In HRM class we had an interesting presentation on compensation and benefit. We all are attracted toward this word compensation and benefit. When we think of compensation it comes to money in terms of salary, bonus, leave encashment, incentives etc. Everyone works for compensation. Compensation & Benefits are an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness.
Why compensation management?
· Compensation systems are designed keeping in minds the strategic goals and business objectives.· Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities
How C&B works?
· Compensation provided to employees can directly be in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off, etc.
· Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services
Pay for Performance
Pay for performance is a standard by which managers tie compensation to employee effort and performance. The term “pay for performance” refers to a wide range of compensation options, including merit based pay, bonuses, salary commissions, job and pay banding, team incentive and various gain sharing programs.
Components of Direct Compensation
· HRA· LTA
· Medical reimbursement
· Telephone bill reimbursement
· Bonus
· Special allowance
· Shift allowance
· Conveyance
