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One factor driving the confusion was that wages went up rapidly for those in high demand, but not everyone was in high demand. Also, paying people based on their individual performance often created “winners” and “losers”.
One former Apple Vice President recounts how a new hire came in at USD 115,000 plus a USD 30,000 hiring bonus right out of college, but star performers in the company made about USD 80,000 at the time. “If you bring in someone at a big salary and then turn out to be a good hire it can be a catastrophic,” he notes.
This illustrates that life is never fair in a tight labour market, especially when compensation is skewed. Neither is it fair when the economy sliding down.
In year 2001-02, the catered lunches, signing bonuses, free laptops and cell phones, and other generous perks designed to entice and keep many employees during the high times went away. Some workers who liked the amenities willingly gave up such indulgences if it meant their businesses stayed alive and they continued to have pay cheques.
Many forms of creative compensation, tossed in to attract or keep employees during the “boom time”, seemed frivolous in the weakened economy amid stock market uncertainties. “There is now a very clear distinction between ‘nice’ and ‘necessary’ when it comes to perks. We went a little too far,” a partner with a big accounting firm noted. Less number of jobs reduced the need for signing bonuses and other recruiting perks necessary a few years ago.
Remuneration is the compensation an employee receives in return for his or her contribution to the organization.
Remuneration occupies an important place in the life of an employee. His or her standard of living, status in the society, motivation, loyalty, and productivity depends upon the remuneration he or she receives.
For HRM too, employee remuneration is a major function. The HR specialist has a difficult task of fixing wages and wage differentials acceptable to employees and their leaders. Since employee remuneration is such an important subject, considerable space is devoted in books and periodicals for detailed discussion of wage-related and salary-related problems.
An average employee in the organized sector is entitled to several benefits-both financial as well as non- financial. Typical remuneration of an employee comprises- wages and salary, incentives, fringe benefits, perquisites, and non-monetary benefits.