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38 Cards in this Set

  • Front
  • Back

What are the 3 parts that make up total compensation?

Base Pay, Performance Pay and indirect Pay

What is an adjustment made to Social Security and Supplemental Security Income to counteract the effects of inflation. Are generally equal to the percentage increase in the consumer price index for urban wage earners and clerical workers (CPI-W) for a specific period.

Cost-of Living adjustments (COLA)

What are the goals of a reward system? (8)

Promote achievement of organizational goals

Fit with the organizational strategy

Attract and retain qualified individuals
Promote desired employee behavior
Seen as equitable
Comply with the law
Be within financial means
Achieve above goals cheapest way

What are factors in the firm context that indicate the most appropriate managerial strategies and organizational structure (business strategy, organization size, technology, workforce.)

Contextual Factors

Needs to be divided total tasks into manageable tasks and coordinate tasks (job design, control system, reward system)

Structural Factors

An approach assumes most employees dislike work but can be induced to work and achieve

Classical Managerial strategy

Assumes most employees dislike work but can be induced to achieve social needs

Human Relation Managerial strategy

Assumes work can be motivating if organizations is structured properly.

High involvement Managerial strategy

3 key employee behavior

Membership, Task Behavior, Organizational citizenship

Employee decide to join and remain with the firm

Membership behavior

Employee perform the specific task that have been assigned to them

Task behavior

Employees undertake special behaviors beneficial to the organization.

Organizational citizenship

Four causes of reward dissatisfaction (VPC,PI,RD,LOJ)

Violation of psychological contract

perceived inequity

relative deprivation

Lack of organizational justice

5 Steps to creating a compensation strategy

1.Define behavior
2.Define the role of compensation
3. Determine the compensation mix
4.Determine the compensation level
5.Evaluate the strategy

Which step in the compensation strategy is the most difficult?

Determining the compensation mix

An approach to analyzing whether a lead,lag, or match strategy would be efficient.

Utility Analysis

What are the 5 types of job evaluation methods

Ranking method

Paired comparison


Factor comparison


HR specialists examine jobs and rank jobs according to overall worth

Ranking Method

Job compared with every other job one pair at a time. Each job is ranked above the other and the ranked total

Paired Comparison

Establishes and defines jobs then create series of grade descriptions for each class


Identifies major factors against which all jobs in a class can be assessed rather than the role as a whole.

Factor Comparison

Questionnaires to gather info about task elements of each job and the task/importance of each task


Promotes equitable pay within, stops jobs from being overpaid, motivates promotion, systemic ways to determine wages for jobs

Pros of a job evaluation

Organizations may not have resources to do evaluations, create "not my job" syndrome, can be costly

Cons of a job evaluation

Risk of analyzing jobholder instead of job

May be gender bias
job dynamic

Key issues in managing evaluation process

Promises that a specific reward will be provided if specified behaviour is performed


Factors that satisfy basic human needs for survival/security as well as social needs

Extrinsic Rewards

What are the 4 job analysis methods (O,I,Qu,FJA)

Observation, Interview, Questionnaires, Functional Job analysis

Perception that overall rewards are fair

Distributive justice

Perception that the process for reward determinations is fair

Procedural justice

Increases an employees' base pay in recognition of good work.

Merit Pay

Cash Payment that doesn't increases base pay

Merit Bonus

An incentive plan in which employees or customers receive benefits directly as a result of cost-saving measures that they initiate or participate in.

Gain sharing

Total value of the skills/competencies an employee has acquired


Determine average amount other employers are offering for a given job.

Market value

How are Maslow's hierarchy of needs and Herzberg's motivation hygiene theory similar

People/employees will do whatever it takes to satisfy their basic needs.

Expectations about the rewards offered by a given job and contribution necessary to perform a job

Psychological contract

Profit Sharing bonuses are allocated to employee accounts only at a later time (retirement)

Deferred profit sharing