Employee Compensation

Compensation and salary is one part of a company's employee retention strategy. Find best
practices in employment compensation and retention programs and use our compensation
analysis tools to research current market rates. The total compensation for an employee includes
more than monetary compensation, including benefits, retirement contributions, stock options,
deferred compensation, paid vacation, and the cost of special employee perks. Employee
compensation is what employees receive in return for what they contribute to the organization.

 The first thing that comes to mind is, of course, wages or salary. But there are many other
ways to compensate employees for their work. Some individuals may be willing to take
slightly lower pay in return for better benefits or hours.
 Compensation is determined first by laws put forth by the federal government that make sure
that all employees are treated equitably. For example, compensation should not vary based
upon race, creed, or gender.
 Next, it is determined by state laws. Once federal and state laws have been met,
compensation is determined by the policies of the organization.
 Lastly, the human resources department and managers determine the final compensation that
an employee will receive. Experience and education influence this decision.

The most obvious reason for compensating employees is that an organization should not expect
something for nothing. But by giving generous compensation, an organization attracts better
employees and retains them for longer. Compensation is what organizations use to compete for
top talent.

Both monetary and non-monetary compensation options are available for organizations to
consider. They include bonuses, cell phones, child care, clothing, commission, dental insurance,
disability insurance, elder care, employee assistance, flexible working schedules, gain-share,
health insurance, holiday pay, hourly wages, laundry service, life insurance, magazine
subscriptions, moving expenses, personal days, retirement programs, salary, sick days,
subsidized housing, subsidized utilities, tickets to events, use of vehicles, vision insurance.
Importance of Compensation in the Workplace

Smart employers know that keeping quality employees requires providing the right
compensation and benefits package. Compensation includes wages, salaries, bonuses and
commission structures. Employers shouldn't ignore the benefits portion of employee
compensation and benefits, because the benefits sweeten employment contracts with the
priorities that most employees need.

 Attracting Top Talent

 Increased Employee Motivation

 Boost Employee Loyalty

 Increased Productivity and Profitability

 Job Satisfaction So People Stay