Pay Parity

What is pay parity?

Pay parity is the practice of paying people equitably. This means that those in the same job and location receive fair pay relative to each other regardless of their race, gender, sexuality, or any other identity. Specifically, the term refers to an effort to erase the gender pay gap between men and women in which women make, on average, less than men.

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Paid Holidays

What are paid holidays?

Paid holidays are days of festivity or recreation when people can take a paid day off. These may be state, national, or religious holidays. US federal law does not require employers to pay their people for holiday days.

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What is a merit increase? - Merit-increase-Glossary-banner-1.png

What is a merit increase?

A merit increase is a salary raise granted to an employee for outstanding work performance or achievements. Eligibility for a merit increase is based on a company’s budget, internal criteria, merit metrics system, and the employee’s value in the job market.

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What is compensation management?

Compensation management is the process of managing analyzing and determining the salary, incentives, and benefits each employee receives.

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Gross wages

What are gross wages?

Gross wages refer to the amount of money earned before taxes are withheld from a paycheck and are the monthly salary people agree to when accepting a job. On a pay stub, gross wages are at the bottom of the page—usually in a larger font.

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Time in lieu

What is time in lieu?

Time in lieu, also referred to as time off in lieu or TOIL, is when a person takes time off as an alternative to pay for overtime hours. It is a specific type of benefit employers can offer, creating a more flexible workforce.

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Gender pay gap

What is the gender pay gap?

A gender pay gap is a difference in pay between men's and women’s average salaries.

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Leave of absence

What is a leave of absence?

A leave of absence (LOA) is time people can take off from work for extraordinary circumstances. If a company's policies concerning time off, sick leave, vacation, and holidays cover LOA, then the team member on leave can receive payment. Otherwise, the leave of absence is unpaid. While companies may not always compensate people for a leave of absence, they do provide protective benefits, and the person on leave can access their health insurance and accrue vacation days.

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Floating holiday

What is a floating holiday?

A floating holiday is a paid day off that an employee can decide to take on a day of their choosing. It’s called a floating holiday because it can “float” to whichever day the person chooses. Companies usually provide these in addition to the standard paid holidays as a type of benefit.

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Revenue per employee (RPE)

What is revenue per employee?

Revenue per employee (RPE) is a financial metric that measures the average profit each employee contributes. Revenue per employee allows organizations to determine the efficiency, productivity, and profitability of each employee and the company as a whole.

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What is a payroll cycle?

What is a payroll cycle?

A payroll cycle is an administrative process of paying employees recurring compensation.

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What is salary benchmarking? - Salary-benchmarking-Glossary-banner.png

What is salary benchmarking?

Salary benchmarking is the process of evaluating a company’s internal job salaries based upon their external value. Salary benchmarking involves analyzing the main components of each position and comparing these positions to similar jobs in other companies. Organizations primarily rely on compensation surveys, government labor databases, and the assistance of compensation consultants for accurate job market data. Why should HR leaders care about salary benchmarking? Salary benchmarking helps compensation managers create competitive salaries. Though compensation isn’t the only important aspect of a job, it's obviously an essential factor, as everyone…

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What are exempt and non-exempt employee statuses? - Exempt-and-non-exempt-employee-status-Glossary-banner.png

What are exempt and non-exempt employee statuses?

Exempt and non-exempt employee statuses are taken from the FLSA (Fair Labor Standards Act) employee classification system. Exempt employees earn a salary, not an hourly wage. They are exempt from receiving overtime pay and cannot qualify to receive it. Exempt employees make a minimum of $35,568 a year and are generally skilled professionals working in white-collar positions. Doctors, lawyers, accountants, HR managers, and engineers, for instance, qualify as exempt. The different types of exemptions include: Outside salesHighly-compensated employeesComputerProfessionalAdministrativeExecutive Non-exempt employees, in contrast, earn hourly wages. Non-exempt employees must receive minimum…

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What is indirect compensation? - Indirect-compensation-Glossary-banner.png

What is indirect compensation?

Indirect compensation is a type of remuneration that typically encompasses non-monetary forms of payment. Direct compensation includes base pay, bonuses, commission, and incentives. Indirect compensation includes paid time off and overtime pay, as well as benefits that have financial value, but no cash value, such as: Insurance plansParental leaveTechnological devicesStock optionsRetirement planning and financial consultations Except for government-mandated benefits, organizations can choose which forms of indirect compensation to incorporate.  Why should HR leaders care about indirect compensation? Understanding indirect compensation is essential for HR leaders. During the hiring process, candidates…

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fringe benefits

What are fringe benefits?

Fringe benefits are supplementary forms of payment that employers provide employees in addition to a salary. While employees must receive government-mandated core benefits, fringe benefits afford additional assistance to employees in their day-to-day lives. Employers can deliver fringe benefits in various forms, such as: Gift cardsSavings bondsCompany carStudent loan refinancing programCritical illness insurancePet insuranceProperty Fringe benefits are cash equivalent and can be qualified as taxable, partially taxable, non-taxable, or tax-deferred. Depending on the number of hours worked, companies also sometimes offer fringe benefits as an incentive to high-performing freelance workers. …

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