Compensation & Benefits.
Compensation and benefits refers to the compensation/salary and other
monetary and non-monetary benefits passed on by a firm to its
employees. Compensation and benefits is an important aspect of HRM as it
helps to keep the workforce motivated. It helps give benefits to employees
based on their performance and actions and brings the best out the employees at
workplace.
Compensation and benefits
components.
There can be
several ways where benefits can be given to employees. Mostly it is given in
terms of a CTC or gross salary. Some of the various components of compensation
and benefits are mentioned below:
1. Fixed pay:
This is the basic
salary paid to the employee irrespective of any other factor. This is stated
clearly in the employment contract. This is the compensation or salary or wage
which an employee or a worker will definitely get as long as he or she is an
employee of the company.
2. Variable Pay:
This is the additional compensation paid to employee based
on employee’s performance, company performance etc. Since variable pay is based
on the performance of an individual, it motivates the employees to perform even
better.
3. Equity Pay:
Employees are awarded
shares of the company, often at a discounted price. Employees are expected to
make money out of them by the appreciation of the stock price and the growth of
the company. This is mostly given to the senior management who have served the
company for a long time.
Difference between compensation and benefits
Both the factors are important in motivating employees for doing their work and paying them for the services they are doing for the company. However, there is a slight difference between compensation and benefits. Compensation is completely related to the money which is being paid to an employee i.e. salary. bonuses etc. On the other hand, benefits are the non-monetary incentives given to employees like health benefits for which the employee doesn't have to pay.
7 Comments
Compensation and benefits is an important aspect of HRM as it helps to keep the workforce motivated.
ReplyDeleteYes.
DeleteThis is main and important aspect to motivate the employees. Are u agree with me?
ReplyDeleteYes , I am agreed. Apart from that employee motivation are effectively contribute to organization to achieving objectives.
DeleteThe more the compensation and benefits are proffered to employees, the more employee's loyalty, motivation to perform the work. Nevertheless, increased attrition rate and less productivity can be observed from the organizations that offer less salaries.
ReplyDeleteYes , That will be happen. Most of the time Compensation and benefits has offed to the employees based on their performances.
DeleteCompensation and benefits is an important aspect of HRM as it helps to keep the workforce motivated
ReplyDeleteIs it work?