Compensation and Benefits

Question 1

A fixed amount of cash compensation an employee receives in exchange for work performed. It is guaranteed, and it tends to reflect the value of the work rather than individual contributions.

Answer 1

Base pay or fixed pay

Question 2

Direct or indirect compensation that is offered in addition to an individual’s base pay, usually awarded upon achieving a goal or milestone.

Answer 2

Bonus

Question 3

A job evaluation method in which jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles.

Answer 3

Classification

Question 4

Criteria or traits employers use to determine the value of jobs and salaries for those jobs.

Answer 4

Compensable factors

Question 5

Pay received in the form of services and benefits (i.e., pensions, health insurance, vacations).

Answer 5

Compensation

Question 6

A set of principles that provide the overall direction for how organizations make decisions about compensation. It is typically driven by HR but should involve senior leadership to ensure alignment with the organization’s mission, vision, and goals.

Answer 6

Compensation philosophy

Question 7

Describes how an organization plans to determine pay and benefits for employees, as informed by the organization’s compensation philosophy.

Answer 7

Compensation strategy

Question 8

Process of analyzing current pay structures and practices to ensure external market equity and that internal job worth mirrors the organization’s market and strategy. This process involves the following: 1) update job descriptions using job analysis, 2) conduct job evaluation, and 3) complete a market study analysis.

Answer 8

Compensation study

Question 9

A fixed amount an individual pays for a covered health care service.

Answer 9

Co-pay

Question 10

An across-the-board base pay inflation designed to align with increases in the cost of living.

Answer 10

Cost of living adjustment (COLA)

Question 11

Amount an individual pays for covered health care expenses before an insurance company begins to pay on a health insurance claim.

Answer 11

Deductible

Question 12

A monetary incentive or reward.

Answer 12

Direct compensation

Question 13

Employees who are not subject to the FLSA provisions for minimum wage and overtime.

Answer 13

Exempt employees

Question 14

Rewards that are intangible. Employees experience them when they engage in work programs or activities.

Answer 14

Experiential rewards

Question 15

Pay that does not vary based on performance or results achieved. The basic cash compensation that an employer pays for work duties. Also referred to as base pay.

Answer 15

Fixed pay

Question 16

Rewards that are tangible and can be measured or assigned a value or cost

Answer 16

Financial rewards

Question 17

Typically have lower monthly premiums and out-of-pocket expenses. Specialist visits require a referral from your primary care physician. Coverage isn’t provided for out-of-network healthcare providers.

Answer 17

Health maintenance organization (HMO)

Question 18

Pay received in the form of services and benefits (i.e., pensions, health insurance, vacations).

Answer 18

Indirect compensation

Question 19

A process for determining the relative compensatory value of a job in an organization.

Answer 19

job evaluation

Question 20

Punishes individuals for undesirable choices or behavior.

Answer 20

Negative incentive

Question 21

Employees who are entitled to overtime pay and must be paid at least the federal minimum wage.

Answer 21

Nonexempt employees

Question 22

The benchmarking of wages paid to employees with wages paid to individuals in similar positions in the marketplace.

Answer 22

Market study (or market analysis)

Question 23

Parity in compensation among similarly situated employees, after accounting for legitimate factors influencing pay decisions.

Answer 23

Pay equity

Question 24

A systematic study of an organization’s pay practices to uncover outliers and potential disparities in compensation for members of a protected class.

Answer 24

Pay equity analysis

Question 25

A job evaluation method in which jobs are ranked using a system based on factors, degrees, and points

Answer 25

Point factor

Question 26

Rewards individuals for desirable choices or behavior.

Answer 26

Positive Incentive

Question 27

Typically have higher monthly premiums and out-of-pocket expenses. Able to see a specialist without a referral. Visits to out-of-network providers has a higher fee and separate deductible.

Answer 27

Preferred provider organization (PPO)

Question 28

The amount that an individual and/or their employer pays for a health insurance plan.

Answer 28

Premium

Question 29

A job evaluation method in which jobs are compared to each other based on the overall worth of the job to the organization.

Answer 29

Ranking

Question 30

Formal or informal acknowledgement of effort or desired behavior.

Answer 30

Recognition

Question 31

Awards performance or accomplishment.

Answer 31

Reward

Question 32

The alignment of compensation with desired organizational goals such that organizational strategy informs compensation strategy (organizational strategy, HR strategy, compensation strategy)

Answer 32

Strategic compensation

Question 33

All the financial and experiential incentives, rewards, and benefits provided to employees by their employer.

Answer 33

Total rewards

Question 34

The principles that guide the design, delivery, forms, and determination of total rewards programs.

Answer 34

Total rewards philosophy

Question 35

Pay that changes with the level of performance or results achieved. Unlike base pay, variable pay is not guaranteed.

Answer 35

Variable pay