Compensation and Benefits

The overall objective of a compensation plan is to recruit the best human capital, motivate employees to perform at their peak and retain employees. The compensation package is critical to the strategic HRM plan since much of an organization's budget is devoted to employee compensation. This chapter details compensation options, compensation theories, and applicable laws regarding compensation. It also differentiates between financial, indirect, and non-financial compensation. Perform and answer exercise question one, which asks you to research your intended career and consider your compensation expectations with what you learn.

Other Types of Compensation

Exercises

  1. Of the benefits we discussed, which ones are required by law? Which are not?
  2. Research current Federal Insurance Contributions Act (FICA) tax rates and Social Security limits, as these change frequently. Write down each of these rates and be prepared to share in class.
  3. Describe the considerations when developing medical benefits. Which do you think would be the most important to you as the HR manager?
  4. Visit websites of three companies you might be interested in working for. Review the incentives they offer and be prepared to discuss your findings in class.