The basic compensation that an employee receives, usually as a wage or salary, is called base pay. In addition to the basic wage, organizations that are committed to developing a compensation system may prefer to use incentive pay programs. Pay incentives can be defined as compensations that reward employees for their high performance. 

Currently, employees expect more than just an hourly wage or salary from their employers; they expect additional considerations that will enrich their lives and support work-life balance. Therefore, many organizations offer benefit programs which are almost 40 percent of the typical total compensation package for employees. A benefit is an indirect reward given to an employee or a group of employees as a part of organizational membership. Training support, discounts for the company’s products, lunch, workplace medical services, and transportation are among benefits that a company provides to its employees.