Total Rewards and Compensation Flashcards
Total Rewards
Monetary and non-monetary rewards provided by companies to attract, motivate, and retain employees.
Tangible rewards
Elements of compensation that can be quantitatively measured and compared between organizations.
Intangible rewards
Elements of compensation that cannot be as easily measured or calculated.
Base pay
Basic compensation that an employee receives, usually as a wage or salary.
Wages
Payments calculated directly from the amount of time worked by employees.
Salary
Consistent payments made each period regardless of the number of hours worked.
Variable pay
Compensation linked directly to individual, team, or organizational performance.
Benefit
Indirect reward given to an employee or group of employees as part of membership in the organization.
Exempt employees
Employees who are not paid overtime.
Nonexempt employees
Employees who must be paid overtime.
Prevailing wage
An hourly wage determined by a formula that considers the rate paid for a job by a majority of the employers in the appropriate geographic area.
Garnishment
A court order that directs an employer to set aside a portion of an employee’s wages to pay a debt owed to a creditor.
Entitlement philosophy
Assumes that individuals who have worked another year are entitled to pay increases, with little regard for performance differences.
Pay-for-performance philosophy
Assumes that compensation changes reflect performance differences.
Expectancy theory
An employee’s motivation is based on the probability that his or her efforts will lead to an expected level of performance that is linked to a valued reward.
