Importance of employee remuneration

 

What is Remuneration?

 

Remuneration is the total compensation he received from the organization for the work he does. it includes bonuses, overtime, allowances, commissions, and all other benefits.

 

Sofa ( 2008 ) found that remuneration is a reward that is given to employees to achieve the goals of the organization.

 

Importance of remuneration in work 

 

1 . Attract the top talents - people only work if they have only any financial benefits' company must pay reasonable amounts for relevant positions to retain the employee. company has to find what are the competitors paying for similar positions in their organization and match the pay scale according to the market conditions.

 

2 . To motivate the employees - employees are compensated properly this will boost their motivation. When people are valued for their work then they will give their full dedication toward work. if employees know about their future monetary benefits such as bonuses and commissions it will increase productivity.

 

3 . Increase employee loyalty - when employees are paid well they will be loyal to the organization and prefer to stay with the organization. by giving only good remuneration only an employer can expect this from an employee.

 

4 . Increase productivity and profits - when employees are paid well they stay with the organization for long periods due to this they know more about the operations of the business' and this will lead to an increase in productivity and high profits.

 

5 . Job Satisfaction - a good employee compensation policy will always make employees happy and this will lead to job satisfaction.

 

Types of Remuneration

 

1 . Salaries

2 . Wages

3 . Commissions

4 . Bonusses and incentives

5 . Profit sharing

6 . Stock options

7 . Non-financial benefits - Health insurance, retirement plans

8 . Overtime

9 . Perks - additional facilities like company cars, annual trips, gyms

 

Factors to consider when deciding a remuneration policy

                  

1 . Job roles should be defined accurately - define the skills, experience, and knowledge of the job for their positions. by doing this you can categorize your workforce.

 

2 . Salary Ranges - Establish a minimum and maximum salary for the different levels and positions in the organization.

 

3 . Equality in deciding pays - if employees are doing the same job there should be no equality in salaries. for example genders.

 

4 . Employee performance - employees who are performing well in the organization need to be considered when deciding remuneration. it is important to do a performance review and compensate them.

 

5 . Job Market - Pay attention to the job market and decide the rates it should be fair not high or low remuneration.

 

6 . Economic conditions - it's important to consider the country's economic conditions when deciding the pay. Its management was responsible to pay a reasonable amount if there is a crisis in a country or otherwise they will have to experience a negative impact due to this.

                Minimum Wage in Europe Figure 1 https://www.kenjo.io/hr-remuneration-guide#laws

 

Conclusion

 Employee remuneration has a big impact on the employee and it will affect the organization's productivity and profitability. so it is the company's responsibility to give an attractive remuneration package to retain talented employees within the organization.

References

Sciences.

Kenjo, 2023. www.kenjo.io. [Online]
Available at: https://www.kenjo.io/hr-remuneration-guide
[Accessed 2 May 2023].

Leonard, K., 2019. www.smallbusiness.chron.com. [Online]
Available at: https://smallbusiness.chron.com/importance-compensation-workplace-38470.html
[Accessed 2 May 2023].

Wallstreetmojo Team, n.d. www.wallstreetmojo.com. [Online]
Available at: https://www.wallstreetmojo.com/remuneration/
[Accessed 2 May 2023].