Wgu c202 managing human capital all EXAMS.pdf 2026.. Page 1 of 33 2026. Wgu c202 managing human capital all EXAMS.pdf
WGU C202 Managing Human Capital All
Direct financial compensation
compensation received in the form of salary, wages, commissions, stock options or
bonuses
indirect financial compensation
all the tangible and financially valued rewards that are not included in direct
compensation including free meals, vacation time and health insurance
nonfinancial compensation
rewards and incentives given to employees that aren't financial in nature
base pay
reflects the size and scope of an employee's responsibilities
severance pay
give to employees upon termination of their employment
fixed pay
pays employees a set amount regardless of performance
variable pay
bases some or all of an employee's compensation on employee, team, or organizational
pay structure
the array of pay rates for different work or skills within a single organization
pay mix
the relative emphasis give to different compensation components
pay leader
organization with a compensation policy of giving employees greater rewards than
competitors
pay follower
an organization that pays its front-line employees as little as possible
resource dependence theory
proposition that organizational decisions are influenced by both internal and external
agents who control critical resources
00:0001:08
wage differentials
differences in wage between various workers, groups of workers, or workers within a
career field
labor market
all of the potential employees located within a geographic area from which the
organization might be able to hire
cost of living allowances
clauses in union contacts that automatically increase wages base on the U.S. Bureau of
Labor Statistics' cost of living index
market pricing
uses external sources of information about how others are compensating a certain
position to assign value to a company's similar job
Compensation surveys
2026=Page 1 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
,Wgu c202 managing human capital all EXAMS.pdf 2026.. Page 2 of 33 2026. Wgu c202 managing human capital all EXAMS.pdf
surveys of other organizations conducted to learn what they are paying for specific jobs
or job classes
benchmark jobs
jobs that tend to exist across departments and across diverse organizations allowing
them to be used as a basis for compensation comparisons
job evaluation
a systematic process that uses expert judgement to assess differences in value
between jobs
ranking methos
subjectively compares jobs to each other based on their overall worth to the
organization
job classification method
subjectively classifies jobs into an exiting hierarchy of grades and categories
point factor method
uses a set of compensable factors to determine a job's value. skill, resp, effort, working
cond.
compensable factor
any characteristic used to provide a basis for judging a job's value
skills, responsibilities, effort, working conditions
Four categories of compensable factors
Hay Group Guide Chart - Profile Method
a point-factor system is used to produce both a profile and a point score for each
position.
know how
problem solving
accountability
working conditions
Know-how, problem solving, accountability, working conditions
Hay Group Method based on four main factors
Position Analysis Questionnaire
a structured job evaluation questionnaire that is statistically analyzed to calculate pay
rates based on how the labor market is valuing worker characteristics. a copyrighted,
standardized, structured job analysis questionnaire. 6 sections covering 187 job
elements.
job pricing
the generation of salary structures and pay levels for each job based on the job
evaluation data
single rate system, pay grades and broadbanding
Three most common job pricing systems
pay grade (pay scale)
the range of possible pay for a group of jobs
broadbanding
using very wide pay grades to increase pay flexibility
internal equity
when employees perceive their pay to be fair relative to the pay of other jobs in the
organization
2026=Page 2 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
,Wgu c202 managing human capital all EXAMS.pdf 2026.. Page 3 of 33 2026. Wgu c202 managing human capital all EXAMS.pdf
employee equity
the perceived fairness of the relative pay between employees performing similar jobs for
the same organization
external equity
when an organization's employees believe that their pay is fair when compared to what
other employers pay their employees who perform similar jobs
comparable worth
if two jobs have equal difficulty requirements, the pay should be the same, regardless of
who fills them
wage rate compression
starting salaries for new hires exceed the salaries paid to experienced employees
golden parachute
lucrative benefits given to executives in the event the company is taken over
Cost-of-living adjustments
pay increases to account for a higher cost of living in one country versus another
Housing allowance
payments to subsidize or cover housing and related costs
hardship premiums
increased salary for living in an area with a lower quality of life, less safety, etc.
tax equalization payments
increased salary to make up for higher taxes that reduce take-home pay and decrease
employee's purchasing power
inflation adjustments
larger and/or more frequent raises to maintain employee's purchasing power in the face
of inflation
Fair Labor Standards Act of 1938
a federal law that sets standards for minimum wages, overtime pay, and equal pay for
men and women performing the same jobs
exempt employees
employees who meet one of the FLSA exemption tests, are paid on a fixed salary basis
and are not entitled to overtime pay
non-exempt employees
employees who do not meet any of one of the FLSA exemption tests and are paid on an
hourly basis and covered by wage and hour laws regarding minimum wage, overtime
pay and hours worked
workers' compensation
a type of insurance that replaces wages and medical benefits for employees injured on
the job in exchange for relinquishing the employee's right to sue the employer for
negligence
fixed rewards
predetermined compensation (salary and benefits)
variable rewards (incentives)
"at risk" rewards which are linked to factors determined as valuable, including
performance, skills, competence and contribution
- Recognize and reward high performers
- Increase the likelihood of achieving corporate goals
2026=Page 3 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
, Wgu c202 managing human capital all EXAMS.pdf 2026.. Page 4 of 33 2026. Wgu c202 managing human capital all EXAMS.pdf
- Improve productivity
- Move away from an entitlement culture
Top four reasons organizations give for tying pay to performance ar
- Preference of individual employees
- Size of the rewards for high performance
- Method of motivating individual job performance
- Objectivity of the evaluation process that determines the rewards
Before designing an incentive pay plan to motivate performance, it is important to
consider the
- Company performance
- Reduced merit increases
- Reductions in head count
- Reduced benefits
- Pay freezes
Most common way employers fund variable pay programs
reward differnentiation
differentiating rewards based on performance rather than giving all employees the same
reward
short-term incentives
one-time variable rewards used to motivate short-term employee behavior and
performance (typically one year or less). ie bonus or profit sharing. to motivate
attendance, cust serv, safety, production quality and quantity
profit sharing
the distribution of organizational profits to all employees
stock options
the right of an employee to buy shares of the company's stock at a certain price (the
exercise price) during some future period of time
long-term incentives
incentives that motivate behaviors and performance that support company value and
long-term organizational health. ie stock options
vesting
the point at which employees can sell or transfer the stock option
pay for performance programs
rewards employees based on some specific measure of their performance
variable pay plans
pay for performance plans that put a small amount of base pay at risk, in exchange for
the opportunity to earn additional pay if performance meets or exceeds a standard
spot awards
awards given immediately when a desired behavior is seen
extrinsic motivation
motivation that comes from outside the individual, including performance bonuses
intrinsic motivation
derived from an interest in or enjoyment from doing a task
skill-based pay
2026=Page 4 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
WGU C202 Managing Human Capital All
Direct financial compensation
compensation received in the form of salary, wages, commissions, stock options or
bonuses
indirect financial compensation
all the tangible and financially valued rewards that are not included in direct
compensation including free meals, vacation time and health insurance
nonfinancial compensation
rewards and incentives given to employees that aren't financial in nature
base pay
reflects the size and scope of an employee's responsibilities
severance pay
give to employees upon termination of their employment
fixed pay
pays employees a set amount regardless of performance
variable pay
bases some or all of an employee's compensation on employee, team, or organizational
pay structure
the array of pay rates for different work or skills within a single organization
pay mix
the relative emphasis give to different compensation components
pay leader
organization with a compensation policy of giving employees greater rewards than
competitors
pay follower
an organization that pays its front-line employees as little as possible
resource dependence theory
proposition that organizational decisions are influenced by both internal and external
agents who control critical resources
00:0001:08
wage differentials
differences in wage between various workers, groups of workers, or workers within a
career field
labor market
all of the potential employees located within a geographic area from which the
organization might be able to hire
cost of living allowances
clauses in union contacts that automatically increase wages base on the U.S. Bureau of
Labor Statistics' cost of living index
market pricing
uses external sources of information about how others are compensating a certain
position to assign value to a company's similar job
Compensation surveys
2026=Page 1 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
,Wgu c202 managing human capital all EXAMS.pdf 2026.. Page 2 of 33 2026. Wgu c202 managing human capital all EXAMS.pdf
surveys of other organizations conducted to learn what they are paying for specific jobs
or job classes
benchmark jobs
jobs that tend to exist across departments and across diverse organizations allowing
them to be used as a basis for compensation comparisons
job evaluation
a systematic process that uses expert judgement to assess differences in value
between jobs
ranking methos
subjectively compares jobs to each other based on their overall worth to the
organization
job classification method
subjectively classifies jobs into an exiting hierarchy of grades and categories
point factor method
uses a set of compensable factors to determine a job's value. skill, resp, effort, working
cond.
compensable factor
any characteristic used to provide a basis for judging a job's value
skills, responsibilities, effort, working conditions
Four categories of compensable factors
Hay Group Guide Chart - Profile Method
a point-factor system is used to produce both a profile and a point score for each
position.
know how
problem solving
accountability
working conditions
Know-how, problem solving, accountability, working conditions
Hay Group Method based on four main factors
Position Analysis Questionnaire
a structured job evaluation questionnaire that is statistically analyzed to calculate pay
rates based on how the labor market is valuing worker characteristics. a copyrighted,
standardized, structured job analysis questionnaire. 6 sections covering 187 job
elements.
job pricing
the generation of salary structures and pay levels for each job based on the job
evaluation data
single rate system, pay grades and broadbanding
Three most common job pricing systems
pay grade (pay scale)
the range of possible pay for a group of jobs
broadbanding
using very wide pay grades to increase pay flexibility
internal equity
when employees perceive their pay to be fair relative to the pay of other jobs in the
organization
2026=Page 2 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
,Wgu c202 managing human capital all EXAMS.pdf 2026.. Page 3 of 33 2026. Wgu c202 managing human capital all EXAMS.pdf
employee equity
the perceived fairness of the relative pay between employees performing similar jobs for
the same organization
external equity
when an organization's employees believe that their pay is fair when compared to what
other employers pay their employees who perform similar jobs
comparable worth
if two jobs have equal difficulty requirements, the pay should be the same, regardless of
who fills them
wage rate compression
starting salaries for new hires exceed the salaries paid to experienced employees
golden parachute
lucrative benefits given to executives in the event the company is taken over
Cost-of-living adjustments
pay increases to account for a higher cost of living in one country versus another
Housing allowance
payments to subsidize or cover housing and related costs
hardship premiums
increased salary for living in an area with a lower quality of life, less safety, etc.
tax equalization payments
increased salary to make up for higher taxes that reduce take-home pay and decrease
employee's purchasing power
inflation adjustments
larger and/or more frequent raises to maintain employee's purchasing power in the face
of inflation
Fair Labor Standards Act of 1938
a federal law that sets standards for minimum wages, overtime pay, and equal pay for
men and women performing the same jobs
exempt employees
employees who meet one of the FLSA exemption tests, are paid on a fixed salary basis
and are not entitled to overtime pay
non-exempt employees
employees who do not meet any of one of the FLSA exemption tests and are paid on an
hourly basis and covered by wage and hour laws regarding minimum wage, overtime
pay and hours worked
workers' compensation
a type of insurance that replaces wages and medical benefits for employees injured on
the job in exchange for relinquishing the employee's right to sue the employer for
negligence
fixed rewards
predetermined compensation (salary and benefits)
variable rewards (incentives)
"at risk" rewards which are linked to factors determined as valuable, including
performance, skills, competence and contribution
- Recognize and reward high performers
- Increase the likelihood of achieving corporate goals
2026=Page 3 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
, Wgu c202 managing human capital all EXAMS.pdf 2026.. Page 4 of 33 2026. Wgu c202 managing human capital all EXAMS.pdf
- Improve productivity
- Move away from an entitlement culture
Top four reasons organizations give for tying pay to performance ar
- Preference of individual employees
- Size of the rewards for high performance
- Method of motivating individual job performance
- Objectivity of the evaluation process that determines the rewards
Before designing an incentive pay plan to motivate performance, it is important to
consider the
- Company performance
- Reduced merit increases
- Reductions in head count
- Reduced benefits
- Pay freezes
Most common way employers fund variable pay programs
reward differnentiation
differentiating rewards based on performance rather than giving all employees the same
reward
short-term incentives
one-time variable rewards used to motivate short-term employee behavior and
performance (typically one year or less). ie bonus or profit sharing. to motivate
attendance, cust serv, safety, production quality and quantity
profit sharing
the distribution of organizational profits to all employees
stock options
the right of an employee to buy shares of the company's stock at a certain price (the
exercise price) during some future period of time
long-term incentives
incentives that motivate behaviors and performance that support company value and
long-term organizational health. ie stock options
vesting
the point at which employees can sell or transfer the stock option
pay for performance programs
rewards employees based on some specific measure of their performance
variable pay plans
pay for performance plans that put a small amount of base pay at risk, in exchange for
the opportunity to earn additional pay if performance meets or exceeds a standard
spot awards
awards given immediately when a desired behavior is seen
extrinsic motivation
motivation that comes from outside the individual, including performance bonuses
intrinsic motivation
derived from an interest in or enjoyment from doing a task
skill-based pay
2026=Page 4 stuvia: Wgu c202 managing human capital all EXAMS.pdf 00/00/2026//2027 Study
