Glossary of Compensation and Benefit Terms
401(K) Plan	United States Internal Revenue Code Section 401(k) refers to CASH OR DEFERRED ARRANGEMENTS.  These are retirement plans typically described as a defined contribution plan used within private for profit firms.
403(B) Plans	U.S. Internal Revenue Code Section 403(b) refers to Tax Sheltered ANNUITY Plans for nonprofit and public firms.
501(C)(9) Plans	A U.S. Internal Revenue Code Section that refers to self-insured funds (also called Voluntary Employee Benefit Plans).  This is a trust that many self-insured organizations establish to fund their organization''s insurance plans. Contributions to a 501(c)
Accrual Basis	In accounting, this is the method where expense items and income are recognized as incurred or earned, even if they have not yet been received or paid. This is also called ACCRUAL METHOD. It is the opposite of CASH BASIS.
Accrual of Vacation Pay	Vacation accrual formulas determine how leave is earned and when it is credited to employees. Vacation may accrue by the hour, day, or week and may be credited per pay period, month, or year. Hourly accrual grants a specific number of hours of vacation pe
Across-the-Board Increase	A wage or salary increase where either a flat rate (common number of cents/hour) or a common percentage of salary is used.  Also called a General Increase.
Active Employment	Describes an individual working for an employer in a regular occupation for regular pay. Includes normal vacation, but does not extend to temporary or seasonal workers.
Actively at Work Provision	Should an employee''s health insurance coverage be scheduled to commence and that employee is absent from work for certain specified reasons, the coverage will not commence until the employee returns to work.
Actual Hours	The number of hours worked during a pay period, as compared to the scheduled hours.
Affinity Provider	An Internet term related to the sharing of links. In some cases, two sites link to each other on a reciprocal basis. The term partner is not used.
Aging Survey Data	The practice of increasing market survey data by an assumed percentage, which is representative of wage movement, to bring the data to a consistent point in time. Also known as ''advancing'' or ''trending'' the data.
All-Salaried Work Force	A pay policy that makes exempt/nonexempt status ''invisible'' to workers. Under this policy, all employees are paid on a salaried basis and all pay is defined in the same terms, such as a monthly or annual salary.
Annual Bonus	Usually a lump-sum payment (cash, shares, etc.) made once a year in addition to an employee''s normal salary or wage for a fiscal or calendar year. Generally nondiscretionary and not based on predetermined performance criteria or standards.
Annual Bonus Plans	A plan in which each year, usually at the end of the year, employees become eligible for an additional amount of money or other reward. Such plans may be by design or discretionary on the part of management. Most often the amount of the reward is based up
Annual Incentive	Usually a lump-sum payment (cash or stock) made in addition to an employee''s normal pay for a fiscal or calendar year, based on performance (individual, business unit and/or company). May also be called an annual bonus.
Annual Information Return	In Canada, a report containing financial and other information that pension plans must file annually with the appropriate provincial or federal government.
Arbitration	For collectively bargained single employer plans, the bargaining agreement''s grievance and arbitration procedure may double as a claims procedure.  In non-bargained plans or in multiemployer plans, an agreement to arbitrate a claim voluntarily may still
Area Differential	(1) Allowance paid to compensate expatriate employees for medium-term cultural and hardship factors present in his or her country of assignment as compared to the base country. (This is also know as a hardship allowance.) (2) Allowance paid to domestic em
Area Wage Surveys	These are standard survey formats used across geographic boundaries so that consistent reporting can illustrate the same jobs and their different pay in various geographic areas.
Arithmetic Mean	Arithmetic Mean (as defined by the U.S. DOL) is the rate of wages to be determined, to the extent feasible, by adding the wages paid to workers similarly employed in the area of intended employment and dividing the total by the number of such workers. Thi
Assessor Series	Geographic, Salary, Benefit, Relocation and Executive Compensation software and databases designed to assist the compensation and benefits analyst and manager with his/her research.
Assignment of Benefits	An authorization directing an insurer to make payment directly to a provider of benefits, such as a physician or dentist, rather than to the insured.
Auto Allowance	Amounts that are reimbursed by an organization to an employee for the business use of his or her automobile.
Automatic Wage Adjustment	Automatically increasing or decreasing wages according to a specific plan formula.
Automatic Wage Progression	Automatically increasing wages after specified periods of service, until the employee reaches the top of his or her salary range. Automatic wage progression often is achieved through an automatic step-rate pay system.
Automobile Benefits	An allowance to an employee for the use of his/her own automobile, which may or may not be taxable.
Average	The average is the result of dividing the sum of two or more quantities by the number of quantities. Example: (a + b + c)/3 = the average. See also mean.
Average Frequency (of Salary Increases)	Normally calculated on a department-wide or company-wide basis. It is determined by summing up the months between increases granted for the employee groups and dividing by the number of increases and employees.
Average Hourly Earnings	Hourly pay determined by dividing hours worked per period into the total wages earned for that period.
Average Indexed Monthly Earnings	In the United States, this is the figure on which social security disability, retirement and other benefits are based. The figure is an average of the monthly earnings on which a worker has paid Social Security tax. The figure is indexed, that is, adjuste
Average Percent Increase	Calculated by dividing the sum of salary increase amounts for all eligible employees by the eligible payroll. Both the numerator and the denominator include those who were eligible and participated but received no increase.
Average Straight-Time Hourly Earnings	Hourly pay determined by dividing the hours worked per period into the total straight-time earnings for the period (excluding overtime).
Back Pay	The amount of lost earnings accruing between the time a plaintiff terminates employment and a subsequent measuring date. Like Front Pay, it is not subject to the Civil Rights Act of 1991 $300,000 liability cap. Each can be awarded over and above any compe
Bankruptcy	As governed by the U.S. Bankruptcy Code, the liquidation of the assets of a business or individual who has been legally judged to be insolvent.  All remaining property and/or monies from the liquidation are collected and paid to creditors.   When an emplo
Base Pay	The expatriate''s stated home country salary before any addition of differentials, allowances or incentives for Foreign Service or required contributions. Base pay is the salary that would be paid for the position on the basis of its level.
Base Payroll	Determined by the sum of annual salaries and/or wages (base rates) paid at the opening of business on the first day of the plan year or last day of prior year, e.g., Dec. 31, before any increase.
Base Rate	The hourly amount paid for a job performed. This does not include shift differentials, benefits, overtime, incentive premiums or any other pay element other than the base rate.  See also base wage rate.
Base Salary	Reflects the annualized base wage (hourly times 2080, or monthly times 12, or weekly times 52) and excludes overtime premiums, hazardous pay premiums, shift differentials, bonus payments, profit sharing, etc.
Base Wage Rate (or Base Rate)	The hourly rate or salary paid for a job performed. This does not include shift differentials, benefits, overtime, incentive premiums, or any other pay element other than the base rate.
Combination Pay Plan	Describes a pay plan that is in two parts.  The first is a base salary and the second is one or any combination of cash incentive elements (e.g. commission and/or bonus).
Commission-Only Plans	Sales compensation plans where all awards are incentive based and typically calculated as a percentage of profits.
Commission-Plus-Draw Plans	Sales compensation plans where individuals are given a set amount each month, with this amount netted (subtracted from) any commission calculation.
Compensation	A methodical approach to assigning a monetary value to employees in return for work performed.  Compensation may include any or all of the following: base pay, overtime pay, commissions, stock option plans, merit pay, profit sharing, bonuses, housing allo
Compensation Committee	A high level committee (board of directors level) that approves pay and incentive award programs where senior management of the company are concerned.
Compensation Committee Report	A requirement of the Securities and Exchange Commission (SEC), this is an annual report to made by the Compensation and Benefits Committee.  The Compensation and Benefits Committee has the responsibility for establishing compensation for a company''s exec
Compensation Costs	This describes the overall cost to a company, including unforeseen and unrealized cost effects of current compensation decisions concerning the total compensation program (base pay, incentive programs and benefit plans).
Compensation Limits for Officers of Corporations	Executive pay in corporations is limited in small measure. The amount of compensation paid to executives that is DEDUCTIBLE or reimbursable to the company is no more than $1 million in compensation paid to an individual chief executive officer or the four
Compensation Strategy / Philosophy / Policy	This describes the intrinsic guiding factor for the application and administration of a compensation program.  Such a policy would, of course ensure that a compensation program (which would include benefits and pay) would align with the company philosophy
Compensation-Total	Total Compensation is the sum of all payments made to an employee for a specific time period.
Cost of Labor	The process of establishing external pay practices, where information on labor market costs (total compensation amounts) are obtained from labor market competitors and relied upon when determining target total compensation opportunity.
Cost of Living	The cost of purchasing goods and services, as determined by the demand and supply of goods, services, and property. Typically, these costs are determined by a standard packages of terms. The cost-of-living is measured by the Consumer Price Index (CPI) whi
Deferred Compensation	Employers can provide future benefits to key employees through non-qualified deferred compensation arrangements without the compliance costs or nondiscrimination restrictions placed on tax-qualified plans. Nonqualified arrangements offer greater flexibili
Deferred Compensation Plan	Established by an employer in order to provide benefits to employees at a future date (e.g. upon the employee''s retirement).
DOL	U.S. Department of Labor.
Eligible Payroll	Established by calculating the total amount of salaries / wages of employees who, though eligible, do not receive a salary increase.
Employee Stock Option Plan (ESOP)	A contract between a company and an employee giving the employee the right to purchase a specific number of shares in the company for a fixed price, during a certain period of time. Employee Stock Option Plans should not be confused with the term EMPLOYEE
Employee Stock Ownership Plan (ESOP)	Typically, this is benefit plan that requires that an employee meet certain requirements in order to participate and that has a portion of its investments (if not all) on company stock. An Employee Stock Ownership Plan (ESOP) is a type of defined contribu
Employee''s Cost Basis	This is the amount taken away from the total amount paid to a pension beneficiary, so as to determine the part of the distribution that is taxable.
Employees	Employees are persons who are compensated for services performed and whose duties are under the control of an employer.
Employees Profit Sharing Plan (EPSP)	In Canada, this is a profit sharing species, whereby the employer makes a deposit of funds in a trust account, but is able to withdraw the amount deposited for tax purposes.  Employees typically are taxed on contributions made on their behalf during the y
Equal Pay Act of 1963	Makes gender based differentials in pay (wage discrimination) illegal for jobs that are similar in terms of qualification requirements and that are performed under similar working conditions
Equal Pay for Comparable Work	This doctrine goes beyond the Equal Pay Act of 1963.  It states that women must be paid the same in a female dominated job as a man for a job that is substantially of the same value.  This doctrine is in effect saying that job value / worth can be measure
Equal Pay for Equal Work	The intention of this doctrine is to protect women from gender based discrimination in pay. The U.S. Equal Pay Act of 1963 embodies this principle.
Flexible Compensation	An approach to expatriate compensation.  Allowances can be changed depending upon the needs and desires of the expatriate.
Form of Payment	Payments can be made by cash, certified check, cashiers or treasurer''s check, or by a United States postal, bank, express, or telegraph money order.
Front Pay	The amount of lost earnings accruing between the time a plaintiff wins a legal judgment and is reinstated to his/her job or takes another job. Like back pay, front pay essentially is the equivalent of lost earnings. Neither Back Pay nor Front Pay is subje
Gainsharing	A group incentive plan where all members of a group share in the ''gain'' of an organization.
Golden Handcuffs	Rewards and penalties designed to discourage key employees from leaving a company.
Golden Parachute	A clause in an executive''s employment contract specifying that he/she will receive large benefits in the event that the company is acquired and the executive''s employment is terminated. These benefits can take the form of SEVERANCE PAY, a bonus, stock o
Gross Income	Total income produced by a property before any expenses are deducted. It is determined by subtracting various allowable deductions and payments from gross income. Itemized deductions such as medical expenses, certain interest payments, and real estate tax
Guaranteed Annual Wage (GAW)	A provision in a contract with an employer, guaranteeing the employee a minimum income or work over a period of one year.
Guaranteed Income Supplement (GIS)	A nontaxable monthly benefit paid to lower-income OAS recipients on the basis of family income.
Hazardous Duty Pay	Under working conditions that expose the employee to a considerably greater risk than normal, pay is above normal rate tables.
Highly Compensated Employees	Either a 5% owner or a person who earned more than $80,000 during the current or preceding year.  Repeals rule treating highest paid officer as an HCE, the top-100 rule, and family aggregation rules in both the HCE definition and the $150,000 compensation
Hiring Bonus	An extra sum of money provided at time of hire to entice an applicant to accept a job offer or to make up for compensation forfeited at the previous company.
Hiring Rate	Refers to the wage or salary to which an employee is assigned upon entering the job.
Hourly	Occurring every hour or payable by the hour.
Immigration Prevailing Wage Rates	A special set of definitions exist for determining the competitive rate of pay that should be paid to immigrants who hold temporary work permits in the United States. These rules are spelled out in General Administrative Letter 2-98.
Incentive	Additional pay (above and beyond the base salary or wage) awarded to an employee.
Incentive Compensation	Rewarding the performance of an individual in an institution with added compensation, typically in the form of bonuses or percentage increments above the base salary.
Incentive Pay	This figure only includes bonus payments and profit sharing pay.  Various other programs can be included in this category as well, such as:  commission, gainsharing payouts, skill based pay if paid in a lump sum, other lump sum payments, goalsharing, etc.
Individual Pay Rate	A pay level assigned to an individual or to a particular position.
Individual Retirement Account (IRA)	An individual retirement account is a trust maintained for the exclusive benefit of an individual or beneficiaries that meets certain criteria. Except for rollover contributions, an IRA must provide that no contribution in excess of $2,000 for individuals
Industry Wage Surveys	Surveys conducted and collected by a variety of sources to provide wage information for a wide variety of industries.
Job	Defined duties that a person performs for pay.
Job Analysis	A detailed study of the requirements necessary to complete a job, taking into consideration the order of operation, material and machinery needed, and the necessary qualifications of workers.
Job Description	A written summary describing a particular job classification or position. This written document identifies a job''s title, principal duties, and responsibilities. In addition, job descriptions usually outline the knowledge, ability, skills, and effort nee
Job Documentation	Physical evidence, such as a written contract, which explains the responsibilities, rights, and duties of each party.
Job Duty	Something that you have to do because it is part of your job.
Job Enlargement	The act of increasing in size, volume, or quantity or scope.
Job Enrichment	Act of making a job fuller, more meaningful or more rewarding.
Job Evaluation	The process of analyzing positions to fit them into some type of hierarchy for salary administration and valuation purposes.
Job Evaluation Committee	The committee that conducts job evaluations.
Job Family	Jobs that are affiliated by having the same nature of duties.
Job Grade	Measure of quality or accomplishment.
Job Responsibility	Ability or necessity to answer for or be responsible for one''s conduct.
Job Satisfaction	The contentment you feel when you have done something right.
Job Sharing	Two people, typically in career-oriented professional positions, performing the tasks of one full-time position in order to enjoy more flexibility in their personal schedules, typically for child or dependent care. Salary and benefits are prorated.
Job Specifications	A detailed, exact statement of particulars, especially a statement prescribing materials, dimensions, and quality of work.
Job Title	A summary for all the duties for a particular job or position.
Keogh Act	The Self-Employed Individuals Tax Retirement Act of 1962 (also called HR-10 or the Keogh Act), and its subsequent amendments, made it possible for owner-employees of unincorporated businesses and other self-employed persons to be covered under qualified r
Keogh Plan	A tax deferred pension account available to the self-employed.
Knowledge Based Pay	Often an extension of work redesign efforts, pay-for-knowledge plans reward employees for increasing the depth and breadth of knowledge and skill and the utilization of those skills.
Labor Grade	Salary classification to a specific job title.
Labor Market	The market in which workers compete for jobs and employers compete for workers.
Living Wage	A wage sufficient for a worker and family to subsist comfortably.
Long-Term Incentive Plan	An incentive plan typically limited to executives. It requires a level of performance for a predetermined amount of time, for the maximum benefit to the employee.
Long-Term Income Protection	Insurance plans that provide financial protection in the event of retirement, disability, and financial security for family needs.
Lost Wages	Lost wages is generally an element of damages recoverable from the defendant under state law. Lost wages is not the same as loss or reduction of future earnings. The plaintiff has the burden of proving to the court or juries the damages that he or she has
Lump Sum Bonus	An award that is paid in a single cash payment.
Lump Sum Distributions	The payment to an employee (or the employee''s estate) from a qualified retirement plan that is equal to the full value of the employee''s account.  The payment must be made within one tax year of the employee''s death, disability, separation from the emp
Lump Sum Incentive Award	An incentive award that is paid in a single cash payment.
Lump Sum Increase	An increase in pay made in the form of one large payment.
Lump Sum Merit Payment	Merit pay in the form of one lump sum cash payment. This is separate from the base pay.
Lump Summing	A method of determining expatriate employee compensation. In this approach, a lump sum is provided to an expatriate to spend as he or she wishes. It can be broken into lump sums for pre-departure, at the post, and repatriation.
Market Based Salary Increase Budget	An organization''s budget to increase salaries that is estimated by their knowledge of the competition.
Matching Contributions	Contributions that are made to an employee''s 401(k) PLAN by their employer. The intent is to match the employee contribution to a pre-set dollar or percentage maximum.
Maximum Reasonable Compensation	In order for executives to avoid taxes and penalties, the total compensation package, including bonuses and benefits, must be ''reasonable.'' IRS regulations define ''reasonable'' as the amount that would ordinarily be paid for like services by similar or
Mean	A mean is the result of dividing the sum of two or more quantities by the number of quantities. See AVERAGE.
Median	One type of norm measure found by arranging the values in order and then selecting the one in the middle. Therefore, half of the numbers are less than the median, and half are higher than the median.
Merit Bonus	An incentive award based upon an individual''s performance.
Merit Increase	A raise in an employee''s salary due to goal achievement and/or other criteria.
Merit Matrix	A process by which an individual''s salary increase is determined by using performance and pay within the salary range.
Merit Pool	Total amount of dollars available for salary increases.
Merit Progression	A process by which an employee progresses through a wage range due to performance or other measurable criteria.
Merit Rating	A process of evaluating the performance of an employee. This is usually used to determine work assignments, promotions and salary increases.
Minimum Bonus	The minimum annual amount that is to be earned under any plan.
Minimum Wage	The lowest allowable hourly wage that an employer can pay an employee.
Mode	In a set of observations, the number that is most prevalent.
National Average Earnings (NAE)	A measurement, per individual country, of the average salary per individual.
National Compensation Survey (NCS)	A survey of salaries, wages, and benefits produced by the U.S. Bureau of Labor Statistics. Includes local, regional, and nationwide data. The NCS is designed to replace the Employment Cost Index (ECI), the Occupational Compensation Survey Program (OCSP),
Nature of Work	Information about a specific occupation that describes its duties and responsibilities.
NCS	The National Compensation Survey (NCS)is the U.S. government''s survey of salaries, wages, and benefits produced by the U.S. Bureau of Labor Statistics. It includes local, regional, and nationwide data. The NCS is designed to replace the Employment Cost I
NEC	Stands for: not elsewhere classified.
Net Income After Tax	An individual''s or company''s profit after taking into consideration all other expenses and income and taxes.
Non-Compete Agreements	A condition of an employment contract that states a specific time period during which the employee cannot compete with the employer if the employee is terminated.
Non-Insured Pension Fund	A pension fund that has not been funded by insurance contracts.
Non-Qualified Annuity	An ANNUITY that has been funded with money that was previously taxed in the same year that the funds are to be deposited.
Non-Qualified Deferred Compensation Plan	Typically used for senior executives and highly compensated employees, this retirement income plan does not meet the guidelines for a qualified plan, therefore it does not meet the criteria to be eligible for the tax advantages of a qualified plan.
Non-Qualified Foreign Plan	A foreign plan that is no longer qualified due to termination or reversal of a section 404A election.
Non-Qualified Pension Plan	A pension plan that does not meet IRS requirements to receive positive tax benefits, due to the increased benefits compared to what is allowable for a qualified plan.
Non-Qualified Stock Options	A stock-option that is part of a compensation package that does not meet the IRS guidelines for a qualified stock option. The employee is taxed at the beginning if the value of the stock is known, or at the end when the employee exercises the option if th
Noncash Incentives	Incentives that are not a direct cash payment, such as comp time, a membership to a club and a reserved parking space.
Nonfinancial Rewards	Any recognition given to an employee by an employer other than cash.
Nonmonetary Awards	An award that is not cash.
North American Industry Classification System (NAICS)	Developed by the United States, Canada, and Mexico to provide comparable statistics of industrial production across the three countries and replace SIC. NAICS also provides for increased comparability with the International Standard Industrial Classificat
Occupation	An activity that provides a regular source of income and that is common to various companies.
Occupational Differentials	Wage rates that have stable differences among occupations.
Occupational Employment Statistics (OES)	Occupational Employment Statistics that provides employment and wage estimates by occupation for selected metropolitan areas, as well as the nation and the individual states.
Occupational Outlook Handbook	Provides general information on jobs, occupations, job categories.
OES	Stands for Occupational Employment Statistics (OES) that provide employment and wage estimates by occupation for selected metropolitan areas, as well as the nation and the individual states.
Office of Federal Contract Compliance Programs	Under the Vocational Rehabilitation Act of 1973, the agency is to enforce affirmative action for government contractors.
Office of the Superintendent of Financial Institutions	An executive agency in Canada that is responsible for administering insurance laws for the provinces.
On-Call Pay	A pre-determined amount of compensation that is provided to an employee who is willing to report to work on short notice.
Operating Income	A measure of a company''s earning power.
Opportunity Cost	The cost of spending funds on one investment instead of another.
Option	The right to buy or sell a specific amount of a given stock, index, commodity, currency, or debt at a specified price during a specified period of time.
Option Exercise Price	The price that will be paid to purchase shares covered by a stock option.
Option Grant Date	The date that a stock option term begins and the option become effective.
Option Performance Vesting	An option becomes exercisable during its term based on certain performance objectives.
Option Profit	When the price of the shares is more than the exercise price at the time the shares are exercised.
Ordinary Income	According to the IRS, all income that is subject to ordinary tax treatment.
Ordinary Income Tax	An individual''s tax paid on earnings from all sources of income, except those subject to CAPITAL GAINS TAXATION.
Out-of-Pocket Limit	The dollar amount that an employee is responsible for paying for medical care during a certain period of time, usually a calendar year. The insurer pays 100% once the out-of-pocket limit has been reached.
Outside Payroll	Refers to costs of benefits that do not include the company''s direct payroll.
Overlap	The degree by which there is overlap in adjacent pay ranges.
Overriding Commission	Commission that is earned by the field office manager and is based upon the business that is created by the agents in the office.
Overtime	If a nonexempt employee works more than a 40 hour week, the Fair Labor Standards Act of 1938 (FLSA) requires that those employees be paid one and half times their normal salary.
Paid Sabbatical	An executive benefit that allows a paid leave of absence for a predetermined period of time, usually to let the executive follow another endeavor.
Paid-Up Policy	An insurance policy that has already been paid, therefore no further PREMIUM is due for services that are received at a future date.
Paired Comparison	An arranging technique that compares the occupations being evaluated to all other jobs to determine which of the positions has a higher value.
Par Value	For stocks: a random number given to a stock that is issued, due to the registration requirements of particular states. Not all states have a par value for shares.
Parachute	An employment contract that states if there is a change in control of the corporation, there will be an increase, accelerated payments, vesting or some other rights to the employee once the change is final.
Part-Time Basis	Refers to an employee working 20-80% of normal full-time hours (40 per week).
Participant	An employee who is currently eligible, or will be eligible in the future, for company benefits.  A participant may also include a beneficiary or a dependent.
Participation	This means an employee is actually active in a compensation plan.
Participation Percentage	The amount of individuals given pay increases as a percentage of all of the employees in that group.
Past Service	The time of employment prior to a pension policy beginning or being amended or the time before that employee had begun participating in the plan.
Pay Adjustments	A universal change in pay raises.
Pay as You Go	The typical technique for financing Social Security, where current workers'' Social Security taxes pay for current retirees'' benefits.
Pay At Risk	A changeable pay policy that is funded by a reduction of base pay, which is typically offset by the chance that a larger variable pay policy will payout when base pay is not at risk.
Pay Compression	A term used to describe differentials in pay that are too little to be considered equitable. May be applied to the differences between (1) a supervisors pay and that of a subordinate and (2) the pay of an experienced employee versus that of a newly hired
Pay Equity	The general concept that equal work deserves equal pay.  This is different from comparable worth, which suggests there should be equal pay for work of equal value.
Pay for Time Not Worked	An employee is paid for the time that was not actually worked, such as holidays, jury duty, and personal days.
Pay in Lieu of Notice	A pay arrangement for employees who have been terminated that is a continuation (for a specific period of time) of the usual pay and usual benefits after the last day.
Pay Plan	A list of pay ranges or rates for each job in the plan classification. Might also include administration rules and benefits.
Pay Policy	A specific position of a company''s pay with respect to the jobs competitive pay at a specific time.
Pay Policy Line	The pay level that a company sets its pay at compared to the market pay, typically the midpoint of the pay structure is set to judge the going market rate.
Pay Range	Usually used to determine individual employee pay, this term refers to a range of rates, from the minimum to the maximum for a particular class or grade of employees.
Pay Range Overlap	The level to which pay ranges in adjacent grades in a category overlap.
Pay Satisfaction	When employees think that the salary they are paid is fair in comparison to the work they actually perform.
Pay Steps	Specific levels in a pay range. An employee may move up pay steps depending upon their performance, time at the same grade, new job skills or performance.
Pay Survey	Data gathered regarding salaries and wages. These surveys are paid for by other employers that seek specific information on market rates for benchmark jobs.
Payable Claim	A claim for which an insurance company is liable under the policy''s terms.
Payee	The individual to whom benefits are payable, as stated in the supplementary contract.
Payout Frequency	The time that incentives are paid. Can be paid weekly, monthly, per quarter, or yearly.
Payroll Deduction Plan	A payment method in which the employer deducts the PREMIUM from the individual employee''s paychecks and sends it to the insurer.
PBA	Principal Business Activities are IRS definitions of industry classifications.
Pension	A fixed sum of money that is paid to a person who has retired and is entitled to receive the benefit under the pension plan.
Pension Benefit Guaranty Corporation (PBGC)	A federal corporation that insures the benefits of defined benefit pension plans. The PBGC is supposed to ensure that all plan participants receive their vested benefits, even in the event that the pension plan goes bankrupt.
Pension Benefits Guarantee Fund	In the Canadian province of Ontario, a fund is created to guarantee that benefits are paid in the event of insolvency of a pension plan.
Pension Benefits Standards Act	Federal legislation in Canada that regulate administration of pension plans for federal employees and other employees who may fall under this legislative authority.
Pension Equity Plan (PEP)	A kind of defined benefit pension plan that bases its retirement on final pay, however the percentage at a certain rate per year based upon the individual''s age and/or service.
Pension Fund	A fund set up to manage the assets and pay for the pensions of retirees.
Pension Index	An index utilized by the Canadian Pension Plan and Quebec Pension Plan to change the pension payments to incorporate the effects of inflation.
Pension Plan	A benefit plan that offers retirement benefits from a trust or another fund, via the purchase of insurance or from an unfunded plan.
Pension Trust Fund	A fund that is made up of money that has been contributed to by both the employer and the employee for pension benefits. A TRUSTEE takes the funds and invests the money, collects the earnings and interest and distributes the benefits.
Pension Versus Lump Sum	A pension is a retirement benefit that is paid periodically, while a lump sum is paid all at one time.
Percentage Contribution	The total PREMIUM that a company member would pay or pays to a contributory insurance plan.
Percentage Method of Withholding	Refers to a method of determining income taxes to be withheld by adding wages for a particular payroll period to total wages already paid during the year; dividing the aggregate by the number of payroll periods; and deducting any excess tax from current p
Percentage Participation	A provision of a policy, typically found in major medical insurance, in which the insured employee and the insurer share the medical and hospital expenses in a predetermined ratio (e.g., 80%:20%), after the DEDUCTIBLE is met. Also known as a form of cost
Percentile	A percentile is a value on a scale of one hundred that indicates the percent of a distribution that is equal to or below it. In general, a percentile greater than 75 is considered above normal, and stated another way - 75 percent of the surveyed populatio
Performance Appraisal	A method used to determine how well an employee has performed during a specific time period. Usually utilized in determining salary increases.
Performance Based Restricted Stock	Restricted shares of stock that are awarded to an executive and are contingent upon the attainment of internal or external performance goals or an increase in the price of the company stock.
Performance Culture	A group of averages and attitudes regarding performance in an organization.
Performance Cycle	Job incumbents performance taken on a year to date cycle.
Performance Dimensions	Phases of performance that are imperative to an occupation by which the incumbent will be measured.
Performance Log	A written log that is kept by managers to remember behaviors that were effective and ineffective with regard to certain performance standards during the appraisal period being measured.
Performance Management	A process utilized by managers that is made up of planning and managing performance via observation and feedback. The process also includes bettering performance through development, assessing and rewarding performance.
Performance Measurement	Any method utilized to gather data that provides a basis for appraising performance.
Performance Period	The time period for which performance is measured.
Performance Targets	Job duties or behavioral goals that are predetermined in order to provide a comparison for performance appraisal purposes.
Performance Unit Plan (PUP)	Closely resembles a performance share plan, however the unit value is not related to the stock price. The award payment could be is stock, cash or a combination of the two.
Perquisite	Special benefits (perks) for high level executives and other managerial employees. This income is taxable to the employee. Some of these perks may include club memberships, legal counseling, and special parking.
Person-Based Pay	Compensation based on skill or knowledge instead of a specifically defined job.
Personal Leave	Leave from the workplace for a specific period of time due to reasons not covered by other leave options (such as vacation, maternity, jury duty or bereavement).  Each employer is left to establish their own policy, possibly including: (1) the number of d
Phantom Stock (Full Value)	An incentive plan that is long term, in which the participant is given the compensation in cash that is determined by a formula. A full value plan pays the full value. The formula does not have to include the actual price of the stock.
Phantom Stock (Incremental Value)	The concept is similar to the phantom stock full value, however the payment is an appreciation or increase in value as determined by the formula. The formula does not have to include the actual price of the stock.
Piece Rate	A performance payment to an employee based upon production. Payment is given based upon each piece or quantity of work that is produced by an individual employee.
Piece Work	An incentive payment is given for work that has been completed. The pay is dependent upon the amount of items produced or operations finished.
Pre-Retirement Counseling	Preparation for the financial and emotional changes that occur during retirement. This may be in the form of literature to employees, group meetings or individual counseling led by a trained professional, or software programs.
Preferred Shares	Capital stock that gives a certain DIVIDEND, which is paid prior to any dividends paid to the common stock holders, and that takes priority over the common stock if the company must liquidate.
Preferred Stock	Capital stock that gives a certain DIVIDEND, which is paid prior to any dividends paid to the common stock holders, and that takes priority over the common stock if the company must liquidate.
Premium	(1) An amount that is added to a base salary to pay additional monies for situations such as graveyard shift, working weekends, or working away from home. (2) In an international situation the definition relates to an incentive that is paid to an expatria
Premium Conversion	Provision that allows employees to make a contribution, pretax, to an employer sponsored health or welfare plan.
Premium Deposits	Money that is left on deposit with the insurance carrier to pay for future premiums.
Premium for Risk	The usual amount of presumed additional return on investment, which is required by investors when they choose a higher-risk investment.
Premium Pay	An amount that is added to a base salary to pay additional monies for situations such as graveyard shift, working weekends, or working away from home.
Prevailing Wage Rate	The salaries that other employers pay for labor in similar markets. These wage rates are typically used with immigration pay analyses, where General Administrative Letter 2-98 requirements must be met. See www.erieri.com/freedata/hrcodes.
Preventive Coverage	Health insurance plan benefits are designed to insure that more serious coverages and benefits are not necessary.
Price At Exercise	The price of a stock at the time a person exercises the option.
Primary Earnings Per Share	These are earnings available to a stock divided by the number of shares outstanding. Available earnings are usually determined by net earnings after taxes and preferred dividends.
Primary Provider of Benefits	Under circumstances when coordination of benefits occurs, the medical expense plan that covers the benefits under this plan prior to any benefits being paid by another medical expense plan.
Productivity	A measuring of an operation''s efficiency, typically including a comparison of outputs to inputs.
Profit Sharing Pension Plan	A money purchase pension plan in Canada that links employer contributions to company profits. Employers are required to make a minimum contribution of 1% of employee earnings, even if the company was not profitable. The plan must adhere to the same legal
Profit Sharing Plan	An agreement between an employer and the employees, in which the profits of the company are shared with the employees. Typically a pot of money is established based upon the total profits of the company. This is then distributed to all employees or the de
Profits	In business: the result of selling goods or services for more than the cost of producing them. In investment: profits result from selling commodities or securities for a higher price than the cost of purchasing them.
Progressive Incentive Formula	An employee rewards plan that increases the incentive as the employee''s performance exceeds predetermined standards.
Promotional Increase	An increase in an employee''s salary due to a promotion.
Proxy Reporting	An SEC requirement for public corporations to reveal the compensation (in a summary compensation table) of the five highest paid executives. Since 1992, the Security Exchange Commission (SEC) has required public corporations to disclose the compensation r
Proxy Statement	The SEC requires that publicly owned companies send out a document that alerts shareholders of the annual meeting, or any other special meetings. The proxy statement also discloses the issues that will be discussed.
Purchasing Power	When determining cost of living, an index must be referred to that determines the strength of the dollar for the purchasing of goods and services.
Pure Endowment	An amount of money that is only paid to the individuals who remain living for a specific period of time. If they do not live for the certain time period, they do not receive any of the endowment. This is typically illegal, unless it is combined with a for
Raise	An increase in wages or salary.
Range	(1) The difference between the maximum value and minimum value, (2) In reference to a pay grade, the amount that the maximum pay exceeds the minimum pay.
Range Penetration	An individual''s pay compared to the complete pay range. Range Penetration = (Pay - Range Minimum) / (Range Maximum - Range Minimum).
Range Spread	Usually used to determine individual employee pay, this term refers to a range of rates, from the minimum to the maximum, for a particular class or grade of employees.
Ranking Method of Job Evaluation	A job comparison that results in the ranking of jobs into a hierarchy beginning at the highest and ending at the lowest.
Rate	The money rate paid to an employee per hour.
Rate Range	Usually used to determine individual employee pay, this term refers to a range of rates, from the minimum to the maximum, for a particular class or grade of employees.
Rated Policy	An insurance policy that covers a person classified as a greater than average risk of loss. The policy''s PREMIUM rate may be higher than the rate for a standard policy or the policy is issued with special limitations, or exclusions or both.
Rating Classes	Three various techniques that insurance companies use for mortality assumptions to determine group life premiums. The methods are rating are: experience rates, manually rated and blended.
Rating Manual	A manual used by underwriters for determining premiums. It includes suggested ratings, but very little background for the impairments listed.
Re-Enlistment Bonus	A monetary incentive paid to an expatriate to stay on the current assignment longer than initially expected.
Real Wages	Earnings that are deflated by a price index. It is utilized as an index of the purchasing strength of the dollars received from salary.
Recognition Program	A process in which employees efforts and successes are recognized.
Recruitment Bonuses	Reward payments that are given to entice a new employees to accept a job offer. The rewards may be paid at the time the employee begins the employment, or over a pre-agreed upon period of time.
Red Circle Rate	Used to describe an employee''s pay that is higher than the already determined maximum that was assigned to the job. Increases in pay are not usually given unless the range maximum exceeds the employee pay rate.
Referral Bonus	Payments that are given to an existing employee who recruits (1) a new employee so long as the new employee remains employed for a specific period of time or (2) a new client that produces new revenue for the organization.
Registered Pension Plan	In Canada, a pension plan that meets the Canadian Minister''s National Revenue requirements.
Registered Retirement Plan	A pension plan in Quebec that has been approved and registered by the Quebec Department of Revenue.
Registered Retirement Savings Plan (RRSP)	A policy in Canada that lets Canadian citizens create tax-sheltered accounts to accrue money for retirement.
Regressive Incentive	A decreasing incentive rate, as performance surpasses previously determined levels.
Regular Rate of Pay	The total compensation that is utilized to determine the overtime rates according the Fair Labor Standards Act.
Reload of Stock Options	When an employee (usually an executive) exercises a set of stock options by paying for the option shares with previously acquired shares that have appreciated in value. The employer in turn issues new options, to the employee.  In this reloading of option
Relocation Premium	A lump sum of money given to an expatriate to help with the unusual expenses associated with relocation.
Remembrance Funds	A fund that pays for expenses such as obituary notices, flowers or small gifts in the event of illness, termination, hospitalization, or death for the employee or a member of the employee''s family. This fund is exempt from reporting for ERISA purposes.
Remote-Site-Allowance	A specific type of payment that is given to an employee if a work site is difficult to reach or isolated.
Remuneration	The sum of the financial and nonfinancial value to the employee of all the elements in the employment package.
Remuneration Strategy, Philosophy, Policy	The characteristics that assist in the administration and implementation of a remuneration plan at a company.
Renter''s Buying Power	The salary equivalent after taking into account the cost of living in the region.
Rest-And-Recreation Leave	Considered to be distinct and separate from regular vacation and/or home leave, this is time off, which is granted to expatriates from time to time, especially to those working in areas where living conditions are very difficult.
Restricted Stock	This is stock given to an employee or which is sold to an employee at a discount.  The employee is typically prevented from selling or otherwise disposing of the stock for a specified period.  The employee owns any dividends deriving there from; but if he
Retired Lives Reserve	A fund set up by some employers into which they pay monies (on the behalf of employees), for the purpose of providing LIFE INSURANCE to the employees upon their retirement.
Retiree Benefit Reserves	In order to protect retirement benefits and to reduce non-funded liabilities of the company, many companies create reserves for payment of future health and insurance obligations. This is often done by establishing a tax-exempt trust to pay employees'' li
Retirement	Defining retirement is a bit tricky. A person may retire from company A if he/she quits and is eligible for retirement benefits from that company. The person may turn around and go to work in company B but still be considered retired from company A. Alter
Retirement Plan	A Retirement Plan is an agreement on the part of management to provide a vehicle for the retirement income needs of employees. Such plans may be qualified or non-qualified for tax purposes. The two main types of retirement plans are DEFINED BENEIFT PLANS
Rewards System	As more companies look for better ways to attract, retain and motivate good employees in a competitive labor market, the pressure is growing to get rid of the old methods of compensation (which focusedon money and nothing else) and replace them with new m
Roth Individual Retirement Account (IRA)	Beginning in 1998, taxpayers can make nondeductible contributions of up to $2,000 a year into a new Roth Individual Retirement Account (IRA).  Unlike traditional IRAs, money (principal and accumulated earnings) is not taxed when withdrawn, as long as the
Salaried	This is the compensation that is received by an employee, weekly, monthly or yearly, as opposed to hourly pay.  Typically, this applies to employees of higher levels with non-repetitive jobs that may or may not be supervisory in nature.  These positions a
Salaried Sales Agents	These sales representatives are actually employees of the insurer and their compensation is typically a combination of a base salary plus commission. Salaried sales agents may work independently or they may work with other agents. They may make direct sal
Salary	This is the fixed wage paid to an employee. The basis is usually weekly, monthly or yearly, and is most often applied to exempt employees.
Salary and Pay Increases	A raise in an employee''s salary due to merit, general policy, or cost-of-living increases.
Salary Budget	Money designated over a specific period to pay salaries.  When structure adjustments and/or individual employee adjustments are being planned, the salary budget must be taken into consideration.
Salary Continuation Plan	A sick leave and/or disability plan providing for employees to receive up to 100 percent of their salary for a certain amount of time, should they become sick or disabled.
Salary Increase Budget	Salary increase budget represents the difference, which exists, between a company''s current pay and the goal it has or where it foresees its pay levels reaching in the future.
Salary Range	Usually used to determine individual employee pay, this term refers to a range of rates, from the minimum to the maximum, for a particular class or grade of employees.
Salary Reduction Plan	Salary reduction plans are ones in which deductions are made from the employees salary prior to the calculation of income for tax purposes. The money thus taken out of the employees current pay is put aside for future purposes. Two important salary reduct
Salary Structure	Usually established within an organization, this is the levels or hierarchy of job and pay ranges. The salary structure is also referred to as job grades, job-evaluation points and/or policy lines.
Salary Structure Change	This term is employed to describe an adjustment in the structure of salaries, which is stated as the percentage that the total off all middle points of the new salary structure exceed or lag behind that of the old structure.
Salary Survey	Salary surveys are used by organizations to determine what the "market rate" is for jobs or skills used in their organization. Paying a competitive wage is important for attracting and maintaining an adequate workforce. Organizations may do their own surv
Salary-Reduction Plan	This is available in most companies and is a system where the employee has to the option to ask pay-roll to reduce the his or her cash compensation and have the difference contributed to the employee''s pension plan, insurance plan or any other benefit pl
Sale of Stock	This is the exchange of shares in return for its cash value.
Sales Compensation	This is the amount that is paid to members of the sales team of a company.  This amount typically varies according to the degree to which individual representatives attained or surpassed their set goals.
Sales Compensation Plans	Sales compensation plans differ from the other types of compensation plans.  Due to the fact that results are measurable in sales related jobs, compensation for those kinds of jobs are typically incentive- (or commission-) based.  Compensation plans for s
Scanlon Plan	This is a profit sharing program whereby employees share in pre-established cost savings, which are due to employee effort.  Formal employee participation is necessary with the Scanlon Plan, as well as periodic progress reporting and an incentive formula,
Scheduled Hours	This represents the number of hours that an employee is scheduled to work in a given work period as opposed to the number of hours actually worked.
Scope	A series of quantifiable job characteristics, ascribing value to certain jobs. The most common measures include asset size of the organization, sales volume, number of subordinates and size of the managed budget.
Scope Data	These are particular numbers (usually sales or number of employees) used for selecting appropriate salary survey figures to determine going rates for a job or organization of jobs.
SEC	The Securities and Exchange Commission (SEC) is the principal federal regulatory agency that regulates the securities industry. The main function of the SEC is to promote full disclosure; it exists to protect investors, in the securities market, against p
Sec Management Compensation Reporting	The annual reporting to the Securities and Exchange Commission (SEC) by publicly traded corporations requires the reporting of the annual salary, bonus, and all other payments to the company''s five top executive officers. This Summary Compensation Table
Secondary Source of Job Information	This is a term employed in job analysis to describe any source of job related information other than the person whose job is being analyzed and/or his direct supervisor.
Section 3460	In Canada, Section 3460 of the Canadian Institute of Chartered Accounts (CICA) contain recommendations relating to employer''s accounting for obligations and pension costs.  The recommendation made by Section 3460 is that, for defined benefit plans, the p
Section 401(K) Plan	In the United States, a deferred profit sharing and/or stock-bonus plan permitting participants to decide the extent to which their compensation is deferred. Contributions of participants are not taxable until that time when the funds are withdrawn.  Cont
Section 403(B) Plan	This is a type of retirement plan, typically established by certain tax-exempt organizations (i.e., charities, churches and hospitals).  Section 403(b) plans are a creation of congress to serve as incentive to tax-exempt organizations, which ordinarily wo
Section 415 Limits	This the limit imposed on the amount of annual contribution that can be made on the behalf of a participant of a defined contribution plan.  There is also a limit placed on the amount of benefits payable to a participant of a defined benefit plan. These l
Section 79	Section 79 of the Internal Revenue Code provides that employer contributions to purchase company term life policy receive preferential tax treatment. It also lists specifications that a plan is required to meet before being  considered a nondiscriminatory
Securities and Exchange Commission (SEC)	The Securities and Exchange Commission (SEC) is the principal federal regulatory agency that regulates the securities industry. The main function of the SEC is to promote full disclosure; it exists to protect investors, in the securities market, against p
Seniority	Determined by the number of years that an employee has worked for a particular employer.  Seniority is frequently the basis for benefits and privileges.  The term is sometimes used to express the amount of time spent working for a division or in a specifi
Seniority Increases	A raise in an employee''s salary, due to length of time in a particular job.
Severance / Benefits Continuation	This is a term employed to describe the continuation of the salary of an employee after he or she has been terminated. This salary is paid either on a continuation basis or in a lump sum. The amount of the severance is typically contingent upon the length
Severance Pay	In most countries, though not the U.S., SEVERANCE PAY is mandatory any time an employee is terminated. The purpose of SEVERANCE PAY is to soften the blow of unemployment, upon the termination of an employee.  Typically, SEVERANCE PAY is equal to one week'
Shift Differentials	Applies to employees paid on an hourly basis. Hourly employees who are required to work a shift other than their normal shift typically receive differential pay (e.g., $.75 or $1.00) in addition to their hourly rate for the entire period that they are wor
Short-Term Disability Income Insurance	This is insurance that provides benefit for both short term and long-term (the first part of long-term) disability.
Short-Term Incentives	Rewards that are based on the achievement of short-term goals (typically 12 months or less).
SIC	Stands for the Standard Industrial Classification System.  A U.S. federally designed system, which  identifies companies by industry with a standard numbering system. It provides other information and is used by securities analysts, market researchers, an
SIC Code	Stands for Standard Industrial Classification code.
Sick Leave	Paid time off.  Sick leave means providing pay for employees when not working due to illness or injury. It may start on the first day of illness or after two or three days. In developing a sick leave policy the following points need to be considered: (1)
Sick Pay	Sick Pay is treated as regular pay for tax purposes unless provided through a third party in the form of insurance.
Simple Plan	First allowed in 1997, this is a kind of qualified retirement plan (IRA or 401(k)) for companies with over 100 employees.
Simplified Employee Pension (SEP)	A pension plan towards which an employer may contribute employee retirement income, using individual retirement accounts or individual retirement annuities. Under a salary reduction SEP, employers may contribute amounts deferred by employees directly into
Skill-Based Pay	This is a compensation system, which is based on the set of skills an employee has and is capable of using should the need arise (even though the employee may not currently be using the skill).
Skills Inventory	Typically used by employment agencies, personnel departments and contract programming companies that wish to set up and maintain a file for candidates and their associated qualifications.  Once all the data is in place and information about a potential ca
Sliding-Scale Agreement	In wage determination, a sliding-scale agreement is a contract, typically between a workers union and an employer, in which a variable wage structure is established that sets wage levels depending on a second variable factor such as the cost-of-living ind
Small-Group Incentive	Any incentive plan that focuses primarily on the performance of a small group (typically a work team).
Social Security Level Income Option	Under this option, employees may chose to have monthly ANNUITY payments (before the age of 62 or 65) increased actuarially; thereafter, the payments are decreased.
Special Vocational Preparation (SVP)	The amount of time required by a typical worker to acquire skills for average performance. There are nine levels of time duration required by a typical worker to acquire skills for average performance in the subject position, 9 being the highest and 1 bei
Specified Fringe Benefits	Benefit plans for specific purposes including group-term life, accident and health, group legal services, cafeteria plans, educational assistance programs, and dependent care assistance programs.
Spendable Income	This is the total income minus housing expenses, taxes, savings, and LIFE INSURANCE.
Split Credit	Credit is given to more than one individual.
Standard Occupational Code (SOC)	The SOC is a Canadian system used by statistical agencies to categorize workers into occupational groups so as to collect, calculate, and disseminate data.  Workers will be grouped into a particular classification of occupation (of which there are over 82
Standard Rate	Designated rate for a specific job classification, established by evaluation or performance.
Starting Rate	Refers to the wage or salary to which an employee is assigned upon entering the job.
State Disability Insurance Program (SDI)	A plan for accident and sickness, or disability insurance required by state legislation of those employers doing business in that particular state.
Statutory Benefits	Benefits that are required by statutory law. In the United States, for example, Workers'' Compensation, Social Security and Unemployment Insurance are required. Benefits vary among countries. Companies operating in foreign countries must comply with host
Statutory Stock Options	Gives an employee a right to purchase company stock, usually at a bargain price.
Step Rates	A method of calculating benefits by assigning a different value to income below and above a certain breakpoint, such as the Social Security level.
Stock Bonus Plan	A qualified defined contribution plan established and maintained by an employer to provide benefits similar to those of a profit-sharing plan, except that the contributions by the employer are not necessarily dependent upon profits and the benefits are di
Stock Option Incentive	A special benefit that some companies offer to their employees to purchase stock at a fixed price. Companies usually award incentive stock options as a bonus for performance, or as an incentive to get employees to work harder.
Stock Options	The right to buy company stock at a certain price within a particular period of time. The assumption is that the market price of the stock will be higher than the predetermined price at the time that the person is allowed to purchase the stock.
Stock Ownership	Stock ownership of one or more shares of a corporate stock which entitles the owner to: (1) a proportionate share of the issuing company''s undivided assets, (2) dividends as declared by the board of directors, (3) voting rights, and (4) sometimes, the ri
Stock Purchase Plan (Non-Qualified)	A plan that allows senior management or other key personnel to purchase employer stock. Certain restrictions apply: (1) the stockholder must be employed for a particular length of time,  (2) the employer has the right to buy back the stock and (3) stockho
Stock Purchase Plan (Qualified)	A program under which employees buy shares in the employer''s stock. The employer contributes a certain amount for each unit of employee contribution. Also, stock may be offered at a fixed price (usually below market) and paid for in full by the employees
Stock Swap	Allowing an executive to deliver already-owned stock, instead of paying cash, to exercise a stock option.
Strength Rating	The overall physical strength required to perform a job is expressed as a strength rating.
Suggestions Awards	Many companies use suggestion award programs to elicit ideas for improvement from employees. This not only provides the company with new ideas but also gives the employees a voice in the governance of the company. Suggestions are usually reviewed by a com
Survivor Income Benefit	A type of group LIFE INSURANCE, which provides income benefits if a ''qualified survivor'' survives the insured. Usually the qualified survivor category includes only the insured''s spouse and children.
Take Home Pay	Pay actually received by an employee after adding on bonuses, but deducting taxes.
Target Compensation	Expected pay for a job or position. This would include all avenues of compensation (base pay, incentives, bonuses, etc.).
Target Total Compensation	The complete cash compensation available to sales representative, for achieving sales goals.
Termination of Employment	An employee who terminates his/her employment or is terminated is entitled to retain their health care benefits for a period of time under COBRA. The terminated employee must pay the monthly premiums plus a small processing fee. The employer may choose to
Tiered Pay Plan	A compensation system that distinguishes the salary based on time of hire and work performance.
Time Off with Pay	Holidays, vacation, sick leave, lunch periods, and other approved time off, during which the employee does receive pay.
Time Span of Discretion	A non-economic definition of job value.
Timing of Payment	When payment is received early, current, or deferred.
Total Annual Cash Compensation	The sum of all cash payments made to an individual for services during a given year.
Total Cash Compensation	This figure reflects your total cash compensation including the following elements: 1) Base Pay, 2) Shift Differentials, 3) Hazardous Pay or Danger Pay incentive or differentials, 4) Total annualized overtime pay ,5) Other miscellenaous payments 6) Bonus
Total Compensation	The sum of all payments made to an employee for a specific time period (usually annual) including base salary, incentives, and bonuses (and/or other variable pay), commissions, and stock options.
Total Covered Payroll	An employee''s total monthly earnings that are covered by a disability insurance policy.
Total Direct Compensation	In executive compensation, total annual cash compensation plus the annualized value of long-term incentives.
Total Payroll	The sum of wages paid at the opening of business on the first day of the plan year or the last day of prior year.
Total Remuneration	The sum of the financial and nonfinancial value to the employee of all the elements in the employment package.
Training Program Wage	Under selected conditions, employers may pay less than the MINIMUM WAGE to young workers who are participating in training programs.
Travel Expense	Travel expenses, such as hotels, taxis, meals, porters, and other incidental costs, are reimbursable to the employee and are not considered income as long as they are reasonable. In order to qualify, the employee must receive reimbursement separate from h
U.S. Minimum Wage	The lowest wage, determined by law or contract, that an employer may pay an employee for a specified job.
Unemployment Compensation	Payments made under state-administered programs to workers who are unemployed and meet the requirements of the law involved to qualify for such payments.  The requirements usually are that the: (1) worker not be unemployed voluntarily; (2) worker has work
Unemployment Insurance	In Canada, a federal statute that provides unemployment insurance to almost all persons who are employed in Canada.
Unexercised Options / Sars	The rights that have not yet been exercised. They may consist of both exercisable (vested) and non-exercisable (non-vested) rights.
Unfunded Commitments To Executives	A non-qualified compensation plan in which future financial commitments have been made to an executive organization. The compensation plan has not been secured with funds that have been set aside for that purpose.
Unreasonable Compensation	A potential tax issue in privately held or closely held companies is executive compensation.
Unscheduled Absence	Any unanticipated time lost from work.
Valuation Date	Designated time of closing (monthly, quarterly, etc.) for determination of account balances in a defined-contribution or defined benefit plan.
Valuation of Benefits	Establishing a value for an employee''s benefits at any one time may be very difficult. Since a number of assumptions need to be made about tenure and life span, it becomes an actuarial calculation. However, organizations needs to calculate this figure fo
Variable Pay	Rewards based on performance rather than rewards based on time spent on the job or the value of the job.
Vesting	The process whereby accrued benefits under a plan become nonforfeitable to the participant.  Any benefits that are a result of employee contributions must always be 100 percent vested from the first day.  Benefits resulting from employer contributions mus
W-2 Form	Wage and Tax Statement.
W-4 Form	The Employee''s Withholding Allowance Certificate.
Wage	The total of salary and also commissions, or bonuses, paid by an employer for services.
Wage and Price Controls	Wages and prices are limited to some low percentage of growth through government regulation, until they are deemed to be under control.
Wage Contour	Developed by labor economist John Dunlop, a way of considering an external wage structure.
Wage Differential	Differences in wage rates due to the location of company, hours of work, working conditions, type of product manufactured, or a variety of other circumstances.
Wage Level	The average of all salaries paid to workers in an occupation or industry.
Wage Movement	A decrease or increase in the wage levels for a particular position or occupation in a market.
Wage Rate	The money rate paid to an employee per hour.
Wage Structure	Usually established within an organization, this is the levels or hierarchy of job and pay ranges.  The salary structure is also referred to as job grades, job-evaluation points and/or policy lines.
Wage Survey	A survey of the going rates for benchmark jobs in a particular market.
Work-Design Variances	Differences that exist in similar jobs within two or more organizations.
Workers'' Compensation	Government-mandated insurance that provides benefits to covered employees and their dependents if the employee suffers job-related injury, disease, or death.