Compensation

Question 1

Definition of compensation

Answer 1

org’s ability to attract/select/hire the best employees, related to individual motivation/engagement/retention, can cause internal conflicts, rewards are monetary value to reinforce behavior

Question 2

Merit pay

Answer 2

employees receive raises or bonuses based on their individual performance and contributions, rather than seniority or other factors (effective for reinforcing performance)

Question 3

Incentive pay (bonuses, commission income, etc.)

Answer 3

aka variable compensation, includes bonus compensation, additional compensation given to employees for achieving specific goals or exceeding performance expectations

Question 4

ESOPs (employee stock ownership plan)

Answer 4

employee ownership plans that give employers certain tax and financial advantages when stock is granted to employees

Question 5

Profit sharing

Answer 5

incentive pay in which payments are a percentage of the organization’s profits and do not become part of the employees’ base salary

Question 6

Benchmarking

Answer 6

essentially comparing yourself to other equal counterparts in the organization or industry

Question 7

Skill-based pay

Answer 7

a pay system that rewards employees for the job skills they can demonstrate

Question 8

Total compensation vs. total rewards

Answer 8

the total amount of money received by an employee from an employer plus the cash equivalent value of the employment benefits received by the employee VS encompass not only compensation and benefits, but also personal and professional growth opportunities and a motivating work environment that includes recognition, job design, and work-life balance

Question 8

Characteristics of merit-based compensation, incentive pay, etc.

Answer 8

• write information of each