Total Remuneration

Total remuneration is the entire compensation package given to employees as a remuneration for their work and services, containing both cash and non-cash benefits. Remuneration package refers to base salary, bonuses, incentives, commissions, and allowances, as well as non-financial rewards such as health insurance, retirement plans, paid time off, and employee benefits. Organizations can retain, reward and engage employees by establishing holistic compensation strategies in line with strategic goals and market benchmarks.

Example

An employee gets a total compensation from the employer which consists of several components including a base salary, performance-based bonuses, health insurance coverage, and retirement benefits. The fixed part of the compensation called base salary ensures the employee financial reliability and stability. On top of the base salary, the employee might qualify to receive performance bonuses or incentives which will be set as individual and organizational performance targets, and the bonuses will reward the exceptional contributions as well as the results. The company also offers full health insurance coverage, including medical, dental and vision benefits, to ensure employees' health and healthcare needs. Besides, an employee pays into a retirement plan, such as a 401(k) or pension scheme, to save now and ensure financial stability after retirement. The employer produces a total remuneration package which beyond monetary benefits also consists of non-monetary ones. The employer thereby improves the employee's overall compensation experience, ensures job satisfaction and loyalty and engagement.