Image Guidelines 4. It includes all other monetary incentives paid to employees for performance results. A particular amount is paid as washing allowance to certain categories of employees and they are expected to keep themselves clean. These benefits include both financial and non-financial benefits. 6. modify (through negotiations) practices of unions. Compensation is the combination of salaries, wages and benefits that employees receive in exchange for them doing a particular job. Benefits on the other hand are other than such payments, also given to the employee in recognition of his/her contribution. There are minimum standards set via federal labor laws that employers are required to follow; state laws expand this protection in some cases. It can be fixed percentage on the basic wage paid annually or in proportion to the profitability. Terms of Service 7. It needs to be remembered that the HRA or the House Rental Allowance is determined by a mix of factors that includes the location of the employee and governmental policies along with the grade of the employee. When the company is doing well then it gives option to employees to purchase shares on some discount. There is also a bonus plan which compensates the Managers and employees based on the sales revenue or Profit margin achieved. where houses are not available at a reasonable rent. The employers get their employees insured under various types of social security schemes. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Employers are required by many states to pay the state minimum wage, which when compared to the federal wage, is a little more per hour. However again proofs of travel expenses must be collected by the company from the employees. Health insurance offers great value to the employees and saves them money since it is employer-sponsored. These could include group health care coverage, retirement contributions, and short-term disability insurance. It is important to understand the laws of the land and taxation policy to understand the components of compensation and compensation strategies. The idea here is to discourage silo based performance and instead concentrate on all round performance. The company tweaked the benefit slightly to include the employee’s parents as well. Thus an element of risk is involved. However there are organizations where a few employees are required to work more in nightshifts and rotations are not possible. HRA limits are fixed by the government and are uniformly applicable. If we take a look at the components of a compensation system, we find that employers decide on what is the right compensation after taking into account the following points. Both individual incentives and group incentives are used. Depending upon the targets achieved, companies may pay a commission on a monthly or periodical basis. In case of EPS and EDLI contributions are generally made fully by the employer. They include such allowances as company car, club membership, paid holidays, furnished residential bungalows, stock option schemes, foreign travel benefits etc. Rewards & Recognition 5. Some companies are becoming more creative with adding extra perks, such as weekly visits from a masseuse or an onsite barista. Employees who neither have got a residence in the housing colony nor at any nearby places, commutes everyday distance by various means while coming to work place. It continues to evolve as part of a system of all the combined rewards that employers offer to employees. Provident Fund contributions are determined in India by the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Benefits 4. Along with a competitive wage or salary, additional benefits are usually provided. ESOPs worked well when stock prices were rising continuously. A common practice for employers is to offer a 401(k) plan since it is less expensive than regular pension plans and fairly easy to administer. So whatever is the stock price the employee ends-up making some money. It can include an annual salary or hourly wages combined with bonus payments, benefits, and incentives. They also differ from employee to employee depending upon the nature of the job, seniority and merit. Then the employee actually gets only 1000 × 10 = 10000/- rupees only. Compensation may be used to: 1. recruit and retain qualified employees.
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