By AllBusiness Editors In: In addition to salary, employers must consider many other components — k plans, stock options, bonuses, and vacation — these too have become part of current compensation packages. Employees also have greater expectations of what should be included in their compensation packages, and they may demand specific benefits that can be costly for small businesses. Costly or not, building a fair and attractive compensation package is critical for attracting and retaining employees.
Rather, the absence of these factors makes employees dissatisfied. However, if compensation is found to be lacking, the employee might very well be unhappy and dissatisfied with the company leading to attrition and other such negative outcomes. Hence, having the right compensation is the first step in getting the best of employees.
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. The Job Description of the employee that specifies how much should be paid and the parts of the compensation package.
The Job Description is further made up of responsibilities, functions, duties, location of the job and the other factors like environment etc.
These elements of the job description are taken individually to arrive at the basic compensation along with the other components like benefits, variable pay and bonus. 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.
Hence, it is common to find a minimum level of HRA that is common to all the employees and which increases in proportion to the factors mentioned above. The Job Evaluation that is a system for arriving at the net worth of employees based on comparison with appropriate compensation levels for comparable jobs across the industry as well as within the company.
Factors like Experience, Qualifications, Expertise and Need of the company determine how much the employer is willing to pay for the employee.
It is often the case that employers compare the jobs across the industry and arrive at a particular compensation after taking into account the specific needs of their firm and in this respect salary surveys and research results done by market research firms as to how much different companies in the same industry are paying for similar roles.
The components of compensation that have been discussed above are the base requirements for any HR Manager who is in charge of fixing the compensation for potential employees.
There are other variables as well that would be discussed in subsequent articles. This article has introduced several concepts around the topic of components of compensation and these concepts are crucial for HR professionals as well as those aspiring management professionals who want to make a career in the corporate world.
Hence, all HR professionals and managers must take this aspect into account when they determine the compensation to be paid to employees.The chart below matches the Disability Benefits Questionnaires (DBQs) to medical conditions or symptoms to the corresponding Disability Benefits Questionnaire (DBQs).
PerfectTUNES a helping hand for your audio collection Add or upgrade Album Art, De-Dup and check for ripping errors. How Your Compensation is Determined. As part of its Total Rewards package, the DPS compensation system supports, incentivizes and recognizes your efforts to ensure Every Child Succeeds.
Contacts. The Office of Compensation Levels and Trends, Branch of Survey Information and Publications, will be glad to assist you with questions about any of the components of the National Compensation Survey. The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than million California public employees, retirees, and their families".
In fiscal year –13, CalPERS paid over $ billion in retirement benefits, and in fiscal year it is estimated that CalPERS will pay over $ A compensation system that is performance-based encourages employees with rewards and goals that are objective and measurable.
Make sure managers are .