What is the term for compensation such as health insurance and retirement plans?

The term that encompasses compensation such as health insurance and retirement plans is Indirect Financial Compensation. This type of compensation refers to benefits that are provided to employees in addition to their direct wages or salaries. Indirect Financial Compensation includes provisions for health and wellness, retirement savings plans, paid time off, and other benefits that enhance the employee's overall compensation package.

This classification is essential for understanding how organizations design their reward systems. Indirect Financial Compensation can significantly influence employee satisfaction and retention, as these benefits contribute to an employee's quality of life and financial security over time. Furthermore, providing a robust benefits package can help attract talent in competitive job markets.

In contrast, other terms such as Direct Financial Compensation refers specifically to monetary payments, including salaries and wages, whereas Base Salary denotes the fixed amount of pay employees receive before any bonuses or additional compensation. Non-monetary Compensation includes aspects like recognition programs or flexible working conditions but does not cover the financial aspects provided by benefits. Thus, the understanding of Indirect Financial Compensation is critical in the broader context of strategic human resource management.