Lakhasly

Salary Concept: In order to understand the general concept of compensation, it is necessary to clarify some of the terms included in the terms of compensation, namely: Direct compensation: The amount of cash an organization pays to its employees for their contribution to it, hence the name "direct" because its payments are directly related to performance and effort levels. Salary or basic salary: It represents the bulk of the compensation that the employees of the organization receive which is the quantitative and qualitative return that the individual provides to the organization in terms of production or performance while working with the organization. Indirect compensation: It refers to all the financial and non-monetary benefits and advantages provided to employees by the organization in which the employee works because they are members of the organization, and therefore these benefits provided to them are not directly related to performance and activity. Direct Additional Compensation: The amount of cash paid to employees in addition to basic salary and wages, including: additional wages and cash incentives. Organizations pay employees such compensation for additional work assigned to them, outstanding work that they do, or for some characteristic that distinguishes employees from their work from other jobs. Financial compensation [1]: One of the functions of human resource management that includes everything related to compensation, inside and outside the organization, and is defined as follows: Human resources are all financial returns that members of the organization receive from the organization through their work and take two forms: cash "direct compensation" and non-monetary "indirect compensation" in the form of additional job benefits represented by various services provided free of charge by the organization, or contributed to the payment of part of the cost.The principle of sufficiency: This principle means that wages and salaries are sufficient to assist the individual in facing the various requirements of life and his multiple obligations, which requires that some bases such as the standard of living, price rate and other foundations be taken into account when setting and determining wages and salaries so that the principle of sufficiency is achieved.The relationship between compensation and motivation to work can be summarized as follows:

1 Motivation to work depends on the extent of the individual's sense of justice by comparing it between what he gets from compensation and what others get at work.It helps to alleviate the anxiety and psychological tension of individuals by compensating them financially for their investment in their abilities at work.Objectives of the salary and wage determination policy: This policy aims to achieve several goals, including: 1.Principles of Wage and Wage Determination: The human resource departments of the organization should consider the following principles when setting wages and salaries for their employees, which include: 1.Equity principle: This principle means that wages should be just, i.e. based on a solid and objective foundation, and applied equally to all workers.Salaries and wages encourage and motivate individuals for greater performance and productivity.Salary.2.3.2.3.2.3.2.3.

Salary Concept:
In order to understand the general concept of compensation, it is necessary to clarify some of the terms included in the terms of compensation, namely:
Direct compensation:
The amount of cash an organization pays to its employees for their contribution to it, hence the name “direct” because its payments are directly related to performance and effort levels.
Salary or basic salary:
It represents the bulk of the compensation that the employees of the organization receive which is the quantitative and qualitative return that the individual provides to the organization in terms of production or performance while working with the organization.
Indirect compensation:
It refers to all the financial and non-monetary benefits and advantages provided to employees by the organization in which the employee works because they are members of the organization, and therefore these benefits provided to them are not directly related to performance and activity.
Direct Additional Compensation:
The amount of cash paid to employees in addition to basic salary and wages, including: additional wages and cash incentives. Organizations pay employees such compensation for additional work assigned to them, outstanding work that they do, or for some characteristic that distinguishes employees from their work from other jobs.

Financial compensation [1]:
One of the functions of human resource management that includes everything related to compensation, inside and outside the organization, and is defined as follows:
Human resources are all financial returns that members of the organization receive from the organization through their work and take two forms: cash “direct compensation” and non-monetary “indirect compensation” in the form of additional job benefits represented by various services provided free of charge by the organization, or contributed to the payment of part of the cost.
There is also non-financial compensation:
They are very important human needs, moral and social needs such as good treatment, job security, psychological comfort, safety and health in the workplace, opportunities for growth and development…etc. These needs are no less important to him than the physical needs, because they bring him psychological and moral satisfaction.
and also by the physical, mental and social work environment in which the work is performed.

Here are the objectives of compensation in general:

1. Attracting the best human elements to work in the organization.


2. Maintaining the best human elements in the organization.


3. Motivating and motivating employees to the best level of performance.
   Compensation Relationship with Motivation to Work[2]:
   There is a direct relationship between the compensation that an individual receives from the organization and the motivation to work.

The relationship between compensation and motivation to work can be summarized as follows:

1 Motivation to work depends on the extent of the individual's sense of justice by comparing it between what he gets from compensation and what others get at work.

2 The motivation to work depends on the extent of the individual’s satisfaction with the compensations he received, whether compensations of an internal nature or of an external nature.

Salaries and wages [3]:
One of the most basic components of compensation.
Its importance stems from several reasons, some of which we will mention, for example, but not limited to, including:

1. Salaries and wages encourage and motivate individuals for greater performance and productivity.


2. It helps to alleviate the anxiety and psychological tension of individuals by compensating them financially for their investment in their abilities at work.


3. Salaries and wages represent the only tangible and measurable return for individuals to employ their full potential at work.
   Objectives of the salary and wage determination policy:
   This policy aims to achieve several goals, including:


4. Attracting and then obtaining qualified manpower resources.


5. Preserve the resources working within the organization and prevent their leakage abroad.


6. Achieving justice in determining and paying wages and salaries in proportion to the work.

Encourage and motivate employees for more outstanding performance while rewarding such performance.

Principles of Wage and Wage Determination:
The human resource departments of the organization should consider the following principles when setting wages and salaries for their employees, which include:

1. Equity principle: This principle means that wages should be just, i.e. based on a solid and objective foundation, and applied equally to all workers. Salary.


2. Equality principle: This principle means that wages and salaries for jobs and jobs with the same or similar responsibilities and obligations must be equal.

This requires the adoption of objective foundations on the basis of which a value is determined, and then the importance of each job compared to other jobs. This principle represents the objective aspect of wages and salaries. "The International Labor Organization has established in its constitution equal pay and equal pay for equal work."
3. The principle of sufficiency: This principle means that wages and salaries are sufficient to assist the individual in facing the various requirements of life and his multiple obligations, which requires that some bases such as the standard of living, price rate and other foundations be taken into account when setting and determining wages and salaries so that the principle of sufficiency is achieved. This principle represents the economic aspect of wages and salaries.
Article (23) of the Declaration of Human Rights [4] stipulates: (the necessity of making wages sufficient for the worker and his family to live in a dignified manner that is worthy of a human being).

For salaries and wages to become influential in motivating workers to improve their performance, these workers must realize that the organization pays them a fair “wage” compensation for their performance and improvement.

In addition, workers must realize that the wages and salaries they receive are commensurate with or equal to their capabilities, experiences and skills.
The best way to achieve this is to use job evaluation, which helps to establish consistency between the wage and salary structure in the organization and the wage and salary structure in other organizations and in other labor markets.
Direct Compensation:
In addition to the basic salary and wages that organizations pay to the human resources they work for, other direct financial compensation is paid to them in the form of financial incentives, the purpose of which is to stimulate these resources and create motivation for them to work diligently, actively and at a high level.

It is highly effective, and it has been called direct because the individual’s access to it is related to his work, effort and activity.
We will explain the most important of these direct incentives, which are classified into two types:
First, individual incentives:
It is called so because it pays the individual on the basis that he is an independent work unit, in light of his effort and the effectiveness of his performance on his own. The most important of these incentives are the following:
1 The periodic increment:
The periodic increase that is paid to employees is part of the direct compensation they receive for their contributions to the organization.
It is: a monetary amount paid to the individual every specified period of time in addition to his basic salary or wages, and the bonus is usually paid if the individual fulfills the following two conditions:

1. A certain level of performance and efficiency in his job or work and regardless of his level of performance in the past years, each period of time in which the increment is due is an independent unit of the previous periods.


2. The lapse of the periodic period specified for granting the increment, which may be a year or more.
   Thus, it can be said that the individual obtaining the bonus makes him keep it throughout his career service in the organization, and not obtaining a new bonus does not lose the previous bonuses he obtained. The amount of the bonus is disbursed monthly with the payment of the salary or the monthly wage, because it is considered a part of it...

2 Financial Rewards: Bonus
A sum of money disbursed to an individual who excels in his performance and giving in his work or job and is done according to one of the following two criteria:
1 If the individual achieves a specific performance rate that indicates his level of efficiency in his work.
Example: Getting an excellent efficiency rating is worth 1,000 monetary units.
Getting a very good efficiency rating is worth 800 cash units.
Getting a good efficiency rating is worth 500 cash units.
2 If the individual does an outstanding job as solving a problem, developing something in the work that has benefited the organization.
Financial rewards are usually disbursed at the end of the year, and they are not considered part of the salary or wages, as they are a free and one disbursement upon achieving excellence. The rewards obtained by the individual in previous years when his level of performance was high shall not be withdrawn over subsequent years when his performance will become average.

For the success of the reward system, the following aspects are usually required:

A - Linking obtaining the reward to the level of performance and effort of the individual and the results and achievements he achieves, and this requires setting specific performance standards that the individual must achieve and exceed.
B - Making the rewards levels gradual, i.e. increasing with the high level of performance.
3 Overtime pay: Over Time
A sum of money paid to the individual in addition to his basic salary or wages and other compensations in return for assigning him additional work outside the official working hours, whether or not this work falls within the scope of his original work.
It is considered as encouraging and motivating workers to work outside official working hours. And when the organization needs them in the event of an increased work pressure, the overtime is voluntary and not obligatory.
So, it is an incentive, not a reward, and it is not included in the salary or wages, given that it is not continuous, like the incentive rewards.

Secondly, collective incentives [5]:
It is paid on the basis of collective effort and excellence in performance, and therefore the unit of financial incentive is the effort of the group or work team, and not the effort of the individual person.
It has many forms and we will talk about the most common ones in use:
profit_sharing:
A predetermined percentage that the organization deducts from its realized profits at the end of the year to be distributed to its employees.
This principle is based on the philosophy that: The profits that the organization achieves at the end of the business period, which is the year, is a reflection of the collective effort made by human resources at work throughout the year. Increasing this effort means increasing the profits of the organization, which is offset by an increase in the incentive that will be obtained by human resources, and thus profit sharing is a collective financial incentive that encourages workers to cooperate and team work.
The length of time between making the effort and the employees obtaining the financial incentive is taken from him, and this weakens his preparatory strength.
Gain-sharing:
It is a percentage of the financial savings that workers achieve in the cost of production by controlling and reducing them, and the organization distributes it to them at the end of the year, after calculating the amount of savings achieved. Participation here is a collective incentive that urges everyone to squeeze production costs.
However, as a result of the practical application of this incentive at the level of the organization, it has been proven ineffective. Because the savings achieved by a team or department may be lost by another department, causing its inefficient performance.
For this reason, this incentive has been applied at the micro level (work team or production lines).

For this method to be successful, the following must be achieved:
Operating costs should be under the control of the work team.
Example: The ruin of a machine because of its age has nothing to do with the team.
Providing employees with confidence that management will be honest in calculating the savings.
Giving the work team freedom to perform its duties.
Providing a comfortable physical and psychological work environment.
Availability of high-quality and modern equipment.
This incentive is distinguished: that employees get it even if the organization does not achieve a profit figure.
Employees owning shares in the organization:
Some organizations base part of their shares on their employees at the end of the year as an alternative to distributing a percentage of their profits achieved at the end of the year.
This means that workers' ownership of the organization's shares (and over time) will increase their ownership of them, which causes them to feel that they are owners and not parts, as they own part of the capital of the organization and this helps to implant their belonging to the organization and their love to work in it.
Participation in the eligible profits:
It is one of the derived forms of profit sharing, so called because the profits are not paid to the employees at the end of the year, but are held in their name and invested in their favor to achieve more profits for them, and the workers get their profits at the end of their job package in the organization for any reason, whether retirement, resignation or... etc.
compensation

Indirect Compensation:
These incentives are called additional job benefits: employee benefits
They are a variety of services of financial value, which organizations provide to all their employees as grants without compensation, or to cover part of their cost, without excluding a category of them (for permanent employees only) and regardless of their level of performance and efficiency at work, they are provided to them because they are members of them. .

It is called indirect: because obtaining it has nothing to do with the effort and activity of the individual in completing the work entrusted to him.
These indirect functional benefits come in two forms:
First: It is voluntary and voluntary, and its purpose is to create a sense of belonging and loyalty to the organization in workers.
The second is mandatory because most of the labor laws of various countries require organizations to offer some employment benefits to their employees. Such as health insurance, social security, etc.
These additional features bring the following benefits:
Develop employee loyalty and a sense of belonging to the organization.

• Raising employee morale and job satisfaction.
  A way to attract talent, especially rare talents in the labor market.
  Improving relations between organizations and trade unions.
  Gain community satisfaction and make a good impression in your organization.

Despite these advantages, it costs organizations, especially large-sized organizations that have a large number of workers, huge sums of money.
In a study on a sample of companies in the United States of America in the year 2000 AD about the cost paid by American companies in the field of additional job benefits, it was found that they pay approximately (50%) of their salaries and wages budget on these benefits.