Total Rewards

Question 1

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 1

Paired-comparison method

Question 2

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

Answer 2

Broadbanding

Question 3

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

Answer 3

Internal equity

Question 4

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 4

Performance-based pay

Question 5

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 5

Pay for performance (P4P, PfP)

Question 6

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

Answer 6

Pay ranges

Question 7

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

Answer 7

Single-rate pay

Question 8

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 8

Pay grades

Question 9

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

Answer 9

Productivity-based pay

Question 10

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

Answer 10

Benefits

Question 11

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 11

External equity

Question 12

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

Answer 12

Total rewards

Question 13

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

Answer 13

Perquisites

Question 14

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

Answer 14

General pay increase

Question 15

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.

Answer 15

Job-content-based job evaluation

Question 16

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 16

Job evaluation

Question 17

Instruments that collect information on prevailing market compensation and benefits practices (including starting wage rates, base pay, pay ranges, statutory and market cash payments, variable compensation, and paid time off).

Answer 17

Remuneration surveys

Question 18

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

Answer 18

Incentive pay

Question 19

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 19

Point-factor system

Question 20

Pay rate divided by the midpoint of the pay range.

Answer 20

Compa-ratio

Question 21

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

Answer 21

Premiums

Question 22

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

Answer 22

Flat-rate pay

Question 23

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

Answer 23

Compensation

Question 24

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 24

Domestic partners

Question 25

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 25

Market-based job evaluation

Question 26

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

Answer 26

Red-circle rates

Question 27

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 27

Pay compression

Question 28

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

Answer 28

Compensation philosophy

Question 29

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

Answer 29

Person-based pay

Question 30

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 30

Merit pay

Question 31

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 31

Job classification

Question 32

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

Answer 32

Time-based step-rate pay

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

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

Answer 34

Total rewards strategy

Question 35

One-time payment made to an employee.

Answer 35

Lump-sum increase (LSI)

Question 36

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

Answer 36

Green-circle rates

Question 37

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

Answer 37

Cost-of-living adjustment (COLA)