TYPES OF COMPENSATION
What is compensation? Compensation refers to any payment given by an employer to an employee during their period of employment. In return, the employee will provide their time, labor, and skills. This compensation can be in the form of a salary, wage, benefits, bonuses, paid leave, pension funds, and stock options, and more (Jay, 2021) Why is understanding different Types of Compensation Important? Many sole proprietors or formerly small companies who are expanding quickly lack a skilled HR team. This indicates that no strategy was considered while creating their salary packages. The following can happen if you don't have an effective compensation plan and don't provide your employees with the correct balance of forms of salaries: Attrition De-motivation Reduced Productivity and therefore Reduced Profitability Lack of Satisfaction and Engagement Failure to Attract Top Talent Reduced Employee Loyalty Types of Compensation Around the world, differ