Glossary of Human Resources Management and Employee Benefit Terms
Employee compensation refers to all the payments and benefits that an employee receives in exchange for their work. This includes their salary or wages, bonuses, commissions, insurance plans, retirement plans, and other perks.
The purpose of compensation is to attract and retain skilled employees, motivate them to perform well, and reward them for their contributions to the organization.
Employee compensation refers to the remuneration provided to employees in return for their time, effort, and skills contributed to the organization. This typically includes monetary benefits like salaries, wages, bonuses, and commissions, but also encompasses non-monetary benefits such as health insurance, retirement plans, paid time off, and more.
There are several types of employee compensation, including:
The key benefits of employee compensation are:
Employee compensation is important because it offers the benefits of talent attraction, employee retention, job satisfaction, equity, and more. Let’s look at the below-pointers in detail:
Determining employee compensation involves a systematic approach that takes into account several key factors:
Here are key elements that contribute to the calculation of employee compensation:
1. Base salary
2. Hourly or daily wages
3. Bonuses
4. Commissions
5. Overtime pay
6. Benefits
7. Stock options and equity
8. Profit sharing
9. Cost of living adjustments (COLA)
10. Incentive Programs
11. Shift differentials
12. Education and training reimbursements
These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).
Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.
eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.