People: Total Rewards

Question 1

Occurs when there is only a small difference in pay between employees regardless of their experience, skills, level, or seniority; also known as salary compression.

Answer 1

Pay compression

Question 2

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

Answer 2

Market-based job evaluation

Question 3

Factor that motivates performance of a desired behavior or discourages performance of an undesired behavior.

Answer 3

Incentive

Question 4

Pay rate divided by the midpoint of the pay range.

Answer 4

Compa-ratio

Question 5

Job evaluation method in which the relative worth and pay structure of different jobs are based on an assessment of their content and their relationship to other jobs within the organization.

Answer 5

Job-content-based job evaluation

Question 6

Job evaluation method in which descriptions are written for each class of jobs; individual jobs are then put into the grade that best matches their class description.

Answer 6

Job classification

Question 7

Situations in which an employee’s pay is below the minimum of the range.

Answer 7

Green-circle rates

Question 8

Instruments that collect information on prevailing market compensation and benefits practices (including starting wage rates, base pay, pay ranges, statutory and market cash payments, variable compensation, and paid time off).

Answer 8

Remuneration surveys

Question 9

One-time payment made to an employee; also called performance bonus.

Answer 9

Lump-sum increase (LSI)

Question 10

Used to group jobs that have approximately the same relative internal or external worth and are paid at the same rate or within the same pay range.

Answer 10

Pay grades

Question 11

Pay systems in which employee characteristics, rather than the job, determine pay.

Answer 11

Person-based pay

Question 12

Process of systematically studying a job in order to identify the activities/tasks and responsibilities it includes, the personal qualifications necessary to perform it, and the conditions under which it is performed.

Answer 12

Job analysis

Question 13

Job evaluation method that looks at compensable factors (such as skills and working conditions) that reflect how much a job adds value to the organization; points are assigned to each factor and then added to come up with an overall point value for the job.

Answer 13

Point-factor system

Question 14

Extent to which employees perceive that monetary and other rewards are distributed equitably, based on effort, skill and/or relevant outcomes.

Answer 14

Internal equity

Question 15

Pay increase given to employees based on local competitive market requirements; awarded regardless of employee performance.

Answer 15

General pay increase

Question 16

Job evaluation method that involves establishing a hierarchy of jobs from lowest to highest based on each job’s overall value to the organization.

Answer 16

Job ranking

Question 17

Process of determining a job’s value and price for the purpose of attracting and retaining employees by comparing the job against other jobs within the organization or against similar jobs in competing organizations.

Answer 17

Job evaluation

Question 18

Situation where an individual’s performance on the job is the basis for the amount and timing of pay increases; also called merit pay or performance-based pay.

Answer 18

Pay for performance (P4P, PfP)

Question 19

Short but broad statement documenting an organization’s guiding principles and core values about employee compensation.

Answer 19

Compensation philosophy

Question 20

Pay based on the quantity of work and outputs that can be accurately measured.

Answer 20

Productivity-based pay

Question 21

System in which pay is based on longevity in the job and pay increases occur on a pre-determined schedule.

Answer 21

Time-based step-rate pay

Question 22

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

Answer 22

Premiums

Question 23

Situations in which employees’ pay is above the range maximum.

Answer 23

Red-circle rates

Question 24

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

Answer 24

External equity

Question 25

Pay adjustment given to eligible employees regardless of performance or organizational profitability; usually linked to inflation.

Answer 25

Cost-of-living adjustment (COLA)

Question 26

Combining several salary grades or job classifications with narrow pay ranges into one band with a wider salary spread.

Answer 26

Broadbanding

Question 27

One-time payment made to an employee; also called a lump-sum increase (LSI).

Answer 27

Performance bonus

Question 28

Mandatory or voluntary payments or services provided to employees, typically covering retirement, health care, sick pay/disability, life insurance, and paid time off.

Answer 28

Benefits

Question 29

Provides each incumbent of a job with the same rate of pay, regardless of performance or seniority; also known as single-rate pay.

Answer 29

Flat-rate pay

Question 30

Situation where an individual’s performance on the job is the basis for the amount and timing of pay increases; also called merit pay or pay for performance.

Answer 30

Performance-based pay

Question 31

Job evaluation method in which each job is compared with every other job being evaluated; the job with the largest number of “greater than” rankings is the highest-ranked job, etc.

Answer 31

Paired-comparison method

Question 32

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

Answer 32

Total rewards strategy

Question 33

Set the upper and lower bounds of possible compensation for individuals whose jobs fall within a pay grade.

Answer 33

Pay ranges

Question 34

Direct and indirect remuneration approaches that employers use to attract, recognize, and retain workers.

Answer 34

Total rewards

Question 35

Unmarried couples, of the same or opposite sex, who live together and seek economic and noneconomic benefits comparable to those granted to their married counterparts.

Answer 35

Domestic partners

Question 36

Provides each incumbent of a job with the same rate of pay, regardless of performance or seniority; also known as flat-rate pay.

Answer 36

Single-rate pay

Question 37

Form of direct compensation where employers pay for performance beyond normal expectations to motivate higher performance.

Answer 37

Incentive pay

Question 38

Situation where an individual’s performance on the job is the basis for the amount and timing of pay increases; also called performance-based pay or pay for performance.

Answer 38

Merit pay

Question 39

Compensation provided on an individual basis in the form of goods or services.

Answer 39

Perquisites