What are the four types of compensation?

• Hourly. Hourly wages are often provided to unskilled, semi-skilled, temporary, part-time, or contract workers in exchange for their time and labor. ...
• Salary. ...
• Commission. ...
• Bonuses. ...
• Equity package. ...
• Stock options. ...
• Benefits. ...
• Non-monetary compensation.

• Base Pay.
• Commissions.
• Overtime Pay.
• Bonuses, Profit Sharing, Merit Pay.
• Stock Options.
• Travel/Meal/Housing Allowance.
• Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...

• Salary compensation. This form of compensation is typically offered to employees as a base pay, straight annual sum, without the stipulation of overtime. ...
• Salary & commission compensation. ...
• Hourly compensation. ...
• Bonuses. ...
• Total compensation.

What is an example of indirect compensation?

Examples of an indirect compensation arrangement include offering your employees health insurance, life insurance, or employee stipends (also called fringe benefits). Social Security, sick leave, a retirement plan, and paid time off (PTO) are also examples of indirect compensation.

Which of the following types of compensation includes wages benefits and training?

Direct compensation includes basic wages and performance-based pay. Indirect compensation, including employee services, benefits, training, etc., consists of rewards provided by the organization to employees for their membership and/or participation in the organization.

What are the 3 types of compensation?

What are the three parts of compensation?

Compensation is the combination of salaries, wages and benefits that employees receive in exchange for them doing a particular job. It can include an annual salary or hourly wages combined with bonus payments, benefits, and incentives.

What is the best compensation type?

Salary plus Commission

This is one of the most reliable types of compensation plans. An employee who agrees to this type of compensation will receive a base salary along with an additional bonus if performance hits or exceeds earning goals.

What are the types of compensation given to employee?

What is direct and indirect compensation?

Direct compensation involves monetary payments to employees for time worked or results obtained. Indirect compensation involves expenditures made by an employer on behalf of all employees and is typically referred to as "fringe benefits." Intangible compensation involves non-monetary rewards such as....

What are the elements of compensation?

What are the direct compensation?

Direct compensation refers to wages paid by employers to employees in exchange for work. Compensation also includes variable pay in the form of short- and long-term incentives, such as cash bonuses, commissions and company stock awards.

What are the principles of compensation?

(i) There should be definite plan to ensure that differences in pay for jobs are based upon variations in job requirements, such as skill, effort, responsibility, working conditions, mental and physical requirements.

What is indirect compensation?

Indirect compensation refers to the various forms of non-monetary pay offered to employees, that can include everything from common contractual features to useful, attractive benefits.

What are the three decisions that managers must make to determine compensation and benefits?

A compensation system has three objectives: Efficiency, Fairness (including procedural fairness), and Compliance (with relevant laws). The compensation system must achieve all three objectives simultaneously.

What is cash compensation?

Cash compensation or cash indemnity is a kind of additional payment made to employees dealing with or responsible for cash flow in pay-desk, cashier's office and so on. This payment is intended to compensate the cash deficit that may occur during such employees' transactions.

What are the examples of non-monetary compensation?

What is non-monetary compensation?

Non-monetary compensation is defined as any compensation rewarded to an employee in a non-cash form. On a simple level, that could mean a trip awarded to “Salesperson of the Month,” where the award has a value but is not paid out as additional cash their paycheck.

What is 3p concept of compensation?

3-P compensation concept (Pay for person, Pay for position, Pay for performance)

What are the five important topics for compensation?

What are objectives of compensation?

There are four basic objectives of compensation: focusing your employees efforts, attracting quality employees, retaining top performers, and motivating your employees. These objectives can be referred to with the acronym FARM: focus, attract, retain, motivate.

What is the role of HR in compensation?

Duties are Many, Varied

Keep competitive pay rates current. Ensure that payroll complies with state laws and federal regulations. Oversee pay distribution to employees. Work with managers to develop employee promotion and retention strategies.

What is the importance of compensation?

When employees are adequately compensated, they feel motivated to come to work. Their morale remains high, and their job satisfaction levels increase. High morale ensures that employees are motivated enough to come to work every day and deliver work to the best of their abilities.