Compensation and Benefits

 

Figure 1:Compensation and Benefits



Introduction 

In exchange for their labor, an organization offers its employees rewards referred to as compensation and benefits. Top talent can be drawn to your company and kept happy, motivated, and involved in the workplace with the support of an alluring pay and benefits package. Thus, one of the most important aspects of human resource management is compensation and benefits.


What are Compensation and Benefits?


Denzel Moyo (2024) Compensation and benefits refer to the compensation/salary and other monetary and non-monetary benefits passed on by a firm to its employees in return for their services.

Compensation is what employees get paid for their work and the services they render to the company is known as compensation. A company-paid car, company-paid housing, and stock options are examples of non-monetary benefits. Compensation also includes monetary benefits like commissions, profit sharing, bonuses, overtime pay, recognition awards, and sales commission.

 

Benefits, are non-cash incentives provided to staff members in recognition of their hard work. Benefits like flexible work schedules, remote work options, catered meals, gym memberships, and casual dress codes are popular with employees.


Figure 2:What are Compensation and Benefits

 

 

Why are compensation and benefits important?

Coann Labitoria (2022), Having a competitive compensation and benefits program aids in job satisfaction. When an employee is happy with the employment package offered to them, it increases their satisfaction with the company’s practices and gives them a greater sense of purpose. This then dimishes employees’ desire to find better job opportunities elsewhere. Being satisfied with what compensation and benefits they are receiving keep employees from leaving, lowering turnover rates of the company.

Figure 3: the importance of compensation and benefits


Types of Compensation and Benefits in HR

Ahrammedia (2020), There are many types of compensation and benefits that HR professionals may consider when developing and administering employee benefit programs. Some common types of compensation and benefits include:

1.    Monetary compensation: This includes salaries, wages, bonuses, and other forms of financial payment for work.

2.    Health insurance: Employers may offer health insurance coverage to employees and their dependents as a benefit of employment.

3.    Retirement plans: Employers may offer retirement savings plans such as 401(k)s or pension plans to help employees save for the future.

4.    Paid time off: This includes vacation time, sick leave, and other paid time off that employees can use to take breaks from work.

5.    Employee assistance programs: These programs provide resources and support to employees to help them manage personal or work-related challenges, such as mental health support or financial counseling.

6.    Training and development opportunities: Employers may offer employees the opportunity to participate in training programs or professional development courses to help them advance their careers.

7.    Employee discounts: Some employers offer employees discounts on products or services, such as discounted gym memberships or discounted tickets to local events.

8.    Flexible work arrangements: Employers may offer flexible work arrangements, such as telecommuting or flexible scheduling, as a benefit to employees.



Conclusion 


Any organization that wants to support significant future growth in the industry must include benefits and compensation in its policies. Let's say your company wants to retain its top employees for as long as possible. The best talent within the company is always on the verge of leaving due to the alluring benefits and compensation packages offered by rival companies. Hiring them through Compensation and Benefits can be a great option in that case.


References 


Moyo . D (2024), What are Compensation and Benefits, Available at:https://www.thehumancapitalhub.com/articles/compensation-and-benefits [Accessed 12 04 2023]


Labitoria . C (2022), Why are compensation and benefits important ,Available at:https://www.hrreporter.com/focus-areas/compensation-and-benefits/6-ways-to-improve-your-companys-compensation-and-benefits/365602  [Accessed 12 04 2023]
Ahrammedia (2020), Types of Compensation and Benefits in HR, Available at:https://hca-pro.com/Compensation-and-Benefits-in-HR  [Accessed 12 04 2023]


 









Comments

  1. Sakvithi SenadeeraApril 12, 2024 at 3:27 AM

    Giving generous rewards keeps workers on board and evantually fosterbloyalty, commitmen, and job satisfaction. Rewarding employees for their services or contributions to the company is known as compensation (Salisu et al. 2015).

    ReplyDelete
  2. Saranga ThilakaratneApril 12, 2024 at 6:31 AM

    Awesome article. I really like how you explained that compensation and benefits are crucial in human resource management, offering monetary rewards like salaries, health insurance, retirement plans, and training to enhance job satisfaction and reduce turnover.
    Thank you for sharing this wonderful article!

    ReplyDelete
  3. Imalka EkanayakeApril 12, 2024 at 7:12 AM

    This article explained well that to retain top talent, prioritize competitive benefits and compensation packages, leveraging Compensation and Benefits strategies effectively. Interesting.

    ReplyDelete
  4. LakruwanApril 13, 2024 at 4:19 AM

    Effective competition policy plays a major role in retention

    ReplyDelete
  5. Kusal SamarakoonApril 13, 2024 at 7:30 PM

    The top talent in the organization is constantly on the edge of departing due to the attractive benefits and compensation packages provided by competitors. Interesting topic.

    ReplyDelete
  6. Pamuditha SamarasingheApril 14, 2024 at 12:23 AM

    Compensation and benefits are important for creating a happy and motivated workforce. That will eventually decrease the staff turnover and can benefit the company. Very well structured comprehensive post!

    ReplyDelete
  7. Gihan RanaweeraApril 14, 2024 at 8:33 AM


    Really clear explanation of compensation and benefits. This makes it easy to see how they play a crucial role in employee satisfaction and retention. Great breakdown!

    ReplyDelete
  8. Dhanushka PathiranaApril 14, 2024 at 9:04 PM

    This blog post provides a comprehensive and informative overview of the critical role of compensation and benefits in attracting, retaining, and motivating employees, and creating a positive and productive workplace culture that supports employee well-being and organizational success. You have done an excellent job.

    ReplyDelete

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