Employee compensation along with benefits

Employee compensation along with benefits

It is the discipline of human resource which deals with the remuneration of the employees. As part of the agreement which the employee enters with the company, they are paid for their services. According to HR they can be divided into the following types

Fixed pay

It is the monthly payment paid to an employer based on an agreement. It is referred to as basic pay. It is used by the employees for the ongoing consumption. In many places it is decided by formulating a basic wage. A difference is achieve based on the individual skill sets or experience

Variable pay

It is based on results achieved or the performance of an employee. They are different types of variable pays such as bonus schemes or sales incentives. In certain cases this plan is administered so that the performance does not fall below a desired level

Benefits

Programs which an employer uses to supplement the compensation of an employee. Examples in the form of medical insurance,  paid time off or a company car are examples. Different types of insurance or pension plan comes into the picture. You can also look up to a benefit plan which is addressed at a particular need.

Equity based compensation

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Here the shares of the company are provided as compensation. The most common form in this regard as the stock options. Additional vehicles in the form of restricted stock or  stock appreciation rights are also provided. In simple terms it is ownership of the company.