Chapter 9 Flashcards
The systematic process of collecting
information related to the nature of a specific job. It
provides the knowledge needed to define jobs and
conduct job evaluation.
job analysis
A systematic procedure designed to
aid in establishing pay differentials among jobs within a
single company. It includes classification, comparison of
the relative worth of jobs, blending internal and external
market forces, measurement, negotiation, and judgment
job evaluation
The process of assigning pay to jobs,
based on thorough job analysis and job evaluation.
job pricing
Composite of experience,
training, and ability as measured by the performance
requirements of a particular job.
skill requirement
The allocation of employee
compensation in a variety of forms tailored to
organization pay objectives and/or the needs of
individual employees.
flexible compensation
A motivation theory that proposes
that individuals will select an alternative based on
how this choice relates to outcomes such as rewards.
The choice made is based on the strength or value of
the outcome and on the perceived probability that this
choice will lead to the desired outcome.
expectancy theory
Rewards that a person receives
from sources other than the job itself. They include
compensation, supervision, promotions, vacations,
friendships, and all other important outcomes apart
from the job itself
extrinsic rewards
Fairness in the amount of reward
distributed to employees
distributive justice
Concept concerned with
the process used to make and implement decisions
about pay. It suggests that the way pay decisions
are made and implemented may be as important to
employees as the results of the decisions
procedural justice
People are motivated by inner needs.
Needs form a hierarchy from most
basic (food and shelter) to higher order (e.g., self-esteem, love, self-actualization).
Maslow’s need hierarchy
Employees are motivated by two types of motivators: hygiene factors and
satisfiers.
Herzberg’s two factor theory
employees’ assessment
of their ability to perform required job
tasks
expectancy
is employees’ beliefs
that requisite job performance will be
rewarded by the organization
Instrumentality
is employees’ beliefs
that requisite job performance will be
rewarded by the organization
valence
Employees are motivated when
perceived outputs (i.e., pay) are equal
to perceived inputs (e.g., effort, work
behaviors)
equity theory
Rewards reinforce (i.e., motivate and
sustain) performance
reinforcement theory
challenging performance goals
influence greater intensity and
duration in employee performance.
goal setting theory
A theory of motivation that depicts
exchange relationships in terms of two parties: agents
and principals. According to this theory, both sides of
the exchange will seek the most favorable exchange
possible and will act opportunistically if given a
chance.
agency theory
The basic cash compensation that an
employer pays for the work performed. Tends to reflect
the value of the work itself and ignore differences in
individual contribution
base pay
A general adjustment
that provides equal increases to all employees
across-the-board increase
Same as across-the-board
increase, except magnitude based on change in cost of
living (e.g., as measured by the consumer price index
[CPI]).
cost-of-living increase
A reward that recognizes outstanding
past performance. It can be given in the form of lumpsum payments or as increments to the base pay
merit pay
Payment of entire increase
(typically merit-based) at one time. Because amount is
not factored into base pay, any benefits tied to base pay
do not increase.
lump-sum bonus
compensation
that is tied directly to objective measures of individual
production
individual incentive
A generic category of pay add-on
(variable pay) which is tied to some
measure of group performance, not
individual performance. Not added into
base pay
success-sharing plans
Add-on linked to group performance
(team, division, total company) relative to
exceeding some financial goal
profit sharing
goal to exceed is not financial performance of
organization but some cost index (e.g.,
labor cost is most common, might also
include scrap costs, utility costs).
gain sharing
Generic category of pay add-on (variable
pay) that differs from success sharing
in that employee not only shares in the
successes but also is penalized during
poor performance years
risk sharing plans
