Nilukas Blog creation - " Remuneration and Benefits of Reward Systems in Organizations"
Remuneration and
Benefits of Reward Systems in Organizations
What is
Renumeration?
The overall pay an
employee receives is known as their remuneration. In addition to the basic
salary, it also includes any bonuses, commissions, overtime pay, or other financial
benefits that an employee receives from the company.
An advantage at work
may or may not pay extra for the employee. A generous vacation policy or
an on-site gym are benefits, but they don't put cash in an employee's hands.
Direct cash payments or taxable supplementary services, and the use
of a company vehicle for personal use, are both acceptable compensation methods
Figure 1 : Renumeration
What are the types
of Remuneration?
Indirect and direct
compensation are the two main categories of pay (compensation).
Financial compensation is
known as "direct remuneration" and includes things like salary,
incentives, bonuses, travel costs, Non-financial compensation is sometimes
referred to as indirect remuneration and includes things like health insurance,
childcare support, and educational chances.
Employers can decide
whether to provide their staff with direct or indirect compensation
Figure 2 : Remuneration types
The Benefits of a
Complete Reward System in Organizations
The elements of an entire
rewards program include, to summarize, all that a business does to attract employees,
including salary, incentives, benefits, and opportunities for professional and
educational advancement. This method offers a lot of benefits to businesses,
especially small ones where owners and managers are required to establish good
interpersonal relationships with staff members. The system, which has four
components altogether, operates in a constant way
1.Staff Retention
Total rewards are important since it has tools to provide actual career routes for employees on the basis of a fundamental template developed by a company for its own program. When a local company hires someone on a comprehensive rewards program, it may show the person the points in their career trajectory where bonuses, salary raises, extra vacation or paid sick leave, and greater benefits occur.
Figure 3 : Staff
Retention
2. Staff Performance
A reward system has the
benefit of presenting employees with apparent career paths, but employees are
aware that key components of these paths, such as incentives, only materialize
if they fulfill performance benchmarks. Aspects of these programs including
professional development, training, and performance management enable staff
members to gain novel and specialized abilities through instruction and
training, enhancing their understanding of and competence in carrying out their
jobs.
Figure 4 : staff performance
3. Controllable Expenses
Entire rewards programs'
extensive and comprehensive reach enables small businesses to make reasonable
estimate projections of the amount of money they will spend on each employee
over a number of years. When a company develops a complete rewards program, it
has the flexibility to develop a matrix of expenditures that fulfills both the
program's initial financial requirements and the projections for the company's
future growth.
Figure 5 : Controllable Expenses
4. Program Administration
The benefit of
centralized management for all employee-related issues, including salary,
benefits, and training, is given by total rewards schemes. As the
administration system offers the benefit of a comprehensive system through
which companies, and particularly small businesses, may oversee all these
areas. In some compensation and incentive systems, training and development are
prioritized above pay bonuses and raises, while health care management happens
apart from pay. In terms of total incentives, everything may be supervised
continuously and happens on even a single timeline.
Figure 6 : Program
Administration
Conclusion
Remuneration is the total
of all cash rewards that will be given to an employee during a specific period.
One of the most essential HRM tasks that is an element of the
employment relationship is remuneration. Since the employee
"sells" their services to the employer and receives
"payment" from the company in return, it establishes the basis of the
relationship. It's not just about paying employees back; there are other
advantages that come along with employment. The primary motivation for an
employee to carry out their duties successfully and efficiently is
remuneration.
References
Bamboohr, 2023. bamboohr. [Online]
Available at: https://www.bamboohr.com/resources/hr-glossary/total-remuneration
[Accessed 22 March 2023].
Chron, 2021. Small
Business. [Online]
Available at: https://smallbusiness.chron.com/advantages-having-total-reward-organizations-14161.html
[Accessed 22 March 2023].
Investopedia , 2023. Investopedia.
[Online]
Available at: https://www.investopedia.com/terms/r/remuneration.asp
[Accessed 22 March 2023].
Figure 1 : Renumeration
Figure 2 : Remuneration types
Figure 3 : Staff Retention
Figure 4 : Staff
performance
Figure 5 : Controllable
Expenses
Figure 6 : Program
Administration
well done
ReplyDeleteRemuneration and benefits are one of the most important factors that can affect the efficiency and welfare of a company's employees. a very informative post..
ReplyDeleteRemuneration leads to employee motivation. In this blog you clearly and simply explain about remuneration.
ReplyDeleteDear Niluka , Thank you for sharing thoughts on vital part of people management in simple way to understand.
ReplyDeleteRemuneration and rewards may have direct impacts on people to be motivated specially on those who are looking for financial recognition. It is crucial to have right understand on offering the right mix of type of compensation to all employees to get best results as expected by the organization.
In this blog you have given us a clear image about how the remuneration leads employees to achieve the goals of an institution
ReplyDeleteYour blog post clearly explained importance of remuneration system to the organisation. Thank you sharing your knowledge with us
ReplyDeleteI liked the way its written and good valuable way if explaining.
ReplyDeleteVery nice and relevant images are being Selected.nice work.
Also Pls check the main heading spellings "What is Renumeration?"
DeleteHi, remuneration is one of the crucial factors to motivate the staff. But we need to consider other factors as well.
ReplyDeleteAs per Maslow's Pyramid, psychological & self-fulfillment needs also to be considered once the staff reached some extent.
In some other cases, staff may not be willing to work with autocratic leaders even if they are paid enough salaries.
This is very well arranged.very useful topic.
ReplyDeleteRemuneration and other benefits are what drives employees to work well
ReplyDeleteVery good content & attractive article.
ReplyDeleteHi Niluka, very good topic and well articulated. Remuneration comes under extrinsic reward systems. This is very much important factor in order to motivate the employees in an organisation.
ReplyDeleteonce I've read your blog. I now have a solid understanding of examples of direct and indirect compensation. Excellent article.
ReplyDeleteGreat job.Thank you for sharing the knowledge
ReplyDeleteThis stertegy take part in transactional leadership theory as well
ReplyDeleteHowever it makes high employee motivation as well good team work through achievement for the organization 💪.