Compensation And Benefits Flashcards, test questions and answers

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What is Compensation And Benefits?

Compensation and benefits are two important aspects of a successful business. Compensation is the payment or reward given to an employee for their work, while benefits are additional services or items that employers offer in order to make the job more attractive. When thoughtfully designed, a compensation and benefits package can be used as a tool to attract and retain talent, increase employee morale, and reduce turnover rates.Compensation is typically based on an individual’s experience, skillset, education level, job responsibilities, performance evaluations and other factors. The most common form of compensation includes salaries or hourly wages; however there are also other forms such as commissions, bonuses, profit-sharing plans and stock options. Payroll systems are used by companies to manage payrolls efficiently while ensuring that employees receive their earned wages on time.Benefits play an important role in any organization’s success by providing employees with additional support outside of their regular salary or wage. Common benefits include health insurance coverage; retirement programs such as 401(k) plans; paid vacations; sick leave; tuition assistance for higher education; life insurance coverage; disability insurance coverage; flexible spending accounts (FSA); dependent care assistance programs (DCAP); wellness programs such as fitness memberships/classes/gym subsidies; discounts on merchandise from company stores or partner merchants; company cars for executives/employees who travel often for work purposes; childcare services/vouchers through daycare centers near the workplace environment etc. Benefits packages can be tailored to meet the needs of both employer and employee alike depending upon their financial situation. When it comes to setting up a competitive compensation and benefit package for your business it is important to consider what best works within your budget while still being attractive enough that potential employees could choose your organization over others when looking for employment opportunities. A thorough understanding of what type of pay structure would be suitable based on employee qualifications must also be taken into account in order to ensure fair distribution of wages across all workers regardless of experience level or job responsibilities assigned within the organization.