Question

Desctibe What is included in a compensation plan?

What is compensation and benefits?

Answer 1

1.

A compensation plan is the package offered to the employees at the time joining the organization. It is also termed as a salary package in lieu of the services rendered by the employees to the organization. The compensation plan includes the following components that are to be awarded to the employees:

A. Fixed payment component and scale

B. Variable pay component that is based upon performance

C. Bonus payment based upon the performance of the organization

D. Group health insurance

E. Employer’s contribution towards the retirement savings (if any)

F. Other fringe benefits as per the company policy.

2.

Compensation is the payment delivered to the employees based upon his skills, qualification and performance. Here, the benefits are also delivered to the employees, but benefits are generally uniform (otherwise mentioned) for all employees at each level as per the company guidelines. Though the compensation varies on the basis of performance delivered by the employees.