Strategic Compensation: A Component of Human Resource Systems
1. What is compensation?: compensation represents the rewards employees
receive for performing their job
2. Types of compensation: intrinsic and extrinsic
3. Intrinsic compensation: represents employees' critical psychological states
that result from performing their jobs
4. Extrinsic compensation: includes both monetary and non-monetary rewards
5. Elements of Core Compensation: Base pay (hourly pay, annual salary) and
Base pay adjustments (COLAs, merit pay, incentive pay, seniority pay, skill-
based pay, person-focused pay)
6. Base Pay: Influenced by four compensable factors:
-employee's skill level
-employee's effort
-employee's level of responsibility
-severity of the working conditions
7. Cost-of-living-adjustments: COLAs represent periodic base pay increases
that are founded on changes in prices as indexed by the consumer price index
(CPI)
8. Seniority pay: system that rewards employees with periodic additions to base
pay according to employees' length of service in performing their jobs
9. Merit pay: programs taht assume that employees' compensation over time
should be determined, at least in part, by differences in job performance
10. Incentive pay: (aka variable pay) rewards employees for partially or
completely attaining a predetermined work objective
11. Pay-for-knowledge plans: reward managerial, service, or professional
workers, for successfully learning specific curricula
12. Skill-based pay: used mostly for employees who perform physical work and
increases these workers' pay as they master new skills
13. Employee Benefits: Discretionary benefits and Legally required benefits
14. Types of discretionary benefits: Protection programs, paid time-off, services
15. Protection programs: provide family benefits, promote health, and guard
against income loss caused by such catastrophic factors as unemployment,
disability, or serious illness
16. Paid time-off: provides employees with pay for time when they are not
working
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1. What is compensation?: compensation represents the rewards employees
receive for performing their job
2. Types of compensation: intrinsic and extrinsic
3. Intrinsic compensation: represents employees' critical psychological states
that result from performing their jobs
4. Extrinsic compensation: includes both monetary and non-monetary rewards
5. Elements of Core Compensation: Base pay (hourly pay, annual salary) and
Base pay adjustments (COLAs, merit pay, incentive pay, seniority pay, skill-
based pay, person-focused pay)
6. Base Pay: Influenced by four compensable factors:
-employee's skill level
-employee's effort
-employee's level of responsibility
-severity of the working conditions
7. Cost-of-living-adjustments: COLAs represent periodic base pay increases
that are founded on changes in prices as indexed by the consumer price index
(CPI)
8. Seniority pay: system that rewards employees with periodic additions to base
pay according to employees' length of service in performing their jobs
9. Merit pay: programs taht assume that employees' compensation over time
should be determined, at least in part, by differences in job performance
10. Incentive pay: (aka variable pay) rewards employees for partially or
completely attaining a predetermined work objective
11. Pay-for-knowledge plans: reward managerial, service, or professional
workers, for successfully learning specific curricula
12. Skill-based pay: used mostly for employees who perform physical work and
increases these workers' pay as they master new skills
13. Employee Benefits: Discretionary benefits and Legally required benefits
14. Types of discretionary benefits: Protection programs, paid time-off, services
15. Protection programs: provide family benefits, promote health, and guard
against income loss caused by such catastrophic factors as unemployment,
disability, or serious illness
16. Paid time-off: provides employees with pay for time when they are not
working
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