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54 Cards in this Set

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  • Back


Establishes a minimum wage, overtime provisions, and child labor, applies to most non-managerial employees in private industry.


Any hours worked over forty in a workweek. Non-exempt employees are eligible for extra pay.

Compensable Time

•Time spent by employees performing work related tasks.

Compensatory time off

Time off given instead of payment for additional time worked.

Non-exempt employee

Employees who are covered by the Fair Labor Standards Act’s minimum wage and overtime pay provisions. These employees are typically paid hourly.

Exempt employee

Employees not entitled to overtime pay under the fair labor standards act; positions classified as executive, administrative, professional, or outside sales

Independent contractor

Individuals who contract with employers to perform specific projects or tasks; they are not employees of the organization.

Prevailing wage

The minimum wage to be paid employees working on federal contracts or subcontracts. The wage is determined by the wage paid other workers in the area.

Davis-Bacon act

Employers with federal construction contracts must pay laborers and mechanics the prevailing wages of the majority of the workers in the same area.

Walsh-Healy public contracts act

Contractors with government contracts over $10,000 for supplies, equipment, and materials must pay workers prevailing wage rates.

Service contract act

Contractors with government service contracts over $2,500 must pay workers prevailing wage rates.

Prevailing wage laws

Davis-Bacon Act

–Construction Projects, over $2,000

•Walsh-Healy Public Contract Act

–Supplies, equipment, materials, over $10,000

•Service Contract Act

–Services, over $ 2,500

Total rewards

Compensation (direct pay),

•Benefits, and

•The work experience (intangible rewards).

Entitlement philosophy

Traditional compensation philosophy that gives automatic salary increases based on seniority.


Basic employee characteristics/behaviors that may enhance individual or team performance.

Maturity curve

A process of determining employees’ salaries as a function of experience. It assumes that years in a profession equate with more highly valued competencies.

Lead policy

Organization intentionally sets pay structure and targets pay level above the market rate.

Match policy

Organization pay policy is to set pay structures and targets pay levels to match the market rates.

Lag policy

Organization intentionally sets pay structures and targets pay levels below the market rate.

Base pay

The basic compensation of a specified position of employment excluding any other payments or allowances.


The total amount regularly paid to an individual regardless of number of hours worked.


Payments to employees who are paid hourly (non-exempt) directly calculated on the amount of time worked.

Piece rate system

Individual incentive plan where workers are paid for each unit produced based on a predetermined standard.

Straight piece rate system

Individual incentive plan in which pay is determined by multiplying the number of units produced by the rate for one unit.

Differential piece rate system

An individual pay plan in which employees are paid one piece-rate wage for units produced up to a standard output and a higher piece-rate wage for units produced over the standard.


The percentage of the selling price that is paid to a sales employee as all or part of compensation.

Straight commission plan

Sales compensation based only on a percentage of each sale.

Combined salary and commission plan

Sales compensation plan that includes straight salary and a commission.


A payroll advance repaid by future commissions earned by the sales employee.

Differential pay

Pay in addition to base pay for special work circumstances.

Shift differential

Paying a premium to employees working less desirable shifts.

Individual incentives

Rewards for individual effort and performance; piece-rate systems, individual bonuses, sales commissions.


A one time amount received or paid in addition to the regular wage or salary.

Variable pay

Pay tied to productivity or some measure that can vary with the firm’s profitability.

Earnings at risk incentive plan

Incentive pay plan that puts a portion of the worker’s base pay at risk, while also allowing the opportunity to earn more above base pay if goals are met or exceeded.

Team incentive plan

Team members share an incentive bonus when production standards are met or exceeded; commonly used in gain sharing plans.

Gain sharing

An incentive plan in which groups of employees receive awards based on increased profits, productivity or efficiency.

Scanlon plan

Incentive bonus plan using employee committees to achieve cost-reduction improvements. A formula determines the employees share of cost savings.

Scanlon plan

Incentive bonus plan using employee committees to achieve cost-reduction improvements. A formula determines the employees share of cost savings.

Rucker plan

Incentive bonus plan based on the relationship between the total earnings of hourly employees and the increased production by the employees.


Gainsharing program where bonuses are based on the overall achievements and productivity of a work team.

Organizational incentives

Rewards employees for the performance of the entire organization.


Special benefits for executives that are usually non-cash items.


The perceived fairness regarding what an individual does and what is received.

Pay equity

The similarity of pay for jobs requiring comparable levels of knowledge, skills, and abilities.

Job analysis

The process of determining the skills and duties required of a job.

Job description

The written duties and responsibilities of a job.

Job specifications

The knowledge, skills, and abilities required for a job.

Job Evaluation

A systematic process for establishing the relative value/worth of jobs within an organization (internal equity).

Compensable factor

An essential, compensable element of a job such as skills, effort, responsibility, and working conditions.


Non-quantitative (whole job) evaluation method of placing each job in order of relative worth to the organization.

Job classification system

Job evaluation system where jobs are classified according to a series of pre-determined salary grades.

Point method

Quantitative job evaluation system that assigns points to each job to determine its relative worth.

Factor comparison system

Job evaluation system in which the evaluation process is accomplished on a factor-by-factor basis.