What is included in a compensation package?
A compensation package is the combination of salary and fringe benefits an employer provides to an employee.
Benefits include such things as vacation days, sick days, personal days, paid company holidays, pension plans, stock ownership plans, health insurance, dental/eye insurance, life insurance, and more..
What are the four types of compensation?
The Four Major Types of Direct Compensation: Hourly, Salary, Commission, Bonuses. When asking about compensation, most people want to know about direct compensation, particularly base pay and variable pay. The four major types of direct compensation are hourly wages, salary, commission and bonuses.
What is considered total compensation?
Total compensation includes the base salary, but it also includes the value of any benefits received in addition to your salary. Some of the benefits that are most commonly provided within a total compensation package include: Bonuses.
What all comes under compensation and benefits?
Prominent examples of benefits are insurance (medical, life, dental, disability, unemployment and worker’s compensation), vacation pay, holiday pay, and maternity leave, contribution to retirement (pension pay), profit sharing, stock options, and bonuses. … You might think of benefits as being tangible or intangible.
When should compensation be used?
Compensation is a tool used by management for a variety of purposes to further the existance of the company. Compensation may be adjusted according the the business needs, goals, and available resources. Compensation may be used to: recruit and retain qualified employees.
How is compensation package calculated?
5 essential factors for determining compensationYears of experience and education level. … Industry. … Location. … In-demand skill sets. … Supply and demand. … The cost of not offering competitive pay. … What happens if you can’t pay market value? … Take the guesswork out of determining compensation.More items…