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Compensation Terms Glossary
Base Pay or Base Salary – The fixed compensation that an employee receives on a regular interval.
Base Rate – Wage rate for work performed during a unit of time, most commonly expressed as an hourly rate. It may, however, be expressed as an amount per day, week, month, or year. Does not include overtime rates.
Benchmark Job – A job commonly found in the market, used to compare an organization’s jobs with pay in the market. A benchmark job exists across a variety of companies and in a variety of industries. It allows an organization to evaluate pay against other companies with a shared point of comparison.
Compensable Factors – The details about a job that influence how the job is paid. The most common compensable factors include years of experience and education. Other important factors include skills, certification requirements, management responsibilities and travel percentage, as well as details about the market such as industry and organization size.
Median – The data point that is in the exact middle (higher than 50% of all data points) in the sample when ordered from low to high. The median is also known as the 50th percentile.
Percentile – The data point that is higher than x% of all data points in the sample, when ordered from low to high. For example, the 25th percentile is higher than 25% of all other data in the sample.
Range Midpoint – The exact middle of the salary range, equidistant to the range minimum and range maximum. Ideally, the range midpoint is aligned to the market value of the jobs in the salary range.
Salary Ranges – The upper and lower limits of compensation, typically including a minimum, midpoint and maximum.
Total Cash Comp (TCC) – Employee’s compensation value that includes both base salary plus allowances (Guaranteed Cash) and variable pay including incentive payouts, bonuses, commissions and cash profit sharing.
Variable Pay – Compensation that is paid to employees as an incentive or bonus. Variable pay is typically based on the performance of an individual or group, or the performance of the company as a whole.