Role of Compensation

Essay by jamiesondaUniversity, Bachelor'sA-, September 2006

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The Industrial revolution brought many new social changes and a need for a fair and equitable system of worker's compensation. Workers are no longer paid with salt as payment in exchange for labor performed as was done to pay the soldiers in Rome. Workers now require an exchange of money for their time and labor and compensation if they are injured on the job.

Role of Compensation

Compensation takes the forms of wages and benefits. The pay structure consists of:

wages which are a monetary payment for services performed on an hourly basis for specified quality of labor (blue-collar worker) either an employee or employer (working for someone else). Wage rate is usually the main monetary concern discussed between the worker and the potential employer when negotiating employment or an employment contract.

Salary is often interchanged with the word wage, but salary is usually governed by an employment contract for a fixed period of time such as a week, month, or per year that requires the employee to possess special training or abilities associated to that particular job position (usually referred to as a white-collar worker).

Employee Benefits are offered from many companies to attract, retrain, improve morale and promote employee productivity. Benefits are usually offered in addition to general wages in a wide variety from company to company in the form of, but are not limited to, paid holidays, vacations, health insurance, dental plans, sick leave, pensions, and 401(k) that are not based on the employee's performance. (Mosely, Pietri, and Megginson, 1995).

"Show Me the Money!" Cuba Gooding Jr. demanded in his Oscar winning performance in the movie Jerry McGuire. Workers soon began using this line all across the United States. "Show me the money," they asked of their employers. Show me the money, and I'll improve...