The availability of workers with the required skills to meet the firm's labor demand.
How many workers the organization will need in the future.
Human Resource Planning (HRP)
Process an organization uses to ensure that it has the right amount and the right kind of people to deliver a particular level of output or services in the future.
Process of generating a pool of qualified candidates for a particular job; the first step in the hiring process.
Process of making a "hire" or "no hire" decision regarding each applicant for a job; the second step in the hiring process.
Process of orienting new employees to the organization and the unit in which they will be working; the third step in the hiring process.
Consistency of measurement usually across time but also across judges.
Extent to which the technique measures the intended knowledge, skill, or ability. In the selection context, it is the extent to which scores on a test or interview correspond to actual job performance.
Extent of correlation between selection and performance scores, when measured at the same time.
Extent to which selection scores correlate with performance scores, when performance is measured later in time.
Job interview based on a thorough job analysis, applying job-related questions with predetermined answers consistently across all interviews for a job.
Set of simulated tasks or exercises that candidates (usually for managerial positions) are asked to perform.
Package of quantifiable rewards an employee recieves for his or her labors. Includes three components which are base compensation, pay incentives, and indirect compentsation/benefits.
The fixed pay an employee recieves on a regular basis, either in the form of a salary or as an hourly wage.
Program designed to reward employees for good performance.
Perceived fairness of the pay sturcture within a firm.
Perceived fairness in pay relative to what other employers are paying for the same type of labor.
Perceived fairness of individual pay decisions.
Knowledge-Based Pay or Skill-Based Pay
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.
Egalitarian Pay System
Pay plan in which most employees are part of the same compensation system.
Elitist Pay System
Pay plan in which different compensation systems are established for employees or groups at different organizational levels.
Groups of jobs that are paid within the same pay range.
Process of evaluating the relative value or contribution of different jobs to an organization.
Work-related criteria that an organization considers most importnat in assessing the relative value of different jobs.
Listing of jobs of their importance to the organization, from highest to lowest.
Benchmark or Key Job
Job that is similar or comparable in content across firms.
Firm's decision to pay above, below, or at the market rate of its jobs.
Practice of replacing narrowly defined job descriptions with broader categories (bands) of related jobs.
Fair Labor Standards Act (FLSA)
Fundamental compensation law in the US. Requires employers to record earnings and hours worked by all covered employees and to report this informantion to the US Department of Labor. Defines two categories of employees: exempt and nonexempt.
Employee who is not covered by the provisions of the Fair Labor Standards Act. Most professional, administrative, executive, and outside sales jobs fall into this category.
Employee who is covered by the provisions of the Fair Labor Standards Act.
Pay concept or doctrine that calls for comparavle pay for jobs that require comparable skills, effort, responsibility, and have comparable working conditions, even if the job content is different.
Internal Revenue Code (IRC)
Code of tax laws that affects how much of their earnings employees can keep and how benefits are treated for tax purposes.
Pay-for-Performance System or Incentive System
System that rewards employees on the assumptions that:-
(1) Individual employees and work teams differ in how much they contribute to the firm;
(2) Firm's overall performance depends to a large degree on the performance of individuals and groups within the firm;
(3) 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.
Compensation system in which employees are paid per unit produced.
Increase in base pay, normally given once a year.
Bonus Program or Lump-Sum Payment
Financial incentive that is given on a one-time basis and does not raise the employee's base pay permanently.
One-time reward usually given in the form of a tangible prize.
Theory of behavior holding that people tend to do those things that are rewarded.
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.
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.
Employee Stock Ownership Plan (ESOP)
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.
Noncash incentives given to a firm's executives.
Employee Benefits or Indirect Compensation
Group membership rewards that provide security for employees and their family members.
Payments made for benefits coverage. Contributions for a specific benefit may come from the employer, employee, or both.
Payments made to cover health care expenses that are split between the employer's insurance company and the insured employee.
Small payment made by the employee for each office visit to a physician under a health plan pays for additional medical expenses that exceed the copayment at no cost to the employee.
Annual out-of-pocket expenditure that an insurance policyholder must make before the insurance plan makes any reimbursements.
Flexible or Cafeteria Benefits Program
Benefits program that allows employees to select the benefits they need most from a menu of choices.
Complete package of benefits that a company offers its employees.
Government program that provides income for retirees, the disabled, and survivors of deceased workers, and health care for the aged through the Medicare program.
Part of the Social Security program that provides health insurance coverage for people aged 65 and over.
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.
Program established by the Social Security Act of 1935 to provide temporary income for people during periods of involuntary unemployment.
Supplemental Unemployment Benefits (SUB)
Benefits given by a company to laid-off employees over and above state unemployment benefits.
Family and Medical Leave Act of 1993 (FMLA)
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.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Legislation that gives employees the right to continue their health insurance coverage for 18 to 36 months after their employment has terminated.
Health Insurance Portability and Accountability Act (HIPAA)
Federal law that protects an employee's ability to transfer between health insurance plans without a gap in coverage due to a preexisting condition.
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.
Money paid to an insurance company for coverage.
Health Maintenance Organization (HMO)
Health care plan that provides comprehensive medical services for employees and their families at a flat annual fee.
Preferred Provider Organization (PPO)
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.
Health Savings Account (HSA)
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.
Employee Retirement Income Security Act (ERISA)
Federal law established in 1974 to protect employees' retirement benefits from mismanagement.
Guarantee that accrued retirement benefits will be given to retirement plan participants when they retire or leave the employer.
Employee benefits, usually retirement funds, that stay with the employee as he or she moves from one company to another.
Pension Benefit Guaranty Corporation (PBGC)
Government agency that provides plan termination insurance to employers with defined benefit retirement programs.
Defined Benefit Plan or Pension
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 three to five years' earning prior to retirement.
Defined Contribution Plan
Retirement plan in which the employer promises to contribute a specific amount 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.