Philosophy Of Employee Compensation

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Compensation philosophy is basically official statement recording the organization position about employee compensation. This explains the “why” of employee pay and produces a framework for stability. Employers can benefit from this if open about their compensation philosophy and having a proper pay strategy (SHRM, 2015). The executive team and the human resources department are the ones that usually develop the compensation philosophy’s. The compensation plan is based on different factors, for example, the organizations financial position, the salary information, the size of the company, and the level complexity in discovering qualified people based on the economy. The compensation philosophy has to be evaluated on a regular basis, to see …show more content…

The company should offer incentive compensation that would be in the form of equity that employees could have owner-ship and to coordinate employee interests so that it aligns with the stakeholder and shareholders. (CITI’S, nd) Maintaining strong capital levels will determine the size incentive compensation this will reflect how the company’s performance goes and as well as industry and environment factors. In senior management incentives compensation, there needs to be a program that recognizes capital planning outcomes this will advance alignment with shareholders’ performance assessments should be done to promote conduct based on the most ethical standards, incentive compensation, disciplinary actions when appropriate, communication and having moral principles at all times is the foundation of most businesses (CITI’S, …show more content…

Some are non-performance bonuses and accrue sick time, are benefits. Other compensation could be overtime pay, severance pay, and commission. Voluntary compensation could be incentives that an employer chooses to give their employees, which are not legally required to give. For example, paid time off vacation, sick, personal and bereavement time. And employer can also offer medical, dental, accidental, disability insurance, a company cell phone, educational assistance, company car, retirement plans and other benefits (Ferguson,

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