Is the payment of remuneration a payment, an encouragement or gratitude for a service? What are the types of rewards?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Employee benefits are all costs that the employer bears on the basis of the concluded labor agreement. On the one hand, the process of determining payments should take into account the activities of the employee, and on the other hand, be a motivation to achieve the required level of his activity.

The essence of the concept

Fundamental role for any employee has a material reward. However, it does not achieve its goals if some other factors are not taken into account. Material rewards are one of the types of incentives that must certainly be combined with interesting work and recognition of the team. A necessary condition is the creation of comfortable working conditions, promotion, etc.

On the one hand, motivation of a material nature is seen as a means that can satisfy physiological needs, as well as maintain safety. On the other hand, the amount of wages is certainly a reflection of the level of position held in the team and the degree of respect.

Thus, a decent remuneration for work is a consequence of the high appreciation of the employee, his specialstatus and prestige. Sometimes the salary itself is seen as a source of self-respect.

Rewards are everything that is valued by a person. That is why this concept is specific for each. In this regard, the evaluation of the reward in terms of its significance is also different for each person.

Basic shapes

All types of rewards are divided into internal and external. The first of them gives a person the work itself. It allows you to feel a sense of content, achievement, and self-respect. The communication that occurs among employees in the course of work can also be considered an internal reward.

The second type of reward is provided by the organization itself. This includes career advancement, recognition, praise from superiors, and wages. External rewards include additional vacations, insurance, etc. This can also include social security and pensions, time for lunch and rest, and so on.

In this case, the payment of remuneration to employees is not only compensation for their work. It is gratitude for their contribution to the production process that affects the ability of the organization's management to attract, retain and motivate the staff they need.

Types of financial incentives

Material rewards are payments made in the form of bonuses and salaries, as well as additional incentives.

All existing types of allowances are classified in two directions. The first of these includesadditional payments made for years of service. For the second category, each enterprise develops its own remuneration system. It provides for payments for various merit.

Money rewards in the form of allowances and payments can be stimulating and compensatory. The first category includes:

- bonuses;

- allowances to tariff rates for workers or to official salaries of employees and specialists;

- encouragement based on the results of the years;

- one-time payments for length of service;- other stimulating incentives provided for high performance.

All these rewards are determined by each organization independently. At the same time, the conditions and amounts of payments should be determined by collective agreements.

As for additional payments and allowances of a compensatory nature, they are divided into two large groups.

The first of these includes those types of incentives that are not limited to areas of work. Compensatory remuneration is obligatory for payment to enterprises of any form of ownership.

The second group includes allowances and surcharges that are calculated in a certain area of labor application. Most of them are also mandatory. But it should be borne in mind that their specific sizes are set by the employer.

Compulsory compensatory incentives

Remunerations to employees that the employer pays, based on the current legislation, are the following additional payments:

-to minor employees due to the need to reduce their working day;

- for work on holidays and weekends, as well as overtime;

- in case of marriage or failure to meet the required production standards, which occurred through no fault of the employee;

- up to the average salary in case of deviations from the normal conditions of the production process;- to a worker up to the category assigned to him, if he was sent to perform a task corresponding to a lower qualification.

Other compensation payments

Other types of allowances are distinguished by a limited form of application. Some of them can be established to compensate for the work that is not directly related to the main duties of the employee. An example of this can be the empowerment of the functions of a leader while performing his own range of affairs in parallel. Other allowances are paid under harmful working conditions.

Features of rewards

The head of the organization certainly evaluates the professional activities of each of his employees. It also affects the amount of accrued rewards. The systems of such assessments may be different. However, they have the same goal. They distinguish between employees who perform well, satisfactorily, and mediocre. Depending on which category the members of the labor collective fall into, remuneration is accrued.

Most organizations in modern conditions conduct annual interviews or certification of their employees for such an assessment. Fromtheir results and rewards depend.

Employee benefits

The remuneration system that exists in any organization consists of three main elements. First of all, this is the main payment for labor. It is considered the base salary. The other two elements are additional payments (bonuses, bonuses, etc.) and social incentives.

Remuneration for work is a permanent part of cash payments for an employee. It is calculated for the performance of permanent duties provided for by the job description. The remuneration for work in terms of the base salary consists of the official salary provided for by the staff list and various allowances. At the same time, the amount of the official salary depends on the position held or the tariff category. Allowances are introduced to take into account the individual contribution of the employee to the production process. They are usually calculated as a percentage of the existing salary. Bonuses can be established for length of service and for knowledge of any foreign language, as well as for performance, etc.

Employee benefits

Basic rewards are payouts that stay the same for a fairly long period. At the same time, they do not directly depend on the results of the employee's labor activity.

The size of the variable part of the salary may depend on the manufacture of each unit of production, for which the employee is charged a fixed remuneration established by the organization. Such payments canbe determined by a sales promotion scheme or commission.

The size of the variable part of the salary can be calculated as a percentage of its base component. In this case, they link the amount of monetary compensation they receive with the performance of the entire company. A similar system is being developed for those categories of workers for whom there are no quantitative performance criteria. Their list includes accountants and managers, lawyers and business executives, etc.

The ratio between the fixed and variable parts of the monetary reward may be different. It is determined by the head of the organization, based on the result obtained and the efforts made by the employee himself. In this case, increased remuneration for labor may take the form of gratitude from the company to its staff. For example, with a large volume of sales, sales managers can be charged 60, 70 or 80% of the base salary.

Encourage inventors

Specialist may spend some time on the creation of any object of industrial property. As a result, the organization pays him roy alties. This type of incentive has the nature of remuneration and has stimulating and compensatory features.

On the one hand, roy alties increase employee interest in working on further improvement of their invention. On the other hand, they compensate for the moral losses from the realization of the impossibility of owning the rights to the product.