Question: What Are The Types Of Compensation?

What are the basic principles of compensation administration?

A general model of compensation administration encompasses the creation and management of a pay system based on four basic, interrelated policy decisions: internal consistency, external competitiveness, employee contributions, and administration of the compensation program..

What is another word for compensation?

Synonyms & Antonyms of compensationdamages,indemnification,indemnity,quittance,recompense,recoupment,redress,remuneration,More items…

What are the 7 types of organizational compensation?

Different types of compensation include: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…

How is compensation determined?

Your Current Compensation Is Determined by These Factors Compensation is defined as the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required. … These components are encompassed when you define compensation.

What is the best form of compensation?

Is pay for performance the best form of compensation? Pay for performance is by far one of the most popular forms of compensation that employees can offer their workforce.

What are the three types of compensation?

3 Types of Compensation Packages To Consider and WhyStraight salary compensation. Salaried employees are paid a set annual amount, and provided that amount is more than $23,660 per year, they do not receive overtime pay. … Salary plus commission compensation. … Straight hourly compensation.

What is an example of direct compensation?

Direct compensation includes wages, salaries, bonuses, tips and commissions. For example, she may offer performance pay for each employee that meets his or her quarterly performance goals.

What is a compensation package example?

Compensation may include hourly wages or an annual salary, plus bonus payments, incentives and benefits, such as group health care coverage, short-term disability insurance and contributions to a retirement savings account. A total compensation package can have several components.

What is the difference between compensation and reward?

Compensation would include rewards when you offer monetary payment such as incentives, various bonuses and performance bonus. Organisations reward their staff when they attain the goals or targets that they have jointly set with the employees. Rewards can be non-monetary such as a paid vacation for two.

What is compensation and its types?

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 compensation includes?

Compensation describes the cash rewards paid to employees in exchange for the services they provide. It may include base salary, wages, incentives and/or commission. Total compensation includes cash rewards as well as any other company benefits.

Which is the best example of indirect compensation?

Here is the list of the most common examples of indirect compensation:Health insurance.Life insurance.Disability income protection.Retirement benefits.Social security.Employer student loan contributions.Educational benefits.Childcare.More items…

What is compensation structure?

Compensation is the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required. … Compensation also includes payments such as bonuses, profit sharing, overtime pay, recognition rewards and checks, and sales commission.

What are the four types of compensation?

The Four Major Types of Direct Compensation: Hourly, Salary, Commission, Bonuses. When asking about compensation, most people want to know about direct compensation, particularly base pay and variable pay. The four major types of direct compensation are hourly wages, salary, commission and bonuses.