Hello Friends, I have some information about Compensation, its type & need. So please read it:

Concept

Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. It includes-

• Base pay

• Variable pay

• Benefits

Objectives

Attract talent

Retain talent

Ensure equity

Desired behaviours: Reward appropriately - loyalty, commitment, experience, risk taking, etc.

Control costs

Comply with legal rules

Factors Influencing Compensation Levels:

some fatcors which can affect the compensation :

• Job Needs

• Organization’s Ability to Pay

• Prevailing Market Rate

• Supply & Demand of Labour

• Productivity

• Trade Union’s Bargaining Power

• Government Regulation

Components of Compensation Plan :

The main components of compensation plan are:

• Wage & Salary

• Incentives

• Fringe Benefits

• Perquisites

• Non – Financial

Wage & Salary Administration :

• W&S Administration refers to the establishment and implementation of sound policies and practices of employee compensation (base & supplementary)

Incentives:

• Incentives are monetary benefits paid to employees in recognition of their outstanding performance.

Fringe Benefits:

• Refers to the extra benefits provided to the employees in addition to the normal compensation paid in the form of wages & salaries.

Need:

• It can be the Employees Demands

• Trade Union Demands

• Compensation can improve human relations

• it can be used as a social security

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