The types of compensation are as follows:
- Base salary
- Bonus
- Profit-sharing
- Stock options/Equity
- Performance-based pay
1. Base salary: This is the fixed amount of money employees receive as regular pay that is determined according to the job responsibilities and qualifications.
2. Bonus: Bonuses are the additional payments given to employees based on individual or collective performance, goals, or achievements that can be discretionary, performance-based, or regulated according to the company’s profit.
3. Profit-sharing: Some organizations have programs related to profit-sharing where a portion of the company’s profit is distributed among the employees with direct finance stakes.
4. Stock options/Equity: Some companies may come up with stock options or equity as a form of compensation, which allows employees to purchase shares at a predetermined price that allows them to benefit from the company’s growth and earn financial returns.
5. Performance-based pay: Performance-based pay includes various forms of compensation tied to individual or team performance.