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139 Cards in this Set

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Compensation
The total of all rewards provided employees in return for their labor.
Direct financial compensation
Pay that a person receives in the form of wages, salary, bonuses, and commissions.
Indirect financial compensation
All financial rewards that are not included in direct compensation.
Equity
The perception by workers that they are being treated fairly.
External equity
Payment of employees at rates comparable to those paid for similar jobs elsewhere.
Internal equity
Payment of employees according to the relative values of their jobs within an organization.
Employee equity
A condition that exists when individuals performing similar jobs for the same firm are paid according to factors unique to the employee, such as performance level or seniority.
Team equity
Payment of more productive teams in an organization at a higher rate than less productive teams.
Compensation policy
Polices that provide general guidelines for making compensation decisions.
Labor market
The geographic area from which employees are recruited for a particular job.
Compensation survey
A means of obtaining data regarding what other firms are paying for specific jobs or job classes within a given labor market.
Benchmark job
A well-known job in the company and industry and one performed by a large number of employees.
Cost-of-living allowance (COLA)
An escalator clause in a labor agreement that automatically increases wages as the U.S. Bureau of Labor Statistics’ cost-of-living index rises.
Job evaluation
That part of a compensation system in which a company determines the relative value of one job in relation to another.
Job evaluation ranking method
A method in which the raters examine the description of each job being evaluated and arrange the jobs in order according to their value to the company.
Classification method
A job evaluation method in which classes or grades are defined to describe a group of jobs.
Point method
An approach to job evaluation in which numerical values are assigned to specific job components, and the sum of these values provides a quantitative assessment of a job’s relative worth.
Job pricing
Placing a dollar value on the worth of a job.
Pay grade
The grouping of similar jobs to simplify the job-pricing process.
Wage curve
The fitting of plotted points on a curve to create a smooth progression between pay grades (also known as the pay curve).
Pay range
A minimum and maximum pay rate for a job, with enough variance between the two to allow for a significant pay difference.
Broadbanding
A compensation technique that collapses many pay grades (salary grades) into a few wide bands in order to improve organizational effectiveness.
Merit pay
Pay increase given to employees based on their level of performance as indicated in the appraisal. The increase is added to the employee’s base pay.
Bonus (lump sum payment)
A one-time award that is not added to employees’ base pay.
Piecework
An incentive pay plans in which employees are paid for each unit produced.
Seniority
The length of time that an employee has worked in various capacities with the firm.
Profit sharing
A compensation plan that results in the distribution of a predetermined percentage of the firm’s profits to employees.
Gainsharing
Plans designed to bind employees to the firm’s productivity and provide an incentive payment based on improved company performance.
Scanlon plan
A gainsharing plan that provides a financial reward to employees for savings in labor costs that result from their suggestions.
Stock option plan
An incentive plan in which managers can buy a specified amount of stock in their company in the future at or below the current market price.
Perquisites (perks)
Special benefits provided by a firm to key executives to give them something extra.
Fair Labor Standards Act of 1938 (FLSA)
The federal legislation that established overtime wage requirements and defined specific exempt occupations.
Vacancy
A budgeted position in which no employee is currently appointed.
Full-Time Employment
employment of an individual for 40 hours per week.
Reclassification
a change in the classification (job title) of a position resulting from a job audit (job analysis).
Pay Plan
the document that outlines pay ranges for all classified job titles.
Perquisites or Perks
Non cash incentives given to a firm’s executives
Job evaluation
Assessment of the relative worth of jobs to a firm
Benchmark jobs (aka key jobs)
Jobs that are characterized by stable tasks and stable jobs specifications
Davis-Bacon Act 1931
This act requires contractors and subcontractors on federally funded construction projects in excess of $2000 in the U.S. to pay wages and benefits at least equal to those prevailing in the area where the work is performed.
Walsh-Healey Act, 1936
This 1936 act extended the concept of prevailing wage to manufacturers and suppliers of goods for federal government contracts in excess of $10,000.
Copeland “Anti-kickback” Act, 1934
This act prohibits federal contractors from receiving kickbacks from employees or subcontractors for wages earned on federal projects.
Walsh-Healey Act, 1936
This act requires that time and a half be paid for work exceeding eight hours a day and 40 hours a week for manufacturers and suppliers of goods for federal government contracts in excess of $10,000
FLSA Fair Labor Standards Act, 1938
This 1938 act is the broadest piece of labor legislation in the U.S., designed to protect workers and address conditions that burdened the American economy during the Great Depression
20-factor
The IRS has a ___-factor test to determine whether workers are employees or independent contractors.
Exempt employees
These types of employees are excluded from FLSA minimum wage and overtime pay requirements
Non-exempt
These types of employees are covered by the FLSA regulations for minimum wage and overtime pay requirements.
$23,660
Under current rules, most workers with a quoted salary of less than $______ per year are guaranteed overtime protection and are classified as nonexempt employees
FLSA Fair Labor Standards Act, 1938
This act is commonly referred to as the Wage and Hour Law
Hourly
Any employee quoted and compensated on an ____ basis is automatically considered a nonexempt employee.
Primary duty
The main or most important duty of a job, including the exercise of discretion and independent judgment with respect to matters of significance.
Matters of significance
The level of importance or consequence of the work performed.
$455
Under current rules, most workers with a quoted salary of less than $___ per week are guaranteed overtime protection and are classified as nonexempt employees
White-collar employees
Bona fide executives, administrative and professional employees, highly compensated employees, certain computer employees and outside sales employees are commonly referred to as what type of employees?
Highly compensated employees
Type of employees with salaries of $100,000 or more per anniversary, calendar, or fiscal year who must also perform at least one of the job duties of an exempt executive, administrative or professional.
1.5 times their regular rate
All nonexempt workers must be paid overtime at what rate?
Workweek
This is any fixed, recurring period of 168 hours
Comp-Time or Compensatory Time
In general, overtime must be paid in cash, however, public-sector employers may grant this instead of cash?
$5.15
This is the hourly Federal minimum wage as of September 1, 1997.
FLSA
To be covered by FLSA private-sector employers must be engaged in interstate commerce or retail service firms must have two or more employees and gross sales of at least $500,000 per year.
Willful
Under FLSA penalties for violations can include up to three years of back pay for these types of violations
$2.13
Employers of tipped employees must pay a cash wage of at least this per hour if they claim a tip credit against their minimum wage obligation
Portal-to-Portal Act, 1947
General rules for hours worked are defined by this act
Portal-to-Portal Act, 1947
According to this act, if the employer restricts an employee’s activities and does not allow any personal business, then the hours are included in overtime.
Employee Commuting Flexibility Act of 1996
This 1996 amendment to the Portal-Portal Act clarifies that commuting time is not paid work time, even when the employer is using a company vehicle.
Travel pay
Pay typically paid to nonexempt workers for the time they spend traveling to or between work assignments.
Portal-to-Portal Act, 1947
This FLSA act does not require employers to pay overtime when an employee is off the premises and on call, but this act does?
Equal work
This is defined by four factors, equal skills, equal effort, equal responsibility and equal working conditions
Portal-to-Portal Act, 1947
According to this act certain types of preparatory and concluding activities must be compensated such as putting on safety gear, cleaning equipment etc.
Portal-to-Portal Act, 1947
According to this act an employer does not have to pay an employee when the employee arrives t work early and is waiting for the workday to begin, however, the employee cannot be doing casual work without pay.
Employee Commuting Flexibility Act of 1996
According to this act travel from home to a customer’s site in response to an emergency call after the regular workday is work time
Equal Pay Act of 1963
This act prohibits unequal pay for equal or ‘substantially equal’ work performed by men and women
Merit Increase
An increase to an individual’s base pay rate based on performance.
Job Classification
A group of positions sufficiently alike in respect to their duties and responsibilities to justify a common name and similar treatment in selection, compensation, and other employment processes.
Skill-based Pay
A person-based remuneration system based on the repertoire of jobs an employee can perform rather than the specific job that the employee may be doing at a particular time.
Well-pay
Extra pay for not taking sick leave.
Exempt Employee
An employee who is not covered by the provisions of the Fair Labor Standards Act. Most professional, administrative, executive, and outside sales jobs fall into this category.
$500,000
To be covered by the FLSA a business must have annual gross sales of over how much money?
Time and a half
The FLSA requires that nonexempt employees be paid what rate over the standard wage for each hour they work over 40 hours a week.
Piece-Rate System
Pay Compression
Occurs when pay differences between individuals becomes small.
Green-Circled
An incumbent paid below the range set for the job.
Fair Labor Standards Act (1938)
Aka the Wage and Hour Law
Portal-to-Portal Act (1947)
This act defined the general rules for hours worked and the determination of on-call/standby time, preparatory/concluding activities, waiting time and meals and breaks.
Total compensation
All forms of financial returns that employees receive from their employers
Direct financial compensation
Pay received in the form of wages, salaries, bonuses, and commissions
Indirect financial compensation
All financial rewards not included in direct compensation
base pay
The basic monetary compensation that an employee receives, usually as a wage or salary.
Wages
Payments calculated on the amount of time worked
Salary
Consistent payments made each period regardless of the number of hours worked in the period.
Variable Pay
Compensation linked to individual, team, or organizational performance.
External equity
Firm's employees are paid comparably to workers who perform similar jobs in other firms
Internal equity
Exists when employees are paid according to relative value of their jobs within same organization
Equity Theory
A pay fairness theory that states that people form equity beliefs by comparing their outcome/ input ratio to that of a referent other
J Stacy Adams
Who proposed Equity theory?
Entitlement Philosophy
Assumes that individuals who have worked another year are entitled to pay increases, with little regard for performance differences.
Pay-for-Performance Philosophy
Requires that compensation changes reflect individual performance differences.
Meet the Market
Attempting to balance employer costs and the need to attract and retain employees. “aka market rate or going rate”
Lag the Market
Paying all that the firm can afford. Taking advantage of the abundant supply of potential employees in a loose labor market. “aka pay followers”
Lead the Market
Paying for higher qualified, more productive workers. “aka pay leaders”
Knowledge-based pay
A system of salary differentiation based on the formal education, related experience or specialized training a professional employee has that qualifies the individual to deal with specific subject matter, or work effectively in a specific field
Skill-based Pay
A person-based remuneration system based on the repertoire of jobs an employee can perform rather than the specific job that the employee may be doing at a particular time.
The Fair Labor Standards Act (FLSA)
This act establishes minimum wage, overtime pay, recordkeeping, and child labor
$5.15
According to the the Fair Labor Standards Act (FLSA) covered nonexempt workers are entitled to a minimum wage of not less than ___ an hour
The Fair Labor Standards Act (FLSA)
This is the most significant law affecting compensation
Fair Labor Standards Act (FSLA) of 1938
This act set minimum wage requirement sets wage floor
Fair Labor Standards Act (FSLA) of 1938
This act requires overtime payments for non-exempt employees
Fair Labor Standards Act (FSLA) of 1938
This act exempts highly-paid computer workers
Fair Labor Standards Act (FSLA) of 1938
This act requires overtime (1½) pay for hours over 40 hours
Exempt Employees
Employees to whom employers are not required to pay overtime under the Fair Labor Standards Act.
Non-exempt Employees
Employees who must be paid overtime under the Fair Labor Standards Act.
Hourly
Any employee quoted and compensated on this basis is automatically considered a nonexempt employee.
Overtime
Non-exempt employees must be paid this for all hours worked over 40 regular hours in a workweek
Compensatory Time Off (Comp Time)
Hours off regular work time given to an employee in lieu of payment for extra time worked.
Davis-Bacon Act of 1931
First national law to deal with minimum wages
Davis-Bacon Act of 1931
This act required payment of “prevailing wage” by firms engaged in federal construction projects
Davis-Bacon Act of 1931
This act requires contractors and subcontractors on federally funded construction projects in excess of $2000 in the U.S. to pay wages and benefits at least equal to those prevailing in the area where the work is performed.
Walsh-Healy Public Contracts Act
This act requires that time and a half be paid for work exceeding eight hours a day and 40 hours a week for manufacturers and suppliers of goods for federal government contracts in excess of $10,000
McNamara-O’Hara Service Contract Act
This 1936 act extended the concept of prevailing wage to manufacturers and suppliers of services for federal government contracts in excess of $10,000.
Copeland “Anti-kickback” Act, 1934
This act prohibits federal contractors from receiving kickbacks from employees or subcontractors for wages earned on federal projects.
Equal Pay Act of 1963
Requires that men and women be paid the same for performing substantially similar jobs with limited non-gender exceptions (e.g., merit and seniority).
Portal-to-Portal Act, 1947
According to this act, if the employer restricts an employee’s activities and does not allow any personal business, then the hours are included in overtime.
Portal-to-Portal Act, 1947
General rules for hours worked are defined by this act
Employee Commuting Flexibility Act of 1996
This 1996 amendment to the Portal-Portal Act clarifies that commuting time is not paid work time, even when the employer is using a company vehicle.
IRS
Makes revenue and private-letter rulings that interpret tax legislation
Private-letter rulings
Type of IRS ruling that addresses only specific a taxpayer or organizations requesting the ruling
Revenue rulings
Type of IRS ruling that is published as general guidelines to all taxpayers or organizations
Job Evaluation
Formal, systematic means to identify the relative worth of jobs within an organization.
Ranking
This method of job evaluation is one of the simplest to administer
Benchmark job
A standard job used to make pay comparisons, either within the organization or to comparable jobs outside the organization, to develop or validate a job-worth hierarchy.
Market Pricing
Use of pay survey data to identify the relative value of jobs based on what other employers pay for similar jobs.
Job Family
A group of jobs having common organizational characteristics.
Broad banding
The practice of using fewer pay grades having broader pay ranges that in traditional systems
Red-Circled Employees
An incumbent (current jobholder) who is paid above the range set for the job.
Green-Circled Employees
An incumbent who is paid below the range set for the job.
Pay Compression
A situation in which pay differences among individuals with different levels of experience and performance in the organization becomes small.
Benchmark job
A standard job used to make pay comparisons, either within the organization or to comparable jobs outside the organization
Compensable factors
Elements of a job for which the organization is willing to pay.
Piece-Rate System
One in which an employee is paid for each unit of production.