Question

Describe a total compensation strategy and the different stakeholder involved, that might work best with an organization?

Answer 1

Total compensation strategy is to be defined as a statement being given to employees at the time when their salary is being credited to them which comprises all the details of the salary structure of the organization for them, like it includes information like basic pay, dearness allowances, housing rent allowances, employees referrals, commission earned and bonus etc.

Total compensation strategy is considered by the corporates for many proposes like –

• It very helps at the times of salary audits, business environment changes dynamically thus it is necessary for organization to revise their salary structure to maintain the monetary interest of their employees, while performing salary audit it gives an idea about the prevailing salary structure and what industry is paying out, thus it helps to maintain competitiveness among the organization.
• It helps in performance management system, as it is important to monitor the interest and performance of the employees, total compensation strategy helps to notice the salary structured which an employee is getting in order to match his performance against the salary.
• Total compensation strategy complies legal accordance as it helps to understand the hiring bias if any is being done in the organization.

The total compensation strategy differs in organization has there are different compensation slabs present in an organization which differ from roles to responsibilities from position to designation while it depends upon employee’s nature of work, the position of the employee in the organization’s hierarchy, while on the other hands the employer often describe the compensation according to the skills and abilities of the employee.