• Unit 6: Compensation and Benefits

    When hiring new employees, business managers must decide how much they will compensate their potential new human capital. Since this expense is often their highest overhead cost, employers need to understand this element of financial planning to avoid business failure. A generous compensation package can be an important recruitment tool: some employees value direct financial compensation while others prefer to receive more indirect benefits, such as healthcare, child care, and tuition reimbursement.

    During times of recession, employers often have more leverage to decrease employee salaries and benefits because they have a larger pool of eager unemployed workers to choose from. However, retaining good people with appropriate compensation and benefits, during periods of low and high growth can foster a productive and committed workforce that appreciates a proper work/life balance. Meanwhile the growing disparity between executive and employee pay continues, as firms continue to align executive compensation with overall company performance. In this unit we explore this issue and others pertaining to employee compensation and benefits.

    Completing this unit should take you approximately 6 hours.

    • 6.1: Compensation of Human Capital

    • 6.2: The Basics on 401k Plans

    • Unit 6 Assessment