06 Compensation and Benefits Free Online FlashCards

What does compensation include?

Compensation is the money and other rewards employees receive in exchange for their work.

What is a pay structure?

A pay structure organizes jobs and sets the pay ranges associated with them.

What is an individual incentive?

Individual incentives link rewards to a person’s results, such as commissions, piece rates, sales targets, or individual performance bonuses.

What is the purpose of a compensation strategy?

A compensation strategy connects pay and benefits to organizational goals and workforce needs while considering cost, motivation, retention, employee preferences, fairness, and legal compliance.

How do direct pay and benefits differ?

Direct pay includes wages, salaries, commissions, and bonuses. Benefits include rewards such as paid leave, insurance, retirement contributions, and legally required programs.

What factors can job evaluation consider?

Job analysis and job evaluation assess factors such as responsibility, skill, effort, and working conditions.

What does the midpoint of a pay range often represent?

A pay range has a minimum, midpoint, and maximum. The midpoint often serves as the reference point for a fully capable employee in the role.

What do lead, match, and lag mean in market pay strategy?

Leading means paying above the market, matching means paying in line with it, and lagging means paying below it while potentially offering other valued rewards.

What does internal equity mean in compensation?

Internal equity means treating comparable work consistently and ensuring differences have clear, job-related reasons.

What results can team incentives reward?

Team incentives reward a group’s output, quality, customer service, or project results.

What is an organization-wide incentive?

Organization-wide incentives, such as profit sharing, are tied to company performance.

What conditions help incentives work well?

Incentives work best when employees understand the goals, can influence the results, and know how performance is measured.