What is a compensation plan?

A compensation plan is a payment package designed to attract and retain team members. A basic compensation package consists solely of a salary or wages. A more comprehensive compensation package could include additional benefits such as bonuses, perks, commissions, health insurance, or retirement investments.

What are the different types of compensation?

It’s critical to build your compensation plan according to your budget and resources. This is especially important when structuring a competitive compensation program with direct and indirect compensation components. Let’s unpack the differences between the two.

What is a total compensation plan, and what is included?

A total compensation plan is everything a company provides to a team member in exchange for their work. A total compensation plan takes the full package into account to demonstrate the complete value of what people earn.

What is the difference between total compensation and total reward statements?

Total compensation refers to the combined financial and non-financial benefits a company provides to its people. It’s a broad term that covers everything from base pay to health benefits and perks. A total reward statement is a personalized document that breaks down the value a company provides to a team member, including both monetary and non-monetary rewards. It’s a way to show people exactly what they’re receiving, from their salary and bonuses to their benefits and additional perks.