HR Chpt 11: Establishing a Pay Structure

Created by J_Schlukebier 

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Job Structure

Relative pay for different jobs within the organization

Pay Level

Average amount (including wages, salaries, and bonuses) the organization pays for a particular job.

Pay Structure

Pay policy resulting from a job structure and pay-level decisions.

Fair Labor Standards Act (FLSA)

Federal law that establishes a minimum wage and requirements for overtime pay and child labor.

Exempt Employees

Managers, outside salespeople, and any other employees not covered by the FLSA requirement for overtime pay.

Nonexempt Employees

Employees covered by the FLSA requirements for overtime pay.

Product Market

Organizations that offer competing goods and services. Organizations in product market are competing to serve the same customers. Need to sell goods and services at a quantity and price that will bring them a sufficient profit.

Benchmarking

Procedure in which an organization compares its own practices against hose of successful competitors.

Job Evaluation

Administrative procedure for measuring the relative internal worth of the organization's jobs.

Piecework Rate

Rate of pay for each unit produced.

Salary

Rate of pay for each week, month, or year worked.

Pay Policy Line

Graphed line showing the mathematical relationship between job evaluation points and pay rate.

Pay Grades

Sets of jobs having similar worth or content, grouped together to establish rates of pay.

Pay Range

Set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade.

Pay Differential

Adjustment to a pay rate to reflect differences in working conditions or labor markets.

Delayering

Reducing the number of levels in the organizations job structure.

Skill-Based Pay Systems

Pay structures that set pay according to the employees levels of skill or knowledge and what they are capable of doing.

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