Unit 4

Question 1

Wage

Answer 1

Pay based on an hourly time period

Question 2

Salary

Answer 2

Pay based on a weekly, monthly, or annual time period

Question 3

Indirect pay

Answer 3

Any type of employer provided reward or benefit that serves an employee’s needs but is not part of base or performance pay

Question 4

Market pricing

Answer 4

Establishing base pay by determining the average pay of other employers

Question 5

Job evaluation

Answer 5

Establishing base pay by ranking jobs according to their value to the firm

Question 6

Pay-for-knowledge system

Answer 6

Establishing base pay according to the value of the employees skills

Question 7

Competency-based pay

Answer 7

Pay based on characteristics rather than performance. Usually applied to managerial or professional employees

Question 8

Skill-based pay

Answer 8

Pay based on specific skills rather than tasks they do. Usually applied to operational employees

Question 9

Skill block

Answer 9

Component of skill-based pay system, containing a bundle of skills or knowledge

Question 10

High-low method

Answer 10

Determines entry-level and skill-block pay amounts by pricing comparable entry-level and top-level jobs and allocating the difference to the various skill blocks

Question 11

Skill certification

Answer 11

The testing process that determines whether an individual has mastered a given skill block and should be given the pay raise associated with that skill block