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Supplementary compensationCompensation Management
Prepared By
Kindly restrict the use of slides for personal purpose. Please seek permission to reproduce the same in public forms and presentations.
Manu Melwin JoyAssistant Professor
Ilahia School of Management Studies
Kerala, India.Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
Compensation in organization
• Compensation is a wide
range of financial and
non financial rewards to
employees for their
services rendered to the
organization.
Compensation in organization
• It is paid in form of wages,
salary, other benefits such
as vacations, maternity
leave, medical facilities etc.
compensation helps in
motivating the employees
and reduce labor turnover.
Types of compensation
• Base compensation
• Supplementary
compensation.
Supplementary compensation
• Now days the organizations use
supplementary compensation
over and above the base
compensation. It helps in
satisfying the employees as well
as retaining them for long time.
Supplementary compensation
• It can be given in form of
various services like housing,
medical, educational facility.
Supplementary compensation is
also called fringe benefit as well
as hidden payroll.
Supplementary compensation
• The basic purpose of fringe
benefit is to maintain
efficient human resources
in the organization and to
motivate the employees.
Supplementary compensation
• Supplementary compensation is
again divided into following types:
– Protection against hazards.
– Employee services.
– Payment for time not worked.
– Legal payments.
Supplementary compensation
• Protection against hazards:
supplementary compensation
helps in protecting against the
hazards of illness, injury, old
age, death, permanent
disability.
Supplementary compensation
• Employee services: some big
organizations provide housing,
low-cost loan, food, medical,
and day care centre for children,
educational facilities to their
employees for their services.
Supplementary compensation
• Payment for time not worked:
the employees are also paid for
the time they are not working
like wash up time, lunch period,
vacations, holidays, sick leave
etc.
Supplementary compensation
• Legal payments: payment
under this category
involves unemployment;
layoff compensation, old
age benefits etc.
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