Topic 9 Flashcards
Cash Plan
Provides for payment of profit shares at regular intervals.
Fair Labor Standards Act of 1938 (FLSA)
A federal law that restricts child labor and establishes minimum wage and overtime pay standards for employees. The intent of the law was to “put a floor under wages and a ceiling over hours of work and to abolish abuses of child labor.”
Givebacks
A reduction in employee wages or benefits conceded by a labor union in exchange for other benefits or in recognition of unfavorable economic conditions.
Job Evaluation
Process to determine the relative worth of job-related contributions.
Variable Compensation
Rewards that link employee pay to employee and organizational performance. Examples include forms of profit sharing, bonuses, stock options, merit pay, and piecework plans.
What Is “Piecework”?
Employees are guaranteed a standard pay rate for each unit of output, also called a piece rate
What Is Fixed Pay?
Compensation that does not vary according to performance; also known as “base pay,” fixed pay is nondiscretionary compensation
What Is Job Evaluation?
The process of comparing jobs by the use of formal and systemic procedures to determine their relative worth within the organization; used to create a job structure such as pay grades or bands
What Is Variable Compensation?
Monies given to link employee pay to employee and organizational performance
What Is a “Cash Plan”?
Payment of profit shares at regular intervals, typically monthly or yearly
What Is a “Stock Option”?
Opportunity for a manager to buy an organization’s stock at a later date, but at a price established when the option is granted
What Is a “Wage-dividend” Plan?
A special type of cash plan in which the company sets the percentage of profits paid to employees according to the amount of dividends paid to stockholders
What Is the Difference Between Direct and Indirect Compensation (Benefits)?
Direct compensation is monies given through wages and salaries; the terms “fringe benefits” and “benefits-pay” are used by many corporations to denote indirect compensation
What Is the Major Difference Between Fixed and Variable Compensation?
Fixed pay may be seen as the amount known in advance; variable compensation is determined by performance or productivity during the pay period or another period of time that adds to an employee’s earnings
What Is the Role of Annual Bonuses in An Organization Compensation Philosophy?
To assist an organization in their strategic role to be more competitive
