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What types of Employee Compensation plan exists?

The human resources department in an organization is fundamental to the overall success of it, especially when it comes to establishing strategies for employees to feel comfortable with the work environment and motivated to achieve the objectives of the company.

Executive compensation in Bay Area can be the decisive factor to retain high potential employees and encourage them to put all their efforts to achieve organizational goals; In addition, it is not just about creating strategies for employees who already belong to the payroll, but also those candidates who aspire to a job.

Offsets are strategies and incentives for employees, in addition to the monthly salary, used mainly to:

• Recruit and retain qualified employees.

• Increase the level of satisfaction.

• Reward and encourage maximum performance.

• Reduce staff turnover.

• Promote loyalty to the company.

But these compensations do not only have to do with money in cash, but some are also based on the achievements of the collaborators, while others are included in the contract for all equally, that is, not limited to certain employees, as this would limit the potential of your organization.

There are different types of compensation for employees, some may be circumstantial and others established in the long term depending on the results and the fulfillment of the objectives. Below we explain each of them.

Types of compensations:

There are two forms of compensation for employees of an organization: direct and indirect.

The direct compensations are divided into different types, among which the extra remuneration for the services rendered and the bonuses stand out. While indirect compensation has to do with long-term benefits and incentives.

Direct compensation for employees:

- Monetary: It is all kinds of remuneration in addition to the basic salary of a worker. Christmas bonuses, vacations, social benefits, and other extra payments are part of monetary compensations.

- Bonds: The bonuses are the most used compensations as an incentive to increase the performance of employees for a certain objective, either time or volume. These are also used to retain employees with high potential with certain skills or specialized knowledge necessary for the company.

Indirect compensation for employees:

- Non-economic benefits: This type of compensation is usually stipulated in the employment contract, although many companies make progressive improvements.

- Training: One of the aspects that potential collaborators evaluate the most when making the decision to work for an organization are training and education opportunities.

- Recreational: The quality of life and entertainment is essential so that employees do not feel that they work for a monotonous organization. That is why it is important to promote integral well-being and encourage them through rest opportunities.

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    What types of Employee Compensation plan exists?