The Accounting Treatment and Disclosures Related To Three Types of Com Essay

The Accounting Treatment and Disclosures Related To Three Types of Compensation and Other Benefits - Essay Example These services generally have many beneficial impacts on the organization. As such, it is important to reward the employees adequately in the form of compensation and other benefits. The compensation benefits include a set of programs which are aimed at attracting capable employees to a company. The compensation benefits help to motivate the employees to perform better and also help to retain more skills within the organization. A satisfactory compensation will help in reducing the attrition rate in a company and also contribute significantly to human resource management in a business. The three types of compensation benefits considered in this report are share-based compensation which includes stock options and restricted stocks, pension plans and regular base compensation. Share-based compensation is becoming more popular among the local as well as multinational organizations. The benefits of share-based compensation are many. The most noticeable advantage of share-based compensation is that it gives a sense of inclusion to the employees as the share-based compensation is associated with privileges of equity ownership. The main purpose of the share-based compensation benefits is to support the interests of the shareholders, employees as well as the management of the company. If the employees have a stake in the company through the ownership of certain shares, it is highly likely that the employees will perform better to ensure that the sales and profit level of the company is increased. An increase in the profitability and revenue generation of the company would result in an increase in the share prices of the company. If the employees are given share-based compensation benefits, an increase in the share prices would mean benefit for the employee as well. Thus, this acts as a win-win situation for the managers, investors as well as the employees of a business. Share-based compensation is common to both established companies and startup companies.