aPHR Flashcard (Course 3: Compensation and Benefits)

What are the HR Compensation and Benefits tasks?

• Establish and maintain compensation and benefit programs

• Creating pay structures

• Designing programs the reward and engage the workforce

• Build and communicate total rewards programs

• Identify best global practices

Total Compensation

An employee’s complete pay package, including cash, benefits, and services

What are the two ways you can use your company’s compensation system?

1. Serves as the ultimate management total for attracting, capturing, and retaining top talent

2. Powerful way to shape this talent and to promote constant learning and growth

What are the objectives of a compensation program?

• To retain and motivate employees

• To offer fair reward for achievements

• To create incentives for future efforts

What are the different types of compensation?

• Base wage/salary

• Benefits

• Incentives

Merit Pay

A variation on the base salary that compensates employees through the salary range for their position based on their performance

Incentive

A monetary or non-monetary reward to motivate an employee like a bonus or extra time off

Benefit

Workers’ entitlements in addition to base salary

Imputed Income

The value of a service or a benefit received by the employee that must be treated as income

Compensation

Everything an employee receives for working, including pay and non-monetary benefits

What are some types of incentives?

• Commission

• Annual Bonus

• Stock Options

What are the different types of raises?

• Annual raises

• Performance-based raises

• Merit increases

• Tenure-based raises

Job evaluation

A systematic process that categorizes all jobs according to the level of responsibility and skills required

What are the different job evaluation techniques?

• Point factor

• Ranking

• Classification

• Factor comparison

Compa Ratio

A number comparing a person’s salary to other salaries for the same job

What is the Compa-Ratio Formulas?

• Current Salary/midpoint of salaries x 100

• Midpoint Salary

  • Lowest salary + Highest salary / 2

Internal equity

Ensures that jobs of similar value receive equal compensation

External Equity

Created by comparing the organization’s internal pay levels to external sources

What are the types of incentive pay?

• Commission

• Merit Pay

• Group incentive pay

• Profit sharing

• Skill-based pay

• Service awards

What are the types of commission structures?

• Capped commission

• Commission based on percentage of sales

• Individual Commission and team commission

What are the legally required benefits?

• Health insurance

• Medicare contributions

• Social security contributions

• Worker’s compensation insurance

• Unemployment insurance

• Family and medical leave

What are some ways to reduce healthcare costs?

• Defined contribution coverage

• Preferred provider organizations

• Employee wellness programs

• Flexible benefits plans

• Defined-contribution plans

• Cash balance plans

What are the Medicare eligibility requirements?

• 65 or older

• End-stage renal disease

• Collecting Social Security Disability Insurance for more than two years

Vesting

The point at which employees own the contributions their employer has made to the pension plan

HRIS

Organize the information required to calculate and keep track of payroll-related issues

How can you use HRIS as a tool?

• Follow laws and regulations

• Manage performance reviews

• Handle employee benefits

How can you use HRIS for employee retention?

• Performance

• Benefits

• Compensation

What are some examples of operational HRIS?

• Tracking employee data

• Managing employee records

• Processing payroll

Operational HRIS

Supports daily operations of an HR department

Tactical HRIS

Supports specific HR functions

What are some examples of tactical HRIS?

• Recruiting

• Performance management

• Training and development

Strategic HRIS

Supports top-level planning needs of an organization

What are some examples strategic HRIS?

• Workforce planning

• Succession planning

• Talent management

Comprehensive HRIS

Supports all aspects of the HR function

What are some examples of a comprehensive HRIS?

• Provide employee self-service

• Benefits administration

• Time and attendance

What should you record for workers compensation?

• Type of injury

• Where the injury is located

• Time and date

• Location the injury took place

• Witness statements

• Timeline of events

• Law and violations

What are the most common wage and hour claims?

• misclassifying employees

• Falsifying timesheets

• Failing to provide rest and meal periods

What classifies long-term disability?

• Lasts 2-5 years or until retirement age

• Encompasses neurological impairments

• Encompasses physical impairments

What classifies short-term disability?

• Maximum 12 weeks

• Often related to pregnancy