Compensating Employees Employee compensation refers to all work-related payments, including wages, commissions, insurance, and time off. Wages and salaries are the most obvious forms of compensation and are based on job evaluations that determine the relative values of jobs to the organization. Under the hourly wage system, employees are paid a fixed amount for each hour they work. The system is generally used for lower skilled occupations. Salaried employees receive a fixed sum per week or month, no matter how many hours they work. Most professional positions are salaried; the reality is that these jobholders
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