Nature of Compensation

Compensation offered by an organisation may come both directly through base pay & variable pay and indirectly through reimbursement.

a)    Base pay: It is the fundamental compensation an employee gets, usually as a wage or salary.

b)   Variable pay: It is the compensation that is associated directly to performance accomplishments (incentives, bonuses ,stock options)

c)   Benefits: These are indirect rewards given to workers or group of workers as a part of organisational membership (vacation pay, health insurance, retirement pension etc.)