Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. It may achieve several purposes, such as assisting in recruitment, job performance, and job satisfaction. How is compensation used? Compensation is a tool utilized by management for various purposes to further the existence of the company. It may be adjusted according to the business needs, goals, and available resources. Compensation may be used to:
- Recruit and retain qualified employees.
- Increase or maintain morale/satisfaction.
- Reward and encourage peak performance.
- Achieve internal and external equity.
- Reduce turnover and encourage company loyalty.
- Modify (through negotiations) practices of unions.
What are the components of a compensation system? Compensation will be perceived by employees as fair if based on systematic components. These include Job Descriptions, Job Analysis, Job Evaluation, Pay Structures, Salary Surveys, Policies, and Regulations.
What are different types of compensation? Different types of compensation include:
- Base Pay
- Commissions
- Overtime Pay
- Bonuses, Profit Sharing, Merit Pay
- Stock Options
- Travel/Meal/Housing Allowance
- Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...
What are regulations affecting compensation? The Fair Labor Standards Act (FLSA) is a major regulation affecting compensation.
How do you develop a compensation plan? The development of a compensation plan involves setting an objective for the program, establishing target dates for implementation and completion, determining a budget, and designating an individual to oversee designing the compensation program. Further steps involve developing a compensation philosophy, conducting a job analysis of all positions, evaluating jobs, determining grades, establishing grade pricing and salary range, determining an appropriate salary structure, developing a salary administration policy, getting top executives' approval of the basic salary program, communicating the final program to employees and managers, implementing the program, and monitoring the program.
From India, Pune
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2- Recruit and retain qualified employees.
- Increase or maintain morale/satisfaction.
- Reward and encourage peak performance.
- Achieve internal and external equity.
- Reduce turnover and encourage company loyalty.
- Modify (through negotiations) practices of unions.
What are the components of a compensation system? Compensation will be perceived by employees as fair if based on systematic components. These include Job Descriptions, Job Analysis, Job Evaluation, Pay Structures, Salary Surveys, Policies, and Regulations.
What are different types of compensation? Different types of compensation include:
- Base Pay
- Commissions
- Overtime Pay
- Bonuses, Profit Sharing, Merit Pay
- Stock Options
- Travel/Meal/Housing Allowance
- Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...
What are regulations affecting compensation? The Fair Labor Standards Act (FLSA) is a major regulation affecting compensation.
How do you develop a compensation plan? The development of a compensation plan involves setting an objective for the program, establishing target dates for implementation and completion, determining a budget, and designating an individual to oversee designing the compensation program. Further steps involve developing a compensation philosophy, conducting a job analysis of all positions, evaluating jobs, determining grades, establishing grade pricing and salary range, determining an appropriate salary structure, developing a salary administration policy, getting top executives' approval of the basic salary program, communicating the final program to employees and managers, implementing the program, and monitoring the program.
From India, Pune
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Basics of Compensation Management.pdf
Compensation management.ppt