Notes Case

Introduction

In this paper, I will develop a compensation and benefits package for the newly hired secretary of Single Help Organization. Here at Single Help, it is our mission to give back to our community and ensure that we do our very best to make a difference in people’s life. What better way to start than within? Whenever somebody is working in any organization, he/she is liable to pay. Because the individual participated and contributed in one way or the other to the organization’s goals, he is rewarded in several ways. Wages remain the most important responsibility owed by an employer to an employee. 60 percent of the total cost of running any business is made up of wages, salaries and other associated costs. This is known as total rewards. (Robert et al, 2008 p. 360) defines total rewards as “monetary and non-monetary rewards provided to employees in order to attract, motivate and retain them”.

Compensation and benefits constitute the total rewards package that an employee gets for working in an organization. Compensation is viewed or regarded as direct pay, since it is the amount of money the employee receives. Benefits are indirect pay, since they are monetary equivalents that can be converted later into cash or used to pay for selected expenses.

Benefit is a “generic word used to describe the components of a substantial element of the total remuneration provided by employing organizations to their work-forces” (White et al 2000, p. 164).

Direct compensation

Direct compensation is all monetary benefits given or provided to employees because of the services they provide to the organization. These monetary benefits include basic salary, variable pay, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular interval at a definite time. The following write-up will explain each one of them in detail. Direct compensation according to (Borgadus, 2004, p92) is “salaries or wages, incentive awards, bonus payments, and sales commissions”.

Base pay or Basic Salary

Employees of all organizations are familiar with base pay. This is the primary form of compensation which is given to employees in cash as a result of working for the employer. It is the amount of money an employee receives from his/her employer by rendering his/her services for a certain period of time. (Borgadus, 2004)

In the U.K, the state intervenes, as to the amount each employee is supposed to receive. Since 1999 a National Minimum Wage law is introduced. In 2007, it stood at 5.35 an hour (Derek et al, 2008, p.643) Today the national minimum wage for adults aged 22 and above stands at 5.93 an hour.

Incentives

Incentives are aspects of compensation paid to employees who achieve goals