Worker's compensation: what it is, types

Workers’ compensation: what it is, types

Worker’s compensation: what it is, types

Workers’ compensation: what it is, types, and how to create a flexible benefits plan, Workers’ compensation allows to increase employee satisfaction, as well as improve their productivity and retain talent

Creating a workers’ compensation policy is a task that all Human Resources departments must face at some point. Properly handling this sensitive issue is essential when it comes to achieving a highly satisfied workforce, something that allows talent to be retained and increases happiness and, therefore, employee productivity.

What is workers’ compensation?

Labor compensation refers to all those extra benefits that the employees of a company receive and that complement their base salary. The objective is to provide a series of personal and work benefits, as well as to improve employee satisfaction and fairly compensate for the work they do, taking into account other aspects besides the economic one.

In recent years, the concept of employee compensation has also been called emotional salary, since these try to improve the conditions of workers not only with money but with other types of benefits, such as flexible hours, family conciliation, restaurant tickets, medical insurance, etc.

Creating a specific workers’ compensation program tailored to each employee’s situation can be tremendously effective in increasing employee satisfaction and productivity. The human resources department will be in charge of creating a compensation and benefits policy, which must be included in a fair, equitable, and competitive salary structure.

Types of workers’ compensation

Money is not the only way to compensate people and human talent, and although it is highly valued by employees, there are things that not even money can pay for. That’s why a good compensation and benefits program should include different types of workers’ compensation.

Compensation and benefits in spices

Employees can receive all kinds of compensation and benefits in the form of spices. Formerly this could refer only to the product that the company produced, but today this goes much further, although it can also be one of the benefits. This section includes all kinds of material compensation and services, such as:

  • Discounts on the acquisition of company products/services
  • company vehicle
  • health insurance
  • private pension plans
  • Training and official qualifications
  • Shares of the company
  • restaurant tickets
  • Nursery tickets or private nursery
    Compensation and strategic benefitsWithin a labor compensation plan, a series of strategic benefits that are mainly related to the job position can also be included. These are advantages that allow the employee to have greater time or work flexibility, such as:
    • Flexible entry and exit times
    • intensive day
    • telecommuting

free days

Affordable Workers’ Compensation

Finally, the most traditional and basic labor compensation is economic compensation. It is a way to compensate the effort and dedication of the employees, as well as to offer a fair and competitive salary, something essential to retain talent. In addition to the monthly salary, you can receive extra compensation such as:

  • extraordinary payments
  • benefit payments
  • Remuneration for performance and/or productivity
  • Sales Commissions
  • target bonuses

How to take advantage of a salary registration tool
How much do you pay your employees?

How to Create a Flexible Compensation or Benefits Plan

Increasing the salary competitiveness of the company without skyrocketing costs is possible by creating a flexible and personalized compensation and benefits program. Achieving it without carrying out an internal and external study is almost impossible, so before implementing it, numerous factors related to employees and their salary must be taken into account.

Equitable pay structure

Before developing an employee compensation plan, an equitable and fair salary structure must be available. Having the organization’s wage bill under control, as well as offering a base salary that corresponds to the reality of the market and the functions of the employees, is essential.

To achieve this, it is best to use software for financial analysis that allows each of the aspects involved to be well organized, as well as to make graphic reports that allow knowing the status of employee salaries at all times.

Being clear about this information will be very useful since workers’ compensation is directly related to base salary.

It is also important that it allows the salary to be related to the job performance of each employee or personal circumstances, as this will greatly influence when deciding which workers’ compensation is most appropriate for each case.

Salary record by gender: how to comply with the equality law
Companies that do not comply are exposed to purposes of between €625 and €6,250

Study of the competition

Corporate compensation is a great tool for retaining talent and keeping employees job-satisfied. Salary competition is very strong in some sectors, and if employees understand that they are not valued enough, it will not take them long to look for a better option for their career and financial situation.

The only way to prevent this from happening is by collecting information about the level of salaries and compensation in similar positions. This will give the power to increase or improve working conditions to a level where the company and the employee are satisfied. In addition, offering personalized strategic benefits can increase satisfaction without increasing costs in the event that market conditions cannot be matched.

Work Compensation Range

Employees will inevitably discuss their salaries with each other, so if there is any kind of pay gap, sooner or later it will end up being a problem for the company. To prevent this from happening, salary ranges divided by levels of experience, productivity or responsibilities must be clearly and transparently defined.

Having a salary registration tool that also includes the level of performance of each employee can be very practical since in this way it will be possible to quickly identify if an employee is receiving the corresponding salary and compensation according to their rank. It is also very useful in detecting when it is necessary to increase the base salary or increase the number of compensation and benefits.

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