Q3. What are the Factors That Influence Employee Compensation and Benefits, and
ID: 375907 • Letter: Q
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Q3. What are the Factors That Influence Employee Compensation and Benefits, and what are some of their features? (Define and Explain each term & mention two real life examples)
How long has employee been with company and how has he or she performed? How large is the company? Does job require high levels of skills? Employee's Tenure and Performance How profitable is the company? Size of Company Kind of Job Performed What industry is job in? Company Profitability Level of Compensation and Benefits Kind of Business Geographical Unionization Location Where is organization located? Management Philosophy Labor or Capital Intensive ls business unionized? What is management's philosophy toward pay? Is business labor or capital intensive?Explanation / Answer
Compensation - Compensation is a monetory and non monetory rewards for employees to performing for organization . Compensation may be in the terms of money and in the terms of motivation.
Factors are as follows which influence the employees benefits and compensation.
There are two types of compensation that influence the employees benefits and compensation.
1) Internal factors
2) External factors
Internal factors- Internal factors are exist inside the organization and influence the pay structure of company.
1) Strength to pay- Organization must know it's playing capacity.
2) Business strategy- Organization should have strong business strategy so that it's afford the cost .
3) Job evaluation and performance appraisal- Before offering compensation Employers must evaluate the performance.
4) Employees - Employees education and experience count much for a compensation plan .
External factors-
1) Labour market -Employers have the knowledge of Labour market conditions.
2) Going rate - Employers should know the compensation rate of this industry while hiring a new employee and design it's compensation plan.
3) Productivity- Employers must have the knowledge about the productivity of employees ,how much employees is productive and beneficial for organization.
4) Cost of living - While designing a compensation and benefits policy Employers must have the city cost of living and affordability of living.
5) Labour unions- Labour unions that really employers need to consider while offering a compensation and benefits policy .
6) Labour laws- Labour laws- such minimum pay , providend fund,working hours etc that influence the employees compensation
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