What are the main components of compensation?
- Salary and Wages. In a compensation package, these typically make up the single largest component.
- Bonuses.
- Federal/State Pay Requirements.
- Providing a Competitive Package.
- Long-Term Incentives.
- Health Insurance.
- Life and/or Disability Insurance.
- Retirement Plan.
What is a compensation package and benefits?
Compensation packages refer to the combination of the salary and various benefits an employer offers you in exchange for employment. Compensation packages tend to vary by employer. Therefore, though they include a basic salary, the fringe benefits they include often depend on the company and the specific position.
How is compensation package calculated?
To calculate your total compensation, you will need to assess the value of the paid time off you receive in a year. Multiply the number of days off you have, across all paid time off buckets, by the amount of money you are paid for a day of work to get that total.
What are the different compensation components?
Different types of compensation include:
- Base Pay.
- Commissions.
- Overtime Pay.
- Bonuses, Profit Sharing, Merit Pay.
- Stock Options.
- Travel/Meal/Housing Allowance.
- Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes…
What is a compensation offer?
It includes more than just salary — it’s everything of value, monetary and otherwise, that an employer provides in exchange for the work you do. Think incentives, benefits and perks. What can be included in a job offer varies greatly depending on the employer and position, but here are the most common pieces: Salary.
How do you create an effective compensation plan?
How to Develop a Strategic Compensation Strategy
- Ask for Employee Input.
- Benchmark against Competitors.
- Allocate Budget.
- Plan for Rewards.
- Determine Pay Grades.
- Confirm Compliance.
- Communicate About Total Compensation.
