Total Rewards Flashcards
additional compensation for performance above expectations, paid in addition to base salary
Bonus
complex point factor system, evaluated based on knowledge, problem, solving accountability
HAY System
shares company profits in form of DC qualified plan, distribute pretax dollars to eligible employees, percentage of base salary
Profit Sharing
splits positions in company into just a few specific ranges, lead to greater collaboration by limiting employee focus on hierarchical differences
Broadbanding
1) Review job description
2) Select Salary Survey
3) Review compensation components
4) Recommend salary range
Job Pricing
salaries based on skills/knowledge, competency profiles replace job descriptions, 10-12 key competencies, increased competence results in higher compensation and places responsibility on employees
Competency-Based Compensation
involve employees and managers in improving productivity and sharing benefits of success
Gainsharing
reward employees for individual or organizational results, motivates employees to achieve business objectives
Variable Compensation
based on length of time employee is in position, years of related experience, entitlement compensation philosophy
Seniority Based Compensation
FLSA Exemption Tests
- salary level test (<23,600)
- salary basis test (cannot be reduced due to lack of work, low quality)
- duties test (executives, admins, professional, computer related, outside personal)
person designated by plan sponsor to manage plan
Plan Administrator
compare value of jobs, subjective, complicated in complex organization
Ranking Method
includes merit increases and promotions, based on how well individuals perform against company’s process for measuring
Performance Based Compensation
value of jobs to each other relative to their value to organization
Internal Equity
process used traditionally to determine value of jobs relative to each other, identify/define compensable factors of each job most relevant to organization
Job Evaluation
the spread between the minimum and maximum for job grade, narrow for entry level, wide for highest
Pay Range
establishment of baseline for organizational productivity and productivity costs, difference = performance
Improshare
esteem achieved from others, working with talented team
Extrinsic Reward
employer required by court order/tax levy to withhold additional funds from employee paychecks, satisfy debt owed (child support/back taxes)
Wage Garnishment
- prohibits employers from terminating employees whose wages are garnished for one debt with multiple garnishments
- sets limit on amount garnished any one week
- defines how disposable earnings are to be calculated
Title III of Consumer Credit Protection Act
validating existing job descriptions in order to identify the external market rate for each position
Benchmarking
Security & Exchange Commission Requirements
- disclose how executive pay compares to general pop
- annually report on compensation packages of top 5 executives
occurs when new employees hired at rate of pay greater than incumbents for similar skills, education and experience
Wage Compression
identify key benchmark positions, match to job, classify according to value on vertical scale, associated with grade on hierarchical salary structure
Classification Method
not associated with wages/salaries, fringe benefits, PTO, holidays, premiums, leaves, SS, pension, FMLA
Indirect Compensation
percentage of base pay compensates employees for sales targets achieved
Sales Bonus
what’s left in check after all legally mandated deductions
Disposable Earnings
provide organization with system of points assigned to position, based on total points received, pay range/grade is assigned
Point Factor
concept of minimizing pay disparities between jobs traditionally held by women with higher paying jobs traditionally held by men
Pay Equity/Comparable Worth
encourage to stay with new company during acquisition
Golden Life Jacket
combines performance rating with position on salary range to recommend increase
Merit Matrix
- used to compare employee salaries; take employee base pay and compare to midpoint
- Base Salary / Midpoint of Salary Range x 100
Compa-ratios
define term of executive severance agreement
Golden Handshake
difference between midpoints of consecutive grades, narrower for lower grades, wider for higher grades
Midpoint Progression
entity that established plan, may be a single employer, labor organization or group representing parties
Plan Sponsor
paying sales employees percentage of sales price sold
Commissions
prevents executive from leaving without losing significant money
Golden Handcuffs
gather benefits and comp data that reflects current trends in labor market
Salary Survey
tax-qualified, DC plan allows employees to own shares in company, tax deductible trust
Employee Stock Ownership Plans
allows org to make contributions to nonqualified plan in order to reduce impact of nondiscrimination testing, make up difference between what executive could have contributed and what was allowed
Excess Deferral Plan
minimize executive risk due to a merger
Golden Parachute
employees recieve portion of cost savings achieved through productivity gains and cost savings, administered by committees
Scanlon Plan
encourages self esteem, satisfaction from tasks
Intrinsic Reward
additional pay for work considered beyond minimum requirements for job
Pay Differentials
after tax payroll deductions to purchase stock at discounted price
Employee Stock Purchase Plans
unsecured funds subject to creditor claims, benefits taxable as ordinary income
Grantor/Rabbi Trusts
payments made to employee associated with wages and salaries, base pay, variable compensation, pay for performance
Direct Compensation
