ABSTRACT
Employee compensation is defined as “all forms of financial returns and tangible services and benefits employees receive as part of employment relationship” (Milkovich et al., 2011: 10). Narrowly speaking, employee total compensation consists of cash compensation and benefits; the former includes various forms of direct payments to employees (e.g., base pay, profit sharing, and stock awards) and the latter includes tangible services provided to employees other than pay for time worked (e.g., insurances, retirement benefits, and leaves of absence). On top of these monetary elements, employees also obtain nonmonetary rewards such as job security, career development, recognition, and autonomy (Bloom & Milkovich, 1996). Collectively, these various forms of monetary and nonmonetary elements shape total rewards (Giancola, 2009). Figure 12.1 illustrates various forms included in total rewards. While this article focuses primarily on monetary compensation (i.e., cash compensation and benefits) in multinational corporations (MNCs) 1 recognizing their central importance to employees (Gerhart, 2009), it also considers nonmonetary rewards.
