What Is Employee Compensation?

Employee compensation refers to various forms of remuneration or compensation given by an enterprise to obtain services provided by employees or to terminate labor relations. These include: short-term pay, after-service benefits, termination benefits, and other long-term employee benefits. The benefits provided by the enterprise to the employee's spouse, child dependants, survivors of deceased employees, and other beneficiaries are also employee benefits. ^[1]

employee's salary

Employee remuneration refers to various forms of remuneration and other related expenditures given by the enterprise to obtain services provided by employees.

"International Accounting Standards" refers to corporate employees as employees, and China refers to corporate employees as employees rather than employees. China's labor remuneration paid to employees by enterprises is collectively referred to as employee compensation, not just

According to Accounting Standards for Business Enterprises No. 9-Employee Compensation, employee compensation includes:

(1) Staff wages, bonuses, allowances and subsidies;

(2)

(One)

"Enterprise Accounting Standards No. 9-Employee Compensation"

"Enterprise Accounting Standards No. 13-Contingencies"

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Based on the analysis of the design goals of the incentive compensation system, a compensation system that is motivating and can attract and retain the company's core employees should be launched in accordance with national and local laws and regulations. Be competitive and encourage employees to continuously improve their human resources capabilities. Based on this, it can be concluded that the factors to be considered in the design of the incentive compensation system are: corporate performance, living standards, market supply and demand relations, and labor relations. Among them, the first two are determinants and the last two are adjustment factors.

Considering these factors comprehensively, you can get five major indicators for determining salary: the value of job work, the ability of employees, the demand of the human market for related jobs, the local minimum wage standard, and the cost of human resources in the enterprise.

The value of employee pay jobs

The value of job position refers to the job value of each position in the enterprise, that is, the relative importance of each position, or the relative contribution of each position to the company's performance. The value of the work here is a relative value, or "comparable value", which is to establish fair pay on a broader basis, rather than focusing only on the same position in terms of fair pay. The value of a job is generally determined through job evaluation or job evaluation.

Compensation of employees

The ability of employees is also a relative concept, which refers to the work skills and work-related knowledge possessed by employees. With the advent of the era of knowledge economy, the contribution of employees' intellectual capital to the company's performance has received more and more attention. The company's internal emphasis on human resource development and the flattening of the organization brought by informatization and process reorganization, the reduction of middle management work, the reduction of managers' promotion plans, and the consideration of the relative value of employees in the compensation system have become the starting point for motivating employees point. The relative value of employees is usually determined based on their ability to achieve their duties or mastery of responsibilities. The means for determining the relative value of employees is performance assessment and skill appraisal.

Employee compensation needs

The situation of different positions in the enterprise in the local labor market mainly refers to the salary levels of various occupations in the labor market. Salary (mainly basic salary) levels directly affect the effective implementation of corporate recruitment plans, and market salary levels are determined through salary surveys.

Minimum wages for employee compensation

The local minimum wage standard specifies the living expenses required by local employees to maintain a certain standard of living. Many local governments in China have stipulated minimum living expenses for urban residents, which companies can use as a reference when considering the cost of living.

Human resources cost of employee compensation

The cost of human resources of an enterprise is affected by the value and benefits brought by the investment of human capital on the one hand, and also determines the productivity of employees, the capital structure of the company, the amount of reinvestment, economic conditions and competitiveness Wait. "Enterprise human resource cost" is difficult to define. How strong the enterprise human resource cost is, it is also difficult to measure and controversial. Therefore, the problems identified by "corporate human resource costs" often require employees and company management to resolve them through negotiation and cooperation.

The consideration from these five aspects is the basic coordinates for formulating the compensation system. At the same time, the formulation of the compensation system must be consistent with the strategic goals of the enterprise. The management of modern enterprises is a "humanized management". From the perspective of human resources That said, the purpose of this management is to maximize the motivation of employees. With the continuous development of corporate management in China today, salary is the factor that is most closely combined with the enthusiasm of employees. Therefore, from the perspective of constructing the compensation system, this article hopes to provide some thoughts for enterprise managers to build a "humanized" compensation system. material. ^[3]