Evolution of Employee Compensation and Benefits

Table of Contents

• Introduction

• Timeline of Employee Compensation and Benefits

• Current Model of Compensation

• Conclusion

Introduction

Compensation packages and employee benefits are a cornerstone in the well-being and motivation of employees. Today’s corporate world knows a holistic approach toward compensation packages, but it has been evolving continuously. 

Timeline of Employee Compensation and Benefits

Early Era

Before money was invented, the barter system was used for goods and services. Individuals who worked for others were paid in kind, with either goods or services they needed. 

Early 20th Century

In the early days of the 20th century, the foundation of compensation was laid. Workers were paid a basic amount, usually calculated on a piece rate system. This era was mainly defined by production and manufacturing. This is why the output produced by each worker had a direct effect on the wages they were paid. 

Mid 20th Century

This era was a time of the industrial revolution. As labor unions became more and more prominent, benefits available to workers increased. Employees were given the general wages but additionally were also given pensions, health insurance, and paid time off. This ushered in an era of structured compensation and job security.

Late 20th Century

In the late 1900s, compensation structures became more flexible and customizable. As compared to the early 1900s, when wages and salaries were output-based, in this time incentives were based on performance.

This was at a time when quality began to take precedence over quantity with consumers, and business entities recognized this shift. Employees were offered stock options, bonuses, and profit-sharing opportunities, in addition to the standard pre-existing benefits. 

21st Century

In today’s world, employee compensation packages are comprised of salaries, perks, benefits, etc. This approach is more well-rounded, and aimed at making employees feel valued and respected. There are also non-monetary perks, sometimes focusing on wellness and a healthy corporate career.

Current Model of Compensation

The current model of compensation has undergone a massive shift. Today’s corporations and workplaces see a more holistic approach to compensation packages for employees. Employees are offered a mix of monetary and non-monetary benefits and perks. 

Monetary benefits include salaries, bonuses, retirement pensions, etc. Non-monetary perks include paid time off, insurance, maternal and parental leave, and even access to mental health resources to ensure the well-being of each employee. 

In addition to this, employees are offered career growth and skill development opportunities. Companies often conduct skill development workshops and other career advancement plans. 

Another element of perks is recognition and appreciation. Companies often hold award ceremonies to recognize the hard work and dedication of employees. Companies also use corporate gifting as a way to celebrate the milestones and achievements of employees.

In recent times, managers and leaders have recognised the need to provide employees with a well-rounded benefits package, covering monetary, and non-monetary benefits, along with opportunities for career development and a healthy work/life balance. 

Conclusion

The evolution of employee benefits and compensation has been primarily driven by changing forces in the market, and a recognition of what employees need. 

Creating both tangible and intangible ways through which to show employees that they are valued and appreciated is an important element of compensation. 

Corporate gifting is one of the best ways to do so, as it involves the perfect blend of personal, professional, and practical. 

At Apsara Gifts, from Bangalore, we believe in the power of corporate gifting. We offer the perfect gifts for your employees, to keep them motivated and cultivate a sense of belonging in every workplace.