There can be several ways where benefits can be given to employees. Mostly it is given in terms of a CTC or gross salary. Some of the various components of compensation and benefits are mentioned below:
1. Fixed pay: This is the basic salary paid to the employee irrespective of any other factor. This is stated clearly in the employment contract. This is the compensation or salary or wage which an employee or a worker will definitely get as long as he or she is an employee of the company.
2. Variable Pay: This is the additional compensation paid to employee based on employee’s performance, company performance etc. Since variable pay is based on the performance of an individual, it motivates the employees to perform even better.
3. Equity Pay: Employees are awarded shares of the company, often at a discounted price. Employees are expected to make money out of them by the appreciation of the stock price and the growth of the company. This is mostly given to the senior management who have served the company for a long time.
4. Other benefits: Benefits such as medical facilities, insurance policies, company owned car of flat etc all play an important role in motivating employees. These benefits are given by the company as a part of recognizing the services of an employee.
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