In the market much is said about salary and remuneration and many think they have the same meaning in business. Yes, salary is one of the types of remunerationhowever, the concept of remuneration is much broader.
Compensation can be described as a set of values that the employee receives.
This because there are several types of remuneration, used as a competitive market strategy. Among the most common types of remuneration are commissions, remuneration for competence, profit sharing, indirect salary, among others.
The types of remuneration when used strategically have the ability to attract and retain talent in the company style=”font-weight: 400;”>.
Compensation x Salary
The remuneration is defined as the sum of the salary plus all the benefits that the employee receives at the company. There are several types of remuneration and they all make up this general account that builds the concept of that word.
Remuneration is quoted in the article 457 of the CLT. With emphasis on item 4, which talks about the composition of wages.
4th The bonuses granted by the employer in the form of goods, services or cash value to an employee or group of employees are considered to be prizes, due to a performance superior to that normally expected in the exercise of their activities. (Wording given by Law No. 13,467, of 2017)
Therefore, we selected 7 types of remuneration that can serve as a great competitive differential for your company to stimulate the productivity of employees and keep them happy and engaged. Check below what they are.
Types of remuneration: Meet 7 of them
The types of remuneration can be used as a determining factor for motivate employees style=”font-weight: 400;”>. These are incentives that the company offers as a way of valuing professionals for the work provided.
This salary addition can be done through different types of remuneration, below are some of the main ones.
- indirect salary;
- functional remuneration;
- skills pay;
- competence-based remuneration;
- profit or result sharing;
Below we will detail each of these types of remuneration.
Within the types of remuneration the indirect salary is that which refers to benefits that companies offer to employees.
Among the most common are food stamps, health plan, meal ticket, gym vouchers and culture vouchers.
Many companies still go beyond traditional incentives and offer the on-demand salary, fuel allowance, work in home-office and pharmacy voucher.
Currently, benefits have a direct impact on talent retention. Companies that offer these additions to the salaries of professionals are more likely to become competitive for retain and attract new talent style=”font-weight: 400;”>.
One CV-Library study revealed that more than 54.4% of people want to receive some kind of labor benefit in addition to their salary. In other words, using the numerous types of remuneration as a strategy to make the company attractive in the market is fundamental.
Functional remuneration is one of the most common types of remuneration on the market and is also known as Plan for jobs and wages.
Through it, the company defines a rule, based on market research, where the remuneration must match the professional’s position.
In this case, the company seeks to implement a salary plan fairer and more egalitarian, without distinction. For this reason, it is fundamental to create a job description, salary survey, salary range and rules for the planning to be effective.
With functional remuneration, the company acquires benefits such as the facility to optimize and organize the payroll. In addition, the employee has a broad view of the positions and which paths to follow to grow and evolve in the career within the organization.
Remuneration for skills
Skills remuneration requires greater training by professionals. Thus, employees have their salary built based on their skills, achieved through studies and training, and which help them to act effectively in the job.
That is, if a professional takes up a position and speaks English, he / she has leadership and management skills will earn more than one who doesn’t have those skills.
With this, there is a great professional appreciation, which goes beyond the positions, and encourages other employees to seek training and professional improvement to reach a level that entitles them to this complementary remuneration.
The difference between remuneration for skill and competence is mainly related to positions. Competency-based compensation is linked to more operational positions and competency-based management positions.
It mainly refers to the practical execution of its functions. Therefore, the company evaluates the work and measures the performance and results achieved by the employee based on their skills, behaviors and aptitudes.
Rewarding employees is undoubtedly a great way to value their work and engage him. For this reason, one of the most used types of remuneration comes through commissions.
These commissions are paid as soon as objectives, pre-defined by the company, are achieved. For example, if a salesperson reaches a certain number of sales he will receive an addition to his fixed salary.
As described in the item 1 of article 457.
1st The salary includes the fixed amount stipulated, legal bonuses and commissions paid by the employer. (Wording given by Law No. 13,467, of 2017)
Profit sharing or results
Regulated by LAW No. 10,101, Profit Sharing or Results (PLR) is one of the types of remuneration that is based on the achievement of some goal or objective.
Therefore, the company defines the guidelines to be achieved so that professionals have access to this percentage of the organization’s results.
With this method, the company not only makes the employee feel more important in the company’s processes and results, but creates a stimulus for him to act at a high level of productivity.
Since this way, he will have the notion that the good results of the company can be financially beneficial to himself.
O Article 2 of LAW No. 10,101 officializes the legality of PLR within the types of remuneration that the company can use to promote greater employee engagement.
Art. 2 Profit or result sharing will be subject to negotiation between the company and its employees, using one of the procedures described below, chosen by the parties by mutual agreement:
I – joint commission chosen by the parties, also integrated by a representative appointed by the union of the respective category; (Wording given by Law No. 12,832, of 2013)
II – collective agreement or agreement.
Have you ever imagined owning a part of the company you work for? Well, know that one of the types of remuneration makes the employee become co-owner part of the organization.
The so-called shareholding, which is considered as one of the types of remuneration most complex on the market, seeks to create a sense of commitment and identification of the employee with the company.
This is because, being one of the “owners” of the organization, even if only a small portion of the shares, he will dedicate himself even more to achieve good results for the company.
So, he knows that part of the financial security received by him will appreciate even more. However, it is essential that the company has a well-constructed plan so that it does not generate losses for it or for the employee.
Types of remuneration: use as a competitive advantage
The market has become extremely competitive. Companies that do not innovate or do not offer benefits that supplement the employee’s salary are left behind.
The salary is no longer sufficient and that is why many organizations are betting on different types of remuneration. Any increase in employee salaries has the ability to attract and retain talent.
It is also important, before applying any type of remuneration, to make an assessment of the company, the employee profile and identify what best fits the reality of the organization.
In view of this, it is possible to reduce possible implementation risks and the actions end up becoming more assertive.If you want to go even deeper into the subject, read our article on how to create an effective variable remuneration process.