The typical remuneration of an employee comprises wages and salary, incentives, fringe benefits, perquisites, and non-monetary benefits. Wages and salary are the monthly or hourly rates of pay and are subject to annual increments. Incentives, also called payments by results, are paid in addition to wages and salaries based on productivity, sales, profit or cost reduction efforts. Fringe benefits include provident fund, gratuity, medical care, and accident relief. Perquisites are additional benefits provided to executives and may include a company car, club membership, and paid holidays. Non-monetary benefits comprise challenging work, recognition, growth prospects, and comfortable working conditions.

1. UNIT-5,TOPIC-2
COMPONENTS OF REMUNERATION
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2. COMPONENTS OF REMUNERATION
In average employee in the organised sector is
entitled to several benefits —
both financial as well as non-financial.
To he specific, typical remuneration of an
employee comprises—
wages and salary, incentives, fringe benefits,
perquisites, and non-monetary benefits.
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3. COMPONENTS OF REMUNERATION
 WAGES AND SALARY
Wages represent hourly rates of pay, and salary
refers to the monthly rate of pay, irrespective of
the number of hours put in by an employee.
 Wages and salaries are subject to annual
increments. They differ from employee to
employee, and depend upon the nature of job,
seniority, and merit..
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4. COMPONENTS OF REMUNERATION
Incentives
Also called 'payments by results', incentives are paid in addition
to wages and salaries. Incentives depend upon productivity,
sales, profit, or cost reduction efforts.
There are:
1) individual incentive schemes and
2) group incentive programmes.
 Individual incentives are applicable to specific employee
performance.
 Where a given task demands group effort for completion,
incentives are paid to the group as a whole. The amount is later
divided among groupmembers on an equitable basis.
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Unit - V HRM,R.Banu rekha, AP/MBA/Components of Remuneration

5. COMPONENTS OF REMUNERATION
 Fringe Benefits
These include such employee benefits as provident
fund
 Gratuity,
 Medical care,
 Hospitalisation,
 Accident relief,
 Health
 Group insurance,
 Canteen,
 Uniform,
 Recreation
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Unit - V HRM,R.Banu rekha, AP/MBA/Components of Remuneration

6. COMPONENTS OF REMUNERATION
 Perquisites
These are allowed to executives and include
company car
 Club membership,
 Paid holidays,
 Furnished house,
 Stock option schemes
are offered to retain competent executives.
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Unit - V HRM,R.Banu rekha, AP/MBA/Components of Remuneration

7. COMPONENTS OF REMUNERATION
 Non-monetary Benefits
These include
 Challenging job responsibilities,
 Recognition of merit,
 Growthprospects,
 Competent supervision,
 Comfortable working conditions,
 Job sharing,
and flexitime.
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