Compensation & Benefits
“Compensation and benefits refer to the compensation/salary and other monetary and non-monetary benefits passed on by a firm to its employees in return for their services. Compensation and benefits are an important aspect of HRM as it helps to keep the workforce motivated and are the most important hygiene factors. It helps give benefits to employees based on their performance and actions and brings the best out of the”
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access on 9th Dec 2022.
Compensation
“Would the three salespersons and the receptionist work for free? No. They
would, like us all, expect something in return. You must have heard a common
phrase: Give and Take. You always have to give things to people in return for
what you take from them. Compensation refers to this exchange but in monetary
terms. Compensation is the employer's feedback for an employee's work. It
simply is the monetary value you would give to your four employees in return for
their services.”
In the book Human Resource Management, Gary Des
slyer defines compensation in these words. "Employee
compensation refers to all forms of pay going to employees and arising from
their employment." The phrase 'all forms of pay' in the definition does
not include non-financial benefits, but all the direct and indirect financial
compensations. I shall, inshallah, explain the two terms in my next article
'Parts of Salary'.
Benefits:
“Employees today are not
willing to work only for the cash alone, they expect 'extra'. This extra is
known as employee benefits. Also known as fringe benefits, Employee benefits
are a non-financial form of compensation offered in addition to cash salary to
enrich workers’ lives.
What benefits would you offer to your employees at my Wear? Of course, you
would provide different benefits to the salespersons and the receptionist.
Problems will arise when you decide what benefit to give to whom and on
which basis? Employee benefits are not performance-based, they are
membership-based. Workers receive benefits regardless of their performance.
Employee benefits as a whole have no direct effect on employee performance;
however, inadequate benefits do contribute to low satisfaction levels and
increase absenteeism and turnover in employees (DeCenzo and Robbins; 2007). So
you would have to carefully design your benefits package. Your package may
include a cell phone for each worker, taking them to a training workshop or
seminar, giving them a day or two off every month, and so on. While deciding on
the benefits package, do consider the associated costs.”
“Remuneration is one of the main expenses in a company because
salaries are expensive. Payroll contributions are very high and make
it difficult for employees to increase their salaries. Compensation and
benefits managers, therefore, need to closely examine all the compensation
schemes available to take advantage of those that benefit from tax deductions
and attract talent.”
compensation & benefit was directly involved in employee
performance & engagement.
[online]
linkedin compensation-benefits-definition-importance
[available
from] https://www.linkedin.com/pulse/compensation-benefits-definition-importance-ahmed-abdul-qader/ access on 5th Dec 2022
[online] mbaskool Compensation & Benefits - Meaning,
Importance, Types, Components & Example | MBA Skool [available from] https://www.mbaskool.com/business-concepts/human-resources-hr-terms/4032-compensation-a-benefits.html
access on 5th Dec 2022
[online]
primeum compensation-benefits-definition-importance [available
from] https://www.primeum.com/en/blog/why-compensation-and-benefits-managers-are-increasingly-in-demand-in-companies
access on 9th Dec 2022
Yes Ajitha, remuneration will not only motivate employees . There should be more benefits including non monetary benefits as well. For organization to gain competitive advantage over employee retention and motivating, special benefits package should be exist for its employees .
ReplyDeleteCompensation and benefits play big role to retain the employees with in the organisation. And aslo reduce the staff turnover.
ReplyDeleteYes ajitha,this is very efficient way to increase performance of employees.the adjustment Of compensation and benifit can assist to retain employees well within the organization.
ReplyDelete