| A | B |
|---|
| Total rewards | Monetary and non-monetary rewards provided to employees in order to attract, motivate and retain them. |
| Base pay | Basic compensation that an employee receives, usually as a wage or a salary. |
| Wages | Payments directly calculated on the amount of time worked. |
| Salaries | Consistent payments made each period regardless of the number of hours worked. |
| Variable pay | Compensation linked directly to individual, team or organizational performance. |
| Benefit | Indirect reward given to an employee or a group of employes for organizational membership. |
| Entitlement philosophy | Assumes that individuals who have worked another year are entitled to pay increases, with little regard for performance differences. |
| Pay-for-performance philosophy | Requires that compensation changes reflect performance differences. |
| Equity | Perceived fairness between what a person does and what the person receives. |
| Procedural justice | Perceived fairness of the process and procedures used to make decisions about employees. |
| Distributive justice | Perceived fairness in the distribution of outcomes. |
| Competency-based pay | Rewards individuals for the capabilities they demonstrate and acquire. |
| Balance-sheet approach | Compensation plan that equalizes cost differences between the international assignment and the same assignment in the home country. |
| Global market approach | Compensation plan that attempts to be more comprehensive in providing best pay, incentives, benefits and relocation expenses regardless of the country to which the employee is assigned. |
| Tax equalization plan | Compensation plan used to protect expatriates from negative tax consequences. |
| Living wage | One that is supposed to meet the basic needs of a worker's family. |
| Exempt employees | Employees to whom employers are not required to pay overtime. |
| Non-exempt employees | Employees who must be paid overtime. |
| Pay equity | Similarity in pay for all jobs requiring comparable knowledge, skills and abilities, even if actual job duties and market rates differ significantly. |
| Garnishment | A court order that directs an employer to set aside a portion of an employee's wages to pay a debt owed a creditor. |
| Job evaluation | Formal, systematic means to identify the relative worth of jobs within an organization. |
| Compensable factors | Job value commonly present throughout a group of jobs. |
| Market pricing | Use of market pay data to identify the relative value of jobs based on what other employers pay for similar jobs. |
| Pay survey | Collection of data on compensation rates for workers performing similar jobs in other organizations. |
| Benchmark jobs | Jobs found in many organizations. |
| Job family | Group of jobs having common organizational characteristics. |
| Pay grades | Groupings of individual jobs having approximately the same job worth. |
| Market line | Graph line that shows the relationship between job value as determined by job evaluation points and job value as determined by pay survey rates. |
| Market branding | Grouping jobs into pay grades based on similar market survey amounts. |
| Broadbanding | Practice of using fewer pay grades with much broader ranges than in traditional compensation systems. |
| Red-Circled employee | Incumbent who is paid above the range set for the job. |
| Green-Circled employee | Incumbent who is paid below the range set for the job |
| Pay compression | Occurs when the pay differences among individuals with different levels of experience and performance become small. |
| Compa-ratio | Pay level divided by the midpoint of the pay range. |
| Seniority | Time spent in the organization or on a particular job. |
| Lump-sum increase (LSI) | One-time payment of all or part of a yearly pay increase. |
| Straight piece-rate system | Pay system in which wages are determined by multiplying the number of units produced by the piece rate for one unit. |
| Bonus | One-time payment that does not become part of the employee's base pay. |
| Gainsharing | System of sharing with employees greater-than-expected gains in profits and/or productivity. |
| Profit sharing | System to distribute a portion of the profits of an organization to employees. |
| Stock option plan | Plan that gives employees the right to purchase a fixed number of shares of company stock at a specified exercise price for a limited period of time. |
| Employee stock ownership plan (ESOP) | Plan whereby employees have significant stock ownership in their employers. |
| Commission | Compensation computed as a percentage of sales in units or dollars. |
| Draw | Amount advanced from and repaid to future commissions earned by the employee. |
| Perquisites (perks) | Special benefits - usually non-cash items - for executives. |
| Compensation committee | Subgroup of the Board of Directors, composed of directors who are not officers of the firm. |
