Key Terms 1
These represent almost 1/3 of an employee's compensation
Benefits
Employees can select a number of these from the range offered (similar to a buffet)
Cafeteria-style benefits
Pleasure in being recognized for one's work and the feeling of satisfaction gained from a job well done
Intrinsic Reward
Which is not an internal factor in influencing compensation?
A. Company culture
B. Employee performance
C. The economy
D. Employee Potential
C. The economy
Name the 4 external factors influencing compensation
1. Employment laws
2. Labor market
3. Geographic Area
4. Economy
Practice of keeping private documents and conversations secret; essential to maintaining trust in performance appraisals
Confidentiality
Evaluates performance in terms of formal goals or objectives set at an earlier date (MBO)
Management by Objectives
Payoffs granted to an employee are conside5red this type of reward. Ex: additional benefits and compensation
Extrinsic Reward
Specific instances of inferior and superior performance are documented when they occur
Critical Incidents
A performance appraisal technique in which supervisors describe the performance in narrative form
Essay Method
This refers to comparing salary structure to that of similar companies and competitors that host a similar business model
Benchmarking Peers
A reward given to an individual to recognize goal attainment unique to that employee
Individualized Reward
Focuses the review process on customers, the team, and the employee's contribution to system improvements (continuing to advance/get better)
Continuous improvement review
This type of raise is generally based on the employee's performance (good performance, pay raise)
Merit Raise
A multi-rater appraisal technique in which a supervisor is evaluated by his/her boss, peers, and subordinates
360-degree review
This compares or ranks coworkers in a work group in head-to-head fashion according to specific accomplishments or job behavior
Forced Ranking System
What are the two categories of performance measures?
Qualitative and Quantitative
Name the three basic types of decisions involved in developing a compensation system
1. Salary Structure
2. Variability of Pay
3. Level of Pay