Total compensation program Is the package awarded during the Initial recruiting process or to employees annually. Total compensation Includes, rewards such pay increases, benefits, and employees recognition. The components of a total compensation program consist of pay and benefits. A total compensation program is used for attracting and retaining employees, implementing the business strategy, and improving productivity.
With attracting and retaining employees a key factor is pay. Pay will attract and retain employees although it is not the sole factor that titivates employees in the workplace. Implementing the business strategy will enhance motivation in the workplace, allowing employees to feel more appreciated and informed of workplace changes. While, Improving productivity may increase the overall morale of the employees as well as the performance of the company.
In the total compensation program annual leave would be factored In as pay for time not worked. This could be vacation time or personal time off, with pay. Many employers Implement an allotted amount of time an employee can earn within a fiscal year. Annual leave time is essential factor that employers take into consideration for developing total compensation programs for potential or current employees. Bonuses, benefits, and stock options are factored into total compensation based upon the position or the pay grade of the employee.
Salaried or exempt employees tend to have benefits, bonuses and stock options within a company. Non- exempt of hourly employees may qualify for some benefits, although in most companies they are not eligible for stock options or bonuses. So each position may have a different structure off total compensation package. Some employers prefer o analyze total compensation rather than Just salary due to the limitations of the salary. Total compensations analyze salary, annual leave, stock options, and bonuses.
The total compensation package will allow the employer and employee the opportunity to view the monetary and non-monetary financial incentives of the position. The total compensation package is the key determinant if some applicants will accept or deny an employment offer. Some employees object to total compensation program because they are often poorly written, contingent upon positions, and are often adjustable at times. Management may object of the total imposition program because they lack the knowledge of the program.
Most employers mandate managers to attend compensation training so they will be aware of the pay rate of their employees and benefits they are eligible to receive. A total compensation program can be beneficial for both an employer and employee. A properly structures total compensations program can attract and retain quality employees. Although, a poorly structured total compensation program will only motivate employees to find a company that offers a better program. Employees want to know that they are valued and appreciated within a company, whether it is in a
