This document discusses remuneration and incentives for employees. It defines remuneration as the total compensation received by an employee, including base salary, bonuses, and other benefits. Remuneration can include various payment types like salaries, commissions, deferred compensation, and performance-linked incentives. It also outlines different types of employee benefits provided in addition to wages. The document discusses financial incentives like bonuses and profit sharing, as well as non-financial incentives for employees such as opportunities for training, job security, and welfare measures. The purpose of incentives is to motivate employees to increase productivity and efficiency.

1. Remunerations and Incentives

2. REMUNERATION
 Remuneration is a payment or compensation
received for service or employment. This includes
the base salary and any bonus or other economic
benefits that an employee or executives received
during employment.
 Remuneration is traditionally seen as the total
income of an individual and may comprises a
range of separate payments determined
according to different rules. For instance the total
remuneration of medical staff may comprise a
capitation fee and a fee for services mot is may
include a salary and shared financial risk. A
remuneration strategy therefore is the particular
configuration of building of payments that go
make up an individual’s total income

3. Types of Remuneration
 Compensations
a) Executives Pay : Executive pay is the total
pay or financial compensation an executive offer
within the co-corporation salary, and all bonuses,
shares, options and any other company benefits.
Executives pay is an important part of corporate
governance and is often determined by
companies’ board of director.
b) Deferred Compensation : It is an arrangement
in which a portion of an employee’s income is
paid out at a date after which that income is
actually earned. Example of deferred
compensation includes pensions, retirement
plans and stock options.

4.  EMPLOYEE BENEFITS : Employee benefits are
various non-wage compensation provided to
employees in addition to their wage and
salaries, where an employee exchange (cash)
wages for some other forms of benefits, this is
generally referred to as salary sacrifice
arrangement. Some of these benefits are
housing ( employer provided or employer- paid )
, group insurance ( health, dental, etc), disability
income protection, retirement benefits, tuition
reimbursement, sick leave, vacation ( pad and not
paid), social security, profit sharing, funding of
education and other specialized benefits. The
purpose of employee’s benefits also is to increase

5.  COMISSION : The payment of commission as
remuneration for service rendered or product sold
in a common way to reward sales people.
 SALARY : A salary is a form an employee to an
employee which may be specified in a
employment contract. It is contracted with piece
wages, where each job, hour or other unit is paid
separately rather than on a periodic basis. From a
point of business salary can also be viewed as
the cost of acquiring human resources for running
operation it is the termed personnel expenses or
salary expenses. In accounting salaries are
recorded in payroll account.

6.  PERFORMANCE LINKED INCENTIVES (PLI) : A
performance linked incentives is a form of
payment from an employer to an employees
which is directly related to the performance output
of an employee and which may be specified on
an employment contact.
PLI may be either open handed ( does not have
fixed ceiling) or closed handed ( has an upper
ceiling which is normally stipulated in the
employment contacts). Open handed incentives
are normally applicable revenue generating
activities (e.g. sales) and close handed are
associated with support functions ( e.g.
operation, human resources, administration etc)

7. INCENTIVES
 Incentive is a reward monetary or non-monetary which is given
to a worker for his efficiency and hard work.
 If a worker has raised production by hard work then there must
be increase in wage corresponding to an increase in output. Any
firm earning high profits give bonus at high rate as incentives. So
the workers exert themselves to produce any where near their
full capacity and try to increase the profit of the firm because
their income increases with the increase in the firm’s profit.
 An incentive motivates and encourages a worker to produce
more and better and are prevalent in the fixed salary method.
Incentives help in increasing the interest of the worker in the
production and are in addition to the job hourly rate and in some
proportion to the worker’s contribution towards production.
 Incentive and production are closely related with each other.
Incentives stimulate the worker for increased production and
help to create better efficiency

8. TYPES OF INCENTIVES
Incentives may be classified in to the following two
groups:
a) financial incentives
b) non- financial incentive

9.  FINANCIAL INCENTIVES
Financial incentives involve direct monetary payments or
benefits to workers for better productivity and performance.
Besides incentives for the immediate work contribution,
workers may receive additional financial benefits in the
form of; i) bonuses ii) profit sharing
METHOD OF FINANCIAL INCENTIVES
i)
Piece rate system
vi) Emerson’s effiency
bonus system
ii)
Cent percent premium
vii) Gantt task and bonus
system
iii) Halsey system
viii) Taylor’s differential piece
rate system
iv) Rowan system
ix) Merrick’s multiple piece
rate system
v)
Bedaux or point system
x) Weir premium plan
vi) Barth system

10.  NON-FINACIAL INCENTIVES
The financial incentives must be
supported by the non-financial incentives. Only cash wages cannot help
in solving the problems of the workers. So there must also be some
non-financial incentives. Non financial incentives include good working
conditions, amenities and social benefits in the organization. Non
financial incentives play an important role in maintaining better
production and efficiency in an organization. With this type of incentives
workers create interest for greater and better output and will also enjoy
richer and fuller life. At last the say that the non-monetary reward given
to the worker for the better productivity and performance, is called nonfinancial incentives. Some of the chief Non-financial incentives are:
1. Security of service. The service of the trained person should be
secure in the industry. A worker knows that the he is not going to be
dismissed, suspended or discharge unless he behaves wrongly or
creates indiscipline or shows carelessness against the work. He will
have security of his service.
2. Opportunity for training. There should exist a suitable
arrangement for the training the workers of different levels and thus
offering them opportunities for improving their knowledge and skill.
3. Chances of Quick Promotion. There is no back door entry of the
worker. Every worker is likely to be promoted to a higher rank when the
opportunity arises. There fore it is necessary for every worker to
increase his efficiency and show his skill what he has. Only then he gets
the chances of promotion. 3. Chances of Quick Promotion. There is no
back door entry of the worker. Every worker is likely to be promoted to a
higher rank when the opportunity arises. There fore it is necessary for
every worker to increase his efficiency and show his skill what he has.

11. 4. Personal Reward. The rewards like certificates of
merit, appreciation for good work, good conduct and
attendances etc. also increase the efficiency of the
workers. Respect of recognition in the organization in
also is itself a reward to the workers.
5. Welfare Measures. Some of the necessary welfare
measure like provision of medical
facilities, transportation, housing, food
services, recreational and educational facilities to
workers and their families has a sound effect on the
workers. In the factory some facilities like drinking
water, shelters, canteen, rest room, latrines and
urinals etc must be provided to the increase the
efficiency of the workers.
6. Sympathetic Attitude of the Management. For
increasing the efficiency of the worker it is necessary
for the management that fair and sympathetic
treatment is given to a worker. A faith in their
individuality is not ignored and their grievances