What is the difference between compensation and remuneration

There exist different methods in a company how to classify different positions and how to distribute monthly wages and further factors of compensation. In general, there are three different approaches which are mainly used in the human resource management:.

A fixed payment consists of salaries and wages which do not change except for general pay increases. This rank is based on the time the employee is working in the company which requires an exact control of absence and presence of the employees. The payment is fixed based on the skills and age of the employee and the position. It is obvious that this system offers low incentives and does not motivate the workers. Neither the performance nor the productivity affect the remuneration or the security of the workplace.

In this case, the wages and salaries depend on quantity and quality of work, which might change within a period of time. Mostly, companies use a mixture between these two systems in order to exchange the received workforce of an employee.

This system is a good way how to give feedback to the employees. If their performance in the last period was better they will receive a higher salary as in the previous phase. The third system is concerned with the payment linked to the results of the company. In this case the employees receive a monthly base wages and get certain bonuses which depend on the successful performance of the company.

There exist many varieties how such a system can be implemented. One way to organize such a reward structure is by selling company shares. If the company has a good reputation in the market the value of the share will increase and consequently the employees will receive higher dividends.

This method is risky for the employees: on the one hand their performance directly influences the quality of the produced goods and services but on the other hand there are also some external factors which influence the success of an industry.

The economical conjuncture plays an important role when judging the opportunities and threat of such a structure. In the branch of human resource administration there were some significant changes in the last years.

In earlier stages payroll administration was a paper intensive process because every transaction required written form. Today, the tasks which should be fulfilled by the administration department have shifted towards a more service orientated position. Additionally, the environmental factors for a company change much faster than some decades ago.

Acting international is one of the main growth-strategy for many companies which require higher knowledge from the administration staff. They have to know the political and legal factors and restrictions which influence the operational as well as the strategic level of compensation administration. But also in general, employees expect the administration staff not only to pay their wages and salaries but also to be competent enough to help if problems in this area occur.

Their tasks have increased from pure administration to consultative aspect as well. Moreover they are responsible for health care contributions as well as for savings possibilities and pension funds.

Besides, they take care of time-off payments and here again need to know the legal backgrounds and changes which occur every now and then.

The below table distinguish the difference between compensation and remuneration from the legal perspective. Compensation Management. Equal pay for equal work. Compensation and Employee Motivation. Direct Employee Compensation.

Indirect Employee Compensation. Compensation for Individual Performance. Piecework Rates. Standard Hour Plan. Merit Pay. First, people who know your income begin to associate you with your earnings, as if you are the money you earn.

Second, people will begin to make money decisions for you. You will be expected to pay for stuff you never intended to pay for. Past employers can say anything that discriminates against you or wrongfully defames your character. He can, however, give specific and verifiable examples of poor performance if they exist. Some employers ask job candidates to give them a salary history list when they apply for a job.

A salary history typically includes the name of each company, job title, and the salary and benefits package the candidate has received in the past. Yes and no, as was mentioned above, most HR departments are very careful about what they disclose to your potential employer. However, your HR department should not be sharing your salary information with other people within your organization while you are employed there.

In , California Governor Jerry Brown signed the California Equal Pay Act, an aggressive equal pay law that expanded on existing anti-discrimination in the workplace laws.

Under the Act, employers cannot prohibit employees from discussing their own wages or the wages of others. No, you cannot be fired for discussing wages at work. The majority of employed and working Americans are protected from discipline exercised simply due to protected classes, such as age, gender, race, and so forth. The biggest reason for maintaining salaries confidential is to mask the pay differences between those performing the same job. Pay differences also arise between employees who are hired from the market compared to those who have grown to a position from within the organization.

Key facts. You are entitled to the same pay as anyone doing the same or broadly similar job, or a job of equal value, regardless of gender. As part of a wider strategy to create a more transparent business environment, letting employees decide their salary shows that you appreciate their work and that the company is willing to change with the times.

What is the difference between compensation and remuneration? What is the remuneration for Labour? What are the four types of compensation?