The document discusses the concept of compensation in organizations, highlighting its financial and non-financial rewards that motivate employees and reduce turnover. It distinguishes between base compensation and supplementary compensation, the latter including fringe benefits such as housing, medical services, and educational facilities. Additionally, it covers types of supplementary compensation like protection against hazards, employee services, payment for time not worked, and legal payments.

1. Supplementary compensation
Compensation Management

2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com

3. Compensation in organization
• Compensation is a wide
range of financial and
non financial rewards to
employees for their
services rendered to the
organization.

4. Compensation in organization
• It is paid in form of wages,
salary, other benefits such
as vacations, maternity
leave, medical facilities
etc. compensation helps in
motivating the employees
and reduce labor turnover.

5. Types of compensation
• Base compensation
• Supplementary
compensation.

6. Supplementary compensation
• Now days the organizations use
supplementary compensation
over and above the base
compensation. It helps in
satisfying the employees as well
as retaining them for long time.

7. Supplementary compensation
• It can be given in form of
various services like housing,
medical, educational facility.
Supplementary compensation
is also called fringe benefit as
well as hidden payroll.

8. Supplementary compensation
• The basic purpose of fringe
benefit is to maintain
efficient human resources
in the organization and to
motivate the employees.

9. Supplementary compensation
• Supplementary compensation is
again divided into following
types:
– Protection against hazards.
– Employee services.
– Payment for time not worked.
– Legal payments.

10. Supplementary compensation
• Protection against hazards:
supplementary compensation
helps in protecting against the
hazards of illness, injury, old
age, death, permanent
disability.

11. Supplementary compensation
• Employee services: some big
organizations provide housing,
low-cost loan, food, medical,
and day care centre for children,
educational facilities to their
employees for their services.

12. Supplementary compensation
• Payment for time not
worked: the employees are
also paid for the time they are
not working like wash up
time, lunch period, vacations,
holidays, sick leave etc.

13. Supplementary compensation
• Legal payments: payment
under this category
involves unemployment;
layoff compensation, old
age benefits etc.