Basic Components Of Compensation

Compensation: It can be defined as the sum of money that an employer pays to an employee for giving his services to the organization. Compensation determines the life style of employee’s in the society, his dedication towards the organization, and his level of motivation. It is also important for the employer also as it determines the production cost in the organization.

Objectives:

• It will built the equity in the employees.

• Workers efficiency will increass.

• Effective distribution of labor.

• It will avoid the conflicts between the employees and employer.

Components of compensation:

1. Basic salary:

Basic salary is the fundamental component of pay structure. It is the major portion of the employee’s compensation. Different components

Overtime pay :

It is the amount of compensation that an employee receives if they works for extra hours beyond his normal working hours.

6. Allowances :

It is a payment given to an employee by an employer in monetary terms. It may be fixed, predetermined or it may be provided regularly to employee. Some important allowances are dearness allowance, house rent allowance, conveyance allowance, leave travel allowance, medical allowance, city allowance.

Employee welfare : Employee welfare is a comprehensive term including various services, benefits and facilities offered to employees by the employer. It covers state of well being, happiness, satisfaction, conservation, and development of human resources. It implies the setting of the minimum desirable standards like health, clothing, housing, education, insurance, job assistance and recreation. Such facilities enable the worker and his family to lead a good work life and social life.

Objectives :

1. It will promote the economic development of the employees.

2. Improving the efficiency of the labour.

3. To provide proper human conditions of work and living.

4. The welfare activities are done to minimize the hazardous.

5. To supplement wages in monetary

Facilities for storing and drying clothing [section 43] : In every factory there should be suitable places for keeping clothing not worn during working hours and for drying of wet clothing in respect of any factory or class or description of factories.

3. Facilities for sitting [section 44] : In every factory suitable arrangements for sitting shall be provided and maintained for all workers obliged to work in a standing position.

4. First-Aid appliance [section 45] : In every factory there shall be provided and maintained so as to be readily accessible during all working hours first-aid boxes or cupboards equipped with the prescribed contents, and the number of such boxes or cupboards to be provided and maintained shall not be less than one for every 150 workers ordinarily employed at any one time in the factory.

5. Canteens [section 46] : In any specified factory wherein more than 250 workers are ordinarily, employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.

6. Shelter, rest rooms and lunch rooms [section 47] : In every factory where in more than 150 workers are ordinarily employed, adequate and suitable shelters or rest rooms and suitable lunch