Chapter 9 Flashcards
Pay-For-Performance Standard
A standard by which managers tie compensation to employee effort and performance.
Pay Equity
An employee’s perception that compensation received is equal to the value of the work performed.
Hourly Work
Work paid on an hourly basis.
Piecework
Work paid according to the number of units produced.
Nonexempt Employees
Employees covered by the overtime provisions of the Fair Labor Standards Act.
Exempt Employees
Employees not covered by the overtime provisions of the Fair Labor Standards Act.
Consumer Price Index (CPI)
A measure of the average change in prices over time in a fixed “market basket” of goods and services.
Escalator Clauses
Clauses in labor agreements that provide for quarterly cost-of-living adjustments in wages, basing the adjustments on changes in the consumer price index.
Real Wages
Wage increases larger than rises in the consumer price index, that is, the real earning power of wages.
Job Evaluation
A systematic process of determining the relative worth of jobs to establish which jobs should be paid more than others within an organization.
Job Ranking System
The simplest and oldest system of job evaluation by which jobs are arrayed on the basis of their relative worth.
Job Classification System
A system of job evaluation in which jobs are classified and grouped according to a series of predetermined wage grades.
Point System
A quantitative job evaluation procedure that determines the relative value of a job by the total points assigned to it.
Work Valuation
A job evaluation system that seeks to measure a job’s worth through its value to the organization.
Hay Profile Method
A job evaluation technique using three factors – knowledge, mental activity, and accountability – to evaluate executive and managerial positions.
