There are mainly 4 categories into which compensation falls. They are
- Guarantee Pay: In this, a fixed amount in terms of cash is paid to the employee as a part of salary or allowance
- Variable Pay: This depends on the dependent conditions of the enterprise and the amount paid varies accordingly. Bonus is an example of variable pay.
- Benefits: All the benefits offered to the employee such as paid off, insurance etc falls under this category.
- Equity-Based Compensation: Under this employer’s share is used as compensation.
The employee compensation and benefits plan is a plan to uplift the employees in working in an organisation. These include factors like Basis pay which the employee gets no matter what is the circumstance in which the employee works. The employer needs to pay the employee this amount. Incentives are given to the employee based on his performance and bonus are according to the other factors in the firm. Employee benefits include various benefits which are enjoyed by the employee in kind. These can be also termed perquisites. Time-Off is the employee compensation given to the employee to take some time off his work and have a fresh start. This is usually given after the completion of a long-term goal.
The employee compensation offered to the employees is mainly of 2 categories. Monetary components and Nom- Monetary components. The non-monetary components usually fall under the benefits provided to the employees along with the compensation. As compensation and benefits go hand in hand this is divided together. the monetary components include fixed pay and variable pay. The fixed pay is given to him according to his pay scale whereas the variable pay varies according to the dependent factors like employee performance, target achievement etc. The benefits include the perquisites enjoyed by the employee like paid-off leave insurance etc. and shares given to the employee by the employer as a reward for the work he has done in the firm.
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