PCM Total Compensation and its components (Factors to consider when…
PCM Total Compensation and its components
Acquire qualified personnel
Compensation package has to be high enough to attract applications
Retain current employees
Employees may quit when compensation packages are not competitive
perceived fairness of salary structure within compan
perceived fairness of salary relative to what other employers are paying for the same type of work
Reward desired behaviours
reward performance in practice, membership based.
obtain and retain employees at a reasonable cost
Comply with legal requirements
consider the legal challenges imposed by the government and ensure the employer’s compliance.
Compensation refers to all forms of financial and non-financial returns, tangible services and benefits employees receive as part of an employment relationship.
Total compensation system is the design process that is started by identifying desired outcomes and goals for the organization.
Factors to consider when implementing TCS
Develop Salary Ranges
Performance Management System
Components of TCS
Direct Financial Compensation
Indirect Financial Compensation/ Benefits
Flexible wage system
A flexible wage system is one that has a sizeable variable component that allows companies to adjust wage costs quickly in severe business downturns.
Reward employees with bigger bonuses in good times ; and
Adjust and better manage its wage costs in bad times.
Recommendations for a flexible, competitive wage system
Enlarge the Annual Variable Component (AVC)
Introduce/build up the Monthly Variable Component (MVC)
Move away from seniority-based wage system