Remuneration
Candlefocus EditorAt a basic level, remuneration consists of a base salary, which is the fixed payment for a specified period of time. Depending on the size of the organization and its policies, a job level and specific job responsibilities determine the salary an employee will be paid. Other forms of remuneration may be extra payments for working outside normal hours, such as overtime or shifts.
In addition to these traditional forms of remuneration, some employers also offer non-wage compensations, like health insurance and other benefits. Employers often use these forms of benefits as recruitment and retention incentives as it is typically cheaper than offering higher salary packages. Other types of non-wage remunerations may include bonuses, travel reimbursements, gym memberships, or well-being initiatives.
At the executive level, remuneration may be a combination of salary, stock shares, and bonuses. Executives may be offered stock options as part of their remuneration package which can encourage their commitment and loyalty to the company. Executive remuneration is often tied to the company’s performance, as these executives are generally responsible for steering the business in the right direction.
An important part of remuneration for all levels of employees is retirement contributions. Many employers provide retirement savings plans and make deductions from their employees’ salaries. Many of these plans are tax free, which can reduce the overall tax burden for employees. This type of deferred remuneration can be a useful tool for employers and employees to save for retirement in a financially effective way.
To sum it all up, remuneration is the total amount of financial reward that is given to an employee in consideration for their service. The exact form of remuneration will be dependant upon the employees’ job position and level of responsibility in the organization. Employers should use remuneration packages as an effective way to motivate and retain employees, and also offer them an additional form of security in the event of retirement or other life plans that require financial stability.