Reward of Your Work : Compensation
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 :
• 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
Keep reading...
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