Total rewards are the monetary and non-monetary return provided to employees in exchange for their time, talents, efforts and results. The phrase “compensation and benefits” has given way to “total rewards”—which encompasses not only compensation and benefits but also personal and professional growth opportunities and a motivating work environment (for example, recognition, valued job design, and work/life balance). Stiffer competition in business has made it difficult for cost-conscious organizations to offer higher wages and more benefits each year. Employers have had to find alternative forms of rewards that cost less to implement but that still motivate employees to excel. Organizations have become much more strategic in their management of human resources, including integrating their various human resource functional areas. Broadly, a total rewards package might include:
* Work-life balance
* Performance and recognition
* Personal development and career opportunities
It is typically a "package" of rewards, and different aspects will speak to different individuals.Compensation Pay provided by an employer to an employee for services rendered (i.e., time, effort and skill). Compensation comprises four core elements: * Fixed pay -- Also known as "base pay," fixed pay is nondiscretionary compensation that does not vary according to performance or results achieved. It usually is determined by the organization's pay philosophy and structure. * Variable pay -- Also known as "pay at risk," variable pay changes directly with the level of performance or results achieved. It is a one-time payment that must be re-established and re-earned each performance period. * Short-term incentive pay - A form of variable pay, short-term incentive pay is designed to focus and reward performance over a period of one-year or less. * Long-term incentive pay -- A form of variable pay, long-term incentive pay is designed to...
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