recognizing differences in employee contributions.
Pay structures
52
A means of obtaining data regarding what other firms are paying for specific jobs or job classes within a given labor market
Compensation survey
53
Grouping of similar jobs to simplify pricing jobs.
Pay grade
54
Minimum and maximum pay rate with enough variance between the two to allow for a significant pay difference.
Pay range
55
``` Fitting of plotted points on a curve to create a smooth progression between pay grades (also known as the pay curve) ```
Wage curve
56
Compensation technique that collapses many pay grades (salary grades) into a few wide bands to improve organizational effectiveness.
Broadbanding
57
A wage structure where newly hired workers are paid less than current employees for performing the same or similar jobs
Two-tier wage systems
58
A company’s pay spread between newly hired or less qualified | employees and more qualified job incumbents is small.
Pay compression
59
Allows the company to recover compensation if subsequent review indicates that payments were not calculated accurately or performance goals were not met
Clawback policy
60
Special benefits provided by a firm to key executives to give the executives something extra
Perquisites (perks)
61
Perquisite that protects executives in the event that another company acquires their firm or if the executive is forced to leave the firm for other reasons.
Golden parachute contract
62
Provision that gives shareholders in all but the smallest companies an advisory vote on executive pay.
Say on pay
63
Management techniques used for determining a job’s | relative worth including job analysis, job descriptions, and job evaluation.
Job Structures
64
After companies have clearly written job descriptions and they have specified job structures, they move on to deciding _______, which focus on pay level and pay mix.
Competitive Compensation Policies
65
Coupled closely with these choices is job pricing, which | leads to the construction of _______.
Pay Structures

Human Resource Management (14 decks)

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