Cash remuneration
Cash compensation (hereinafter, the Compensation) is any monetary reward that an employee receives in exchange for the service he or she performs for their employer and/or for his or her time spent upon employer's requests. Usually, the Compensation is a combination of guaranteed pay and variable pay.
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Guaranteed pay
Guaranteed pay is a fixed monetary reward paid by an employer to an employee.
Base salaries and wages
- Skill-based pay. A pay system that rewards employees for the job skills they can demonstrate.
- Merit-based pay (merit-based pay plan). A pay plan based on performance appraisal ratings.
- Piece-rate pay (piece-rate pay plan). A pay plan in which workers are paid a fixed sum for each unit of production completed.
Cash allowances
- Housing allowance, transport allowance, meal allowance.
Pay differentials
- Shift differentials, holiday differentials.
- Night shift, seniority
Profit-sharing
- Profit-sharing (profit-sharing plan). An organization-wide program that distributes compensation based on some established formula designed around a company's profitability.
Variable pay
- Variable pay (variable compensation, variable compensation plan, variable-pay program, pay-for-performance, pay-for-performance program). A pay system or plan in which an individual's compensation is contingent on performance. This pay plan bases at least a portion of an employee's pay on some individual and/or organizational measure of performance.
- Bonus. A pay plan that rewards employees for recent performance rather than historical performance.
commissions, incentives
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.
