John earns $45,200 per year as a mechanic in your organization. The $42,500 per year does not include earnings John may have through shift differentials, benefits, overtime, incentives, and bonuses…

Base pay refers to the core fixed compensation an employee earns for performing their job, not contingent on performance, hours, or additional factors. The $45,200 figure is explicitly the guaranteed salary amount before any variable elements are added. This is distinct from total compensation, which would include all the excluded items like shift differentials, bonuses, and overtime.

Market-demand pay refers to compensation rates set according to labor market supply and demand for a skill or role, not a fixed salary classification.

Hygiene factor is a term from Herzberg's Two-Factor Theory describing conditions that prevent job dissatisfaction, not a compensation pay category.

Variable pay is compensation that fluctuates based on performance, hours, or other conditions - it describes exactly the shift differentials, overtime, and bonuses that were excluded from the $45,200 figure.