Compensation Packages drive company performance

When we talk about compensation, we usually refer to payments made by employers to employees in the form of wages, salaries, and benefits. However, it is crucial to clarify that payments may relate to payments paid to absent or injured people under, such as "salary" for unemployed people, other people, or injuries. Payment may also relate to the outcome of the litigation. Payment can also apply to any of the costs associated with incurring a loss, such as "pay dinner to trouble." Another method of categorizing payments is to distinguish between direct and indirect payments.Noe R. A., Hollenbeck J. R., Gerhart B., Wright P., (2003)

Commercial payments, in which money or measured money is exchanged, are divided into two categories. Direct payments are cash payments made to employees, such as hourly wages , salaries, bonuses, and commissions. In this article has explin the types of compensation  the main forms of employee compensation and the reasons our  company should use them. Depending on the culture and objectives of company each strategy might be effective despite having benefits and cons of its own.

1. Base salary schedule

The usual salary an employee receives for putting in a predetermined number of hours is referred to as their base pay package. Either a monthly salary or an hourly compensation might be used for this. Depending on their roles, the choice between the two could change. According Brown, D. (2003) to An employee, for instance, will receive a base compensation package if they are working on clearly defined duties or a specific assignment. On the other hand, hourly-type compensation plans are typically used for part-time or low-paying positions. Hourly packages are typically only available to low-skilled, intermediate-skilled, part-time, contract, and temporary employees. It is the payment made to them in return for their labor and labor-hours. Construction, retail, and the hospitality sectors are those that typically pay hourly rates. Additionally, it offers the chance for overtime pay for the employees. company  must, however, adhere to region's minimum wage laws as choose labor  hourly rate.

2. Package of equity

Over the past few years, this type of remuneration has grown in popularity. It is a method of paying workers in the form of business stock. Numerous law firms, IT businesses, and even retail organizations have chosen this type of payment. Giving an employee stock or ownership ties their compensation directly to the success of the business. In addition to increasing the employee's financial gain, it also enhances their loyalty. company might find this interesting: How Employee Benefits And Compensation Can Be Re-examined In Talent Management.

3. Commission 

Employees receive bonuses based on their performance. Although it can be extended to any level of employee, managers are more frequently the recipients. Brown, D. (2003)For instance, the incentive percentage offered to the company's vice presidents and chief executive officers is larger. This bonus is based on the team's or the company's financial performance.

However,  employees may still switch to a competitor that offers more services. Our organization also has a business strategy where it sets wages and benefits below the industry level. This is often a cost-saving measure for small businesses and nonprofits. But a business strategy can make it difficult to hire and retain the best employees.

Each strategy is further nuanced with employee benefits, bonuses and other benefits . Payment policy is how Our organization handles payment and benefits. This includes determining salaries, deciding how to calculate raises and bonuses, and deciding what benefits we want to offer our employees. A good compensation strategy should reflect the needs of our organization, the culture we want to create, and trends in the foreign market. Employees feel valued and satisfied when they receive the benefits and salary they want. When they feel taken care of, they are inspired to improve their personal performance and productivity, which enables the organization to achieve its goals. When our employees are satisfied with their pay and benefits, they stay with us.Noe R. A., Hollenbeck J. R., Gerhart B., Wright P., (2003). Find new paths with our competitors. This reduces costs and saves time and money on recruiting and hiring employees, as well as training replacement workers.

References 

Brown, D. (2003). Reward strategies, Journal of personnel management, 1; 17-29.

Chen, G., Ployhart, R. E., Thomas, H. C., Anderson, N., & Bliese, P. D. 2011. The power of momentum: A new model of dynamic relationships between job satisfaction change and turnover intentions. Academy of Management Journal, 54: 159-181.

Noble, A. (2009). Building health promotional work setting: identifying the relationship work characteristics and occupational stress. Promotional international journal, 18 (4) 351-359.

Noe R. A., Hollenbeck J. R., Gerhart B., Wright P., (2003)  Human resource management:gaining a competitive advantage , New York: McGraw-Hil/Irwin,