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Definition
| The package of quantifiable rewards an employee receives for his or her labors. Includes three components: base compensation, pay incentives, and indirect compensation/benefits. |
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| The fixed pay an employee receives on a regular basis, either in the form of salart or as an hourly wage. |
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| A program designed to reward employees for good performance. |
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| The perceived fairness of the pay structure within a firm. |
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| The perceived fairness in pay relative to what other employers are paying for the same time of labor. |
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| The perceived fairness of individual pay decisions. |
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| Knowledge-based Pay (Skill-based Pay) |
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Definition
| A pay system in which employees are paid on the basis of the jobs they can do or talents they have that can be successfully applied to a variety of tasks and situations. |
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| A pay plan in which most employees are part of the same compensation system. |
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| A pay plan in which different compensation systems are established for emploees or groups at different organizational levels. |
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| Groups of jobs that are paid with in the same pay range. |
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| The process of evaluating the relative value or contribution of different jobs to an organization. |
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| Work-related criteria that an organization considers most important in assessing the relative value of different jobs. |
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| A listing of jobs in order of their importance to the organization, from highest to lowest. |
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| A job that is similar or comparable in content across firms. |
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| A firm's decision to pay above, below, or at the market rate for its jobs. |
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| The practice of replacing narrowly defined job descriptions with broader categories (bands) of related jobs. |
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Term
| Fair Labor Standards Act (FLSA) |
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Definition
| The fundamental compensation law in the US. Requires employers to record earnings and hours worked by all covered employees and to report this information to the US Department of Labor. Defines two categories of emploees: exempt and nonexempt. |
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| An employee who is not covered by the provisions of the FLSA. Most professional, administrative, executive, and outside sales jobs fall into this category. |
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| An emplyee who is covered by the provisions of the FLSA. |
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| A pay concept or doctrine that calls for comparable pay for jobs that require comparable skills, effort, and responsibility and have comparable working conditions, even if the job content is different. |
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| Internal Revenue Code (IRC) |
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Definition
| The code of tax laws that affects how much of their earnings employees can keep and how benefits are treated for tax purposes. |
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Term
| Pay-for-performance System (Incentive System) |
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Definition
| A system that rewards employees on the assumptions that (1) individual employees and work teams differ in how much they contribute to the firm; (2) the firm's overall performance depends to a large degree on the performance of individuals and groups within the firm; and (3) to attract, retain, and motivate high performers and to be fair to all employees, the firm needs to reward employees on the basis of their relative performance. |
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Definition
| A compensation system in which employees are paid per unit produced. |
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| An increase in base pay, normally given once a year. |
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| Bonus Program (Lump-sum Payment) |
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Definition
| A financial incentive that is given on a one-time basis and does not raise the employee's base pay permanently. |
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| A one-time reward usually given in the form of a tangible prize. |
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| A theory of behavior holding that people tend to do those things that are rewarded. |
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| A plantwide pay-for-performance plan in which a portion of the company's cost savings is returned to workers, usually in the form of a lump-sum bonus. |
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Definition
| A corporatewide pay-for-performance plan that uses a formula to allocate a portion of declared profits to employees. Typically, profit distributions under a profit-sharing plan are used to fund employees' retirement plans. |
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| Employee Stock Ownership Plan (ESOP) |
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Definition
| A corporatewide pay-for-performance plan that rewards employees with company stock either as an outright grant or at a favorable price that may be below market value. |
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Term
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Definition
| Noncash incentives given to a firm's executives. |
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| Employee Benefits (Indrect Compensation) |
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Definition
| Group membership rewards that provide security for employees and their family members. |
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Definition
| Payments made for benefits coverage. Contributions for a specific benefit may come from the employer, employee, or both. |
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Definition
| Payments made to cover health care expenses that are split between the employer's insurance company and the insured employee. |
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Definition
| A small payment made by the employee for each office visit to a physician under a health plan. The health plan pays for additional medical expenses that exceed the copayment at no cost to the employee. |
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Term
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Definition
| An annual out of pocket expenditure that an insurance policyholder must make before the insurance plan makes any reimbursements. |
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Term
| Flexible or Cafeteria Benefits Plan |
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Definition
| A benefits program that allows employees to select the benefits they need most from a menu of choices. |
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Definition
| The complete package of benefits that a company offers to its employees. |
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Definition
| A government program that provides income for retirees, the disabled, and survivors of deceased workers, and health care for the aged through the Medicare program. |
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Term
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Definition
| A part of the Social Security program that provides health insurance coverage for people aged 65+. |
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Term
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Definition
| A legally required benefit that provides medical care, income continuation, and rehabilitation expenses for people who sustain job-related injuries or sickness. Also provides income to the survivors of an employee whose death is job related. |
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Definition
| A program established by the Social Security Act of 1935 to provide temporary income for people during periods of involuntary unemployment. |
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| Supplemental Unemployment Benefits (SUB) |
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Definition
| Benefits given by a company to laid-off employees over and above state unemployment benefits. |
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Term
| Family and Medical Leave Act of 1993 (FMLA) |
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Definition
| A federal law that requires employers to provide up to 12 weeks' unpaid leave to eligible employees for the birth or adoption of a child; to care for a sick parent, child, or spouse; or to take care of health problems that interfere with job performance. |
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| Consolidated Omnibus Budget Reconciliation Act (COBR) of 1985 |
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Definition
| Legislaton that gives employees the right to continue their health insurance coverage for 18 to 36 months after employment has terminated. |
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| Health Insurance Portability and Accountability Act (HIPPA) |
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Definition
| A federal law that protects an employee's ability to transfer between health insurance plans without a gap in coverage due to a preexisting condition. |
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Term
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Definition
| A medical condition treated while an employee was covered under a former employer's health plan and requires treatment under a new employer's different health plan. |
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Term
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Definition
| The money paid to an insurance company for coverage. |
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Term
| Health Maintenance Organization (HMO) |
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Definition
| A health care plan that provides comprehensive medical services for employees and their familes at a flat annual fee. |
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Term
| Preferred Provider Organization (PPO) |
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Definition
| A health care plan in which an employer or insurance company establishes a network of doctors and hospitals to provide a broad set of medical services for a flat fee per participant. In return for the lower fee, the doctors and hospitals who join the PPO network expect to receive a larger volume of patients. |
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| Health Savings Account (HSA) |
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Definition
| A qualified health plan with a high deductible that lets individuals save money for health care expenses with pretax dollars and lets unspent money accumulate as a tax-free stash of money. |
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Term
| Employee Retirement Income Security Act (ERISA) |
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Definition
| A federal law established in 1974 to protect employees' retirement benefits from mismanagement. |
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Term
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Definition
| A guarantee that accrued retirement benefits will be given to reitrement plan participants when they retire or leave the employer. |
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Term
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Definition
| Employee benefits, usually retirement funds, that stay with the employee as he or she moves from one company to another. |
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Term
| Pension Benefit Guaranty Corporation (PBGC) |
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Definition
| The government agency that provides pan termination insurance to employers with defined benefit retirement programs. |
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Term
| Defined Benefit Plan (Pension) |
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Definition
| A retirement plan that promises to pay a fixed dollar amount of retirement income based on a formula that takes into account the average of the employee's last 3 to 5 years' earnings prior to retirement. |
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| Defined Contribution Plan |
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Definition
| A retirement plan in which the employer promises to contribute a specific amunt of funds into the plan for each participant. The final value of each participant's retirement income depends on the success of the plan's investments. |
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Definition
| The identification, measurement, and management of human performance in organizations. |
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Definition
| An aspect of performance that determines effective job performance. |
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Term
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Definition
| Characteristics associated with successful performance. The observable characteristics people bring with them in order to perform the job successfully. |
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| Set of competencies associated with a job. |
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Definition
| An appraisal format that asks supervisors to com are an employee's performance to the performance of other employees doing the same job. |
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Term
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Definition
| An appraisal format that asks supervisors to make judgments about an employee's performance based solely on performance standards. |
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Term
| Trait appraisal instrument |
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Definition
| An appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring. |
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Term
| Behavioral appraisal instrument |
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Definition
| An appraisal tool that asks managers to assess a worker's behaviors. |
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Term
| Outcome appraisal instrument |
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Definition
| An appraisal tool that asks managers to assess the results achieve by workers. |
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| Management by objectives (MBO) |
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Definition
| A goal-direct approach to performance appraisal in which workers and their supervisors set goals together for the upcoming evaluation period. |
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Definition
| A performance appraisal system in which workers rate themselves. |
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Term
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Definition
| A performance appraisal system in which workers at the same level in the organization rate one another. |
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Term
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Definition
| A performance appraisal system in which workers review their supervisors. |
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Term
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Definition
| The combination of peer, subordinate, and self-review |
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Term
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Definition
| An error in performance appraisals that reflects consistent biases on the part of the rater. |
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Term
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Definition
| In performance ratings, the degree to which the performance ratings given by various supervisors in an organization are based on similar standards. |
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Term
| Frame-of-reference (FOR) training |
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Definition
| A type of training that presents supervisors with fictitious examples of worker performance (either in writing or on video), asks the supervisor to evaluate the workers in the example, and then tells them what their ratings should have been. |
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| Situational factors or system factors |
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Definition
| A wide array of organizational characteristics that can positively or negatively influence performance. |
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Definition
| The process of providing employees with specific skills or helping them correct deficiencies in their performance. |
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Definition
| An effort to provide employees with the abilities the organization will need in the future. |
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Definition
| A device or situation that replicates job demands at an off-the-job site. |
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Term
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Definition
| The use of a number of technologies to replicate the entire real-life working environment in real time. |
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Definition
| External sources of informations such as pamphlets and reference guides, that workers can access quickly when they need help in making a decision or performing a specific task. |
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Term
| Cross-functional training |
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Definition
| Training employees to perform operations in areas other than their assigned jobs. |
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Definition
| High-performing workers who double as internal ob-the-job trainers. |
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Definition
| A creativity training technique in which participants are given the opportunity to generate ideas openly, without fear or judgement. |
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Definition
| The mastery of basic skills (reading, writing, arithmetic, and their uses in problem solving). |
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Definition
| The process of informing new employees about what is expected of them in the job and helping them cope with the stresses of transition. |
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| Realistic job preview (RJP) |
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Definition
| Realistic information about the demands of job, the organization's expectations of the job holder, and the work environment. |
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Definition
| An ongoing and formalized effort that focuses on developing enriched and more capable workers. |
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Definition
| A couple whose members both have occupational responsibilities and career issues at stake. Nearly 80% of all couples are working couples. Career may conflict with family life. |
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| A career development activity in which managers make decisions regarding the advancement potential of subordinates. |
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Definition
| A career development activity that focuses on preparing people to fill executive positions. |
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Definition
| A system in which an organization announces job openings to all employees on a bulletin board, in a company newsletter, or through a phone recording or computer system. |
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Definition
| A company-maintained record of employees' abilities, skills, knowledge, and education. |
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Definition
| A chart showing the possible directions and career opportunities available in an organization; it presents the steps in a possible career and a plausible timetable for accomplishing them. |
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Definition
| A collection of career development materials such as workbooks, tapes, and texts. |
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Definition
| A developmentally oriented relationship between senior and junior colleagues or peers that involves advising, role modeling, sharing contacts, and giving general support. |
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