What is compensation? Definitions, features and Objectives of compensation

-

Compensation

Compensation may be define as money receive in performance of work plus many kinds of services and benefits that organization provide to the employees. Compensation may be classify into; (a) Basic or primary compensation, (b) Supplementary compensation.


Primary compensation refers to basic pay in the form of wages and salaries. It is a fixed or non incentive payment on the basis of time expended on the job. Supplementary compensation consists of incentives and variables payments based on there individuals output or output of the organization as a whole.


Wages - Wages is a general term referring to direct monetary compensation. It is also used specifically to refers to payments to service workers on the basis of hourly rates production.


Salary  - Salary refers to weekly or monthly rates paid to clerical administration and professional employees.


Characteristics of Compensation

These are the following main Characteristics of Compensation:-

  • A hierarchy of pay levels.
  • A hierarchy of jobs.
  • A Set of rules and procedures.
  • Quality required for movement from one level to other.


Objectives of compensation

These are the following objectives of Compensation :-

  1. The compensation should be paid to each employee on the basis of their liabilities and training.
  2. Compensation should be in the form of package.
  3. It should motivates the employees towards increasing productivity.
  4. It should be capable of taking care of employees for safety and security need also.
  5. It should be flexible and clear.
  6. It should be excessive.
  7. Compensation should be decided by the management as per the norms fixed by the legislations in Constitution with the union.

Comments

Post a Comment

Popular posts from this blog

What is decision making? Definitions and features of decision making

-
Decision making Decision making is a process of selecting the best  among the different alternative. It is the act of making a choice. There are so many alternative found in the Organization and departments. Decision making defined as the selection of choice of one best alternatives. Before making decisions all alternative should be evaluated from which advantages and disadvantages are known. It helps to make the best decision. It is also one of the important function of Management. Without other management functions such as planning, organizing, directing, Controlling, staffing can't be conducted because in this managerial function decision is very important. Decision making is an essential skill for Operational team leaders. Applying a systematic method to solve problems is critical to team performance and the safety of operation. Definitions Stephen P. Robbins - "Decision making is define as the selection of a preferred course of action from two or more alternative." C...
Read more