Chapter 11

Front 1

Employee Compensation

Back 1

All forms of pay or rewards going to employees and arising from their employment.

Front 2

Direct Financial Payments

Back 2

Pay in the form of wages,salaries, incentives, commissions and bonuses.

Front 3

Indirect Financial Payments

Back 3

Pay in the form of financial benefits such an insurance.

Front 4

Pay Equity

Back 4

Providing equal pay to male-dominated job classes and female-dominated job classes of equal value to the employer.

Front 5

Equity Theory

Back 5

A theory suggesting that people are motivated to maintain a balance between what they perceive as their contributions and their rewards.

Front 6

External Equity

Back 6

An employee perception of pay as fair given the pay rates in other organizations.

Front 7

Internal Equity

Back 7

An employee perception of pay as fair given the pay rates of others in the organization.

Front 8

Job Evaulation

Back 8

A systematic comparison to determine the relative worth of jobs within a firm.

Front 9

Benchmark Jobs

Back 9

A job that is critical to the firm's operations or that is commonly found in other organizations.

Front 10

Compensable Factor

Back 10

A fundamental, compensable element of a job, such as skill, effort, responsibility, and working conditions.

Front 11

Job Evaluation Committee

Back 11

A diverse group (including employees, HR staff, managers, and union representatives) established to ensure the fair and comprehensive representation of the nature and requirements of the jobs in question.

Front 12

Classification/grading method

Back 12

A method for categorizing jobs into groups.

Front 13

Classes

Back 13

Groups of jobs based on a set of rules for each class, such as amount of independent judgement, skill, physical effort, and so forth. Classes usually contain similar jobs - such as all secretaries.

Front 14

Grades

Back 14

Groups of jobs based on a set of rules for each grade, where jobs are similar in difficulty. Grades often contain dissimilar jobs, such as secretaries, mechanics, and firefighters.

Front 15

Grade/Group Description

Back 15

A written description of the level of compensable factors required by jobs in each grade; used to combine similar jobs into grades or classes.

Front 16

Point Method

Back 16

A job evaluation method in which a number of compensable factors are identified, the degree to which each of these factors is present in the job is determined, and an overall point value is calculated.

Front 17

Pay Grade

Back 17

Comprises jobs of approximately equal value.

Front 18

Wage/Salary Survey

Back 18

A Survey aimed at determining prevailing wage rates.

Front 19

Wage Curve

Back 19

A graphic description of the relationship between the value of the job and the average wage paid for this job.

Front 20

Pay Ranges

Back 20

A series of steps or levels within a pay grade, usually based on years of service.

Front 21

Broadbanding

Back 21

Reducing the number of salary grades and ranges into just a few wide levels or "bands," each of which then contains a relatively wide range of jobs and salary levels.

Front 22

Red Circle Pay Rate

Back 22

A rate of pay that is above the pay range maximum.

Front 23

Market-Pricing Approach

Back 23

An approach usually limited to determining compensation for professional jobs based on values established for similar benchmark jobs in the market.