In the world of work, remuneration is an important aspect related to payroll and rewards from the company to employees.
Applying the right remuneration is very important in ensuring employees feel valued and motivated to give their best contribution.
Then, what are the types, benefits and advantages of remuneration? Let’s look at the following article.
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Definition of Remuneration
Remuneration is an appreciation and award in return for the contribution and performance of employees to the company. Forms of remuneration compensation, such as salaries, benefits, bonuses, health benefits, pensions, leave and other incentives.
In addition, remuneration aims to ensure that employees are given adequate incentives so that they remain motivated, perform well and stay in the organization.
This contributes to the achievement of organizational goals and assists companies in attracting and retaining quality employees.
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Remuneration Value Factor
The amount of remuneration is due to several factors, including:
1. Enterprise Standards
Each company has its own standards and rules for remuneration values.
The greater the company’s income, the greater the amount of remuneration received by workers.
2. Contribution
Maximum work results from workers can make the company’s growth better.
This factor can make the remuneration value even greater.
3. Certain Achievements
Employees who have new achievements or skills to contribute to the company can also receive remuneration.
The more skills increase, the income also increases.
4. Class of workers
For stable companies, usually have levels of working groups.
This class of workers is based on the length of time worked and the ability of workers.
Usually found in state-owned companies, ASN, and others.
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Types of Remuneration
There are several types of remuneration that are commonly applied in human resource management practices. The following are several types of remuneration that are important to understand:
1. Fixed Salary
Fixed salary is the amount of salary paid to employees at a certain period of time, such as monthly or hourly.
Remuneration is not the same as salary or benefits. This is because remuneration is total compensation, while salary is the basic wage of employees.
Each company has a different remuneration system. Some companies have a remuneration component, but some only include basic salary and benefits.
2. Allowances
Next, there are benefits as an additional form of compensation given to employees outside of a fixed salary.
Employee benefits can include health benefits, transportation allowances, housing allowances, education allowances, meal allowances, and so on.
3. Bonus
Bonuses are additional payments given to employees as a reward for achieving specific performance targets or results.
Bonuses can be in the form of cash, company shares, or other incentives. This provides employees with additional incentives to achieve better results and increases motivation.
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4. Commission
Commission is a form of remuneration that is generally given to employees involved in sales or marketing.
Usually the commission is given as a percentage of the sales they generate or as a reward for achieving certain sales targets.
This can encourage employees to try harder to acquire customers and increase company revenue.
5. Employee Shares
Employee stock is a form of remuneration in which employees are given company stock or the option to buy company stock at a subsidized price.
6. Performance Incentives
Performance incentives are programs designed to reward employees who achieve outstanding results.
Performance incentives can take the form of non-monetary rewards, such as holidays, trips, public recognition or other special awards.
7. Employee Benefit
Employee benefits can include programs such as health insurance, life insurance, pension plans, sick leave, annual leave, and so on.
8. Non-Financial Awards
Apart from financial remuneration, non-financial rewards also play an important role in increasing employee motivation and satisfaction.
Non-financial awards can be in the form of praise and awards in the form of trophy rewards, and so on.
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Remuneration Benefits
Following are some of the main benefits of remuneration, including:
1. Attract and Motivate Employees
The first benefit with fair and competitive remuneration can attract quality employees and motivate them to work harder and achieve better work results.
This can help companies create a productive and profitable work environment.
2. Increase Job Satisfaction and Employee Retention
Furthermore, remuneration can also increase job satisfaction and employee retention.
Employees who feel valued and fairly paid tend to be happier and more likely to stay in their jobs than employees who feel unappreciated.
3. Improving Company Performance
The existence of proper remuneration can improve the company’s overall performance. Employees can be motivated tend to work harder and be more enthusiastic to achieve company performance targets.
4. Improving Employee Welfare
Employee welfare can take the form of health benefits, insurance and other benefits that can provide financial protection and stability for employees and their families.
5. Improving Company Reputation
Companies that provide fair and competitive remuneration tend to have a good reputation in the eyes of employees and the public.
This can help companies attract quality employees and build good relationships with the surrounding community.
6. Encouraging Innovation
Providing fair and competitive remuneration can help companies create a productive work environment and motivate employees to achieve better work results.
This can help companies improve performance and earn greater profits, while also enhancing employee welfare and the company’s reputation in the eyes of society.
So, those are some reviews regarding remuneration. Hope this article helps you.