Remuneration

Remuneration for employees is an essential component of Human Resource Management.Remuneration can be defined as "Reward for employment in the form of pay, salary, or wage, including allowances, benefits (such as company car, medical plan, pension plan), bonuses, cash incentives, and monetary value of the non cash incentives".

In any company,employees are paid according to their skills,talent and performance.All three factors comes hand in hand.No matter how talented you are but if your performance is not upto mark then it will definitely affect remuneration given to you.Remuneration for an employee is dependent on many factors,some of them are internal to an organization and some are external to the organization.Some of these factors are illustrated below:

1.Talent and Skills:

  Talent and skills play an important role in defining remuneration at an early stage of the career.Companies prefer more skilled and talented persons and their salaries are directly proportional to the skills they acquire.Person with more skills should be paid more than the person with less skills.

2.Performance 

    On the job performance is an critical factor in determining the remuneration.Performance has a direct relation with the salary and benefits given.If your performance dips then it will have a negative impact on your salary.

3.Labor Market 

  Demand and supply in labor market always influence remuneration.If demand exceeds supply then remuneration will be higher.However,if supply exceeds demand then remuneration will be lower.

4.Cost of Living

   Cost of living also have a direct impact on remuneration.Companies may be forced to pay more to their employees with the increase in cost of living.

5.Economy

    State of economy determines how current employees will be paid.Good state of economy lead to good increment.However bad state of economy may lead to decrease in salary and benefits.We can draw some examples from current state of economy where many companies stalled increment due to  bad performance of economy.

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