Question

How dose compensation and the benefits impact an organization and there employees?

Why is it important for business professionals to be knowledgeable about the topic of compensation and benefits?

Answer 1

Compensation and Benefits (C&B) is a sub-discipline of HR that focuses on employee compensation and benefits policies. Although the remuneration and benefits are tangible, there are intangible rewards such as recognition, professional life and development. In combination, they are referred to as collective rewards. "Compensation and benefits" refer to discipline as well as rewards.

Compensation and employee compensation are divided into four broad categories:

1. Settlement Guarantee - The fixed cash reward (in cash) provided by the employer to the employee. The general form of guaranteed salaries is the base salary. Guaranteed payments also include cash allowances (housing assistance, transportation allowance, etc.), differentials (differential shifts, holiday differences) and premiums (night shifts, etc.).

2. Variable Wages - Fixed cash rewards (net cash) given to an employer depending on the decision, outcome, or result. The most common forms of variable pay are bonuses and incentives.

3. Benefits - Programs that employers use to supplement employee benefits such as paid leave, health insurance, car insurance, companies and others.

4. Equity-based compensation - share programs or shareholdings that employers use to secure tangible ownership in the company that links employees' compensation to the long-term success of the company. The most common example is stock options.

Employee benefits include different types of salaries that are not offered to employees in addition to their regular salaries or wages. In the event that an employee changes salary for other forms of compensation, it is called "salary packaging" or "salary change." In most countries, most types of employee benefits are subject to at least some taxes. Examples of these benefits include: housing (provided by the employer or paid by the employer) equipped or not, with or without free appliances. Group insurance; Disability income protection, retirement benefits, school; Training rehabilitation; Sick leave; Outstanding (paid and unpaid); Social security; Distribution of student loans, employer loans; Real estate; Domestic helpers (servants); And other specialized qualifications.

The purpose of employee benefits is to improve the economic security of employees and thus improve employee retention throughout the organization. So it is one of the components of award management.