COMPONENTS OF REMUNERATION
An average employee in the organised sector is entitled to several benefits — both financial as well as non-financial. To he specific, typical remuneration of an employee comprises—wages and salary, incentives, fringe benefits, perquisites, and non-monetary benefits.
WAGES AND SALARY
Wages represent hourly rates of pay, and salary refers to the monthly rate of pay, irrespective of the number of hours put in by an employee. Wages and salaries are subject to annual increments. They differ from employee to employee, and depend upon the nature of job, seniority, and merit.
Incentives
Also called 'payments by results', incentives are paid in addition to wages and salaries. Incentives depend upon productivity, sales, profit, or cost reduction efforts.
There are:
1) individual incentive schemes and
2) group incentive programmes.
Individual incentives are applicable to specific employee perform-
ance. Where a given task demands group effort for completion, incentives are paid to the group as a whole. The amount is later divided among group
members on an equitable basis.
Fringe Benefits
These include such employee benefits as provident fund, gratuity, medical care, hospitalisation, accident relief, health and group insurance, canteen, uniform, recreation and me like.
Perquisites
These are allowed to executives and include company car, club membership, paid holidays, furnished house, stock option schemes and the like- Perquisites are offered to retain competent executives.
Non-monetary Benefits
These include challenging job responsibilities, recognition of merit, growth
prospects, competent supervision, comfortable working conditions, job sharing, and flexitime.
An average employee in the organised sector is entitled to several benefits — both financial as well as non-financial. To he specific, typical remuneration of an employee comprises—wages and salary, incentives, fringe benefits, perquisites, and non-monetary benefits.
WAGES AND SALARY
Wages represent hourly rates of pay, and salary refers to the monthly rate of pay, irrespective of the number of hours put in by an employee. Wages and salaries are subject to annual increments. They differ from employee to employee, and depend upon the nature of job, seniority, and merit.
Incentives
Also called 'payments by results', incentives are paid in addition to wages and salaries. Incentives depend upon productivity, sales, profit, or cost reduction efforts.
There are:
1) individual incentive schemes and
2) group incentive programmes.
Individual incentives are applicable to specific employee perform-
ance. Where a given task demands group effort for completion, incentives are paid to the group as a whole. The amount is later divided among group
members on an equitable basis.
Fringe Benefits
These include such employee benefits as provident fund, gratuity, medical care, hospitalisation, accident relief, health and group insurance, canteen, uniform, recreation and me like.
Perquisites
These are allowed to executives and include company car, club membership, paid holidays, furnished house, stock option schemes and the like- Perquisites are offered to retain competent executives.
Non-monetary Benefits
These include challenging job responsibilities, recognition of merit, growth
prospects, competent supervision, comfortable working conditions, job sharing, and flexitime.