Definitions of Reward Systems

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Terms in this set (...)

Base Pay
Given to employees in exchange for work performed
Cost-of-living adjustments (COLA) and contingent pay
-COLA=imply the same percentage increase for all employees regardless of their indiv performance
-Contingent pay=AKA merit pay=given as an additional to the base pay based on past performance
Short-term incentives
-Not added to base pay, only temporary pay adjustments based on review period
-Known in advance
Long-term incentives
-Attempt to influence future performance over a longer period of time
-Typically involve stock ownership or options to buy stocks at pre-established and profitable price
Income protection
Serve as backup to employees' salaries in the event that an employee is sick, disabled, or no longer able to work
Work/life focus
-Include programs that help employees achieve a better balance between work and non-work activities
-Include time away from work, services to meet specific needs, and flexible work schedules
Allowances
Includes allowances covering housing and transportation (poplar for high-level managers)
Relational returns
-Intangible in nature,
-Include retention and status, employment security, challenging work, opportunities to learn, and opportunities to form personal relationships ar work