GRP flashcards
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35 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Total rewards
- The combined value of pay, benefits, development, recognition, and work environment offered to employees; used to attract and retain talent.
- Total compensation cost per employee
- Sum of base pay, variable pay, benefits, and employer taxes divided by headcount; the core cost metric for reward design.
- Compression
- A situation where new hires or junior employees earn close to or more than experienced peers, weakening retention and internal equity.
- Pay differentiation ratio
- Top-performer pay divided by median-performer pay in the same role; values near 1.0 indicate little reward differentiation.
- FLSA exempt status
- Classification requiring salary basis, a minimum salary threshold, and duties tests; exempt employees are not entitled to overtime pay.
- Regular rate of pay
- The hourly rate used for overtime, including base pay plus nondiscretionary bonuses and shift differentials, excluding discretionary bonuses.
- Pay transparency laws
- Jurisdiction-specific rules requiring salary range disclosure in postings and often banning salary history inquiries during hiring.
- ERISA
- US federal law governing retirement and welfare benefit plans, setting fiduciary duties, vesting rules, and disclosure requirements.
- Range spread
- (Maximum minus minimum) divided by minimum for a pay range; typical spreads widen as job level increases.
- Range penetration
- (Employee pay minus range minimum) divided by (maximum minus minimum); locates an employee within the range from 0% to 100%.
- Compa-ratio
- Employee base pay divided by the range midpoint; 1.00 means pay equals midpoint and 0.80 to 1.20 is a common healthy band.
- Midpoint progression
- Percentage difference between midpoints of adjacent grades; typically 10 to 20 percent, with larger gaps indicating structural issues.
- Red-circle rate
- Pay above the range maximum, usually frozen until the range catches up; requires documented transition planning.
- Payout curve
- Relationship between performance and incentive payout defined by threshold, target, and maximum points, often with linear interpolation between them.
- Sales leverage
- Upside variable pay divided by target variable pay; higher leverage shifts more pay at risk for roles with strong line of sight.
- Clawback provision
- Plan term allowing recovery of paid incentives after a financial restatement or misconduct; required for listed-company executives.
- Restricted stock units
- Equity awards delivering share value at vesting, taxed as ordinary income; no exercise price and less downside than options.
- Market reference point
- The competitive pay level for a matched benchmark job, derived from survey data at a chosen percentile such as median.
- Survey aging
- Adjusting survey data forward using an annual movement factor raised to the fraction of a year since the survey effective date.
- Competitive position ratio
- Company pay divided by market reference pay; below 1.00 indicates a lag position and above 1.00 a lead position.
- Weighted survey average
- Combining survey sources using headcount weights so larger, more representative samples influence the market reference more.
- Pay equity regression
- A model controlling for job, tenure, performance, and location; the residual coefficient on a protected group measures unexplained pay gap.
- Voluntary turnover rate
- Voluntary separations divided by average headcount for the period; segment by performance and compa-ratio to find risk.
- Cost of turnover
- Recruiting cost plus vacancy cost plus onboarding and lost productivity; used to justify retention and reward investments.
- Flight risk model
- A predictive model using compa-ratio, time since last increase, performance rating, and tenure to estimate likelihood of departure.
- Share-based compensation expense
- Grant-date fair value of equity awards recognized over the vesting period; options are valued with models such as Black-Scholes.
- Incentive accrual
- Target incentive times headcount times expected performance factor times prorated service period; recorded when earned, not paid.
- Compensation ratio
- Total compensation cost divided by revenue; a benchmark for affordability and cost competitiveness against industry norms.
- Benefits cost per employee
- Total benefits spend including employer taxes and premiums divided by eligible headcount; input to total rewards statements.
- Pay philosophy statement
- A written position on target market percentile, variable pay mix, and differentiation that guides reward decisions and employee communication.
- Manager pay conversation guide
- A tool giving managers range data, compa-ratio context, and talking points so pay decisions are explained consistently.
- Change management stages
- Awareness, understanding, acceptance, and commitment; reward program communication must precede the effective date to build support.
- Balance sheet approach
- An expatriate pay method preserving home-country net income by adding allowances and tax equalization for host-country costs.
- Tax equalization
- A policy keeping assignees at their home-country tax burden while the company absorbs host-country tax differences.
- Global job grading
- A common job evaluation framework applied across countries, with local market data used to set country-specific pay ranges.