An employee in the organized sector is entitled to several benefits both financial as well as non-financial. To be specific, typical remuneration of an employee comprises wages and salary, incentives, fringe benefits, perquisites, and non-monetary benefits.
1. Wages and salary
Wages represent hourly rates of pay, and salary refers to the monthly rate of pay, irrespective of the number of hours put in by an employee. Wages and salaries are subject to annual increments. They differ, from employee to employee, and depend upon the nature of job, seniority, and merit.
2. Incentives
Also called “payments by results”, incentives are paid in addition to wages and salaries. Incentives depend upon productivity, sales, profit, or cost reduction efforts.
There are: (i) individual incentive schemes, and (ii) group incentive programmers. Individual incentives are applicable to specific employee performance. Where, a given task demands group effort for completion, incentives are paid to the group as a whole. The amount is later divided among group members on an equitable basis.
3. Fringe Benefits
These include such employee benefits as provident fund, gratuity, medical care, hospitalization, accident relief, health and group insurance, canteen, uniform, recreation and the like. These are hidden costs of employers which are given to the employees.
4. Perquisites
These are allow to execute and include company car, club membership, paid holidays, furnished house, stock option schemes and, the like. Perquisites are offered to retain competent executives. In the crisis and available labor market even perquisites play an impertinent role.
5. Non-monetary Benefits
These include challenging job responsibilities, recognition of merit, growth prospects, competent supervision, comfortable working conditions, job sharing, and flextime. These benefits are not directly linked to fennel. But organizations spend a lot of money for the welfare of the employees.
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