Compensation Basics
What is compensation
Total Pay and benefits employees receive for their work
What is job evaluation?
Process of determining a job's worth
What is a wage and salary survey?
Data on pay rates from other companies
What does minimum wage law ensure?
A legal pay floor
What are employee benefits?
Non-wage compensation (health insurance, PTO)
What are the two main types of compensation?
Direct (wages/salary) and indirect (benefits)
What is the purpose of job evaluation?
To ensure internal pay equity
Why do companies use pay ranges?
To allow flexibility in compensation
What law regulates overtime pay?
Fair Labor Standards Act
What is a retirement plan example?
401(k)
What is base pay?
Fixed salary or hourly wage before bonuses
What is the Hay Profile Method used for?
Evaluating managerial jobs
What is pay compression?
Small pay differences between employees no matter the experience
What is overtime pay typically?
1.5x regular pay after 40 hours
What is health insurance considered?
Indirect compensation
What is variable pay?
Pay tied to performance (bonuses, comissions)
What is internal equity?
Fair pay within the company
What is a wage curve?
Graph showing relationship between job value and pay
What is pay equity law focused on?
Equal pay for equal work
What is a bonus?
One-time performance based payment
What is a pay structure?
The organization of pay rates across jobs
What is a compensable factor?
A job characteristic used to determine pay (skills, effort, responsibility)
What is broadbanding?
Combining pay grades into wider ranges
What is the difference between exempt and nonexempt employees?
Exempt = no overtime pay, nonexempt = eligible for overtime
What is a compensation strategy?
Plan aligning with company goals