exam 2 topic 9 Flashcards
pay structure
Relative pay of different jobs and how much theyre paid
Pay Level
average pay, including wages, salary and bonuses
Job Structure
relative pay of jobs in an org. (range of salary grades)
External Equity
pay comparisons focusing on what employees in other orgs. are paid for doing the same job
Internal Equity
pay comparisons that focus on what employees in same orgs. are paid
efficiency wage theory
wages influence worker productivity
product-market competition
sells goods and services at a quantity and price that will bring a return on investment; upper bound on labor costs and compensation
labor-market competition
amount an org. must pay to compete with other orgs. hiring employees; lower bound on labor costs
Market pay surveys
focus on key jobs, wage data is collected from a relevant labor market
benchmarking
procedure by which an org. compares its own practices against the competition
key issues in market pay surveys
- which employers to include
- Which jobs to include
- how to weight and combine data
Job evaluation
method to measure internal job value; composed of compensable factors
Compensable factor
characteristics of a job that an org. values and chooses to pay for
Point factor system
quantitative approach to job evaluation using points to determine relative value of the job
point manual
handbook with description of compensable factors, point values and degrees
Developing a pay structure
- Market Survey
- Pay policy Line
- Pay grades
Market survey
Based on external comparisons; pay based on market surveys covering as many key jobs as possible
Pay policy line
Mathematical expression describing the relationship between a job’s pay and its job evaluation points
Pay grades
grouping of jobs of similar worth or content together
Market Survey data approach
emphasis on external data; (many jobs as possible) determine pay for non-key jobs
pay policy line approach
internal and external data; pay is on key and not key jobs based on job evaluation points
Pay grades approach
groups jobs into smaller sets of pay classes; range spread
Range Spread
distance btwn minimum and maximum pay in a range
Delayering
reduce the number of job lvls to achieve more flexibility
Broad-Banding
Collapse salary grades into a few wide bands
Limitations
fewer promotions
Advantages
= flexibility
pay-for-knowledge
pay increases based on mastery of new skills capable of using
Equal pay act of 1963
- prohibits gender discrimination in pay
- job pay should be equal if they are on similar levels
minimum wage
7.25
overtime
1.5x hourly rate after working 40 hours per week
Non exempt
covered by FLSA; eligible for overtime (hourly based)
exempt
not covered by flsa/ineligible for overtime (usually salary based)
