Approach to Total Compensation

Approach to Total Compensation
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Approach to Total Compensation
Total compensation refers to all the payments that a company should pay an employee for a period, basically yearly. The compensation includes diverse aspects, such as bonuses, basic salary, incentives, commissions, or other variable payments. In addition, other non-financial components might be included in the total compensation of an employee. Therefore, the total compensation statement offers workers information on the packages awarded due to their direct or indirect contribution. Direct compensation includes aspects such as basic salary and incentives that are directly paid to the workers. On the other hand, indirect compensation includes insurance, educational benefits, retirement packages, paid time off, and relocation benefits (SHRM, n.d.).
The approach to total compensation must be comprehensive and address all aspects that are important to the employee and employer. These components must include issues related to basic salary, insura...