COMPENSATION PLANS

PROBLEM AREAS ► Responsibility For Salary Decision ► What Other Employers Are Paying? ► Activity And Reward System ► Salary Determining Criteria ► Special Treatment

CONT… ► TOTAL COMPENSATION : The package of quantifiable rewards an employee receives for his/her labors. This includes 3 components : 1. Base Compensation 2. Pay Incentives 3. Benefits 4. Rewards

CONT… ► BASE COMPENSATION : The fixed pay an employee receives on a regular basis, either in the form of a salary or as an hourly wage. ► PAY INCENTIVES : A program designed to reward employee for good performance. ► BENEFITS : They are also known as indirect compensation available only to employees with some special status in organization.

CRITERIA FOR A COMPENSATION PLAN ► Internal Versus External Equity ► Egalitarianism VERSUS ELITISM ► Job Versus Individual Pay ► Monetary Versus Non-monetary Awards Awards

GLOBAL CONVERGENCE ► Employees paid differently in different countries. ► These differences are disappearing altogether as leading companies take a similar global approach. ► However, CONVERGENCE does not mean CONFORMITY.

COMPENSATION TOOLS ► JOB BASED COMPENSATION PLAN ► SKILL BASED COMPENSATION PLAN

EMPLOYEE BENEFITS ► Contribution ► Coinsurance ► Co-payment ► Deductibles ► Flexible Cafeteria Benefit Program

TYPES OF BENEFITS ► Legally Required Benefits ► Insurance ► Health Insurance Benefits ► Retirement Benefits ► Paid Time Off ► Employee Services

FRINGE BENEFIT TAX A Fringe benefit is generally payable where: A Fringe benefit is generally payable where: ► A benefit is provided ► The benefit is provided in respect of the employment of the employee ► The benefit is provided by the employer (or an associate of an employer or a third party under an arrangement) ► The benefit is provided to an employee or an associate (family member) of the employee