Compensation and Benefits Flashcards
A fixed amount of cash compensation an employee receives in exchange for work performed. It is guaranteed, and it tends to reflect the value of the work rather than individual contributions.
Base pay or fixed pay
Direct or indirect compensation that is offered in addition to an individual’s base pay, usually awarded upon achieving a goal or milestone.
Bonus
A job evaluation method in which jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles.
Classification
Criteria or traits employers use to determine the value of jobs and salaries for those jobs.
Compensable factors
Pay received in the form of services and benefits (i.e., pensions, health insurance, vacations).
Compensation
A set of principles that provide the overall direction for how organizations make decisions about compensation. It is typically driven by HR but should involve senior leadership to ensure alignment with the organization’s mission, vision, and goals.
Compensation philosophy
Describes how an organization plans to determine pay and benefits for employees, as informed by the organization’s compensation philosophy.
Compensation strategy
Process of analyzing current pay structures and practices to ensure external market equity and that internal job worth mirrors the organization’s market and strategy. This process involves the following: 1) update job descriptions using job analysis, 2) conduct job evaluation, and 3) complete a market study analysis.
Compensation study
A fixed amount an individual pays for a covered health care service.
Co-pay
An across-the-board base pay inflation designed to align with increases in the cost of living.
Cost of living adjustment (COLA)
Amount an individual pays for covered health care expenses before an insurance company begins to pay on a health insurance claim.
Deductible
A monetary incentive or reward.
Direct compensation
Employees who are not subject to the FLSA provisions for minimum wage and overtime.
Exempt employees
Rewards that are intangible. Employees experience them when they engage in work programs or activities.
Experiential rewards
Pay that does not vary based on performance or results achieved. The basic cash compensation that an employer pays for work duties. Also referred to as base pay.
Fixed pay
Rewards that are tangible and can be measured or assigned a value or cost
Financial rewards
Typically have lower monthly premiums and out-of-pocket expenses. Specialist visits require a referral from your primary care physician. Coverage isn’t provided for out-of-network healthcare providers.
Health maintenance organization (HMO)
Pay received in the form of services and benefits (i.e., pensions, health insurance, vacations).
Indirect compensation
A process for determining the relative compensatory value of a job in an organization.
job evaluation
Punishes individuals for undesirable choices or behavior.
Negative incentive
Employees who are entitled to overtime pay and must be paid at least the federal minimum wage.
Nonexempt employees
The benchmarking of wages paid to employees with wages paid to individuals in similar positions in the marketplace.
Market study (or market analysis)
Parity in compensation among similarly situated employees, after accounting for legitimate factors influencing pay decisions.
Pay equity
A systematic study of an organization’s pay practices to uncover outliers and potential disparities in compensation for members of a protected class.
Pay equity analysis
A job evaluation method in which jobs are ranked using a system based on factors, degrees, and points
Point factor
Rewards individuals for desirable choices or behavior.
Positive Incentive
Typically have higher monthly premiums and out-of-pocket expenses. Able to see a specialist without a referral. Visits to out-of-network providers has a higher fee and separate deductible.
Preferred provider organization (PPO)
The amount that an individual and/or their employer pays for a health insurance plan.
Premium
A job evaluation method in which jobs are compared to each other based on the overall worth of the job to the organization.
Ranking
Formal or informal acknowledgement of effort or desired behavior.
Recognition
Awards performance or accomplishment.
Reward
The alignment of compensation with desired organizational goals such that organizational strategy informs compensation strategy (organizational strategy, HR strategy, compensation strategy)
Strategic compensation
All the financial and experiential incentives, rewards, and benefits provided to employees by their employer.
Total rewards
The principles that guide the design, delivery, forms, and determination of total rewards programs.
Total rewards philosophy
Pay that changes with the level of performance or results achieved. Unlike base pay, variable pay is not guaranteed.
Variable pay
