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Nipissing U > Compensation and Rewards TEST > Flashcards

Compensation and Rewards TEST Flashcards

1
Q

Piece Rates

A

An employee receives a specified sum of money for each unit of output produced or processed.

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2
Q

Straight piece rate

A

The same specified sum of money is paid for each piece produced regardless of how many are produced.

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3
Q

Differential piece rate

A

A lower sum of money per piece is paid if employee production does not meet standard, higher sum is paid if standard is met.

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4
Q

Advantages of piece rate

A
  1. motivational in producing task behaviour
  2. reduce need for supervision
  3. link compensation to output
  4. provide info about production standard
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5
Q

Disadvantages of piece rate

A
  1. limited application
  2. jobs where tasks are constantly changing
  3. not accurate
  4. do not motivate max effort
  5. create conflict
  6. lower potential quality output
  7. expensive if needed machinery
  8. loss of safety focus
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6
Q

Sales commissions

A

Pay geared to dollar volume of sales or transactions (percentage of gross sales)

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7
Q

Straight commission

A

Pay geared toward volume of sales/transactions without base pay.

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8
Q

Advantages of commission

A
  1. easy to set and measure
  2. employee output is distinct
  3. no limit to sales employee can make
  4. reduce need for control mechanisms
  5. serve as feedback
  6. reduce employer risk
  7. increases sales
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9
Q

Disadvantages of commission

A
  1. income is variable
  2. need to attract top performers
  3. recessions may bring on drops in income at no fault to salesperson
  4. little initial income
  5. resist work not related to sales
  6. cause aggressive sales approaches
  7. competition
  8. credit for sale may be given away
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10
Q

Maintenance selling

A

selling established products to existing customers

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11
Q

Conversion selling

A

selling established products to new customers

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12
Q

Leverage selling

A

selling new products to existing customers

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13
Q

New market selling

A

selling new products to new customers

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14
Q

Merit pay

A

used to recognize and encourage continuing good performance by individual employees. Always used in combination with base pay and is an overall indicator of performance.

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15
Q

Merit raises

A

a permanent increase to an employee’s base pay in recognition of good performance.

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16
Q

Merit bonuses

A

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

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17
Q

Special purpose incentives

A

An incentive designed to motivate a specific type of employee behaviour.

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18
Q

Suggestion system

A

An incentive plan through which employees receive cash bonuses for submitting money-saving suggestions.

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19
Q

Gain sharing plans

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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20
Q

Advantages of gain sharing

A
  1. self funding
  2. generate productivity
  3. positive work group norms
  4. increased commitment
  5. awareness of the business and improved communication
  6. can be applied to non-for-profit
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21
Q

Disadvantages of gain sharing

A
  1. extra costs
  2. not amendable
  3. personal focus on maximizing bonuses
  4. provides additional matters to argue about
  5. free riding
  6. not often effective
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22
Q

Goal-sharing plan

A

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

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23
Q

Advantages of goal-sharing

A
  1. simple and flexible
  2. less costly
  3. amendable
  4. motivational
  5. positive group norms
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24
Q

Disadvantages of goal-sharing

A
  1. arbitrary
  2. no established basis for judging value
  3. difficult to set goals
  4. situational factors affect goals
  5. dissatisfaction when goal isn’t reached
  6. conflict
  7. high discontinuation
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25
Q

Competitive bonus plan

A

group pay plan that rewards groups for outperforming other groups

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26
Q

Pooled performance pay

A

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

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27
Q

Group commissions

A

Pay plan in which commissions of group of sales workers are pooled and then equally shared.

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28
Q

Group piece rates

A

Pay plan in which group members get paid based on the number of products produced by the group.

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29
Q

Employee profit-sharing plan

A

Formal pay program in which a firm provides bonus payments based on firm profitability.

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30
Q

Current distribution profit-sharing plan

A

Profit-sharing plan that distributes the profit-sharing bonus to employees in the form of cash or shares.

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31
Q

Deferred profit-sharing plan

A

The profit-sharing bonuses are allocated to employee accounts but not paid out until a later date

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32
Q

Combination profit-sharing plan

A

Plan that combines the current distribution and deferred plans

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33
Q

Employee stock plan

A

Type of plan through which employees acquire shares in the firm that employs them.

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34
Q

Employee stock bonus plan

A

Plan through which employees receive shares in their employer firm at no cost

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35
Q

Employee share purchase plan

A

Employees may purchase shares in their employer firm

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36
Q

Employee stock option plan

A

Employees are provided with options to purchase shares in their employer at a fixed price within a limited time period.

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37
Q

Long-term incentives

A

Type of performance pay in which the incentives are tied to an organization performance horizon that ranges beyond one year

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38
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 accomplishment

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39
Q

Performance share plan

A

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

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40
Q

Employment Standards Legislation

A

Legislation that sets minimum standards for pay and other conditions of employment.

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41
Q

Human rights legislation

A

Legislation that prohibits discrimination in hiring or employment on the basis of race, gender, ethnic origin, religion, gender, marital status or age.

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42
Q

Trade union legislation

A

Legislation that defines the rights of parties involved in a collective bargaining relationship.

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43
Q

Labour market constraints

A

Constraints on compensation flowing from the relative levels of demand and supply for particular occupational groups.

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44
Q

Product/service market constraints

A

constraints on compensation caused by the nature of the product or service market in which the firm operates.

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45
Q

The compensation strategy formulation process

A
  1. define required behaviour
  2. define role of compensation
  3. determine compensation mix
  4. determine compensation level
  5. evaluate proposed strategy
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46
Q

Technical ladder

A

Defined progression of skills development to keep work interesting and provide opportunities for higher compensation.

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47
Q

Lag compensation-level strategy

A

compensation-level strategy based on paying below the average compensation in a labour market.

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48
Q

Lead compensation policy

A

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

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49
Q

Match compensation policy

A

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

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50
Q

utility analysis

A

A method used to analyze whether a lead, lag, or match compensation strategy is best for an organization.

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51
Q

Hybrid compensation policy

A

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

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52
Q

Three basic screens

A

Affordability, legality, and employee attraction

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53
Q

Contingent workers

A

workers not employed on a permanent full-time basis.

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54
Q

Job sharing

A

Two workers who share one full-time permanent job.

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55
Q

Balance sheet approach to expatriate pay

A

Approach to designing expatriate compensation that attempts to provide a standard of living comparable with the home country.

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56
Q

Negotiation approach to expatriate pay

A

entails negotiation between employer and employee to create a mutually acceptable compensation package.

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57
Q

Localization approach to expatriate pay

A

entails paying expatriate employees the same compensation as local nationals in equivalent positions.

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58
Q

Lump sum approach to expatriate pay

A

various allowance amounts are paid directly in home-country currency.

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59
Q

Job analysis

A

Process of collecting information on which job descriptions are based.

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60
Q

Job description

A

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

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61
Q

Job specifications

A

Employee qualifications deemed necessary to successfully perform the duties for a given job.

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62
Q

Four principal methods of job analysis

A
  1. observation
  2. questionnaires
  3. interviews
  4. functional job analysis
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63
Q

5 major methods for job evaluation

A

ranking
classification or grading
factor comparison
statistical/policy capturing
point method

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64
Q

Ranking method

A

The relative values of different jobs are determined by knowledgable individuals

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65
Q

Paired comparison method

A

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

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66
Q

Classification/grading method

A

The use of generic grade descriptions for various classes of jobs to assign pay grades to specific jobs.

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67
Q

Factor comparison method

A

Assigns pay levels to jobs based on the extent to which they embody various job factors.

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68
Q

Statistical/policy capturing method

A

Combines use of statistical methods and job questionnaires to derive job values based on prevailing external or internal pay rates.

69
Q

The point method

A

Establishes job values by the application of points to each job based on compensable factors.

70
Q

Three main purposes for conducting job evaluation

A

control wage costs, create an equitable pay structure, and create perceptions of equitable pay

71
Q

Four events that can trigger a need to re-evaluate jobs

A
  1. job itself has changed
  2. organizational strategy has changed
  3. job eval. system is no longer working
  4. legislative conditions require it
72
Q

Job-to-job method

A

Establishes pay equity by comparing a female job class to a male job class that is comparable in terms of job evaluation criteria.

73
Q

Proportional value method

A

Establishes pay equity where no comparator male job class exists by extrapolating a hypothetical male comparator job class based on other male job classes.

74
Q

Proxy comparison method

A

Establishes pay equity in public sector organizations where neither job-to-job method nor the proportional value method can be used.

75
Q

Permissible differences

A

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

76
Q

Five main steps in developing a job evaluation system using point method:

A
  1. identify key characteristics that differentiate the value of jobs
  2. develop a measuring scale for each factor
  3. weight each factor according to its importance.
  4. apply job evaluation system to every job
  5. test the results
77
Q

Compensable factors

A

Characteristics of jobs that are valued by the organization and differentiate jobs from one another.

78
Q

Four main categories of compensable factors

A

skill, effort, responsibility and working conditions

79
Q

Benchmark job

A

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

80
Q

Market Line

A

A regression line that relates job evaluation points to market pay 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

Correlation coefficient

A

A statistic that measures the extent to which plots of two variables on a graph fall in a straight line.

83
Q

Pitfalls of point method

A
  1. inconsistent construction formation
  2. factor overlaps
  3. hierarchal grounding
  4. gender bias
84
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.

85
Q

Pay grade

A

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

86
Q

Pay range

A

The minimum and maximum pay rates for jobs in a particular pay grade.

87
Q

Equal interval approach

A

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

88
Q

Equal increase approach

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.

89
Q

Equal percentage approach

A

Method to establish pay grade sizes in which each pay grade increases in width by an equal percentage

90
Q

Broadbanding

A

The practice of reducing the number of pay grades by creating large grades sometimes known as bands.

91
Q

Intergrade differentials

A

The differences between the range midpoints of adjacent pay grades in a pay structure.

92
Q

Range spread

A

The difference between the max and min pay level for a given pay range.

93
Q

Range spread percentage

A

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

94
Q

Just noticeable difference

A

The amount of pay increase necessary to be considered significant by employees receiving the increase.

95
Q

Reward

A

Anything provided by the job or the organization that satisfies an employee need.

96
Q

Extrinsic reward

A

Factors that satisfy basic human needs for survival and security, as well as social needs and needs for recognition.

97
Q

Intrinsic reward

A

Factors that satisfy higher-order human needs for self esteem, achievement, growth and development.

98
Q

Incentive

A

A promise that a specified reward will be provided if a specified employee behaviour is performed.

99
Q

Reward system

A

The mix of intrinsic and extrinsic rewards that an organization provides to its members.

100
Q

Comensation system

A

The economic or monetary part of the reward system.

101
Q

Total rewards

A

A compensation philosophy that considers the entire spectrum of rewards that an organization may offer to employees.

102
Q

Reward strategy

A

The plan for the mix of rewards to be provided to members along with the means through which they will be provided.

103
Q

Base pay

A

The foundation pay component for most employees, usually based on some unit of time worked.

104
Q

Performance pay

A

Relates employee monetary rewards to some measure of individual, group, or organizational performance.

105
Q

Indirect pay

A

Noncash items or services that satisfy a variety of specific employee needs sometimes known as employee benefits.

106
Q

Compensation strategy

A

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

107
Q

Optimal reward system

A

The reward system that adds the most value to the organization after considering all its costs.

108
Q

Required Professional Capabilities

A

A set of capabilities designated by the Canadian Council of Human Resources Associations as essential for HR practitioners and required for CHRP.

109
Q

Organizations

A

Systems that apply procedures to a set of resources to transform inputs into valued outputs.

110
Q

Technology

A

Procedures and resources used by an organization to transform inputs to outputs.

111
Q

Business strategy

A

An organization’s plan for achieving its goals/

112
Q

Organization structure

A

The means through which an organization generates the behaviours necessary to execute its business strategy.

113
Q

Contingency approach to organization design

A

An approach to organization design based on the premise that the best type of structure for an organization depends on the key contingencies associated with that organization.

114
Q

Job design

A

A dimension of organization structure that describes the manner in which the total task of an organization is divided into separate jobs.

115
Q

Coordination and departmentation

A

A dimension of organization structure that describes the methods used to coordinate the work of individual employees and subunits in the organization.

116
Q

Control structure

A

Describes the nature of the processes used to control employee behaviour

117
Q

Managerial strategy

A

One of three main patterns or combinations of structural variables that can be adopted- classical, human resources or high involvement.

118
Q

Contextual variables

A

Factors in the firm’s context that indicate the most appropriate managerial strategy and organizational structure

119
Q

Classical managerial strategy

A

Assumes most employees inherently dislike work but can be induced to work in order to satisfy their economic needs

120
Q

Human relations managerial strategy

A

Assumes most employee inherently dislike work but can be induced to work to satisfy social needs

121
Q

High involvement managerial strategy

A

Assumes that work can be intrinsically motivating if the organization is structured properly

122
Q

Organizational culture

A

The set of core values and understandings shared by members of an organization.

123
Q

Five contextual variables

A

environment, corporate strategy, technology, organization size, nature of the workforce

124
Q

Defender business strategy

A

focuses on dominating narrow product or service market segment

125
Q

Prospector business strategy

A

Focuses on identifying and exploiting new opportunities quickly

126
Q

Analyzer business strategy

A

focuses on exploiting new opportunities at an early stage while maintaining base of traditional products/services

127
Q

Low-cost business stategy

A

depends on providing low-cost products/services to a broad range of customers

128
Q

Focused low-cost strategy

A

providing low-cost to a narrow range of customers

129
Q

Long-linked technology

A

Divides the total task of producing a product or service into a series of small sequential steps performed by different employees

130
Q

Mediating technology

A

Uses standardized transactions to connect parties wishing a mutually beneficial relationship

131
Q

intensive technology

A

Requires each item or case to be dealt with individually, depending on the specific nature of each case

132
Q

routine technology

A

Few exceptions occur during the production process and those exceptions that occur can be dealt with in a standardized way

133
Q

nonroutine technology

A

many exceptions are inherent in the production process and there is no standardized way to deal with exceptions

134
Q

Craft technology

A

few exceptions occur but there is no standardized way to deal with them

135
Q

Engineering technology

A

Many exceptions occur but there are standardized ways of dealing with them

136
Q

process technology

A

Manufacturing technology that produces a single product in a continuous flow

137
Q

Three basic types of reward problems

A

failure to produce desired behaviour
production of desired behaviour with undesirable consequences
production of reward dissatisfaction

138
Q

Membership behaviour

A

occurs when employees decide to join and remain with a firm

139
Q

Task behaviour

A

occurs when employees perform the tasks that have been assigned to them

140
Q

organizational citizenship behaviour

A

Occurs when employees voluntarily undertake special behaviours beneficial to the organization

141
Q

Job satisfaction

A

attitude one holds toward one’s job and workplace

142
Q

Work motivation

A

attitude one holds toward good job performance

143
Q

Organizational identification

A

A sense of shared goals and belongingness and the desire to remain a member of the organization

144
Q

Relationships between attitudes and behaviours

A

job satisfaction = membership behaviour
work motivation = task behaviour
organizational identification = citizenship behaviour

145
Q

Causes of reward dissatisfaction

A

violation of psychological contract
perceived inequity
relative deprivation
lack of organizational justice

146
Q

Psychological contract

A

Expectations about the rewards offered by a given job and the contributions necessary to perform the job

147
Q

Equity theory

A

employees’ base perceptions of equity on a comparison of their contributions/rewards ratio to others perceived as being similar

148
Q

Distributive justice

A

Perception that overall reward outcomes are fair

149
Q

Procedural justice

A

perception that the process for reward determination is fair

150
Q

Equity sensitivity

A

a personality trait that entails a high predisposition toward perceiving personal inequity

151
Q

Organizational commitment

A

The strength of the individual’s attachment to their organization

152
Q

Affective commitment

A

Attachment to an organization based on positive feelings toward the organization

153
Q

Continuance commitment

A

Attachment to an organization based on perceived lack of better alternatives

154
Q

content theories of motivation

A

focus on understanding motivation by identifying underlying human needs

155
Q

Process theories of motivation

A

focus on understanding motivation by determining the processes humans use to make choices about the specific actions they will take

156
Q

Maslow’s hierarchy of needs

A

survival needs
safety needs
social needs
ego needs
self-actualization

157
Q

Two-factor theory of motivation

A

Argues that intrinsic factors influence work motivation while extrinsic factors influence job satisfaction

158
Q

Task identity

A

The extent to which a worker performs a complete cycle of job activities

159
Q

Task significance

A

The perceived importance or social value of a given task

160
Q

Skill variety

A

The variety of skills required for task completion

161
Q

Job autonomy

A

Degree of freedom workers have in deciding how to perform their jobs

162
Q

need salience

A

The degree of urgency an individual attaches to the satisfaction of a particular need

163
Q

Reinforcement theory

A

states that a behaviour will be repeated if valued outcomes flow from that behaviour or if performing the behaviour reduces undesirable outcomes

164
Q

Expectancy theory

A

states that individuals are more likely to exert effort to perform behaviours if they believe the behaviour will lead to valued consequences

165
Q

Attribution theory

A

Argues that humans often act without understanding their motives and attempt to attribute motives to actions

166
Q

personal competencies

A

person’s physical, verbal and mental skills

167
Q

Personal values

A

core beliefs about appropriate and inappropriate behaviour

168
Q

personality characteristics

A

behavioural and emotional tendencies

Nipissing U (15 decks)

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