Total Rewards

Merit pay

Situation where an individual's performance on the job is the basis for the amount and timing of pay increases; also called performance-based pay or pay for performance.

Green-circle rates

Situations in which an employee's pay is below the minimum of the range.

Red-circle rates

Situations in which employees' pay is above the range maximum.

Time-based step-rate pay

System in which pay is based on longevity in the job and pay increases occur on a pre-determined schedule.

Broadbanding

Combining several salary grades or job classifications with narrow pay ranges into one band with a wider salary spread.

Perquisites

Compensation provided on an individual basis in the form of goods or services.

Remuneration surveys

Instruments that collect information on prevailing market compensation and benefits practices (including starting wage rates, base pay, pay ranges, statutory and market cash payments, variable compensation, and paid time off).

Job-content-based job evaluation

Job evaluation method in which the relative worth and pay structure of different jobs are based on an assessment of their content and their relationship to other jobs within the organization.

Lump-sum increase (LSI)

One-time payment made to an employee.

Cost-of-living adjustment

Pay adjustment given to eligible employees regardless of performance or organizational profitability; usually linked to inflation.

Productivity-based pay

Pay based on the quantity of work and outputs that can be accurately measured.

Compa-ratio

Pay rate divided by the midpoint of the pay range.

Premiums

Payments in return for the achievement of specific, time-limited, targeted objectives.

Single-rate pay

Provides each incumbent of a job with the same rate of pay, regardless of performance or seniority; also known as flat-rate pay.

Flat-rate pay

Provides each incumbent of a job with the same rate of pay, regardless of performance or seniority; also known as single-rate pay.

External equity

Situation in which an organization's compensation levels and benefits are similar to those of other organizations that are in the same labor market and compete for the same employees.

Pay for performance

Situation where an individual's performance on the job is the basis for the amount and timing of pay increases; also called merit pay or performance-based pay.

Pay grades

Used to group jobs that have approximately the same relative internal or external worth and are paid at the same rate or within the same pay range.