IntroductionWhen it comes to employee compensation, most managers are busy asking: "What do I have to pay toÃ¢ÂÂ¦?" That is not an easy question to answer. A better question might be: "What do I want my compensation package to say?"Compensation package of the organization says it all like the child care and health benefits say that the company values family. Giving longevity bonuses for employees on the anniversaries of their employment says that the company value employees who stay with the business. Throwing a party at the end of your business's busy season lets the employees and their families know that you appreciate it when your people go the extra mile. No matter what compensation elements the company uses, they all carry a message.
That message is important. Compensation packages can be linked to business structure, employee recruitment, retention, motivation, performance, feedback and satisfaction. Compensation is typically among the first things potential employees consider when looking for employment.
It is important, therefore, to give a lot of consideration to your business's compensation structure. After all, for employees, compensation is the equivalent not to how they are paid but, ultimately, to how they are valued.
TextCompensation StructureA Successful compensation structure, are more like a total rewards system, containing non-monetary, direct and indirect elements. It's important to give a lot of consideration to the business's compensation structure because it ultimately reflects how employees are valued. The compensation program consists of:Direct compensation is an employee's base wage. It can be an annual salary, hourly wage or any performance based pay that an employee receives, such as profit-sharing bonuses.
Indirect Compensation is far more varied, including everything from legally required public protection programs such as Social Security to health insurance, retirement programs, paid leave, child care or housing.
Non-Monetary Compensation can include any benefit...