Additional Employee Benefits Compensation

Additional Employee Benefits Compensation

This is money that employees receive in addition to their regular pay. These money can include bonuses, commissions and gifts as well indirect compensation like stock options plans or profit-sharing.

Bonuses can be contractual or discretionary and may include:

• Sales commissions
• Individual or company-wide performance awards
• For example, lump sum gifts Exemplary actions at work

These compensations are usually part of incentive programs that motivate employees to produce more and better quality results. They may also help keep morale high. Often, bonuses are determined by union contracts.

However, there are arguments that monetary rewards can sometimes lead to unethical behaviour or envy from coworkers. A salesperson might steal prospects from colleagues or create a hostile environment in their office by knowing that the top salesperson will be paid more. These outcomes can be prevented by making sure everyone has equal chances of earning bonuses. Make the bonus criteria transparent for all employees. Also, don't ignore discrepancies between employee performance.

Here's our template policy to help you create a transparent and clear bonus policy.

Expensive Errors

It is expensive to provide benefits that are tailored to the needs of employees and comply with all laws. Benefits can add between 30-40 percent to the base salary for many employees. This makes it critical to maximize these funds. This is where small businesses often fail because their benefits approach is fraught with costly mistakes that could land them in serious financial trouble with their insurance companies or with their employees. The most common mistakes:

• Absorbing the entire cost of employee benefits. These days, fewer companies pay the entire benefits bill like Chamber of Commerce Group Plan Insurance. According to a survey of California companies by human resources management consulting firm William M. Mercer, 91 percent of employers require employee contributions toward health insurance, while 92 percent require employees to contribute toward the cost of insuring dependants. While employee contributions can vary in size from just a few dollars each pay period to hundreds of dollars each month, one advantage of co-payment plans is that they eliminate employees who do not need the coverage. Many employees are covered under other policies--a parent's or spouses, for instance--and if you offer insurance for free, they'll take it. But even small co-pay requirements will persuade many to skip it, saving you money.

If workers needs vary widely, consider the increasingly popular " cafeteria plans ," which give workers lengthy lists of possible benefits plus a fixed amount to spend.