✔️[People] Total Rewards Flashcards
Occurs when there is only a small difference in pay between employees regardless of their experience, skills, level, or seniority
Pay compression
One-time payment made to an employee; also called a lump-sum increase (LSI).
Performance bonus
Plan or method implemented by an organization that provides monetary, benefits-in-kind, and developmental rewards to employees who achieve specific business goals.
Total rewards strategy
Pay based on the quantity of work and outputs that can be accurately measured.
Productivity-based pay
Situations in which employees’ pay is above the range maximum.
Red-circle rates
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.
Performance-based pay
Job evaluation method that involves establishing a hierarchy of jobs from lowest to highest based on each job’s overall value to the organization.
Job ranking
Provides each incumbent of a job with the same rate of pay, regardless of performance or seniority; also known as single-rate pay.
Flat-rate pay
System in which pay is based on longevity in the job and pay increases occur on a pre-determined schedule.
Time-based step-rate pay
Direct and indirect remuneration approaches that employers use to attract, recognize, and retain workers.
Total rewards
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.
Job classification
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.
Job-content-based job evaluation
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.
Job evaluation
Combining several salary grades or job classifications with narrow pay ranges into one band with a wider salary spread.
Broadbanding
Pay rate divided by the midpoint of the pay range.
Compa-ratio
Provides each incumbent of a job with the same rate of pay, regardless of performance or seniority; also known as flat-rate pay.
Single-rate pay
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.
Pay grades
Extent to which employees perceive that monetary and other rewards are distributed equitably, based on effort, skill and/or relevant outcomes.
Internal equity
Pay adjustment given to eligible employees regardless of performance or organizational profitability; usually linked to inflation.
Cost-of-living adjustment (COLA)
Pay systems in which employee characteristics, rather than the job, determine pay.
Person-based pay
Short but broad statement documenting an organization’s guiding principles and core values about employee compensation.
Compensation philosophy
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.
Paired-comparison method
Form of direct compensation where employers pay for performance beyond normal expectations to motivate higher performance.
Incentive pay
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.
Point-factor system
