Employee Compensation & Benefits

In today’s highly competitive environment, the ability to recruit, maintain and motivate quality manpower is the most challenging task facing organizations.

A well-conceived Employee Compensation & Benefit Plan should include the following elements:

Salary Structure:

A standard pay structure is based on the position of the employee in the organization. It offers fixed pay ranges, with maximum and minimum levels established to take into account varying levels of experience and expertise.


Variable pay is based on the employee’s performance levels, for example, how competently he has achieved set targets for the year.


Incentive plans are a reward-based form of variable pay, such as Bonuses.


A commission method is based on determining compensation as a percentage of net sales. This method is a great motivator as it provides a direct relation between result and reward.


Bonus is a sum of money paid to an employee over and above his standard compensation and is usually performance based.

Stock Options:

Stock option plans offer employees of a company the right to buy a certain number of shares of the company's stock at a particular price on a specified date. This is an attractive tool for retaining manpower, since employees benefit directly when the company’s stock goes up.

Profit Sharing Plans:

  • Insurance
  • Health Insurance:
    A health insurance policy covers the medical expenses of an employee. There are several health package plans ranging from basic to comprehensive coverage. Most employers also provide partial dental and vision coverage.
    Life Insurance:
  • Disability Insurance:
  • Unemployment Insurance:

Profit sharing plans offer employees a share of the company’s profits based on a given formula, in addition to their regular salary.

Life insurance coverage guarantees the payment of a sum of money to the beneficiary upon the death of the insured. Generally, the employer bears the entire premium. Some organizations let employees acquire extra coverage for family members or themselves at a low monthly rate. Employers also offer group life insurance to employees, based on the company size.
It is designed to provide an employee with income due to temporary or permanent loss in earning capacity. Unemployment insurance is designed to give assistance to employees who are involuntarily terminated.

Leave Benefits:

They are an invaluable asset to employees and include sick leave, holidays, vacation, maternity leave, personal leave or caring for family members. Many companies allow employees to accumulate each of their paid leave days for use later.

Retirement Benefits:

Most organizations offer employees retirement assistance whereby employees reserve a part of their compensation through automatic payroll deduction for retirement savings.

Dependent Care Assistance:

Companies may offer flexible working hours, off-site daycare, referrals, and financial-planning assistance for child and elder care.

Adoption Assistance Programs:

This benefit program includes referral services, paid maternity leave, and financial assistance for adoption.

Outplacement Services:

Due to staff cutbacks, companies may assist employees find alternative job prospects.

Education Assistance Programs:

Employers may invest in job related training and education for their employees. Counseling on personal matters is also provided.

Employee Merit Awards:

Monetary rewards are bestowed on employees for exceptional performance.

Golden Parachutes:

Benefits in the form of a sizeable severance pay or a generous one-time bonus are provided to top executives in case of unemployment due to takeovers or acquisitions.

Flex Time:

Flextime allows employees to work hours suitable to them resulting in a more productive and motivated workforce.

Other Benefits:

Relocation expenses

Parking/commuting expense reimbursement

Overtime/travel compensation

On-site Exercise Facilities

An effective and attractive compensation package gives a company an edge in recruiting and retaining talent. Added benefits improve employee morale and in turn, provide exponential returns.