Compensation and Benefits
Compensation philosophy states pay differential for tough assignment in different times. It gives additional pay for work which is considered beyond minimum requirements of the job.
Pay differentials includes
• Shift pay
• On-call pay
• Call-back pay
• Reporting pay
• Hazard pay
• Geographic pay
PHR: Individual incentives
For motivating individual performance, individual rewards can en the powerful tool for employees who achieve goals and objectives.
Incentive plan program have three critical phases such as,
Plan design: Based on performance goals, organization makes incentive plan simple is called as plan design.
Review process: Bonus-based incentive program defines desired financial metrics must achieve. In some organization, incentive is paid more frequently where employees have direct influence on revenue generation.
Communication and Implementation: Communication strategy is practiced as a part of incentive plan across organization to understand organization metrics. Organization publishes incentive program in details as part of communication strategy.
Organization or group incentives: Group incentives are common in organization to achieve company goals for individual performance. Organization adopts group incentives to maximize awareness and involvement in the organization. It has several types of group incentive such as,
• Scanlon plan
• Profit sharing
• Employee Stock Ownership Plans
• Employee Stock Purchase Plans
Special incentive plan is provided in specific circumstances to ensure specific executives employed for long term or performance. One of the special incentive is special incentive is retention bonus; it is provided to the employee who retains in the organization for particular period of time. Other type of special incentive is yearly incentives, where an employee stays for certain years in the organization.
Retention bonuses termed as full bonus if the employee remain in the organization for certain date.
Commissions and sales bonuses
Difference between commission and bonus plan calculation varies based on compensation programs. Commission gives incentives to sales employees by paying some percentage of sale prices for products and services sold to a customer. For sales employees, compensation are paid based on commission depends upon organization norms. Some organization provides sales bonus plan, if the employee achieves the sales target. Organization pays certain percentage form base pay as sales bonus plan.
Bonus is an additional compensation for performance might be above and beyond expectations and paid in addition to an employee's base salary or hourly rate. Bonuses takes the form of sales-performance bonus paid to sales people exceed their quotas, employee-referral bonuses paid based on reference and employee of the month rewards.