Components About Salary And Compensation

Salary is important aspect to attract people, retain key employees and maintain motivation among the employees. Shifts occurring in the salary and compensation are not surprising, but the organization is trying to keep with changes in salary and compensation.

Increment in salary has become impossible for the organizations. The organization left with too small budget, give rewards only to their top performers. Some companies use this as salary criteria, organization which thinks broadly are thinking in very different way about salary and compensation.

To attract the best performers in your organization, you must offer them increment with six to seven percent, in addition to their basic payment. These rewards are not given to all staff, but only to the high performers. The organization must use compensation as the communication tool to send message about your expectations and achievement rewards.

Recent compensation thinking

Components followed for thinking current salary and compensation:

• Directions regarding the compensation should be prepared in writing. After the board of Directors review that compensation, it is agreed by the managers.
• In an entrepreneurial setup, the compensation philosophy needs to adopt a method of grouping similar jobs for the purpose of broad banding, because promotional opportunities are limited.
• It’s better to avoid increments in base pay, but give more emphasis on offering incentives via bonuses for positive performance.
• Rewards are given for both individual as well as organizational goal achievement.
• As the cost of benefits increases, their place in compensation package also increases. So shifting the costs of benefits is the last option in the whole scenario.