DESIGNING OF TYPES FOR COMPENSATION

BYSYED MINHAJ UR REHMAN

• Human Resource is the most vital resource for any organization.

• It is responsible for each and every decision taken, each and every work done and each and every result.

• Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standards.

• The good compensation will also serve the need for attracting and retaining the best employees.

• Compensation Management is designing and implementing total compensation package with a systematic approach to providing value to employees in exchange for work performance,

• Compensation is a systematic approach to providing monetary value to employees in exchange for work performed.

• Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction

• To recruit & retain qualified employees.

• To increase or maintain morale.

• To determine basic wage & salary.

• To reward for job performance.

• Direct Compensation

• Indirect Compensation

• Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization.

• The monetary benefits include basic salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular interval at a definite time.

• Indirect compensation refers to non-monetary benefits offered and provided to employees in lieu of the services provided by them to the organization.

• They include Leave Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday Homes

• Wage & salary.

• Base pay

• Merit pay

• Fringe benefits

• Perquisites

Different types of compensation include:

•Base Pay •Commissions •Overtime Pay •Bonuses, Profit Sharing, Merit Pay •Stock Options •Travel/Meal/Housing Allowance •Benefits including: dental, insurance, medical, vacation, leaves, retirement

• The design process is started by identifying desired outcomes and goals for your organization. This is often referred to as developing your compensation philosophy. Your philosophy is formed by considering a number of factors. The balance of direct and indirect rewards, the complexity and responsibility of a role and the candidate or employee filling it, as well as your focus on internal versus external equity are just few factors explored in this section. It is the ability to achieve results that is critical to organizational success.