Employee compensation
Employee compensation (alternatively known as total compensation, total employee compensation, compensation and benefits or C&B; hereinafter, the Compensation) is the aggregate of cash compensation and employee benefits that an employee receives or can expect to receive in exchange for the service he or she performs for their employer and/or for his or her time spent on the employer's request.
In addition, total compensation may also refer to the total amount of the Compensation, while compensation and benefits (C&B) may refer to the sub-discipline of human resources that is focused on employee compensation and benefits policy-making.
Components
The common components of the Compensation are as follows.
Guaranteed pay
- Main wikipage: Guaranteed pay
- Guaranteed pay is a fixed monetary (cash) reward paid by an employer to an employee. The most common form of guaranteed pay is base salary. Guaranteed pay also includes cash allowances (housing allowance, transport allowance, etc.), differentials (shift differentials, holiday differentials) and premiums (night shift, etc.)
2. The Variable pay – a non-fixed monetary (cash) reward paid by an employer to an employee that is contingent on discretion, performance, or results achieved. The most common forms of variable pay are bonuses and incentives.
4. Equity-based compensation – stock or pseudo stock programs an employer uses to provide actual or perceived ownership in the company which ties an employee's compensation to the long-term success of the company. The most common examples are stock options.
