Terminology Related to Salary Administration
Traditional Salary Structure - Structure of job grades and pay ranges established within an organisation.
Career Bands - A human resources strategy that consolidates a large number of relatively narrow pay grades into much fewer broad bands with relatively wide salary ranges, typically in the neighborhood of 100 percent or more.
Broad Grades - A broad banding design that departs significantly from traditional salary grade structures by using relatively few wide pay ranges to cover each group of employees in an organisation, but retains some of the controls (e.g., ranges, midpoints, etc.) associated with a traditional approach. This design is usually implemented to simplify salary administration as well as encourage skill acquisition and career development (e.g., range spreads of 75%-100%).
Performance Share / Units - Contingent units of the employer’s common stock / cash and must be "earned" by meeting of pre-established performance goals over a specified period. The value of these "shares/units" is provided at no cost to the recipient. The grant price could be the market price (performance share) or a predetermined value (performance units).
Restricted Stock - Actual shares of employer stock assigned at no cost to the recipient (or at a bargain price) that are not transferable until certain conditions are fulfilled by recipient (e.g., continued employment for a specific number of years).
Gain Sharing / Productivity Awards - Plans designed to share a percent of cost savings of a group, unit, or organisation. The gains are typically shared uniformly among all participants.
Cash Profit Sharing Awards - Equal payment (as a flat amount or percentage of salary) to all or mist employees based on a percentage of organisational profitability.
Business Incentive Awards - Combined financial and/or operating measures for company, business unit, department, plant, and/or individual performance.
Long-Term Incentives (Stock Options / Ownership Awards) - Variable compensation earned over a period of more than 12 months.
