Human resource managementLesson 6 of 8 in the course Managing Human Resources and Labor Relations

Employee Compensation: Pay Structures, Incentives, and Benefits

5 flashcards · 5 quiz questions · 5 match pairs · 5 fill-in sentences · English

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Summary

Pay is a central part of the relationship between an employer and an employee. A fair, competitive pay scale helps an organization attract and retain capable people, while also reflecting the value and demands of different jobs. This lesson explains how internal job factors and external labor-market conditions influence compensation.

A pay structure organizes wages and salaries within an organization. It reflects the relative value of jobs and commonly considers job responsibilities, required skills, education, experience, and level of authority. Positions with greater responsibility or more demanding qualifications generally receive higher compensation.

All flashcards

Pay structure
An organization’s arrangement of wages and salaries across jobs, reflecting factors such as responsibilities and qualifications.
Pay level
The general amount an employer pays compared with rates in the labor market.
Market pay information
Wage surveys, government resources, O*NET, and posted salary data can help employers compare compensation.
Worker's compensation
Benefits that can cover lost work time from work-related injuries and support rehabilitation.
Flexible benefits
Benefit choices employees can select or combine to better reflect their differing needs.

Quiz questions

  1. What does a pay structure organize within an organization?Answer: The relative wages and salaries of jobs.
  2. A salesperson receives a $1,000 base salary, 3% on the first $50,000 in sales, 4% on the next $30,000, and 5% on the next $20,000. What is the total pay?Answer: $4,700
  3. Which description best defines direct compensation?Answer: Wages or salary paid to an employee.
  4. What is a purpose of worker's compensation?Answer: To provide benefits related to lost work time from work-related injuries.
  5. Why might an employer offer employees a choice of benefits?Answer: Different benefit choices can better reflect employees' differing needs.

Based on Introduction to Business 2e by Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.

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