Compensation and Benefits For Employees

 Compensation & Benefits



What are Compensation and Benefits

Compensation is an important part of Human Resource Management since it helps to improve the overall performance and effectiveness of the workers that work for the company.

 

Compensation is the benefit received by an employee in exchange for the service he has delivered to the organization in broad Human Resource terms

 

Compensation and benefits relate to the salary, monetary, and non-monetary benefits that a business provides to its employees at work. It is a major tool used by Human Resource Managers to help individuals reach their full potential at work. In some ways, it works: 'Better remuneration and benefits, better performance and retention!' Compensation and Benefits take care of everything, from internal motivation to increased productivity.

 

Companies with better Compensation and Benefits plans are on the edge of attracting employees from other companies because workers are always looking for better salary structures, compensation, and other benefits, such as health insurance. Everything about the company's work culture and benefit schemes may be discovered on the internet, particularly on Glassdoor. Employee experiences, both monetary and non-monetary, are documented in internet reviews about the organization.



                                                                                                                           Source: www.aihr.com


Compensation and Benefits Goals


In terms of compensation and benefits, the perspectives of the employer and the employees are rather different. Employers prefer to pay the smallest amount possible to save money. Employees, on the other hand, aim to gain as much as possible. As a result, the compensation management objectives are created to address and fulfill the needs of both employers and employees to reach a common point.


The multiple objectives related to Compensation and Benefits are listed below.


1. Keep better control of the organization's outgoing costs.


2. To boost an employee's overall motivation.


3. To raise the overall company's social media ranking in terms of employee motivation and satisfaction.


4. Employee retention for a long period.


5. In exchange for the task performed, payment must match the employees' total needs and expectations.

 


                  


                                                                  Source: http://hrworkitechs.com/


Compensation Types


Compensation might be monetary or non-monetary.


1. Monetary Compensation


It helps companies to ensure that employees are paid fairly and without bias within the company's limits. This sort of pay includes all benefits, including the employee's income as well as health-related benefits.

 

The following are some examples of monetary compensation:

 

- Bonus


- Employee recognition and rewards


- Sales commission


- Profit-sharing, 


-Overtime Payments.


2. Non- monetary Compensation


Employees are indirectly motivated by non-monetary rewards. It does not involve a direct money transfer between the two parties. Instead of receiving financial rewards, employees are provided with a variety of other advantages. It finally gives them a sense of belonging and admiration from the company, which keeps them away from considering resigning.


The following are some examples of non-monetary compensation:


- Promotion opportunities


- Transfer facility


- Providing a Company Car


- Paying House rent 


- Mobile phone reimbursement


- Public recognition



How do compensation and benefits contribute to a company's success?


Several factors go into determining an employee's compensation and benefits package. An HR professional must ensure that their company offers competitive compensation and benefits packages and convey this to current and potential employees.

 

A corporation gains two unique advantages from having defined compensation and benefit criteria.

-able to recruit and keep the top personnel in their field 

- it gives organizations a clear picture of how much compensation and benefits account for their overall operating expenses, allowing them to ensure that revenue is kept at a level that allows them to pay their employees competitively.



                                                                                           Source: www.glassdoor.com



Reference


StartupHR Toolkit. (2021). What is Compensation and Benefits in HRM. [online] Available at: https://www.startuphrtoolkit.com/compensation-and-benefits-in-hrm/. (Accessed on 10.12.2021)

 

Comments

  1. Anuruddha ShanakaDecember 12, 2021 at 10:41 PM

    What is the purpose of compensation and benefits ?

    ReplyDelete
    Replies
    1. Chinthaka KiulgallaDecember 13, 2021 at 12:52 PM


      Simply compensation and benefits programs are designed to attract top talent and retain valued employees with the organization for a longer period.

      Delete
  2. NadeeshDecember 13, 2021 at 9:17 PM

    Any changes to an employee’s compensation, such as a bonus or enrollment in a new benefit, are reflected and updated on their Total Rewards Experience in real-time

    ReplyDelete
  3. Samantha DematawalaDecember 13, 2021 at 9:57 PM

    This comment has been removed by the author.

    ReplyDelete
  4. Samantha DematawalaDecember 14, 2021 at 1:40 AM

    great work

    ReplyDelete
  5. Duminda GunathilakeDecember 15, 2021 at 6:40 PM

    Totally agreed with you .

    ReplyDelete
  6. Udani NissankaDecember 15, 2021 at 8:14 PM

    Really useful article

    ReplyDelete
  7. Nayana AbeysingheDecember 15, 2021 at 10:26 PM

    According to my personal point of view, Compension and benefits plays the main role of motivating an employee, specially in this type of financial catastrophe.





    .

    ReplyDelete
  8. Lasath KarunanayakeDecember 17, 2021 at 1:16 PM

    Interesting post
    Thanks for sharing

    ReplyDelete
  9. Kaushali HerathDecember 18, 2021 at 2:46 PM

    Brown, Sturman and Simmering (2003), also stated that compensation and benefits as human resource management practice is an effective tool for individual and organisational performance management.

    ReplyDelete

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