Total Rewards

Question 1

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

Answer 1

Benefits

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

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

Answer 3

Total Rewards Strategy

Question 4

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

Answer 4

Single-Rate Pay

Question 5

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

Answer 5

Productivity-Based Pay

Question 6

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

Answer 6

Flat-Rate Pay

Question 7

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 7

Remuneration Surveys

Question 8

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

Answer 8

Red-Circle Rates

Question 9

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

Answer 9

Pay Ranges

Question 10

Pay rate divided by the midpoint of the pay range.

Answer 10

Compra-Ratio

Question 11

One-time payment made to an employee.

Answer 11

Lump-Sum Increase (LSI)

Question 12

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

Answer 12

Cost-of-Living Adjustment (COLA)

Question 13

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

Answer 13

Person-Based Pay

Question 14

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

Answer 14

Internal Equity

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

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 16

Pay Compression

Question 17

Green-circle rates
Situations in which an employee’s pay is below the minimum of the range.

Answer 17

Green-Circle Rates

Question 18

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 18

Pay Grades

Question 19

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 19

Merit Pay

Question 20

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 20

Market-Based Job Evaluation

Question 21

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 21

Point-Factor System

Question 22

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 22

Pay for Performance (P4P, PfP)

Question 23

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

Answer 23

Perquisites

Question 24

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 24

Job-Content-Based Job Evaluation

Question 25

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 25

Job Classification

Question 26

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 26

Job Ranking

Question 27

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 27

Paid-Comparison Method

Question 28

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

Answer 28

Incentive Pay

Question 29

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 29

Job Evaluation

Question 30

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

Answer 30

Compensation Philosophy

Question 31

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

Answer 31

General Pay Increase

Question 32

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

Answer 32

Broadbanding

Question 33

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

Answer 33

Premiums

Question 34

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

Answer 34

Total Rewards

Question 35

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 35

Performance-Based Pay

Question 36

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

Answer 36

Compensation

Question 37

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

Answer 37

Time-Based Step-Rate Pay