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Glossary of Terms

base pay -- The amount of money you can expect to earn working your regular schedule without any overtime, extra pay, fringe benefits or deductions (See total compensation ).

benchmark job -- A job that is defined in the same way, or nearly the same way, across many organizations and for which market pay comparisons can be made simply by using the job's title or a short description.

compensation strategy/philosophy/policy -- The principles that guide design, implementation and administration of a compensation program. The strategy ensures that a compensation program, consisting of both pay and benefits, supports an organization's mission, goals and business objectives. It also specifies what programs will be used and how they will be administered. The philosophy ensures that a compensation program supports an organization's culture. The policy ensures that a compensation program carries out the compensation strategy while supporting the compensation philosophy.

competencies -- Behaviors that contribute to and predict superior performance, such as how one performs a job rather than what is done.

exempt -- A term referring to those jobs or groups of employees -- executives, administrative employees and professionals -- which are not covered by the minimum wage and overtime provisions of the Fair Labor Standards Act.

Fair Labor Standards Act (FLSA) -- A federal law governing minimum wage, overtime pay, equal pay for men and women in the same jobs, child labor, and recordkeeping requirements.

job category -- A designation for differentiating between roles and responsibilities across positions.

job classification -- A grouping of jobs having similar duties and responsibilities and assigned to the same job category.

job description -- A summary of key features of a job and of the credentials required to perform the job. This is the PMT tool.

job title -- A job title is the descriptive name for the total collection of tasks, duties and responsibilities assigned to one or more individuals whose positions have the same nature of work performed at the same level.

market study -- An analysis to determine the rates other organizations pay for specific jobs.

merit increase -- An adjustment to individual salary based on performance.

merit rating -- A method for appraising the performance of an employee with respect to his or her job. It frequently serves as a basis for making pay adjustments, promotion decisions, or reassignment of work.

minimum wage -- The lowest allowable hourly pay level established by Congress as part of the Fair Labor Standards Act. Some states have laws that mandate higher minimum wages for some employees.

non-exempt -- Jobs or employees that are subject to the minimum wage and overtime pay provisions of the Fair Labor Standards Act.

overtime -- Under the Fair Labor Standards Act of 1938, non-exempt employees must be paid one-and-a-half times their normal wage rates for all hours worked in excess of 40 in any work week.

pay administration -- An organization's policies and guidelines for setting and adjusting rates of pay.

pay equity -- A concept that refers to internal or external equity. Internal equity is the fairness of one's pay relative to others performing similar work, taking into account differences in performance, length of service or other factors. External equity is the competitiveness or fairness of an organization's salaries relative to the external labor market.

pay for performance -- A reward system that relates pay to an individual's fulfillment of expectations or objectives (See performance-based increase ).

pay zones -- Ranges of pay used to hire employees that can keep the system more structurally intact. Maximums, midpoints, and minimums provide guides to appropriate pay for certain levels of work.

performance-based increase -- A pay increase typically granted annually that rewards an individual's performance or accomplishments in the prior period. A performance-based increase amount/percentage can vary from employee to employee based on his or her performance and other factors (See pay for performance ).

performance review -- The step in the performance management process in which a supervisor evaluates his or her employee's performance and achievements relative to expectations.

performance management/partnership -- A systematic approach to planning, coaching, evaluating, and rewarding individual and/or team performance with the overall objective of improving the level of performance across Rensselaer. It involves collaboration between an employee and his or her supervisor in goal setting, ongoing feedback on performance, formal performance appraisal at the end of the performance period and career development.

Performance Management Tool (PMT) -- A comprehensive document that outlines the duties and responsibilities, core competencies, qualifications and skills for a specific position and is used as the basis for performance evaluation.

range minimum -- The lowest pay rate Rensselaer is willing to pay for a position.

range midpoint -- Typically reflects median pay in the competitive labor market.

range maximum -- The highest pay rate Rensselaer is willing to pay for a position.

salary range -- The range, expressed as the minimum, midpoint and maximum, that Rensselaer will pay for jobs assigned to it.

salary survey -- A process to assess rates other organizations are currently paying for specified jobs (See market study ).

skills -- Measurable abilities to perform job-related functions, such as word processing, computer programming, etc.

total compensation -- The total of one's base pay plus other cash compensation and the value of non-cash fringe benefits such as employer-paid pension contributions, insurance premiums, and tuition reimbursement (See base pay .)

 
Last modified: February 11, 2011
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