Components of Compensation paid to Employees Essay -- wages salary inc

A rigorous review of requital and all its components requital is what is paid to an employee, whether in the form of net incomes, salary or incentives by the employer for a particularised enumerate of time, skill and effort made available by the employee in fulfilling specific job requirements (Biesheuval, 1984). salary is important in brass instruments as it conveys information to an employee more or less their relative importance to the organisation and provides a scale to identify how a great deal recognition they are receiving for their contribution (Harley and Stephenson, 1992). Compensation shows employees how much they are comprehended and worth. The most important differentiating element between jobs is the effort involved in performing a job (Biesheuval, 1985). Objectives of pay systems (Harzing and Van Ruysseveld, 1999)Objective How to acquire it.To attract employees Job salaryTo keep qualified employees Bonus or incentive to stay e.g. sharesTo stimulate ef fective performance Payment by resultsTo teach employees new behaviours at twist Multi-skill bonusTo compensate for inconvenient working conditions A separate allowance Monetary and non-monetary compensationCompensation is made up of many parts. Although money (extrinsic compensation) is the most recognised, other factors fuel be just as rewarding. Employee benefits are one image of non-monetary compensation and are intended to improve the quality of work life of an organisations savvy force (Sherman and Bohlander, 1992). These benefits make up a significant portion of the wage bill. Although benefits were initially introduced as a bonus to employees, they have since come to be expected in the workplace (ibid). Employee input is integral in find out the type of non-monetary compensation that is the most desired (ibid). Benefits (Sherman and Bohlander, 1992) Medical aid funds including health and dental plans Pension funds where the employer also contributes a per centage. Employee avail programs where counselling and assistance are provided with day-to-day issues such as life history planning and emotional trauma. Education assistance plans where the employer pays a portion towards besides study. This often benefits the employer as the employee becomes more multi-skilled and efficient at their job. Child and older care ... ...e companys overall scheme before ascertain the compensation structure. The way an organisation uses compensation can drive an organisation in specific directions (Noe et al, 2003). Therefore, great thought should go into deciding what type of compensation structure to use in terms of the whole organisations strategy and the chosen method should contribute to furthering the overall objectives of the organisation (Sherman and Bohlander, 1992). E.g., individual incentives exit not fit into an organisation that wants to further a team-based approach to work (ibid). Compensation sends a message about wha t an organisation feels is important and the types of activities it encourages (Sherman and Bohlander, 1992). Compensation tailoring is an integral method of maintaining the budget (ibid). For this reason, many companies resort to retrenchments in economic downturns (Venter, 2003). An organisations compensation program determines the type of employees that it will attract as well as either increase or decrease the applier pool (Sherman and Bohlander, 1992).2295Works CitedWork Motivation and Compensation By Simon Biesheuvel print 1984 McGraw-Hill ISBN0074507184