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PACE. Rate of output or performance compared to an accepted standard. May be expressed quantitatively in terms of units per time or in terms of percent relative to standard.

PACE RATING. A worker’s speed of performance as compared with normal pace. (See PERFORMANCE RATING.)

PACE SETTER. A worker who is better than average on a particular job, and whose production is used by the employer as a standard for measuring the amount of work which can be done in a given period of time.

PACKAGE SETTLEMENT. A term used to describe a combination of benefits received by workers as a result of collective bargaining. A package may include wage increases and other benefits of monetary value, such as insurance, paid holidays, paid vacations, and sick leave. The term generally implies that a specific amount of increase was to be applied partly to rates of pay, and partly to the financing of the related benefits.


PAID ABSENCE ALLOWANCE. Payment for lost working time available to workers for various types of leave not otherwise compensated for, e.g., excused personal leave.

PAID HOLIDAYS. Holidays are days of special religious, cultural, social, or patriotic significance on which work or business ordinarily ceases. Paid holidays are those established by agreement or by company policy, for which workers receive their full daily pay without working. (See HOLIDAY PAY, UNPAID HOLIDAYS.)

PAID LUNCH PERIOD. Time allowed for eating lunch (or the midshift meal on late shifts), commonly 20-30 minutes, counted as part of the paid workday. Usually practiced where employees cannot leave their workplace for meals (e.g., coal mining). Agreements sometimes also require a company to furnish meals when workers remain in the plant for overtime work.

PAID VACATIONS. Excused leave of absence of a week or more, with full pay, granted to workers annually for purposes of rest and recreation. Paid vacations are provided in private industry by collective bargaining agreements or company policy, not by law. Vacations are frequently graduated by length of service. (See EXTENDED VACATION PLAN.)

PAPER LOCALS. Local unions which exist only “on paper” (charter) with no actual membership.

PARTICIPATION POINT. Established level of job performance at which employee is eligible for additional earnings or compensation.

PART-TIME EMPLOYEE. Worker employed on a temporary or regular basis for a workweek substantially shorter than the scheduled week for full-time employees. Usually under 25 hours per week in order to minimize obligation for fringe benefits. (State law often determines how many hours constitutes “Part-time”).

PART-TIME WORKER RATE. A rate paid to a part-time temporary, or contingent worker, as distinguished from that paid to a regular or full-time worker. Part-time rates may be equal to, or lower or higher than, regular or full-time rates. During periods of ample labor supply, part-time rates are usually lower, but may become equivalent or higher when the labor market is tight because of keen competition for such help. Retail trade establishments and restaurants are among the industries dependent on part-time or temporary help to carry on their normal functions.

PAST PRACTICE. Existing practices in the plant or company, sanctioned by use and acceptance, that are not specifically included in the collective bargaining agreement, except, perhaps, by reference to their continuance.

PAST SERVICE. Under a pension plan, years of employment or credit service prior to the establishment of the plan or a change in the plan’s benefits.

PATTERN BARGAINING. Term applied to follow-the-leader negotiating practices in an industry.

PAY ADJUSTMENT. A general revision of pay raises. The adjustment may be either across-the-board, such as cost of living or COLA increases, or spot adjustments for revisions in prevailing wage rates.




PAY GRADE. One of the classes, levels or groups into which jobs of the same or similar value are grouped for compensation purposes. All jobs in a pay grade have the same pay range: maximum, minimum, and midpoint.

PAY GRADE OVERLAP. The degree to which adjacent pay grades in a structure overlap. Numerically, the percentage overlap between two adjacent pay grades.


PAY-IN-LIEU-OF NOTICE. Where employers are required to provide advance notice of layoff and fail to do so, agreements often require the employer to pay workers for the full notice period as a penalty.

PAYMENT BY RESULT. Refers to any method of wage payment where the amount of the wage depends upon the amount of output. The term applies to straight piece- work or other types of incentive systems. The production to which wages are related may be the output of an individual worker or the output of a group of workers.


PAY PLAN. A schedule of pay rates or ranges and a list showing the assignments of each class in the classification plan to one of the rates or ranges. May extend to rules of administration and the benefit package.


PAYROLL DEDUCTION. A deduction from an employee’s gross earnings made by the employer for social security, unemployment insurance, federal income tax, local government payroll tax, union dues, special union assessments, group insurance premiums, savings plans, etc.

PAYROLL PERIOD. The established frequency with which workers are paid in a particular industry, regard less of the time to which the rate applies.

PAYROLL TAX. Taxes levied by the government and paid by employers, employees, or both, creating funds from which employees receive retirement, unemployment, or other benefits. Also may refer to employer contributions, based on fixed percentages of total payroll, to union or other private health and welfare and vacation funds, and to payroll taxes levied by cities.

PAY STEPS. The levels within a pay range.

PAY STRUCTURE. A tabulation of wage scales for groupings or various jobs. May be applied to arrangement of wage levels or adjustments within a given job or compensation category.

PAY SURVEY. The gathering of data on wages and salaries paid by other employers for selected key classes of jobs or benchmark jobs.

PAY TREND LINE. A line fitted to a scatter plot that treats pay as a function of job values. The most common technique for fitting a pay trend line is regression analysis.

PEG POINT. An occupational rate for a key unskilled, semiskilled, or skilled job establishing differentials within the wage structure. The term first used by the National War Labor Board in its decisions on wages in the cotton textile industry in 1945 (see 21 W.L.B.882) and thereafter applied to the wage structure through collective bargaining.

PEL. Paid education leave.

PENALTY RATE. An extra rate which is paid for hazardous jobs, late-shift work, or for overtime. (See PREMIUM RATE OF PAY.)

PENSION. The amount of money usually paid at regular intervals to an employee who is retired from a company and is eligible under a pension plan to receive such benefits.

PENSION ADMINISTRATOR. As defined by the Employment Retirement Income Security Act (ERISA) of 1974, the person or organization (frequently the sponsor) designated by the terms of the instrument under which a pension or welfare plan operates. Also called plan administrator.

PENSION BENEFIT GUARANTEE CORPORATION (PBGC). A Federal corporation set up in the Labor Department, similar to the Federal Deposit Insurance Corporation (FDIC) which guarantees vested pensions (defined benefits). Insurance premiums are paid by employers with covered pension programs.

PENSION LIABILITY. The financial liability assumed by an organization in the administration of a pension plan. Under the Employee Retirement Income Security Act (ERISA), organizations cannot abandon pension plans without conforming to specific government regulations and, therefore, have a definite financial liability.

PENSION PARACHUTE. A special arrangement in certain pension plans that allows excess money in the plan to accrue to the beneficiaries and paid to said beneficiaries when an unfriendly takeover of a company becomes imminent.

PENSION PLAN. Any plan whose primary purpose is to provide regular payments for a determined period of time, usually life, to employees upon retirement. Additional benefits are often provided. The term private pension plans is often used to distinguish voluntary plans from the social security system. If the employee shares in the cost, the plan is contributory; if the cost is borne entirely by the employer, the plan is noncontributory.

 PENSION TRUST FUND. A fund consisting of money contributed by the employer and, in some cases, the employee to provide pension benefits. Contributions are paid to a trustee who invests the money, collects the interests and earnings, and disperses the benefits under the terms of the plan and trust agreement.

PER CAPITA TAX. Regular payments made on the basis of a paid-up membership count by a local union to its national organization, or by a national union to a federation, to finance the activities of the parent organization. Amount usually set by union constitution.

PERCENTAGE INCREASE. The percent increase of wage or salary rates from the original rate as opposed to a dollar increase added to wage and salary rates.

PERFORMANCE. The degree with which an employee applied skill and effort to an operation or task as measured against an established standard. Standard time divided by actual time expressed as a percentage.

PERFORMANCE APPRAISAL. Supervisory or peer analysis of work performance. May be made in connection with wage and salary review, promotion, transfer, or employee training.

PERFORMANCE EFFICIENCY. A measure of work performance determined by comparing actual work done with the standard amount of work for this job determined as “normal.”

PERFORMANCE RATING. Observation of worker performance to determine productivity in terms of standard or normal.

PERFORMANCE RATING FACTOR. The ratio of a standard performance time to an actual performance time, usually expressed as a percentage.

PERFORMANCE RATING SCALE. Correlation of performance with a numerical index usually designating standard or normal performance as 100.


PERFORMANCE STANDARDS. Task or behavioral standards established as goals to be achieved by an employee and providing the basis for performance appraisal.

PERK (PERQUISITE). Employer-paid benefits or expenses of employees extending beyond normal fringe benefits and paid compensation. (See also PERQUISITE)

PERIOD CERTAIN OPTION. Provision in a pension plan under which the pensioner may elect to receive a reduced benefit for life, on the condition that if he dies before receiving a specified number of payments the balance is continued to the beneficiary. A guarantee of a specified number of payments may be a standard plan provision, in which case it is called a payment certain guarantee.

PERMANENT AND TOTAL DISABILITY. Inability of a worker to perform any job owing to physical or mental impairment which is expected to be of long- continued and indefinite duration. The existence of the impairment must be certified by a physician, under the Social Security Act and most private pension plans, in order to qualify for benefits. Mental disabilities may be excluded by some pension plans.

PERMANENT ARBITRATOR. An arbitrator who is selected to serve under the terms of a collective bargaining agreement for a specified period of time or for the life of the contract. The duties of the permanent arbitrator are defined in the contract.

PERMANENT PART TIME. Fixed arrangements for regular employees to work fewer than five days per week or forty hours per week.

PERMANENT PIECE RATE. A rate established for a piece- work job calculated to yield an appropriate level of earnings and based, generally, on experience with trial rates for the job assignment; such rates are expected to persist until basic conditions change.


PERMIT CARD. Card issued by a union to a nonmember which permits the recipient to accept or retain employment on a temporary basis in a union shop or on a union job. Also known as work permit.

PERQUISITE. Relates to the furnishing by employers of food, lodging and other payments in kind to workers in addition to monetary compensation thus, waitresses are generally allowed a certain number of meals, depending upon the length of shift; board and lodging are usually supplied to workers in lumber camps and in some cases to farm labor. Often called perks. (See EMPLOYEE SERVICES AND PERQUISITES, PERK)

PERSONAL LEAVE. Excused leave for reasons important to the individual worker, but not otherwise provided for, e.g., getting married. May be included as part of vacation allowance.


PERSONAL TIME. An allowance usually included in a work standard as a percentage to provide time for the personal needs of the worker during the workday.


PHANTOM STOCK, ALSO CALLED “SHADOW STOCK”.  An involved financial compensation technique in which a company buys stock for a particular employee without the use of that employee’s name and at an agreed upon time turns the proceeds or the stock itself over to the employee or an amount equal to the worth of the transactions if the company elected not to actually purchase the stock. Either way, the name of the employee is not involved in the transactions until payment is made. A form of deferred compensation.

PHANTOM STOCK PLANS. The actual programs or procedures used to execute the purchase of phantom stocks.

PHYSICAL ABILITIES TEST. Tests used to measure the physical suitability of job applicants to determine whether the applicant can fulfill the established performance standards.

PHYSICAL WORK ENVIRONMENT. Composed of the building, chairs, equipment, machines, lights, noise, heat, chemicals, toxins and other factors associated with occupational accidents, diseases, fatigue, physical or psychological stress, and the consequent loss of productivity.

PICKETING. Patrolling near employer’s place of business by union members (pickets) to publicize the existence of a labor dispute, persuade workers to join the union or the strike, discourage customers from buying or using employer’s goods or service, etc. 1.) Informational picketing. Picketing directed toward advising the public that an employer does not employ members of, or have a contract with, a union.  2.) Organization picketing. Picketing carried on for the purpose of persuading employees to join the union or authorize the union to represent them.  3.) Recognitional picketing. Picketing to compel the employer to recognize the union as the exclusive bargaining agent for employees.

PIECE RATE. Under an incentive wage system, the predetermined amount paid to a worker for each unit of output. Rates may be based on individual or group output. (See INCENTIVE RATE.)

PIECE RATE PLAN. A method of wage payment based on piece rates. (See PIECEWORK RATE.)


PIECEWORK. Production for which payment is based on rates per unit of output. Method of wage payment based on the number of units produced, or any work for which piece rates are paid.

PIECEWORK EARNINGS. Wages received for work produced while on piece rate assignment.

PIECEWORK PLAN. A method of wage payment based upon a set amount of pay earned for each unit of production. (See PIECE RATE PLAN.)

PIECEWORK RATE. A set amount of pay for a unit of production or worker output.

PIECEWORK WITHOUT BASE GUARANTEE. A piece work pay arrangement wherein the amount of pay strictly reflects the amount of production or output with the extreme of no pay for no production.

PINK COLLAR WORKER. Term used to identify the influx of women to the industrial work force. Clearly, a “pink collar” can be “white” or “blue.” (See BLUE COLLAR WORKERS, WHITE COLLAR WORKER.)

PLANT CLOSING ACT (1988). Requires 60 days notice of plant or office closing for employers with more than 100 employees.

P.M.  An incentive payment to sales personnel in retail trade to push and sell items on which the margin of profit is large, to dispose of slow moving items, or to clean out old stock. Also referred to as premium money, push money.

POINT. An increment of value applied to a job factor when measured in connection with a point factor job evaluation plan.




PORTABILITY. A pension plan feature that allows participants to change employers without changing the source from which benefits (for both past and future accruals) are to be paid.

PORTAL-TO-PORTAL. (1) Payment for travel to and from a work-site from the point at which an employee enters the plant or arrives at the place of employment. (2) Payment for travel time from a point of entry to the job site and return.

POSITION. A job or work classification. A collection of related tasks, duties, responsibilities, and authority.

POSITION CLASS. A group designation for various positions based normally on compensation rate and job duties, but which may reflect other considerations (i.e., exempt or non-exempt).


POSITION GUIDE. A position description usually expanded to encompass a definition of working relation ships with other individuals or groups, general responsibilities and overall aspects of working procedure.


POTENTIAL EARNINGS. Projected level of compensation reasonably expected from a high level of performance.

POWER. A person’s control in a relationship is the capacity to influence others in that relationship.

PREFERENTIAL HIRING. Agreed-upon arrangement whereby the employer gives preference in hiring to union members, to applicants with previous training and experience in the industry, to workers displaced from another plant or from another part of a particular plant, or by order of the National Labor Relations Board to “employees found to be discriminatorily discharged.”

PREMIUM. (1) Payment over and above a regular job rate for various reasons such as production performance above standard, or for working overtime or on other than regular shifts. (2) Compensation at greater than regular rate. Usually directly based on the hourly rate time during which work is performed or quantity of work produced as opposed to bonus.



PREMIUM RATE OF PAY. An extra rate paid for overtime, work on late shifts, holidays and Sunday work, or for work in particularly dangerous or unpleasant occupations. The term is also used in reference to extra rates paid to employees, usually because of exceptional ability or skill in the occupation. (See OVERTIME PREMIUM PAY, PENALTY RATE, SKILL DIFFERENTIAL.)


PREVAILING RATE. Typically, the predominant or more common rate paid to a group of workers, usually with reference to specific occupations in an industry or labor market area. In actual application, the term “prevailing rate” is used in a variety of ways. Some of the variations arise from differences in the concept of the geographic unit or industry that is pertinent to a particular situation. Also called prevailing wage. In some situations, notably locality wage surveys, measures of prevailing rates relate to the arithmetic mean, or to the median. In view of these variations, the use of the term “prevailing rate” requires specific mention of the area, occupation, industry, rate, and type of quantitative measure involved to have definite meaning.

PREVAILING WAGE LAW. Federal act requiring the payment of prevailing wage rates in the locality on construction, alteration, or repair of public works performed under contract with the federal government, e.g., Davis-Bacon Act (1931) amended in 1964 to include certain payments for fringe benefits as part of the prevailing rate.

PREVENTIVE MEDIATION. A function of the Federal Mediation and Conciliation Service involving the development of procedures by union and management designed to anticipate and to study potential problems. This may take the form of early entry into labor disputes before a strike threatens.

PRICE LIST. A listing of piece prices or rates to be paid by a company or a group of companies making similar products. In unionized establishments, price lists are established typically upon agreement between the union and the employer.

PRIVACY RIGHTS. The Privacy Act of 1974, applies to federal agencies, and its purpose is to protect all individuals from unauthorized disclosure of personal information by government employees. The Act protects an employee’s right on the job through the establishment of rules for the confidential verification of references in selection and employment decisions.

PROBATIONARY PERIOD. Usually a stipulated period of time during which a newly hired employee is on trial prior to establishing seniority or otherwise becoming a regular employee. Sometimes used in relation to discipline, e.g., a period during which a regular employee, guilty of misbehavior, is on trial. Usually 60 or 90 days.

PROBATIONARY RATE. The rate of pay for a new employee during the trial period of employment. The probationary rate is usually lower than the minimum rate for that job. May apply to other employees on new assignments or new plants. (See ENTRANCE RATE.)

PRODUCTION. The generation of goods and services.

PRODUCTION BONUS. A bonus payment directly related to the output of an individual worker or group of workers. Usually paid for production in excess of quota or for the completion of a job in less than standard time. The bonus may be a flat amount paid for all production above standard, or it may increase in various proportions as production increases. May be non-monetary such as time off. (See BONUS, INCENTIVE PAY, NON-PRODUCTION BONUS.)

PRODUCTION RATE. The unit volume of output during a set time unit such as x pieces per hour.

PRODUCTION STANDARDS. Usually, expected output of a worker or group of workers, consistent with the quality of workmanship, efficiency of operations, and the reasonable working capacities of normal operators. An expectation of output for a worker used as a base to evaluate performance, production rate, and/or pay.

PRODUCTION WORKERS. Usually, employees directly involved in manufacturing or operational processes, as distinguished from supervisory, sales, executive, and office employees. The term “production and related workers” as used in federal government statistics is usually specifically defined for survey purposes.

PRODUCTIVE LABOR. Term sometimes applied to direct labor.

PRODUCTIVE TIME. Period when worker is performing assigned task. Sometimes called “up time” as opposed to “down time” when work is delayed.

PRODUCTIVITY. The relationship between the amount or volume of output or service provided and the resources contributing to the actual production of the output or services. The ratio of output to total input; each of these may be measured in physical terms or in financial terms. The ratio of actual production to standard production-applicable to either an individual worker or group of workers. Units per manhour or manhours per unit.

PRODUCTIVITY BARGAINING. Negotiation of contractual obligations to increase productivity expressed in a collective bargaining agreement in exchange for increases in employee compensation or benefits. May have form of givebacks (q.v.).


PRODUCTIVITY GAINSHARING (PGS). A plan based on an identification by the employees with the goals of the enterprise, b) involvement of the employees in developing and administering the plan, c) equity in the distribution of the future gains between the employees and the company, and d) managerial competence in the direction and control of the business. The plan involves developing an adequate measure of overall productivity, computing changes in productivity levels, and distributing the financial gains to all participants. (See GAINSHARING, RUCKER PLAN, SCANLON PLAN.)

PRODUCTIVITY MEASUEMENT.  A gauge of  productivity using real or physical volume factors used for promoting productivity and making budget and long-tgerm projections..

PROFIT SHARING. Any procedure in which employees receive in addition to their regular pay or wages, a share of the profits of the business. A disbursement of business profits paid in addition to regular compensation usually based on a specific formula and in recognition of employee contributions to improved business performance.

PROFIT SHARING PLAN. The plan and/or procedures governing the distribution of a portion of an organization’s profit to employees. The plan may be based on a single factor, such as a percentage of the profits, or on multiple factors such as profit, length of service, or position. Different amounts may be distributed among different groups of employees such as hourly, salaried non- exempt, exempt, and executive.  Deferred profit sharing plan. Share of profits set aside in a fund to be distributed at some later date, usually when the employee retires (a form of retirement plan).

PROFIT SHARING TRUST. In a deferred profit sharing plan, the money due employees under a given formula is invested via a trust fund and the income and principle is distributed to the employees at time of separation. The investment vehicle is referred to as a profit sharing trust.

PROGRESSION. Movement to a higher level of work or to a higher level of pay in same grade. (See LINE OF PROGRESSION.)


PROGRESSION SYSTEM. Wage progression.

PROMOTION. The assignment of an employee to a job in a higher job classification or pay grade.

PROMOTIONAL PAY. (1) Additional payment usually in the form of a bonus for stimulating sales or for accomplishing specific sales program objectives aimed at increasing sales performance. (2) An increase in base wages as a result of work performance or contracted obligation.

PROMOTION INCREASE. An increase in a salary or wage rate accrues to a person because of a promotion to a higher level job.

PROTECTED EMPLOYEES. Protected status for union employees who have been rendered excess or redundant as a result of contractual specified occurrences such as productivity improvements, certain volume reductions et al. Employees in this status are not laid-off and may be redeployed, with full pay and benefits, to non-traditional activities including community work. (This protective status varies with each company.)

PROTEST PRICE. In some industries, notably pottery and women’s dresses, piece rates on new work are determined on the basis of previously developed time elements. A worker may not be able to earn an appropriate amount under such estimated time allowances and piece rates. If he/she does not earn enough, he/she enters a protest but continues to work at these rates until a review is made and new rates are set. Any adjustment in rates is usually retroactive to the time of protest, or the time the worker was started on the new work.

PURCHASING POWER. Measure of level of compensation in terms of equivalent goods and services for which compensation may be exchanged at current market prices.

PUSH MONEY. An incentive payment for certain types of employees. (See P.M.)

PYRAMIDING. (1) Double payment of overtime rates for overtime work which may result from paying both daily and weekly overtime rates for same hours of work; sometimes applied to any premium added to another premium rate. (2) Multiple pay premium resulting in increased earnings.

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