Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

HR Competencies > PEOPLE III > Flashcards

PEOPLE III Flashcards

1
Q

Total Rewards

A

Includes everything the employee perceives to be of value resulting from the employment relationship.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Rewards: benefits

A

Retirement, health care, sick pay/disability schemes, life insurance, and paid time off,. External and internal training and development that employees receive is also considered a benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Rewards: Compensation

A

Salary and allowances. Commissions and bonuses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Rewards: Perquisites

A

Compensation provided on an individual basis in the form of goods or services. Ex: cars and mobile devices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Rewards: Incentives or premiums

A

Payments in return for the achievement of specific, time-limited, targeted objectives.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

. Rewards: Location

A

City or suburbs;nearness to transportation, shopping, restaurants.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Rewards: Flexibility

A

Work attire, schedules, work-at-home opportunities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Rewards: Social interaction

A

Friendly workplace, family picnics or outings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Total rewards strategy

A

A plan or method implemented by an organization that provides monetary, benefits-in-kind, and developmental rewards to employees who achieve specific business goals.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Compensation philosophy

A

A short statement documenting the organization’s guiding principles and core values about employee compensation. The why behind employee pay.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Compensation philosophy passes the following quality test

A

Is the overall program equitable?
Is the overall program defensible and perceived by employees as fair?
Is the overall program fiscally sensitive?
Is the compensation philosophy legally compliant?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Compensation philosophy passes the following quality test continued

A

Can the organization effectively communicate the philosophy to employees and prospective candidates?
Are the programs the organization offers fair, competitive, and in line with the compensation philosophy and policies?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Building a total rewards strategy

A

Assessment: Evaluate the current compensation and benefits systems and the effectiveness of those systems in helping the organization reach its goals. Employees are usually surveyed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Building a total rewards strategy

A

Design: Identifies and analyzes various reward strategies to determine what would apply best in their workplace. Decisions are made about what will be rewarded and what rewards will be offered to employees for those achievements.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Building a total rewards strategy

A

Implementation: Implements the new rewards system and circulates materials that communicate the new strategy to employees. Training also commences so that department managers are able to effectively measure the achievement and employees understand what they need to accomplish to receive the rewards.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Building a total rewards strategy

A

Evaluation:

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Organizations typically take one of two basic approaches toward employees: Entitlement-oriented

A

Some organizations promote a caring, protective feeling and want employees to feel as if they are part of the family. In general, as benefits increase, there is less emphasis on individual employee contributions and responsibility and more emphasis on the success of the organization as a whole.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Organizations typically take one of two basic approaches toward employees: Contribution-oriented

A

Compensation programs of other organizations are more performance-driven, putting emphasis on the performance and contributions of individual employees. Compensation systems emphasize performance-based pay, incentives, and shared responsibility for benefits.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Pay Equity

A

Related to the fairness of compensation and benefits paid to employees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Internal Equity

A

Occurs when employees feel that performance or job differences result in corresponding differences in rewards that are fair.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

External Equity

A

Involves comparing an organization’s compensation levels and benefits to those of other organizations that are in the same labor market and that compete for the same employees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Lag market competition

A

Sets pay rates below those of other organizations.
May enable an organization to offset other higher costs such as purchasing, distribution, or sales expenses.
Will offer other benefits such as learning and development, attractive roles via career paths.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Match market competition

A

Offers wage rates and benefits packages similar to that of the competition.
Often referred to as being externally competitive.
Most common approach.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Lead market competition

A

Offers higher wages and/or better benefits in an attempt to attract and keep the best talent.
Rationalizes that higher-quality employees are most productive, which makes up for the higher salaries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Implications for Global Compensation and Benefits Strategy: Ethnocentric

A

This leads to transfer of headquarters total compensation policies, with inadequate consideration of local legal and cultural differences.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Implications for Global Compensation and Benefits Strategy: Polycentric

A

Local cultural and legal compensation norms are more likely to be understood and emplemented

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Implications for Global Compensation and Benefits Strategy: Regiocentric

A

There is greater potential for consistency of remuneration approaches within a region.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Implications for Global Compensation and Benefits Strategy: Geocentric

A

Local compensation strategies are more likely to be consistent with global policies. A desire for too much global consistency can lead to the imposition of inappropriate policies at the local country level.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

4 reasons for communication for the total rewards strategy

A
  1. Educating employees about the organization’s total rewards practices.
  2. Achieving employees’ buy-in and making them aware of the overall value.
  3. Supporting the organization’s strategic objectives
  4. Supporting the organization’s goals for performance management.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Required communication

A

Some communications are mandated by laws and statutory regulations.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Common items included in a total compensation statement are:

A 
Salary/hourly rate.
medical benefits coverage
flexible spending account information
Paid leave
Disability insurance
life insurance
employee assistant program
retirement benefits
educational assistance programs
relocation expenses
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Self-service technologies and employee self-service (ESS) applications provide employees with quick and easy access to compensation and benefits information online.

A

Less administrative tasks for HR.
Increased accuracy of employee data.
Improved timeliness in information and employee transactions.
Reduced dollars spent on other traditional HR delivery channels (Paper-based transactions)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Two effective practices for compliance are to always:

A
  1. Research local laws versus organizational practices.
  2. Involve experts, internal or external, to validate particularly complex local compensation and benefits practices and requirements in order to implement compliant and culturally accurate programs.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Is the system strategy in compliance?

A

How easy is it for the organization to meet legal requirements?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Is the system strategy in compliance?

A

Does the system protect employee privacy and the organization’s proprietary data?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Is the system strategy in compliance?

A

Does the system support the organization’s diversity/inclusion goals?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

A project team working on the design of a total rewards strategy decides to survey employees’ attitudes. This survey is done during which project phase?

A

Assessment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Which philosophy would an entitlement-oriented organization embrace?

A

Across-the board annual raises

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

What is a major advantage of an organization having internal equity?

A

It allows organizations to fairly recognize unique jobs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

An employee is motivated by knowing there is room for base pay to grow. This BEST exemplifies

A

Pay transparency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

When an organization operates in a jurisdiction where there are multiple sets of laws and regulations in force, the organization must

A

Comply with all employment laws, codes, and practices.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Activities in Compensation System Design: Job Analysis

A

identifies job tasks and qualifications of incumbents

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Activities in Compensation System Design: Job Documentation

A

Creates job descriptions/specifications

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Activities in Compensation System Design: Job Evaluation

A

Establishes value of jobs within organization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Activities in Compensation System Design: Pay Structure

A

Establishes pay grades/ranges

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Job analysis

A

A systematic study of jobs to determine what activities (tasks) and responsibilities they include, the personal qualifications necessary for performance of the jobs, and the conditions under which the work is performed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Job analysis gathers information: Job context

A

The purpose of the job, its work environment, its place in the organizational structure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Job analysis gathers information: Job content

A

The duties and responsibilities of people who hold the job.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Job analysis gathers information: Job specifications/qualifications

A

knowledge, skills, and abilities required for a person to have a reasonable chance of successfully performing the job.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Job analysis gathers information: Performance criteria

A

Desired behaviors/results that will constitute performance in the job.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Job Analysis Methods: Observation

A

Direct observation of employees performing the tasks of a job, recording observations, and translating them into the necessary knowledge, skills, and abilities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Job Analysis Methods: Interview

A

Face-to-face interview in which the interviewer obtains the necessary information from the employee, peers, supervisors, and team/unit members about knowledge, skills, and abilities needed to perform the job.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Job Analysis Methods: Open-ended questionnaire

A

For job incumbents and sometimes managers, asking about the KSAs necessary to perform the job.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Job Analysis Methods: Highly structured questionnaire

A

Questionnaires structured in a manner that allows only specific responses, aimed at determining the frequency with which specific tasks are performed, their relative importance, and the skills required.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Job Analysis Methods: Work diary or log

A

Record maintained by the employee. Job information, including the frequency and timing of tasks, is recorded in the diary.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

Job documentation results in three deliverables

A

Job descriptions, Job specifications, Job Competencies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

Job documentation helps compensation systems

A

Helps to set up evaluation criteria for job performance.
Provides data for comparing pay with that of other organizations.
Helps in assigning objective classifications or job titles to employees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

Job evaluation

A

Determines the value and price of a job in order to place and compare it within an organization as well as attract and retain employees in a competitive environment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

Job-content-based job evaluation

A

The relative worth and pay structure of different jobs are based on an assessment of their content (responsibilities and requirements) and their relationship to other jobs within the organization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

Two common non quantitative methods include

A

job ranking and job classification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

Job Ranking

A

Involves establishing a hierarchy of jobs from lowest to highest based on each job’s overall value to the organization. Ranking evaluates the whole job, rather than parts of it, and compares on job to another.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

Paired-comparison method

A

Used in which each job is compared with every other job being evaluated.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

Job classification method

A

writes descriptions for each class of jobs. Individual jobs are then put into the grade that best matches their class description, based on the judgment of the evaluator.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

Quantitative methods evaluate the job using a variety of factors - often called compensable factors.

A

Compensables factors reflect how much the job adds value to the organization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

Compensable factors should

A

Reflect the actual work being done.
Be supported by documentation such as job descriptions.
Reinforce the organization’s strategic plan and culture.
Be valued by all affected parties (stakeholders).
Be reviewed annually.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

Point-factor system

A

The compensable factors chosen for the evaluation must reflect the nature of the job being evaluated. Example: Hazards and working environment would be pertinent factors in a manufacturing setting but not as relevant in most office jobs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

The factors most commonly used in point-factor evaluations include:

A

Skills, responsibilities, Effort and Physical Demands, Working conditions, supervision of others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

Market-based job evaluation

A

The relative worth and pay structure of different jobs are based on their market value or the going rate in the marketplace.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
69
Q

Remuneration Surveyes

A

Collect information on prevailing market compensation and benefits practices, including starting wage rates, base pay, pay ranges, other statutory and market cash payments (EX: OT and shift differentials), variable compensation (short and long term incentive plans) and time off

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
70
Q

Internal Surveys

A

Organizations that have available resources and expertise may choose to develop their own internal survey to allow for more control over the survey technique and data analysis.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
71
Q

Disadvantages of an internal survey

A
  1. competitors may not be willing to cooperate and to share their pay structures
  2. Matching the positions may be difficult.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
72
Q

Advantages of using an independent consultant for internal surveys

A
  1. The organization still maintains control over the internal survey
  2. Outsourcing the task may place less demand on organizational resources.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
73
Q

External Surveys

A

External surveys may draw on extensive databases of incumbents and industry benchmarks and can provide real-time insights into total compensation levels, practices, and emerging trends.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
74
Q

Benefits of compensation and benefits benchmarking and consulting:

A
  1. Access to pay data
  2. Knowledge of local and regional laws and cultural practices
  3. Assessment of current market position.
  4. Improved understanding of current market practices as well as key market trends and innovative ideas.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
75
Q

Two types to developing pay structure

A
  1. Grouping jobs into pay grades and setting pay ranges
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
76
Q

Pay grades

A

Used to group jobs that have approximately the same relative worth in an organization. All jobs within a particular grade are paid the same rate or within the same pay range.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
77
Q

Number of pay grades an organization has will depend on the following factors

A
  1. The size of the organization ( how many employees and positions in the organization)
  2. The distance between the highest- and lowest-level jobs
  3. How clearly the organization defines and differentiates jobs
  4. The organizational policies regarding pay increases and promotions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
78
Q

For each pay grade:

A

An organization creates a pay range that sets the upper and lower limits of compensation for employees whose jobs fit within that particular grade.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
79
Q

Developing a pay structure:

A
  1. Develop a market line for all jobs, comparing the job evaluation points or values with the market value for comparable jobs.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
80
Q

Developing a pay structure:

A
  1. use the market line to decide pay grades by grouping together the jobs with similar value to the organization
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
81
Q

Developing a pay structure:

A

Spread pay grades evenly over the points or values on the market line, attempting to place jobs in the middle of the pay grade.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
82
Q

Developing a pay structure:

A

Calculate the pay ranges for each grade. Assuming that the jobs are placed in the middle of the range (midpoint). set up a range spread that fits with the type of positions and the number of grades. Each pay range will have a minimum, midpoint, and maximum, with equal distance between each.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
83
Q

Developing a pay structure:

A

Calculate individual pay rates using a pay policy line that is set by the organization. Example: in a highly competitive marketplace, an employer may decide to hire employees at 105% of the pay structure, or 5% above the midpoint each range.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
84
Q

Compa-ratios

A

When pay ranges are based on the target market rate. The indicator as to how actual wages match, lead, or lag the target market.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
85
Q

Compa-ratios are computed by dividing the pay rate of an employee by the midpoint of the pay range.

A

Compa-ratio=pay rate/midpoint

86
Q

Broadbanding

A

Combines two or more salary grades to create larger ranges and give people wide latitude to move within their job without outgrowing the pay scale.

87
Q

Advantages of broadbanding

A

Provides wider ranges than the spread of a traditional pay range.
Reduces the number of job grades.
Reduces the number of reporting levels within an organization.

88
Q

Disadvantages of broadbanding

A

Affords less control for the organization in salary and promotion decisions.
Reduces the opportunity for promotion and accompanying job title and base salary changes;fewer salary ranges lessens promotions to another range, which can lead to retention issues

89
Q

A job analysis has identified several knowledge, skill, and ability requirements for salespeople responsible for selling a product line to corporate accounts and government agencies. What example of a knowledge requirement?

A

Identifying product features and benefits

90
Q

What is an example of a skill requirement?

A

Demonstrating product features

91
Q

What is an example of an ability requirement?

A

Maintaining friendly relations with suppliers

92
Q

Which job evaluation method would provide a small organization with a quick and inexpensive way to compare one job to another?

A

Job ranking

93
Q

Which job evaluation method would be MOST appropriate for an organization that has a large number of people with similar, defined jobs?

A

Job classification

94
Q

Hr gathered salary data but was unable to analyze it until the following year. Is the data still considered usable?

A

yes, if the data is adjusted for wage inflation

95
Q

What is the compa-ratio for an employee who earns $15 per hour where the salary range has a midpoint of $12 per hour?

A

1.25

96
Q

Most employees receive some type of base pay, in one of two forms:

A
  1. Hourly wage(for each hour worked)

2. A salary (the same amount no matter how many hours are worked)

97
Q

Single-rate pay or flat-rate pay systems

A

Each incumbent of a job has the same rate of pay, regardless of performance or seniority.

98
Q

Time-based step-rate pay system

A

The employee’s pay rate is based on longevity in the job. Pay increases occur on a pre-determined schedule.

99
Q

Performance-based pay system

A

The individual employee’s performance on the job is the basis for the amount and timing of pay inreases

100
Q

A performance-based pay system is commonly called

A

merit pay or pay for performance

101
Q

Difficulties in using merit pay

A
  1. The incentive value of the reward offered may be too small to motivate performance.
  2. The link between performance and rewards may be weak.
  3. Managers may be reluctant to distinguish between performance levels.
102
Q

Guidelines for effective use of merit pay

A

Gain executive buy-in.
Align the merit pay system with organizational goals and culture.
Develop accurate performance appraisal systems that recognize proficiency. Proficiency at a job should dictate value and awards (not just longevity or tenure or other subjective measures)

103
Q

Guidelines for effective use of merit pay continued

A

Train supervisors in the mechanics of the performance appraisal system and in the art of giving feedback.
Tie meaningful rewards closely to performance.
Use a wide range of increases to differentiate between performance levels.

104
Q

Productivity-based pay system

A

Pay is determined by the employee’s output

105
Q

Straight Piece-Rate System

A

The employee receives a base wage rate and is awarded additional compensation for the amount of output produced.

106
Q

Differential Piece-Rate System

A

The employee receives one piece rate up to the standard and then a higher rate once the standard has been exceeded.

107
Q

Person-based pay

A

employee characteristics, rather than how the job is performed, determine pay.

108
Q

Knowledge-based system

A

pay is based on the level of knowledge the employee has in a field. This approach is dominant for compensating learned professions such as scientists or teachers, although staff professionals may also be paid this way.

109
Q

Skill-based systems

A

Base pay on the number of different skills an employee is qualified to perform. Employees increase their pay by acquiring new skills, even if they do not use the skills in their current assignment.

110
Q

Competency-based systems

A

Set pay at the level at which an employee can operate in defined competencies (Directing or training others). This type of system is commonly found when rewarding professional groups of employees.

111
Q

Single- or flat-rate system (advantages)

A

Works well for routine, simple jobs.

Implemented and administered simply

112
Q

Single- or flat-rate system (disadvantages)

A

Does not reflect individual performance, seniority, or skill differences

113
Q

Time-based step-rate system

advantages

A

Best suited to routine jobs where the qualifications of job incumbents increase with time.

114
Q

Time-based step-rate system

disdvantages

A

Generally does not reflect the varying rates at which incumbents become proficient.
Does not reflect performance differences, except for unsatisfactory performance
Can raise average pay levels over time even if performance is below average

115
Q

Performance-based/merit pay system; pay for performance

advantages

A

Works best where individual performance is valued and accurately measured.
Rewards and encourages superior performance.

116
Q

Performance-based/merit pay system; pay for performance

disadvantages

A

Requires well-documented performance appraisal systems on which managers have been thoroughly trained.
Can be manipulated by supervisors to benefit certain employees over others.
Bias or subjectivity in performance appraisals may lead to employee discrimination claims

117
Q

Productivity-based system (advantages)

A

Works best where emphasis is on quantity of work and outputs are accurately measured.
Encourages high level of employee productivity.
Ties pay to the volume of the work performed.

118
Q

Productivity-based system (disadvantages)

A

May sacrifice quality of work without careful supervision

May lead to inflexibility in the workforce bc employees may want to stay with the job for which they are paid the most.

119
Q

Person-based system (advantages)

A

Works best where skill/knowledge levels are well defined and development of employees is valued.
Encourages a flexible and better-trained workforce.
May reduce need of specialists
Allows for work teams that are highly interdependent.

120
Q

Person-based system (disadvantages)

A

Can be costly in terms of both administration and training.
May result in high pay rates.
Skills/knowledge must be effectively utilized to provide the organization with an offset to the higher pay rates.
May be more difficult to institute cost controls

121
Q

Red-circle rates

A

Employee pay rates above the range maximum

122
Q

Green-circle rates

A

Are the opposite of red-circle rates-and employee’s pay is below the minimum of the range.

123
Q

Examples of when red-circle rates may occur

A

When long-term employees reach the maximum rate in their range or when promotion opportunities are rare
When employees are bumped down to a lower-level job, rather than getting laid off, but their salary is not reduced ( Sometimes a red-circle is rate frozen until the pay structure is increased enough so that the rate falls within the range.)

124
Q

Examples of when red-circle rates may occur

A

When a manager is paid at the top of the job range but there are no openings at the next job range ( In this case, bonuses are sometimes used to increase the manager’s take-home pay.)

125
Q

Green-circle rates can happen when an organization

A

Promotes an employee or “tries out” an employee who does not possess all the requisite KSAs for a job.

126
Q

Green-circle rates can happen when an organization

A

Reviews and updates its pay ranges, increasing minimums as a result

127
Q

Pay compression

A

Salary compression, describes situations where there is only a small difference in pay between employees regardless of their experience, skills, level, or seniority

128
Q

Pay compression typically occurs when:

A

Beginning salaries are raised due to increases in the minimum wage or inflation. Therefore, new hires can make the same as employees in the same job with more experience who began at a lower wage.

129
Q

Pay compression typically occurs when:

A

Labor market pay levels increase more rapidly than an employer’s pay adjustments. An example would be hiring an inexperienced systems engineer at or close to what more-experienced systems engineers earn bc of escalation in competitive hiring rates. If the experienced systems engineer is paid more than the experienced ones, pay compression occurs.

130
Q

Pay compression typically occurs when:

A

There is not enough difference between pay levels. This situation allows an employee making overtime to have a larger net pay than his/her supervisor even though the base pay of the employee is less than the supervisor’s pay.

131
Q

To counteract the effects of pay compression, organizations can:

A
  1. Match the market in pay rates for all employees, not just new hires.
  2. Provide other benefits to employees affected by pay compression.
  3. Continuously evaluate survey data and update pay ranges accordingly.
132
Q

To counteract the effects of pay compression, organizations can:

A
  1. Provide incentive plans for managers.
  2. Increase the amount of time off awarded.
  3. Provide longevity bonuses.
  4. Monitor salaries for inflation.
  5. Install a more aggressive merit pay program.
133
Q

Cost-of- living adjustment (COLA)

A

Is a pay adjustment given to all eligible employees without regard to organizational profitability, employee productivity, or other performance factors. Paid as a lump sum, or quarterly

134
Q

General pay increase

A

Is given to all employees (or sometimes a class of employees such as office or production workers) based on local competitive market requirements. This type of increase is awarded regardless of employee performance. The pay increase is not linked to the cost of living and will depend on the employer’s ability to pay for compensation increases.

135
Q

Seniority Increase

A

Is the time spent in an organization, is sometimes the basis for pay adjustments.

136
Q

Organizations may agree to one of these two conditions when seniority is used:

A
  1. Employees may need to be employed for a certain period of time before they are eligible for pay increases
  2. Employees may receive pay increases automatically after a set time in the job.
137
Q

Lump-Sum Increases (LSIs) or performance bonus

A

An LSi is a one-time payment of all or part of a yearly pay increase. An employee’s base wage rate is typically not adjusted by this increase.

138
Q

Market-Based Increases

A

Organizations may use market-based salary increases to be competitive in attracting new talent or to keep key employees. Market-based salary increases are usually added to base pay and may also be called equity increases

139
Q

Differential Pay (or variable pay)

A

Depends on performance and is not added to the employee’s base pay. This practice allows organizations to better control their labor costs and to tie performance and pay together.

140
Q

Hazard pay

A

Is used in some industries to compensate employees for increased levels of risk. Example: Employees earn hazard when working in workplaces with high infection or injury rates or in geographical areas characterized by violence or instability.

141
Q

Time-Based Differential Pay

A

Some employees receive time-based differential pay, or a different rate of pay based on when they work. Keep in mind that any overtime premium must be applied to the differential pay.

142
Q

Time-Based Differential Pay: Shift Pay

A

Some employees receive extra pay when they work less-desirable hours such as a second or third shift. Shift pay may be a flat amount per hour or a percentage of the base pay.

143
Q

Time-Based Differential Pay: Emergency-shift pay

A

Certain types of industries pay emergency-shift pay when employees work in response to an emergency

144
Q

Time-Based Differential Pay: Premium pay

A

Some employers pay premium pay (extra pay), or overtime at a higher rate, for working any of the following:

  1. Holidays or vacation days or weekends.
  2. For the sixth or seventh day of straight time.
  3. After eight hours in a day
145
Q

Time-Based Differential Pay: Premium pay

A
  1. On-call or call-back pay- In some organizations employees earn pay when they are on call, even if they are not called in to work (on-call pay). Employees may also earn extra pay when they are called back for an extra shift in the same workday (call-back pay)
146
Q

Time-Based Differential Pay: Reporting pay

A

Employees are paid for reporting to work as scheduled even if upon arrival no work is available.

147
Q

Time-Based Differential Pay: Travel pay

A

Hourly employees receive travel pay for time spent traveling to work assignments, even if the travel time is outside of working hours.

148
Q

Time-Based Differential Pay: Overtime pay

A

In various countries the minimum amount to be paid for overtime is dictated by legislation

149
Q

Geographic differential pay

A

Based on where an employee works. Organizations with facilities in different locations often need to tailor their compensation programs to the differences in local labor markets

150
Q

Reason for differential pay by geographic region: For labor costs

A

For labor costs: Employers change their base-pay structure to reflect different wage rates or factors that impact the cost of living in different geographic areas.

151
Q

Reason for differential pay by geographic region: To attract workers to certain locations

A

Employers pay more to employees who accept work in remote locations or in places where the climate or quality of living is a deterrent. An offshore oil platform is a good example.

152
Q

Reason for differential pay by geographic region: For foreign countries

A

Employers offer a base-pay structure plus allowances to reflect factors that affect the economics of employees who work in foreign countries. These factors may include differences in culture, education, technology, climate, and taxes.

153
Q

Incentive pay

A

Used to motivate employees to perform at a higher level by paying for performance that exceeds base-pay expectations.

154
Q

Incentive Type: Individual

A

The piece-rate system is the most basic individual incentive system. Workers who produce more earn more.
A commission.
Gifts, awards, trips, prizes,

155
Q

Incentive Type: Group

A

Past production records may be used to set up base productivity standards. Any gains above that standard are shared 50/50 by the organization and its employees.

156
Q

Incentive Type: Organization-wide

A

Profit sharing and stock ownership are the most common organization-wide incentive plans.

157
Q

For an incentive pay plan to be successful, organizations need to have the following in place:

A

Competitive base salaries
Fairly stable management presence and strategic direction
Good communication between management and employees
Reliable method for measuring the results linked to incentives
Commitment from the top down to communicate the plan and to provide ongoing training and coaching

158
Q

Executive pay plans

A

Incentives usually account for a greater share of an executive’s total direct compensation package (total annual cash compensation plus the annualized value of long-term incentives)
Second. Incentives are generally linked to the performance of the entire organization or the major units/businesses - typically to organizational profitability.

159
Q

Types of Executive Compensation

A

Companies often use equity or pay executives large cash discretionary bonuses and pay increases linked to cost-of-living adjustments. Pay-for-performance alignment is vital.

160
Q

Typical long-term incentives for executives

A

Stock option plans: the right to purchase shares of the company’s stock at a pre-determined price, which is referred to as the exercise price.
given a certain time period to purchase stock - five to ten years. Participants usually gain vesting rights to exercise a pre-determined percentage of the total stock option allocation each year.

161
Q

Typical long-term incentives for executives

A

Stock purchase plans are broad-based plans available to most or all of a public company’s employees. An opportunity to invest in the organization’s stock either at a discount or without payment of brokerage commissions.

162
Q

Typical long-term incentives for executives

A

A restricted stock grant does not require an employee or executive to purchase the stock. A transfer or gift of stock with forfeiture provisions that result in a possible loss of the shares if certain requirements are not met. A holder of restricted stock can vote the shares at stockholder meetings and has all other rights as a stockholder. Can’t sell the stock until the specified time period has passed or vesting has occured.

163
Q

Typical long-term incentives for executives

A

Phantom stock award, the employer pays a cash award to the employee in units that mimic actual shares of stock.

164
Q

Typical long-term incentives for executives

A

Restricted stock units: Grantee does not receive actual equity ownership. Grantee is given a promise of a certain amount of stock after restrictions have been fulfilled (a vesting period, a company going public or being acquired)

165
Q

Typical long-term incentives for executives

A

Performance grants: public companies can also benefit from linking stock-based compensation to organizational performance.

166
Q

Direct Sales Personnel

A

Organizations compensate their direct sales force in one of 3 ways: Straight salary, straight commission, or salary plus commission and/or bonus

167
Q

Straight salary

A

Least used compensation package for direct salespeople.

168
Q

Appropriate straight salary use for direct sales

A
  1. The sales staff spends a significant amount of time servicing customers rather than securing sales (Ex: training, trade shows, or handling customer inquiries)
169
Q

Appropriate straight salary use for direct sales

A
  1. Measuring sales performance is difficult
  2. The nature of the sales process makes it impossible to separate one individual’s efforts from those of the support people who also help secure the sales.
  3. There is a long sales cycle
170
Q

Straight commission

A

The salesperson’s entire compensation is based on commission.

171
Q

Appropriate staight commission use for direct sales

A
  1. The organization’s objectives are to motivate sales volume.
  2. Holding down the cost of sales is important.
  3. Competitors also compensate through commission-only systems.
172
Q

Appropriate Salary plus commission and/or bonus use for direct sales

A
  1. motivated by financial gain.

2. Fits and best supports the organizational strategy.

173
Q

Compensation Ratio: Relationship of current salaries to the midpoints of the salary ranges.
Employee’s pay rate/ pay ranges midpoint

A

Tracking individual salaries in comparison to the pay range midpoint allows managers to consider if employees are being paid appropriately on the basis of their skills, experience, and performance.

174
Q

Total company compensation expense: All costs associated with employment, including salaries, overtime, benefits, and bonuses.
Salaries + OT + Benefits + Bonuses/ total costs

A

Tracking total compensation as a percentage of total costs helps an organization manage the costs associated with human capital, including evaluating the use of fixed versus variable compensation.

175
Q

A compensation method related to an employee’s individual performance is known as

A

A merit pay plan

176
Q

Which compensation system guarantees an employee a base wage and then pays an additional amount for each unit produced

A

Straight piece-rate system

177
Q

An employer has redesigned its pay structure, and a position has a pay range for the grade of $9.10 to $12.75 per hour. What term would apply to an employee in this position who is earning $8 per hour?

A

Green-circle rate

178
Q

Two consecutive years of mandated 10% increases in the minimum wage would probably result in

A

Compression between the lowest-paid workers and more-skilled workers for a retail trade employer.

179
Q

Gainsharing is a type of

A

Group incentive

180
Q

Which type of long-term incentive allows an executive to purchase shares of a company’s stock at a pre-determined price?

A

Stock options

181
Q

What should be the compensation basis for a sales representative whose time is spent acquainting potential customers with the organization’s product line and providing technical assistance?

A

Base salary that represents a large percentage of compensation

182
Q

To spend its benefits budget wisely, an organization must answer the following questions

A

Which benefits are required by law? Laws require that employers provide certain benefits to their employees.

183
Q

To spend its benefits budget wisely, an organization must answer the following questions

A

Which benefits enable an employer to compete for employees? Paid time off. Offer an attractive benefit that is not offered by other employers.

184
Q

To spend its benefits budget wisely, an organization must answer the following questions

A

Which benefits are cost-effective to purchase and to administer? paid holidays are easy to administer; pension and health-care plans are more time-consuming and costly to administer.

185
Q

To spend its benefits budget wisely, an organization must answer the following questions

A

Which benefits do employees prefer? Must consider what benefits will attract and keep new employees. Survey employees regularly to understand how they feel

186
Q

To spend its benefits budget wisely, an organization must answer the following questions

A

Which benefits do employees prefer contin? Health insurance ranks high with employees of all ages, Tuition reimbursement, life insurance and retirement for older workers

187
Q

To spend its benefits budget wisely, an organization must answer the following questions

A

Which benefits provide creative choices? Organizations that cannot afford to provide health insurance may consider annual cash bonuses that employees can apply toward their insurance costs.

188
Q

To spend its benefits budget wisely, an organization must answer the following questions

A

Which benefits provide creative choices? An organization that cannot offer a benefit due to cost may think about offering popular lower-cost benefits, such as a flexible work schedule, telecommuting, and casual dress.

189
Q

Benefits Needs Assessment

A

Decide on a benefits package that will match the overall organizational strategies, support the organization’s mission and vision, and meet employee needs.

190
Q

Benefits Needs Assessment: Review the organization’s strategy

A

Organizations that want to lead the market will offer their employees a more extensive benefits package.

191
Q

Benefits Needs Assessment: Review the organization’s compensation philosophy

A

HR will need to find out how much can be spent on benefits

192
Q

Benefits Needs Assessment: Analyze the demographics of the organization’s workforce

A

Organizations benefits plan must address the needs of various categories of employees. Cateogories include full-time vs part-time status, active vs retired status, age, martial status, and family status

193
Q

Benefits Needs Assessment: Analyze the design and utilization data on all benefit plans

A

this analysis may result in design changes to a plan. Based on employee lifestyle and employee mix, types of benefits will vary and may include retirement, medical expenses, insurance, dependent care assistant, and capital accumulation.

194
Q

FInal step in a benefits needs assessment is to compare the following

A

Organization needs (including budget)
employee needs
existing set of benefits

195
Q

Gap Analysis Issues and Suggested Actions: Issues

A

Needs that are not being met by existing benefits
benefits that are not addressing organizational or employee needs
benefits that overlap each other
Benefits that are underutilizaed
Benefits that are too costly but are heavily used by employees.

196
Q

Type of benefit: Paid time off

A

Vacation or holiday leave, Public, national, or bank holidays, maternity and paternity, or parental leave, leave related to illness, or other types of leave.

197
Q

Employee assistance programs (EAP)

A

intended to help identify and resolve employee concerns related to personal matters or work-related issues that, some instances, can affect health or performance in the workplace. Usually priced her head or per capita rate

198
Q

Wellness programs

A

Intended to promote and support the health, safety, and well-being of employees.

199
Q

circumstances under which an organization can terminate employment and the amount of payment the terminated employee receives is prescribed by law and differs by country

A

Issuing warnings for misbehavior
the reasons for which termination can occur
the amount of severance payments provided to an employee
how long wages must continue to be paid to an employee after termination

200
Q

Defined benefit

A

Promises specific benefit amount upon retirement.
Vesting schedule is set up.
Provides benefits based on service and perhaps on salary
Amount of benefit is decided by a formula
Provides a pre-specified level of benefts
Employer bears the investment risk

201
Q

Defined contribution

A

Amount of money that is to be regularly contributed to the fund is specified.
No promises are made about the future value of the benefit.
Employees will be entitled to 100% of their investment and the vested portion of the employer’s contributions upon retirement.

202
Q

Social security: Social insurance, where people receive benefits or services in recognition of contributions to an insurance program.

A

These services typically include provision for retirement pensions, disability insurance, survivor benefits, and unemployment insurance.

203
Q

Social Security: Services provided by government or designated agencies responsible for social security provision

A

Includes medical care, financial support during unemployment, sickness, or retirement; health and safety at work; aspects of social work; and even industrial relations

204
Q

Social Security: Basic security irrespective of participation in specific insurance programs where eligibility may otherwise be an issue

A

Assistance may be given to new-arriving refugees for basic necessities such as food, clothing, housing, education, money, and medical care.

205
Q

Perquisites

A

Special incidental payments, benefits or privileges given to individual employees, over and above their regular rewards.

206
Q

Common perquisites

A
  1. Free/discounted products or services
  2. Mobile devices
  3. Professional organizations/certifications
  4. Training programs
  5. Education fees
  6. Housing
  7. Company car and/or cash allowances
207
Q

As part of conducting a benefits plan needs assessment, the HR professional has looked at the organization’s business strategy and compensation philosophy. What is the next step that should be taken?

A

Determine employee needs with regard to benefits

208
Q

What is a possible outgrowth of a benefit plan needs assessment?

A

Adding medical coverage for acupuncture and chiropractic care

209
Q

Which benefit has the best potential to reduce an employer’s health-care costs

A

Promoting a wellness program

210
Q

Workers compensation benefits are provided

A

For an approved work-related accident or illness

211
Q

An employee is terminated for repeated violations of employer policy. How does this type of separation impact severance payments?

A

It depends on country law and whether compensation is required.

HR Competencies (13 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions