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Most companies want to hire the most qualified employees and keep those employees loyal and productive. To attract and keep their best employees, companies provide a “package” that includes compensation (money), incentives (special perks or rewards for good work), and benefits (valuable options such as health insurance and paid vacation). Because each employee is unique, larger corporations offer a wide range of mix-and-match options to suit individual needs and preferences. As a manager, you may have the option of offering your team members specific incentives based on their type of work and particular areas of interest and need. CompensationCompensation is just another word for wages. Managers work with human resources to set and raise wages based on a number of factors:
As a manager, you may need to negotiate compensation both within your corporation and with your new hire. For example, you may need to make the case for paying Audrey more than Joe would have demanded by explaining why Audrey’s skills will make a positive difference to the bottom line. The reasons behind compensation are complex; as a manager, you will need to keep your eyes on the competition and changing trends to be sure your employees receive fair and equitable pay. Payroll ManagementCompensation is usually provided through a payroll system that manages and records payment of wages to each employee. Payroll systems are set up and managed by HR or by a contracted payroll company. Payroll involves:
IncentivesIf you want to encourage people to work hard, you should offer them both a reward for good work and a consequence for poor performance. The consequence is often that if you do poor work, you will get fired and lose your income and benefits. But how do you encourage (or incentivize) a person to do their best work? The answer depends on the culture of the business, the needs or preferences of the individual, and the options available. One industry that offers an incredible range of perks and incentives to its employees is software development. Silicon Valley is loaded with companies that provide everything from free food to massages to its employees. Google, in particular, is well-known for making its employees happy and providing resources to lower stress. Free haircuts and dry cleaning, gyms and swimming pools with personal trainers, nap pods, subsidized massages, and on-site doctors are just a few of the perks it offers. Watch the following news clip to find out more about perks at Google. You can view the transcript for “Life at Google. Inside Google’s lair – How google employees work” here (opens in new window). Other companies offer completely different kinds of perks. Home Depot, for example, has a terrific on-site childcare program called Little Apron that is good enough to be highlighted by the magazine Working Mother: Little Apron Academy has a learning-based curriculum and offers programs such as Language Works, Math Counts, Science Rocks and ArtSmart, as well as kindergarten prep and school-age programs, and programs geared toward infants, toddlers and preschoolers. It has a capacity for 326 children—including 278 enrolled full-time and 48 school age kids who attend for summer camp and school breaks. The center also provides back-up care services for families of The Home Depot.[1] It’s easy to guess which types of employees would be attracted by foosball (young single men) and which by a childcare program (working mothers and fathers). But there are also incentives that can motivate people with completely different needs and goals. For example:
Practice QuestionBenefitsBenefits are a part of the compensation package, and they are often worth a great deal to employees. Health insurance and retirement, in particular, are valuable and coveted benefits. So too are paid vacations, sick days, life insurance, and retirement packages. Because these benefits are so valuable, it’s important for managers to make their employees aware of what’s available to them—and to work with HR to provide training in how to access and use benefits. In most companies, employees can choose among different benefits. There is a cost associated with many benefits, so some employees will opt out (so they can have more in their paycheck) whereas others will opt in (for better health benefits or a greater sense of security in case of disaster).
Practice QuestionContribute!Did you have an idea for improving this content? We’d love your input. Improve this pageLearn More Which of the following is not a type of compensation?Employees' contribution to social security schemes are not included in compensation of employees, whereas, wages and salaries in cash and windfall gains are included in compensation of employees.
Which of the following is most likely not a role played by the HR?Accordingly, conducting appraisals of employees are prepared by the supervisors rather than the HR department.
What is the benefit of having subordinates evaluate supervisors?It is important, therefore, to determine what performance factors are important to subordinates when they evaluate their supervisors. Such information could help an organization in training its supervisors and could provide important information to supervisors regarding how they are perceived by their subordinates.
Which of the following is the most likely problem of supervisors evaluating subordinates?Answer and Explanation: The correct option is A) focusing too much on a single performance standard. Subordinates' performance evaluation is a compulsory process.
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