Compensation and Rewards
Compensation may be defined as money received in the performance of work, plus the many kinds of benefits and services that organisations provide their employees.
Money’ is included under direct compensation (popularly known as wages, i.e., gross pay); while benefits come under indirect compensation and may consist of life, accident, and health insurance, the employer’s contribution to retirement, pay for vacation or illness, and employer’s required payments for employee welfare as social security.
A ‘wage’ (or pay) is the remuneration paid, for the service of labour in production, periodically to an employee/worker. “Wages” usually refer to the hourly rate or daily rate paid to such groups as production and maintenance employees (“blue-collar workers”).
On the other hand, ‘Salary’ normally refers to the weekly or monthly rates paid to clerical, administrative and professional employees (“white-collar workers”).