Pay and Rewards

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HR is responsible for negotiating pay and compensation for employees and keeping it under review

Compensating Employees

Ways that HR compensate employees:

Flat rate pay: Employees receive a fixed rate of pay per week or month based on the number of hours worked. There is no incentive for employees to work longer or harder since their pay does not vary with effort or performance.
Time rate pay: Employees are paid a set amount for each hour they work, with extra pay often provided for overtime. This method does not incentivise improved efficiency or productivity.
Piece rate pay: Employees are compensated for each item they produce that meets the desired quality standards. This pay structure encourages higher productivity but may compromise quality if not monitored carefully.
Commission: Employees receive extra payment based on a percentage of the sales they achieve. This incentivises employees to increase sales and can significantly boost earnings for high performers.
Bonus payments: Employees receive additional compensation as a share of the profits resulting from their increased effort or efficiency. Bonuses serve as a reward for exceeding performance expectations and achieving company goals.

Benefits in kind: Employees receive taxable non-cash payments, such as company cars, health insurance, or housing allowances. These benefits enhance overall compensation packages and can improve job satisfaction.
Profit sharing schemes: Firms distribute a portion of their profits to employees through payments added to wages. This scheme aligns employee interests with the company's profitability and encourages a collective effort towards achieving financial success.

Share ownership schemes: Employees are offered free or discounted shares in the company. This not only provides a financial benefit but also fosters a sense of ownership and long-term commitment to the company's success.

*Many companies offer company cars as a Benefit in Kind to reward employees *