Q. Show basic Components of compensation ?
Components of compensation / remuneration: to be specific, typical remuneration of an employee comprises:
1. Wages and salary: wages represents hourly rates of pay, and salary refers to the monthly rate of pay, irrespective of the number of hours put in by an employee. Wages and salaries are subject to annual increments. They differ from employee to employee, and depend upon the native of job, seniority and merits.
2. Incentives: also called payments by results incentives are paid in addition to wages and salaries. Incentives depend upon productivity, sales, profit, or cost reduction efforts. There are:
Individuals' incentives schemes.
Group incentives programmes. Individual incentives are applicable to specific employee performance. When a given task demands group effort for completion, incentives are paid to the group as a whole. The amount is later divided among group members on the equitable basis.
3. Fringe benefits: these include such employee benefits as provident fund, gravity, medical care, hospitalization, accident relief, and group insurance, canteen, uniform recreation and the like.
4. Perquisites: there are allowed to the executives and include company car, club membership, paid holidays, furnished house, stock option schemes and the like. Perquisites are offered to retain competent executives.
5. Non monetary benefits: these include challenging job responsibilities, recognition of merits, growth prospects, competent supervisors, comfortable working conditions, job sharing and flexible time.