Lesson 1 Flashcards
It is a branch of human resources that focuses on how a company or organization pays his or her employees and provides them with benefits.
Compensation and Benefits
What are the importance of Compensation and Benefits?
- Used to reward employees for their hard work and dedication.
- Motivate to achieve organizational goals.
- Attract and retain talented employees.
It is the compensation an employee receives in return for his or her contribution to the organization or company.
Employee Remuneration
These are provided to employees over and above salaries and wages. These employee benefit packages may include medical, insurance, cation, profit sharing and retirement benefits, to name just a few.
Perks or Fringe Benefits
It is the clean rate of compensation the employee receives in exchange for the services he or she provides for the employer.
Fixed Pay
It is part of employee compensation determined by the performance of the employee.
Variable Pay
What are the Elements of Compensation?
Fixed Pay and Variable Pay
What are the Forms of Compensation?
Financial and Non-Financial
Composed of Direct and Indirect Compensation
Financial
It consists of the satisfaction that an employee receives from the job itself in terms of their psychological, emotional, physical and spiritual well-being
Non-Financial
Composed of wages, salaries, bonuses and commissions
Direct Compensation
Has financial value, but not a direct monetary payment
Indirect Compensation
What are the Main Components of Compensation?
Monetary and Non-Monetary
Are rewards given to employees that have a direct monetary value
Monetary
Rewards that don’t have an explicit value tied to them or in other words can’t be redeemed for cash.
Non-Monetary
Examples of Non-Monetary Rewards (There are 5)
- Personal Growth
- Career Advancement
- Professional Development
- Social Benefits
-Community Involvement
What motivates young Filipino workers? (Give 5)
- Personal sense of accomplishment
- Doing what they love or enjoy
- Opportunity for promotion and growth - Compensation and rewards
- Good relationship with peers
What motivates young Filipino workers to stay in the organization? (Give 5)
- Good compensation
- Professional growth
- Love for job itself
- Harmonious relationship with peers
- Good benefits
Some Principles in Setting Basic Salary
- Pay must be equitable in relation to what other employees get for what they do.
- Pay rates must be realistic, based on the company’s capacity to pay and compete in the labor market so that it can continue to attract and retain the right employees.
- The purchasing power of the money that the employee receives from the amount of essential needs for a decent living that the employee can provide for himself and his family.
- Any regulation on wages such as the minimum wage law or wage order adjustment should dictate a minimum level basic salary.
A simplistic way of compensation is through this equation:
A+B+D=E
In the equation A+B+D=E, A means?
A.
Guaranteed Cash
Regular Salary
Fixed and guaranteed allowance Fixed/guaranteed bonuses (13th month pay)
In the equation A+B+D=E, B means?
B. Variable or discretionary compensation (e.g. commission, profit share, performance bonus, management incentives).
In the equation A+B+C+D=E, C means?
C. Total Cash (A+B)
In the equation A+B+C+D=E, D means?
D. Benefits
In the equation A+B+C+D=E, E means?
E. Total Remuneration (C+D)
