Final Exam Flashcards
What is total rewards?
a strategy that focuses on aspects of the workplace that are rewarding for employees, fueling motivation and performance achievement
What are the 5 elements of total rewards?
compensation
well-being
benefits
development
recognition
A total rewards strategy takes into account what employees _ to find the right mix of rewards.
value
Total rewards elevate a company’s ability to…
ARME
What does ARME stand for?
Attract
Retain
Motivate
Engage
Compensation programs should meet three basic standards called S.E.T, considered a best practice and what employees want. What does S.E.T. stand for?
Strategic
Equitable
Transparent
According to SHRM, what does pay transparency promote?
-closing the gender pay gap
-employee trust and loyalty to the company
-employee productivity
-employee engagement driving better overall organization success
What are the two forms of pay?
Base Pay and Variable Pay
What is base pay?
salaries
hourly rates
What is variable pay?
incentive awards
bonus payouts
This activity compares employee salaries, variable pay and/or salary ranges to assess the difference of company pay to market pay. What is this activity called?
Salary Market Analysis
Salary surveys are the main source for external pay data. What are some of the types of information that should be included in surveys to increase the validity of the analysis and findings?
Data cuts such as
industry or job family
revenue size
asset size and/or total number of employees
location
average salaries or weighted average salaries plus medians
When employee salary is higher than the market salary average, what equation do we use?
((employee salary) - (market average salary)) / market average salary = _ -> %
When employee salary is lower than the market salary average, what equation do we use?
((employee salary) - (market salary average)) / employee salary = _ -> %
What are the salary guidelines to properly interpret pay positioning against market?
- within 5% are at market
-up to 20% above or below are acceptable pay parameters
-over 20% above or below are outside acceptable pay parameters
What are salary ranges?
establish the internal pay parameters for jobs in a company
What are the three control points in a salary range?
minimum, midpoint, and maximum
What does the midpoint represent in market priced salary ranges?
midpoint is the same as the salary market average for the job
What does the midpoint represent in salary range structures?
average from blending of the salary ranges of all comparable jobs
What is job evaluation?
a formal process used to create an internal job value hierarchy within an organization based on defined criteria
In _ _ _, jobs are evaluated against a variety of compensable factors. Each factor is awarded points based on level category per factor.
point factor analysis
In point factor analysis, what are 5 factors that are used to evaluate jobs?
education
experience
complexity of decisions
authority/autonomy
mental effort
working conditions
supervisory responsibility
What does FLSA stand for?
Fair Labor Standards Act
What are the three primary areas covered in FLSA?
minimum wage
work week hours
rules for child labor
To determine whether jobs or employees are exempt or non-exempt from FLSA for white collar jobs, what are the five exemption tests used to determine classification?
administrative
executive
learned professional
creative
computer professional
Jobs that are non-exempt qualify for _ pay.
overtime
Employees working in excess of 40 hours within a work week are to receive overtime pay. What is the formula for overtime pay?
Rate of pay X 1.5 for hours over 40
What are the 4 elements of developing an effective compensation communications plan?
-develop the goals and objectives
-target audience
-key messages?
-mediums to uses
What are the three main types of compensation practices?
salary determinations
salary adjustments
salary administration
Salary determinations in compensation practice are most applied in what three areas?
new hire salary offers
promotional increases
lateral moves
Salary adjustments are used as a _ or _ to a compensation situation.
correction or remedy
Salary adjustments are most often applied in five different situations. what are they?
when a salary is
-below minimum
-over maximum
-internal equity
-external equity
-compression
what is salary compression?
when a newer employee receives pay at the same or higher levels
What are the three areas that salary administration manages and monitors?
-salary planning & budgeting
-annual salary range adjustments
-annual salary increases
Merit increases are annual salary increases determined by performance achievement, also know as _.
pay for performance
When companies apply a merit matrix to determine merit increases, performance level plus _ determines the level of increase an employee should recieve.
position in range (comparatio)
Pay equity is the practice of _ mitigating employee wage
inequalities and resolving wage disparities based on various criteria most typically identified with gender but also other areas
protected under different U.S. laws
equal pay for equal work
What are at least three significant outcomes of the Lilly Ledbetter Case, looking at it from beginning to end?
- change of statute of limitations for pay/pay practice discrimination cases
-record keeping rules for employers
-movement towards pay transparency
-focus on pay equity
a segment of the labor force/market that is relegated to freelance or short-term contract work as opposed to ongoing employment in a regular full-time job is called what?
the gig economy
approximately _ million Americans, nearly _% of the total U.S. workforce, are full or part time gig workers.
59, 36%
What are some of the pros or positive aspects of a gigger?
-flexibility
-greater independence
-pay
-variety
-interesting work
-additional income
-suitable to lifestyle
What are some of the cons or negative aspects of being a gigger?
-no benefits
-quarterly taxes
-personal expenses
-pay
-solitary
-stress
employers offer benefit plans that are designed to help protect income. these plans are either _ or _.
mandatory or nonmandatory
what are the income protection plans that are mandatory?
-unemployment insurance
-workers compensation insurance
-social security
-disability insurance (only 5 states)
for each mandatory income protection plan, who pays?
Employers:
-workers compensation
-unemployment insurance
-social security
Employees:
-social security
-disability insurance (only 5 states)
What are the income protection plans that are non-mandatory?
-health & welfare plans
– insurance & disability
-Retirement & investment plans
–defined benefit (pension(
–defined contribution
(401k)
in addition to income protection plans, what is one more primary category of benefits?
time off benefits
name 5 types of time off plans
-PTO
-vacation
-sick days
-personal days
-legal holidays
-bereavement leave
-military leave
-jury duty
-volunteer time off
are time off benefits mandatory or non mandatory?
non mandatory
what does ERISA stand for?
Employee Retirement Income Security Act
What is ERISA and its purpose?
governs all retirement, pension, and health insurance coverage employers provide its employees as part of a plan
-ensures that employees receive the benefits offered and agreed to by the employer
What is total compensation?
is the full monetary value of all pay and benefits combined that employees receive annually
What is total cash compensation?
is the value of base (or fixed) pay with any additional variable payouts
what is market-based job evaluation method?
valuing jobs internally based on the external job salary market
what is the content job evaluation method?
valuing jobs internally based on the internal job salary market
Total Rewards of which compensation and benefits are a large part, is a _ that focuses on aspects of the workplace that are rewarding for employees, fueling
_ and _.
strategy, motivation and performance achievement
what are the four ways in which total rewards elevated an employer’s capability?
AMRE
to what theoretical hierarchy model is total rewards related?
Maslow’s Hierarchy of Needs
What are the number and name of the levels of the Maslows model that are most closely correlated to compensation and benefits?
compensation - level 1 physiological needs
benefits - level 2 safety needs
For total rewards to be effective, they need to _ with employee values
align
Ten steps are included in developing
a full compensation program. Name
the step that determines employee pay differentials to external salary averages?
Salary market analysis
What is a salary range?
A salary range establishes the internal pay parameters for jobs at a certain level or grades based on job value that is linked to the external
market.
Managers use _ _ as a tool to determine new hire salaries, promotion/annual
increases, adjustments etc. that assist with internal pay equity and market competitiveness. They also can be used for pay transparency.
salary ranges
When is an employees pay not acceptable and should be corrected?
When the employee’s salary is below the minimum of the job salary range
What are lump sum bonuses and when are they used?
- one time payment for annual increase that is not added to salary
-salary is over the max of salary range
People by nature resist change. Change is often equated to what process?
grieving
How do companies help mitigate change resistance for employees?
communications and communications planning
Lilly Ledbetter Fair Pay Act was passed in _ and had a significant impact on _ _.
2009, pay equity
What is pay equity?
equal pay for equal work
What is the calculation of employee salary in comparison to market? (compa-ratio) What does it mean in relation to guidelines?
actual salary/salary midpoint
how far is it from the midpoint
