What is Compensation?
When most people hear the term compensation they think about "what a person is paid". Although this is true, it is only one aspect of a very complex topic. Compensation includes not only salary, but also the benefits, direct and indirect rewards the employee is provided with in return for their contribution to your organisation.
To determine compensation, organisations should develop an adequate remuneration and rewards program. This type of program outlines a fair and equitable process for compensating employees. A well-structured program with a good combination of wages, benefits and rewards will support an organisation to remain ahead in today's very competitive labour market and ensure sustainability in the future.
To discuss how our HR advice or our compensation and benefits services could help your organisation, please book a consultation with us.
DEFINING SALARY
Compensation (also known as total rewards) can be defined as all of the rewards earned by employees in return for their labour.
This includes:
- Direct financial compensation consisting of pay received in the form of wages, salaries, bonuses and commissions provided at regular and consistent intervals.
- Indirect financial compensation including all financial rewards that are not included in direct compensation. This normally includes benefits, leave, retirement plans, education, and employee services.
- Non-financial compensation relating to topics such as career development and advancement opportunities, opportunities for recognition, as well as work environment and conditions.
Employees tend to focus on direct financial compensation when scrutinising their rewards. However according to research, with individuals who are relatively satisfied with their salary, it is the non-financial rewards that tend to be more effective in contributing to long-term employee engagement.
If you require further assistance with compensation and require HR advice, please contact us.
OUR SERVICES
At Lanes Employment Solution Specialists we can help with:
- Reward Strategy
- Pay Reviews
- Salary and Benefits Review
- Benchmarking
- Salary Surveys
- Flexible Benefits Implementation
- Job Evaluation
- Employee Assistance Programmes
- HR Advice
- Gender Pay Gap Reporting
- Employee Health and Well-being
Are You Compliant with Mandatory Gender Pay Gap Reporting?
Since 2017, any organisation that has 250 or more employees must publish and report specific figures about their gender pay gap.
The gender pay gap is the difference between the average earnings of men and women, expressed relative to men’s earnings. For example, ‘women earn 15% less than men per hour’.
Are You Compliant with Mandatory Gender Pay Gap Reporting? (Cont...)
Employers must:
- Publish their gender pay gap data and a written statement on their public website.
- Report their data to government online - using the gender pay gap reporting service.
If your organisation has fewer than 250 employees, it can publish and report voluntarily but is not obliged to do so.
Get In Touch With Us
Please get in touch if you would like to know more about employee compensation and require our HR advice and expertise.