Compensation means the total amount of money or remuneration received by an employee in exchange for services he/she provides. In an organization, compensation is earned by employees mostly monthly that includes basic salary, bonuses, incentives, other additions.
Compensation doesn’t always mean money, although that’s part of it. Compensation comprises several different elements that may be cash and non-cash payments.
Here’s a list of some of the most common types of compensation
- Base pay (hourly or salary wages)
- Overtime pay, shift differentials, and longevity pay
- Profit-Sharing distributions
- Merit Pay or recognition
- Incentive plan or achievement award
- Tip income
- Benefits including Dental, insurance, medical, vacation, leaves, retirement, etc.
- Stock options
- Travel/Meal/Housing Allowance
- Child care and tuition assistance
- Gym memberships and free lunches
- Employee assistance programs that provide counseling, legal advice, and other services.
- Health and wellness benefits
- Other non-cash benefits