Compensation 4Th Cdn Edition Chapters 1-7 Milkovich

Front 1

Compensation

Back 1

all forms of financial returns and tangible services and benefits that employees receive as part of an employment relationship

Front 2

Relational Returns

Back 2

psychological returns employees believe they receive in the workplace

Front 3

total rewards

Back 3

all rewards received by employees, including cash compensation, benefits, and relational return

Front 4

Wage

Back 4

pay expressed at an hourly rate

Front 5

Salary

Back 5

pay expressed at an annual or monthly rate

Front 6

Merit increase

Back 6

increment to base pay in recognition of past work behaviour

Front 7

Cost of living adjustment

Back 7

percentage increment to base pay provided to all employees regardless of performance in order to maintain pay levels relative to increases in cost of living

Front 8

incentives (variable pay)

Back 8

one time payments for meeting pre-established performance objectives in a future time period

Front 9

work/life programs

Back 9

programs that help employees better integrate their work and life responsibilities

Front 10

allowances

Back 10

compensation to provide for items that are in short supply such as lodging

Front 11

internal alignment

Back 11

pay comparisons between jobs or skill levels inside a single organization

Front 12

external competitiveness

Back 12

comparison of compensation with that of competitors

Front 13

strategic perspective

Back 13

a focus on compensation decisions that help the organization gain and sustain competitive advantage

Front 14

strategy

Back 14

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

Front 15

competitive advantage

Back 15

a business practice or process that results in better performance than one's competitors

Front 16

best fit perspective

Back 16

suggests that compensation be aligned or fit with the specific business strategy adopted by the organization

Front 17

best practices perspective

Back 17

suggests there is one set of best pay practices that can be applied universally across situations and strategies, attracting superior employees who then create a winning strategy

Front 18

Internal equity

Back 18

the relationships between the jobs within a single orga

Front 19

Pay structure

Back 19

the array of pay rates for different work or skills within a single orga; the number of levels, the differentials in pay between levels, and the criteria used to determine these differences create the structure

Front 20

workflow

Back 20

process by which goods and services are delivered to the customer

Front 21

differentials

Back 21

pay differences between job levels

Front 22

marginal productivity theory

Back 22

the theory that unless an employee can produce something of value from his/her job equal to the value received in wages, it will not be worthwhile for an employer to hire that employee

Front 23

human capital

Back 23

the education, experience, knowledge, abilities, and skills that people possess

Front 24

internal labour markets

Back 24

rules and procedures that determine the pay for different jobs within a single organization and that allocate employees to those different jobs

Front 25

procedural justice

Back 25

fairness of a process by which a decision is reached

Front 26

distributive justice

Back 26

fairness of a decision outcome

Front 27

tailored structure

Back 27

pay structure for well defined jobs with relatively small differences in pay

Front 28

loosely couples structure

Back 28

pay structure for jobs that are flexible, adaptable, and changing

Front 29

Equity theory

Back 29

Focuses on how employees compare their work qualifications and pay to those of others (judge fairness of their pay)

Front 30

Tournament Theory

Back 30

Suggests that the greater the difference between salaries in the pay structure the harder employees will work

Front 31

Institutional Theory

Back 31

Organization should copy the "best practices" of others

Front 32

Job analysis

Back 32

the systematic process of collecting information about the nature of specific jobs

Front 33

Position analysis Questionnaire (PAQ)

Back 33

a structured job analysis questionnaire used for analyzing jobs on the basis of 194 job elements that describe generic work behaviours

Front 34

job description

Back 34

written summary of a job including responsibilities, qualifications, and relationships

Front 35

Job specifications

Back 35

qualifications required to be hired for a job; may be included in the job description

Front 36

offshoring

Back 36

movement of jobs to locations beyond home country borders

Front 37

validity

Back 37

accuracy of a measure

Front 38

benefits of traditional job analysis?

Back 38

provides defensible job related decisions and establishes a foundation for career paths

Front 39

job structure

Back 39

hierarchy of all jobs based on value to the organization; provides the basis for the pay structure

Front 40

job evaluation

Back 40

the process of systematically determining the relative worth of the job to create a job structure for the organization

Front 41

benchmark job

Back 41

a job whose contents are well known, relatively stable, and common across different employers

Front 42

Ranking

Back 42

a job evaluation method that ranks jobs from highest to lowest based on a global definition of value

Front 43

alternation ranking method

Back 43

ranking the highest and lowest valued jobs first then the next highest and lowest values jobs repeating the process until all jobs have been ranked

Front 44

paired comparison method

Back 44

listing all the jobs across columns and down rows of a matrix, comparing the two jobs in each cell and indicating which is of greater value, then ranking the jobs on the basis of the total number of times each is ranked as being of greater value

Front 45

classification

Back 45

job evaluation method based on job class descriptions into which jobs are categorized

Front 46

point method

Back 46

job evaluation method that assigns a number of points to each job based on compensable factors that are numerically scaled and weighted

Front 47

Six steps in the point method

Back 47

1) conduct job analysis
2) determine compensable factors
3) scale the factors
4) weight the factors and assign points
5) communicate the plan
6) apply the plan to non benchmark jobs

Front 48

compensable factors

Back 48

those characteristics of the work that the organization values, that help it pursue its strategy, and that achieve its objectives

Front 49

factor degree/level

Back 49

description of several different degrees or levels of a factor in jobs; a different number of points will be associated with each degree/level

Front 50

factor weights

Back 50

weighting assigned to each factor to reflect the differences in importance attached to each factor by the employer

Front 51

Skill based pay structures

Back 51

link pay to the depth or breadth of the skills, abilities, and knowledge a person acquires that are relevant to the work

Front 52

Skill analysis

Back 52

a systematic process to identify and collect information about skills required to perform work in an organization

Front 53

four basic steps in skill analysis

Back 53

1) decide what info should be collected
2) decide what methods should be used to collect info
3) decide who should be involved
4) ensure the results are useful for pay purposes by establishing certification methods

Front 54

competencies

Back 54

underlying, broadly applicable, knowledge, skills, and behaviours that form the foundation for successful work performance

Front 55

Competency based pay structure

Back 55

links pay to work related competencies

Front 56

core competencies

Back 56

competencies required for successful work performance in any job in the organization

Front 57

competency sets

Back 57

specific components of competency

Front 58

competency indicators

Back 58

observable behaviours that indicate the level of competency within each competency set

Front 59

competency analysis

Back 59

a systematic process to identify and collect information about the competencies required for successful work performance

Front 60

two possible sources of bias in internal pay structures

Back 60

1) bias in the job evaluation of traditionally female dominated jobs

2) bias in current wages that may be perpetuated when job evaluation plans are structured to mirror existing pay rates

Front 61

Pay level

Back 61

the average of the array of rates paid by an employer: Base+Bonuses+Benefits+Stock Options / # of employees

Front 62

Pay forms

Back 62

the mix of the various types of payments that make up total compensation

Front 63

Marginal product of labour

Back 63

the additional output associated with the employment of one additional human resources unit, with other production factors held constant

Front 64

marginal revenue of labour

Back 64

the additional revenue generated by each additional unit of human resources, with other production factors held constant

Front 65

compensating differentials theory

Back 65

the idea that higher wages must be offered to compensate for negative features of jobs

Front 66

efficiency wage theory

Back 66

high wages may increase efficiency and lower labour costs by attracting higher quality applicants who will work harder

Front 67

Signalling theory

Back 67

the idea that pay levels and pay mix are designed to signal desired employee behaviours

Front 68

Reservation wage theory

Back 68

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

Front 69

human capital theory

Back 69

the idea that higher earnings are made by people who improve their potential productivity by acquiring education, training, and experience

Front 70

external competitiveness

Back 70

the relationship of one organizations pay to that of its competitors

Front 71

Three major factors that shape external competitiveness

Back 71

1) competition in the labour market for ppl with various skills

2) competition in the product and service markets which affects the financial condition of the organization

3) characteristics unique to each organization and its employees such as its business strategy, technology and the productivity and experience of its sales force

Front 72

Three competitive pay level alternatives

Back 72

1) match the market
2) lag the market
3) lead the market