Total rewards Flashcards
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 company or against similar jobs in competing companies
Key in the company’s remuneration program and supports the company’s concern for pay equity
Job Classification
Job evaluation method in which descriptions are written for each class of job;
individual jobs are then put into the grade that best matches their description
Disadvantages: the process is subjective, and jobs can easily go into many grade levels. It relies on job titles and duties and assumes they are the same at other companies
Internal equity
Employees feel that they are being paid fairly for their work. It also helps ensure compliance with fair pay regulations and prevent employee lawsuits
The extent to which employees perceive that monetary and other rewards are distributed equitably, based on effort, skill, and relevant outcomes
Pay equity
the fairness of compensation and benefits paid to employees
Paired comparison method
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.
Perquisites
Compensation is provided on an individual basis in the form of goods or services.
Example: cars& cell phones
Broadbranding
Combines 2+ salary grades to create larger ranges and give people wide latitude to move within their job without outgrowing the pay scale. This is done in large companies that want to flatten their structure and remove levels of management.
Combining several salary grades or job classifications with narrow pay ranges into one band with a wider salary spread
Benefits
Tangible payments or services are provided to broad groups of employees. Mandatory or voluntary payments or services provided to employees typically covering retirement, health care, sick pay/ disability, life insurance, and paid time off
Red-circle rates
Situations in which employee pay is above the range maximum.
Ex: when long term employees reach max rate in pay range. Employee bumped down a little but pay salary didn’t change
Single rate pay
provides each incumbent of a job with the same rate of pay, regardless of performance or seniority Aka flat rate pay. Often set to correspond to target market survey data relating to the job
Remuneration surveys
Collects information on prevailing market compensation and benefit practices; including wage rates, pay ranges, time off
Internal surveys for a salary survey
Advantages:
Allows for more control over survey technique
Ensure that salaries are internally aligned meaning comparable jobs and skills are paid comparable wages
Has the ability to shape the design, administration, data analysis, and reporting as needed by the company.
Disadvantages:
Competitors may not want to share their pay structures
Matching positions may be hard
External salary survey
Advantage:
Draws on extensive databases for industry benchmarks and provides real-time
insights into total compensation levels, trends, and practices
Disadvantage:
Limited company control
Point factor system
Job evaluation method that looks at compensable factors such as skills and working conditions that reflect how much a job adds value to the company;
Points are assigned to each factor and then added to come up with an overall point value for the job
most commonly used quantitative eval
Helps company determine traits that they value across the board.
Job ranking
establishing a hierarchy of jobs from lowest to highest based on each job’s overall value to the company. It evaluates the whole job and compares one job to another
Overall quick and inexpensive and easy to explain to managers.
Not clear why one job may be valued over another not helpful if there are many positions
