Total Rewards/Compensation and Benefits Flashcards
What is the Fair Labors Standards Act (FSLA)?
Guides minimum wage standards and classifies employees.
What is an exempt employee?
Not subject to the FSLA. Paid a salary and not subject to overtime pay.
What is a non-exempt employee?
Entitled to overtime and minimum wage.
What is a Salary Level Test?
Determines how much an employee earns. Employees earning less than $23,000 per year are non-exempt.
What is a Salary Basis Test?
The salary can’t be reduced or increased.
What is the Duties Test?
The Duties Test determines exempt or non-exempt status.
What are examples of exempt employees?
- Executives
- Administrative Professionals
- Sales Personnel
- Computer-Related Occupations
- Teachers and Nurses
What are Monetary Compensations?
Base pay, commissions, overtime pay, bonuses, profit sharing, merit pay, stock options, and per diems.
What are Non-Monetary Compensations?
Medical insurance, paid time off, retirement plans, and perquisites (car allowances, club memberships, mobile devices, etc.)
What are 2 compensation philosophies?
- Entitlement - Rewards are based on longevity.
- Pay for Performance - Rewards are based on merit.
What are Total Rewards?
All of the financial and non-financial benefits that are of value to the employee.
What are the 4 job pricing methods?
- Point Method
- Ranking
- Classification
- Factor Comparison
What is a Compa-Ratio?
Compares internal pay rates to external market rates.
What is Range Penetration?
Compares employee’s pay to the total pay range.
What is Pay Compression?
When internal wages don’t grow as quickly as external wages.
What is a Competency-Based Pay Approach?
Pay is determined by job responsibilities.
What is Procedural Justice?
Employee’s perception of how pay ranges are established and how raises are given.
What are the 3 parts to creating a benefits program?
- Benchmarking - Comparing your company’s benefits in the external market.
- Ask employees what they want.
- Ensure legal compliance.
What are the 2 types of benefits?
- Statutory
- Voluntary
What is a statutory benefit?
A benefit created by law or regulated by a law.
What is a voluntary benefit?
A benefit offered by choice by the employer.
What are non-monetary rewards for executives?
Corporate housing, club memberships, company cars, and tax benefits.
What is the Securities and Exchange Commission?
Discloses executive pay and annually reports on compensation packages.
What is a Golden Handshake?
Defines the terms of severance agreement.
What is a Golden Parachute?
Minimizes executive risks due to a merger.
What are Golden Handcuffs?
Prevents executives from leaving without losing significant money.
What are Golden Life Jackets?
Encourages executives to stay with a new company during acquisition.
What is a Clawback Clause?
Allows a company to take money back from the executive.
What is Employee Stock Ownership (ESOP)?
Provide equity ownership in the company.
What is Restricted Stock?
Can’t be cashed until certain conditions are met.
What is Phantom Stock?
Stock ownership, but not equity.
