COMPENSATION AND BENEFITS Flashcards
is defined as the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required.
COMPENSATION
is the initial rate of compensation an
employee receives in exchange for services. It excludes extra lump sum compensation such as bonuses or overtime pay, as well as benefits and raises. An employee’s base pay can be expressed as an hourly rate or as
a weekly, monthly or annual salary.
BASE PAY
is a sum of money that is paid to an
employee upon completion of a task, usually the task of selling a certain amount of goods or services.
COMMISSIONS
money earned at an increased rate for
working more than the usual number of hours
OVERTIME PAY
is an approach to compensation that rewards the higher performing employees with additional pay or incentive pay
Bonuses, Profit Sharing, Merit Pay
a benefit in the form of an option given
by a company to an employee to buy stock in the company at a discount or at a stated fixed price.
Stock Options
These rates are likely to differ based on whether the employee travels in his or her home area, away from home, or internationally.
Travel/Meal/Housing Allowance
is any additional advantage an employee
receives from his or her employer.
Benefits
are surveys of compensation paid to employees by other employers in a particular geographic area, industry, or occupational group.
Pay Surveys
generally refer to hourly compensation paid to operating employees. The basis for wages is time.
WAGES
is income paid to an
individual on the basis of
time.
Salary
is a schedule specifying the amount of annual increases a person will receive.
maturity curve
is a method for determining the relative value or worth of a job to the organization so that individuals who perform that job can be compensated adequately and
appropriately.
Job evaluation
attempts to group sets of jobs together into clusters, which are often called grades.
Classification system
requires managers to qualify, in objective terms, the value of the various elements of specific jobs.
point system
involves compensating
employees for learning
specific information.
Pay-for-knowledge
rewards employees for
acquiring new skills.
Skill-based pay
is the ongoing process of managing a wage and salary structure.
Wage and salary administration
refers to
the extent to which
the compensation of
any individual in an
organization is secret
or the extent to which
it is formally made
available to other
individuals.
PAY SECRECY
occurs when individuals with substantially different levels of experience and/or performance abilities are being paid wages or salaries that are relatively equal.
Pay compression
occurs when the external
market changes so rapidly that the new
employees are actually paid more than
experienced employees.
Pay inversion
is a mandated protection plan that provides a basic substance payment to employees who are between jobs.
UNEMPLOYMENT INSURANCE
provides limited income to
retired individuals.
SOCIAL SECURITY
is insurance that Covers individuals who suffer a job-related illness or accident.
WORKERS’ COMPENSATION
are administered by the
organization and provide income to the
employees at their retirement.
Private Pension Plans
a private pension plan where the benefit is precisely known based on a simple formula such as years of service.
Defined benefit plans
a private pension plan in which the size of the benefit depends on how much money is contributed to the plan.
Defined contribution plans
concentrate on keeping
employees from
becoming sick rather than
simply paying expenses
when they do become ill.
WELLNESS PROGRAM
assist parents with child
care expenses.
CHILD CARE PROGRAMS
allow employees to
choose the benefits they
really want.
CAFETERIA-STYLE BENEFITS
includes
provisions for the minimum wage,
overtime, and child labor.
HR managers must
adhere to overtime
laws.
Fair Labor Standards Act
