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Remuneration is payment in reward for work or service. It means to compensate someone, usually with money, and can also refer to compensation other than money, such as employees receiving vacation time or different leave.
Remuneration is the total amount of money an employee receives in exchange for their work. It includes the base salary, commissions, bonuses, other incentives, and additional benefits like medical and vacation pay.
Remuneration is the money paid to an employee for his services rendered. Remuneration could be one of the six types of compensations:
Base Salary: A fixed amount paid to an employee irrespective of whether the company profits or incurs losses.
Short-term Incentive/Bonus: A sum of money paid to an employee as a reward for achieving specific goals.
Employee Benefits: It includes medical facilities, education, training, and other benefits to the employees tax-free.
Paid Expenses in the form of reimbursement: The employer’s reimbursement is delivered to its employee for traveling and other expenses.
Long-Term Incentive Plans: include stock options, stock purchase plans, and share option plans to motivate employees.
Insurance-based Compensation: Insurance-based compensation refers to that part of remuneration paid out on death or disability of an employee or his family members.
The term “remuneration” is used by Human Resources specialists, while the word “salary” is used by employees to describe their income and earnings. During a discussion between an employee and their employer about a new employment contract, it is essential to know whether the remuneration will include other amounts such as bonuses, commissions, or performance incentives.
Employees are often compensated for their services and efforts in the modern workplace. This process is called remuneration. A remuneration is a form of compensation usually paid to employees in cash, such as salary and wages. In addition, the employee can receive other forms of remuneration in the form of benefits, bonuses, stocks, and shares. The primary reason for remuneration is to motivate employees to work efficiently and effectively. The organization will only hire talented people if they offer them competitive salaries. In addition to receiving wages or incentives, they can also reward employees with other beneficial items or services. These services may include health care coverage, educational assistance, training programs, and travel reimbursement.
The reasons for remuneration are as follows:
1. Motivation
2. Taxation
3. Wage formation
4. Reducing unemployment
5. Compensation for risk and uncertainty of labor
6. Managing the labor supply
Total remuneration is the total sum of compensation that an employee receives in a particular duration. It is a term used by human resource professionals to include all forms of payment, including base salary, bonuses, benefits in kind, and other forms of monetary and non-monetary remuneration.
The Equal Remuneration Act of 1976 is a policy statement that sets the guidelines for pay equity between men and women. This act was introduced to eliminate gender discrimination in the workplace and ensure that all people performing the same job are given equal pay.
For this purpose, any organization that employs both men and women must maintain records of wages and other conditions of employment. The organization must also provide an opportunity for women to discuss their wages with their co-workers to identify disparities in pay between them and their male colleagues.
To calculate remuneration, add up the base salary and all the financial aid an employee receives in the form of employee benefits and bonuses. Usually, employers calculate income every month.
The calculation of remuneration is necessary when you want to know how much your employees are making in a month, or if you want to compare the pay structure of two companies. For example, if you have two organizations and each has an employee who has put in 10 years with the company, but one is paid more than the other, you may wonder why. This information will help you determine if they are being over-or underpaid for their efforts.
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