Importance and Roles of Employee Compensation

1415 Words Nov 25th, 2008 6 Pages
When thinking about a job, considering the salary and the benefits offered by and employer is important. Many benefits play a critical role in the lives of employees and their families by assisting in health needs, future financial security, needed absences from work, and more. Benefits may include programs like paid time off, medical insurance, dental insurance, disability, life insurance, retirement benefits, family leave, education and training programs, bonuses, commissions, and stock options.
Employee compensation was first introduced to America by Europe and imbedded in the colonies. “The Plymouth Colony settlers’ military retirement program, which was established in 1636, was of the first compensation programs recorded.” (EBRI,
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Some companies offer unique benefits, and unique benefits can vary depending upon the nature of the work. Examples of unique benefits are cars, cell phones, laptops, cafeteria plans, products or service discounts, telecommuting options, credit unions, uniforms, child care, nap rooms and nursing facilities.
Employee benefits play an increasingly important role in the lives of employees and their families, and have a significant financial and administrative impact on a business. Most companies operate in an environment in which an educated work force has come to expect a comprehensive benefits program. Indeed, the absence of a program or an inadequate program can seriously hinder a company's ability to attract and keep good personnel. Employers must be aware of these issues and be ready to make informed decisions when they select employee benefits. The high costs of pension plans are, at first glance, a drain on company resources. With so many employees going from job to job and taking their experience and training with them it seems a waste of time and resources to offer pensions but we hope to show how providing retirement benefits to employees actually benefits both the employer and the employee. Years ago an employee would stay with one company for most, if not all, of his or her working life. The employee knew that by doing a good job and maintaining a loyal attitude to