Types Of Employees Compensation Schemes/Systems

February 16th, 2009 Comments off
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Compensation is not all about financial rewards. In fact it includes both financial and non-financial rewards that companies give their staff in exchange for their hard work.

The purpose of a compensation scheme/system is to attract and retain good staff to work and help the organization to achieve its goals.

Some of the compensation schemes or systems include the following:

1. Piecework

·        This system reward employees based on a set rate for every item they produce.

2.  Commission

·        This system rewards employees on a percentage of transaction’s value they made

3.  Profit sharing

·         Besides their regular compensation, under this profit sharing system, the employees are rewarded with a certain percentage of company profit

4.  Employee Stock Ownership Plan

·        This system reward employees with shares of company stock in addition to their regular compensation..

5.  Stock Option

  • This compensation study rewards employees with the right to buy shares of stock at a set price.


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