of work and the workplace in order to keep people motivated. Organizational compensation included many different types of reward and benefits. You have Direct financial compensation- consist of the pay that a person receives in the form of wages, salaries, bonuses, and commissions., Indirect financial compensation (benefits) includes all financial rewards that are not included in direct compensation., Nonfinancial compensation- consist of the satisfaction that a person receives from the job itself or from the psychological and /or physical environment in which the person works. All such rewards make up a total compensation program. Several factors influence the differences in compensation and benefit packages for different employees. These include, 1.The kind of job performed (Different jobs require different kinds and levels of skills and these skills have varying levels of value to the organization.). 2.The kind of business the organization is in (Private sector job typically provides higher rates of pay than public or non-profit jobs.).3.Either the organization is unionized (The wages of union workers tend to be highest than those of non unionized employees for comparable jobs. but this difference holds mainly, in heavy manufacturing industries.). 4.Whether the organization is labor or capital intensive ( as a business becomes more capital intense it does not take as many workers to dot he organizations work, but these employees need higher levels of knowledge and skills. Higher skills means higher pay.). 5.Managements pay philosophy (some companies believe in paying there employees absolutely any more than they have to.). 6.The organizations geographical location (The higher the cost of living the higher the wage.). 7.The organizaions level of profitability (If the companies profits are declining so will the ability to offer high levels of pay and benefits but, it pro...
