Question

1. Distinguish between direct compensation and indirect compensation.(100 words )
2. Distinguish between current compensation and deferred compensation. (100 words ,please write in your own words )

Answer 1

1.A) The distinguish between the direct compensation and indirect compensation:

1. Direct and Indirect Compensation are two basic Components of the organization that to designed to compensate and provide benefit to employees.

2.The direct compensation refers to monetary or cash benefits that are provided to the employees at periodic intervals.   3.The performance of employees in their job matters in this type of compensations. Basic pay, variable pay, short-term and long-term incentive, cash rewards, house rent allowance, sales commission, increments and equity stock option plans  (ESOPs) are some of the main examples of direct compensation.

Indirect Compensation:

The term Indirect Compensation refer to the which is in terms of non-monetary form provide the benefits to the employee.

These type of compensation are not based on the performance of the employee.Examples of the Indirect Compensation medical insurance, unpaid leaves, flexible timing, retirement programs, higher education opportunity and facility of vacation at holiday resort with family.

Current Compensation and Deferred compensation

Current Compensation refers to the amount received by the employee in terms of salary bonus which includes to the cost to the company and received at the end of month of the current employment.

Deferred Compensation : Deferred compensation  is an arrangement in which a portion of an employee's income is paid out at a later date after which the income was earned. Examples of Deferred compensation include pensions, retirement plans, and employee stock options.