Key Terms at the End of Each Chapter Flashcards
(133 cards)
1
Q
What are allowances?
A
Compensation to provide for items that are in short supply
2
Q
What is compensation?
A
> all forms of financial returns and tangible services and benefits that employees receive as part of an employment relationship
3
Q
What are COLAs’?
A
a percentage increment to base pay provided to all employees regardless of performance.
4
Q
What is external competitiveness?
A
> the comparison of compensation with that of competitors
5
Q
What are incentives (variable pay)?
A
> one-time payments for meeting pre-established performance objectives in a future time period
6
Q
What is internal alignment (internal equity)
A
> the relationships between the jobs within a single organization
7
Q
What are merit increases?
A
> increments to base pay in recognition of past work behaviour
8
Q
What are relational returns?
A
> psychological returns employees believe they receive in the workplace
9
Q
What is a salary?
A
> pay expressed at an annual or monthly rate
10
Q
What are total rewards?
A
> all rewards received by employees, including cash compensation, benefits, and relational returns
wage
11
Q
What is total compensation?
A
> the complete pay package for employees, including all forms of pay, stock and benefits
12
Q
What is a wage?
A
> pay expressed at an hourly rate
13
Q
What are work/life programs?
A
> programs that help employees better integrate their work and life responsibilities
14
Q
What is competitive advantage?
A
> a business practice or process that results in better performance than one’s competitors
15
Q
What is a cost-cutter business strategy?
A
> focuses on efficiency and stresses doing more with less by minimizing costs, encouraging productivity increases, and specifying in greater detail exactly how jobs should be performed
16
Q
What is a customer-focused business strategy?
A
> stresses delighting customers and bases employee pay on how well they achieve this goal
17
Q
What are employee contributions?
A
> focuses on how an organization can recognize and reward employees for their work in helping the organization achieve its objectives
18
Q
What is an innovator business strategy?
A
> stresses introduction new and better products and short response time to market trends
19
Q
What is a strategic perspective?
A
> a focus on compensation decisions that help the organization gain and sustain competitive advantage
20
Q
What is strategy?
A
> the fundamental business decisions an organization has made to achieve its strategic objectives, such as what business to be in and how to obtain competitive advantage
21
Q
What is delayering?
A
> eliminating some layers or job levels in the pay structure
22
Q
What are differentials?
A
> pay differences between job levels
23
Q
What is distributive justice?
A
> the fairness of a decision outcome
24
Q
What is human capital
A
> the education, experience, knowledge, abilities, and skills that people possess
25
What are internal labour markets?
> rules and procedures that determine the pay for different jobs within a single organization and that allocate employees to those different jobs
26
What are loosely coupled structures?
> a pay structure for jobs that are flexible, adaptable, and changing
27
What is marginal productivity?
> the theory that unless an employee can produce something of value from his or her job equal to the value received in wages, it will not be worthwhile for an employer to hire that employee
28
What is outsourcing?
> the practice of hiring outside vendors to perform functions that do not directly contribute to achieving the business objectives and in which the organization does not have a comparative advantage
29
What is a pay structure?
> the array of pay rates for different work or skills within a single organization; the number of levels, the differentials in pay between the levels, and the criteria used to determine these differences determine the structure
30
What is procedural justice?
> the fairness of a process by which a decision is reached
31
What is tailored structure?
> a pay structure for well-defined jobs with relatively small differences in pay
32
What is tournament theory?
> the notion that larger differences in pay are more motivating than smaller differences; differences between the top job and the second-highest job should be the largest
33
What is workflow?
> process by which goods and services are delivered to the customer
34
What is job analysis?
> the systematic process of collecting information about the nature of specific jobs
35
What is a job description?
> a document that list the tasks, duties, and responsibilities that make up a job
36
What is a job family?
> a group of jobs involving work of the same nature but requiring different skills and responsibility levels (e.g., finance and accounting is a job family; controller, financial analyst, and accounting clerk are jobs within that family)
37
What are job specifications?
> a list of the knowledge, skills, abilities, and other characteristics necessary to perform a job
38
What is offshoring?
> the movement of jobs to locations beyond home-country borders
39
What is a position analysis questionnaire?
> a structured job analysis questionnaire used for analyzing jobs on the basis of 194 job elements that describe generic work behaviours
40
What is reliability?
> the consistency of results from repeated applications of a measure
41
What is validity?
> the accuracy of a measure
42
What is the alternation ranking method?
> a job evaluation method in which the highest- and lowest-valued jobs are ranked first, then the next-highest- and lowest-valued jobs, repeating the process until all jobs have been ranked
43
What is a benchmark job?
> a job with contents are well known, relatively stable, and common across different employers
44
What is a classification?
> a job evaluation method based on job class descriptions into which jobs are categorized
45
What are compensable factors?
> those characteristics of the work that the organization values, that help it pursue its strategy, and that achieve its objectives
46
What is a factor degree/level
> a description of several different degrees or levels of a factor in jobs; a different number of points are associated with each degree/level
47
What are factor weights?
> a weighting assigned to each factor to reflect differences in importance attached to each factor by the employer
48
What are job evaluations?
the process of systematically determining the relative worth of jobs to create a job structure for the organization
49
What is the paired compensation method?
> a job evaluation method in which all jobs are listed across columns and down rows of a matrix, the two jobs in each cell are compared, and the job of greater value is indicated, and then jobs are ranked on the basis of the total number of times each is ranked as being of greater value
50
What are point methods?
> job evaluation methods that assign a number of points to each job based on compensable factors that are numerically scaled and weighted
51
What is ranking?
> a job evaluation method that ranks jobs from highest to lowest based on a global definition of value
52
What are competencies?
> underlying, broadly applicable knowledge, skills, and behaviours that form the foundation for successful work performance
53
What is a competency analysis?
> a systematic process to identify and collect information about the competencies required for successful work performance
54
What is a competency set?
> specific components of a competency
55
What is a core competency?
> competencies required for successful work performance in any job in the organization
56
What is a skill analysis?
a systematic process to identify and collect information about skills required to perform work in an organization
57
What is a skill-based pay structure?
a pay structure that links pay to the depth or breadth of the skills, abilities, and knowledge a person acquires that are relevant to the work
58
What is the compensating differentials theory?
> economic theory that suggests higher wages are required in order to attract workers to perform jobs with negative characteristics
59
What is efficency wage theory?
> the idea that high wages may increase efficiency and lower labour costs by attracting higher-quality applicants who will work harder
60
What is human capital theory?
> the idea that higher earnings are made by people who improve their potential productivity by acquiring education, training, and experience
61
What is the marginal product of labour?
> the additional output associated with the employment of one additional person, with the other factors of production held constant
62
What is the marginal revenue of labour?
> the additional revenue generated by the marginal product produced by each additional person, with the other factors of production held constant
63
What are pay forms?
> the mix of the various types of payments that make up total compensation
64
What are pay levels?
the average of the array of rates paid by an employer: base + bonuses + benefits + stock options/number of employees.
65
What is reservation wage theory?
> the idea that job seekers have a reservation wage level below which they will not accept a job, no matter how attractive the other job attributes
66
What is signalling theory?
> the idea that pay levels and pay mix are designed to signal desired employee behaviours
67
What is the aging/trending survey data?
> adjusting survey data to represent pay at the current or future date when the pay decisions will be implemented
68
What is broadbanding?
> collapsing several pay grades into a large band of jobs
69
What is a compensation survey?
> the systematic process of collecting and making judgments about the compensation paid by other employers
70
What is the market pay line?
> a graph that links a company’s benchmark jobs on the horizontal axis (internal structure) with market rates paid by competitors (market survey) on the vertical axis
71
What is an outlier?
> a data point that falls outside the majority of the data points
72
What is pay grade?
> a grouping of jobs considered substantially equal for pay purposes
73
What is a pay policy line?
> the pay line representing an adjustment to the market pay line to reflect the company’s external competitive position in the market (i.e., lead, match, or lag)
74
What is a pay range?
> the range between the upper and lower limits on pay for all jobs in a particular pay grade
75
What is range spread?
> the size of a pay range, based on a judgment about how the range supports career paths, promotions, and other organization systems
76
What is survey levelling?
> multiplying survey data by a numerical factor to adjust for differences between the company job and the survey job
77
What is the CPP/QPP?
> a mandatory, government-sponsored pension plan for all employed Canadians, funded equally by employers and employees
78
What is coinsurance?
> the percentage of insurance premiums paid for by the employee
79
What is the coordination of benefits?
> the reduction of benefits by any amount paid under a spouse’s plan
80
What is a deductible?
> a specified dollar amount of claims paid by the employee each year before insurance benefits begin
81
What is a defined benefit plan?
> a pension plan in which an employer agrees to provide a specific level of retirement pension, the exact cost of which is unknown
82
What is a defined contribution plan?
> a pension plan in which an employer agrees to provide specific contributions, but the final benefit is unknown
83
What is an employee assistance plan?
> an employer-sponsored program that provides employees with confidential counselling and/or treatment programs for personal problems including addiction, stress, and mental health issues
84
What are employee benefits?
> part of the total compensation package, other than pay for time worked, provided to employees in whole or in part by employer payments, such as life insurance, pension plan, workers’ compensation, vacation, and so on
85
What is employment insurance?
> a mandatory, government-sponsored plan for all employed Canadians that provides workers with temporary income replacement as a result of employment interruptions due to circumstances beyond their control; funded by employer and employee contributions
86
What is a flexible benefit plan?
> a benefit plan in which the employee is provided with a specified amount of money and then chooses which benefits to spend the money on, according to their attractiveness and cost
87
What is LTD?
> employer-sponsored plans that provide income protection due to long-term illness or injury that is not work-related
88
What is a pension plan?
> a plan that provides income to an employee at retirement as compensation for work performed now
89
What are STD/salary continuation plans?
> employer-sponsored plans that provide a continuation of all or part of an employee’s earnings when the employee is absent from work due to an illness or injury that is not work-related
90
What are sick leave plans?
> employer-sponsored plans that grant a specified number of paid sick days per month or per year
91
What is vesting?
> the waiting period for entitlement to the employer-paid portion of pension benefits
92
What is workers compensation?
> a mandatory, government-sponsored, employer-paid, no-fault insurance plan that provides compensation for injuries and diseases that arise out of, and while in the course of, employment
93
What is 360-degree feedback?
> a performance appraisal method that includes feedback from up to five sources: supervisor, peers, self, customers, and subordinates
94
What is agency theory?
> motivation theory stating that employees and management/owners both will act opportunistically to obtain the most favourable exchange possible
95
What is alternation ranking?
> ranking the best employee, then the worst employee, then the next-best and next-worst, and so on
96
What are behaviourally anchored rating scales (BARS)?
> Performance rating scales using behavioural descriptions as anchors for different levels of performance on the scale
97
What is equity theory?
> a motivation theory stating that people compare the ratio of their own outcomes (e.g., pay, status) to inputs (e.g. effort, ability, performance) with the outcome to input ratio of other workers.
98
What are appraisal formats?
> the method used to evaluate an employee’s performance, either ranking against other employees or rating on one or more performance criteria
99
What is expectancy theory?
> a motivation theory stating that people cognitively evaluate potential behaviours in relation to rewards offered in exchange
100
What is management by objectives?
> a performance rating method based on meeting objectives set at the beginning of the performance review period
101
What is motivation?
> a process involving the determination of what is important to a person, and offering it in exchange for desired behaviour
102
what is paired comparison performance ranking?
> ranking each employee against all other employees, one pair at a time
103
What is a pay for performance plan?
> a pay plan that links individual pay to some measure of performance on the job
104
What is a performance appraisal?
> the process of evaluating or appraising an employee’s performance on the job
105
What is straight ranking?
> a type of performance appraisal format in which the rater compares or ranks each employee relative to other employees
106
What is a total reward system?
> all financial and non-financial rewards provided by organizations to their employees
107
What are broad-based stock option plans
Stock options provided to employees at all levels
108
What are dual career tracks?
Career progressions on either a managerial path or a professional path
109
What is an earnings at risk plan?
an incentive plan that includes reductions in base pay in unsuccessful years
110
What is an employee stock ownership plan?
> plans offering employees the opportunity to purchase company stock, often partially or fully matched by employer-paid stock for the employee
111
What are gain-sharing plans?
> group incentive plans in which employees share in cost savings
112
What are group incentive plans?
incentive pay for meeting or exceeding team performance standards
113
What is a gantt plan?
> Individual incentive plan that provides for variable incentives as a function of a standard expressed as time period per unit of production; under this plan, the standard time for a task is purposely set at a level requiring high level of effort to complete, and workers only receive incentive when they meet or exceed the high standard
114
What is the Halsey 50-50 method?
> individual incentive method that provides for variable incentives as a function of a standard expressed as time period per unit of production; this plan derives its name from the shared split between worker and employer of any savings in direct costs
115
What is the merrick plan?
> individual incentive plan that provides for variable incentives as a function of units of production per time period by setting three piecework rates: (1) high — for production exceeding 100 percent of standard; (2) medium — for production between 83 and 100 percent of standard; and (3) low — for production less than 83 percent of standard
116
What is a profit sharing plan?
> variable pay plans requiring a profit target to be met before any payouts occur
117
What is a rowan plan?
It’s an individual incentive plan that provides for variable incentives as a function of a standard expressed as time period per unit of production; under this plan, a worker's pay increases as the time required to complete the task decreases
118
What is a standard hour plan?
> individual incentive plan that set the incentive rate based on completion of a task in some expected time period
119
What is a stock option?
> the right to purchase stock at a specified (exercise) price for a fixed time period
120
What is a straight piecework plan?
> individual incentive plan in which rate determination is based on units of production per time period; wages vary directly as a constant function of production level
121
What is a Taylor plan?
> individual incentive plan that provides for variable incentives as a function of units of production per time period that establishes two piecework rates: a higher rate than regular wage rate when production is above standard and a lower wage rate when production is lower than standard
122
What is the gender wage gap?
> the amount by which the average pay for female workers is less than the average pay for male workers
123
what is the job-to-job method?
> a method of comparing pay for male- and female-dominated job classes in which each female job class is compared to a male job class of of equal or comparable value?
124
What is occupational segregation?
>he historical segregation of women into a small number of occupations such as clerical, sales, nursing, and teaching
125
what is pay equity legislation?
> Legislation intended to redress the unexplained portion of the gender wage gap by requiring employers to proactively pursue equal pay for work of equal of value between female-dominated and male-dominated jobs
126
What is the proportional value/wage line method?
> a method of comparing pay for male- and female-dominated job classes when female job classes have no appropriate male comparators under the job-to-job system, in which the wage line for male job classes is applied when setting pay for female job classes
127
What is the proxy comparison method?
> a method of comparing pay for male- and female-dominated job classes when pay equity cannot be achieved through job-to-job or proportional value methods, in which female job classes are compared to similar female job classes that have achieved pay equity with another employer
128
What is the spillover effect?
> employers seeking to avoid unionization offer workers the wages, benefits, and working conditions won in rival unionized firmsW
129
What is the compa-ratio?
> the ratio of average rates actually paid to range midpoint
130
What is the current year's rise?
> the ratio of average rates actually paid to range midpoint
131
What are green circle rates?
> pay rates below the range minimum
132
What are red circle rate?
> pay rates above the range minimum
133
What is the turnover effect?
> the decreased budget required as lower-paid workers replace employees who leave, calculated as annual turnover rate times planned average increase
