Employee Compensation

Question 1

Compensation

Answer 1

Money, benefits, and services paid to employees for their work

Question 2

Salary

Answer 2

Fixed cash compensation for work, usually by a yearly amount: Independent of the number of hours worked

Question 3

Wages

Answer 3

Cash payment based on the number of hours an employee has worked or the number of units an employee has produced

Question 4

Bonus

Answer 4

A cash payment, in addition to regular wage or salary, that serves as a reward for achievement

Question 5

Commissions

Answer 5

Employee compensation based on a percentage of sales made

Question 6

Profit Sharing

Answer 6

The distribution of a portion of the company’s profits to employees

Question 7

Gain Sharing

Answer 7

Tying rewards to profits or cost savings achieved by meeting specific goals

Question 8

Pay for Performance

Answer 8

An incentive program that rewards employees for meeting specific, individual goals

Question 9

Knowledge-based Pay

Answer 9

Pay tied to an employee’s acquisition of knowledge or skills: also called competency-based pay or skill-based pay