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MGMT 474 > W11: Compensation Practices > Flashcards

W11: Compensation Practices Flashcards

1
Q

What are the 3 compensation practices?

A

Salary Administration
Salary Determinations
Salary Adjustments

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2
Q

What does Salary Administration handle?

A

Salary planning & budgeting
Salary range adjustments
annual increases

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3
Q

Who handles the budgeting in salary administration?

A

Human Resources and Finance

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4
Q

What are some strategic examples of compensation practices?

A

goal alignment
drive achievement
ARME
advance individual business imperatives

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5
Q

What are some transactional examples of compensation practices?

A

program implementation & monitoring
salary surveys
salary ranges
market analysis
annual increases
salary budget

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6
Q

What does Salary Determinations handle?

A

New hires
Promotions
Lateral Moves

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7
Q

What are some considerations with Salary Determinations?

A

Budget
Salary (history of employee, requirements)
Experience
Advancement History
Relationships History
Known Strengths
Train or Buy Talent
Assessed Potential

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8
Q

Does a company have a better advantage with internal or external employees?

A

Internal

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9
Q

What are some institute guidelines with salary determinations?

A

-Review cases individually - apply guidelines consistently
-Outside of Guidelines requires additional justification/rationale

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10
Q

What does Salary Adjustments handle?

A

Below Minimum
Internal Inequity
Compression
External Inequity
Over Maximum

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11
Q

What is below minimum? (SA)

A

unacceptable to pay employees below minimum of salary range. adjust to minimum or above

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12
Q

What is internal inequity? (SA)

A

relates to ongoing pay decisions for employees in alignment with Title IV & other related laws but also all situations calling for fair treatment of people

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13
Q

What is compression? (SA)

A

New employees receive higher pay over more tenured employees with organization
OR
Employees are paid at same or lessor amount than employees in lower grades (less experience, skills, or seniority)

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14
Q

What is external equity? (SA)

A

Employee pay alignment with market based on acceptable pay parameters

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15
Q

What is over maximum? When do they typically happen? (SA)

A

Employee pay that is over the maximum of the established salary range for the job
They typically happen with lump sum increases

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16
Q

When do pay compressions happen?

A

-Labor Shortages
-Minimum wage increases
-Current compensation program is misaligned with the external market
-Starting Salaries set too close to existing employee salaries
-LACK OF PAY TRANSPARENCY

17
Q

What is the impact of pay compression?

A

Can lead to wage gaps and/or pay equity issues

MGMT 474 (8 decks)

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