Regular or fixed compensation is a form of employee payment in which an individual receives a paycheck every pay period. There is no fluctuation in the employees’ amount of pay each time they are paid. They are paid the same amount every period, weekly or biweekly. They may not receive any raises. Certain benefits come with regular compensation that cannot be purchased by simply offering bonuses.
There are four main types of compensation: hourly, salary, commission, and bonuses. An employer can choose one method of compensation for employees or use a hybrid method.
Compensation policy is the method used by an employer to pay employees. It reflects the company’s philosophy and includes the ways in which the company decides to pay the employees—salary, benefits, perks, incentives, and more.
Paying an employee overtime for the extra hours worked is an example of compensation.
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