Glossary of Compensation Terms

  • Acting Assignment:听鈥淎cting鈥 is most commonly used when an employee temporarily assumes the duties or authority of another employee when they are unable to perform their job or are away on leave or vacation.
  • Base Pay: The part of compensation that serves as the foundation upon which other variable pay elements, such as overtime, shift differential, or temporary pay, may be added.听
  • Business Title:听The business title (also known as the working title) is an unofficial title used by a hiring department to more closely match the work assignment of a position than the broader payroll job title.听 HR recommends that business or working titles not exceed the approved classification level of the job. For example, a business or working title should not refer to a position as a director if the position鈥檚 level on campus does not match that of a director.听
  • Colorado Equal Pay for Equal Work Act (CEPEWA):听The Equal Pay for Equal Work Act (C.R.S. 搂 8-5-101 et seq.) was signed into law by Colorado Governor Polis on May 22, 2019. Effective January 1, 2021, this act amends Colorado law and provides new wage discrimination and employer provisions that differ from federal law and other state equal pay laws.
  • 颁辞尘辫补-搁补迟颈辞:听Compa-ratio is a comparison of employee pay to the salary grade midpoint and is calculated as Pay Rate / Grade Midpoint.听听听
  • Compensable Factors:听Compensable factors are used to evaluate jobs and develop a job worth hierarchy to provide fairness and equity throughout an organization. The Colorado Equal Pay for Equal Work Act defines compensable factors for substantially similar work and pay equity as follows:听听
    • Substantially similar work is based on a composite of skill; and effort, which may include consideration of shift work; and responsibility, regardless of job title. A wage rate differential is permissible if at least one of the following factors accounts for the entire wage rate differential:听听
      • A seniority system;听听
      • A merit system;听听
      • A system that measures earnings by quantity or quality of production;听听
      • The geographic location where the work is performed;听听
      • Education, training, or experience to the extent that they are reasonably related to the work in question;
      • Travel, if the travel is a regular and necessary condition of the work performed.听
  • Compensation Pool:听The campus鈥檚 annual compensation pool is the amount of money allocated by the campus and approved by the Board of Regents for employee increases each year.听 The compensation pool may be used for one, or a combination, of employee pay actions, including but not limited to merit, across-the-board, promotion & tenure, minimum wage, compression, pay range progression, equity, structural and/or market adjustments. The annual compensation pool may be applied differently across employee populations and differently, each year to best meet campus needs and priorities. An X% pool does not mean that all employees will receive that exact percentage as a pay increase.听
  • Compression: Wage compression is a phenomenon that occurs when new employees are paid at or near the same rate as employees with longer tenure in the same job. For some occupations, this can also occur when the pay of subordinates encroaches upon the pay of the supervisor. Compression can also occur when the salaries of a group of employees are close in amount despite varying lengths of service, salary grade, requisite skills, and knowledge, or other factors of pay that traditionally result in greater differentiation.听听听
  • Compensation Philosophy: High-level documentation on what the organization is trying to achieve with its compensation plan.听听
  • Competitiveness:听(as referenced in CU 麻豆影院鈥檚 Compensation Philosophy):听In line with relevant labor markets, the campus aspires to provide base salaries that utilize national, regional, and local market compensation data including AAU public peer institutions, CUPA-HR and other relevant salary surveys, and professional occupational data sources as appropriate for the employee population, discipline or occupation.
  • Consistency:听(as referenced in CU 麻豆影院鈥檚 Compensation Philosophy):听Create and maintain clear compensation guidelines and substantially similar positions will be compensated similarly based on the relevant labor market, education, experience, expertise, and merit.
  • Consumer Price Index (CPI):听Measures the change in consumer prices which is otherwise known as inflation.听听
  • Cost of Labor: The cost of labor includes all compensation, benefits, and payroll taxes paid by employers to employees and can be compared from location to location.听听听
  • Cost of Living: The cost of living is tied to wages and represents the amount of money needed to maintain a certain standard of living as measured through housing, food, healthcare, and taxes and can be compared from location to location. Cost of living is often higher than the cost of labor in a location.听听
  • Cost of Living Adjustment (COLA):听An across-the-board salary increase or supplemental pay intended to bring pay in line with inflation in a geographical area.听听
  • Equity (as referenced in CU 麻豆影院鈥檚 Compensation Philosophy):听The campus aims to provide equitable compensation for employees who perform substantially similar work and have similar education, experience, expertise, and merit.
  • External Pay Equity: External equity is the comparator of an organization鈥檚 pay rates concerning the average rates in the organization鈥檚 market or sector.听听
  • Fairness (as referenced in CU 麻豆影院鈥檚 Compensation Philosophy):听Salaries, total compensation, evaluations, and salary adjustments will be based on meritorious performance as defined by applicable campus policy and unit criteria.听
  • Interim Assignment: 鈥淚nterim鈥 is commonly used when an employee is put fully in charge of another employee鈥檚 position for an indefinite period, typically while a search is being conducted or while a department/unit reorganization is taking place.
  • Internal Pay Equity:听Internal equity exists when employees at an organization perceive that they are being rewarded fairly according to the relative value of their jobs.听听
  • Job Pricing: The process of assigning a value for compensation purposes of a job by researching pay for similar jobs in the target market which can be internal, local, regional, national, global, and/or by industry.听
  • Labor Market: The labor market (or talent market) is the industry, the size of the organization, and the location where the organization competes to hire employees.听听听
  • Market Adjustment: A market adjustment is an increase in the employee鈥檚 pay based on market movement.听听
  • Market Pricing: Market pricing is a job evaluation methodology that creates a job worth hierarchy based on the 鈥渁pplicable market rate鈥 for benchmark jobs in the external marketplace relevant to the business.听
  • Market Study: The process by which an organization compares the pay of its jobs against what other companies with similar jobs are paying.听
  • Merit (as referenced in CU 麻豆影院鈥檚 Compensation Philosophy):听Evaluated based on performance criteria delineated by employee classification.
  • Merit Increase: A pay increase designed to recognize pay for performance.听
  • Merit Matrix:听A pay-for-performance tool used to determine pay increases for employees based on their performance and position in the assigned pay grade; also referred to as grade penetration.听听
  • Midpoint: The exact middle of the grade, equidistant to the grade minimum and grade maximum, and aligned to the market value for the job.听听
  • Minimum Wage: The federally, or state, mandated lowest hourly rate that can be paid to workers.听听
  • Pay Equity:听According to the Plunkett Pay Equity Framework from Salary.com, pay equity involves fair pay for comparable jobs that is internally equitable, externally competitive, and transparently communicated.听听
  • Pay Grade: Pay grades (or salary grades) are distinct alpha or numeric designations used within a salary structure and support in defining the hierarchy of an organization, typically based on internal equitable and market competitiveness. It reflects the upper and lower limits of compensation, typically including a minimum, midpoint, and maximum. Multiple jobs can be grouped into the same pay grade.听听
  • Pay Range: The minimum and maximum amounts of compensation that are associated with a specific pay grade.听听
  • Pay Structure: The template of jobs, pay grades, and pay ranges that form the compensation schema within an organization.听听
  • Performance-based Pay: A method of compensation that is based on individual performance and contribution. 听
  • Performance Management: A systematic, standardized process of overseeing, guiding, and evaluating employee job performance through coaching, training, and periodic meetings.听听
  • Position in Range:听Position in range (or range penetration) represents an employee鈥檚 pay compared to the complete pay range and refers to how far an employee has penetrated the salary range from 1-100%. It is calculated as (Pay Rate 鈥 Range Minimum) / (Range Maximum 鈥 Range Minimum).听听
  • Promotion: A promotion recognizes movement to a new role with a higher pay grade. A promotion represents an increase in job responsibilities, required skills, experience, and knowledge. It will likely result in a pay increase, but not always, depending on the employee鈥檚 experience and the location of the employee鈥檚 base salary in the new pay grade.听听听
  • Quartile: Quartiles are three values obtained by dividing the sorted data set into four equal parts. The lower or first quartile is the 25th percentile. The median or second quartile is the 50th percentile. The upper or third quartile is the 75th percentile.听听
  • Salary Range: A salary range represents the minimum, midpoint, and maximum rates that a business is willing to pay employees performing a job. Typically, the midpoint or control point is set to provide market competitive, fair, and equitable salaries based on the competitive marketplace for the business.听
  • Substantially Similar:听A group of jobs that have comparable skills, responsibilities, effort, and working conditions for making pay equity comparisons.听 Substantially similar work is based on the duties assigned to a job, not the job鈥檚 title alone.听听听
  • At CU 麻豆影院:听
    • For faculty, substantially similar work is determined by the position鈥檚 rank and academic discipline.听
    • For research positions, substantially similar work may also include the responsibilities required by a specific grant or project.听
    • For staff, substantially similar work is based on the personnel system (union or non-union), type, and level of work organized by job families.听
    • For student assistants, substantially similar work is determined by the type and level of work as assigned by the hiring department, school, or college.听
  • Total Compensation:听Includes all forms of pay and benefits an employee receives.听 听
  • Transfer: Transfers describe employee movements between two positions with the same pay grade (lateral transfer) or to a pay grade that is lower than the employee鈥檚 current pay grade (demotion). As a result, transferring to a different position in a department or on campus may or may not result in a pay increase or continuation of the employee鈥檚 current salary.听 The salary set upon transfer depends on the pay grade assigned to the position being filled and the employee鈥檚 experience.听听听
  • Transparency (as referenced in CU 麻豆影院鈥檚 Compensation Philosophy):听Sharing information about compensation with employees and prospective employees.听
  • Within-Grade Adjustment: A within-grade adjustment is an increase to a different salary point in the same pay grade, position, Compensation Code and ,job code level without a job change.听听
  • Working Title:听The working title (also known as the business title) is an unofficial title used by a hiring department to more closely match the work assignment of a position than the broader payroll job title.听 HR recommends that business or working titles not exceed the approved classification level of the job. For example, a business or working title should not refer to a position as a director if the position鈥檚 level on campus does not match that of a director.听 Additionally, a business or working title of 鈥渃hief officer鈥 is reserved for the one top position that oversees the function campus-wide, i.e., chief financial officer or chief information officer, and is not a college, school, institute or unit unit-level.听