HRMG 460 Compensation Ch. 14 ~ Compensation of Special Groups: Executives and Others

maturity curve

a plot of the empirical relationship between current pay and years since a professional has last received a degree (YSLD), thus allowing organizations to determine a competitive wage level for specific professional employees with varying levels of experience

agency theory

a theory of motivation that depicts exchange relationships in terms of two parties: agents and principals; according to this theory, both sides of the exchange will seek the most favorable exchange possible and will act opportunistically if given a chance; as applied to executive compensation, this theory would place part of the executive's pay at risk to motivate the executive (agent) to act in the best interests of the shareholders (principals) rather than in the executive's own self-interests

professional

an employee who has specialized training of a scientific or intellectual nature and whose major duties do not entail the supervision of people

dual-career ladders

presence of two different ways to progress in an organization, each reflecting different types of contribution to the organization's mission; the managerial ladder ascends through increasing responsibility for supervision or director of people; the professional track ascends through increasing contribution of a professional nature that do not mainly entail the supervision of employees

base salary (base wage)

the basic cash compensation that an employer pays for the work performed; tends to reflect the value of the work itself and ignore differences in individual contributions