Unit 3 -
Pay based on the skills, knowledge, and experience an individual applies in the workplace rather than their job title or position.
Competency-based pay
Gilbert is in the process of conducting a job evaluation by listing all job titles in the company and then ranking them in order of importance to the organization. Which job evaluation process is Gilbert using?
Job ranking
Fred was injured in a skiing accident and was off from his job for nine months. Luckily, Fred was provided with about 75% of his salary during his recuperation. What type of insurance did Fred have?
Long-term disability
Which type of pay level model gives maximum flexibility for supervisors to pay what they think their subordinates should earn?
Management fit
Every manager makes a decision about who should be paid what when that person is hired.
Management fit model
job ranking system
job titles are listed and ranked in order of importance to the organization
The purpose of compensation is to __________, __________, and __________ employees.
attract, develop, retain
Job evaluation
defined as the process of determining the relative worth of jobs to determine pay structure and pay ranges
management fit model
each manager makes a decision about who should be paid what when that person is hired
paired comparison
in which individual jobs are compared with every other job, based on a ranking system, and an overall score is given for each job, determining the highest-valued job to the lowest-valued job.
Employees are paid based on the number of items that are produced.
Piecework rate
Which of the following legal provisions provides for payments to workers who have been laid off?
Federal Unemployment Tax Act (FUTA)
This can include a variety of options including sick leave, paid vacation time, health club memberships, daycare services.
Fringe benefits
Some organizations provide a retirement plan for employees. The company would work with a financial organization to set up the plan so employees can save money, and often, companies will "match" a percentage of what the employee contributes to the plan.
401(k) plans
Which of the following is true with regard to 401(k) plans?
A 401(k) plan is a plan set up by the organization in which employees directly deposit money from their paycheck.
Terry is using a job evaluation method that involves comparing individual jobs with every other job, based on a ranking system. An overall score is given for each job, determining the highest-valued job to the lowest-valued job. Terry is using which method?
A paired comparison
Terry is using a job evaluation method that involves comparing individual jobs with every other job, based on a ranking system. An overall score is given for each job, determining the highest-valued job to the lowest-valued job. Which method is Terry using?
A paired comparison
All jobs in a particular category are assigned a specific pay category.
Broadbanding
Pamela is an employee who works forty hours a week and she has medical insurance as a company provided benefit. Recently her schedule was reduced to twenty hours per week, so she no longer qualifies for benefits. What is an option for Pamela?
Consolidated Omnibus Budget Reconciliation Act (COBRA)
In HR, this theory is important, because even if someone is being paid fairly, they will always compare their own pay to that of others in the organization. This is which theory?
Equity theory
Jillian found out that Jackie was earning a higher salary than she was and they are doing the same job. Jillian perceives this to be unfair, because she feels she is more productive than Jackie. Now Jillian isn't as motivated as she once was because she thinks she does more work for less money than her coworker. Which theory regarding pay does this situation address?
Equity theory
Match the pay rate to what other companies are paying for the same position.
Going rate model
Patty's insurance plan allows her to select from a limited number of physicians and specialists. Going outside the plan and seeing another doctor may result in a large out-of-pocket expense for the employee. This is what type of insurance plan?
HMO
Most organizations provide health and dental care benefits for employees. In addition, disability and life insurance benefits are offered.
Health benefits
Employees are paid on the basis of number of hours worked.
Hourly wage
To make a compensation strategy work, the perceived ____ and ____ need to match fairly.
Inputs and outputs
Which of the following is NOT a desirable trait of an incentive plan?
It is complex.
At XYZ Company, Sheryl is a salesperson who receives a set base pay but she earns more if she meets her sales quota. What type of pay system is this?
Variable pay system
Employees receive a base pay and additional pay is linked with the attainment of certain goals or achievements.
Variable pay system
going rate model
analysis of the going rate for a particular job at a particular time is considered when creating the compensation package
compensable factor
any particular skill, responsibility, effort or physical demand for which an employer is willing to pay an employee.
job classification system
objectively and accurately defining and evaluating the duties, responsibilities, tasks, and authority level of a job. The job classification, done correctly, is a thorough description of the job responsibilities of a position without regard to the knowledge, skills, experience, and education of the individuals currently performing the job. Job classification is most frequently, formally performed in large companies, civil service and government employment, nonprofit agencies, and colleges and universities.
The equity theory states that:
people will evaluate their own satisfaction with their compensation/inputs by comparing it to others' compensation/inputs.
Variable pay system
provides employees with a pay basis but then links the attainment of certain goals or achievements directly to their pay
Competency-based pay
reward employees based on the skills, knowledge and experience they apply in the workplace rather than their job title or position
Skill-based pay
salary levels are based on an employee's skills, as opposed to job title
Broadbanding
similar to a pay grade system, except all jobs in a particular category are assigned a specific pay category
Pay grading
the process of setting the pay scale for specific jobs or types of jobs.
point-factor system
which determines the value of a job by calculating the total points assigned to it.
Some organizations choose to reward employees financially when the organization as a whole performs well. This can be an excellent incentive for employees to both work as a team and also monitor their own personal performance so as not to let down the team. What type of incentive is this?
Profit-sharing plan
Fixed compensation calculated on a weekly, biweekly, or monthly basis. No extra pay for overtime work.
Salary
Salary levels are based on an employee's skills, as opposed to job title.
Skill-based pay
