The four main components of a compensation programme are:
- Wages and Basic Salary
The most important component for employees would undoubtedly be salary and wages. This is because the quality of life for most employees and their dependants is largely determined by the earned income. Wages and salary received will determine the type and quantity of food, clothing, accommodation and means of transport that an employee can afford. - Increment in Wages and Salary
This includes payment for overtime [OT] work, work shifts and premium payment for work performed during weekends or public holidays. - Payment of Incentives (Long-term and Short-term)
Incentives will be awarded if an employee manages to achieve output of a certain quantity and quality. This is a traditional method of reward and includes short-term and long-term incentives.
- Employee Benefits and Services
The following form part of a compensation programme:- Imbursement upon discharge;
- Imbursement upon suspension or termination of an employee;
- Imbursement upon the inability to work due to an accident or illness;
- Imbursement for protection and medical attention;
- Retirement imbursement, imbursement to a deceased employee’s dependants; and
- Allocation of products and services required, such as company cars, cafeteria service, childcare or eldercare, and recreational activities.
Employee benefits and services can influence an individual’s current and future lifestyle.
