Strategic Alignment
Define Strategic perspective.
What is focusing on compensation choices that help the organization gain and sustain competitive advantage.
Define a job evaluation
The process of systematically determining the relative worth of jobs to create a job structure for the organization.
Define external competitiveness.
Refers to the pay relationships among organizations – pay relative to competitors.
Define the Equity Theory.
Employees experience equity and will be motivated to perform when the ratio of their perceived outputs is equal to the perceived outputs/inputs of a comparison person.
What is an example of why employee benefits costs have increases?
Wage and price controls, unions, employer impetus, cost effectiveness of benefits, and government impetus.
Define internal alignment
Refers to the pay relationships among different jobs/skills/competencies within a single organization.
What are the three most common job evaluation methods?
Ranking, classification, and point method
Define broad banding.
Consolidates four or five traditional grades into a single band with a minimum and maximum.
Define a merit pay system.
The system links increases in base pay to how highly employees are rated on a performance evaluation.
What is a individual retirement account (IRA)?
A tax-favored retirement savings plan individuals can establish themselves, used to store wealth accumulated in other retirement vehicles, rather than as a way to build new wealth.
Name the three tests to Competitive Advantage
Is it aligned? Does it differentiate? Does it add value?
Define skill analysis
A systematic process of identifying and collecting information about skills required to perform work in an organization.
Define pay mix.
The various types of payments, or pay forms, that make up total compensation.
Define performance-based-pay.
Pay that is contingent upon continued achievement of challenging, specific performance goals increases. performance.
What are the three different ways benefits can be financed?
Noncontributory, contributory, and employee financed.
Name the four components to the Total Compensation Strategy
Step one is to assess total compensation implications, map a total compensation strategy using the five elements of the pay model, implement the strategy through the design and execution of the compensation system, eases and realign.
What are the 5 major decisions in the job evaluation process?
Establishing the purpose, deciding on single versus multiple plans, choosing among alternative methods, obtaining involvement of relevant stakeholders, and evaluating the usefulness of the results.
What is the labor cost formula?
Labor Costs = (pay level) X (number of employees)
The effectiveness of a pay-for-performance plan depend on what three factors?
Efficiency, equity, and compliance
What are the four major objectives to unemployment insurance?
To offset lost income during involuntary unemployment, to help unemployed workers find new jobs, to provide incentive for employers to stabilize employment, to allow workers to return to their employer after short-term layoff.
Name the four External factors shaping internal structure
Economic pressures, Government policies/laws, External stakeholders, and cultures/customs
Early conceptions of competencies are focused on what five areas?
Skills, knowledge, self-concepts, traits, and motives
What are the three approaches to conducting an external salary survey?
Benchmark-Job Approach, Low-High Approach, and Benchmark Conversion/Survey Leveling.
How do merit bonuses differ from merit pay increases?
Employees receive an end of the year bonus that does not build into base pay like merit pay increases do.
At what age are employees eligible for pension plans?
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