Page 671 - Business Principles and Management

C HAPTER 24 A SSESSMENT
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CHAPTER CONCEPTS

• Factors that affect the amount of pay an employee receives include the
skill required for the job, working conditions, education and experience,
supply and demand for that type of worker, and economic conditions.
• Companies develop compensation plans to determine how employees
will be paid. Common compensation plans are time plans, performance
plans, and combination plans.
• Companies may choose to provide a range of employee benefits in
addition to wages. Employers must be sure that compensation plans
meet all federal and state laws.
• On average, companies spend between 20 and 40 percent of employee
wages and salaries for benefits. Customary benefits include insurance,
retirement plans, vacations and time off, as well as benefits required
by law.
• Performance reviews assess how well employees are doing their jobs.
Procedures should be followed for evaluation as well as for possible
penalties or termination.
• The large amount of money companies spend on formal and informal
training can be justified if the result is more effective and productive
employees.

REVIEW TERMS AND CONCEPTS

Write the letter of the term that matches each definition. Some terms will
not be used.
a. bonus 1. Process of assessing how well employees are doing their jobs
b. cafeteria plan 2. All forms of compensation and services a company provides to
c. combination plan
d. commission plan employees in addition to salaries and wages
e. compensation 3. Payment method that pays a certain amount for a specified period
f. compensation plan of time worked
g. employee benefits 4. Carefully planned instruction with a specific curriculum and instructor
h. flex-time 5. Payment method that pays the employee a fixed rate for each unit
i. formal training produced
j. informal training 6. Arrangement in which employees choose their own work hours
k. job sharing within specified limits
l. minimum wage law 7. Law that specifies it is illegal for employers to pay less than an iden-
m. performance review tified wage rate to any employee
n. pension plan 8. Pay based on an hourly rate
o. piece-rate plan 9. Program in which employees can select the benefits that meet their
p. profit-sharing plan personal needs
q. salary
r. tax deferred 10. Company-sponsored retirement plan that makes regular payments
s. time plan to employees after retirement
t. wage 11. Pay and other benefits employees receive in exchange for their labor
12. Pay based on a time frame other than hourly, such as weekly or
monthly

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