Employee Compensation

Employee Compensation




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Employee compensation includes all the individual salaries, incentives and benefits that the company gives an employee as a way of appreciation. It also includes any additional service like insurance cover, vacation, leave days and pension benefits. The compensation rates vary with different companies. However, it is very crucial for every company to reveal its rates to help them in budgeting and financial accounts (Ladou, 2009). Total reward program entails the new definition of the employee compensation to mean what is paid to the employees and all the benefits entitled to them like medical cover, leave days and vacation benefits. The main purpose of using the reward programs is for the small businesses which are affected by the economy to seek for less costly rewarding options for their employees.

Total reward programs have simplified the ways of encouraging, appreciating and motivating the employees. This is because these programs create more ways of rewarding other than salary increment or monetary benefits. In addition, the programs have to ensure that there is a balance on expense in the business and revenue productivity while ensuring that there are activities to boost employee morale (Madhani, 2009). Some of the relevant programs that would be cost sensitive and also effective reward include developing health care, gym facilities, regular team building activities and scholarship programs. These are very basic as they will save the employee’s money and they also feel recognized by the company which in turn would improve employee’s morale to work towards achieving the organizational goals.

Conclusively, in our company the management offers free parking for all the employees and also cafeteria services where the bill is catered for by the company. In Juniper networks, we also get free transport which makes it very convenient for all the employees to get to work in time (Milkovich, 2008). These programs reduce the daily expenditure of the employees and are less costly for the company compared to monetary compensation.


Ladou, J. (2009). Federal Employees’ Compensation Act. International journal of occupational and environmental health, 15(2), 180-194.

Madhani, P. M. (2009). Sales employees’ compensation: An optimal balance between fixed and variable pay. Compensation & Benefits Review, 41(4), 44-51.

Milkovich, G. T., Newman, J. M., & Milkovich, C. (2008). Compensation (Vol. 8). New York: McGraw-Hill.