Employers offer employees a range of advantages, including lodging (which may be provided or paid for), group insurance (including wellness, dental, life, etc.), disability income protection, retirement benefits, daycare services, tuition reimbursement, sick leave, paid and unpaid holidays, social security contributions, income sharing plans for education support and other specialized benefits. These benefits aim to improve the financial stability of employees. Direct compensation refers to wages that are given directly to employees as payment for their work and services without involving any intermediaries.
Indirect compensation refers to benefits that are provided to employees, but not given directly to them.
Direct Compensation: Wages and Salary
Direct compensation includes the salary and rewards that are paid out. This encompasses contractual wages, overtime pay, payment for unscheduled time worked, workers' compensation payments, and any retroactiv
...e wage adjustments.
Direct Compensation: Vacations and Leave
The payment for vacations and leave is also considered as a part of direct compensation.
Leave includes sick leave, funeral leave, pregnancy leave, military responsibility or other paid time off from work.
Bonus
All forms of bonuses are included in direct compensation. These include bonuses for performance, length of service, signing and others.
Other Allowances
Other paid or reimbursed allowances are included in direct compensation, including Travel (including meals) and some medical care when it is paid by the employee and reimbursed.
Introduction
I disagree, as direct compensation may not foster loyalty in the same way added benefits do. All jobs pay a salary, and most are competitive in the market. A job will usually pay around the same wherever you are. However, it is often the fringe benefits that retain staff.
Additiona
perks in our organization often serve as something to strive for. For instance, once you reach a certain level, a company car becomes available. It is satisfying to know that with some effort (plus a larger tax deduction), a brand new BMW could be yours. Benefits are forms of value given to employees in exchange for their contribution to the organization or for doing their job. Some benefits, such as unemployment and worker's compensation, are federally required (worker's compensation being a worker's right rather than a benefit). Examples of excellent benefits include various insurances (medical, life, dental, disability, unemployment, and worker's compensation), paid vacation and maternity leave, retirement contributions (pension payments), profit sharing, stock options, and bonuses (some may consider profit sharing rewards along with stock options and bonuses as forms of compensation).
You may perceive benefits as either tangible or intangible. The previously mentioned benefits are tangible ones. Intangible benefits are less immediate and include things like recognition from a supervisor, potential for promotion, pleasant office environment, etc. People sometimes mention peripheral benefits, usually referring to tangible benefits, but sometimes including both types of benefits. You may also view benefits as either company-paid or employee-paid. Although the company typically covers most types of benefits (holiday pay, vacation pay, etc.),
) , some benefits, such as medical insurance, are often partially paid by employees due to the high costs.
direct and indirect compensation
Direct compensation refers to payments made by the program to a service supplier for services provided to the program or because of an individual's position with the program. This term also includes expenses reimbursed by the program but paid by the employer. In
short, indirect compensation is any payment received by a service supplier from sources other than direct compensation from the program or the program patron. This applies if the payment was received in connection with services rendered to the program or the individual's position with the program.
It does not include compensation that would have been received if the provider had not rendered services or the transactions had not taken place, or that cannot be reasonably allocated to transactions or services involving the program. The simplest example of indirect compensation would be a situation where Plan X pays Fred $10,000 for recordkeeping and consulting, and Fred pays Ilene $7,500 to do the recordkeeping. The $10,000 payment to Fred is direct compensation. The $7,500 payment to Ilene is indirect compensation.
Unless there are any exceptions, Schedule C documents the total payments of $17,500. However, often indirect compensation is handled differently. For example, if Plan X invests $5,000,000 in Mutual Fund M, M will charge an expense fee of 0.40%, which amounts to $20,000. In turn, M hires Investment Manager I to provide investment advisory services for the fund.
Plan X specifies that I's compensation is $6,000. Although the $20,000 expense burden is not reported, Ten does report the indirect compensation of $6,000 paid to I. Compensation encompasses various aspects related to pay and salary plans and structures, such as salary ranges for job descriptions, merit-based plans, bonus-based plans, commission-based plans, etc. It refers to the payment given to an employee in exchange for their contribution or performance in their job within the organization. The most common forms of compensation include rewards, wages, and tips. Typically, compensation consists of a base
salary and/or variable salary determined based on one's position within the organization and market conditions for the required expertise.
The level of pay an individual receives can fluctuate based on their job performance, including the extent to which they meet their annual goals. Variable compensation encompasses incentive initiatives such as bonus plans. Employers offer various perks to their employees, essentially involving the provision of valuable items or services to recognize their contributions towards the company's achievements.
Employee benefits play a vital role in attracting and retaining employees, serving as incentives and boosting job satisfaction. They are an essential component of a company's compensation package, offering non-monetary perks alongside salary. Establishing an employee benefits strategy can benefit both employees and employers by allowing employers to enhance their salary offerings with additional advantages.
One major advantage for employers is the moderation of their own cashflow. This is especially true when implementing a salary forfeit system, where employees give up a portion of their wage in exchange for other benefits. If the workforce is large, it may be possible to negotiate price reductions with benefit suppliers, making the provision of non-cash benefits cheaper than providing the portion of the wage that the employee is giving up. Additionally, there are potential tax advantages, although these are limited and potentially complex. More information on the tax deductions of a benefits strategy can be found elsewhere on this site. Employee Benefits The advantages of accepting a benefits strategy for an employee are apparent.
The first case involves the provision of appealing benefits that provide access to useful offerings, such as a pension strategy or a company car, without requiring personal arrangement. This is especially advantageous
for utilities like mobile phones, which can be granted as a non-cash benefit by employers.
Furthermore, if certain activities or services that would typically require payment are available as benefits, it will give you a clearer understanding of your cashflow situation and eliminate the need to allocate money towards those items.
In addition, both employees and employers receive tax advantages. By collaborating with your employer, it is possible to negotiate a benefits package that offers tax advantages. For instance, when your employer covers the cost of your mobile phone, it is considered a non-taxable benefit.
It is important to consider miscellaneous items like this as they can significantly increase your annual income. If you are an employee, be aware of the potential pressure to accept a salary sacrifice agreement. Only agree if you genuinely find the benefits worthwhile and are content with the associated cost - in other words, the portion of your salary that you will be giving up for these perks.
Examples of Employee Benefits:
- Paid time off
- Vacation time
- Sick paid leave
- Vacations
- Birthday vacation
- Personal day
- Jury dutyMilitary service
- Insurance - Health, Dental, Disability, Life< / li >< l i > Tuition reimbursement - including for kids
- Matching retirement contributions
- Discounts on theme park attractions
- Employee assistance plans
Health and wellness plans
Discounts to workout facilities
Discounts on business products and services
Flexible work schedules
On-site daycare Bring your pet to work
Dry cleaning servicesThe Employee Benefits at McDonald's:
McDonald's provides an employee discount card to its approximately 85,000 UK staff members from their first day of employment. This
card allows employees to enjoy discounted meals at McDonald's restaurants.There are three options available for purchase on each visit. These options include a medium extra value meal priced at ?2.99, a breakfast extra value meal priced at ?1.99, or a toasted food shop sandwich meal priced at ?2.99. However, please note that each visit is restricted to only two purchases.
Staff are also provided with complimentary meals while they are working. According to Neal Blackshire, McDonald's benefits and compensation director, this initiative was implemented many years ago to formalize a practice that was already happening informally in several restaurants. It was not intended to motivate employees, but rather as the right thing to do in our relationship with our staff.
Employee Benefits at ASDA
After three months of service, Asda offers its staff a 10% discount card.
The card can be used in any Asda shop in the UK and in any planetary Walmart, Asda 's parent company. Using the card, Asda 's 175,000 staff save over ?60 million a twelvemonth. When Asda launched an online voluntary benefits strategy in 2010, it besides included price reductions on its ain services, such as insurance, entree to lens makers, flower bringing and auto dislocation screen. Angela Woodward, wages director at Asda, says: `` By offering staff price reductions throughout the concern, they become occupied and can besides supply penetration into the company trade name. ''
Employees benefits in BGL Group instead than compensation
Insurance agent the BGL Group has added a fiscal instruction programme to the scope of benefits it offers its 2,100 employees.
Lucy Painter, associate manager for the shared services group HR at
the company, explains that they currently offer pension seminars and one-to-one sessions with their pensions adviser, AWD Chase de Vere. Additionally, they provide employees with access to financial aid through their employee aid programme (EAP). According to Painter, these offerings have been well-received and have generated numerous requests for more financial instruction. As a result, they have decided to expand the programme. After conducting market research, Painter opted to utilize the Money Advice Service to implement a financial instruction programme. She states, "We are very impressed with the materials provided by the Money Advice Service."
"It covers a wide range of topics and makes finance fun and easy, which aligns well with our culture." In March, a series of Money Matters workshops were launched. These workshops cover budgeting, adoption, insurance, nest eggs, and investing. Staff members were given time off work to attend these workshops. "We are monitoring feedback from the workshops to determine what to offer next," says Painter. "We want our employees to benefit from the information they receive, using tips from the workshops to make the most of their money."
Employees benefits in Barbon
In 2010, Barbon implemented several initiatives to improve employee engagement rates in benefits. These initiatives included the introduction of a 'pension wheel' desk bead, a concertina cusp for pensions, and a new benefits brochure. Additionally, the HR team organized presentations by representatives from the Financial Services Authority's free Moneymadeclear service at various company locations.
As a result of these efforts, pension engagement increased by 31% within a year, and there was a 45% increase in utilization of the wellness cash program. Furthermore, absence rates decreased from approximately 5-6% across different company
locations to about 3%. In January, Barbon received recognition as a "one-to-watch" company in the Sunday Times' 100 Best companies to work for.
Richard Walden, HR manager at Barbon (pictured), explains that they believe employee engagement is key to their success.
It implies improved outcomes for the company and ultimately, better returns for shareholders.
Benefits for BT employees in terms of compensation
BT provides a voluntary program of financial education for employees over the age of 50 to help them start planning for retirement. This includes seminars, offered in conjunction with provider Wealth at Work, as well as BT's own online pension modeling tool. These tools assist staff in making lifestyle choices while fully understanding the potential financial implications. "The tools allow staff to make personal decisions regarding when they want to stop accruing a larger pension, in favor of retiring earlier. The [tools] are there to get staff thinking about what they are opting for.
They may have mourning, attention, or wellness issues to deal with.
Employee benefits at City and Guilds
City and Guilds began collaborating with Thomsons in July 2010 to establish a flexible benefits strategy. Thomsons offered the opportunity to use Asperity's online retail and leisure discount portal. Chris Coyne, group head of wages at City and Guilds, stated that they considered whether the portal would be a valuable addition to their benefits package during the strategy design process. Coyne said, "The advantage of the portal is that it provides immediate savings to employees during challenging times when employers may struggle to offer exciting salary reviews." In November 2010, City and Guilds introduced Asperity's strategy to
its 900 UK employees, finding that having one contact point saved them time and resources when evaluating suppliers and obtaining employee references from other companies.
DDL's Employee Benefits in Comparison to Compensation
DDL implemented a flexible benefits program in June 2010, incorporating its existing voluntary benefits strategy. This program includes various options such as a wellness cash program, work motorcycles, child care verification, critical illness insurance, private medical insurance, a discount program, salary sacrifice for company cars, holiday purchasing, and a group personal pension program. Provided by Lorica Consulting, these benefits are available to all 6,000 employees of the leisure company, regardless of their role. The aim is to standardize benefits following multiple ownership changes in recent years.
Severn Trent H2O's employee benefits
Severn Trent Water introduced the SmartWater benefit in January 2010, allowing employees to pay for their H2O usage through a salary sacrifice agreement. According to Chris Blakesley, Severn Trent Water's wage and benefits director, this benefit has significantly increased employee engagement. He stated, "We have received very positive feedback because employees often questioned what benefits they could receive related to the services provided by the company. While free water is not possible due to regulatory constraints, SmartWater is a close alternative."
Employee benefits in Towry
Wealth management firm Towry utilizes a traditional incentive system, a pre-paid MasterCard (Spree card), to offer flexible benefits to its employees. Staff members have the choice to load funds onto the Spree card, provided by P Motivation, and can obtain savings of 5-15% at selected retail merchants. Towry also utilizes the card to distribute any remaining amount in the employees' flexible benefits
fund. Currently, 35% of its employees have chosen to load their benefits via the Spree-flex card.
Adrian Duncan, concern development manager at P ; A ; MM Motivation, states that some employers have gone a step further by offering pay incentives and acknowledgment payments on the card.
Employee benefits at UKRD Group
UKRD Group, Luminus, and Kenneth Green Associates are included in The Sunday Times 100 Best Companies to Work for in the UK 2011. This list evaluates organizations based on various factors, such as leadership, management, team collaboration, community involvement, well-being, fair trade, and personal growth. Ranked as the top company, UKRD Group has implemented a profit-sharing scheme for its employees and increased its training and development budget even during the economic recession.
Last year, the administration spent ?64,000 on staff events such as days out sailing, theatre trips, parties, and clay pigeon shooting.
Employee benefits in Northumbrian Water
Northumbrian Water provides a range of tax-efficient benefits to its 3,000 employees. Since 2006, the water and waste provider has offered childcare vouchers, work motorcycles, and holiday purchases through salary sacrifice. In 2008, they introduced a scheme for staff to pay their water bills via salary sacrifice and added company car salary sacrifice in October 2009. They also have a tax-efficient share-incentive program (Sip) that allows employees to contribute from their gross salary.
According to Michelle Legg, the director of compensation and benefits, salary forfeiture has been a topic of discussion among employees for a while. During employee surveys, they inquire about preferences for the benefits package, which led to the development of the water and car strategies.
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