People: Total Rewards

Question 1

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

Answer 1

Internal equity

Question 2

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 2

Domestic partners

Question 3

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

Answer 3

Compensation philosophy

Question 4

All financial returns (beyond any tangible benefits payments or services), including salary and allowances.

Answer 4

Compensation

Question 5

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

Answer 5

Benefits

Question 6

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

Answer 6

Total rewards strategy

Question 7

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

Answer 7

Total rewards

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 payment, variable compensation, and paid time off).

Answer 8

Remuneration surveys

Question 9

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

Answer 9

Green-circle rates

Question 10

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

Answer 10

Red-circle rates

Question 11

Pay rate divided by the midpoint of the pay range.

Answer 11

Compa-ratio

Question 12

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

Answer 12

Broadbanding

Question 13

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 13

Pay grades

Question 14

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

Answer 14

Pay ranges

Question 15

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 15

External equity

Question 16

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

Answer 16

Perquisites

Question 17

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

Answer 17

Premiums

Question 18

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 18

Pay compression

Question 19

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

Answer 19

Cost of living adjustment (COLA)

Question 20

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

Answer 20

Time-based step-rate pay

Question 21

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

Answer 21

Productivity-based pay

Question 22

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

Answer 22

Incentive pay

Question 23

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

Answer 23

General pay increase

Question 24

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

Answer 24

Person-based pay

Question 25

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 25

Pay for performance

Question 26

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

Answer 26

Flat-rate pay

Question 27

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

Answer 27

Single-rate pay

Question 28

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 28

Performance-based pay

Question 29

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 29

Merit pay

Question 30

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

Answer 30

Performance bonus

Question 31

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

Answer 31

Lump-sum increase (LSI)

Question 32

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 32

Job evaluation

Question 33

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 33

Job ranking

Question 34

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 34

Point-factor system

Question 35

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 35

Job classification

Question 36

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 36

Market-based job evaluation

Question 37

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 37

Paired-comparison method