The Impact of Indirect Compensation on Employee performance: an Overview

Abstract

"If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don't have to manage them."(Jack Welch).Compensation management is one of the most important elements of personnel management. It includes economic rewards in shape of wages and salaries as well as in different forms of non-wage economic payment known as fringe benefits, indirect compensation or supplementary pay. The subject of Compensation and for that matter Indirect Compensation is of great importance because it affects the wellbeing of the individuals in the concerned organizations. According (Tsai, Yu, & Shih-Yi, 2005), Indirect compensation helps organizations to attract and retain highly competitive employees which are seen as strategic resources in getting competitive advantage. Therefore, this research work has been done to look at the impact of Indirect Compensation on the performance of employees. Organizations should pay the necessary attention to the Indirect Compensation, as this will help to boost the morale of employees which will in turn result in higher productivity.

Keywords: Compensation, Benefits, Performance, Indirect, Management