Benefits and compensation in workplace offers a labor friendly condition to the workers to ensure that they give fully their potential. Compensation is an approach that is systematic to ensure that employees are provided with monetary value in exchange of the work performed. The purposes that the compensation is able to achieve include recruitment, job performance and job satisfaction. While benefits are a kind of compensation, that are given to employees in additional to what they get as wages and salaries.
People during the pre-industrial era treated workplace and home place as one place, which change significantly with emergence of the machines and factory. Industrialization thus brought socioeconomic hierarchical that was accompanied with gender role stereotypes. This means that men were the one who were able to access the paid jobs while the women worked at home. The quality of the family was affected very much by the socio-economic hierarchy that each family occupied. This is because the wealthy people were the one who drove the industrial demand of goods. During the time of war, the demand for the industrial workers improved as men mostly worked as military. Therefore, women were the other option to be recruited to work in men dominated careers in the industries. However like men, they were neither given enough economic rights nor able to access good work protection for their jobs. According to the industrial employment conditions that were reported in those early times, they showed that men and women received very low wages, succumbed long working hours and poor working conditions as they serve hazardous job places. They were also discriminated in terms of sex, race color and gender. Some of them reported sexual harassment. There was rampant child labor reported in the work place.
Due to all these problems, laborers formed uprisings that were too used to address the issue of good payment, better working conditions as well as equal and fair treatment in the workplace. This fight got support from all the divides where religious and academicians supported them. This led to formation of unions as well as cooperatives to help the workers acquire better benefits and compensation in the workplace. People behind cooperatives and independent communes were socialist Robert Owen and Charles Fourier in the eighteenth century. Owen advocated for short working hours, formation of unions and self-governing workshop while Fourier fought for equal women rights and good basic income. He also advocated decent minimum payment for the unemployed thus creating benefit for the unemployed. Child labor was abolished as they were forced to go to school and attending other recreation activities.
These struggles lead to the formation of the International Labor organization (ILO) in 1919. The countries who signed this convention were on their way to promote their employees at workplace, bring about decent employment opportunities, strength dialogue between the employees and the employers as well as handling professionally work related issues. It also offered a platform that there would be possibility of forming labor groups, organizations and they have representative from state government. These ensured that consultation to come up with ideal working standards and policies were formed. Therefore, this was the birth of good benefits and compensation at the work place.
Important Types of Benefits and Compensation
Various compensations offer incentives to the employees of the company. The first one is base pay. Base pay is a form of compensation that is fixed that an employee is offered after performing a specific job or after undertaking a certain responsibility. It is usually paid in as a monthly salary, hourly or as piece rate. This type of compensation does not include any additional pay.
The other type of compensation is commission. This compensation is the one offered for service that have been rendered based on the amount of a percentage that has been agreed upon by both parties depending with the amount sold. This is usually an incentive given to sales people to ensure that their sales morale is increased as the more the sales, the higher the commission offered.
Overtime pay is another compensation that is offered to the employees. After working four the normal working hours, overtime sometimes may be introduced to various reasons. First, one employee may have fallen sick and he/she has not been replaced; therefore creating a vacant shift that requires someone to work extra hours. The company might be in the transitional period of expanding their functioning time and the recruitment of extra employees is underway. Therefore, the created time is counted as overtime to the regular employees as they will be forced to work for extra hours. The other way that overtime is created is when some of the employees are on leave. These hours are paid extra money on top of the normal salary to compensate the person undertaking the responsibility. Most of the overtimes are calculated with a given percentage over the base salary per hour worked after normal time.
Employee stock option is a form of incentive that employees are offered by the corporation. This is through being given an offer to buy stock in the corporation at a bargained price. This bargained price is made to run at a specified period. Most of the companies will offer such incentives to their executives to ensure that they feel the ownership of the company.
Other compensations that the employees are able to enjoy include bonuses, profit sharing, merit pay, travel, meal as well as housing allowance. Benefits including insurances, medical, vacation, leaves, retirement and taxes.
How Benefits and Compensation are Used in Workplace?
Compensation as a tool is used by the management to further their company existence through achievement of various purposes through its dispensation. It is usually adjusted to cater for various company needs, goals and available resources. Compensation in the company is used in the company to ensure that they recruit employees and retain those who are highly qualified. This ensures that the company’s human resource is always competent to undertake the duties in accordance to the postulated goals and objectives of the company.
Compensation in the company works as a morale booster in the company as it maintains employees satisfactions in their jobs ensuring that their productivity is increased. Therefore, through good compensation scheme, the business is able to increase its output with minimum resources possible thus making good returns. Compensation ensures that the top performers are also rewarded and the same high performance act is increased throughout the working period. When the company encourages high performance in the business, it increases high returns and due to reward offered to the high performing employees, labor turnover in the business is decreased.
Through proper compensation, it is capable of achieving internal and external equity of the company. It increases company loyalty by its employees reducing labor turnover. Therefore, when the company offers a good compensation scheme, it reduces its expenses that come from continuous recruitment due to high labor turnover as well as lower employees loyalty. Good compensation ensures good work communication through proper modification of unions practice that offers proper compensation negotiations. This is very important in the company as it offers job satisfaction and increases high morale in the working place.