Compensation And Benefits Essay

Compensations and benefits are often become as one of the most important role in the hospitality industry, which could maintain employment relationship for both employees and employers. Typically, employees usually could get the direct financial and indirect financial payment compensation such as salaries and insurance benefits from the workplace. For the employers, according to Steers and Porter (1991) (as cited in Kevin and James, 2003), the research showed that the compensations could attract people working into the organizations and those employees are willing to continue the work. Compensations and benefits strategies are not only minimizing the cost of recruitment and training, but also improving the profitability. Furthermore, employers

According to Luis, Pascual and Monica (2010), pay mix could consist of fixed component and variable dimension to employees. Fixed component are salary and benefits and variable dimension are bonuses and long-term income. Salary is a based pay for all employees and generally minimum compensations which has less value for job satisfaction and engagement. Furthermore, regarding to external equity, the salary should compete with the labor markets. For benefits, there are four types of employee indirect financial and nonfinancial benefits for continuing their employment relationship to the organizations. They are supplemental pay, insurance benefits, retirement benefits and executive services. Although there are many types of benefits and very difficult to identify and analysis, they sometimes contribute and motivate the employees success. Furthermore, Bonuses could consider as a short-term incentives such as lump-sum merit to employees in order to motivate employees to attain the goals. That will not raise the part of employees’ salary but only rewards for the performance. According to Baker, Jensen and Murphy (1988), the important organizational incentive systems are including pay for performance compensations system, promotion-based incentive system and profit sharing plans. Therefore, before offering the bonuses, the organizations should conduct the job appraisal