Compensation And Benefits

Essay by PaperNerd ContributorUniversity, Master's August 2001

download word file, 14 pages 3.0

Compensation takes many forms. Total compensation is comprised of three components. These are base compensation, pay incentives and benefits. The first two components comprise of direct compensation, which is the largest component and is an important motivator. However, money is not the only motivator. Indirect compensation is the other component and it takes two forms. These are benefits and employee services. These can also play and important role in building the relationships between employees and employers. Benefits remain crucial to attracting, retraining and motivating employees. The Royal Bank of Canada is a diversified financial service company with over 54,000 people who serve 10 million personal, business and public sector customers in North America and some 30 countries around the worldwide.(1) *?. We will be discussing, analyzing and critiquing Royal Bank's current Human Resources practices from a customer service representative perspective for compensation and benefits and how they support their overall business strategies, as well as how they also compare to standard employee compensation in Canada.

Most employers provide their employees with benefits such as medical and dental benefits, life insurance or disability benefits. Benefits now constitute approximately 30 percent of all compensation costs. (Gomez-Mejia and et al p.377). Controlling the costs of employee benefit plans continues to be a primary objective of many employers. Organizations realize that they need to properly manage these costs. However, ensuring a adequate level of benefits, an effective partnership between all stakeholders, including the carrier, benefits consultants, medical community, the employee and the organization is also required.

There are many reasons why employee benefit programs are provided. These are outlined by Raymond Koskie and et al (1995). They are: 1. The paternalism of employers- the concern that any employer will feel for the well-being of its employee, 2. Economics of scale- the extent to which...