This document discusses non-wage forms of employee compensation including monetary benefits like profit sharing and bonuses, and non-monetary benefits like health insurance and paid time off. It provides examples of companies like Starbucks, Hormel Foods, and dentist practices that offer these types of compensation and incentives. Effective incentive plans should be designed to motivate employees and link their compensation to achieving company goals.

1. Non wage component of
labour remuneration
Presented by –
Shahna chaudhary
Rupali agrawal
Anshika banga
Vridhi dhamija

2. Introduction
Non-wage labor costs are social security and insurance
contributions, labor taxes and other costs related to
employing someone.
Non-wage forms of compensation are monetary and non-
monetary items used to attract, retain, motivate, and reward
employees above and beyond traditional wage and salary
payments
Monetary Non monetary

3. • Monetary, non-wage compensation includes profit-
sharing payments, lump sum bonuses, stock
options, and other forms of contingent
compensation
• Non-monetary, non-wage forms of compensation
are employee benefits — these used to be called
fringe benefits, but as they now represent a
substantial fraction of total compensation, “fringe”
benefits has become a misnomer
Major employee benefits include employer-provided
health insurance and pension plans as well as
vacation and sick days, life and disability insurance,
supplemental unemployment benefits, paid
holidays, dental insurance, educational and legal
assistance, and a myriad of other items.

4. Case study –EU reforms
In a period of high unemployment, strong fiscal pressures and low
growth, EU policymakers have underlined the importance of
identifying policy reforms – including labor taxation reforms – that
are conducive to both economic growth and employment creation.
• Aggregate EU labor market performance has begun to improve
since 2013 as evidenced by higher employment rate in 2015 and
steady declines in unemployment.
• And among the unemployed, almost one in two of all unemployed
had been without work and actively seeking a job for 12 months or
more in 2015 (48.5%) compared with 37% pre-crisis.
• Increasing the incentives for employers to take on new workers
may help to alleviate some of these problems.

5. Hormel Foods
• As a global branded food company, the company plays
a critical role in providing safe, high-quality food
during this unprecedented time. “the incredible team of
more than 13,000 plant professionals is the backbone of
the company and this special bonus is one way we can
continue to thank them for how they have risen to the
challenge and continue to produce food with a sense of
purpose and pride.”
• Hormel Foods has announced a special cash bonus,
totaling more than $4 million, to its plant production
team members who continue to work to produce food
during the COVID-19 outbreak.

6. The special bonus includes $300 for full-time team members
and $150 for part-time team members. Additionally, the
company has expanded its CARE Program employee assistance
program fund, and extended paid sick leave and waived waiting
periods and eligibility requirements for certain benefits for its
workforce

7. • A dentist routinely provided his team with annual pay raises.
When the practice experienced a decrease in production, the
dentist did not give the raises that the team had come to expect.
Case study: Bonus and incentive plans
• The employees were
disappointed and angry.
Three resigned, including the
office manager of seven years
who was a key employee.
This caused the doctor major
staffing and patient
scheduling problems.

8. • But many dentists mistakenly
assume that if conditions
warrant not giving raises, then
the staff will understand.
• Wrong! In fact, most team
members count on that
money to pay their own
increasing expenses.
Consideration
• There are times when not giving raises may be justified, such as
when production and collections are down, job performance is not up
to par, or an employee becomes overpriced in the job market.

9. • . In many cases, the people who work for you do not see your
practice as a business.
• They do not necessarily relate the bottom-line health of the
business to their own compensation.
• Given that every employee wants the opportunity to earn more
money, the solution is to come up with compensation
alternatives that won’t exacerbate a practice’s financial
challenges and, at the same time, are motivating for employees.

10. Solution
• The easiest way to achieve these
goals is through a well-designed
bonus plan.
• The plan must be “self-
liquidating,” meaning it must be
paid for by a percentage of the
increased revenue it induces.
• Bonus plans are not about people
not doing their jobs, but rather
about people working together
and accomplishing more, thus
sharing in the growth and
financial success of the practice.

11. Starbucks
• The best-known employer providing health
benefits to part-time
employees, Starbucks benefits package is
called “Your Special Blend”, and it extends
to part-time employees.
• In order to be eligible, the worker must
work at least 240 hours over a three
consecutive month period, or at least 20
hours per week. The company begins
monitoring your paid hours on the first day
of the month following your hire date. So if
you’re hired on March 15, it looks like the
benefits clock won’t begin ticking until April
1. Once you become eligible, your benefits
will begin on the first day of the second
month following the three month waiting
period.

12. • If my calculations are correct, that means that the waiting period
can be anywhere from four months and one day, to four months and
29 days. To be safe, figure that you’ll need to be employed for about
five months before your health benefits will begin.
• The health insurance coverage looks to be comprehensive, and includes
prescription drugs, mental health, and chemical dependency treatment. It
looks like they will also cover alternative care treatments, including
acupuncture, chiropractic care, and homeopathic care.

13. • The specific insurance carrier, and the exact level of coverage, will
vary depending upon where you live. But they also include dental
and vision coverage.
• On balance, this is one of the very best healthcare packages
available to part-time employees.

14. Conclusion
• A company can issue bonus shares to its
shareholders to share its accumulated
earnings. Not only does bonus issue
strengthen a company’s equity base, but also
increases retail participation in its shares. As
an investor you stand to gain if the company
announces a bonus issue.
• An effective incentive plan is
intended to influence the behavior of
employee, hence it is extremely
important for management to define
the desired behaviors to achieve the
firm's goal prior to implementation of
the incentive plan.