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base pay: The foundation pay component for most employees¸ usually based on
some unit of time worked
compensation strategy:
compensation system: The plan for the mix and total amount of base pay¸
performance pay and indirect pay to be paid to various categories of employees.
extrinsic rewards: Factors that satisfy basic human needs for survival and
security¸ as well as social needs and needs for recognition.
incentive
indirect pay: Noncash items or services that satisfy a variety of specific
employee needs
intrinsic rewards: Factors that satisfy higher order human needs for selfesteem¸ achievement¸ growth¸ and development.
The economic or monetary part of the reward system.
A promise that a specified reward will be provided if a specified employee
behaviour is performed.
sometimes known as "employee benefits."
Matching Question 1.2
 optimal reward system
- performance pays: Relates employee monetary rewards to some measure of
individual¸ group¸ or organizational performance.
 purpose of a compensation system
 reward
 reward strategy
- reward system: The mix of intrinsic and extrinsic rewards that an organization
provides to its members.
 total rewards
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Anything provided by the job or the organization that satisfies an employee need.
The plan for the mix of rewards to be provided to members along with the means
through which they will be provided.
A compensation philosophy that considers the entire spectrum of rewards that an
organization may offer to employees.
To help create a willingness among qualified persons to join the organization and
to perform the tasks needed by the organization.
The reward system that adds the most value to the organization¸ after
considering all its costs.