Compensation and Benefit

Employee Compensation

Compensation is a payment to an employee in return for their contribution to the organization. Compensation includes topics in regard to wage, salary and tips programs and structures. For example, merit-based programs, bonus-based programs, commission-based programs and so on. It is usually provided as base pay and/or variable pay. Base pay is based on the role in the organization and the market for the expertise required conducting that role. Meanwhile, variable pay is based on the performance of the person on that role such as bonus plans are a form of variable pay. Organizations usually associate compensation with job descriptions in the organization. The ranges include the minimum and the maximum amount of money that can be earned per year in that role.

Employee Benefit

Benefits are one of the payment and also the forms of value that provide to the employee in return for their contribution to the organization. Some benefits such as unemployment and worker’s compensation are federally required which is the worker’s compensation is really a worker’s right, rather than a benefit.

Employee benefits also refer to retirement plans, health life insurance, disability insurance, vacation and so on. Benefits are increasingly expensive for businesses to provide to employees, so that, the range and options of benefits are changing rapidly to include like flexible benefit plans. Besides that, in benefits, there are tangible benefits and also intangible benefits. The benefits listed above are tangible benefits while intangible benefits are less direct. For example, appreciation from a boss, likelihood for promotion and others. 

In benefits, there are 4 types of employee benefits:

i.                     Supplemental pay (pay for time not worked)

-          Unemployment insurance

-          Sick leave

-          Severance pay

-          Vacations and holidays

-          Parental leave

-          Supplemental unemployment benefits

ii.                   Insurance benefits

-          Workers’ compensation

-          Hospitalization, health, and disability insurance

-          Health maintenance organization

-          Preferred provider organization

-          Life insurance

iii.                  Retirement benefits

-          Social security

-          pensions

iv.                 Executive benefits

             -      vacation

             -      medical

Besides of these compensation and benefit, some organizations also have provided some facilities to their employees that we called it as family-friendly benefits. There are some examples of family-friendly benefits:

-          Subsidized child care

-          Sick child benefits

-          Elder care

-          Time off

-          Subsidized employee transportation

-          Food services

-          Educational subsidies

-          Fitness and medical facilities

-          Flexible work scheduling