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CHRP - Labour Relations > Compensation and Benefits - Definitions > Flashcards

Compensation and Benefits - Definitions Flashcards

1
Q

Extrinsic Rewards

A

Factors that satisfy basic human needs for survival and security, as well as social and recognition needs.
It comes from a job’s content

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2
Q

Intrinsic Rewards

A

Factors that satisfy higher-order human needs for self-esteem, achievement, growth and development.
Comes from a job’s context

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3
Q

Reward

A

Anything provided by an organization that satisfies an employee need

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4
Q

Incentive

A

A promise that the a specified reward will be provided if the employee performs a specified behaviour

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5
Q

Reward System

A

combination of intrinsic and extrinsic rewards provided by an organization

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6
Q

Compensation System

A

The economic/monetary part of the reward system. This is only a part of the reward system

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7
Q

Reward Strategy

A

The plan for the mix of rewards (intrinsic and extrinsic) that will be provided, as well as how, in order to elicit the desired behaviours necessary for the organizations success

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8
Q

Compensation Strategy

A

The plan for the mix and total amount of base, performance pay, and indirect pay to be paid to various categories of employees

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9
Q

Vertical Fit (in a compensation system)

A

The alignment between an organization’s mission, values and vision, and the supportive strategies that cascade down an organization

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10
Q

Horizontal Fit (in a compensation system)

A

The alignment between and among strategies at the same level

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11
Q

Classical Managerial Strategy

A

People are inherently lazy, dislike work, and would prefer to get as much from a work relationship as possible, and give as little as possible.

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12
Q

Human Relations Strategy

A

People inherently dislike work, but can be motivated by appealing to their social needs.

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13
Q

High-Involvement Managerial Strategy

A

An approach to management that assumes work can be intrinsically motivating if the organization is structured properly

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14
Q

Membership Behaviour

A

Occurs when employees decide to join and remain with a firm

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15
Q

Task Behaviour

A

When employees perform the specific task assigned to them

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16
Q

Organizational Citizenship Behaviour

A

When employees voluntarily undertake special behaviours beneficial to the organization that go beyond simple membership (e.g. extra effort)

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17
Q

Psychological Contract (of rewards)

A

Expectation about the rewards offered for a job, and the contributions necessary to perform the job

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18
Q

Equity Theory

A

Employee’s base perception’s of equity on a comparison of their contributions rewards ratio to the ratio of others perceived as being similar

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19
Q

Equity Sensitivity

A

A personality trait that entails a high predisposition toward perceiving personal inequity
People with this are more likely to resort to drastic action to reduce their perceived reward imbalance

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20
Q

Organizational Commitment

A

The strength of an individual’s attachment to an organization

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21
Q

Affective Commitment

A

The attachment to an organization based on positive feelings towards the organization

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22
Q

Continuance Commitment

A

Attachment to an organization due to a perceived lack of better alternatives

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23
Q

Content Theories of Motivation

A

Theories that involve understanding motivation by identifying the underlying human needs

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24
Q

Process Theories of Motivation

A

Theories that involve understanding motivation by determining the processes humans use to make choices about the specific actions they will take

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25
Q

Job Enrichment

A

The process of redesigning jobs to incorporate more of the 5 core dimensions of intrinsically satisfying work (task identity, task significance, skill variety, job autonomy, job feedback)

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26
Q

Herzberg’s Theory of Motivation

A

There are hygiene factors (factors caused by job satisfaction) and motivators (Factors that made people feel good about their work)

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27
Q

Reinforcement Theory

A

Behaviour will not be repeated if valued outcomes flow from that behaviour, or if performing the behavior reduces undesirable outcomes

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28
Q

Expectancy Theory of Motivation

A

Individuals are more likely to exert effort to perform a particular behaviour if they believe that behaviour will lead to valued consequences and if they expect they can perform that behaviour

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29
Q

Attribution Theory of Motivation

A

Humans often act without understanding their motives for their behaviour and afterward attempt to attribute motives for their actions

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30
Q

Economic Theory of Motivation

A

People are only motivated by economic rewards, and will seek to maximize their reward while minimizing their contribution to the organization

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31
Q

Indirect Pay

A

Any type of employer-provided reward/benefit that serves an employee need, but isn’t part of their base or performance pay. Is usually about 15% of total compensation

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32
Q

Market Pricing

A

Basing base pay on what other employers are offering for a given job

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33
Q

Job Evaluation

A

Systematically ranking all jobs based on value to the firm

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34
Q

Pay-for-knowledge System (PKS)

A

Establishing base pay according to the total value of the skills and competencies an employee has acquired

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35
Q

Skill Blocks

A

Contains a bundle of skills or knowledge necessary to carry out a specific production or service delivery task. The basic component of a skill-based pay system

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36
Q

High-low method (skill blocks)

A

A method that prices comparable entry- and top-level jobs in the market, and allocates the difference to the various skill blocks

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37
Q

Piece Rates

A

A pay system under which individuals receive a specified sum of money for each unit of output they produce or process

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38
Q

Straight Piece Rate

A

The same sum of money is paid for each piece produced or processed, regardless of how many pieces are produced or processed.

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39
Q

Differential Piece Rate

A

A lower sum of money per piece is paid if employee production does not meet the production standard, and a higher sum per piece is paid once the production standard is met

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40
Q

Straight Commission

A

Pay that is geared only to the volume of sales or transactions, with no base pay component.

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41
Q

Merit Raise

A

An increase to an employee’s base pay in recognition of good job performance

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42
Q

Merit Bonus

A

A cash payment, provided to recognize good employee performance, that does not increase base pay.

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43
Q

Gain-Sharing Plan

A

Group performance pay plan that shares cost savings or productivity gains generated by a work group with all members of that group.

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44
Q

Goal-Sharing Plan

A

A group performance pay plan in which a work group receives a bonus when it meets pre-specified performance goals

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45
Q

Competitive Bonus Plan

A

A group pay plan that rewards work groups for outperforming other work group

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46
Q

Pooled Performance Plan

A

A pay plan in which the performance results of a group are pooled and group members share equally in the performance bonus.

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47
Q

Group Commissions

A

A performance pay plan in which the commissions of a group of sales workers are pooled and then shared equally among members of the group.

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48
Q

Group Piece Rates

A

A performance pay plan in which group members get paid based on the number of completed products produced by the group.

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49
Q

Employee Profit-sharing Plan

A

A formal pay program in which a firm provides bonus payments to employees based on the profitability of the firm

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50
Q

Current Distribution Profit-Sharing Plan

A

A profit-sharing plan that distributes the profit-sharing bonus to employees in the form of cash or shares, at least annually.

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51
Q

Deferred Profit-Sharing Plan (DPSP)

A

A profit-sharing plan in which the profit-sharing bonuses are allocated to employee accounts but not actually paid out until a later date, usually on termination or retirement.

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52
Q

Combination Profit-Sharing Plan

A

A plan that combines the current distribution and deferred profit- sharing plans by paying some of the profit- sharing bonus on a current (cash) basis and deferring the remainder

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53
Q

Employee Stock Bonus Plan

A

A plan through which employees receive shares in their employer firm at no cost to the employee

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54
Q

Employee Share Purchase Plan

A

A plan through which employees may purchase shares in their employer firm

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55
Q

Employee Stock Options Plan:

A

A plan through which employees are provided with options to purchase shares in their employer at a fixed price within a limited time period

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56
Q

Performance Unit Plan

A

A long-term incentive in which the bonus amounts are expressed in units for which the monetary value will fluctuate, depending on degree of goal accomplishment

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57
Q

Performance Share Plan

A

A long-term incentive in which the bonus amounts are expressed in company shares

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58
Q

Technical Ladders

A

Defined progression of skills development to keep work interesting and provide opportunities for higher compensation. Technical ladders have been developed to substitute for career advancement opportunities

59
Q

Lead compensation policy

A

A compensation-level strategy based on paying above the average compensation level in a given labour market.

60
Q

Match compensation policy

A

A compensation-level strategy based on paying at average compensation levels in a given labour market.

61
Q

Hybrid Compensation policy

A

A compensation-level strategy that varies across employee groups or compensation components.

62
Q

Utility Analysis

A

An approach to analyzing whether a lead, lag, or match strategy would be most efficient for a given organization

63
Q

Equalization approach (for Expatriates)

A

Reasonable costs are calculated for the expense and then the company deducts or adds income to ensure the standard is the same as it would be in Canada

64
Q

Job Description

A

A summary of the duties, responsibilities, and reporting relationships pertaining to a particular job

65
Q

Job Specifications

A

The employee qualifications deemed necessary to successfully perform the duties for a given job. Often called KSAO’s

66
Q

Functional Job Analysis

A

An attempt to develop generic descriptions of jobs using a common set of job functions.
The current system uses a series of task statements that contain four elements for each job:
- Who performs what
- To whom or what
- With what tools, equipment, or processes
- To achieve what purpose or outcome

67
Q

Job Evaluation: Ranking Method

A

The relative values of different jobs are determined by knowledgeable individuals/judges

68
Q

Job Evaluation: Paired Comparison Model

A

Every job is compared with every other job, providing a basis for a ranking of job

69
Q

Job Evaluation: Job Classification/Grading

A

This method establishes and defines general classes of jobs (e.g. technical, clerical) and then creates a series of grade descriptions for each class

70
Q

Job Evaluation: Factor Comparison Method

A

This method identifies several major factors against which all jobs in a job class can be assessed and then rates the extent to which each factor is present in each of a large set of “key jobs” thought to be properly compensated at the present time

71
Q

Job Evaluation: Statistical/Policy Capturing Method

A

This method combines the use of statistical methods (from internal and market data) and job questionnaires to derive job values based on prevailing external or internal pay rates

72
Q

Job Evaluation: Point Method

A

This method identifies key job characteristics (known as “compensable factors”) that differentiate the value of various jobs, weights these factors, and then determines how much of each factor is present in a given job by assigning a certain number of points to each job for that factor. This hierarchy of jobs is then transformed into a set of pay grades and pay ranges, based on the market rates of certain key or benchmark jobs.

73
Q

Job Comparison: Job-to-job method

A

This method establishes pay equity by comparing a female job class to a male class that is comparable in terms of job evaluation criteria

74
Q

Job Comparison: Proportional Value Method

A

This method establishes pay equity where no comparator male job class exists by extrapolating a hypothetical male comparator job class based on other male job classes

75
Q

Job Comparison: Proxy Comparison Method

A

This method establishes pay equity in public sector organizations where neither the job-to-job method nor the proportional value method can be used. The employer selects another public sector employer that has completed pay equity procedures and collect information on the female job classes in that “proxy” organization

76
Q

Permissible Differences Pay

A

Differences between female and male job classes that are not considered inequitable because they stem from certain specified allowable circumstances, such as seniority

77
Q

Compensable Factors

A

Characteristics in the work that the organization values, that help it pursue its strategy and achieve its objectives. The 4 most common are: Skill, Effort, Responsibility, and Working conditions

78
Q

Benchmark Jobs

A

A job in the firm’s job evaluation system for which there is a good match in the labour market data

79
Q

Market Comparator Job

A

A job in the market data that matches a benchmark job within the firm’s job evaluation system

80
Q

Market Line

A

A regression line that relates job evaluation points to market pay (in dollars) for the benchmark jobs

81
Q

Pay Policy Line

A

The intended pay policy for the organization, generated by adjusting the market line for the intended pay level strategy of the organization

82
Q

Base Pay Structure

A

The structure of pay grades and pay ranges, along with the criteria for movement within pay ranges, that applies to base pay

83
Q

Pay Grade

A

A grouping of jobs of similar value to the organization, typically grouped by point totals

84
Q

Pay Range

A

The minimum and maximum pay rates (in dollars) for jobs in a particular pay grade

85
Q

Establishing Pay Grades: Equal Internal Approach

A

A method to establish pay grade widths, in which the point spreads are equal for all pay grades

86
Q

Establishing Pay Grades: Equal Increase Approach

A

A method to establish pay grade sizes, in which each pay grade increases in width by a constant number of points from the preceding pay grade

87
Q

Establishing Pay Grades: Equal Percentage Approach

A

A method to establish pay grade sizes, in which each pay grade increases in width by an equal percentage from the preceding pay grade

88
Q

Establishing Pay Grades: Broadbanding

A

The practice of reducing the number of pay grades by creating large or “fat” grades, sometimes known as “bands.”

89
Q

Establishing Pay Ranges: Range Spreads

A

The difference between the maximum and the minimum pay level, in dollars, for a given pay range.

90
Q

Establishing Pay Ranges: Range Spread Percentages

A

A percentage calculated by dividing the range spread for a given pay range by the minimum for that pay range

91
Q

Compensating Differentials

A

A higher compensation level offered by an employer because of undesirable aspects of the employment.

92
Q

Market Comparator Firms

A

Firms selected as comparators when constructing a sample of market data

93
Q

Compensation Surveys: Key Job matching

A

Including jobs on a compensation survey that are well understood and numerous in the labour market, and asking respondents to supply compensation information for those jobs

94
Q

Analyzing Survey Data: Interquartile Range

A

A measure of pay dispersion across employers, calculated by dividing the difference between the 25th and 75th percentile values by the value of the 25th percentile……or Q3-Q1

95
Q

Analyzing Survey Data: Compa-Ratio

A

It assesses the distribution of employees within their pay range. The compa-ratio is calculated by taking the mean base pay of all employees holding a particular job and then dividing this amount by the midpoint of the pay range for that job.

96
Q

Performance Appraisal Reliability

A

When a performance appraisal system produces the same scores even when applied by different appraisers.

97
Q

Performance Appraisal Validity

A

The process of assessing the overall performance levels of individual employees. It occurs when employees who receive the highest scores in a performance appraisal system are in fact the highest performers

98
Q

Central Tendency Error

A

Occurs when appraisers rate all employees as “average” in everything

99
Q

Halo Error

A

when appraisers rate an individual either high or low on all char­acteristics because one characteristic is either high or low

100
Q

Recency Effect

A

The tendency of appraisers to over­-weight recent events when appraising employee performance

101
Q

Contrast Effect (Performance Appraisal)

A

The tendency for a set of performance appraisals to be influenced upward by the presence of a very low performer or downward by the presence of a very high performer

102
Q

Similarity Effect

A

The tendency of appraisers to inflate the appraisals of appraisees they see as similar to themselves

103
Q

Leniency Effect

A

The tendency of many appraisers to provide unduly high performance appraisals

104
Q

Harshness Effect

A

The tendency of some appraisers to provide unduly low performance appraisals

105
Q

Beauty Effect

A

The tendency for the physical attractiveness of a ratee to affect their performance appraisals

106
Q

Methods for Individual Appraisal: Paired Comparison Method

A

Determines the rank order of all employees in a unit by comparing each employee with each of the other employees in the unit.

107
Q

Methods for Individual Appraisal: Forced Distribution Method

A

A performance appraisal method that stipulates the distribution of employees across the performance categories

108
Q

Methods for Individual Appraisal: Graphic Rating Scale

A

An appraisal method in which appraisers use a numerical scale to rate employees on a series of characteristics

109
Q

Methods for Individual Appraisal: Behaviourally anchored rating scales (BARS)

A

BARs provides specific descriptions of behaviours for each point on the rating scale for each job aspect

110
Q

Methods for Individual Appraisal: Behavioural observation scales (BOS)

A

Appraisal method under which appraisers rate the frequency of occurrence of different employee behaviour

111
Q

Methods for Individual Appraisal: Management by objectives (MBO)

A

An approach to management that involves setting employee goals and providing feedback on goal accomplishment

112
Q

Methods for Individual Appraisal: Field Review

A

This method involves a short period of direct observation of the job perfor­mance of the individual being rated. Usually by someone outside the organization

113
Q

Sources of Individual Appraisal: 360-degree feedback method

A

A method that combines peer and subordinate appraisals (and sometimes even customer appraisals) with supervisory appraisals

114
Q

Performance Management

A

A method for improving employee performance based on goal setting, feedback, encouragement and support, and rewards for success

115
Q

Individual/team merit grid

A

A method for linking individual merit pay to both individual and team performance
If the team does not meet its performance goals, there is no merit pay for anyone, regardless of individual performance

116
Q

Gain Sharing Plan: Scanlon Plan

A

A gain-sharing plan that creates mechanisms for employee participation in developing productivity improvements and that shares the financial benefits of those improvements with the employee group that generated them.

117
Q

Gain Sharing Plan: Rucker Plan

A

A gain-sharing plan similar to the Scanlon plan but that expresses labour costs as a percentage of value added

118
Q

Gain Sharing Plan: Family Measures Plan

A

A gain-sharing plan that uses a variety of measures to determine the extent to which a bonus payout is justified

119
Q

Gain Sharing Plan: Improshare

A

A gain-sharing plan that focuses on labour hours per unit of output and that does not usually include worker participation

120
Q

Goal-Sharing Plans

A

Work groups or teams receive a bonus when certain pre-specified performance goals are met

121
Q

Employee Stock Bonus Plans: Appreciation Rights

A

A plan through which employees are awarded shares in their employer at no cost to themselves if the price of employer shares rises during a specified period

122
Q

Employee Stock Bonus Plans: Phantom Share Plan

A

A plan through which employees participate in the appreciation of company shares and any associated dividends, without ever owning any company shares

123
Q

Employee Stock Bonus Plans: Phantom Equity Plan

A

A plan that helps retain key employees by providing rewards based on the stock performance of a portfolio of promising new high-tech firm

124
Q

Mandatory Benefits

A

Government-provided employee benefits, such as pensions, to which employers must contribute on behalf of their employees

125
Q

Defined Benefit Plans

A

A plan that provides a specified stream of income from the time of retirement until death

126
Q

Defined Contribution Plans

A

The employer commits a certain amount of money in an investment on behalf of each employee, then at retirement, the amount of the pension is paid based on whatever amount of money is in the trust.

127
Q

Hybrid Pension Plans

A

Pension plans that combine features of the defined benefit pension plan and the defined contribution pension plan

128
Q

Health Care Spending Account (HCSA)

A

A tax-favoured employee benefit that allows employees to use employer-provided health care spending credits to purchase a wide array of healthcare services.
The funds paid to each employee are not taxable

129
Q

Supplemental Unemployment Benefits (SUBs)

A

An employer-provided benefit that extends (tops up) government-provided unemployment benefits. These plans must be approved and registered with the Employment Insurance Commission

130
Q

Employee Assistance Programs (EAPs)

A

Employer-provided programs to help employees deal with a variety of personal problems

131
Q

Fixed Benefit System

A

An employee benefit plan that provides a standard set of benefits to all those covered by the plan

132
Q

Flexible Benefit System

A

An employee benefit plan that allows employees to allocate employer-provided credits to purchase the benefits of most value to them.

133
Q

Compensation Administration

A

The process through which employee earnings are calculated and the appropriate remittances are paid to employees, governments, and other agencies

134
Q

Average earnings per employee

A

Total compensation divided by the number of full-time equivalent employees. It takes the perspective of the individual employee.

135
Q

Technical Premium

A

Compensation measures that increase the compensation of technical employees

136
Q

Task Identity (Theory of Motivation)

A

The extent a worker performs a complete cycle of an activity

137
Q

Task Significance (Theory of Motivation)

A

The perceived importance of the job

138
Q

Skill Variety (Theory of Motivation)

A

The number of skills required for the task

139
Q

Job Autonomy (Theory of Motivation)

A

The extent workers can decide for themselves

140
Q

Job Feedback (Theory of Motivation)

A

The level of feedback on work quantity and quality

141
Q

Split Pay Range

A

Where the mid-point represents the maximum pay for fully satisfactory performance. To move above the midpoint, performance must be above standard

142
Q

Contributory (Pension) Plan

A

A pension plan that requires members to make contributions in addition to any employer required contributions

143
Q

Lockstep Compensation Model

A

A seniority-based system of remuneration where employees are paid according to their rank. No other factors, such as merit, performance background or university, affect remuneration.

CHRP - Labour Relations (9 decks)

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